Redcastle and Whroo JVs with Mawson Gold – the search for the next Fosterville is being expanded
2020 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 and Other
Comprehensive Income
Statement of Financial Position
Statement of Changes In Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor's Report
Additional ASX Information
8
13
17
18
19
20
21
22
41
42
48
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:
https://www.nagambieresources.com.au/investor
-information/corporate-governance-statement
Chairman’s Letter
CHAIRMAN’S LETTER
Dear Shareholder
Gold exploration has been transformed this year with the Company’s strategic partnership with Mawson Gold Limited
(“Mawson”). The North East Link Project (NELP) tender closed in May this year, with Nagambie asked to provide pricing
for “Underwater Storage” PASS Management at the Nagambie Mine.
Strategic Partnership with Mawson
Following extensive negotiations, a game-changing strategic partnership with Mawson, a successful Canadian international
gold exploration company, was signed in March this year. Mawson became a cornerstone investor in Nagambie by
acquiring a 10.0% shareholding (50.0M shares) in return for 8.5M Mawson shares, purchased the Clonbinane Project from
Nagambie for $0.528M and 1.0M Mawson shares, and entered into the Redcastle & Doctors Gully option / joint venture
(JV) agreements on terms favourable to Nagambie.
The impact on Nagambie’s balance sheet has been very significant. Total Net Assets at 30 June increased by $3.9M to
$12.7M, year on year, a 45% increase. Importantly, total Net Current Assets increased by $2.5M to $1.4M, having been
negative $1.1M a year before. Finally, Nagambie’s 9.5M Mawson shares at 30 June had a market value of approximately
A$4.0M.
As recently announced, the Doctors Gully JV is now to be expanded from 4 sq km to 199 sq km with improved terms and
become the Whroo JV, subject to Nagambie shareholders approving the JV at this year’s AGM. The JV terms are set out
in the AGM Notice of Meeting and I strongly encourage shareholders to vote in favour of the Whroo JV resolution.
For the Redcastle and Whroo JVs combined, spending by Mawson could reach $5.25M (JV expenditure and cash payments
to Nagambie) before Nagambie needs to contribute to further JV expenditure. Mawson retains its right of first refusal to
take up or match all proposals under consideration by Nagambie on its remaining 3,400 sq km of Waranga Domain
tenements provided that Mawson continues to hold its original 50.0 million Nagambie shares. Mawson also has the right
to appoint a director to the Nagambie board provided it increases its’ holding above, and maintains it above, 15.0% of
Nagambie.
Nagambie has been limited, for funding reasons, to utilizing only one diamond drilling rig in its 100%-owned tenements
between the Nagambie Mine and Wandean in recent years. Mawson has recently been using one or two additional
diamond drilling rigs at Nagambie’s Redcastle property, where Nagambie can ultimately retain a 30% interest. Mawson
will probably commence drilling in early 2021 at Nagambie’s Whroo property, where Nagambie can ultimately retain a 40%
or a 30% interest. The use of multiple drilling rigs instead of one on Nagambie’s tenements greatly improves the chances
of exploration success for shareholders.
At Redcastle, Mawson is well advanced on a series of geophysical surveys including aerial LiDAR, gradient Induced
Polarisation (IP), dipole-dipole IP, ground magnetics and ground gravity. Mawson are proposing to carry out the same
suite of surveys at Whroo. Nagambie has shown at the Nagambie Mine that dipole-dipole IP can outline sulphide-gold
targets in the Waranga Domain but complementary, supportive geophysical techniques could be established by Mawson
that would be applicable throughout Nagambie’s exploration tenements.
Covid-19 Impacts
The Covid-19 pandemic has affected activities during CY 2020. Local demand for Nagambie quarry products was well
down on anticipated levels as business developments in the Nagambie region were put on hold. Diamond drilling of the
RAD002 hole at the Racecourse Prospect was delayed by a total of eight weeks because the drilling contractor had
manning issues resulting from the strict virus testing protocols required and the closure of the border with Tasmania, the
home state for several of its employees. A follow up IP geophysical survey at Racecourse West had to be deferred as the
preferred IP contractor, Zonge, is based in Adelaide and the South Australian border has been closed to Victoria.
Normal Victorian Government business has also been delayed by Covid-19. The State budget is normally delivered in May
but the 2020/21 budget is now expected to be delivered in November. An important component of the budget will be NELP,
the biggest-ever infrastructure project in Victoria. Tenders closed as scheduled in May for the construction of NELP, which
will require the management of around 5.4 million tonnes of PASS rock plus 1.2 million tonnes of PASS soil which will be
excavated by large tunnel boring machines.
I would like to take this opportunity to sincerely thank Geoff Turner who, after over 12 years of providing geological services
to the Company, this year decided to fully retire. Geoff’s intersecting-faults concept for gold mineralisation in the Waranga
Domain has led to Nagambie holding the biggest contiguous tenements package in Victoria and being able to attract
Mawson as a strategic partner to accelerate the search for the next Fosterville.
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.
Mike Trumbull
Executive Chairman
30 October 2020
Nagambie Resources Limited | 2020 Annual Report | Page 1
CEO’s Operations & Exploration Review
CEO’s OPERATIONS & EXPLORATION REVIEW
GOLD EXPLORATION
Gold exploration for Fosterville-style high-grade underground sulphide-gold deposits in Nagambie Resources’ 100%-owned
Waranga Domain tenements continued to be methodically advanced during the year.
Following lengthy negotiations in the first half of the year, an extensive strategic partnership with a Canadian gold exploration
company, Mawson Gold Limited (“Mawson”), was announced on 30 January 2020. The final agreements relating to the
partnership were signed in late March.
Strategic Partnership with Mawson
Mawson took up an initial 10.0% cornerstone shareholding in Nagambie Resources of 50.0 million fully-paid ordinary shares.
Mawson has right of first refusal to take up or match all proposals under consideration by Nagambie on its 3,600 sq km of
Waranga Domain tenements provided that Mawson continues to hold its original 50.0 million Nagambie shares. Mawson
also has the right to appoint a director to the NRL board provided it increases its’ holding above, and maintains it above,
15.0% of Nagambie.
As consideration for the 50.0 million Nagambie shares, Nagambie received 8.5 million shares in Mawson which had a value
at the time of the announcement of $2.5 million. The value per Nagambie share of 5.0 cents represented a 31.6% premium
to the last ASX sale price for Nagambie shares on 29 January 2020 of 3.8 cents.
Mawson acquired 100% of NRL’s Clonbinane tenements for $0.528 million cash and a further 1.0 million Mawson shares,
valued at the time of the announcement at $0.294 million.
Total consideration to Nagambie for the 50.0 million Nagambie shares and Clonbinane was therefore valued at the time of
the announcement at $3.322 million; $0.528 million in cash and approximately $2.794 million in 9.5 million Mawson shares.
The 9.5 million Mawson shares were valued at approximately $3.954 million at 30 June 2020, an increase of $1.16 million.
Mawson also had the right to spend the next $1.0 million on each of Nagambie’s Redcastle exploration licence and
Nagambie’s Doctors Gully retention licence to earn a 70% joint venture interest in each.
Redcastle Joint Venture (Nagambie Resources currently 100%)
Mawson commenced field work at Redcastle (refer Figures 1 and 2) in the June 2020 quarter and commenced extensive
geophysical surveys and diamond drilling at Redcastle during the September quarter.
Figure 1 3,600 km² Waranga Domain Tenements (red hatched) and Redcastle & Whroo JVs (outlined in blue)
Note: Mawson Figure, modified from Willman et. al, 2010: Economic Geology (2010) 105 (5): 895–915
Nagambie Resources Limited | 2020 Annual Report | Page 2
CEO’s Operations & Exploration Review
The surveys being carried out include aerial LiDAR (Light Detection and Ranging), gradient-array Induced Polarisation (IP),
dipole-dipole IP, ground magnetics and ground gravity.
The principal historical mines are being diamond drilled for the first time ever to establish the major structural controls on
gold mineralisation. Subsequent drilling by Mawson Gold will target anomalies outlined from the various geophysical surveys
as they are completed.
Doctors Gully Joint Venture / Whroo Joint Venture (Nagambie Resources currently 100%)
Mawson commenced field work at Doctors Gully during the September 2020 quarter. Negotiations to expand the option /
joint venture (JV) from 4 sq km to 199 sq km on improved terms, and rename it the Whroo JV, were carried out during that
quarter. On 14 October 2020, Nagambie and Mawson announced the signing of the expanded JV agreement which is
subject to the approval of Nagambie’s shareholders at the 2020 AGM.
The Whroo JV covers the following 100%-owned contiguous Nagambie gold tenements (refer Figures 3 and 4) in the
Waranga Domain, the northern portion of the greatly underexplored Melbourne Zone in Victoria:
Four granted exploration licences - EL6158 (Rushworth, 46 sq km), EL6212 (Reedy Lake, 17 sq km), EL7205
(Angustown, 69 sq km) and EL7209 (Goulburn West, 34 sq km);
Two exploration licence applications - ELA7237 (Kirwans North 1, 20 sq km) and ELA7238 (Kirwans North 2, 9 sq km);
and
One granted retention licence - RL2019 (Doctors Gully, 4 sq km).
