Nelson Resources Limited
Annual Report 2020

Plain-text annual report

And Controlled Entities ABN: 83 127 620 482 ANNUAL REPORT For the Year Ended 30 June 2020 For personal use only CONTENTS CORPORATE DIRECTORY CHAIRMAN’S LETTER 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 FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES 1 2 3 21 22 23 24 25 26 51 52 57 Nelson Resources Limited and Controlled Entities For personal use only CORPORATE DIRECTORY DIRECTORS Warren Hallam Adam Schofield Stephen Brockhurst SECRETARY Stephen Brockhurst Non-Executive Chairman Executive Director Non-Executive Director REGISTERED AND BUSINESS OFFICE Level 11, London House 216 St Georges Terrace Perth WA 6000 Telephone: +61 8 9481 0389 Facsimile: +61 8 9463 6103 WEBSITE & EMAIL www.nelsonresources.com.au info@nelsonresources.com.au STOCK EXCHANGE LISTINGS Australian Securities Exchange ASX Code: NES AUDITORS Criterion Audit Pty Ltd Suite 1 GF 437 Roberts Road Subiaco WA 6008 BANKER National Australia Bank 1232 Hay Street West Perth WA 6005 LEGAL ADVISORS Price Sierakowski Level 24, St Martin’s Tower 44 St Georges Terrace Perth WA 6000 SHARE REGISTRY Automic Registry Services Pty Ltd Level 2 267 St Georges Terrace Perth WA 6000 Nelson Resources Limited and Controlled Entities 1 For personal use only CHAIRMAN’S LETTER Dear Shareholders It is with pleasure that I present you the third Annual Report of Nelson Resources Limited as a listed public company. In what has been a challenging 6 - 12 months for many Junior Explorers, the Company has managed to achieve several successes:     The Company has completed a successful and highly oversubscribed Rights Issue and Placement to existing and new shareholders raising $2.355m after costs. The Company has completed its planned reconsolidation of the Woodline Project. The Company has finalised an 18-month review of the large Woodline data set it acquired and has generated an exploration model for Woodline that will guide its future exploration programs. The Company has delineated its exploration programs for the next 6 -12 months which it believes will produce significant exploration success. Since listing on the ASX in December of 2017 with 20 km² of tenure, the Company has delivered on its exploration commitments across the Company’s portfolio of gold assets in the prolific eastern goldfields’ region of WA. The Company has subsequently built a significant and enviable 956 km² tenement holding. Within this holding the Company has 934 km² of tenure in the Albany Fraser Range and more specifically has re-consolidated 828 km² of the exciting Woodline Project that was previously explored by SIPA Resources, Newmont and MRG Resources. The Woodline Project is located north of the Fraser Range and is at the southern end of the interpreted Tropicana belt. Total exploration expenditure to date by previous explorers, including Nelson Resources, is approximately $14m. The exploration to date has an identified >20km long gold geochemical surface and bedrock anomaly that is placed in the same structural setting as the Tropicana Gold Mine which is 350km north east. The Company believes the Woodline Project has the potential to deliver several significant gold resources including the potential for a Tropicana scale deposit and looks forward to continuing the exceptional work undertaken to date. The Tempest Project was acquired by the Company during the year and has an exciting extension of the gold bearing paleochannel identified in drilling at the adjoining IGO/Rumble Thunderstorm project. The Company anticipates the base metals potential at this project to also be of significant interest. The Yarri project which lies 12km north of Carosue Dam has had considerable work completed by the Company. This project has delivered some significant gold intercepts, however further work is required to determine the resource potential of the project. Nelson Resources Limited and Controlled Entities 2 For personal use only CHAIRMAN’S LETTER continued The Fortnum project lies 14km southwest of the Fortnum Mining center and has some exciting historical drilling. The Company is in discussions with a potential JV partner for this project. I commend our team managed by Adam Schofield for their efforts during the year and the demeanor and care for with which they have looked after shareholder’s funds and for their methodical approach to project building and exploration. I look forward to an exciting year ahead where our Woodline Project and Tempest Project will be the focus of our attention. To you, our shareholders I thank you for your patience and for the support that you have placed in the Board and our team and we look forward to working together and remain focused on delivering shareholder value through our exploration success. ____________________ Warren Hallam Non-Executive Chairman 12 August 2020 Nelson Resources Limited and Controlled Entities 3 For personal use only DIRECTORS’ REPORT Your Directors submit the annual financial report of the Consolidated Entity for the year ended 30 June 2020. DIRECTORS The names of Directors who held office during or since the end of the year: Warren Hallam Adam Schofield Stephen Brockhurst Non-Executive Chairman Executive Director Non-Executive Director COMPANY SECRETARY Stephen Brockhurst Company Secretary PRINCIPAL ACTIVITIES The principal activities of the Consolidated Entity during the year were the exploration and development of natural resources. There have been no other significant changes in the activities of the Consolidated Entity during the year other than matters noted in this report. REVIEW OF RESULTS The loss after tax for the year ended 30 June 2020 was $723,634 (2019: $1,079,273). DIVIDENDS No dividends were paid or declared during the year ended 30 June 2020 (2019: nil). CORPORATE Funding On 14 February 2020 the Company issued 7,228,916 shares at $0.0415 each raising $300,000 plus 3,614,458 unquoted free attaching options exercisable at $0.08 each, expiring 14 February 2022 as part of a placement. On 9 June 2020 the Company announced a renounceable entitlements issue for the offer of one new share (at a price of $0.038 each) for every one existing share held on 12 June 2020, with one attaching quoted option, exercisable at $0.08 and expiring 24 months from issue, for every two new shares subscribed. On 3 July 2020 the Company announced that the offer had closed, raising $2,007,226. On 7 July 2020 the Company announced that 52,821,762 shares along with 26,410,881 free attaching options exercisable at $0.08 expiring 7 July 2022 had been issued. Nelson Resources Limited and Controlled Entities 4 For personal use only DIRECTORS’ REPORT continued On 7 July 2020 the Company announced that a placement had been undertaken raising $348,027 from the issue of 9,158,618 shares along with 4,579,275 free attaching options exercisable at $0.08 expiring 7 July 2022. COVID-19 Impacts While the impact of COVID-19 on the Company's operations was initially severe, the easing of intrastate restrictions has minimised its impact. The Company continues to follow all State Government directives in respect to COVID-19 and the Company’s operations. OPERATIONS Figure 1 – Project Locations Nelson Resources Limited and Controlled Entities 5 For personal use only DIRECTORS’ REPORT continued Project Activity: Nelson Resources has completed the following work at each of its projects during the year: Woodline Project (Grindall-Redmill-Harvey & Socrates) The Woodline Project lies 140km South East of Kalgoorlie and is halfway between the Trans Australia Rail line and the Eyre Highway. The Woodline Project is made up of the Grindall, Redmill, Harvey & Socrates Projects which make up 828km² of premium Tenure (Figure 2) During the year, the Company completed its planned reconsolidation of the Woodline Project and finalised an 18-month review of the large Woodline data set it acquired. This has generated an exploration model for the Woodline Project that will guide its future exploration programs. The Woodline project has a significant number of distinct exploration opportunities and these are shown below with the planned work programs: Cundeelee Fault (Tropicana Scale Potential) The Woodline Project has 45km of the Cundeelee fault within its tenure. This fault is the boundary between the Albany Fraser Oregon and the Yilgarn Craton. There is an already identified >20km gold geochemical and bedrock anomaly which is interpreted to be in the hanging wall of the Northern Foreland of the Albany Fraser Oregon which is the same structural setting as the Tropicana Gold Mine. There is limited RC drilling in this anomaly and the Company intends to conduct approximately 3,000 meters of RC drilling within the anomaly during the remainder of 2020. This drilling is to follow up on significant gold intercepts obtained from Sipa/Newmont drilling at Grindall and Redmill and is intended to demonstrate the presence of a larger gold system and the potential for a large Tropicana scale discovery. Prior to commencing this drilling, the Company will conduct the following geophysics at both Grindall and Redmill to help guide drilling by improving the structural understanding of the localised geology: • • • 4 km² Photogrammetry Surveys for Centimetre level accurate DEM data; 4 km² Ultra High-Resolution Ground Magnetic Surveys for structural data; 4 km² Passive Seismic Surveys for cover mapping and structural data. This will be followed up with approximately 3,000 meters of RC drilling at Grindall and Redmill