NAVARRE MINERALS LIMITED
ABN 66 125 140 105
Annual Report 2020
Navarre Minerals Limited
ABN 66 125 140 105
Corporate Directory
Company
Navarre Minerals Limited
(ABN 66 125 140 105)
and subsidiaries:
Black Range Metals Pty Ltd
(ABN 31 158 123 687)
Loddon Gold Pty Ltd
(ABN 80 640 282 882)
North Central Gold Exploration Pty Ltd
(ABN 59 640 554 516)
Tandarra Gold Pty Ltd
(ABN 63 640 554 534)
Western Victoria Gold Pty Ltd
(ABN 37 641 639 018)
Directors
Kevin Wilson (Chairman)
Geoff McDermott (Joint Managing Director)
Ian Holland (Joint Managing Director)
Colin Naylor
Company Secretary
Colin Naylor
Registered Office & Principal Operations Office
40-44 Wimmera Street
PO Box 385
Stawell Victoria 3380 Australia
Telephone +61 (3) 5358 8625
Email
info@navarre.com.au
Website www.navarre.com.au
Share Registrar
Boardroom Pty Limited
Level 7, 411 Collins Street
Melbourne Victoria 3000 Australia
Telephone +61 (2) 9290 9600
+61 (3) 9279 0664
Facsimile
Auditor
RSM Australia Partners
Level 21, 55 Collins Street
Melbourne Victoria 3000 Australia
Contents
Chairman’s Report
Managing Director’s Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Review Report
Additional Shareholder Information
2
3
13
29
30
31
32
33
34
53
54
57
FORWARD LOOKING STATEMENTS
about
that have been based on
This Financial Report includes certain forward-looking
current
statements
and
future
expectations
circumstances. These forward-looking statements are,
however, subject to risks, uncertainties and assumptions
that could cause those acts, events and circumstances to
differ materially from the expectations described in such
forward-looking statements.
events
acts,
These factors include, among other things, commercial
and other risks associated with the meeting of objectives
and other investment considerations, as well as other
matters not yet known to the Company or not currently
considered material by the Company.
Stock Exchange Listing
ASX Limited
Level 4, North Tower, Rialto, 525 Collins Street
Melbourne Victoria 3000 Australia
ASX Code: NML
Incorporated 30 April 2007
Victoria, Australia
1
Navarre Minerals Limited
ABN 66 125 140 105
CHAIRMAN’S LETTER
Dear Fellow Shareholder,
It is my pleasure to present the Navarre Minerals Limited Annual Report for the year ended 30 June 2020.
During the year the company benefited from three key positive themes.
Globally, the gold price has been on a strong run and has enjoyed record levels, particularly in Australian dollar terms.
This has spurred investor interest which has focused especially on the high prospectivity of Victoria’s historic goldfields.
Global investors have warmed to the gold story and are supporting exploration with an enthusiasm not seen for more
than a decade.
Despite these positive developments we were also impacted by the COVID-19 pandemic from early 2020. We rapidly
adjusted our drilling programs to accommodate the safety measures required and, as a result, the virus slowed our
program for a few months – but with limited net impact.
Against this backdrop, the Company is advancing its key exploration projects at Irvine, near Stawell and at Tandarra, near
Bendigo. These projects will continue to be our focus over the next twelve months. We will also conduct early stage
exploration at the historical Jubilee Gold Mine and around the historical gold workings at St Arnaud, where we have
recently consolidated a substantial land position.
At our flagship Stawell Corridor Gold Project, drilling is starting to demonstrate the potential of the Resolution Lode
where we aim to deliver a maiden resource in the coming year. Resolution, on the Irvine basalt dome, is just one target
of many on this extensive goldfield. We will continue to work on others in parallel, with a goal of delivering several
potential advanced prospects within commercial distance of the nearby Stawell processing facility.
Then there’s the Tandarra Gold Project, our joint venture managed by 51 per cent partner Catalyst Metals Limited.
Drilling during the year delivered more excellent results – grades of up to 95 grams a tonne – in an area assessed by the
Victorian government as potentially having more than 32 million ounces of undiscovered gold.
On the management front, post balance date we announced that Mr Geoff McDermott will transition from the managing
director role, in favour of Mr Ian Holland.
For over a decade, Geoff has led the Company from its formation and through its 2011 ASX listing to become one of
Victoria’s most active mineral explorers.
He leaves Navarre well-funded and with an exceptional suite of exploration projects. Ian, who led the revival of the
nearby Fosterville Gold Mine to become one of the world’s greatest gold mines, will take over from Geoff in calendar year
2021.
It’s a credit to the work of Geoff and his team that we have been able to attract such talent and we look forward to Ian
leading us in the next phase of the Company’s growth.
Finally, on behalf of the Board I would like to acknowledge the dedication and commitment of our first-class management
team. I also thank our staff, shareholders, the communities in which we operate and other stakeholders for their ongoing
support.
Kevin Wilson
Chairman
15 September 2020
2
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS
I am pleased to present my last Review of Operations as Navarre’s Managing Director. It has been a solid year of progress
on a number of fronts for Navarre as it pursues its aggressive exploration programs across key tenements at a time of
rising gold price and heightened investor interest in Victorian gold.
Navarre maintained an active exploration program during the year with the objectives of identifying economic gold and
copper mineral deposits. These efforts included safely completing more than 35,000 metres of air-core (AC), reverse
circulation (RC) and diamond drilling across our premier Victorian projects.
Our activities remained focused on our mainstay Stawell Corridor Gold Project, on which we completed over 5,500 metres
of diamond drilling, where we are targeting a maiden mineral resource for delivery in the first quarter of 2021.
In other highlights, the company continued to advance the Tandarra Gold Project, in joint venture with Catalyst Metals
Limited (ASX:CYL).
In June 2020, we expanded our gold portfolio with a strategic acquisition of the Jubilee Gold Project, 25km southwest of
Ballarat (Figure 1). The project captures the historical Jubilee Gold Mine which produced approximately 130,000 ounces
of gold at a recovered grade of 12 g/t1 and has not been subject to drilling since mine closure in 1913.
The second half of the year posed the challenge of the COVID-19 pandemic. I am pleased to report our operations have
been minimally affected to date, although some exploration activity has slowed as a result. Most importantly, we took all
appropriate precautions to protect our staff, contractors and the communities in which we operate, and are grateful for
their support in these difficult circumstances.
Post balance date, we were awarded priority status for a tenement that will consolidate our tenure over the highly
prospective St Arnaud Gold Project. We have also applied for two adjoining acreages, which will expand the project’s
scope and prospectivity.
Following an $8 million capital raising in July 2020, Navarre has started the 2020-21 year in sound shape.
Figure 1: Location of Navarre’s Victorian projects
1 Source: W. Baragwanath. 1914: Geol. Survey of Vic. Bulletin No.35 – The Jubilee Mines, Scarsdale.
3
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
STAWELL CORRIDOR GOLD PROJECT (ELs 5476, 5480, 6525, 6526, 6527, 6528, 6702, 6745, 7125 & ELAs 6530 & 6843) (Navarre
100%)
The Group has a dominant land position along 70km of strike of the prospective Stawell Gold Corridor, south on-strike of
the five million-ounce Stawell Goldfield (Figures 1 & 2). The Group’s 100%-owned Stawell Corridor Gold Project contains
seven potential Stawell Magdala gold deposit analogues that the Group is systematically exploring from north to south.
Figure 2: Stawell Corridor Gold Project location map
Irvine Basalt Dome
The project contains the advanced Resolution and Adventure lode prospects along the eastern flank of the Irvine basalt
dome, 20km south of the operating Stawell Gold Mine (Figures 1 - 3). Navarre is expanding the strong and extensive
zones of shallow gold mineralisation intersected at Adventure and Resolution lodes with a significant diamond drilling
program targeting mineralisation at depth as the Company strives towards establishing a mineral resource base for the
project area.
Resolution Lode
During the year, your Company continued a 9,000m diamond drilling program targeting depth extensions to the 1.6km
long Resolution Lode gold structure to approximately 300m below surface. Significant results for the first 12 diamond
holes of the program have continued to deliver strong, consistent grades of gold mineralisation (refer NML ASX releases
of 27 April 2020 & 8 July 2020; Figure 4), including:
▪
▪
▪
▪
▪
▪
▪
▪
2.5m @ 6.1 g/t Au from 373.2m and 2.4m @ 6.0 g/t Au from 428.5m in RD016
2.6m @ 5.5 g/t Au from 301.9m in RD015
2.4m @ 4.4 g/t Au from 293.7m in RD018
3.1m @ 3.1 g/t Au from 204.3m in RD019
2.9m @ 6.2 g/t Au from 187.3m within a broader zone of 9.4m @ 2.6 g/t Au in RD023
2.0m @ 9.9 g/t Au from 235.8m in RD024
1.0m @ 20.8 g/t Au from 358.6m within a broader zone of 10.3m @ 2.2 g/t Au in RD024
7.7m @ 5.6 g/t Au from 141.8m and 3.9m @ 4.4 g/t Au from 154.8m within a broader zone of 18.7m @ 3.4 g/t
Au recorded in southernmost hole, RD025.
4
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
Interpretation of the drilling results indicate:
▪
▪
▪
▪
▪
▪
gold occurs in two higher-grade gold shoots;
the gold shoots appear to plunge gently to the south;
a second zone of gold mineralisation has been detected approximately 50m west of the main zone;
gold mineralisation has been expanded beyond 300m depth and remains open;
the width of mineralisation in the southern gold shoot appears to thicken towards the south; and
the tenor of gold within the gold shoots, below the base of oxidation, is consistent at between 4 g/t and 6 g/t.
The drilling is targeting a maiden mineral resource in March 2021 Quarter.
Drilling continues to build the potential of the Irvine Gold Project into a new large-scale gold system similar to the
4Moz Magdala gold deposit at Stawell.
Figure 3: Plan showing location of Resolution and Adventure lodes relative to alluvial gold workings of the historical
1Moz Ararat Goldfield
5
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
Adventure Lode
The 1.3km long Adventure Lode prospect, like Resolution Lode, represents an opportunity to define significant gold
mineralisation to contribute towards the projects mineral resource (Figure 3).
During the year Navarre completed its first diamond drilling program at Adventure Lode comprising five widely-spaced
holes in 1,405 metres of drilling. The program tested the depth extensions of several higher-grade gold shoots, typical of
a shear-hosted gold system targeted by Navarre’s exploration model. Two of the five diamond holes intersected
significant gold mineralisation in two gold shoots that remain open down-plunge and require further drilling (see Figure
5).
Significant intersections include (see 20 December ASX release; Figure 5):
▪
▪
4.75m @ 3.5 g/t Au from 206.9m, including 1.15m @ 9.8 g/t Au in AD001
4.6m @ 3.5 g/t Au from 327.3m in AD002
Interpretation of the drill results indicate:
▪
▪
▪
▪
the gold mineralisation occurs in geometrical patterns similar to the gold shoots at the Magdala Gold Mine;
four higher-grade gold shoots have been identified (Shoots 1 - 4 in Figure 5);
gold mineralisation has been expanded to 300m depth and remains open; and
similar to Magdala, the geometry of the basalt dome appears to influence the location and geometry of the gold
shoots: where the basalt contact is at a low angle (e.g., area around AD001 & AD002), the shear structure dilates
(widens) and is well-mineralised; and where the basalt steepens (e.g., area around AD004 & AD005), the
structure is narrow and poorly mineralised.
Follow up programs of diamond drilling are planned for the 2020-21 field season.
Figure 4: Longitudinal Projection of the Resolution Lode showing infill AC drill results (refer to ASX announcement of 8
July 2020)
6
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
Figure 5: Longitudinal Projection of the Adventure Lode showing key drill intercepts.
Langi Logan
South of the Irvine basalt dome, the 12km long Langi Logan basalt dome is the next major prospect for Magdala-style
mineralisation within the Stawell Corridor Gold Project (Figures 2 & 6).
Prior to World War One, deep lead mining within the prospect area produced approximately 133,000 ounces of gold from
old river gravels now covered by younger lava flows that range from 2 to 30 metres in thickness.
A 6,120m reconnaissance AC drilling program completed during the year has assessed approximately half of the 12km
strike length of the Langi Logan basalt dome for potential Magdala analogues. Results have highlighted several areas of
anomalous gold, quartz veining and sulphides (pyrite + arsenopyrite) requiring follow-up infill drilling. Significant gold
intersections include (see ASX release 20 December 2019; Figure 6):
•
•
•
1m @ 21.2 g/t Au from 32m in IAC120
2m @ 0.9 g/t Au from 40m in IAC121
4m @ 1.0 g/t Au from 21m in IAC119 (in alluvial gravels)
A highlight intersection of 1m @ 21.2 g/t Au expands shallow high-grade gold mineralisation at Target A to over 650m in
strike length (Figure 6). The highly anomalous gold grades intersected to date are considered significant for this early
stage of reconnaissance drilling.
Follow-up reconnaissance and infill AC drilling is planned for the 2020-21 field season.
The Langi Logan prospect is at an early stage of exploration and is showing potential to be a new gold system similar to
the Magdala gold deposit at Stawell.
7
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
Figure 6: Gravity image showing AC drill results and geological interpretation.
TANDARRA GOLD PROJECT (RL 6660) (JV with operator Catalyst Metals Limited; Navarre 49%)
The high-grade Tandarra Gold Project is located 50km northwest of Kirkland Lake Gold’s world-class Fosterville Gold
Mine, and 40km north of the 22 million-ounce Bendigo Goldfield (Figure 1). Exploration at Tandarra, in Joint Venture with
operator Catalyst Metals Limited (ASX:CYL), is targeting the next generation of gold deposits under shallow cover in the
region.
8
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
Figure 7: Tandarra - Drill plan for the southern AC program, showing results, main gold intersections with
interpolated gold trends and depth to basement (Diagrams reproduced courtesy of Catalyst Metals Limited).
Diamond Drilling:
In July 2019, a six hole, 1,566 metre diamond drilling program testing depth extensions and mineralised repetitions of the
high-grade Tomorrow mineralisation was completed. Drilling intersected encouraging zones of quartz veining, sulphides
and alteration. Highlight drill intersections (refer ASX announcement 14 October 2019) included:
•
•
•
7.0m @ 5.4 g/t Au from within a broader interval of 14.6m @ 3.0 g/t Au from 102.4m in DDT020;
0.4m @ 243 g/t Au from 180.0m in DDT020; and
3.0m @ 4.7 g/t Au from 118m in DDT023.