The Whroo JV Property (refer Figures 1 and 2) starts to the north of the Wandean oxide-gold mineralisation and runs
northwards to the historic gold mines at Whroo (including the Balaclava Mine) and White Hills (including Doctors Gully).
These northern mines are located in a roughly-east-west trend of several Whroo anticlines and thrust faults (refer historical
Figure 3). The northern Balaclava and Doctors Gully Thrust Faults can be compared to the east-west-striking Nagambie
Mine, Racecourse, Wandean and Wandean North Thrust Faults to the south.
Figure 2 Nagambie Resources’ 100%-owned Whroo JV and Redcastle JV Properties
Note: Adapted from Mawson Figure.
Mawson is paying $0.1 million cash to Nagambie upon approval of the JV at Nagambie’s 2020 AGM and committing to spend
an additional $0.4 million in the first year to earn no interest in the Whroo JV Property.
Mawson then has the option to spend a cumulative $2.75 million (JV expenditure plus cash to Nagambie) to earn a 60%
interest in the Whroo JV Property. When Mawson has earned that 60% interest, Nagambie has the option to call for the
formation of a 60:40 Mawson:Nagambie JV. If Nagambie does not exercise that 60:40 option, Mawson then has two options:
(1) to call for the formation of a 60:40 JV; or (2) to spend an additional $1.5 million (cumulative $4.25 million of JV expenditure
and cash to Nagambie) to earn a 70% interest in the Whroo JV Property, leading to the formation of a 70:30
Mawson:Nagambie JV.
Mawson are planning to commence extensive geophysical surveys in the Whroo JV Property and initial diamond drilling at
Doctors Gully early in CY 2021.
Nagambie Resources Limited | 2020 Annual Report | Page 3
Figure 3 Whroo – White Hills: East-West Trend of Historical Gold Workings
CEO’s Operations & Exploration Review
Note: Mawson Figure, based on Plan of Whroo Gold Workings (from Bradley 1869).
Nagambie Resources’ IP and Diamond Drilling in 2019/2020
WTD002
The WTD002 diamond hole at Wandean was designed to traverse under the surface oxide-gold mineralisation discovered
in 2014 and intersect a strong IP chargeability anomaly 300m to the north. No significant gold assays occurred throughout
WTD002 with the only anomalous results being beneath the surface oxide-gold mineralisation. The lithogeochemical results
indicated hydrothermal alteration of the sediments beneath the surface gold mineralisation but not towards the end of the
hole where the IP chargeability anomaly had been recorded. The lithogeochemical analysis did indicate the possibility of
carbonaceous material within the siltstone beds that could have resulted in the IP anomaly. Such a sedimentary
carbonaceous IP response could be expected to extend for many kilometres east-west, similar to the Cahill sedimentary
pyrite IP anomaly to the north west of the Nagambie Mine.
The next step to locate the sulphide source for the Wandean oxide-gold mineralisation would logically be to carry out an IP
survey to the north and west of the Goulburn River at Wandean. As that area lies immediately to the south of the Whroo JV
Property, Nagambie will liaise with Mawson in order to extend Whroo geophysical surveys southwards to the Goulburn River.
The Reedy Lake soil anomaly, which occurs at the intersection of the Wandean Crustal Fault and the Wandean North Thrust
Fault, lies only 2 km north west of Wandean.
Dipole-Dipole IP Surveys
IP surveys were carried out in January and March 2020 to the west and north west of the Nagambie Mine. The two strongest
IP chargeability anomalies generated to date in the Nagambie Mine area, Racecourse and Nagambie Mine West, straddle
the Racecourse Thrust and the Nagambie Mine Thrust respectively and are most intense at or near the respective
intersections with the Wandean Crustal Fault (refer Figure 4). Diamond holes RAD002 and NWD001 were then designed
to intersect those anomalies.
Epizonal (Fosterville-style) versus Mesozonal (Ballarat/Bendigo-style)
The Melbourne Zone and the Eastern Bendigo Zone that host the later-formed (370 Ma to 380 Ma) epizonal Fosterville,
Costerfield and Nagambie gold mines (refer Figure 1) are entirely underlain by the older crustal Selwyn Block.
It is this deep crustal architecture that distinguishes epizonal deposits from the earlier-formed (400 Ma to 420 Ma) mesozonal
deposits such as the Bendigo, Ballarat and Stawell gold mines.
The gold in mesozonal quartz-vein deposits is typically nuggetty with very uneven distribution, giving rise to highly variable
grades and making effective resource drilling problematic and expensive. Gold in epizonal deposits is typically fine grained
and evenly disseminated in association with pyrite and arsenopyrite. As a result, resource drilling of epizonal deposits will
typically be straightforward and relatively inexpensive.
Nagambie Resources Limited | 2020 Annual Report | Page 4
Figure 4 Plan showing Major Structures, IP Sulphide-Gold Targets and Designed DDHs RAD002 & NWD001
CEO’s Operations & Exploration Review
Nagambie Resources’ Gold Model for the Waranga Domain
Nagambie’s evolving gold mineralisation model for the Waranga Domain, the northern portion of the Melbourne Zone, has
as its basis that hot hydrothermal mineralised fluids from the underlying Selwyn Block passed up deep, north-west-striking
crustal faults under pressure before intersecting east-west-striking thrust faults nearer surface. These thrust faults typically
extend around 6 km or more below the current day surface.
As the Selwyn Block-sourced hydrothermal fluids extended east, west and upwards under pressure into fluid pathways
associated with the thrust faults, the temperature and pressure of the fluids dropped to optimal levels and quartz, carbonates,
pyrite, arsenopyrite, stibnite and gold were precipitated into the surrounding folded and fractured sandstone and siltstone
marine-formation rocks (turbidites).
In early 2017, Nagambie’s geological consultant, Geoff Turner, began to articulate his intersecting-faults concept for the
Waranga Domain (refer Figure 5). He had recognised that the known Fosterville-style, epizonal gold deposits at the
Nagambie Mine, Wandean, Whroo (including Balaclava Hill) & White Hills (including Doctors Gully) and several gold
anomalies, including the Reedy Lake Soil Anomaly, are all at or near to the intersections of gravity-inferred deep crustal
faults and magnetic-inferred or visually-outcropping nearer-surface thrust faults.
Waranga Domain Gold Endowment Potential
Over 10 years ago, in February 2010, Earth Resources Victoria probabilistically estimated that 3.0 Moz of gold remained to
be discovered in the Waranga Domain (refer Nagambie announcement to the ASX of 27 February 2020: “3,600 sq km of
Fosterville-style Gold Tenements”). The biggest gold deposit considered in that statistical analysis, based on protocols
developed and used extensively by the US Geological Survey, was Fosterville at 2.1Moz. The Fosterville Gold Mine’s total
gold endowment today exceeds 10.0 Moz and is continuing to grow in size.
Nagambie in the last decade has carried out the first significant research, via IP surveys and deep oriented diamond drilling,
into the controls on mineralisation in the Waranga Domain. Based on that research and the dramatic growth of the Fosterville
deposit, Nagambie now considers that the total undiscovered gold endowment in the Waranga Domain could greatly exceed
the 3.0 Moz estimated by Earth Resources Victoria in 2010.
Gold Tenements
The Company’s tenements as at 30 September 2020, totalling 3,694.6 sq km, are listed in Table 1.
POTENTIAL BACTERIAL RECOVERY OF GOLD IN HISTORIC HEAP LEACH PAD
Total recorded gold production from the Nagambie Mine cyanide heap between 1989 and 1997 was 134,000 ounces and
Nagambie Resources considers that a significant amount of gold remains in the heap.
Nagambie Resources Limited | 2020 Annual Report | Page 5
Figure 5 Intersecting Structures Plan (Geoff Turner, as at 24 January 2017)
CEO’s Operations & Exploration Review
Notes: (1) Only some of the mapped east-west-trending thrust faults were shown in order to simplify the plan.
(2) NRL has pegged additional ground in the area since January 2017 (refer Figure 2).
In 1997, the average price of gold was around A$450 per ounce. Currently, the price of gold is around A$2,600 per ounce,
over five times the price in 1997. In the USA, the use of naturally-occurring bacteria in solution has been shown to get
significant recovery of residual gold in cyanide heap leach pads.
Nagambie Resources is investigating the ways it could recover residual gold from the heap using naturally-occurring bacteria
and establishing which laboratories are best equipped to carry out the bacterial speciation test work required at an acceptable
cost.
Nagambie Resources is looking to commence laboratory work early in 2021.
PASS PROJECT
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.
The North East Link Project (NELP) tender closed as scheduled in May 2020, with Nagambie asked to provide pricing for
“Underwater Storage” PASS Management at the Nagambie Mine. NELP will be the biggest-ever road infrastructure project
in Victoria and will require the management of around 5.4 million tonnes of PASS rock plus 1.2 million tonnes of PASS soil
which will be excavated 24x7 by large tunnel boring machines.
Normal Victorian Government business has been significantly delayed by Covid-19. The State budget is usually delivered
in May but the 2020/21 budget is now expected to be delivered in November 2020. As a result, the winning tenderer for the
construction of NELP may not be announced until early 2021.