to follow up on existing targets and those identified by the geophysics. Additional to the above, the Company will conduct the below geophysics over the >20 km long gold geochemical and bedrock anomaly to generate targets for future drilling: • • • 120 km² Photogrammetry Surveys for Centimetre level accurate DEM data; 120 km² High-resolution UAV Aero Magnetic Surveys for structural data; 120 km² UGV Passive Seismic Surveys for cover mapping and structural data. Nelson Resources Limited and Controlled Entities 6 For personal use only DIRECTORS’ REPORT continued The Company anticipates it will identify the structural controls for the gold system it is targeting with the above programs. Claypan Fault (Socrates) The Socrates project (12km²) is the Company’s original Woodline project and has had approximately 8400 meters of RC drilling done. The bulk of this drilling is on a mineralised zone that currently extends for approximately 450m and is open on strike and down dip. The best gold intercepts currently are: 1m @ 142 g/t Au 192m @ 0.5 g/t Au 8m @ 3.53 g/t Au 25m @ 2.06 g/t Au The Company plans to conduct a geophysics program as shown below. • • 144 km² Photogrammetry Surveys for Centimetre level accurate DEM data; 144 km² High-resolution UAV Aero Magnetic Surveys for structural data. This will better map three parallel potentially gold bearing structures that have been identified by low resolution magnetics and show gold anomalism at surface. This will be followed up with approximately 1500 meters of RC drilling and 1500m of Aircore drilling to follow up on targets identified by the geophysics and to show extension of the existing strike. The Company believes it will be in a position to declare a resource at Socrates in 2021. Keith-Kilkenny Fault (Norseman - Wiluna Greenstone Belt) There is approximately 30km of unexplored Greenstones within the Woodline tenure that has had little to no exploration done. The Company plans to conduct a geophysics program as shown below. • • 180 km² Photogrammetry Surveys for Centimetre level accurate DEM data; 180 km² High-resolution UAV Aero Magnetic Surveys for structural data. Subject to the results of the geophysics the Company may drill approximately 3000m of Aircore to follow up on any targets that look promising for both Gold and Base Metals. The above exploration programs may vary as the results of the geophysics programs are reviewed. Nelson Resources Limited and Controlled Entities 7 For personal use only DIRECTORS’ REPORT continued Figure 2. 20km Gold Geochemical Anomaly with Woodline tenure shown (Granted & Pending) Tempest Project The Tempest project is located 250km ESE of Kalgoorlie and 90km NE from Nova-Bollinger Mine. It has an area of 105 km² and borders the IGO / Rumble Thunderstorm JV project (Figure 3). Recent drilling at the Thunderstorm JV includes an exceptional intercept of 25m @2.42g/t Au at the Themis Prospect and 4m @ 3.8g/t Au at the Pion Prospect (ASX Announcement Rumble Resources 1st July 2019). Nelson Resources Limited and Controlled Entities 8 For personal use only DIRECTORS’ REPORT continued The project is located in the Fraser Complex of the Proterozoic Albany-Fraser Orogen and is east of the Archean Yilgarn Craton. Tertiary fluvio-marine sediments associated with the Eucla Basin cover much of the region. The Proterozoic geology is characterized by granulite facies, felsic to mafic gneisses and felsic and mafic schists and intruded granites. The Tempest project has the potential to host both gold and base metal resources and historical exploration is both limited and early stage. Historical work done is unrelated to the anticipated extension of the paleochannel identified at the neighbouring Thunderstorm project. Within the remainder of 2020, the Company intends to conduct the following Geophysics programs: • • • 24 km² Photogrammetry Surveys for Centimetre level accurate DEM data; 24 km² Ultra High-Resolution Ground Magnetic Surveys for structural data; 24 km² Passive Seismic Surveys for cover mapping and structural data. This work is intended to map the extent of the paleochannel and define RC drill targets for 2021. Additionally, the Company may look to fly an EM survey to potentially identify and base metal conductors as IGO is currently conducting a large Moving Loop EM program at the Thunderstorm project adjacent to the Tempest project. Nelson Resources Limited and Controlled Entities 9 For personal use only DIRECTORS’ REPORT continued Figure 3. Tenement E28/2805 in relation to Rumble’s Thunderstorm JV with IGO Nelson Resources Limited and Controlled Entities 10 For personal use only DIRECTORS’ REPORT continued Yarri Project The Yarri Project lies 160km North East of Kalgoorlie on Edjudina Station and is 30km North of Saracens Carosue Dam Mine and 7.5km East of the Porphyry Mine. Nelson’s Yarri project consists of three prospects to the North and East of the historic Yarri State Battery site. The Company’s main focus is on the Wallaby line of workings immediately to the East of Yarri, where recent drilling by the Company has returned a number of high grade encouraging drill intersections. The Wallaby lodes were mined from 1902 to 1914 and from 1934 to 1940 producing 22,000 ounces of gold. The maximum depth of the old workings was to a shallow 35 metres (100 feet) below surface. The Great Banjo lodes were mined between 1903 and 1905 producing 84.2 ounces of gold from 129 tonnes of ore at an average grade of 20.3g/t. The Gibberts lodes were also mined between 1903 and 1905 and produced 37.5 ounces from 64.5 tonnes at an average grade of 18.1g/t. No production is documented since this time. In the region, the Porphyry Mine is located approximately 7.5 kilometres to the West in similar host rocks. It has amassed a resource of approximately 880,000 ounces of gold (production plus defined resource estimates obtained from available literature). In May the Company signed a 3-month option agreement with Haddison Limited for the potential sale of the Yarri Project. Haddison has withdrawn from the option agreement and the Company is seeking other sales and development opportunities. Fortnum Project The Fortnum project tenement number E52/3695 totals 21km². The Project is located within the Peak Hill Mineral Field, 140km north-west of Meekatharra and approximately 14km southwest of the Fortnum Mining center, in the locality of Billara Bore. The geology of the tenure consists of a fault bounded package of schists derived from the Narracoota and Labouchere Formation constrained by the Despair Granite to the east and Yarlarweelor Gneiss complex to the West. Thin surficial cover extends over the area, with strong insitu regolith development in the eastern parts of the schist, adjacent to the Despair Granite. There are four gold mineralisation prospects on the tenure. Billara A, Billara North and Billara South are associated with quartz veining in highly sheared mafic schist adjacent to the contact with the Despair Granite. Billara D is associated with quartz veins in a NNE-trending, biotiterich schist, the Despair Granite, analogous to the Wilthorpe gold mine, 9km to the south. The Company is in discussions regarding a potential Joint Venture on the Fortnum Project. Happy Jack The Company has a retained 1% NSR on any future gold production on this tenement. Nelson Resources Limited and Controlled Entities 11 For personal use only DIRECTORS’ REPORT continued The Company confirms that it is not aware of any new information or data that materially affects the exploration results included in this report. Climate Risk The Company acknowledges that climate change issues could constitute a risk to its operations but has assessed the risks to be Low. The largest concern for the Company is water management during its exploration activities. Most of the Company’s operations occur in areas with scarce access to water and the Company believes that climate change could exacerbate this issue as weather patterns potentially become less predictable. The Company’s approach is to be flexible and adaptive in its response to manage this potential issue. Key potential vulnerabilities  Extreme weather events (floods, cyclonic activity, storm activity and bushfires) which could impede exploration ability; affect occupational health and safety; impact supply chains; damage infrastructure; and increase of unplanned water discharge.  Sea level rise might impact on the longer-term access to and viability of infrastructure.   