A follow-up expansion program of four holes in 1,325m of diamond core drilling was completed in April 2020 with results
expected to be reported in September 2020 following completion of core logging, sampling and geological interpretation.
9
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
AC Drilling:
During the year, approximately 15,800m of reconnaissance and infill AC drilling was completed across the southern
projection of the Tomorrow and Macnaughtan prospects. Significant gold mineralisation was intersected 1,200m beyond
the previously known southern limit of Tomorrow and 400m beyond the southern limit of Macnaughtan, in each case
remaining open to the south. In addition, a new zone of gold mineralisation, named the Lawry prospect was revealed
approximately 400m east of the Tomorrow prospect (Figure 7).
The best drill intersections returned from Lawry were (see ASX release of 6 April 2020):
•
•
•
31m @ 1.2 g/t Au, including and 1m @ 10.2 g/t Au from 56m in ACT378
2m @ 1.7 g/t Au from 91m in ACT376
1m @ 1.45 g/t Au from 71m in ACT381
The best drill intersections returned from Tomorrow were (see ASX release of 6 April 2020):
•
•
2m @ 1.8 g/t Au from 125m and 2m @ 1.5 g/t Au from 69m in ACT373
3m @ 2.1 g/t Au from 78m in ACT458
The best drill intersections returned from Macnaughtan were (see ASX releases of 6 April 2020 & 30 June 2020):
•
3m @ 5.25 g/t Au from 102m in ACT444
•
3m @ 2.8 g/t Au from 96m in ACT446
• 3m @ 94.9 g/t Au from 87m in ACT475
•
18m @ 1.6 g/t Au, including 3m @ 7.8 g/t Au from 75m in ACT464
•
•
1m @ 2.5 g/t Au from 108m to end of hole in ACT473
3m @ 1.8 g/t Au from 66m in ACT476
Follow up drill programs will be assessed once all previous drill results have been received and interpreted.
ST ARNAUD GOLD PROJECT (EL 6556 & ELAs 6819, 7431, 7436) (Navarre 100%)
The St Arnaud Gold Project surrounds the historical St Arnaud Goldfield, which has previously produced approximately
400,000 ounces. High-grade gold was mined from quartz lodes in a structural setting consistent with most gold deposits
in central Victoria, including Bendigo and Fosterville (Figure 1).
In August 2020, the Victorian Government’s Earth Resource Regulation awarded priority status to Navarre’s exploration
licence application, ELA 6819, in a competitive bid process.
The new ground consolidates the 400,000 ounce St Arnaud Goldfield and surrounding tenure, providing access to follow
up rich legacy drill hits such as one metre at 1,174 grams per tonne gold (see ASX release of 13 August 2020).
The Company has lodged two adjacent exploration licence applications over almost 1,000 square kilometres, which would
double the size of the project.
On 30 July 2019, the Company announced the results of an AC drilling program of 975m across 11 holes targeting two
mineralised transverse quartz reef structures at the St Arnaud East prospect. The drilling intersected gold mineralisation
up to 5.4 g/t in a reef that extends up to 200m in length and remains open at depth and to the west. Further details
about the results of the program can be found in Navarre’s ASX announcements of 30 July 2019.
Following grant of EL 6819, the Company is planning its first drilling to follow-up the legacy intercept of 1m @ 1,174 g/t
Au.
WESTERN VICTORIA COPPER PROJECT (ELs 5497, 5425 & 4590)
The Group is targeting large volcanic massive sulphide, epithermal and porphyry copper-gold deposits in the Stavely Arc
volcanics within its Western Victoria Copper Project (Figure 1). The Project area captures multiple polymetallic targets in
three project areas including Glenlyle, Eclipse and Stavely.
Black Range Project (EL 4590) (Navarre 100%)
The Black Range Project captures three fault-bound segments of the Stavely Arc Volcanics. The Project area includes the
Eclipse prospect where a supergene blanket of enriched copper (chalcocite) mineralisation is developed above
widespread copper, gold and zinc mineralisation, interpreted to be associated with a potential volcanic-hosted massive
sulphide system (VMS).
10
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
During the year, the Company completed a 1,496m diamond drilling program across 3 diamond holes confirming VMS
style mineralisation in three horizons.
The drilling returned peak assays of 2.4 grams a tonne gold, accompanied by 1.5% copper and 0.3% zinc.
Detailed geological assessments suggest the VMS horizons strengthen towards the north, where airborne magnetics
highlight a large volcanic basin, 4km long and 1.5km thick.
Further details about the results of the program can be found in Navarre’s ASX announcements of 18 June 2020.
A follow-up campaign of AC and diamond drilling is now planned for the 2020-21 field season.
Glenlyle Project (EL 5497) (Navarre 100%)
During the year, the Company completed its third phase of AC drilling designed to expand and scope the shallow lateral
expanses of gold and silver mineralisation discovered in 2018 (referred to as the Morning Bill prospect).
The drilling intersected similar discrete gold + zinc + copper mineralisation, mainly within a broad envelope of anomalous
silver (assaying between 1 and 12 g/t silver). The gold-silver zone is interpreted to have lateral extents of approximately
350m (east-west) by 300m (north-south), remaining open to the south and at depth.
Highlight drill intercepts include (see ASX release of 14 April 2020):
•
•
•
•
•
5m @ 1.0 g/t Au from 58m, incl. 1m @ 3.6 g/t Au (GAC077)
2m @ 1.7 g/t Au from 30m (GAC064)
19m @ 2.8 g/t Ag from 84m, incl. 3m @ 8.8 g/t Ag (GAC075)
46m @ 2.2 g/t Ag from 54m to end of hole, incl. 1m @ 0.5 g/t Au & 0.5% Zn (GAC085)
31m @ 1.0 g/t Ag from 63m to end of hole (GAC073)
The mineralisation is coincident with a magnetic low zone, interpreted to represent demagnetising of the volcanic
(andesite) host rock as a result of the pervasive silica-sericite alteration. This observation highlights other larger magnetic
lows within the project area that remain untested.
Glenlyle is an early stage project with potential for polymetallic mineralisation hosted in either a porphyry, epithermal or
a VMS setting.
Further details about the results of the program can be found in Navarre’s ASX announcement of 14 April 2020.
Stavely Project (EL 5425) - Earn-in Agreement with Stavely Minerals Limited (Navarre 49%)
In January 2018, the Company entered into an Earn-in and Joint Venture Agreement with Stavely Minerals Limited (ASX:
SVY) (Stavely) under which Stavely may earn up to an 80% equity interest in Exploration Licence EL 5425 by spending
$450,000 over a five year period. EL 5425 adjoins Stavely’s namesake Stavely Copper Project in western Victoria (Figure
1).
During the year, as manager Stavely completed two diamond drill holes for a total of 403 metres, but neither hole
produced obvious indications of mineralisation.
Stavely also informed Navarre that they had fulfilled the initial expenditure commitment of $150,000 for the first earn-in
period and has elected to spend a further $300,000 over the next three years which will take their equity interest in EL
5425 from 51% to 80%. EL 5425 is adjacent to Stavely’s namesake Stavely Copper Project in western Victoria.
CORPORATE
Capital raising
During the financial year, the Company raised $4,752,009 (before transaction costs) from a share placement In October
2019 ($4,750,009) and the exercise of employee options ($2,000).
Cash position
Navarre is fully funded to continue its ongoing exploration programs, with $5,606,648 cash as at 30 June 2020.
Subsequent to year's end, the Company completed an $8,000,000 capital raising (before transaction costs), by way of a
placement to new and existing institutions and sophisticated investors.
11
Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS (cont.)
Board movements
Mr Ian Holland was appointed an independent non-executive director of the Company on 25 May 2020. Subsequent to
the balance date, the Company announced, as part of a phased succession process, the appointment of Mr Holland as
joint Managing Director with effect from 1 September 2020.
On April 2 Mr John Dorward resigned from the board, owing to increased work commitments in his role as president and
CEO of the Canada-based Roxgold Inc.
OUTLOOK
With a strengthened balance sheet at a time of renewed investor interest in gold, Navarre is in an excellent position to
fast track its exciting exploration efforts. The board and management look forward to updating shareholders in coming
months, with strong news flow expected.
Geoff McDermott
Managing Director
15 September 2020
Competent Person Declaration
The information in this Annual Report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore
Reserves is based on information compiled by Shane Mele, who is a Member of The Australian Institute of Mining and
Metallurgy and who is Exploration Manager of Navarre Minerals Limited. Mr Mele 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’. Mr Mele consents to the inclusion in the release of the matters based on his
information in the form and context in which it appears.
12
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
The directors present their report together with the consolidated financial statements of the group comprising Navarre
Minerals Limited (variously the “Company”, “Navarre” and “Navarre Minerals”) and its subsidiaries (together, the
“Group”) for the financial year ended 30 June 2020. Navarre Minerals is a company limited by shares, incorporated and
domiciled in Australia. In order to comply with the provisions of the Corporations Act 2001, the directors report as
follows:
1.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
follows. The directors were in office during the entire period unless otherwise stated.
Director
Designation &
independence
status
Qualifications, experience & expertise
Directorships
of other listed
companies
Special
responsibilities during
the year
Kevin Wilson
Chairman
BSc (Hons), ARSM, MBA
Appointed
30 April 2007
Non-executive
Independent
Mr Wilson has over 30 years’ experience in the minerals and finance
industries. He was the Managing Director of Rey Resources Limited,
an Australian energy exploration company, from 2008 to 2016 and
the Managing Director of Leviathan Resources Limited, a Victorian
gold mining company, from its initial public offering in 2005 through
to its sale in 2006. He has prior experience as a geologist with the
Anglo American Group in Africa and North America and as a
stockbroking analyst and investment banker with CS First Boston and
Merrill Lynch in Australia and USA.
Los Cerros
Limited
(ongoing)
Investigator
Resources
Limited
(ongoing)
Geoff
McDermott
Appointed
19 May 2008
Joint Managing
Director
Executive
Joint Managing
Director
Executive
Ian Holland
Appointed Non-
executive,
independent
director on 25
May 2020
Appointed Joint
Managing
Director on 1
September 2020
BSc (Hons), MAIG
None
Mr McDermott is a geologist with over 30 years’ industry experience
working
in surface and underground metalliferous mining
operations, in mineral exploration and as a consultant to the
minerals industry.
Mr McDermott has a broad range of international experience having
worked as a geologist in Canada, Fiji and Australia for companies
such as Western Mining Corporation and Rio Tinto and with the
Government of the Northwest Territories, Canada. From 2002 until
2007, Mr McDermott was Chief Geologist and Group Geologist with
MPI Mines Limited and Leviathan Resources Limited.
BSc, MMinGeoSc, FAusIMM, F Fin, MAICD
None
Mr Ian Holland has over 20 years of experience in the minerals
industry across a number of gold and base metal operations
throughout Australia. He is a geologist by background and has a
strong track record of value creation with his most recent role as
Vice President, Australian Operations for Kirkland Lake Gold where
he lead the growth of the world-class Fosterville Gold mine in
Victoria. He was also previously the General Manager of Fosterville
for a number of years as well as roles at Mount Isa Mines, Mount
Gordon and Renison.
Colin Naylor
Appointed
5 November 2010
Director &
Company
Secretary
Non-
Independent
Appointed
Company
Secretary on 31
July 2018
B.Bus (Acc), FCPA
None
Mr Naylor was previously Chief Financial Officer and Company
Secretary of oil and gas explorer, Melbana Energy Limited, a position
held for over 11 years until July 2018. Before joining Melbana, Mr
Naylor held a number of senior roles in major resource companies,
including Woodside Petroleum, BHP Petroleum and Newcrest
Mining. Mr Naylor also worked at MPI Mines Limited and Leviathan
Resources Limited.
Chairman of the Board
Chairman of the
Remuneration &
Nomination
Committee
Acting Chairman of the
Audit Committee from
2 April to 25 June 2020
and from 1 September
2020.
Member of the
Remuneration &
Nomination
Committee
Chairman of the Audit
Committee from 25
June to 31 August
2020
Member of the
Remuneration &
Nomination
Committee from 25
June 2020
Member of the Audit
Committee and the
Remuneration &
Nomination
Committee
John Dorward
Director
BComm (Hons), GradDipAppFin, CFA
Appointed
15 August 2008
Resigned 2 April
2020
Non-executive
Independent
Mr Dorward is President, Chief Executive Officer and Director of
Roxgold Inc., a TSX listed gold explorer and producer.
Roxgold Inc.
(ongoing)
Contact Gold
Corp.
(ongoing)
Until 2 April 2020 ,
Chairman of the Audit
Committee and
Member of the
Remuneration &
Nomination
Committee
13
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
1.
DIRECTORS (cont.)
Interests in the shares and options of the company
As at the date of this report, the relevant beneficial and non-beneficial interests of each of the directors in the shares and
share options in the Company were:
K Wilson
G McDermott
C H Naylor
I Holland
Ordinary Shares
13,606,085
12,978,568
5,814,562
500,000
Director
Options
1,700,000
-
1,400,000
-
MD Options
-
6,000,000
-
-
MD
Performance
Rights
-
1,500,000
-
-
Company
Secretary
Options
-
-
1,000,000
-
The terms of these options are set out in Note 19 to the consolidated financial statements.
2.
COMPANY SECRETARY
Mr Colin Naylor was appointed Company Secretary with effect from 31 July 2018. Ms Ford was appointed Assistant
Company Secretary with effect from 6 September 2017.
3.
DIVIDENDS
No dividend has been paid, provided or recommended during the financial year and to the date of this report (2019: nil).
4.
OPERATING AND FINANCIAL REVIEW
4.1
Principal activities
The principal activities during the year were mineral exploration in Victoria, Australia.
The Company had 6 permanent employees at 30 June 2020 including directors (2019: 7).
4.2
Environment, health and safety
The Group conducts exploration activities in Victoria. No mining activity has been conducted by the Group on its
exploration licences, and its exploration activities to date have had a low level of environmental impact.