Nagambie Resources Limited | 2020 Annual Report | Page 6
Table 1 Nagambie Resources Group Tenements as at 30 September 2020
CEO’s Operations & Exploration Review
Tenement Number
MIN 5412
EL 5430
EL 5511
EL 6158
EL 6212
EL 6352
EL 6421
EL 6508
EL 6606
EL 6719
EL 6720
EL 6731
EL 6748
EL 6937
ELA 6877
ELA 7205
ELA 7207
ELA 7208
ELA 7209
ELA 7210
EL 7211
ELA 7212
ELA 7213
ELA 7237
ELA 7238
ELA 7264
ELA 7265
RL 2019
EL 5546
ELA 7498
ELA 7499
Tenement Name
Nagambie Mining Licence
Bunganail Exploration Licence
Nagambie Central Exploration Licence
Rushworth Exploration Licence
Reedy Lake North Exploration Licence
Miepoll Exploration Licence
Pranjip Exploration Licence
Tabilk Exploration Licence
Gowangardie Exploration Licence
Euroa Exploration Licence
Tatura Exploration Licence
Arcadia Exploration Licence
Waranga Exploration Licence
Nagambie East Exploration Licence
Nagambie Exploration Licence Application
Angustown Exploration Licence Application
Arcadia Exploration Licence Application
Cullens Road Exploration Licence Application
Goulburn West Exploration Licence Application
Locksley Exploration Licence Application
Shepparton Exploration Licence
Shepparton North Exploration Licence Application
Pederick Exploration Licence Application
Kirwans North (1) Exploration Licence Application
Kirwans North (2) Exploration Licence Application
Resource Recovery Exploration Licence Application
Nagambie Town Exploration Licence Application
Doctors Gully Retention Licence
Total Waranga Domain
Redcastle Exploration Licence
Cornella Exploration Licence Application
Sheoak Exploration Licence Application
Total
sq km
3.6
160.0
24.0
46.0
17.0
414.0
94.0
63.0
120.0
81.0
199.0
386.0
136.0
10.0
8.0
69.0
156.0
29.0
34.0
26.0
498.0
321.0
683.0
20.0
9.0
1.0
8.0
4.0
3,619.6
51.0
19.0
5.0
3,694.6
James Earle
Chief Executive Officer
STATEMENT AS TO COMPETENCY
The Exploration Results in this report have been compiled by Adam Jones who is a Member of the Australian Institute of
Geoscientists (MAIG). Adam Jones has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration, and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. He consents 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 | 2020 Annual Report | Page 7
Directors’ Report
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 2020.
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
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
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 over 20 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.
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
Nagambie Resources Limited | 2020 Annual Report | Page 8
Directors’ Report
GARY R DAVISON
Non-Executive Director
Independent
Appointed 15 May 2019
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 40 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 is chairman of the Audit and Compliance Committee.
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 | 2020 Annual Report | Page 9
Directors’ Report
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.
Review of Operations
Following lengthy negotiations in the first half of the year, an extensive strategic partnership with a Canadian gold
exploration company, Mawson Gold Limited (“Mawson”), was announced on 30 January 2020.
Induced Polarisation (IP) geophysical surveys carried out in January and March 2020 outlined strong sulphide-gold
targets at Racecourse and Nagambie Mine West. Follow up deep diamond drilling of these targets is being carried out.
Tenders closed during May 2020 for the construction of the North East Link in Melbourne, which will require the
management of around 5.4 million tonnes of PASS rock to be excavated by large tunnel boring machines. Nagambie
Resources was requested by one of the tenderers to provide pricing for the underwater management of PASS at the
Nagambie Mine and it did so.
Strategic Partnership with Mawson
Mawson took up an initial 10.0% cornerstone shareholding in Nagambie Resources Limited (“NRL”) of 50.0 million
fully-paid ordinary NRL shares. Mawson has right of first refusal to take up or match all proposals under consideration
by NRL on its 3,600 sq km of Waranga Domain tenements provided that Mawson continues to hold its original 50.0
million NRL shares. Mawson also has the right to appoint a director to the NRL board provided it increases its’ holding
above, and maintains it above, 15.0% of NRL.
As consideration for the 50.0 million NRL shares issued for $2,500,000, NRL received 8.5 million shares in Mawson.
The value per NRL share of 5.0 cents represented a 31.6% premium to the last ASX sale price for NRL shares on 29
January 2020 of 3.8 cents.
Mawson acquired 100% of NRL’s Clonbinane tenements for $500,000 cash and 1.0 million Mawson shares. Mawson
also paid NRL $28,000 to cover the tenement bonds.
Total consideration to NRL for the 50.0 million NRL shares and Clonbinane was valued at $3,245,412; $528,000 in
cash and $2,717,412 in 9.5 million Mawson shares. The 9.5 million Mawson shares were valued at $3,954,108 at 30
June 2020.
Mawson also has the right to spend the next $1,000,000 on each of NRL’s Redcastle exploration licence and NRL’s
Doctors Gully retention licence to earn a 70% joint venture interest in each.
Covid-19 Impacts
The Covid-19 pandemic affected activities in the second half of the year. Local demand for quarry products was well
down on anticipated levels as business developments in the Nagambie region were put on hold.
Diamond drilling of the RAD002 hole at the Racecourse Prospect was delayed by a total of eight weeks because the
drilling contractor had manning issues resulting from the strict virus testing protocols required and the closure of the
border with Tasmania, the home State for several of his employees. A follow up IP geophysical survey at Racecourse
West had to be deferred as the preferred IP contractor is based in Adelaide and the South Australian border was, and
remains, closed to Victoria.
Likely Developments
During the 2021 financial year, Nagambie Resources is planning to:
1. Complete RAD002 into the Racecourse sulphide-gold prospect and drill NWD001, the first hole into the
Nagambie Mine West sulphide-gold prospect;
2. Carry out lithogeochemical sampling of RAD002 and NWD001 to assist in vectoring towards and/or prioritising
structures and follow up drilling;
3. Carry out a ground IP geophysical survey to the west of the Nagambie Bypass Freeway to assist in targeting
a follow up Racecourse prospect hole to the west of RAD002;
4. Secure a PASS Management contract for some of the estimated 5.4 million tonnes of PASS rock to be
excavated from the tunnels for the North East Link;
Nagambie Resources Limited | 2020 Annual Report | Page 10
Directors’ Report
5. Secure additional joint ventures over more of Nagambie Resources’ 3,600 sq km of contiguous tenements in
the Waranga Domain. Mawson is likely to be the joint venture participant as it has right of first refusal to take
up or match all gold exploration proposals under consideration by NRL; and
6. Carry out bacterial speciation testwork to establish the best naturally occurring bacteria to use to recover
residual gold in the Nagambie Mine 1989-1997 heap leach pad and to establish potential gold recovery. In
the USA, the use of naturally occurring bacteria in solution has been shown to get significant recovery of such
residual gold.
Financial Matters
The consolidated loss for the group for the year amounted to $876,491 after tax. This compared to a loss after tax for
the year ended 30 June 2019 of $1,485,048. The decrease of $608,557 in the loss for the year arises after a decrease
in revenue of $22,731 a decrease in expenditures of $183,050 and receipt of an R&D tax incentive of $727,624. After
an increase in the value of the shares in Mawson Gold Limited is taken into account as Other comprehensive income
there is a Total comprehensive income of $360,206 for the year.
A total of $3,163,800 before costs was raised in share capital by the company during the 2020 financial year. This
included $603,800 from issue of 11,392,468 shares at 5.3 cents from a share purchase plan, $60,000 from issue of
1,132,076 shares at 5.3 cents in a placement and $2,500,000 from the issue of 50,000,000 shares at 5.0 cents to
Mawson Gold Limited. There was also $200,000 raised from the issue of 4,000,000 convertible notes at 5 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 (2019:
Nil).
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.
Michael Trumbull (director)
Alfonso Grillo (director)
Gary Davison (director)
James Earle (chief executive officer)
4,000,000
2,000,000
2,000,000
2,000,000
Shares under option or issued on exercise of options
No options were exercised during the year.
Nagambie Resources Limited | 2020 Annual Report | Page 11
Directors’ Report
Options on issue as at reporting date
Number of options
11,300,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
14,900,000
72,450,000
Grant date
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
29/11/2019
Vesting date
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
29/11/2019
Expiry date
28/11/2020
4/7/2021
30/11/2021
24/11/2022
20/12/2022
22/8/2023
23/11/2023
27/2/2024
29/11/2024
Exercise price
10 cents
25.5 cents
25.0 cents
10 cents
14.1 cents
12.6 cents
10.8 cents
12.0 cents
10.0 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 5 audit and compliance committee meetings were held.
Directors
Michael Trumbull
Alfonso Grillo
Gary Davison
Board of directors
Audit and compliance committee
Held
Attended
Held
Attended
7
7
7
7
7
6
-
5
5
-
5
5
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
21,168,492
1,937,973
586,038
Share options
Number
20,000,000
8,000,000
4,000,000
Nagambie Resources Limited | 2020 Annual Report | Page 12
Remuneration Report
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:
Michael Trumbull
Alfonso Grillo
Gary Davison
James Earle
Remuneration Policy
Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
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 2020, the board resolved that the executive chairman’s remuneration be set at $150,000 (2019: $150,000) per
annum excluding superannuation and share based payments. For non-executive directors, remuneration was set at
$42,000 (2019: $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 Group earnings and movements in shareholder wealth for
the five years to June 2020.