water discharge Legislation uncertainty or compliance changes due to climate-related impacts. DIRECTORS’ QUALIFICATIONS AND EXPERIENCE The Directors’ qualifications and experience are set out below Current Directors Director Warren Hallam Qualifications Position Appointment Date Resignation Date Length of Service Biography Current ASX Listed Directorships Former ASX Listed Directorships Details MSc (Min. Econ), BAppSci (Metallurgy), GradDip (Fin) Independent Non-Executive Chairman 1 February 2019 N/A 1 year 5 months Mr Hallam is a Metallurgist and a Mineral Economist and holds a Graduate Diploma in Finance. Mr Hallam has considerable technical, managerial and financial experience across a broad range of commodities being predominantly copper, nickel, tin, gold and iron ore. Essential Minerals Limited Westgold Resources Limited Metals X Limited Capricorn Metals Limited Millennium Minerals Limited Nelson Resources Limited and Controlled Entities 12 For personal use only DIRECTORS’ REPORT continued Adam Schofield Qualifications Position Appointment Date Resignation Date Length of Service Biography Current ASX Listed Directorships Former ASX Listed Directorships Stephen Brockhurst Qualifications Position Appointment Date Resignation Date Length of Service Biography Current ASX Listed Directorships Former ASX Listed Directorships COMPANY SECRETARY Dip (MechEng) Executive Director 7 July 2016 N/A 3 years, 11 months Mr Schofield is an Executive Director with over 21 years’ experience in the resources sector in Africa and Australia. He is a Mechanical Engineer with significant experience in conducting feasibility studies and taking projects from feasibility stage into operations. Mr Schofield has an extensive experience in gold, mineral sands, iron ore and copper. N/A N/A BCom Independent Non-Executive Director 1 February 2019 N/A 1 year 5 months Mr Brockhurst has over 19 years’ experience in the finance and corporate advisory industry and has been responsible for the due diligence process and preparation of prospectuses on a number of initial public offers. His experience includes corporate and capital structuring, corporate advisory and company secretarial services, capital raising, ASX and ASIC compliance requirements. Mr Brockhurst has served on the board and acted as Company Secretary for numerous ASX listed companies. He is currently Company Secretary of Jacka Resources Limited, Galena Mining Limited and Kingfisher Mining Limited. Estrella Resources Limited Kingwest Resources Limited Roto-Gro International Limited Company Secretary Stephen Brockhurst Position Appointment Date Resignation Date Details Company Secretary 22 June 2017 N/A Nelson Resources Limited and Controlled Entities 13 For personal use only DIRECTORS’ REPORT continued MEETINGS OF DIRECTORS The number of meetings held during the year and the number of meetings attended by each Director was as follows: Number of Meetings Held Number of Meetings Attended: Warren Hallam Adam Schofield Stephen Brockhurst Board Audit & Risk Management Committee 2 6 Nomination & Remuneration Committee 2 6 6 6 2 2 2 2 2 2 The Consolidated Entity does not have an Audit, Remuneration or Nomination Committee with the full Board carrying out the functions that would otherwise be dealt with by such Committees. All Directors were eligible to attend all Board Meetings held when they were in office. SHARE OPTIONS As at the date of this report, there were 7,614,458 unquoted options of varying exercise prices and expiry dates and 30,990,156 quoted options exercisable at $0.08 expiring 7 July 2022 over ordinary shares on issue that have been issued. SHARES ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS No shares as a result of the exercise of the options were issued as at the date of this report. DIRECTORS’ INTERESTS AND BENEFITS The movement during the reporting period in the number of fully paid ordinary shares of the Company held directly, indirectly or beneficially, by each Director or key management personnel, including their personally-related entities is as follows: Director No. Shares Held at 30 June 2019 On- Market Purchases Exercise of Options Other Changes No. Shares Held at 30 June 2020 No. Shares Held at Date of this Report - - Warren Hallam Directly Indirectly Adam Schofield Directly Indirectly Stephen Brockhurst Directly Indirectly Total 75,000 - - - 75,000 - - - - - - - - - - - - - - - - - - - - - - - - 1,315,788 75,000 - - - 75,000 1,465,789 175,000 - 1,315,789 4,272,366 Nelson Resources Limited and Controlled Entities 14 For personal use only DIRECTORS’ REPORT continued The movement during the reporting period in the number of options over ordinary shares of the Company held directly, indirectly or beneficially, by each Director or key management personnel, including their personally-related entities is as follows: Director No. Options Held at 30 June 2019 Grant of Options Exercise of Options Other Changes No. Options Held at 30 June 2020 No. Options Held at Date of this Report - - Warren Hallam Directly Indirectly Adam Schofield Directly Indirectly Stephen Brockhurst Directly Indirectly Total 2,537,500 - - - 2,537,500 - - - - - - - - - - - - - - - - - - - 657,894 (37,500)1 - 2,500,000 - 3,195,395 87,500 - - (37,500) - - 2,500,000 - 657,895 4,598,684 The movement during the reporting period in the number of performance rights of the Company held directly, indirectly or beneficially, by each Director or key management personnel, including their personally-related entities is as follows: Director No. Performance Rights Held at 30 June 2019 Issue of Performance Rights Conversino of Performance Rights Other Changes No. Performance Rights Held at 30 June 2020 No. Performance Rights Held at Date of this Report - - Warren Hallam Directly Indirectly Adam Schofield Directly Indirectly Stephen Brockhurst Directly Indirectly Total 1,500,000 - - - 1,500,000 - - - - - - - - - - - - - - - - - - - - - - - - - 1,500,000 - 1,500,000 - - - 1,500,000 - - 1,500,000 1 Expired 30 September 2019. Nelson Resources Limited and Controlled Entities 15 For personal use only DIRECTORS’ REPORT continued REMUNERATION REPORT Introduction The Directors present the Remuneration Report for the Consolidated Entity for the year ended 30 June 2020. This Remuneration Report forms part of the Directors’ Report in accordance with the requirements of the Corporations Act 2001 and its regulations. For the purposes of this report, Key Management Personnel (“KMP”) of the Consolidated Entity are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Consolidated Entity, directly or indirectly, including any director (whether executive or otherwise) of the Parent Entity. Remuneration Policy The Company Constitution provides that the remuneration of non-executive Directors will be not more than the aggregate fixed sum determined by a general meeting. The aggregate remuneration for non-executive Directors has been set at an amount not to exceed $250,000 per annum. The remuneration of executive Directors will be fixed by the Directors and may be paid by way of fixed salary or consultancy fee. Remuneration Report Approval at FY2020 AGM The remuneration report for the period ended 30 June 2020 will be put to shareholders for approval at the Company’s AGM which will be held during September 2020. Nelson Resources Limited and Controlled Entities 16 For personal use only DIRECTORS’ REPORT continued Details of Remuneration Details of the remuneration of the Directors, other key management personnel of the Consolidated Entity and specified executives of the Consolidated Entity for the years ended 30 June 2020 and 30 June 2019 respectively are set out on the following tables: Fixed STI LTI Total Proportion of Remuneration Salary fees and leave $ Other Fees $ Term- ination Payment $ Super- annuation $ Incentive Payments $ FV Securities $ Fixed % STI % $ LTI % Non- Executive Directors Warren Hallam2 Peter Cook3 Stephen Brockhurst4 Brett Clark6 Total Non- Executive Directors Executive Directors Adam Schofield Total Executive Directors Year 2020 2019 2020 2019 2020 2019 2020 2019 2020 72,000 30,000 - 42,000 52,560 21,9005 - 28,000 124,560 2019 121,900 2020 2019 2020 164,250 143,7177 164,250 2019 143,717 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6,840 2,850 - 3,990 - - - 2,660 6,840 9,500 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 78,840 32,850 - 45,990 52,560 21,900 - 30,660 131,400 100% 100% - 100% 100% 100% - 100% 100% 131,400 100% - 223,583 - 164,250 367,300 164,250 100% 39% 100% 223,583 367,300 39% - - - - - - - - - - - - - - - - - - - - - - - - - 61% - 61% 2 Appointed 1 February 2019. 3 Resigned 1 February 2019. 4 Appointed 1 February 2019. 5 The contract was previously incorrectly classified as an employee agreements and has now been correctly classified as a contractor arrangement. 6 Resigned 1 February 2019. 7 The contract was previously incorrectly classified as an employee agreements and has now been correctly classified as a contractor arrangement. Nelson Resources Limited and Controlled Entities 17 For personal use only DIRECTORS’ REPORT continued Consultancy Agreements Adam Schofield is engaged as an executive director pursuant to a consultancy agreement with the Company. The consultancy agreement commenced on 1 April 2017 and will continue until it is terminated in accordance with its terms. For his role as an executive director, the Company will pay Adam Schofield a fee of $164,250 per annum (revised, effective 1 April 2019). In his role as executive director, Adam Schofield will, among other things:  act with professional skill with a view to promoting, advancing and improving the business of the Company; implement strategic and tactical plans of the Company; review and initiate continuous improvement in support and administrative functions;    use best endeavours to achieve the corporate objectives of the Company;  formulate strategies to promote and improve the financial performance of the Company; and  advise the Board in relation to all relevant issues affecting the Company and its performance. Either party may terminate the agreement without cause by providing the other party with no less than 3 months’ written notice. The Company may terminate the agreement by summary notice to Adam Schofield with cause in circumstances considered standard for agreements of this nature in Australia. The agreement is otherwise on terms and conditions considered standard for agreements of this nature in Australia. The terms of the agreement were further modified effective 1 July 2020, increasing the remuneration to $208,050 per annum. Stephen Brockhurst is engaged as a non-executive director pursuant to a consultancy agreement with the Company. The consultancy agreement commenced on 1 February 2019 and will continue until it is terminated in accordance with its terms. For his role as a non-executive director, the Company will pay Stephen Brockhurst a fee of $52,560 per annum. Share Based Compensation There was no share based compensation during the year. No ordinary shares in the Company were provided as a result of an exercise of remuneration options to Directors and other key management personnel of the Consolidated Entity in this or the previous reporting period. Related Party Transactions Effective 1 March 2019 the Company entered into a sub-lease agreement with Kingfisher Mining Limited (a company of which both Warren Hallam and Adam Schofield are directors) for the occupancy of its premises. The agreement was terminated effective 1 April 2019. End of Audited Remuneration Report. Nelson Resources Limited and Controlled Entities 18 For personal use only DIRECTORS’ REPORT continued ENVIRONMENTAL REGULATION The Company is subject to significant environmental and monitoring requirements in respect of its natural resources exploration activities. The Directors are not aware of any significant breaches of these requirements during the year. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS There are no likely development of which the Directors are aware of which could be expected to significantly affect the results of the Company’s operations in subsequent financial periods not otherwise disclosed in the ‘Principal activities’ and ‘Review of operations’ or the ‘Significant events after the balance sheet date’ sections of the Directors’ report. INDEMNIFICATION AND INSURANCE OF OFFICERS The Company has agreed to indemnify all of the Directors of the Company for any liabilities to another person (other than the Company or related body corporate) that may arise from their position as Directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. During the financial year the Company paid a premium in respect of a contract insuring the Directors and officers of the Company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001. CORPORATE GOVERNANCE The Board intends to set measurable objectives for achieving diversity, specifically including gender diversity and will review and report on the effectiveness and relevance of these measurable objectives. However, due to the current size of the Board and management, these measurable objectives have not yet been set. NON AUDIT SERVICES Criterion Audit Pty Ltd was appointed as the Company’s auditor on 24 October 2016 and has not provided any non-audit services to the Company since its appointment. Nelson Resources Limited and Controlled Entities 19 For personal use only DIRECTORS’ REPORT continued EVENTS SUBSEQUENT TO REPORTING DATE There are no matters or circumstances have arisen since the end of the year which will significantly affect, or may significantly affect, the state of affairs or operations of the reporting entity in future financial periods other than the following:  On 7 July 2020 the Company announced that 52,821,762 shares along with 26,410,881 free attaching options exercisable at $0.08 expiring 7 July 2022 had been issued.  On 7 July 2020 the Company announced that a placement had been undertaken raising $348,027 from the issue of 9,158,618 shares along with 4,579,275 free attaching options exercisable at $0.08 expiring 7 July 2022.  On 7 July 2020 the Company paid a bonus of $50,000 to Adam Schofield as detailed in the 9 June 2020 renounceable entitlements issue prospectus.  On 12 August 2020 the Company announced that Haddison had withdrawn from the Yarri project option agreement. AUDITOR’S DECLARATION OF INDEPENDENCE The auditor’s independence declaration for the year ended 30 June 2020 has been received and is included within the financial statements. This report is made in accordance with a resolution of Directors, pursuant to section 306(3) of the Corporation Act 2001. Signed in accordance on behalf of the Directors. ____________________ Adam Schofield Executive Director 12 August 2020 Nelson Resources Limited and Controlled Entities 20 For personal use only Criterion Audit Pty Ltd ABN 85 165 181 822 PO Box 2138 SUBIACO WA 6904 Suite 1 GF, 437 Roberts Road SUBIACO WA 6008 Phone: 6380 2555 Fax: 9381 1122 To The Board of Directors Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 As lead audit director for the audit of the financial statements of Nelson Resources Limited and its controlled entities for the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and • any applicable code of professional conduct in relation to the audit. Yours faithfully ELIZABETH LOUWRENS CA Director CRITERION AUDIT PTY LTD DATED at PERTH this 12th day of August 2020 Liability limited by a scheme approved under Professional Standards Legislation For personal use only CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 Revenue Administration and other expenses Accounting and audit fees Consultancy fees Depreciation: plant and equipment Depreciation: right of use assets Directors’ fees Finance costs: lease liability Finance costs: other Reversal of (impairment) of receivables Impairment of exploration expenditure Legal fees Marketing expenses Occupancy expenses Share based payments: options - Director Share based payments: options - Employee Share based payments: performance rights - Director Travel and accommodation expenses Write-off of tenement expenses Loss before tax Income tax benefit/(expense) Note 3 9 10 13 11 16 16 16 4 Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 25,855 40,121 (177,350) (125,637) 2,991 (86,042) (47,560) (175,650) (1,435) (2,025) 56,490 (26,371) (19,102) (36,000) (34,111) - - - (28,700) (48,987) (723,634) - (277,055) (125,179) (23,025) (64,788) - (170,118) - (1,405) - (12,256) (12,872) (37,309) (30,652) (159,833) (95,900) (63,750) (19,053) (26,199) (1,079,273) - Net loss for the year from operations (723,634) (1,079,273) Other comprehensive income - - Total comprehensive loss for the year (723,634) (1,079,273) Basic and diluted loss per share (cents) 5 (1.50)c (2.37)c The accompanying notes form part of these financial statements. Nelson Resources Limited and Controlled Entities 22 For personal use only CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 ASSETS Current Assets Cash and cash equivalents Trade and other receivables Prepaid expenses Total Current Assets Non-Current Assets Plant and equipment Right of use asset Exploration and evaluation assets Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables Liability for application money Lease liability Provisions Total Current Liabilities Total Liabilities Net Assets EQUITY Contributed equity Reserves Accumulated losses Total Equity Note Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 7 8 9 10 11 12 8 13 14 70,585 2,026,991 21,243 666,222 108,463 30,375 2,118,819 805,060 217,867 15,853 3,662,667 260,260 - 3,330,881 3,896,387 3,591,141 6,015,206 4,396,201 214,579 2,008,227 11,687 4,410 118,257 - - 20,687 2,238,903 138,944 2,238,903 138,944 3,776,303 4,257,257 15 16 36,655,595 319,483 (33,198,775) 36,163,913 568,483 (32,475,141) 3,776,303 4,257,257 The accompanying notes form part of these financial statements. Nelson Resources Limited and Controlled Entities 23 For personal use only CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 Consolidated Entity Balance at 1 July 2019 Securities issued during the year Equity issue expenses Reversal of expired options Loss for the year Other comprehensive income Total comprehensive loss for the year Contributed Equity $ Reserves $ Accumulated Losses $ Total $ 36,163,913 568,483 (32,475,141) 4,257,257 300,000 (57,318) 249,000 - - - - (249,000) - - - - - (723,634) - 300,000 (57,318) - (723,634) - - - (723,634) (723,634) Balance at 30 June 2020 36,655,595 319,483 (33,198,775) 3,776,303 Consolidated Entity Balance at 1 July 2018 Equity issue expenses Share based payments Cancellation of performance rights Loss for the year Other comprehensive income Total comprehensive loss for the year Contributed Equity $ 36,172,915 (9,002) - - - - - Reserves $ 249,000 - 357,733 (38,250) - - Accumulated Losses $ Total $ (31,395,866) - - 5,026,049 (9,002) 357,733 - (1,079,273) - (38,250) (1,079,273) - - (1,079,273) (1,079,273) Balance at 30 June 2019 36,163,913 568,483 (32,475,141) 4,257,257 The accompanying notes form part of these financial statements. Nelson Resources Limited and Controlled Entities 24 For personal use only CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 Cash flows from operating activities Payments to suppliers and employees Payment for exploration and evaluation assets Interest paid Interest received Note Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ (438,487) (395,038) (2,025) 6,290 (793,088) (1,906,137) (209) 41,971 Net cash (used in) operating activities 7 (829,260) (2,657,463) Cash flows from investing activities Proceeds from disposal of tenements Payment for plant and equipment Proceeds from insurance payout 4,545 (49,483) 14,258 1,000 (316,603) - Net cash (used in) investing activities (30,680) (315,603) Cash flows from financing activities Proceeds from equity issues Payment for costs of equity issues 300,000 (35,697) - (9,002) Net cash from / (used in) financing activities 264,303 (9,002) Net increase / (decrease) in cash held (595,637) (2,982,068) Cash and cash equivalents at beginning of the year 666,222 3,648,290 Cash and cash equivalents at year end 7 70,585 666,222 The accompanying notes form part of these financial statements. Nelson Resources Limited and Controlled Entities 25 For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 1. Corporate information This annual report covers Nelson Resources Limited (the “Consolidated Entity”), a company incorporated in Australia for the year ended 30 June 2020. The presentation currency of the Consolidated Entity is Australian Dollars (“$”). A description of the Consolidated Entity’s operations is included in the review and results of operations in the Directors’ Report. The Directors’ Report is not part of the financial statements. The Consolidated Entity is a for-profit entity and limited by shares incorporated in Australia whose shares are traded under the ASX code “NES”. The financial statements were authorised for issue on 12 August 2020 by the Directors of the Consolidated Entity. The Directors have the power to amend and reissue the financial statements. The principal accounting policies adopted in the preparation of the financial statements are set out below. 2. Accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. a. Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Nelson Resources Limited is a for-profit entity for the purpose of preparing the financial statements. The financial statements are presented in Australian dollars and have been prepared under the historical cost convention. b. Going concern The annual financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Consolidated Entity incurred a loss from ordinary activities of $723,634 for the year ended 30 June 2020 (2019: loss $1,079,273) and net cash outflows from operating activities of $829,260 (2019: $2,657,463). The net working deficit position of the Consolidated Entity at 30 June 2020 was $120,084 (2019: $666,116 net working capital). The Consolidated Entity has exploration commitments due within the next 12 months. Subsequent to year end, the Company completed a renounceable entitlements issue and placement which raised a total of $2,355,254. The Directors have prepared a cash flow forecast, which indicates that the Consolidated Entity will have sufficient cash flows to meet all commitments and working capital requirements for the 12 month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the Directors are satisfied that the going concern basis of preparation is appropriate. Should the Consolidated Entity be unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. Nelson Resources Limited and Controlled Entities 26 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 2. Accounting policies (continued) The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Consolidated Entity be unable to continue as a going concern and meet its debts as and when they fall due. c. Principles of consolidation The financial statements incorporate the assets and liabilities of all subsidiaries of Nelson Resources Limited and the results of all subsidiaries for the year then ended. Subsidiaries are all entities (including structured entities) over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Company. The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany transactions, balances and unrealised gains on transactions between companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of profit or loss, statement of financial position and statement of changes in equity respectively. The Company treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Company. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of Nelson Resources Limited. When the Company ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in the profit or loss. The fair value is the initial carrying amount for the purposes of subsequent accounting for the retained interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Company had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to the profit or loss. Nelson Resources Limited and Controlled Entities 27 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 2. Accounting policies (continued) d. Comparatives When required by Australian Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current year. e. Finance costs Finance costs comprise interest expense on borrowings. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset. All other borrowing costs are recognised in the profit or loss using the effective interest rate. f. Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Consolidated Entity and that are believed to be reasonable under the circumstances. The key estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Exploration and evaluation expenditure Determining the recoverability of exploration and evaluation expenditure capitalised, in accordance with the Company’s accounting policy where a potential impairment is indicated, requires estimates and assumptions as to whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. This assessment requires estimates and assumptions about the resources, the timing of expected cash flows and future capital requirements. If, after having capitalised the expenditure under accounting policy, a judgement is made that recovery of expenditure is unlikely, an impairment loss is recognised in the profit or loss. Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structure, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology and discounted by a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the restoration works. Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. Nelson Resources Limited and Controlled Entities 28 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 2. Accounting policies (continued) Recoverability of deferred tax assets Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Leases – incremental borrowing rate Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the Consolidated Entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment. h. New or amended Accounting Standards and Interpretations adopted The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The following Accounting Standard and Interpretation is most relevant to the Consolidated Entity: AASB 16 Leases The Consolidated Entity 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. Impact of adoption AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated. Nelson Resources Limited and Controlled Entities 29 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 3. Revenue ATO cashflow boost Disposal of tenements Interest revenue Other revenue Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 10,000 4,545 4,310 7,000 25,855 - 4,608 34,931 582 40,121 Accounting policy Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Other revenue is recognised when it is received or when the right to receive payment is established. 4. Income tax Income tax benefit Current income tax Reconciliation of income tax benefit to prima facie tax Loss before income tax benefit Tax at the Australian tax rate of 30% (2019: 27.5%) Movements in timing differences not recognised Non-deductible expenses Current year losses for which no deferred tax asset was recognised Income tax expense Deferred tax balances not recognised Tax losses Exploration Business related costs Other - - (723,634) (217,090) (235,458) 69,012 (1,079,273) (296,800) (702,019) 101,812 383,536 897,007 - - 2,321,517 (536,784) 83,677 981 1,901,689 (326,148) 127,407 2,461 1,869,391 1,705,409 Nelson Resources Limited and Controlled Entities 30 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 4. Income tax (continued) Tax losses The tax benefit at 30% of estimated unused tax losses is currently under review and it has not been recognised as a deferred tax asset. The benefit of deferred tax assets will only be brought to account if future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised and the conditions for deductibility imposed by the relevant tax legislation continue to be complied with and no changes in tax legislation adversely affect the Company in realising the benefit. Accounting policy Income tax Income tax comprises current and deferred tax. Income tax is recognised in the profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will be available to allow the deferred tax asset to be recovered. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates (and tax laws) enacted or substantively enacted by the end of the reporting period. Deferred tax relating to items recognised in other comprehensive income or equity is recognised in other comprehensive income or equity and not in the profit or loss. Nelson Resources Limited and Controlled Entities 31 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 4. Income tax (continued) GST Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office ("ATO"). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. Commitments and contingencies are disclosed net of amount of GST recoverable from, or payable to, the ATO. 5. Earnings per share Loss used for basic and diluted loss per share are loss after tax of $723,634 (2019: loss after tax of $1,079,273). The weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share is 48,318,503 ordinary shares (2019: 45,592,846 ordinary shares). There were no potential ordinary shares that are considered dilutive in the current reporting year. Accounting policy Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares issued during the period. Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. 