The Group’s exploration operations are subject to environmental and health and safety regulations under the various
laws of Victoria and the Commonwealth. There were no reported Lost Time Injuries or environmental incidents during
the year.
4.3
Review of operations
Refer to the Managing Director’s Review of Operations 2020 on pages 3 to 12.
4.4
Review of financial position
(a)
Results for the year
The net loss for the financial year, after provision for income tax, was $984,124 (2019: loss after tax of $866,104).
(b)
Review of financial condition at the balance date
At balance date the Group held cash and cash equivalents of $2,596,648. During the year the Group increased the cash
balance by $848,783 following net proceeds from share issues of $4,479,210 and interest received of $107,037, which
was partially used to meet investment, exploration and capital net cash outflows of $2,989,355 and corporate costs of
$748,109.
(c)
Share issues
In October 2019, Navarre raised $4,750,009 (before transaction costs) from a share placement to institutional and
sophisticated investors, resulting in the issue of 43,181,900 ordinary shares at an issue price of $0.11 per share.
In October 2019, Navarre raised $2,000 (before transaction costs) from issuing 50,000 fully paid ordinary shares following
the exercise of unlisted employee share options (exercise price $0.04, expiry date 31 December 2019).
14
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.4
Review of financial position (cont.)
(d)
Significant changes in the state of affairs of the Group during the financial year
During the year, the Group raised $4,752,009 (before transaction costs) through capital raising initiatives, as detailed
above (under the heading “Share issues”). The purpose of the capital raising was mainly to enable the Company to
pursue exploration programs at the various prospects in the emerging Stavely Arc mineral province and provide flexibility
to expand the scale of the drilling at the Stawell Corridor Gold Project.
In June 2020, the Company executed an Asset Sale Agreement to acquire 100% of the Jubilee Gold Project (EL 006689), a
high-grade gold exploration licence, 25km south-west of Ballarat, Victoria. The Company made a $20,000 cash payment
on execution of the agreement and will pay a further $20,000 cash on transfer of the exploration licence, which is
currently being processed by the Victorian Department of Jobs, Precincts and Regions.
(e)
Significant events after the balance date
In July 2020, the Group raised $8,000,000 (before transaction costs) through a share placement to sophisticated and
professional investors, resulting in the issue of 64,000,000 ordinary shares at an issue price of $0.125 per share.
On 1 September 2020, Non-executive Director, Mr Ian Holland, was appointed as joint Managing Director as part of a
phased succession process which will see Mr Holland as sole Managing Director on 1 April 2021. As part of the Mr
Holland’s appointment, and subject to shareholder approval at the November 2020 Annual General Meeting, an LTI
allocation of 1.5 million Performance Rights will be granted with vesting to occur against various share price milestones
over 3 years.
Other than the above, 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.
(f)
Likely developments and expected results
During the year under review, the Group continued to focus on the Irvine Gold Project and Tandarra Gold Project, while
also broadening its mineral exploration activities to include programs at Langi Logan, Glenlyle and Black Range.
During the course of the next financial year, the Group will continue its mineral exploration activities and will investigate
additional opportunities in which the Group may wish to participate.
4.5
Business strategy and prospects for future financial years
(a)
Business strategy
The Group’s mission is to reward shareholders by creating value through mineral discovery. This involves maximising the
potential of our assets by unlocking their potential with targeted exploration programs and identifying new opportunities
to compete for capital.
The Group’s goal is to define a mineral resource and to become a low-cost mineral producer through exploration success.
The Group undertakes an active exploration program within emerging and proven mineral corridors, with the objective of
identifying economic gold and copper mineral deposits. The Group’s strategy for the next twelve months is to focus its
financial and managerial resources on development of its most prospective mineral opportunities at the Irvine Gold
Project and Tandarra Gold Project, and exploration at the Langi Logan, Glenlyle, Jubilee and St Arnaud tenements.
Opportunities for growth through acquisition will also be considered.
(b)
Future prospects of the Group
The key driver of the Group’s future prospects will be the success of its exploration programs. The discovery of an
economic mineral deposit has the potential to significantly increase shareholder wealth.
The key material risks faced by the Group that are likely to have an effect on its future financial prospects include:
15
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.5
Business strategy and prospects for future financial years (cont.)
(i)
(ii)
(iii)
(iv)
(v)
exploration risk – the Group’s mineral tenements are in the early stages of exploration, and there can be no
assurance that exploration of the tenements currently held by the Group, or any other tenements that may be
acquired in the future, will result in the discovery of an economic mineral deposit. Until the Group is able to
realise value from its mineral tenements, it is likely to incur ongoing operating losses. If exploration is successful,
there will be additional costs and processes involved in moving to the development phase. By its nature,
exploration risk can never be fully mitigated, but the Group has the benefit of significant exploration expertise
through its management team and of operational and business expertise at both board and management level;
land access (including native title) – there is a substantial level of regulation and restriction on the ability of
exploration and mining companies to have access to land in Australia. Negotiations with both native title
claimants/holders and the owners/occupiers of private land are generally required before the Group can access
land for exploration or mining activities. Inability to access, or delays experienced in accessing, the land may
impact on the Group’s activities;
requirements for capital – as exploration costs reduce the Group’s cash reserves, the Group will require additional
capital to support the long term exploration and evaluation of its projects. If the Group is unable to obtain
additional financing as needed, through equity, debt or joint venture financing, it may be required to scale back its
exploration programs. The Group will continue to consider capital raising initiatives, as required, including possible
corporate opportunities;
tenement title – the Group could lose title to its mineral tenements if insufficient funds are available to meet the
relevant annual expenditure commitments, as and when they arise. The Group closely monitors its compliance
with licence conditions, including expenditure commitments and rents, and maintains a dialogue with the relevant
State government representatives who are responsible for enforcing licence conditions; and
reliance on key personnel – the responsibility of overseeing the day-to-day operations and the strategic
management of the Company depends substantially on the executive and non-executive Directors. There can be
no assurance given that there will be no detrimental impact on the Company if one or more of the Directors,
particularly the Managing Director, no longer acts as a Director.
This is not intended to be an exhaustive list of the risk factors to which the Company is exposed.
Navarre Minerals is also exposed to a range of market, financial and governance risks. The Company has risk
management and internal control systems to manage material business risks which include insurance coverage over
major operational activities and regular review of material business risks by the Board.
5.
SHARE OPTIONS
Compensation options issued during the financial year
No share options were issued by the Company to directors or employees of the Company during the financial year.
Options expired during the financial year
1,150,000 unlisted employee share options in the Company expired on 29 November 2019 and 1,400,000 unlisted
employee share options in the Company expired on 2 April 2020.
Unissued shares under option
At the date of this report, there were 19,000,000 unissued ordinary shares of the Company under option. The details of
these options are as follows:
Expiry Date
6 June 2021
31 December 2021
17 May 2012
29 January 2023
10 April 2023
21 February 2024
17 May 2014
Exercise Price
$0.150
$0.090
$0.1313
$0.150
$0.150
$0.120
$0.120
Number
1,000,000
200,000
4,000,000
2,000,000
4,650,000
1,700,000
5,450,000
16
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
5.
SHARE OPTIONS (cont.)
These options do not entitle the holder to participate in any share issue of the Company.
Shares issued on the exercise of Options
During or since the end of the financial year, the Company issued fully paid ordinary shares as a result of the exercise of
options as follows:
Number of shares
50,000
200,000
Amount paid on each share
$0.04
$0.072
6.
SHARE PERFORMANCE RIGHTS
Compensation performance rights issued during the financial year
During the financial year, the Company issued 1,300,000 share performance rights to senior employees of the Company,
and, following approval at the 2019 Annual General Meeting, 1,500,000 share performance rights to the Managing
Director of the Company.
Performance rights expired during the financial year
No performance rights expired during the financial year.
Unissued shares under performance rights
At the date of this report, there were 2,800,000 unissued ordinary shares of the Company under performance rights. The
terms of these performance rights are as follows:
Expiry Date
31 December 2022
30 June 2023
Number
1,500,000
1,300,000
These performance rights do not entitle the holder to participate in any share issue of the Company.
Shares issued on the exercise of performance rights
During or since the end of the financial year, there has been no issue of ordinary shares as a result of the exercise of
performance rights.
7.
INDEMNIFICATION AND INSURANCE OF DIRECTORS
The Company paid an insurance premium in respect of a contract insuring all directors of the Company against legal costs
incurred in defending proceedings as permitted by Section 199B of the Corporations Act 2001.
8.
BOARD AND COMMITTEE MEETINGS
The following table sets out the members of the Board of Directors and the members of the Committees of the Board, the
number of meetings of the Board and of the Committees held during the year and the number of meetings attended
during each director’s period of office.
Board of Directors
Audit Committee
K Wilson
G McDermott
J Dorward1
C Naylor
I Holland2
A
11
11
5
11
3
B
11
11
6
11
3
A
4
-
3
4
-
B
4
-
4
4
-
Remuneration &
Nomination Committee
A
8
6
4
8
-
B
8
8
5
8
-
A – Number of meetings attended
B – Number of meetings held during the time the director held office during the year
1Mr Dorward resigned on 2 April 2020.
2Mr Holland was appointed on 25 May 2020.
17
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
9.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The directors have received the independence declaration from the auditor, RSM Australia Partners, set out on page 29.
Non-Audit Services
There were no non-audit services provided during the year by the auditor, RSM Australia Partners.
10.
REMUNERATION REPORT (Audited)
The Remuneration Report for the year ended 30 June 2020 outlines the remuneration arrangements of the Company, in
accordance with Section 300A of the Corporations Act 2001 and its regulations.
The information provided in this Remuneration Report has been audited as required by Section 308(3C) of the
Corporations Act 2001. This Remuneration Report forms part of the Directors’ Report.
The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”), who are
defined as those persons having authority and responsibility for planning, directing and controlling the activities of the
Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.
10.1 Key Management Personnel for the year ended 30 June 2020
Directors
K Wilson
Chairman (independent non-executive)
G McDermott
Managing Director
I Holland
Director (independent non-executive) (appointed 25 May 2020)
C H Naylor
Director and Company Secretary (executive)
J Dorward
Director (independent non-executive) (resigned as director 2 April 2020)
Executives
Jodi Ford
Accountant and Assistant Company Secretary
S Mele
Exploration Manager
10.2 Board oversight of remuneration
The policy for determining the nature and amount of remuneration for directors and executives is set by the Board of
Directors as a whole. The Board established a Remuneration and Nomination (“R&N”) Committee to provide the Board
with a regular, structured opportunity to focus on remuneration and nomination issues. All directors of the Company,
including the Managing Director, are members of the R&N Committee. Any potential for, or perception of, conflict of
interest resulting from the Managing Director’s membership of the R&N Committee is addressed by ensuring that the
Managing Director withdraws from committee meetings during any discussion of his remuneration arrangements or
performance and takes no part in the discussion or decision-making process in relation to such matters.
The Board may obtain professional advice when appropriate to ensure that the Company attracts and retains talented
and motivated directors and employees who can enhance Company performance through their contributions and
leadership.
10.3 Non-executive director remuneration arrangements
The Board seeks to set non-executive director remuneration at a level that provides the Company with the ability to
attract and retain directors of high calibre, at a cost acceptable to shareholders.
The amount of aggregate remuneration approved by shareholders and the fee structure for non-executive directors is
reviewed annually by the Board against fees paid to non-executive directors of comparable companies.
The Company’s Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors
must be determined from time to time by members in a general meeting. An amount not exceeding the amount
determined is then divided between the directors as agreed. The maximum aggregate annual remuneration for non-
executive directors is currently set at $300,000 per annum. Any increase in this amount will require shareholder approval
at a general meeting.
18
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.3 Non-executive director remuneration arrangements (cont.)
Non-executive directors are remunerated at marketplace levels by way of fixed fees, usually in the form of cash and
statutory superannuation contributions, and (from time to time, as appropriate) options issued through the Navarre
Minerals Limited Option Plan (“NMLOP”) or share performance rights issued through the Navarre Minerals Performance
Rights Plan. In September 2019, the R&N Committee reviewed the annual base fee payable to non-executive directors,
noting that the base fee had not changed since the company listed on the ASX in March 2011. In recognition of market
conditions and the importance of setting directors fees which have the capacity to attract new directors, the base fee
payable to non-executive directors was increased by $10,000 per annum (excluding statutory superannuation) effective
from 1 July 2019. The Chairman is entitled to receive $50,000 per annum (excluding statutory superannuation) and the
other non-executive director is entitled to receive $40,000 per annum (excluding statutory superannuation).
In addition to directors’ fees, the directors are entitled to be paid all travelling and other expenses they incur in attending
to the Company’s affairs, including attending and returning from general meetings of the Company or meetings of the
Board or of committees of the Board. No additional remuneration is paid to directors for service on board committees or
on the boards of wholly owned subsidiaries, but additional remuneration may be paid to directors if they are called upon
to perform extra services or make any special exertion for the purposes of the Company.
The non-executive directors have no leave entitlements and do not receive any retirement benefits, other than statutory
superannuation and salary sacrifice superannuation (if directors wish to exercise their discretion to make additional
superannuation contributions by way of salary sacrifice).
The remuneration of the Company’s non-executive directors for the year ended 30 June 2020 and 30 June 2019 is
detailed in Table 1 and Table 2 of this Remuneration Report.
10.4 Executive remuneration arrangements
The Company aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company and so as to:
•
•
•
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.
Executive remuneration consists of fixed remuneration and, where appropriate, variable (at risk) remuneration.
Fixed remuneration
The base salaries of the Managing Director and other executives are fixed. Fixed remuneration is set at a market
competitive level, considering an individual’s responsibilities, performance, qualifications and experience, and current
market conditions in the mining industry. Base salaries are reviewed annually, but executive contracts do not guarantee
any increases in fixed remuneration.
Executives receive statutory superannuation from the Company and may, in their discretion, make additional
superannuation contributions by way of salary sacrifice.
The Managing Director approves the terms and conditions of consultants’ contracts, including fees, taking into account
market conditions for the services that are provided. Consulting contracts do not include any guaranteed fee increases.
The fixed component of executives’ remuneration is detailed in Table 1 and Table 2 of this Report.