Revenue
Net loss before tax
Net loss after tax
30 June
2020
30 June
2019
30 June
2018
30 June
2017
$306,173
$1,604,115
$876,491
$328,904
$1,764,434
$1,485,048
$762,163
$1,187,261
$1,187,261
$669,836
$1,621,972
$1,621,972
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)
4.4
5.2
Nil
(0.19)
(0.19)
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)
30 June
2016
$453,058
$619,449
$619,449
3.4
16.5
Nil
(0.21)
(0.21)
Nagambie Resources Limited | 2020 Annual Report | Page 13
Director and executive remuneration
The directors, executives and consultants detailed below received the following amounts as compensation for their
services during the year:
Remuneration Report
Short
Term
Benefits
Salary
and fees
$
Post
Employment
Benefits
Superannuation
$
164,250
164,250
45,990
45,990
45,990
5,749
-
45,990
200,000
172,000
456,230
433,979
-
-
-
-
-
-
-
-
19,000
14,250
19,000
14,250
Share
Based
Payment
Performance
Related
Benefits
Other
LongTerm
Benefits
Total
Options
(non-cash)
$
113,916
155,928
56,958
77,964
56,958
-
-
77,964
56,958
155,928
284,790
467,784
$
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
$
278,166
320,178
102,948
123,954
102,948
5,749
-
123,954
275,958
342,178
760,020
916,013
Alfonso Grillo (2)
Directors
Michael Trumbull (1) 2020
2019
2020
2019
2020
2019
2020
2019
Gary Davison (3)
Kevin Perrin (4)
Chief Executive Officer
James Earle (5)
2020
2019
Total for Year
Total for Year
2020
2019
Apart from the contracts disclosed at (1) and (4) below there were no other contracts with management or directors
in place during the 2020 and the 2019 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 (2019: $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 2020 financial year, fees of $164,250 (2019: $164,250) were paid to Cypron Pty Ltd, an entity
controlled by Michael Trumbull, for his services as a director of the company. At 30 June 2020, there was
an amount of $90,337 (2019: Nil) owing to Cypron Pty Ltd.
During the 2020 financial year, fees of $45,990 (2019: $45,990) 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
2020 financial year the company also paid fees of $99,802 (2019: $44,438) to GrilloHiggins Lawyers for
secretarial and legal services provided by Alfonso Grillo and other GrilloHiggins personnel.
At 30 June 2020, there was an amount of $3,437 (2019: $3,770) owing to GrilloHiggins.
Gary Davison was appointed a director on 15 May 2019. During the 2020 financial year he was paid $45,990
(2019: $5,749) 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 2020, there was no amount (2019: $5,749) owing to Gary Davison.
Kevin Perrin retired as a director on 30 June 2019.
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 $200,000 per annum plus
superannuation. He is also entitled to a cash incentive bonus subject to performance hurdles. For the 2020
financial year there was no cash bonus paid (2019: $22,000). 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 | 2020 Annual Report | Page 14
Remuneration Report
Shareholdings of key management personnel
Balance
1 July 2019
Granted as
remuneration
On exercise
of options
Net change
(1)
Balance
30 June 2020
Michael Trumbull
Alfonso Grillo
Gary Davison
James Earle
Total
20,602,454
1,371,935
-
975,268
22,949,657
-
-
-
-
-
-
-
-
-
-
566,038
566,038
586,038
283,019
2,001,133
21,168,492
1,937,973
586,038
1,258,287
24,950,790
(1) Net change refers to on and off market acquisitions/disposals.
Executive Options
The Group 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 72,450,000 share
options on issue under this plan, of which 43,000,000 are held by directors and key management personnel and
29,450,000 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
11,300,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
14,900,000
72,450,000
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
29/11/2019
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
29/11/2019
16/11/2020
4/7/2021
30/11/2021
24/11/2022
20/12/2022
22/8/2023
23/11/2023
27/2/2024
29/11/2024
10 cents
25.5 cents
25 cents
10 cents
14.1 cents
12.6 cents
10.8 cents
12.0 cents
10.0 cents
Value of options issued to directors and executives
The following grants of share-based payment compensation to directors and executives relate to the 2020 financial
year:
Name
Michael Trumbull
Alfonso Grillo
Gary Davison
James Earle
Option series
issued 29/11/2019
issued 29/11/2019
issued 29/11/2019
issued 29/11/2019
Number
granted
4,000,000
2,000,000
2,000,000
2,000,000
Number
vested
4,000,000
2,000,000
2,000,000
2,000,000
% of
grant
vested
100%
100%
100%
100%
% of
grant
forfeited
0%
0%
0%
0%
% of compensation
for year consisting
of options
40.9%
55.3%
55.3%
34.2%
Nagambie Resources Limited | 2020 Annual Report | Page 15
Remuneration Report
The following table summarises the value of options granted, exercised or lapsed during the 2020 financial year to
directors and executives:
Name
Michael Trumbull
Alfonso Grillo
Gary Davison
James Earle
Value of options granted
at the grant date (i)
$
113,916
56,958
56,958
56,958
Value of options exercised
at the exercise date (ii)
$
Nil
Nil
Nil
Nil
Value of options lapsed
at the date of lapse (iii)
$
$56,000
$14,000
Nil
Nil
(i)
(ii)
(iii)
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 2.85 cents per option.
No options were exercised during the reporting period.
5,000,000 directors options and no executives options lapsed during the reporting period.
Option holdings of key management personnel
Balance
1 July
2019
Granted as
remuneration
Options
Exercised
Options
Lapsed
Balance
30 June
2020
Vested and
exercisable at
30 June 2020
Michael Trumbull 20,000,000
7,000,000
Alfonso Grillo
2,000,000
Gary Davison
9,000,000
James Earle
38,000,000
Total
4,000,000
2,000,000
2,000,000
2,000,000
10,000,000
-
-
-
-
-
(4,000,000) 20,000,000
8,000,000
(1,000,000)
4,000,000
-
- 11,000,000
(5,000,000) 43,000,000
20,000,000
8,000,000
4,000,000
11,000,000
43,000,000
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 27 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
28 September 2020
Nagambie Resources Limited | 2020 Annual Report | Page 16
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF NAGAMBIE RESOURCES
LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Melbourne, 28 September 2020
Nagambie Resources Limited | 2020 Annual Report | Page 17
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 2020
Revenue
4
306,173
328,904
Consolidated
Note
2020
$
2019
$
Corporate expenses
Cost of sales and rehabilitation
Depreciation
Employee benefits expense
Impairment of assets
Interest expense
Loss before income tax
Income tax benefit
(575,860)
(628,971)
(10,287)
(199,923)
(205,982)
(122,195)
(547,428)
(755,448)
(107,303)
-
(463,428)
(386,801)
4
10
(1,604,115)
(1,764,434)
5
727,624
279,386
Loss for the year after tax
(876,491)
(1,485,048)
Items that will not be re-classified to profit or loss
Other comprehensive income
1,236,697
-
Total comprehensive income (loss) for the year
360,206
(1,485,048)
Loss per share calculated on Loss for the year after tax
Basic and diluted loss per share in cents
6
(0.19)
(0.35)
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2020 Annual Report | Page 18
Statement of Financial Position
as at 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Equity investments at fair value
Total current assets
Non-current assets
Security deposits
Equity investments at fair value
Property, plant and equipment
Right of use assets
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Revenue in advance
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Options reserve
Asset revaluation reserve
Accumulated losses
Total equity
Statement of Financial Position
Note
16(b)
7
8
9
8
11
12
10
13
17
18
17
18
14
15
15
Consolidated
2020
$
2019
$
224,057
75,235
1,977,054
2,276,346
709,213
1,977,055
284,013
743,579
12,149,498
15,863,358
224,988
68,477
-
293,465
635,479
-
817,051
-
11,768,062
13,220,592
18,139,704
13,514,057
246,725
300,000
279,349
32,303
41,188
899,565
4,234,000
287,092
18,927
4,540,019
341,553
1,060,622
-
15,523
-
1,417,698
3,330,489
-
10,845
3,341,334
5,439,584
4,759,032
12,700,120
8,755,025
27,284,103
2,105,677
1,236,697
(17,926,357)
12,700,120
24,123,551
1,828,340
-
(17,196,866)
8,755,025
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2020 Annual Report | Page 19
Statement of Changes In Equity
Statement of Changes in Equity
for the financial year ended 30 June 2020
Issued
capital
$
Options
reserve
$
Note
Consolidated
Asset
revaluation
reserve
$
Accumulated
losses
$
Total
$
Balance at 30 June 2018
22,091,390 1,214,896
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their
capacity as owners
-
-
-
Shares issued during the year
14(b)
2,025,500
Share issue expenses
(20,749)
-
-
-
-
-
Recognition of share based payments
Transfer on lapse of options
-
-
662,694
(21,840)
Transfer on exercise of options
27,410
(27,410)
Balance at 30 June 2019
24,123,551 1,828,340
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their
capacity as owners
-
-
-
Shares issued during the year
14(b)
3,163,800
Share issue expenses
(3,248)
-
-
-
-
-
Recognition of share based payments
Transfer on lapse of options
-
-
424,337
(147,000)
-
-
-
-
-
-
-
-
-
-
-
(15,733,658)
7,572,628
(1,485,048)
(1,485,048)
-
-
(1,485,048)
(1,485,048)
-
-
-
2,025,500
(20,749)
662,694
21,840
-
-
-
(17,196,866)
8,755,025
(876,491)
(876,491)
1,236,697
-
1,236,697
1,236,697
(876,491)
360,206
-
-
-
-
-
-
-
3,163,800
(3,248)
424,337
147,000
-
Balance at 30 June 2020
27,284,103 2,105,677
1,236,697
(17,926,357)
12,700,120
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2020 Annual Report | Page 20
Statement of Cash Flows
for the financial year ended 30 June 2020
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
2020
$
2019
$
327,309
408,149
(779,204)
(955,694)
11,213
16,980
(422,325)
(340,506)
727,624
279,386
Net cash inflows used in operating activities
16(a)
(135,383)
(591,685)
Cash flows from investing activities
Payments for exploration expenditure
(1,235,018)
(2,092,107)
Payments for security bonds
Proceeds from sale of Clonbinane Goldfield assets
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds (repayment) of borrowings
Proceeds from issue of convertible notes
Repayment of lease liabilities
Net cash provided by financing activities
(71,653)
(479)
528,867
-
-
(13,810)
(777,804)
(2,106,396)
660,552
2,004,751
300,000
(133,752)
200,000
700,000
(248,296)
-
912,256
2,570,999
Net increase (decrease) in cash and cash equivalents
(931)
(127,082)
Cash and cash equivalents at the beginning of the financial period
224,988
352,070
Cash and cash equivalents at the end of the financial period
16(b)
224,057
224,988
The accompanying notes form part of these financial statements
Nagambie Resources Limited | 2020 Annual Report | Page 21
Notes to the Financial Statements
Notes to the Financial Statements
for the financial year ended 30 June 2020
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 with the exception of certain
assets measured at fair value. 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.