6. Segment reporting Operating segment are determined based on the reports reviewed by the Board of Directors, which are used to make strategic decisions. The Company does not have any operating segments with discrete financial information. All of the Company’s assets and liabilities are located within Australia. The Company does not have any customers at this stage. Internal management reports for the Board of Directors’ review are consistent with the information provided in the statement of profit or loss and other comprehensive income, statement of financial position and statement of cash flows. As a result, no reconciliation is required because the information as presented is what is used by the Board to make strategic decisions. Nelson Resources Limited and Controlled Entities 32 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 7. Cash and cash equivalents Cash in hand and at bank Reconciliation of loss for the year to net cash flows from operating activities Loss for the year Adjustments for: Depreciation Impairment of exploration and evaluation expenditure Fixed assets write-off Share based payments Change in operating assets and liabilities: (Increase)/decrease in receivables (Increase)/decrease in prepaid expenses (Increase)/decrease in exploration and evaluation expenditure Increase/(decrease) in trade payables and accruals Increase/(decrease) in provisions Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 70,585 70,585 666,222 666,222 (723,634) (1,079,273) 133,602 26,371 - - 88,699 9,132 64,788 - 5,016 319,483 (90,395) (11,612) (358,158) 11,005 (16,277) (1,866,944) 13,660 (12,186) Net cash used in operating activities (829,260) (2,657,463) Accounting policy Cash and cash equivalents include cash at bank and on hand and term deposits held at call with financial institutions with original maturities of three months or less but exclude any restricted cash. Restricted cash is not available for use by the Company and therefore is not considered highly liquid. Nelson Resources Limited and Controlled Entities 33 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 8. Trade and other receivables Accrued interest revenue GST receivable Mongolian projects receivable8 Impairment of Mongolian projects receivable8 Other receivables9 Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 42 13,678 555,304 (555,304) 2,013,271 2,022 81,911 611,794 (611,794) 24,530 2,026,991 108,463 The ageing of the receivables and allowance for expected credit losses provided for above are as follows: Not overdue 0-3 months overdue 3-6 months overdue >6 months overdue Expected Credit Loss Rate % 0% 0% 0% 100% Carrying Amount $ 2,026,991 - - 555,304 2,582,295 Allowance for Expected Credit Losses $ - - - (555,304) (555,304) Accounting policy 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. The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience and historical collection rates. 8 On 9 June 2017, the Company entered into an agreement with an independent third party buyer to sell its interest in assets and projects in Mongolia for a cash consideration of USD500,000. During the year the Company received an initial sum of USD40,000 or equivalent of AUD56,490 as a good faith payment, for the sale. The Directors are of the view that the full amount of the receivable is likely to be not recoverable and, therefore, a full provision for impairment has been made. Ownership of the shares has already been transferred. 9 During the year ended 30 June 2020, $2,008,227 related to entitlements offer funds received but securities not yet issued and allotted. Nelson Resources Limited and Controlled Entities 34 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 9. Plant and equipment 2020 Written down value at beginning of year Additions Depreciation Written down value at end of year 2019 Written down value at beginning of year Additions Depreciation Write-offs Written down value at end of year Computer Equipment $ Office Equipment $ Motor Vehicles $ Exploration Equipment $ Total $ 16,556 - (5,708) 11,179 5,337 (3,862) 110,700 - (25,187) 121,825 38,312 (51,285) 260,260 43,649 (86,042) 10,848 12,654 85,513 108,852 217,867 Computer Equipment $ Office Equipment $ Motor Vehicles $ Exploration Equipment $ Total $ 4,950 16,263 (4,657) - - 13,157 (1,978) - 1,114 129,877 (20,291) - 6,321 158,382 (37,862) (5,016) 12,385 317,679 (64,788) (5,016) 16,556 11,179 110,700 121,825 260,260 Accounting policy Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment in value. The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits. Depreciation is calculated on a diminishing value basis over the estimated useful life of the asset as follows: Computer equipment – 2.5 years Office equipment – 2.5 years Motor vehicles – 4 years Exploration equipment – 2.5 years Nelson Resources Limited and Controlled Entities 35 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 10. Right of use assets Balance at beginning of year (restated – AASB 16 recognition)10 Adjustment for change in variables Depreciation Balance at end of year Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 88,845 (25,432) (47,560) 15,853 - - - - Accounting policy A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight- line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Consolidated Entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right- of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. 11. Exploration and evaluation assets Balance at beginning of year Exploration and evaluation expenditure incurred during the year Impairment 3,330,881 1,463,937 358,157 (26,371) 1,879,200 (12,256) Balance at end of year 3,662,667 3,330,881 10 The lease agreement commenced on 1 November 2018 for a term of 2 years and an option to extend for 6 months. The discount rate (incremental borrowing rate) applied is 3.53%. Nelson Resources Limited and Controlled Entities 36 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 11. Exploration and evaluation assets (continued) Accounting policy Exploration and evaluation expenditure in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: (i) (ii) at least one of the following conditions is also met: the rights to tenure of the area of interest are current; and   the exploration and evaluation expenditure are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Indirect costs that are included in the cost of an exploration and evaluation asset include, among other things, charges for depreciation of equipment used in exploration and evaluation activities. If an area of interest is abandoned or is considered to be of no further commercial interest, the accumulated exploration costs relating to the area are written off against income in the year of abandonment. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. 12. Trade and other payables Accrued expenses Trade creditors Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 62,900 151,679 14,525 103,732 214,579 118,257 Nelson Resources Limited and Controlled Entities 37 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 12. Trade and other payables (continued) Accounting policy These amounts represent liabilities for goods and services provided to the Company prior to the end of the reporting period that are unpaid. They are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. 13. Lease liability (current) Balance at beginning of year (restated – AASB 16 recognition) Adjustment for change in variables Repayments Balance at end of year Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 88,845 (26,345) (50,831) 11,687 - - - - Accounting policy A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate, which has been set at 3.53%. There is an option to extend the lease. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. 14. Provisions Annual leave provision 4,410 4,410 20,687 20,687 Nelson Resources Limited and Controlled Entities 38 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 14. Provisions (continued) Accounting policy Provision is made for the Consolidated Entity's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. Consolidated Entity 30 June 2020 No. $ Consolidated Entity 30 June 2019 No. $ 15. Contributed equity Balance at beginning of year Share issue: 14 February 2020 Share issue costs Reversal of expired options 45,592,846 36,163,913 300,000 7,228,916 (57,318) - 249,000 - 45,592,846 - - - 36,172,915 - (9,002) - Balance at end of year 52,821,762 36,655,595 45,592,846 36,163,913 Listed options Balance at beginning of year Options expired Balance at end of year Consolidated Entity 30 June 2020 No. Consolidated Entity 30 June 2019 No. 12,500,000 (12,500,000) 12,500,000 - - 12,500,000 Nelson Resources Limited and Controlled Entities 39 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 15. Contributed equity (continued) Unlisted options Balance at beginning of year Options granted11 Options granted (free attaching)12 Options expired13 Consolidated Entity 30 June 2020 No. Consolidated Entity 30 June 2019 No. 7,000,000 - 3,614,458 (3,000,000) 3,000,000 4,000,000 - - Balance at end of year 7,614,458 7,000,000 Performance rights Balance at beginning of year Performance rights issued14 Performance rights cancelled15 1,500,000 - - - 2,400,000 (900,000) Balance at end of year 1,500,000 1,500,000 Capital management The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Company’s activities, being mineral exploration, it does not have ready access to credit facilities and therefore is not subject to any externally imposed capital requirements, with the primary source of Company funding being equity raisings. Accordingly, the objective of the Company’s capital risk management is to balance the current working capital position against the requirements to meet exploration programmes and corporate overheads. This is achieved by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. 