Variable/at risk remuneration
The performance of executives is measured against criteria agreed annually and is based predominantly on the overall
success of the Company in achieving its broader corporate goals. Variable remuneration is linked to predetermined
performance criteria. Variable remuneration is also used to promote retention of high calibre staff, which the Company
considers to be essential to the growth and success of the Company.
19
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.4 Executive remuneration arrangements (cont.)
Variable remuneration may take the form of short-term incentives, such as payment of a cash bonus, or long-term
incentives through participation in the NMLOP or Navarre Minerals Performance Rights Plan, which are used to provide
long term performance and retention incentives, as appropriate. See page 27 for details of options and performance
rights granted to key management personnel during the year.
The Company prohibits executives from entering into arrangements to protect the value of unvested options or
performance rights. The prohibition includes entering into contracts to hedge their exposure to options or performance
rights awarded as part of their remuneration package.
10.5 Executive Contractual Arrangements
Remuneration arrangements for Key Management Personnel are formalised in employment or consultancy agreements
(as applicable). Details of these contracts are provided below.
•
Managing Director
-
-
-
-
Mr Geoff McDermott is employed by the Company on a full-time basis pursuant to an executive service agreement
dated 10 December 2010, which contains the following major terms (including amendments made in March 2013,
July 2015, September 2016 and February 2017):-
Term: From 31 March 2011 until either the Company or Mr McDermott terminates the agreement.
Notice: The Company may terminate the agreement at any time by giving six months’ notice in writing. Mr
McDermott may terminate the agreement at any time by giving six months’ written notice to the Company or on
one month’s written notice to the Company if a ‘fundamental change’ to his employment occurs or the Company
has failed to remedy a notified breach of its obligations under the agreement. The Company may immediately
terminate the agreement by giving written notice in certain circumstances, including if serious misconduct has
occurred. The Company may elect to pay Mr McDermott in lieu of part or all of any notice period.
Base salary: Mr McDermott’s total fixed remuneration is $245,936 per annum plus statutory superannuation
($21,003). This is reviewed by the R&N Committee (excluding the Managing Director) on an annual basis, but
there is no guarantee of any increase in fixed remuneration.
Short-term incentive: Mr McDermott is eligible to receive an annual short-term incentive payment on terms
decided by the Board (excluding the Managing Director).
The Managing Director’s remuneration package for calendar year 2019 included a short-term incentive in the form
of a cash payment of up to $100,000, subject to achievement of agreed KPIs. Those KPIs comprised performance
measures in relation to:
•
•
health and safety, because the Company regards the safety of its people as a major priority; and
delivery of operating programs and exploration success, because these are key drivers of shareholder value.
In February 2020, the R&N Committee (excluding the Managing Director) assessed the Managing Director’s
performance against his 2019 short term incentive KPIs and determined that two of four KPIs had been met in full
and two of four KPIs had been partially met. Accordingly, the Board (excluding the Managing Director) approved a
cash payment of $60,000 to the Managing Director by way of short term incentive for calendar year 2019.
In October 2019, the R&N Committee (excluding the Managing Director) considered the Managing Director’s short
term incentive arrangements for calendar year 2020. The R&N Committee (excluding the Managing Director)
resolved that the grant of Performance Rights, with appropriate performance hurdles, to be a more effective
incentive arrangement than the incentive arrangement used in previous years. Therefore, no short term incentive
payment was included in Mr McDermott’s remuneration package for calendar year 2020. Instead, Mr McDermott
was granted 1,500,000 share performance rights (see below Long-term incentive section for further details).
20
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.5 Executive Contractual Arrangements (cont.)
-
Long-term incentive: Mr McDermott is eligible to participate in the Company’s long-term incentive arrangements
(as amended or replaced) on terms decided by the Board, subject to necessary shareholder approvals.
The Managing Director’s remuneration package for calendar year 2019 included a long-term incentive in the form
of a grant of 3,000,000 share options. The options will vest in three equal tranches over a period of three years
from the date of grant. The first tranche may vest at any time after the grant date, the second tranche may vest
after the first anniversary of the grant date and the third tranche may vest after the second anniversary of the
grant date, but in each case, vesting is conditional on the closing price of the Company’s shares exceeding the 12
cent exercise price for ten consecutive trading days after the potential vesting date. The Managing Director must
also be employed by the Company at the time that the options vest. The Company obtained shareholder approval
for the grant of these options at the Company’s extraordinary general meeting in May 2019 and the options were
issued shortly after that meeting on 17 May 2019. Vesting conditions have been achieved for two tranches of the
share options totalling 2,000,000 options.
In October 2019, the R&N Committee (excluding the Managing Director) reviewed the long term share option
incentive arrangements for the Managing Director. The R&N Committee (excluding the Managing Director)
resolved that the grant of performance rights, with appropriate performance hurdles, to be a more effective
incentive arrangement than the incentive arrangement used in previous years.
The Managing Director’s remuneration package for calendar year 2020 includes an incentive in the form of a grant
of 1,500,000 share performance rights. The performance rights will vest based on the following conditions:
Number of
Performance Rights
Service Condition
500,000
500,000
166,666
166,667
166,667
These Performance Rights will vest and become exercisable upon Mr McDermott holding the position
of Managing Director at 31 December 2020 (Retention Service Period).
At the discretion of the Board (excluding Mr McDermott) these Performance Rights will vest and
become exercisable upon satisfactory meeting the following hurdles in the period to 31 December
2020 (Service Performance).
-
-
Securing statutory permitting and community support for drilling programs
Execution of drilling programs - on budget with no safety or environmental incidents
These Performance Rights will vest and become exercisable when the Share price exceeds a closing
price of 12 cents per Share for 10 consecutive Trading Days in the period leading up to 31 December
2020.
These Performance Rights will vest and become exercisable when the Share price exceeds a closing
price of 16 cents per Share for 10 consecutive Trading Days in the period leading up to 31 December
2020.
These Performance Rights will vest and become exercisable when the Share price exceeds a closing
price of 20 cents per Share for 10 consecutive Trading Days in the period leading up to 31 December
2020.
The Company obtained shareholder approval for the grant of these performance rights at the Company’s annual
general meeting in November 2019 and the performance rights were issued shortly after that meeting on 18
November 2019. The Service Condition has been achieved for 166,666 Performance Rights with the Navarre share
price exceeding a closing share price of 12 cents per share for 10 consecutive Trading Days.
-
Termination payments: If Mr McDermott’s employment is terminated by the Company for any reason (other than
in circumstances warranting summary dismissal), Mr McDermott is entitled to a retirement benefit calculated as
one month’s total fixed remuneration, plus two weeks’ total fixed remuneration for each completed or part-
completed year of continuous service with the Company. If Mr McDermott resigns within six months of a
‘fundamental change’, Mr McDermott is entitled to a lump sum payment equivalent to six months’ total fixed
remuneration.
21
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.5 Executive Contractual Arrangements (cont.)
•
Exploration Manager
-
-
-
-
-
Mr Mele was appointed Exploration Manager of the Company with effect from 22 February 2017. Mr Mele was
engaged by the Company on a consultancy basis prior to entering into an employment arrangement and becoming
a full-time employee with the Company.
On 8 January 2018, Mr Mele entered into an executive service agreement which contains the following major
terms:-
Term: From 8 January 2018 until either the Company or Mr Mele terminates the agreement.
Notice: The Company may terminate the agreement at any time by giving three months’ notice in writing. Mr
Mele may terminate the agreement at any time by giving three months’ written notice to the Company or on one
month’s written notice to the Company if a ‘fundamental change’ to his employment occurs or the Company has
failed to remedy a notified breach of its obligations under the agreement. The Company may immediately
terminate the agreement by giving written notice in certain circumstances, including if serious misconduct has
occurred. The Company may elect to pay Mr Mele in lieu of part or all of any notice period.
Base salary: Mr Mele’s total fixed remuneration is $212,951 per annum plus statutory superannuation ($20,230).
Total fixed remuneration is reviewed by the R&N Committee on an annual basis, but there is no guarantee of any
increase in fixed remuneration.
Short-term incentive: Mr Mele is eligible to receive an annual short-term incentive payment on terms decided by
the Board. No short-term incentive was paid to Mr Mele in the financial year.
Long-term incentive: Mr Mele is eligible to participate in the Company’s long-term incentive arrangements (as
amended or replaced) on terms decided by the Board.
Mr Mele’s remuneration package for calendar year 2019 included a long-term incentive in the form of a grant of
1,300,000 share options. The options will vest in three equal tranches over a period of three years from the date
of grant. The first tranche may vest at any time after the grant date, the second tranche may vest after the first
anniversary of the grant date and the third tranche may vest after the second anniversary of the grant date, but in
each case, vesting is conditional on the closing price of the Company’s shares exceeding the 12 cent exercise price
for ten consecutive trading days after the potential vesting date. Mr Mele must also be employed by the Company
at the time that the options vest. Vesting conditions have been achieved for two tranches of the share options
totalling 866,666 options.
Mr Mele’s remuneration package for calendar year 2020 includes an incentive in the form of a grant of 1,000,000
share performance rights. The performance rights will vest based on the following conditions:
Number of
Performance Rights
400,000
600,000
Service Condition
These Performance Rights will vest and become exercisable upon Mr Mele holding the position of
Exploration Manager at Close of Business, 30 June 2021 (Retention Service Period).
At the discretion of the Board these Performance Rights will vest and become exercisable (in part or in
full) upon satisfactorily meeting the following hurdles in the period to 30 June 2021 (Service
Performance):-
-
significantly advancing at least one of the Company’s 100%-owned projects by either:
•
Delivery of a Mineral inventory [e.g., 500koz inferred resource + 500koz exploration target]
of > 1,000,000 ozs of gold / gold equivalent by 30 June 2021; or
Delivery of a minimum of five potential economic > 30 gram metre gold drill intercepts;
•
and
Securing statutory permitting and community support for drilling programs, and
execution of drilling programs - on budget with no safety or environmental incidents
-
-
22
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.5 Executive Contractual Arrangements (cont.)
-
Termination payments: If Mr Mele’s employment is terminated by the Company for any reason (other than in
circumstances warranting summary dismissal), Mr Mele is entitled to a retirement benefit calculated as one
month’s total fixed remuneration, plus two weeks’ total fixed remuneration for each completed or part-completed
year of continuous service with the Company (to be calculated by reference to Mr Mele’s start date as a consultant
geologist on 18 May 2016).
•
Company Secretary
Mr Colin Naylor was appointed Company Secretary on 31 July 2018, in addition to his role as a Director of the
Company. Mr Naylor has been engaged on a part-time basis and entered into an executive service agreement. Mr
Naylor is eligible to participate in the Company’s long-term incentive arrangements (as amended or replaced) on
terms decided by the Board. Mr Naylor’s remuneration package as Company Secretary for calendar year 2019
included a long-term incentive in the form of a grant of 1,000,000 share options. The options will vest in three
equal tranches over a period of three years from the date of grant. The first tranche may vest at any time after the
grant date, the second tranche may vest after the first anniversary of the grant date and the third tranche may
vest after the second anniversary of the grant date, but in each case, vesting is conditional on the closing price of
the Company’s shares exceeding the 12 cent exercise price for ten consecutive trading days after the potential
vesting date. Mr Naylor must also be employed by the Company at the time that the options vest. The Company
obtained shareholder approval for the grant of these options at the Company’s extraordinary general meeting in
May 2019 and the options were issued shortly after that meeting on 17 May 2019. Vesting conditions have been
achieved for two tranches of the share options totalling 1,100,000 options.
The Company may terminate the agreement at any time by giving three months’ notice in writing. Mr Naylor may
terminate the agreement at any time by giving three months’ written notice to the Company or on one month’s
written notice to the Company if a ‘fundamental change’ to his employment occurs or the Company has failed to
remedy a notified breach of its obligations under the agreement. The Company may immediately terminate the
agreement by giving written notice in certain circumstances, including if serious misconduct has occurred. The
Company may elect to pay Mr Naylor in lieu of part or all of any notice period.
In his role as a director, Mr Naylor is entitled to receive $40,000 per annum (excluding statutory superannuation).
This amount reflects an increase of $10,000 (excluding statutory superannuation) effective from 1 July 2019, in line
with the increase in the annual base fee payable to non-executive directors, which was approved by the R&N
Committee in September 2019. In addition, Mr Naylor is entitled to be paid all travelling and other expenses he
incurs in attending to the Company’s affairs, including attending and returning from general meetings of the
Company or meetings of the Board or of committees of the Board. No additional remuneration is paid to Mr
Naylor for service on board committees or on the boards of the wholly owned subsidiaries, but additional
remuneration may be paid to Mr Naylor if he was called upon to perform extra services or make any special
exertion for the purposes of the Company.
•
Other executives
All executives have standard employment agreements. The Company may terminate the executive’s employment
agreement by written notice (ranging from four weeks to three months’ notice) or providing payment in lieu of the
notice period (based on the fixed component of the executive’s remuneration). The Company may terminate the
agreement at any time without notice if serious misconduct has occurred. The executive may terminate the
agreement by written notice to the Company (ranging from four weeks to three months’ notice). On cessation of
employment, any outstanding options and any unvested performance rights will be forfeited.
23
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.6 Remuneration of Key Management Personnel of the Company
Table 1: Remuneration for the year ended 30 June 2020
Non– executive directors
K Wilson
J Dorward2
I Holland3
Sub-total
non-executive
directors
Executive directors
G McDermott
C Naylor
J Ford
S Mele
Sub-total executive
KMP
Short term
Salary/
Consulting
fees
$
Directors
fees
$
STI cash
bonus
$
Post
Employment
Super-
annuation
benefits
$
Share-
based
Payment
Equity-
Settled1
$
Long term
Long
service
leave
$
50,000
30,273
4,044
84,317
-
-
-
-
-
-
-
-
4,750
2,876
384
7,356
4,713
-
8,010
12,069
-
-
-
-
Total
Performance
Related
$
%
62,106
37,862
4,428
11.8
12.4
0.0
104,396
11.6
-
-
-
-
-
-
-
241,939
60,000
40,000
37,908
Other key management personnel
-
-
60,132
212,951
25,000
25,000
142,383
15,171
4,789
474,111
-
118,079
5,712
20,230
17,543
52,510
1,170
2,359
84,557
288,050
40,000
552,330
60,000
75,942
227,607
8,318
964,797
124,317
TOTAL
1Refer Note 19 to the consolidated financial statements for fair value calculation of options and performance rights.