Changes in accounting policies
Other than the policies described below there have been no changes in accounting policies.
AASB 16 – Leases (“AASB 16”)
The Group has adopted AASB 16 from 1 July 2019. This standard replaces AASB 117 “Leases” and for leases
eliminates the classification of operating leases and finance leases. Except for short-term leases and leases of low
value assets, right of use assets and corresponding lease liabilities are recognised in the statement of financial position.
Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets
(including operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In
the earlier period of the lease, the expense associated with the lease under AASB 16 will be higher when compared to
the lease expense under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation)
results improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For
classification with the statement of cash-flows, the interest portion is disclosed in operating activities and the principal
portion of the lease payments are separately disclosed in the financing activities. For lessor accounting, the standard
does not substantially change how a lessor accounts for leases.
Impact of adoption
As the Group’s only lease expired on 14 October 2019 there was no impact on adoption of this standard as at 1 July
2019. A new lease was signed on 15 October 2019 which has been recorded as a right of use asset / lease liability on
15 October 2019.
Hire purchase assets were transferred from plant and equipment to right on use asset on 1 July 2019. This did not
result in any financial impact to the Group.
The following significant accounting policies have been adopted in the preparation and presentation of the financial
statements:
(a)
Going concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation and settlement of liabilities in the normal course of business.
(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 Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity.
Nagambie Resources Limited | 2020 Annual Report | Page 22
Notes to the Financial Statements
2. Significant accounting policies (continued)
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:
the rights to tenure of the area of interest are current; and
(8)
(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
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.
Nagambie Resources Limited | 2020 Annual Report | Page 23
Notes to the Financial Statements
2. Significant accounting policies (continued)
(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
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.
Nagambie Resources Limited | 2020 Annual Report | Page 24
Notes to the Financial Statements
2. Significant accounting policies (continued)
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)
Right of use assets
A right of use asset is recognised at the commencement date of a lease. The right of use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable; any lease payment
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling
and removing the underlying asset and restoring the site or asset.
Right of use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. When the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right of use assets
are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with a term of 12 months or leases of low-value assets. Lease payments on these assets are expensed
to profit or loss as incurred.
(j)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payment to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease
payments comprise of fixed payments, less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of
a purchase option when the exercise of the option is reasonably certain to occur and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in
which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following; future lease payments arising from a change in an index or a
rate used, residual guarantees, lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the following right-of-use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
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.
(k) 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.
Nagambie Resources Limited | 2020 Annual Report | Page 25
Notes to the Financial Statements
2. Significant accounting policies (continued)
(l)
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.
(m) 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
revenue is recognised 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.
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. When rental
income is received in advance at the end of a period it is recognised as income in the following period to which
it relates.
Government Grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
(n) 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.
(o) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
8.
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.
(p)
(q)
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.
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.
Nagambie Resources Limited | 2020 Annual Report | Page 26
Notes to the Financial Statements
2. Significant accounting policies (continued)
(r)
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.
(s)
(t)
(u)
(v)
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.
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.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part
of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification is
determined based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the company has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset, it’s carrying value is written off
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
company intends to hold and has irrevocably elected to classify them as such upon initial recognition. There are
two types of FVOCI accounting under AASB 9 (Equity FVOCI and Debt FVOCI)
Impairment of financial assets
The company recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the company’s assessment at the end of each reporting period as to whether the
financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss recognised
is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of
the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance
is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other
cases, the loss allowance reduces the asset’s carrying value with a corresponding expense through profit or
loss.
(w) 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.
Nagambie Resources Limited | 2020 Annual Report | Page 27
Notes to the Financial Statements
2. Significant accounting policies (continued)
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.
(x)
Fair value measurement hierarchy
The company is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted
prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability.
Considerable judgement is required to determine what is significant to fair value and therefore which category
the asset or liability is placed in can be subjective.
(y)
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 29.
Nagambie Resources Limited | 2020 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,
Standard
Mandatory date for
annual reporting periods
beginning on or after
Reporting period
standard adopted by
the company
The revised Conceptual Framework for Financial Reporting
1 January 2020
1 July 2020
AASB 2018-6 Amendments to Australian Accounting
Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting
Standards – Definition of Material
AASB 2020-1 Amendments to Australian Accounting
Standards – Classification of liabilities as Current or Non-
Current
1 January 2020
1 July 2020
1 January 2020
1 July 2020
1 January 2023
1 July 2023
4. Revenue and expenses
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
Government cash flow boost
Interest
Sundry income
Total revenue
(b) Expenses
Employee benefits expense
Employee benefits
Share based payments expense
Superannuation expense
Consolidated
2020
$
2019
$
190,542
44,851
50,730
11,213
8,837
306,173
95,785
424,337
27,306
547,428
194,695
102,601
-
16,980
14,628
328,904
60,595
662,694
32,159
755,448
Nagambie Resources Limited | 2020 Annual Report | Page 29
5.
Income tax
(a)
Income tax expense
Loss from operations
Notes to the Financial Statements
(1,604,115)
(1,764,434)
Prima facie tax benefit calculated at 30% (2019: 30%)
481,235
529,330
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
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.
6. Loss per share
5,201
(127,301)
1,727
(198,808)
(359,135)
(332,249)
727,624
727,624
279,386
279,836
5,180,203
4,892,103
Consolidated
2020
$
2019
$
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
876,491
1,485,048
Weighted average number of ordinary shares used in the calculation of basic and
diluted earnings per share
458,442,320
428,548,060
Basic and diluted loss per share in cents
0.19
0.35
As discussed in Note 22, 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. Equity investments at fair value
Current assets
Shares in Mawson Gold Limited
Non-current assets
Shares in Mawson Gold Limited
16,901
58,334
75,235
4,039
64,438
68,477
1,977,054
1,977,055
-
-
The shares shown above as current assets are those which are available for sale within the next 12 months. Those
shown as non-current assets are subject to escrow periods which expire beyond that time.
The difference between fair value at balance date and the cost at the date of the transaction for equity investments is
$1,236,697. This amount is reflected in an Asset revaluation reserve and shown at Note 15.
Nagambie Resources Limited | 2020 Annual Report | Page 30
Notes to the Financial Statements
8. Equity investments at fair value (continued)
Financial assets at fair value through other comprehensive income relate to Mawson Gold Limited which are ordinary
shares in a company listed on the Toronto Stock Exchange. These have been valued at the quoted prices at accordance
with AASB 13, using Level 1 of the fair value hierarchy - quoted prices (unadjusted) in active markets for identical
assets or liabilities
AASB 13 'Fair Value Measurement' requires disclosure of fair value measurements by level of the fair value
hierarchy, as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly;
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
9. Security deposits
Non-current assets
Security deposits - environmental bonds (i)
Deposit on land
Total other assets
(i) Security deposits – environmental bonds
559,213
150,000
709,213
585,479
50,000
635,479
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.