11 On 12 December 2018 the Company granted 4,000,000 unlisted options exercisable at $0.20 each, expiring 20 November 2021 to a Director and an employee under the Amended Employee performance Rights and Options Plan. The fair value of $0.064 was calculated using the share price at grant date of $0.15, a risk free interest rate of 1.95% and a volatility of 76%. 12 On 14 February 2020 3,614,458 unlisted options exercisable at $0.08 each, expriring 14 February 2022 were granted as free attaching to the placement as described above. 13 Expired 30 September 2019. 14 On 12 December 2018 the Company granted 2,400,000 unlisted performance rights, expiring 20 November 2021 to a Director and an employee under the Amended Employee performance Rights and Options Plan. Refer to the Notice of Annual General Meeting, dated and released on the ASX platform on 26 October 2018 for the terms and conditions of the performance rights. Refer to sub Note 40 for further details. 15 On 2 May 2019 900,000 of the unlisted performance rights expiring 20 November 2021 were cancelled due to the employee leaving the Company. Nelson Resources Limited and Controlled Entities 40 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 15. Contributed equity (continued) Accounting policy Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. 16. Reserves Options reserve Balance at beginning of year Grant of options16 Reversal of expired options Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 504,733 - (249,000) 249,000 255,733 - Balance at end of year 255,733 504,733 Share based payments reserve Balance at beginning of year Share based payments17 Cancellation of performance rights18 Balance at end of year 63,750 - - 63,750 - 102,000 (38,250) 63,750 Total reserves 319,483 568,483 16 On 12 December 2018 the Company granted 4,000,000 unlisted options exercisable at $0.20 each, expiring 20 November 2021 to a Director and an employee under the Amended Employee performance Rights and Options Plan. The fair value of $0.064 was calculated using the share price at grant date of $0.15, a risk free interest rate of 1.95% and a volatility of 76%. 17 On 12 December 2018 the Company granted 2,400,000 unlisted performance rights, expiring 20 November 2021 to a Director and an employee under the Amended Employee performance Rights and Options Plan. The value of the performance rights was calculated by using the share price at issue date of $0.15 and given a probability of the milestone being achieved. The performance condition for Tranche 1 is that the performance rights will vest upon the Company achieving a market capitalisation of A$10 million provided that if this is achieved within 6 months of the Performance Rights being granted then they will not vest until 6 months from the time the Performance Rights were granted. The performance condition for Tranche 2 is that the performance rights will vest upon the Company achieving a market capitalisation of A$20 million provided that if this is achieved within 6 months of the Performance Rights being granted then they will not vest until 6 months from the time the Performance Rights were granted. The performance condition for Tranche 3 is that the performance rights will vest upon the Company’s discovery of a 100,000oz JORC resource, provided that if this is achieved within 6 months of the Performance Rights being granted then they will not vest until 6 months from the time the Performance Rights were granted. 18 On 2 May 2019 900,000 of the unlisted performance rights expiring 20 November 2021 were cancelled due to the employee leaving the Company. Nelson Resources Limited and Controlled Entities 41 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 16. Reserves Accounting policy The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. 17. Financial instruments Financial risk management objectives, policies and processes The Company has exposure to the following risks from their use of financial instruments: credit risk, liquidity risk, and    market risk (including gold price risk, interest rate and currency risk). This note presents information about the Company’ exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk. The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board reviews and agrees policies for managing each of these risks and they are summarised below. The Company’s principal financial instruments comprise cash. The main purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the Company. The Company also has other financial instruments such as receivables and payables which arise directly from its operations. For the year under review, it has been the Company’s policy not to trade in financial instruments. Financial instruments Financial assets Cash and cash equivalents Trade and other receivables Financial liabilities Trade and other payables Liability for application money Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 70,585 2,026,991 666,222 108,463 2,097,576 774,685 214,579 2,008,227 118,257 - 2,222,806 118,257 Nelson Resources Limited and Controlled Entities 42 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 17. Financial instruments (continued) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company only transacts with entities that are rated the equivalent of investment grade and above. The Company’s exposure and the credit ratings of its counterparties are continuously monitored. Credit exposure is controlled by counterparty limits that are reviewed and approved by the Board annually. The Company does not have any significant credit risk exposure to the National Australia Bank. The credit risk on liquid funds is reduced because the counterparty is a bank with high credit rating assigned by international credit rating agencies. Liquidity risk Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and banking facilities and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Company did not have any undrawn facilities at its disposal as at reporting date. The table below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Contractual maturities of financial liabilities Details <1 Year 1-2 Years 2-5 Years $ $ $ 30 June 2020 Trade and other payables Accrued expenses Liability for application money Total 30 June 2019 Trade and other payables Accrued expenses Total 151,679 62,900 2,008,227 2,222,806 103,732 14,525 118,257 - - - - - - - - - - - - - - >5 Years Total $ Carrying Amount $ $ - - 151,679 62,900 151,679 62,900 - 2,008,227 2,008,227 - 2,222,806 2,222,806 - - - 103,732 14,525 118,257 103,732 14,525 118,257 Nelson Resources Limited and Controlled Entities 43 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 17. Financial instruments (continued) Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The Company does not have short or long-term debt and therefore the risk is minimal. The Company limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have acceptable credit ratings. Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Current financial assets and financial liabilities are generally not exposed to interest rate risk because of their short-term nature. The Company’s cash and cash equivalents at 30 June 2020 are fixed interest rate financial instruments. Therefore, they are not subject to interest rate risk. Fair value measurements The fair values of cash, receivables, trade and other payables approximate their carrying amounts as a result of their short maturity. When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. Nelson Resources Limited and Controlled Entities 44 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 17. Financial instruments (continued) Accounting policy Investments and other financial assets Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off. Financial assets at fair value through profit or loss Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss. Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income include equity investments which the Consolidated Entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition. Impairment of financial assets The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Consolidated Entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss. Nelson Resources Limited and Controlled Entities 45 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 18. Commitments and contingencies The Company had no capital expenditure contracted at the reporting date (2019: nil). There is a lease agreement, falling under the capital commitments at 30 June 2020. The Company has certain statutory requirements to undertake a minimum level of exploration activity in order to maintain rights of tenure to its various exploration tenements. These requirements may vary from time to time, subject to approval of the relevant government departments and are expected to be fulfilled in the normal course of operations of the Company to avoid forfeiture of any tenement. The Company has a 100% share of tenements rental and expenditure commitments. These exploration commitments are not provided for in the financial statements and are payable: Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 382,681 1,701,355 - 122,362 260,454 - 2,084,036 382,816 Not longer than 1 year More than 1 year but not longer than 5 years More than 5 years a. Contingent assets There are no contingent assets as at 30 June 2020. b. Contingent liabilities There were no contingent liabilities at 30 June 2020 other than a bank guarantee for the office rent of $20,315 and the payment of a $50,000 bonus to Adam Schofield which was contingent upon the successful completion of the renounceable entitlements issue. The Directors are not aware of any significant breaches of environmental legislation and requirements during the year. As announced on 9 June 2020, the Company has also, subject to shareholder approval, agreed to issue the underwriter, Mahe Capital Pty Ltd or its nominee, one $0.08 option (expiring 24 months from date of issue) for every $1 raised under the entitlements issue, closing on 1 July 2020, or in the event approval is not obtained, a cash amount equal to the value of the options. 