2Mr Dorward resigned as non-executive director effective 2 April 2020.
3Mr Holland was appointed non-executive director on 25 May 2020.
239,676
552,330
83,952
60,000
8,318
1,069,193
Table 2: Remuneration for the year ended 30 June 2019
Short term
Salary/
Consulting
fees
$
Post
Employment
Super-
annuation
benefits
$
STI cash
bonus
$
-
-
-
-
-
-
3,800
2,850
Directors
fees
$
40,000
30,000
70,000
Share-
based
Payment
Option
plan1
$
33,449
27,845
Long term
Long
service
leave
$
Total
Performance
Related
$
%
-
-
-
77,249
60,6952
43.3
45.9
137,944
44.4
6,650
61,294
23,329
21,062
5,624
20,230
83,974
29,567
18,761
47,822
7,742
411,933
-
125,807
1,518
85,100
-
281,003
Non– executive directors
K Wilson
J Dorward
Sub-total
non-executive
directors
Executive directors
G McDermott
C Naylor3
J Ford4
S Mele
Sub-total executive
KMP
-
243,138
53,750
30,000
45,178
Other key management personnel
-
-
59,197
212,951
30,000
560,464
53,750
70,245
180,124
9,260
903,843
100,000
TOTAL
560,464
1Refer Note 19 to the consolidated financial statements for fair value calculation of options.
2During the period, Mr Dorward became an Australian resident for taxation purposes, therefore he is entitled to statutory superannuation.
3Appointed as Company Secretary effective 31 July 2018 in addition to role as director.
4Appointed as Company Secretary effective 1 June 2018 until 31 July 2018.
1,041,787
241,418
53,750
76,895
9,260
24
42.7
12.8
20.7
18.2
29.8
28.0
33.4
23.5
22.0
17.0
25.9
28.3
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.7
Remuneration Mix
The Company’s executive remuneration is structured as a mix of fixed annual remuneration and variable ‘at risk’
remuneration. The mix of these components varies for different management levels and according to whether an
executive is engaged as an employee or a contractor.
Table 3: Relative proportion and components of total remuneration packages for the year ended 30 June 2020
Executives
G McDermott
C Naylor
J Ford
S Mele
% of Total Remuneration
Performance-based remuneration
Fixed remuneration
%
Short Term Incentive
%
Long Term Incentive
%
57.3
87.2
79.3
81.8
12.7
-
-
-
30.0
12.8
20.7
18.2
10.8
Equity instruments
(a)
Share options
Table 4: Options granted, vested and lapsed during the year
Number of
options
granted
during FY20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fair value
per option
at grant
date ($)
Exercise
price per
option ($)
Expiry Date
Vest Date
Number of
options
vested
during FY20
Number of
options
lapsed
during FY20
0.033
0.034
0.033
0.034
0.048
0.033
0.034
0.036
0.033
0.034
0.027
0.028
0.027
0.028
0.120
0.120
0.120
0.120
0.150
0.120
0.120
0.120
0.120
0.120
0.120
0.120
0.120
0.120
17 May 24
17 May 24
17 May 24
17 May 24
10 Apr 23
17 May 24
17 May 24
17 May 24
17 May 24
17 May 24
17 May 19 1
17 May 20 1
17 May 19 1
17 May 20 1
- 1
- 1
- 1
- 1
17 May 19 1
17 May 20 1
266,667
266,667
1,000,000
1,000,000
-
-
-
-
550,000
550,000
-
-
-
-
750,000
216,667
216,667
216,666
-
-
21 Feb 24
21 Feb 24
21 Feb 24
21 Feb 24
21 Feb 19 1
21 Feb 20 1
21 Feb 19 1
21 Feb 20 1
133,333
133,333
433,333
433,333
-
-
-
-
Grant date
17 May 19
17 May 19
17 May 19
17 May 19
10 Apr 18
17 May 19
17 May 19
17 May 19
17 May 19
17 May 19
21 Feb 19
21 Feb 19
21 Feb 19
21 Feb 19
Directors
K Wilson
K Wilson
G McDermott
G McDermott
J Dorward
J Dorward
J Dorward
J Dorward
C Naylor
C Naylor
Executives
J Ford
J Ford
S Mele
S Mele
1 Closing share price must exceed exercise price for 10 consecutive trading days after the vesting date.
All options expire on the earlier of their expiry date or termination of the employee’s employment. These options do not
entitle the holder to participate in any share issue of the Company.
Table 5: Shares issued on exercise of options
J Ford
No. of shares
50,000
Amount paid per
share ($)
0.040
25
Directors
G McDermott
G McDermott
G McDermott
G McDermott
Executives
J Ford
S Mele
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.8
Equity instruments (cont.)
Table 6: Value of options granted, exercised and lapsed during the year
Value of options granted
during the year
$
Value of options exercised
during the year
$
Value of options lapsed
during the year
$
-
-
-
437
57,951
-
Directors
J Dorward
Executives
J Ford
For details on the valuation of options, including models and assumptions used, please refer to Note 19 to the
consolidated financial statements.
(b)
Share performance rights
Table 7: Performance Rights granted, vested and lapsed during the year
Number of
rights
granted
during FY20
1,000,000
166,666
166,667
166,667
Grant date
18 Nov 19
18 Nov 19
18 Nov 19
18 Nov 19
Fair value
per right at
grant date
($)
Expiry Date
Vest Date
Number of
rights
vested
during FY20
Number of
rights lapsed
during FY20
$0.1050
$0.0877
$0.0692
$0.0549
31 Dec 22
31 Dec 22
31 Dec 22
31 Dec 22
31 Dec 20 1
31 Dec 20 1
31 Dec 20 1
31 Dec 20 1
-
166,666
-
-
300,000
1,000,000
18 May 20
18 May 20
$0.1400
$0.1400
30 Jun 23
30 Jun 23
30 Jun 21 1
30 Jun 21 1
-
-
1 Vesting is conditional on certain performance conditions (see section 10.5 above for further details).
Unvested share performance rights expire on the earlier of their expiry date or termination of the employee’s
employment and vested share performance rights expire on the earlier of their expiry date or three months from the date
of termination of the employee’s employment. These performance rights do not entitle the holder to participate in any
share issue of the Company.
Table 8: Shares issued on exercise of performance rights
There was no exercise of performance rights during the reporting period.
Table 9: Value of share performance rights granted, exercised and lapsed during the year
Value of rights granted
during the year
$
Value of rights exercised
during the year
$
Value of rights lapsed
during the year
$
Directors
G McDermott
Executives
J Ford
S Mele
140,300
42,000
140,000
-
-
-
-
-
-
For details on the valuation of performance rights, please refer to Note 19 to the consolidated financial statements.
26
-
-
-
-
-
-
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.9 Additional disclosures relating to shares, options and performance rights
Movement in shares
The movement during the reporting period in the number of ordinary shares in Navarre Minerals Limited held directly,
indirectly or beneficially, by key management personnel, including their related parties, is as follows:
Held at 1
July 2019
Shares held in Navarre Minerals Limited (number)
Purchases
Received on
Exercise of
Options
Sales
Held at 30
June 2020
Directors
K Wilson
G McDermott
J Dorward1
C Naylor
I Holland
Executives
J Ford
S Mele
13,606,085
12,978,568
9,639,875
5,814,562
-
58,770
160,435
1 Shareholding at resignation on 2 April 2020.
Options over equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,606,085
12,978,568
5,814,562
-
50,000
-
50,000
-
58,770
160,435
The movement during the reporting period in the number of options over ordinary shares in Navarre Minerals Limited
held, directly, indirectly and beneficially by key management personnel, including their related parties is as follows:
Held at 1
July 2019
Granted as
Remuner-
ation
Options
Exercised
Options
Lapsed
Held at 30
June 2020
Vested in
2020
Vested and
exercisable
at 30 June
2020
Options held in Navarre Minerals Limited (number)
Directors
K Wilson
G McDermott
J Dorward
C Naylor
I Holland
Executives
J Ford
S Mele
1,700,000
6,000,000
1,400,000
2,400,000
-
1,350,000
2,800,000
-
-
-
-
-
-
-
Performance rights over equity instruments
-
-
-
-
-
-
-
1,400,000
-
-
1,700,000
6,000,000
-
2,400,000
-
533,334
2,000,000
-
1,100,000
-
533,334
2,000,000
-
1,100,000
-
50,000
-
-
-
1,300,000
2,800,000
266,666
866,666
666,666
866,666
The movement during the reporting period in the number of performance rights over ordinary shares in Navarre Minerals
Limited held, directly, indirectly and beneficially by key management personnel, including their related parties is as
follows:
Held at 1
July 2019
Granted as
Remuner-
ation
Performance
Rights
Exercised
Performance
Rights Lapsed
Held at 30
June 2020
Vested in
2020
Vested and
exercisable
at 30 June
2020
Performance Rights held in Navarre Minerals Limited (number)
Directors
G McDermott
Executives
J Ford
S Mele
-
-
-
1,500,000
300,000
1,000,000
-
-
-
27
-
-
-
1,500,000
166,666
166,666
300,000
1,000,000
-
-
-
-
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
10.
REMUNERATION REPORT (Audited) (cont.)
10.10
Company performance
With the exception of long-term incentives, the remuneration of executives and consultants is not linked to financial
performance measures of the Company. Long-term incentives granted to executives are linked to improvements in the
Company’s share price.
In accordance with Section 300A of the Corporations Act 2001, the following table summarises Navarre’s performance
over a five-year period:
Net profit/(loss) - $000
Basic earnings/(loss) per share – cents per share
Share price at the beginning of year - $
Share price at end of year - $
Dividends per share – cents
2020
(984)
(0.21)
0.084
0.110
Nil
2019
(866)
(0.22)
0.059
0.084
Nil
2018
(1,251)
(0.47)
0.032
0.059
Nil
2017
(703)
(0.34)
0.034
0.032
Nil
2016
(2,672)
(2.78)
0.024
0.034
Nil
11.
CORPORATE GOVERNANCE STATEMENT
*** End of Remuneration Report ***
The Company’s Corporate Governance Statement for the year ended 30 June 2020, ASX Appendix 4G (Key to Disclosure of
Corporate Governance Principles and Recommendations) and other ancillary corporate governance related documents
may be accessed from the Company’s website at www.navarre.com.au/governance/.
Signed in accordance with a resolution of the Directors made pursuant to s298(2) of the Corporations Act 2001.
On behalf of the Directors
G McDermott
Managing Director
Melbourne, 15 September 2020
28
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Navarre Minerals Limited for the year ended 30 June 2020,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
J S CROALL
Partner
Dated: 15 September 2020
Melbourne, Victoria
29
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Interest income
Income
Net administration expenses
Exploration expenditure written-off
Loss before income tax
Income tax expense
Net loss for the period
Total comprehensive loss for the period
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Note
4
5
6
6
2020
$
96,341
96,341
2019
$
54,771
54,771
(900,355)
(180,110)
(917,312)
(3,563)
(984,124)
(866,104)
-
-
(984,124)
(866,104)
(984,124)
(866,104)
(0.21)
(0.21)
(0.22)
(0.22)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
30
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other financial assets
Property, plant and equipment
Exploration and evaluation costs
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share based payments reserve
Accumulated losses
TOTAL EQUITY
Note
2020
$
2019
$
7
8
9
9
10
11
12
13
13
14
14
14
2,596,648
180,822
3,010,000
5,787,470
1,747,865
299,264
4,287,848
6,334,977
110,000
39,525
15,297,618
15,447,143
110,000
44,416
10,997,701
11,152,117
21,234,613
17,487,094
429,664
111,709
541,373
416,375
97,762
514,137
2,359
2,359
1,434
1,434
543,732
515,571
20,690,881
16,971,523
29,634,657
672,749
(9,616,525)
25,155,010
521,068
(8,704,555)
20,690,881
16,971,523
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
31
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Issued
Capital
$
Share Based
Payments
Reserve
$
Accumulated
Losses
$
Total Equity
$
Balance at 1 July 2019
25,155,010
521,068
(8,704,555)
16,971,523
Net loss for the period
-
-
(984,124)
(984,124)
Total comprehensive loss for the year
(984,124)
(984,124)
Transactions with owners in their capacity as owners:
Cost of share based payments
-
224,272
Share issues
Costs of issues
4,752,009
(272,799)
-
-
Transfer of equity instruments exercised
437
(437)
-
-
-
-
Transfer of equity instruments lapsed
-
(72,154)
72,154
224,272
4,752,009
(272,799)
-
-
At 30 June 2020
29,634,657
672,749
(9,616,525)
20,690,881
Issued
Capital
$
Share Based
Payments
Reserve
$
Accumulated
Losses
$
Total Equity
$
Balance at 1 July 2018
16,641,488
131,005
(7,840,309)
8,932,184
Net loss for the period
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Cost of share based payments
Share issues
Costs of issues
-
-
-
9,013,200
(499,678)
-
-
(866,104)
(866,104)
(866,104)
(866,104)
391,921
-
-
-
-
-
391,921
9,013,200
(499,678)
Transfer of equity instruments lapsed
-
(1,858)
1,858
-
At 30 June 2019
25,155,010
521,068
(8,704,555)
16,971,523
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
32
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
2020
$
2019
$
(748,109)
107,037
(712,580)
34,365
Net cash (used in) operating activities (Note 15)
(641,072)
(678,215)
CASH FLOWS FROM INVESTING ACTIVITIES
Receipts / (payments) for investments
Expenditure on plant and equipment
Expenditure on exploration tenements
TARGET Minerals Exploration Initiative – Milestone 3 grant
1,277,848
(9,593)
(4,257,610)
-
(4,277,848)
(31,145)
(3,696,385)
365,091
Net cash (used in) investing activities
(2,989,355)
(7,640,287)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues
Transaction costs on issue of shares
Net cash from financing activities
4,752,009
(272,799)
9,013,200
(373,517)
4,479,210
8,639,683
Net (decrease) / increase in cash and cash equivalents
848,783
321,181
Cash and cash equivalents at beginning of period
1,747,865
1,426,684
Cash and cash equivalents at end of period (Note 7)
2,596,648
1,747,865
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
33
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
CORPORATE INFORMATION
The financial report of Navarre Minerals Limited (“Navarre Minerals”, or the “Company”) for the year ended 30 June 2020
was authorised for issue in accordance with a resolution of the directors on 15 September 2020.