10. Exploration and evaluation assets
Balance at beginning of the year
add Exploration costs capitalised for the year
less Disposal of Clonbinane Goldfield tenements
less Impairment charge
Balance at end of the year
Consolidated
2020
$
11,768,062
1,235,018
(746,279)
(107,303)
12,149,498
2019
$
9,675,955
2,092,107
-
-
11,768,062
During the financial year the group reassessed the recoverable value of all tenement areas to which exploration costs
have been capitalised and an amount of $72,888 was deemed applicable as an impairment charge. This matter is
discussed further in ‘Critical accounting estimates and judgements’ at Note 2(s).
On 24 March 2020 the group announced completion of the sale of the subsidiary Clonbinane Goldfield Pty Ltd to
Mawson Gold Limited. That sale resulted in an impairment charge of $34,415 arising on the disposal tenements which
were owned by the subsidiary company.
Nagambie Resources Limited | 2020 Annual Report | Page 31
11. Property, plant and equipment
Gross carrying amount
Balance at 1 July 2018
Additions
Balance at 1 July 2019
Transfer - right of use asset
Balance at 30 June 2020
Accumulated depreciation
Balance at 1 July 2018
Depreciation expense
Balance at 1 July 2019
Depreciation expense
Transfer - right of use asset
Balance at 30 June 2020
Net book value
As at 30 June 2019
As at 30 June 2020
12. Right of use assets
Gross carrying amount
Balance at 1 July 2019
Additions
Transfer - right of use asset
Balance at 30 June 2020
Accumulated depreciation
Balance at 1 July 2019
Depreciation expense
Transfer - right of use asset
Balance at 30 June 2020
Net book value
As at 30 June 2019
As at 30 June 2020
Notes to the Financial Statements
Land and
buildings
$
Plant and
equipment
$
Consolidated
Computer
equipment
$
Motor
vehicles
$
Total
$
45,063
-
45,063
-
45,063
986,737
13,810
1,000,547
(609,674)
390,873
-
-
-
-
-
-
(188,940)
(103,688)
(292,628)
(28,169)
161,843
(158,954)
25,951
-
25,951
-
25,951
(16,179)
(4,233)
(20,412)
(2,166)
-
(22,578)
195,143
-
195,143
(88,932)
106,211
(122,339)
(14,274)
(136,613)
(1,220)
35,280
(102,553)
1,252,894
13,810
1,266,704
(698,606)
568,098
(327,458)
(122,195)
(449,653)
(31,555)
197,123
(284,085)
45,063
45,063
707,919
231,919
5,539
3,373
58,530
3,658
817,051
284,013
Consolidated
Land and
buildings
$
Plant and
equipment
$
Motor
vehicles
$
Total
$
-
416,523
-
416,523
-
-
609,674
609,674
-
-
88,932
88,932
-
416,523
698,606
1,115,129
-
(98,650)
-
(98,650)
-
(62,327)
(161,843)
(224,170)
-
(13,450)
(35,280)
(48,730)
-
(174,427)
(197,123)
(371,550)
-
317,873
-
385,504
-
40,202
-
743,579
Land and buildings consists of the group’s rental lease for farm land in Nagambie (remaining term is 29 months, no
option to extend is included in valuation). For calculation of the value the group has used a discount rate based on
weighted average incremental borrowing rate of 10%.
Plant and equipment consists of the group’s rental lease for equipment. For calculation of the value the group has
used a discount rate based on weighted average incremental borrowing rate of 10%.
Motor vehicles consists of the group’s rental leases for motor vehicles. For calculation of the value the group has used
a discount rate based on weighted average incremental borrowing rate of 10%.
13. Trade and other payables
Trade payables
Other payables
Consolidated
2020
$
96,149
150,576
246,725
2019
$
196,157
145,396
341,553
Nagambie Resources Limited | 2020 Annual Report | Page 32
14.
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
November 2019 issue price 5.3 cents
March 2020 issue price of 5.0 cents
October 2018 issue price 6.2 cents
Share purchase plan
November 2019 issue price 5.3 cents
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
2020
$
27,284,103
2019
$
24,123,551
Year ended
30 June 2020
Year ended
30 June 2019
Number of
shares issued
Issued
capital
$
437,407,802
24,123,551
Number of
shares
issued
407,085,912
Issued
capital
$
22,091,390
1,132,076
50,000,000
-
60,000
2,500,000
-
-
-
9,677,417
-
-
600,000
11,392,468
-
-
-
-
499,932,346
603,800
-
-
-
(3,248)
27,284,103
-
16,814,473
3,830,000
-
-
437,407,802
-
1,042,500
383,000
27,410
(20,749)
24,123,551
(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 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 2020 there were 29,450,000 (2019 19,650,000) 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 29,450,000 were vested by 30 June 2020 (2019:
19,650,000).
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 2020 there were 43,000,000 options over ordinary shares issued to directors (2019:48,000,000).
Of these options 43,000,000 were vested by 30 June 2020 (2019: 48,000,000).
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.
Shares issued to Mawson Gold Limited
In March 2020 50,000,000 shares were issued to Mawson Gold Limited for $2,500,000. This was part of a strategic
alliance whereby Nagambie Resources received 8,500,000 shares in Mawson Gold Limited. Further details are
included in the Directors’ Report.
(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 2019 Financial Statements.
Nagambie Resources Limited | 2020 Annual Report | Page 33
15. Reserves
Options reserve
Balance at beginning of the year
Recognition of share based payments
Value of options exercised
Value of options lapsed
Balance at end of the year
Notes to the Financial Statements
Consolidated
2020
$
2019
$
1,828,340
424,337
-
(147,000)
2,105,677
1,214,896
662,694
(27,410)
(21,840)
1,828,340
The options reserve represents the fair value of unvested and vested ordinary shares under options granted to
directors, consultants and employees.
Asset revaluation reserve
Balance at beginning of the year
Increase on Equity investments at fair value
Balance at end of the year
16. Notes to the statement of cash flows
-
1,236,697
1,236,697
-
-
-
(a) Reconciliation of loss after tax to net cash flows from operations
Net loss for the period
(876,491)
(1,485,048)
Depreciation of property, plant and equipment
Share based payment expense
Non-cash interest on lease liabilities
Impairment of assets
Changes in assets and liabilities
(Increase)/Decrease in receivables
Increase/(Decrease) in creditors
Increase/(Decrease) in employee provisions
Net cash from (used in) operating activities
(b) Reconciliation of cash
Cash and cash equivalents comprise:
Cash on hand and at call
(c) Non-cash investing activity
Equity investments acquired by issue of shares
Equity investments acquired by sale of tenements
17. Borrowings
Current
Unsecured convertible notes (i)
Loan – Shareholder (ii)
Non-current
Unsecured convertible notes (i)
Total borrowings
205,982
424,337
41,104
107,303
(8,840)
(53,640)
24,862
(135,383)
122,195
662,694
-
-
96,225
23,876
(11,627)
(591,685)
224,057
224,057
224,988
224,988
2,500,000
217,412
2,717,412
-
-
-
-
300,000
300,000
934,000
-
934,000
4,234,000
4,234,000
3,100,000
3,100,000
4,534,000
4,034,000
Nagambie Resources Limited | 2020 Annual Report | Page 34
Notes to the Financial Statements
17. Borrowings (continued)
(i)
The Company has four series of unsecured Convertible Notes outstanding for a total of $4,234,000.
Series 5: 3,333,333 Notes issued at 18 cents on 19 September 2016 for a total of $600,000
Series 6: 18,000,000 Notes issued at 10 cents on 17 November 2017 for a total of $1,800,000
Series 7: 7,000,000 Notes issued at 10 cents on 27 February 2019 for a total of $700,000
Series 8: 22,680,000 Notes issued at 5 cents on 19 January 2020 for a total of $1,134,000
Each series of Convertible Note has the following terms:
Interest is payable at 10% per annum every six months after the issue date;
Convertible on a 1 for 1 basis into ordinary shares in the company at any time prior to the
maturity date at the option of the note holder;
Redeemable for cash in full after 5 years, if not converted;
Unsecured but rank ahead of shareholders; and
Protected for reorganisation events such as bonus issues and share consolidations.
The Company has a short term unsecured loan from a shareholder. The loan is repayable on 31
October 2020 and bears interest at a rate of 10% per annum.
(ii)
18. Provisions
Current
Employee benefits
Non-current
Employee benefits
Total provisions
19. Commitments
Consolidated
2020
$
2019
$
32,303
15,523
18,927
10,845
51,230
26,368
(a) Planned exploration expenditure
The amounts detailed below are the minimum expenditure required to maintain ownership of the current
tenements held. An obligation may be cancelled if a tenement is surrendered.
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
1,038,640
2,038,261
-
3,076,901
1,122,657
3,120,858
-
4,243,515
(b) Capital expenditure commitments
There were no capital expenditure commitments at 30 June 2020 or 30 June 2019 except for the one noted at
19(d) below.