Navarre Minerals Limited is a company limited by shares incorporated in Australia. The Company’s shares are publicly
traded on Australian Stock Exchange.
The nature of operations and principal activities of the Group are described in Note 3.
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board, as appropriate for for-profit orientated entities, and is presented in Australian dollars. The
financial report has also been prepared on a historical cost basis.
(i)
Compliance with IFRS
The financial report complies with Australian Accounting Standards issued by the Australian Accounting Standards Board
and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
(ii)
Early adoption of new Accounting Standards
The Group has not elected to early adopt any of the standards set out under (c) New Accounting Standards for
Application in Future Periods.
(iii) Historical cost convention
The financial statements have been prepared under a historical cost convention.
(b)
New Accounting Standards and Interpretations
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates the
classifications 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 (included in operating costs)
and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease,
the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses 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 within 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 financing activities. For lessor accounting, the standard does not substantially change how a lessor
accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such comparatives have not been restated.
Right-of-use assets are measured at an amount equal to the lease liability. The Group has applied AASB 16 practical
expedient and elected not to recognise right-of-use assets and lease liabilities for leases with less than 12 months of lease
term. As the Group only have short term leases that are less than 12 months, these have been expensed directly to the
profit or loss for the period ended 30 June 2020.
34
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(c)
New Accounting Standards for Application in Future Periods
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet
mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements.
(d)
Other Standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on the
Group in the current or future reporting periods and on foreseeable future transactions. However, the position will be
further reviewed during FY2020 – 2021.
(e)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Navarre Minerals Limited and its subsidiaries
as at 30 June 2020 and the results of all the subsidiaries for the year then ended (“Group”).
Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies so as
to obtain benefits from their activities.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and
transactions, income, expenses and profit and losses from intra group transactions, have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
(f)
Significant accounting judgements, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on judgements, estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of share options is determined using either a Black
Scholes or binomial option pricing model, and using the assumptions detailed in Note 19.
Exploration and evaluation costs
Exploration and evaluation costs are accumulated separately for each area of interest and carried forward provided that
one of the following conditions is met:
•
•
such costs are expected to be recouped through successful development or sale; or
exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations in relation to the area are
continuing.
Significant judgement is required in determining whether it is likely that future economic benefits will be derived from the
capitalised exploration and evaluation expenditure. In the judgement of the Directors, at 30 June 2020, exploration
activities in each area of interest have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of ore reserves. Active and significant operations in relation to each area of interest are continuing and
nothing has come to the attention of the Directors to indicate future economic benefits will not be achieved. The
Directors are continually monitoring the areas of interest and are exploring alternatives for funding the development of
areas of interest when ore reserves are confirmed. If new information becomes available that suggests the recovery of
expenditure is unlikely, the amounts capitalised will need to be reassessed at that time.
(g)
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
35
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(h)
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment losses. Depreciation is
calculated on a straight-line basis over the estimated useful lives of the assets which range from 3 to 5 years.
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs. Impairment exists when the carrying value of an asset exceeds its estimated
recoverable amount. The asset is written down to its recoverable amount.
The recoverable amount of plant and equipment is the greater 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.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) is included in the consolidated statement of
comprehensive income in the period the item is derecognised.
(i)
Exploration and evaluation costs
Exploration and evaluation expenditure is carried at cost. If indication of impairment arises, the recoverable amount is
estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying
amount.
Exploration and evaluation costs are accumulated separately for each current area of interest and carried forward
provided that one of the following conditions is met:
•
•
such costs are expected to be recouped through successful development or sale; or
exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations in relation to the area are
continuing.
Impairment of exploration and evaluation costs
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future,
profits/ (losses) and net assets will be varied in the period in which this determination is made.
Farm-outs
The Group will account for farm-out arrangements as follows:
•
•
•
The Group will not record any expenditure made by the farminee on its behalf;
The Group will not recognise a gain or loss on the farm-out arrangement but rather will redesignate any costs
previously capitalised in relation to the whole interest as relating to the partial interest retained; and
Any cash consideration to be received will be credited against costs previously capitalised in relation to the whole
interest with any excess to be accounted for by the Group as gain on disposal.
(j)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
36
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(k)
Leases
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset (“right-of-use”
asset), the Group uses the definition of a lease in AASB 16.
Right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position with a
depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised
lease liabilities (included in finance costs).
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
(l) Trade and other payables
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of the goods and services.
(m) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the consolidated statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the balance date. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. The increase in the provision resulting from the passage
of time is recognised in finance costs.
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities for wage and salaries, including non-monetary benefits and annual leave entitlements expected to be settled
within 12 months of the reporting date are recognised in provisions in respect of employees’ service up to the reporting
date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value
of expected future payments to be made in respect of services provided by employees up to the 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 in
national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future
cash outflows.
(n)
Share-based payment transactions
The Group provides benefits to employees and directors of the Group in the form of share-based payment transactions,
whereby services are rendered in exchange for shares or rights over shares (‘equity-settled transactions’).
37
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(n)
Share-based payment transactions (cont.)
The cost of equity-settled transactions is measured by reference to the fair value at the date at which they are granted.
The fair value of options and performance rights with market performance criteria is determined using either a Black
Scholes or binomial option pricing model. The fair value of performance rights with non-market performance criteria is
determined by reference to the Company’s closing share price on the trading day prior to grant.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the recipient becomes fully entitled to the
award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors, based
on the best available information at balance date, will ultimately vest. No adjustment is made for the likelihood of market
conditions being met as the effect of these conditions is included in determination of fair value at grant date. The charge
or credit for the period represents the movement in cumulative expense recognised as at the beginning and end of the
period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as
if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options and performance rights is reflected as additional share dilution in the
computation of earnings per share.
(o) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares, options or
performance rights are shown in equity as a deduction, net of tax, from the proceeds.
(p) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. Specific recognition criteria must also to be met:
Interest income
Revenue is recognised as the interest accrues using the effective interest method.
(q)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantially enacted by the reporting date.
Deferred income tax is provided on all temporary differences at balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
38
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(q)
Income tax (cont.)
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
•
•
where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax assets and unused tax losses can be used, except:
•
•
where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
when the deductible temporary differences is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be applied.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it is
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right of set off exists to set off
current tax assets against current liabilities and the deferred tax assets and liabilities relate to the same taxable entity and
the same taxable authority.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the consolidated
statement of comprehensive income.
(r)
Goods and services tax
Revenues, expenses and assets are recognised net of GST, except receivables and payables which are stated with GST
included. Where GST incurred on a purchase of goods or services is not recoverable from the taxation authority, the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the consolidated statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
39
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(s)
Earnings per share
Basic earnings per share is calculated as net profit/(loss) attributable to members divided by the weighted average
number of ordinary shares.
Diluted earnings per share is calculated as net profit/(loss) attributable to members divided by the weighted average
number of ordinary shares and dilutive potential ordinary shares.
(t)
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 the business.
(u)
Parent entity financial information
The financial information for the parent entity, Navarre Minerals Limited, disclosed in Note 21 has been prepared on the
same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounting for at cost less accumulated impairment losses in the financial statements of
Navarre Minerals Limited.
NOTE 3:
SEGMENT INFORMATION
The Group’s reportable segment is confined to mineral exploration only within Australia.
NOTE 4:
NET ADMINISTRATION EXPENSES
Net administration expenses
Consultants fees and expenses
Directors remuneration (non-executive)
Salaries and on-costs
Share based payments
Investor relations
Motor vehicle expenses
Audit costs
Stock exchange registry and reporting costs
Travel costs
Depreciation and amortisation
Other administration expenses
Gross administration expenses
Capitalised as exploration and evaluation costs1
Consolidated
2020
$
2019
$
10,231
136,127
849,608
224,272
196,718
19,249
27,537
71,699
8,592
16,657
87,909
1,648,599
(748,244)
5,083
109,500
981,437
263,921
163,959
12,736
26,600
78,985
14,681
17,585
84,431
1,758,918
(841,606)
Net administration expenses
,
900,355
917,312
1 The amount capitalised as exploration and evaluation costs, totalling $748,244 (2019: $841,606), forms part of the exploration and evaluation
expenditure for the year as set out in Note 11.
40
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5:
INCOME TAX
Statement of Comprehensive Income
Current income tax
Current income tax credit
Tax losses not recognised as probable
Deferred income tax
Temporary differences
Tax losses brought to account offsetting temporary differences
Income tax expense reported in the consolidated statement of comprehensive
income
Consolidated
2020
$
2019
$
226,899
(226,899)
-
178,981
(178,981)
-
1,284,598
(1,284,598)
-
1,022,574
(1,022,574)
-
-
-
Consolidated
2020
$
2019
$
Tax Reconciliation
A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the
Group’s applicable income tax rate is as follows:
Accounting loss before tax
At the statutory 30% tax rate (2019: 30%)
Share based payment expense
Non-deductible expenses
Tax losses not brought to account
Income tax expense reported in the consolidated statement of comprehensive
income
(984,124)
(866,104)
295,237
(67,282)
(1,057)
(226,898)
259,831
(79,176)
(1,674)
(178,981)
-
-
Deferred Income Tax
Statement of Financial Position
Income Statement
2020
$
2019
$
2020
$
2019
$
Deferred income tax at 30 June relates to the following:
CONSOLIDATED
Deferred tax liabilities
Interest receivable
Exploration and evaluation costs
Gross deferred income tax liabilities
Deferred tax assets
Accruals
Provisions
Share issue costs
Temporary differences not recognised as not
probable
Tax
deferred tax liability
Gross deferred income tax assets
Net Deferred Tax Asset
Deferred tax expense
losses brought to account to offset net
(3,617)
(4,589,285)
(4,592,902)
(6,826)
(3,299,310)
(3,306,136)
3,209
(1,289,975)
(6,121)
(1,051,152)
40,904
34,220
81,840
43,197
29,759
149,904
(2,293)
4,461
-
28,447
6,252
-
(81,840)
(149,904)
-
-
4,517,778
4,592,902
-
41
1,284,598
1,022,574
3,233,180
3,306,136
-
-
-
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5:
INCOME TAX (cont.)
Tax consolidation
(i)
Members of the tax consolidated group
Navarre Minerals Limited and its 100% owned Australian resident subsidiary formed a tax consolidated group with effect
from 2 May 2012. During the course of the year four subsidiary companies were incorporated and added to the tax
consolidated group. Navarre Minerals Limited is the head entity of the tax consolidated group.
(ii)
Tax effect accounting by members of the tax consolidated group
Measurement method adopted under UIG 1052 Tax Consolidated Accounting
The head entity and the controlled entities in the tax consolidated group continue to account for their own current and
deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of
current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax
amounts are measured in a systematic manner that is consistent with the principles in AASB 112 Income Taxes.
In addition to its own current and deferred tax amounts, the head entity also recognises current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
Tax losses
At balance date, the Group has estimated unused gross tax losses of $21,175,000 (2019: $19,126,000) that are available
to offset against future taxable profits subject to continuing to meet relevant statutory tests. To the extent that it does
not offset a net deferred tax liability, a deferred tax asset has not been recognised in the accounts for these unused losses
because it is not probable that future taxable profit will be available to use against such losses.
In June 2018, the Company received an allocation of up to $1,576,603 exploration credits in the Federal Government’s
Junior Minerals Exploration Incentive (“JMEI”) scheme for FY2019. The JMEI scheme enables eligible exploration
companies to create exploration credits by giving up a portion of their tax losses from greenfields minerals expenditure
and distributing these exploration credits to eligible investors who were issued new shares in the Company’s capital
raising activities during FY2019. On 11 November 2019, the Company created JMEI tax credits totalling $977,070 which
have been applied and distributed on a pro-rata basis to eligible investors. Accordingly, carry forward tax losses have
been reduced by $3,256,901 (i.e. $977,070 grossed up by 30%).
The balance of unused JMEI credits from FY2019 ($599,533) have been carried forward to FY2020, and depending on the
tax loss recorded for the FY2020, will be distributed to the FY2019 eligible investors. When issuing JMEI credits for
FY2020, priority will be given to the carry forward FY2019 credits up to the maximum of $599,533, prior to issuing JMEI
credits to FY2020 eligible investors.
In June 2019, the Company received an allocation of up to $1,500,000 exploration credits in the Federal Government’s
JMEI scheme for FY2020 which can be distributed to eligible investors who were issued new shares in the Company’s
capital raising activities during the FY2020. Following lodgement of the Company’s FY2020 tax return, the Company will
calculate the pool of exploration credits to be issued to eligible shareholders. However, as mentioned above, the
carryover FY2019 JMEI tax credits ($599,533) will be issued to the FY2019 eligible investors before the remaining
exploration credits can be allocated to the FY2020 eligible investors.
The JMEI scheme replaced the previous Exploration Development Incentive scheme (“EDI”) scheme from 1 July 2017. The
EDI operated for a three year period (FY15 – FY17) and the Company issued exploration credits to shareholders to the
value of $666,519. The value of tax losses forgone is $2,341,207.
NOTE 6:
EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share amounts are calculated by dividing net loss for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings/(loss) per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into
ordinary shares.
42
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6:
EARNINGS/(LOSS) PER SHARE (cont.)
For the year ended 30 June 2020 and for the comparative period, there are no dilutive potential ordinary shares as
conversion of share options and performance rights would decrease the loss per share and hence are non-dilutive.
The following data was used in the calculations of basic and diluted loss per share:
Net loss
Consolidated
2020
$
(984,124)
2019
$
(866,104)
Shares
Shares
Weighted average number of ordinary shares used in calculation of basic loss per
share
464,660,543
392,791,664
NOTE 7:
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Cash at bank earns interest at floating rates based on daily bank rates.