(c) Operating lease commitments
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
-
-
-
-
139,071
371,167
-
510,238
(d) Property acquisition with deferred settlement
As noted in the 2019 Annual Financial Report the company is in the process of purchasing a farming property in
the Nagambie area. The balance due on or before 15 October 2022 will be $1,513,488. The land as an asset and
the balance due at settlement as a liability have been brought to account as a Right of use – Land and buildings
and the liability as a lease liability in respect of the rental prior to acquisition.
20. Contingent Liabilities
Apart from the matter discussed in Note 9 the group has no contingent liability as at 30 June 2020.
Nagambie Resources Limited | 2020 Annual Report | Page 35
Notes to the Financial Statements
21. Financial instruments
The board of directors is responsible for monitoring 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 exposures of the group are liquidity risk and market 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
Cash and cash equivalents
Receivables
Equity investments at fair value
Financial liabilities
Trade and other payables
Borrowings
Consolidated
2020
$
224,057
75,235
3,954,108
2019
$
224,988
68,477
-
246,725
4,534,000
341,553
4,391,111
(b) Liquidity risk
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
Interest
rate
%
Less than 1
month
$
1-3 months
$
3+ months
to 1 year
$
1-5 years
$
5+ years
$
2020
Trade and other payables
Lease liabilities
Borrowings
2019
Trade and other payables
Lease liabilities
Borrowings
10.0
10.0
10.0
10.0
98,451
24,010
-
122,461
202,436
11,283
-
213,719
126,486
48,020
-
174,506
72,565
22,565
65,000
160,130
21,698
207,319
300,000
529,017
66,552
101,543
1,272,400
1,440,495
-
287,092
4,234,000
4,521,092
-
237,512
3,920,000
4,157,512
-
-
-
-
Nagambie Resources Limited | 2020 Annual Report | Page 36
Notes to the Financial Statements
21. Financial instruments (continued)
(c) Market risk
The group is exposed to price risk in relation to equity investments which it holds in Mawson Gold Limited. These
shares are listed on the Toronto Stock Exchange and the price will fluctuate. The following table shows the impact
of a 50% change in the price of those listed securities.
Average price increase
Effect on
profit
before tax
Effect on
equity
Average price decrease
%
change
Effect on
profit
before tax
Effect on
equity
Nil
$1,977,054
-50%
Nil
($1,977,054
)
%
change
+50%
Shares in Mawson
Gold Limited
22. 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 72,450,000 (2019: 67,650,000). Of these 29,450,000 (2019:
28,650,000) have been issued to executives and employees and the balance of 43,000,000 (2019: 39,000,000)
have been issued to directors and key management personnel.
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 2020
30 June 2019
Number of
options
67,650,000
14,900,000
-
(10,100,000)
72,450,000
Exercise price
10 cents
10 cents
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
Options on issue at the end of the reporting period
Number of
options
11,300,000
2,000,000
12,500,000
13,750,000
1,000,000
4,500,000
10,500,000
2,000,000
14,900,000
74,250,000
Grant date
Vesting date
Expiry date
Exercise price
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
29/11/2019
16/11/2015
4/7/2016
30/11/2016
24/11/2017
20/12/2017
22/8/2018
23/11/2018
27/2/2019
29/11/2019
16/11/2020
4/7/2021
30/11/2021
24/11/2022
20/12/2022
22/8/2023
23/11/2023
27/2/2024
29/11/2024
10 cents
25.5 cents
25 cents
10 cents
14.1 cents
12.6 cents
10.8 cents
12.0 cents
10.0 cents
Fair value at
grant date
1.00 cents
3.40 cents
3.44 cents
2.80 cents
2.80 cents
3.90 cents
3.90 cents
3.90 cents
2.85 cents
(i)
(ii)
Exercised during the financial year
There were no 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
Nagambie Resources Limited | 2020 Annual Report | Page 37
Notes to the Financial Statements
22. Share-based payments (continued)
The weighted average fair value of the share options granted during the financial year is 3.90 cents (2019: 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
29/11/2019
14,900,000
5.5 cents
10.0 cents
79.5%
23. Key Management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
24. Subsidiaries
Name of entity
Parent entity
Nagambie Resources Limited
Subsidiaries
Nagambie Developments Pty Ltd
property owning entity
Nagambie Landfill Pty Ltd
no business activity conducted during the year
Clonbinane Goldfield Pty Ltd
development of gold and associated minerals
25. Related party transactions
Option life
Dividend yield
Risk free interest rate
Vesting date
5 years
Nil
0.90%
29/11/2019
Consolidated
2020
$
456,230
19,000
-
-
284,700
760,020
2019
$
433,979
14,250
-
-
467,784
916,013
Ownership interest
2019
2020
%
%
-
100
100
Nil
-
100
100
100
Country of incorporation
Australia
Australia
Australia
Australia
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.
26. 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
$164,752 (2019 $166,345) of its rental income described in note 4 from the Department of Defence. There was no
other major reliance on any other customer.
Nagambie Resources Limited | 2020 Annual Report | Page 38
Notes to the Financial Statements
Consolidated
2020
$
2019
$
26,900
-
26,900
25,962
-
25,962
27. 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
28. 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.
29. Parent entity disclosures
The following information are the disclosures pertaining to the parent entity:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Options reserve
Accumulated losses
Asset revaluation reserve
Total equity
Loss
Total comprehensive income
Parent
2020
$
2019
$
2,276,346
292,068
15,802,280
13,289,365
18,078,626
13,581,433
877,304
328,615
4,521,092
4,391,111
5,398,396
4,719,726
27,254,003
24,123,551
2,105,677
1,828,340
(17,916,147)
(17,090,184)
1,236,697
-
12,680,230
8,861,707
(867,067)
(1,486,574)
369,630
(1,486,574)
There were no contingent liabilities and commitments of the parent entity not otherwise disclosed in the consolidated
financial statements
Nagambie Resources Limited | 2020 Annual Report | Page 39
Directors’ Declaration
Directors’ Declaration
In the Directors opinion:
(a)
(b)
(c)
The financial statements and notes are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for
the year ended on that date; with Accounting Standards, the Corporations Regulations 2001 and other
mandatory, professional reporting requirements; and
(ii) Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory,
professional reporting requirements.
There are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable; and
At the date of this declaration there are reasonable grounds to believe that the members of the group are able
to meet their obligations as and when they become due and payable.
Note 2 confirms that the financial statements also comply with International Reporting Standards as issued by the
International Accounting Standards Board.
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
28 September 2020
Nagambie Resources Limited | 2020 Annual Report | Page 40
Nagambie Resources Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Qualified Opinion
We have audited the financial report of Nagambie Resources Limited (the Company) and
its subsidiaries (the Group), which comprises the consolidated statement of financial
position as at 30 June 2020, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, except for the matters described below in the Basis for Qualified Opinion,
the accompanying financial report of the Group, is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Qualified Opinion
Fair valuation of the debt component of convertible notes upon initial recognition
As disclosed in Note 17 to the financial statements in the current and prior year, the
Company has raised $3,634,000 from investors through the issue of Series 6, Series 7
and Series 8 unsecured convertible notes. All tranches of unsecured convertible notes
have a coupon interest rate of 10% per annum and include an equity conversion feature,
entitling the noteholder to convert the principal value of each note into ordinary shares at
10 cents per share for Series 6 and Series 7, and 5 cents per share for Series 8. AASB
132 Financial Instruments: Presentation requires that the debt component of such
convertible notes, with fixed conversion formulae, be valued at fair value upon initial
recognition (the date upon which the Company and the convertible noteholder became
party to contract), with any difference between the face value of those notes and the fair
value of the debt component recognised in equity.
The directors of the Company believe there is no reliable basis for measuring at fair value
the debt component at initial recognition, principally upon the basis that there is no readily
accessible market for unsecured debt with no equity conversion rights for exploration
enterprises with similar market capitalisation levels either in Australia or any other foreign
jurisdiction, upon which it could benchmark a reliable discount rate to fair value the debt.
Upon that basis, they have assessed the fair value of the debt component to equal the
face value of the convertible notes for both tranches of convertible notes.
Nagambie Resources Limited | 2020 Annual Report | Page 41
Notwithstanding this, we consider that a market value for the debt component of such convertible notes can
be imputed from other like-for-like Australian-based listed exploration companies, principally due to the
growth in popularity of convertible notes as a mechanism for obtaining finance in recent years. Our view is
that the depth of the active market has become sufficient for our basis of opinion around the time that the
Series 6 notes were issued. Based upon our analysis, we believe that 25% would be an appropriate
discount rate for Series 6 and Series 7 and a 20% discount rate for Series 8 to apply in calculating the fair
value of the debt component of convertible notes at initial recognition.
Based upon this key assumption, had such a discount been applied against the three tranches of
convertible notes which were issued during the current and prior years, the following adjustments would be
required to these financial statements as at 30 June 2020:
Series 6
— Convertible notes held at $1,800,000 in the statement of financial position would be restated to
$1,368,929;
— An equity reserve would be created, worth $691,837, representing the difference between the face
value and fair value of the Convertible Note at initial recognition; and
— An additional interest charge of $260,766, representing the proportionate unwind of the discount
applied to the convertible notes from initial recognition through to 30 June 2020.