NOTE 8:
TRADE AND OTHER RECEIVABLES
Goods and services tax refund
Interest receivable
Prepaid Tandarra joint venture advance
Other
Consolidated
2020
$
2,596,648
2019
$
1,747,865
Consolidated
2020
$
86,808
12,057
56,795
25,162
2019
$
96,751
22,753
156,442
23,318
180,822
299,264
At balance date, no receivables are past due or impaired. Due to the short term nature of these receivables, their
carrying value approximates fair value. Trade receivables are non-interest bearing and are generally on 30-90 day terms.
Details regarding the credit risk of current receivables are disclosed in Note 16.
NOTE 9:
OTHER FINANCIAL ASSETS
Current
Term Deposits
Non-current
Bank Guarantees – Exploration Permit bonds
Consolidated
2020
$
3,010,000
2019
$
4,287,848
Consolidated
2020
$
110,000
2019
$
110,000
43
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10:
PROPERTY, PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Movement in Plant and Equipment
Net carrying amount at beginning of year
Additions
Depreciation
Net carrying amount at end of year
The useful life of the plant and equipment is estimated for 2020 at 3 to 5 years.
NOTE 11:
EXPLORATION AND EVALUATION COSTS
Balance at beginning of year
Expenditure for the year
Expenditure written-off during the year
Consolidated
2020
$
272,226
(232,701)
2019
$
260,460
(216,044)
39,525
44,416
44,416
11,766
(16,657)
30,856
31,145
(17,585)
39,525
44,416
Consolidated
2020
$
10,997,701
4,480,027
(180,110)
2019
$
7,493,861
3,507,403
(3,563)
15,297,618
10,997,701
Capitalised exploration and evaluation costs at 30 June 2020 relate to Bendigo North $5,067,766 (2019: $4,078,495),
Western Victoria Copper Project $1,310,384 (2019: $528,037), Stawell Corridor $8,047,955 (2019: $5,581,283), St Arnaud
Gold Project $836,027 (2019: $809,886) and Jubilee Gold Project $35,486 (2019: $0).
NOTE 12:
TRADE AND OTHER PAYABLES
Trade Creditors
Trade payables are non-interest bearing and are normally settled on 30 day terms.
NOTE 13:
PROVISIONS
Current
Annual leave entitlement
Long service leave entitlement
Non-current
Long service leave entitlement
Consolidated
2020
$
429,664
2019
$
416,375
Consolidated
2020
$
59,045
52,664
111,709
2019
$
51,058
46,704
97,762
Consolidated
2020
$
2,359
2019
$
1,434
44
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 14:
CONTRIBUTED EQUITY AND RESERVES
ISSUED AND PAID UP CAPITAL
Ordinary shares
Movements in Ordinary Shares
Balance at beginning of year
Share Issues:
Share placement at $0.11
Exercise of employee share options
Cost of equity instruments exercised
Share placement at $0.05
Share purchase plan at $0.05
Share placement at $0.075
Transaction costs 1
2020
Shares
Consolidated
2020
$
2019
Shares
2019
$
478,242,151
29,634,657
435,010,251
25,155,010
435,010,251
25,155,010
294,746,251
16,641,488
43,181,900
50,000
-
-
-
-
-
4,750,009
2,000
437
-
-
-
(272,799)
-
-
-
33,980,000
26,284,000
80,000,000
-
-
-
-
1,699,000
1,314,200
6,000,000
(499,678)
Balance at end of year
478,242,151
29,634,657
435,010,251
25,155,010
1 The total transaction costs for FY2019 include $128,000 being the value of 4,000,000 share options granted to Hartleys Limited as part consideration
for management of the Company’s Share Placement in April/May 2019. For further details, including the valuation of these options, please refer to
Note 19.
(a)
Terms and Conditions of Ordinary Shares
Ordinary shares entitle their holder to receive dividends as declared. In the event of winding up the Company, ordinary
shares entitle their holder to participate in the proceeds from the sale of all surplus assets in proportion to the number of
and amounts paid up or which should have been paid up on shares held. Each ordinary share entitles the holder to one
vote, either in person or by proxy, at a meeting of the Company. Ordinary shares issued during the year and since the end
of the year, from date of issue rank equally with the ordinary shares on issue.
(b)
Share Options
Employee Options
At 30 June 2020, 14,200,000 options over unissued shares granted to senior employees and non-executive directors of
the Company were outstanding. The options are granted pursuant to the Navarre Minerals Limited Option Plan, details of
which are set out in Note 19.
Other Options
At 30 June 2020, 5,000,000 share options over unissued shares were outstanding consisting of 1,000,000 options granted
to an ex-consultant of the Company and 4,000,000 share options granted to Zenix Nominees Pty Ltd, a subsidiary of
Hartleys Limited, as part consideration for Hartleys’ role as manager for the Share Placement completed in April/May
2019.
(c)
Share Performance Rights
At 30 June 2020, 2,800,000 performance rights over unissued shares were granted to senior employees and the managing
director of the Company. The performance rights are granted pursuant to the Navarre Minerals Limited Performance
Rights Plan, details of which are set out in Note 19.
(d)
Capital Management
Capital is defined as equity. When managing capital, management’s objective is to ensure the entity continues as a going
concern as well as to maintain optimal returns to shareholders and benefits of other stakeholders. All methods of
returning funds to shareholders outside of dividend payments or raising funds are considered within the context of the
Group’s objectives.
45
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 14:
CONTRIBUTED EQUITY AND RESERVES (cont.)
The Group will seek to raise further capital, if required, as and when necessary to meet its projected operations. The
decision of how the Group will raise future capital will depend on market conditions existing at that time. It is the Group’s
plan that this capital will be raised by any one or a combination of the following: placement of shares, pro-rata issue to
shareholders, the exercise of outstanding options, and/or a further issue of shares to the public. Should these methods
not be considered to be viable, or in the best interests of shareholders, then it would be the Group’s intention to meet its
obligations by either partial sale of the Group’s interests or farm-out, the latter course of action being part of the Group’s
overall strategy.
The Group is not subject to any externally imposed capital requirements.
OTHER RESERVES
Share Based Payments Reserve
The share based payments reserve records the value of benefits provided as equity instruments to directors, employees
and consultants under share-based payment plans (Note 19).
Balance at beginning of year
Cost of share based payments
Cost of expired equity instruments transferred to accumulated losses
Cost of exercised equity instruments transferred to issued capital
Balance at end of year
ACCUMULATED LOSSES
Balance at beginning of year
Net loss for the year
Cost of equity instruments expired
Balance at end of year
NOTE 15:
STATEMENT OF CASH FLOWS RECONCILIATION
Reconciliation of net loss after tax to net cash flows used in operating activities
Net loss
Adjustments for:
Exploration expenditure written-off
Depreciation and amortisation (net of allocation to exploration licences)
Share based payments (net of allocation to exploration licences)
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables (net of allocation to exploration
licences)
Increase in trade and other payables (net of allocation to exploration licences)
Increase in provisions (net of allocation to exploration licences)
Consolidated
2020
$
521,068
224,272
(72,154)
(437)
2019
$
131,005
391,921
(1,858)
-
672,749
521,068
Consolidated
2020
$
(8,704,555)
(984,124)
72,154
2019
$
(7,840,309)
(866,104)
1,858
(9,616,525)
(8,704,555)
Consolidated
2020
$
(984,124)
2019
$
(866,104)
180,110
1,836
104,898
3,563
1,995
152,197
21,326
(7,148)
27,657
7,225
28,546
8,736
Net cash flows used in operating activities
(641,072)
(678,215)
46
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 16:
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and short term deposits, the main purpose of which is to
finance the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and
trade payables, which arise directly from its operations. The main risks arising from the Group’s financial instruments are
credit risk, interest rate risk and liquidity risk. The Board of Directors has reviewed each of those risks and has
determined that they are not significant in terms of the Group’s current activities.
Credit risk
The Group trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing
basis with the results being that the Group’s exposure to bad debts is not significant.
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade, other
receivables and other financial assets. The Group's exposure to credit risk arises from potential default of the counter
party, with a maximum exposure equal to the carrying amount of these instruments. No collateral is held as security.
Exposure at balance date is the carrying value as disclosed in each applicable note.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s cash and cash
equivalents with a floating interest rate. The impact of a 1.0% change in the market interest rates will not have a material
impact on the Group’s financial position.
There is no impact on equity other than the above net profit sensitivities on retained earnings/accumulated losses.
Liquidity Risk
The Group’s exposure to financial obligations relating to corporate administration and projects expenditure, are subject
to budgeting and reporting controls, to ensure that such obligations do not exceed cash held and known cash inflows for
a period of at least 1 year.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built in an appropriate
liquidity risk framework for the management of the Group’s short, medium and longer term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate equity funding through the
monitoring of future cash flow forecasts of its operations, which reflect management’s expectations of the settlement of
financial assets and liabilities.
The Group has limited financial resources and will need to raise additional capital from time to time as such fund raisings
will be subject to factors beyond the control of the Group and its directors. When Navarre requires further funding for its
programs, then it is the Group’s intention that the additional funds will be raised by any one or a combination of the
following: placement of shares, pro-rata issue to shareholders, the exercise of outstanding options, and/or a further issue
of shares to the public. Should these methods not be considered to be viable, or in the best interests of shareholders,
then it would be the Group’s intention to meet its obligations by either partial sale of the Group’s interests or farm-out,
the latter course of action being part of the Group’s overall strategy.
Maturity Analysis
At balance date, the Group holds $429,664 of financial liabilities consisting of trade and other payables. All financial
liabilities will mature within 12 months.
Fair Values
The aggregate net fair values of the financial assets and liabilities are the same as the carrying values in the consolidated
statement of financial position.
47
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17:
COMMITMENTS AND CONTINGENCIES
(a)
Commitments
Operating Lease
Future minimum rentals payable under operating lease for office premises at
balance date:
Payable not later than one year
Exploration Commitments – Exploration Permits
Estimated cost of minimum work requirements contracted for under exploration
permit is estimated at balance date:
Payable not later than one year
Payable later than one year but not later than five years
Payable later than five years
2020
$
2019
$
2,390
2,390
2020
$
2,390
2,390
2019
$
727,350
2,195,000
588,000
3,510,350
463,500
1,275,200
735,000
2,473,700
Exploration commitments at 30 June 2020 relate to Bendigo North (the Company’s 49% interest in the Tandarra Gold
Project) $1,274,000 (2019: $1,396,500), Western Victoria Copper Project (excluding EL 5425, see below for details)
$306,000 (2019: $231,000), Stawell Corridor $1,551,050 (2019: $465,900), St Arnaud Gold Project $209,500 (2019:
$380,300) and Jubilee Gold Project $169,800 (2019: $0).
During FY2019, the Company received notification from the Victorian Department of Economic Development, Jobs,
Transport and Resources (DEDJTR) that Retention Licence RL 6660 had been granted for a ten-year term expiring on 2
November 2028 for the Tandarra Gold Project. The programme of work and milestones were also agreed with the
DEDJTR and will require expenditure of $3.1 million during the ten-year period. The Company is obligated to pay 49% of
the required exploration programme expenditure of $3.1 million over the period of the licence.
Exploration commitments for Stavely (EL 5425) during the reporting period were met by Stavely Minerals Limited
(Stavely) under an earn-in, pursuant to which Stavely may earn up to 80% interest in EL 5425. During the financial year,
the Company received notification that Stavely had satisfied the conditions for the first earn-in stage by sole funding
$150,000 of exploration costs in the first two years, to earn a 51% equity interest in EL 5425 in accordance with the
Stavely Farm-in and Joint Venture Agreement signed in January 2018. Stavely has also elected to proceed to the second
earn-in stage and sole fund a further $300,000 of exploration costs over the next three years to earn an additional 29%
equity interest.
In June 2020, the Group executed an Asset Sale Agreement to acquire 100% of the Jubilee Gold Project (EL 006689).
Under the agreement, and upon transfer of the tenement, the Group will be required to meet all exploration
commitments for the tenement. The transfer of the tenement is currently being processed by the Victorian Department
of Jobs, Precincts and Regions.
The Company currently has five exploration licence applications in process. If these licences are granted, there will be
minimum expenditure commitment applicable to the tenements. The amount of this commitment is currently unknown.
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform work to meet
the minimum expenditure requirements set by the Victorian State Government. These obligations are expected to be
fulfilled in the normal course of operations. Exploration interests may be relinquished or joint ventured to reduce this
expense to the Group. The Victorian State Government has the authority to defer, waive or amend the minimum
expenditure requirements.
48
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18:
RELATED PARTY DISCLOSURES
Subsidiaries
The consolidated financial statements include the financial statements of Navarre Minerals Limited and the following
subsidiaries:
Black Range Metals Pty Ltd
Loddon Gold Pty Ltd
North Central Gold Exploration Pty Ltd
Tandarra Gold Pty Ltd
Western Victoria Gold Pty Ltd
Compensation of key management personnel by category:
Short term employee benefits
Post-employment benefits
Share-based payments
Long service leave expense
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
%
Entity Interest
2019
%
100
-
-
-
-
2020
%
100
100
100
100
100
Consolidated
2020
$
737,247
83,952
239,676
8,318
1,069,193
2019
$
714,214
76,895
241,418
9,260
1,041,787
Details of compensation of individual key management personnel are set out in the Remuneration Report.
NOTE 19:
SHARE BASED PAYMENT PLANS
The Group has established the Navarre Minerals Limited Option Plan (“Option Plan”) and the Navarre Minerals Limited
Performance Rights Plan (“Performance Rights Plan”), both of which have been approved by shareholders at a general
meeting, whereby the Group may, at the discretion of the Board of Directors , grant options over ordinary shares and
performance rights over ordinary shares in the company to certain key management personnel of the Group. The options
and performance rights are issued for nil consideration and are granted in accordance with performance guidelines
established by the Remuneration and Nomination Committee.
In November 2019, 1,500,000 performance rights were issued to the Managing Director and in May 2020 a further
1,300,000 performance rights were issued to senior employees, pursuant to the Performance Rights Plan.
In addition to options issued under the Option Plan, the Group may also issue options to service providers as
consideration for services provided to the Group.