Series 7
— Convertible notes held at $700,000 in the statement of financial position would be restated to $503,615;
— An equity reserve would be created, worth $269,048, representing the difference between the face
value and fair value of the Convertible Note at initial recognition; and
— An additional interest charge of $72,663, representing the proportionate unwind of the discount applied
to the convertible notes from initial recognition through to 30 June 2020
Series 8
— Convertible notes held at $1,134,000 in the statement of financial position would be restated to
$811,049;
— An equity reserve would be created, worth $322,951, representing the difference between the face
value and fair value of the Convertible Note at initial recognition; and
— An additional interest charge of $67,587, representing the proportionate unwind of the discount applied
to the convertible notes from initial recognition through to 30 June 2020.
Other matters relevant to the Basis for Qualified Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
Nagambie Resources Limited | 2020 Annual Report | Page 42
We confirm that the independence declaration required by the Corporations Act 2001, has been
provided on the date of this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion sections, we
have determined the matters described below to be the key audit matters to be communicated in our report.
CARRYING VALUE OF EXPLORATION AND EVALUATION ASSETS
Area of focus
Refer also to notes 2 and 10
The Group has incurred exploration and
evaluation costs for exploration projects in
Victoria over a number of years.
The Group holds the right to explore and
evaluate those projects through tenement
and licence agreements.
There is a risk that the Group may lose its
right to further explore and evaluate those
areas of interest and therefore amounts
capitalized to the statement of financial
position from the current and historical
periods be no longer recoverable.
How our audit addressed it
Our audit procedures included:
— Understanding and vouching the underlying
contractual entitlement to explore and evaluate
each area of interest, including an evaluation of
the requirement to renew that tenement at its
expiry;
— Examining project spend per each area of
interest and comparing this spend to the
minimum expenditure requirements set out in
the underlying tenement expenditure plan;
— Examining project spend to each area of interest
to ensure that it is directly attributable to that
area of interest;
— For areas of interest that were disposed of
during the year we have obtained the sale
documentation to verifiy that the disposal has
been accounted for correctly;and
— From an overall perspective, comparing the
market capitalisation of the Group to the net
carrying value of its assets on the statement of
financial position to identify any other additional
indicators of impairment.
We also assessed the adequacy of the Group’s
disclosures in respect of exploration and evaluation
assets in the financial report.
Nagambie Resources Limited | 2020 Annual Report | Page 43
SHARE BASED PAYMENTS
Area of focus
Refer also to notes 2, 15, 22 and the
Remuneration Report
The Group rewards its key management
personnel and employees through
ownership-based incentive scheme through
the granting and issuing of options.
These are share-based payments which
are charged to the profit or loss as they
vest. These options had no performance
hurdles or service conditions attached to
their vesting, hence they vested
immediately upon grant and issue.
How our audit addressed it
Our audit procedures included:
— Determining the grant dates, and evaluating
what were the most appropriate dates based on
the terms and conditions of the share-based
payment arrangements;
— Evaluating the fair values of share-based
payment arrangements by reviewing the
independent experts report;
— Evaluating the vesting of the share-based
payments;
There were significant subjectivities relating
to the accounting for these options in this
financial report, including:
— The determination of the grant date for
the options and their vesting period for
identifying the appropriate share price
used in the formula for calculating the
value of the option;
— For the specific application of the option pricing
model, we assessed the experience of the
external expert used to advise the value of the
arrangement to management. We retested some
of the key assumptions used in the model; and
— We considered that the forecast volatility applied
in the model to be appropriately reasonable and
within industry norms.
We also assessed the adequacy of the Group’s
disclosures in respect of share based payments in
the financial report.
— Determining the volatility rate used in
pricing the options and the selection
and use of the Binomial model in
computing the value of those options;
and
— Reflecting the vested benefit attributed
to key management personnel in
disclosures in the financial report and in
the Remuneration Report.
The Group commissioned the use of an
independent expert during the year to
appraise the fair value of the options which
were granted and issued.
Nagambie Resources Limited | 2020 Annual Report | Page 44
TRANSACTION WITH MAWSON GOLD LIMITED
Area of focus
Refer also to notes 2, 8 and 15
During the year the Group entered a
strageic partnership with Mawson Gold
Limited (“Mawson”).
How our audit addressed it
Our audit procedures included:
— Examining the contractual arrangement between
Mawson and the Group;
Under the terms of the transaction Mawson
acquired a 10% shareholding in the Group.
In consideration the Group received 8.5
million shares in Mawson.
— Verifying that the Group has accounted for the
transaction in accordance with AASB 9 –
Financial Instruments at initial recognition; and
— Assessing the value of the Mawson investment
Acccounting for this transaction in complex
in nature under the requirements of AASB 9
– financial instruments and therefore has
been disclosed as a key audit matter.
as at 30 June 2020 has been valued in
accordance with AASB 13 – Fair Value
Measurement, including the measurement
hierarchy.
We also assessed the adequacy of the Group’s
disclosures in respect of share based payments in
the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information in
the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and
the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Nagambie Resources Limited | 2020 Annual Report | Page 45
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Nagambie Resources Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Melbourne, 28 September 2020
Nagambie Resources Limited | 2020 Annual Report | Page 46
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 was current as at 23 October 2020.
Number of holders of equity securities
Ordinary share capital
499,932,346 fully paid ordinary shares are held by 996 individual shareholders. All the shares carry one
vote per share.
Options
72,450,000 options are held by 17 individual optionholders. Options do not carry a right to vote.
Unsecured convertible notes
51,013,333 unsecured convertible notes are held by 8 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
55
86
110
457
288
996
Total Units
4,197
318,523
963,363
20,437,799
478,208,464
499,932,346
% Issued Share Capital
0.00%
0.06%
0.19%
4.09%
95.65%
100.00%
The number of holders with an unmarketable parcel was 190, holding a total of 677,964 amounting to
0.14% of the Issued Share Capital.
Substantial Shareholders
Fully Paid Ordinary Shareholders
MAWSON GOLD LIMITED
MR RALPH DOUGLAS RUSSELL & MS ANNE-MAREE HYNES
ADARE MANOR PTY LTD
MR GEOFFREY MICHAEL WALCOTT & MRS JULIE ANN WALCOTT
Total
Shares
50,000,000
34,318,434
30,049,522
26,378,905
140,746,861
%
10.00%
6.86%
6.01%
5.28%
28.15%
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
-
-
-
-
17
-
-
-
-
72,450,000
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
-
-
-
-
8
-
-
-
-
51,013,333
Nagambie Resources Limited | 2020 Annual Report | Page 47
Additional ASX Information
Optionholders holding greater than 20% of the unquoted options
Optionholder
Mr Michael W Trumbull
Options held
20,000,000
% held
27.61%
Convertible Noteholders holding more than 20% of the unquoted convertible notes
Noteholder
PPT Nominees Pty Ltd
Notes held
38,163,333
% held
74.81%
Unquoted options over unissued shares
Exercise price
Grant Date
Vesting Date
Expiry Date
$0.10
$0.10
$0.255
$0.25
$0.10
$0.141
$0.126
$0.108
$0.12
$0.10
Number
3,300,000
8,000,000
2,000,000
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
12,500,000
24 November 2017
24 November 2017
24 November 2022
13,750,000
20 December 2017
20 December 2017
20 December 2022
22 August 2018
22 August 2018
22 August 2023
1,000,000
4,500,000
23 November 2018
23 November 2018
23 November 2023
10,500,000
27 February 2019
27 February 2019
27 February 2024
2,000,000
29 November 2019
29 November 2019
29 November 2024
14,900,000
Total
72,450,000
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
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
PRECISION SUPER PTY LTD
CYPRON PTY LTD
1
2 MAWSON GOLD LIMITED
3 ADARE MANOR PTY LTD
4
5 MR GEOFFREY MICHAEL WALCOTT & MRS JULIE ANN WALCOTT
6
7
8 ADMIC SUPER PTY LTD
9 MR RALPH DOUGLAS RUSSELL & MS ANN MAREE HYNES
10 LINCONRIDGE PTY LTD
11 HEPSBOURNE PTY LTD
12 NORMET INDUSTRIES NOMINEE PTY LTD
13 MCCARTHY CATTLE COMPANY PTY LTD
14 MR ROBERT CARL GUERNIER & MRS JEAN GUERNIER
15 EGAN SUPERCO PTY LTD
16 MR GEOFFREY TURNER
17 MR RICHARD MOGOROVICH & MRS GIULIANA MOGOROVICH
18 CYPRON PTY LTD
19 MR SVEN BRENN
20 MR DARRYL SCOTT
Total
Total issued shares
%
Shares
16.19%
80,919,662
10.00%
50,000,000
6.01%
30,049,522
5.84%
29,201,705
4.77%
23,829,211
4.44%
22,190,505
2.87%
14,346,038
2.11%
10,546,481
2.08%
10,418,510
1.87%
9,369,229
1.78%
8,905,143
1.67%
8,333,333
1.10%
5,500,000
0.96%
4,786,816
0.75%
3,726,908
0.74%
3,707,325
0.71%
3,542,756
0.67%
3,342,390
0.60%
3,000,000
0.56%
2,820,001
328,535,535
65.72%
499,932,346 100.00%
Nagambie Resources Limited | 2020 Annual Report | Page 48