Set out below are summaries of options granted under the Option Plan:
2020
Grant date
Expiry date
23/06/2015 31/12/2019
22/02/2017 31/12/2021
22/02/2017 31/12/2021
29/01/2018 29/01/2023
10/04/2018 10/04/2023
06/06/2018 06/06/2021
21/02/2019 21/02/2024
17/05/2019 17/05/2024
17/05/2019 17/05/2022
Exercise
price
Held at 1
July 2019
Options
Granted
Options
Exercised
Options
Lapsed
Held at 30
June 2020
$0.0400
$0.0720
$0.0900
$0.1500
$0.1500
$0.1500
$0.1200
$0.1200
$0.1313
50,000
200,000
200,000
2,750,000
5,400,000
1,000,000
2,100,000
6,100,000
4,000,000
21,800,000
-
-
-
-
-
-
-
-
-
-
50,000
-
-
-
-
-
-
-
-
50,000
-
-
-
750,000
750,000
-
400,000
650,000
-
-
200,000
200,000
2,000,000
4,650,000
1,000,000
1,700,000
5,450,000
4,000,000
2,550,000 19,200,000
Weighted average exercise price
$0.1338
$0.0000
$0.0400
$0.1376
$0.1335
49
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19:
SHARE BASED PAYMENT PLANS (cont.)
2019
Grant date
Expiry date
31/01/2014 31/12/2018
16/02/2015 31/12/2018
23/06/2015 31/12/2019
22/02/2017 31/12/2021
22/02/2017 31/12/2021
29/01/2018 29/01/2023
10/04/2018 10/04/2023
06/06/2018 06/06/2021
21/02/2019 21/02/2024
17/05/2019 17/05/2024
17/05/2019 17/05/2022
Exercise
price
Held at 1
July 2018
Options
Granted
Options
Exercised
Options
Lapsed
Held at 30
June 2019
$0.1000
$0.1000
$0.0400
$0.0720
$0.0900
$0.1500
$0.1500
$0.1500
$0.1200
$0.1200
$0.1313
25,000
100,000
50,000
200,000
200,000
2,750,000
5,400,000
1,000,000
-
-
-
9,725,000
-
-
-
-
-
-
-
-
2,100,000
6,100,000
4,000,000
12,200,000
-
-
-
-
-
-
-
-
-
-
-
-
25,000
100,000
-
-
-
-
-
-
-
-
-
-
-
50,000
200,000
200,000
2,750,000
5,400,000
1,000,000
2,100,000
6,100,000
4,000,000
125,000 21,800,000
Weighted average exercise price
$0.1460
$0.1237
$0.0000
$0.1000
$0.1338
Set out below are the options, vested and exercisable at the end of the financial year:
Grant date
Expiry date
23/06/2015 31/12/2019
22/02/2017 31/12/2021
22/02/2017 31/12/2021
06/06/2018 06/06/2021
21/02/2019 21/02/2024
17/05/2019 17/05/2024
17/05/2019 17/05/2022
2020
Options
-
200,000
200,000
1,000,000
566,666
3,634,334
4,000,000
2019
Options
50,000
200,000
200,000
1,000,000
-
-
4,000,000
9,601,000
5,450,000
The weighted average share price during the financial year was $0.1062 (2019: $0.0686).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.84 years
(2019: 3.87 years).
Set out below are summaries of performance rights granted under the Performance Rights Plan:
2020
Grant date
Expiry date
18/11/2019 31/12/2022
18/05/2020 30/06/2023
Held at 1
July 2019
Performance
Rights
Granted
Performance
Rights
Exercised
Performance
Rights Lapsed
Held at 30
June 2020
-
-
-
1,500,000
1,300,000
2,800,000
-
-
-
-
-
-
1,500,000
1,300,000
2,800,000
50
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19:
SHARE BASED PAYMENT PLANS (cont.)
For the performance rights granted during the current financial year, the valuation model inputs used to determine the
fair value at grant date are as follows:
Grant date
Expiry date
18/11/2019 31/12/2022
18/11/2019 31/12/2022
18/11/2019 31/12/2022
18/11/2019 31/12/2022
18/05/2020 30/06/2023
Share
price at
grant date
$0.105
$0.105
$0.105
$0.105
$0.140
Expected
volatility
Dividend yield
Risk-free
interest rate
-
85%
85%
85%
-
-
0%
0%
0%
-
-
0.81%
0.81%
0.81%
-
Fair value
at grant
date
$0.1050
$0.0877
$0.0692
$0.0549
$0.1400
Set out below are the performance rights, vested and exercisable at the end of the financial year:
Grant date
Expiry date
18/11/2019 31/12/2022
NOTE 20:
AUDITOR’S REMUNERATION
Amounts received or due and receivable by RSM Australia Partners for:
Audit or review of the financial reports
Other audit services
NOTE 21:
PARENT ENTITY INFORMATION
Information relating to Navarre Minerals Limited
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Share based payment reserve
Accumulated losses
Total shareholders’ equity
(Loss) of the parent entity
Total comprehensive (loss) of the parent entity
Details of any guarantees entered into by the parent entity in relation to the debts of its
subsidiaries
Details of any contingent liabilities of the parent entity
Details of any contractual commitments by the parent entity for the acquisition of
property, plant or equipment
51
2020
Performance
Rights
166,666
2019
Performance
Rights
-
Consolidated
2020
$
27,100
-
27,100
2019
$
26,600
-
26,600
2020
$
2019
$
7,031,809
(541,373)
(543,732)
6,334,977
21,549,176 17,487,094
(514,138)
(515,572)
29,634,657 25,155,010
521,068
672,749
(9,301,962)
(8,704,556)
21,005,444 16,971,522
(865,841)
(865,841)
(983,857)
(983,857)
n/a
n/a
n/a
n/a
n/a
n/a
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 22:
EVENTS SUBSEQUENT TO BALANCE DATE
In July 2020, the Group raised $8,000,000 (before transaction costs) through a share placement to sophisticated and
professional investors, resulting in the issue of 64,000,000 ordinary shares at an issue price of $0.125 per share.
On 1 September 2020, Non-executive Director, Mr Ian Holland, was appointed as joint Managing Director as part of a
phased succession process which will see Mr Holland as sole Managing Director on 1 April 2021. As part of the Mr
Holland’s appointment, and subject to shareholder approval at the November 2020 Annual General Meeting, an LTI
allocation of 1.5 million Performance Rights will be granted with vesting to occur against various share price milestones
over 3 years.
Other than the above, 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.
52
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Navarre Minerals Limited, I state that:
In the opinion of the Directors:
(a)
The financial statements and notes of Navarre Minerals Limited for the financial year ending 30 June 2020 are in
accordance with the Corporations Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Company’s and the consolidated entity’s financial position as at 30 June
2020.
Complying with Accounting Standards (including the Australian Accounting
Corporations Regulations 2001.
Interpretations) and
The financial statements and notes also comply with International Financial Reporting Standards as disclosed in
Note 2(a)(i).
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
(b)
(c)
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2020.
On behalf of the Board
G McDermott
Managing Director
Melbourne, 15 September 2020
53
INDEPENDENT AUDITOR’S REPORT
To the Members of Navarre Minerals Limited
Opinion
We have audited the financial report of Navarre Minerals Limited. (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement
of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 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 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.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matter to be communicated in our report.
54
Key Audit Matters (Continued)
Key Audit Matter
How our audit addressed this matter
Carrying Value of Capitalised Exploration Expenditure
Refer to Note 11 in the financial statements
The Group has capitalised exploration and
evaluation expenditure, with a carrying value of
$15,297,618 as at 30 June 2020.
Under AASB 6 Exploration for and Evaluation of
Mineral Resources, the Group is required to test the
exploration and evaluation asset for impairment
when facts and circumstances suggest that the
carrying amount may exceed
the recoverable
amount. We determined this to be a Key Audit Matter
judgment
the significant management
due
involved in assessing the carrying value of the asset.
to
Our audit procedures in relation to the carrying value of
exploration and evaluation expenditure included:
• obtaining evidence that the Group has valid rights to
explore in the specific areas of interest;
• enquiring with management and reviewing the basis on
which they have determined that the exploration and
evaluation of mineral resources has not at the reporting
date, reached a stage which permits a reasonable
assessment of
the existence or otherwise of
economically recoverable reserves;
• enquiring with management and reviewing budgets and
plans
to assess whether active and significant
operations are continuing in the specific areas of
interest;
•
•
reviewing whether management has received any data
which might cause
the
exploration and evaluation asset is unlikely to be
recovered in full from successful development or by
sale; and
to conclude
them
that
and
reviewing minutes of director meetings and Australian
Securities
Commission
announcements to ensure the Directors have not
resolved to discontinue activities in the specific areas of
interest.
Investments
Other Information
The directors are responsible for the other information. The other information comprises the information included
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 accordingly 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.
55
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 have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Navarre Minerals Limited for the year ended 30 June 2020, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
J S CROALL
Partner
Dated: 15 September 2020
Melbourne, Victoria
56
Navarre Minerals Limited
ABN 66 125 140 105
ADDITIONAL SHAREHOLDER INFORMATION
The information set out below was compiled as at 11 September 2020.
1.
Listing Information
The Company is listed, and all of the Company’s issued shares are quoted on, the Australian Securities Exchange
(ASX).
2.
(i)
Distribution of Equity Securities
Ordinary share capital
542,442,151 fully paid ordinary shares are held by 3,291 individual shareholders.
At a general meeting of shareholders, on a show of hands, each person who is a shareholder or sole proxy has one
vote. On a poll, each shareholder is entitled to one vote for each fully paid share.
(ii)
Unquoted options on issue
19,00,000 unquoted options are held by 7 individual option holders.
There are no voting rights attached to these options.
(iii) Unquoted share performance rights on issue
2,800,000 unquoted options are held by 3 individual option holders.
There are no voting rights attached to these performance rights.
(iv) Analysis of number of shareholders by size of holding
Ranges
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
>100,001
Totals
Holders
126
289
571
1,714
591
3,291
Total Units
12,005
1,162,040
4,692,603
71,668,169
464,907,334
542,442,151
% IC
0.000
0.210
0.870
13.210
85.710
100.000
225 holders holding a total of 313,773 shares held less than a marketable parcel of ordinary shares.
3.
Director Nomination
The Company will hold its Annual General Meeting of shareholders on 26 November 2020. The Company also
advises that the Closing Date for receipt of nominations for the position of Director is Friday, 9 October 2020.
Nominations must be received in writing no later than 5.00pm (Melbourne time) on this date at the Company’s
registered office.
57
Navarre Minerals Limited
ABN 66 125 140 105
ADDITIONAL SHAREHOLDER INFORMATION
4.
20 Largest Shareholders
The following table sets out the top 20 holdings of the Company’s shares:
Shareholder
Newmarket Gold NT Holdings Pty Ltd
VBS Exchange Pty Ltd
HSBC Custody Nominees
Dr Stephen Garth Nordstrom
Holdings associated with Kevin Wilson
Holdings associated with Geoff McDermott
Holdings associated with Colin Naylor
Spruzen Corporation Pty Ltd
Campbell Kitchener Hume & Associates Pty Ltd
Mr Howard Manly Dimond & Mrs Linda Margaret Doris Dimond
Valleytech Instrumentation Pty Ltd
Citicorp Nominees Pty Limited
ESM Limited
Tattersfield Securities Limited
Cs Fourth Nominees Pty Limited
Yavern Creek Holdings Pty Ltd
Cospiqua Pty Ltd
Pe Group Holdings Pty Ltd
Mr Ralph Douglas Russell & Ms Ann Maree Hynes
Sandhurst Trustees Ltd
Number of
shares
47,981,303
42,433,412
39,646,657
38,000,000
13,606,085
12,978,568
5,814,562
5,800,000
5,600,000
5,190,000
5,100,000
4,816,205
4,225,000
3,861,114
3,698,103
3,040,000
2,795,000
2,734,339
2,459,915
2,405,794
252,186,057
% Issued
capital
8.845
7.823
7.309
7.005
2.508
2.393
1.072
1.069
1.032
0.957
0.940
0.888
0.779
0.712
0.682
0.560
0.515
0.504
0.454
0.444
46.491
5.
Substantial Shareholders
The substantial holders were as follows:
Shareholder
Newmarket Gold NT Holdings Pty Ltd
VBS Exchange Pty Ltd
1832 Asset Management L.P
Dr Stephen Garth Nordstrom
No of shares
47,981,303
42,433,412
38,881,830
38,000,000
% Issued Capital
8.845
7.823
7.168
7.005
58
Navarre Minerals Limited
ABN 66 125 140 105
ADDITIONAL SHAREHOLDER INFORMATION
TENEMENT INFORMATION (as at 11 September 2020)
Project
Bendigo North
Tandarra3
Western Victoria Copper Project
Black Range
Stavely4
Glenlyle
Stawell Corridor
Ararat
Tatyoon
Long Gully
Westgate
Hospital Hill
Napoleon
Snake Hill
Langi Logan
Langi Logan West
Margaret Gully
Mininera
St Arnaud
St Arnaud
Lord Nelson
St Arnaud East
St Arnaud West
Jubilee Gold Project
Jubilee5
Tenement Details1, 2
Group Interest
RL 6660
EL 4590
EL 5425
EL 5497
EL 5476
EL 5480
EL 6525
EL 6526
EL 6527
EL 6528
ELA 6530
EL 6702
EL 6745
ELA 6843
EL 7125
EL 6556
ELA 6819
ELA 7431
ELA 7436
EL 006689
49%
100%
49%
100%
100%
100%
100%
100%
100%
100%
0%
100%
100%
0%
100%
100%
0%
0%
0%
0%
Notes
1 EL = Exploration Licence; ELA = Exploration Licence Application; RL = Retention Licence.
2 All tenements are located in Victoria.
3 Catalyst Metals Ltd successfully completed all obligations to earn a 51% interest under a farm-out agreement
with Navarre. In addition to its ownership of the Tandarra licence in the Bendigo North area, Navarre is
entitled to a 1% royalty on Catalyst’s share of proceeds from future production from part of the area covered
by exploration licences EL 5266 (Raydarra) and EL 5533 (Sebastian).
4 Stavely Minerals Limited completed its obligations to earn a 51% interest and may earn a further 29% interest
under an earn-in and joint venture agreement with Navarre.
5 Navarre purchased EL 006689 (Jubilee) and the transfer of the exploration licence is currently being processed
by the Victorian Department of Jobs, Precincts and Regions.
59