19. Auditor’s remuneration Criterion Audit Pty Ltd: Audit and review of financial reports Total auditor’s remuneration 23,000 23,000 21,000 21,000 Nelson Resources Limited and Controlled Entities 46 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $ 20. Key management personnel compensation Salary, fees and leave Superannuation Fair value of Share Options 288,810 6,840 - 265,617 9,500 223,583 Total key management personnel compensation 295,650 498,700 Effective 1 March 2019 the Company entered into a sub-lease agreement with Kingfisher Mining Limited (a company of which both Warren Hallam and Adam Schofield are directors) for the occupancy of its premises. The transaction was on an arm’s length term, initially expiring 31 October 2020. The agreement was terminated with an effective date of 1 April 2019. Directors’ interests and benefits Director No. Shares Held at 30 June 2019 On- Market Purchases Exercise of Options Other Changes No. Shares Held at 30 June 2020 No. Shares Held at Date of this Report - - Warren Hallam Directly Indirectly Adam Schofield Directly Indirectly Stephen Brockhurst Directly Indirectly Total 75,000 - - - 75,000 - - - - - - - - - - - - - - - - - - - - - - - - 1,315,788 75,000 - - - 75,000 1,465,789 175,000 - 1,315,789 4,272,366 Nelson Resources Limited and Controlled Entities 47 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 20. Key management personnel compensation (continued) Director No. Options Held at 30 June 2019 Grant of Options Exercise of Options Other Changes No. Options Held at 30 June 2020 No. Options Held at Date of this Report - - Warren Hallam Directly Indirectly Adam Schofield Directly Indirectly Stephen Brockhurst Directly Indirectly Total 2,537,500 - - - 2,537,500 - - - - - - - - - - - - - - - - - - - 657,894 (37,500)19 - 2,500,000 - 3,195,395 87,500 - - (37,500) - - 2,500,000 - 657,895 4,598,684 Director No. Performance Rights Held at 30 June 2019 Issue of Performance Rights Conversino of Performance Rights Other Changes No. Performance Rights Held at 30 June 2020 No. Performance Rights Held at Date of this Report - - Warren Hallam Directly Indirectly Adam Schofield Directly Indirectly Stephen Brockhurst Directly Indirectly Total 1,500,000 - - - 1,500,000 - - - - - - - - - - - - - - - - - - - - - - - - - 1,500,000 - 1,500,000 - - - 1,500,000 - - 1,500,000 21. Interests in controlled entities Company Name 79 Exploration Pty Ltd Nelson Exploration Services Pty Ltd Place of Incorporation Australia Australia 30 June 2020 % Ownership 100% 100% 30 June 2019 % Ownership 100% 100% 19 Expired 30 September 2019. Nelson Resources Limited and Controlled Entities 48 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 22. Interests in controlled entities (continued) Nelson Resources Limited is the ultimate parent entity of the Company. The parent entity’s financial performance and financial position are as follows: ASSETS Current Assets Cash and cash equivalents Trade and other receivables Prepaid expenses Total Current Assets Non-Current Assets Plant and equipment Right of use assets Investments Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables Liability for application money Lease liability Provisions Total Current Liabilities Total Liabilities Net Assets EQUITY Contributed equity Reserves Accumulated losses Total Equity Company 30 June 2020 $ Company 30 June 2019 $ 65,476 2,025,547 19,631 639,889 49,996 28,488 2,110,654 718,373 16,581 15,853 1,100,001 19,997 - 1,100,001 1,132,435 1,119,998 3,249,447 1,838,371 203,003 2,008,227 11,687 4,410 92,756 - - 20,687 2,227,327 113,443 2,227,327 113,443 1,022,120 1,724,928 36,655,595 319,483 (35,952,958) 36,163,913 568,483 (35,007,468) 1,022,120 1,724,928 Nelson Resources Limited and Controlled Entities 49 For personal use only NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 30 JUNE 2020 22. Events after the end of the reporting year There are no matters or circumstances have arisen since the end of the year which will significantly affect, or may significantly affect, the state of affairs or operations of the reporting entity in future financial periods other than the following:  On 7 July 2020 the Company announced that 52,821,762 shares along with 26,410,881 free attaching options exercisable at $0.08 expiring 7 July 2022 had been issued.  On 7 July 2020 the Company announced that a placement had been undertaken raising $348,027 from the issue of 9,158,618 shares along with 4,579,275 free attaching options exercisable at $0.08 expiring 7 July 2022.  On 7 July 2020 the Company paid a bonus of $50,000 to Adam Schofield as detailed in the 9 June 2020 renounceable entitlements issue prospectus.  On 12 August 2020 the Company announced that Haddison had withdrawn from the Yarri project option agreement. Nelson Resources Limited and Controlled Entities 50 For personal use only DIRECTORS’ DECLARATION The Directors of the Consolidated Entity declare that: The financial statements and notes are in accordance with the Corporations Act 2001 and: a. b. comply with Australian Accounting Standards; and give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2020 and of the performance for the year ended 30 June 2020. In the Directors’ opinion there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as and when they become due and payable. The Directors have been given the declarations required by section 295A of the Corporations Act 2001. This declaration is signed in accordance with a resolution of the Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors ____________________ Adam Schofield Executive Director 12 August 2020 Nelson Resources Limited and Controlled Entities 51 For personal use only Criterion Audit Pty Ltd ABN 85 165 181 822 PO Box 2138 SUBIACO WA 6904 Suite 1 GF, 437 Roberts Road SUBIACO WA 6008 Phone: 6380 2555 Fax: 9381 1122 Independent Auditor’s Report To the Members of Nelson Resources Limited Report on the Audit of the Financial Report Opinion We have audited the accompanying financial report of Nelson Resources Limited (“the Company”) and Controlled Entities (“the Consolidated Entity”) , which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying consolidated financial report of the Consolidated Entity is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2020 and of its performance for the year ended on that date; and b) 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 Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We 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. Liability limited by a scheme approved under Professional Standards Legislation For personal use only 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. Key audit matter How our audit addressed the key audit matter Exploration and Evaluation Expenditure – $3,662,667 Our procedures included, amongst others: (Refer to Note 11) • Assessing management’s determination of its areas Exploration and evaluation is a key audit matter due to: of interest for consistency with the definition in AASB • The significance of the balance to the Consolidated 6. This involved analysing the tenements in which Entity’s consolidated financial position. the Consolidated Entity holds an interest and the • The level of judgement required in evaluating exploration programmes planned for those management’s application of the requirements of tenements. AASB 6 Exploration for and Evaluation of Mineral • For each area of interest, we assessed the Resources. AASB 6 is an industry specific Consolidated Entity’s rights to tenure by accounting standard requiring the application of corroborating to government registries and significant judgements, estimates and industry evaluating agreements in place with other parties as knowledge. This includes specific requirements for applicable; expenditure to be capitalised as an asset and • We tested the additions to capitalised expenditure for subsequent requirements which must be complied the year by evaluating a sample of recorded with for capitalised expenditure to continue to be expenditure for consistency to underlying records, carried as an asset. the capitalisation requirements of the Consolidated • The assessment of impairment of exploration and Entity’s accounting policy and the requirements of evaluation expenditure being inherently difficult. AASB 6; • We considered the activities in each area of interest to date and assessed the planned future activities for each area of interest by evaluating budgets for each area of interest. • We assessed each area of interest for one or more of the following circumstances that may indicate impairment of the capitalised expenditure: • the licenses for the right to explore expiring in the near future or are not expected to be renewed; • substantive expenditure for further exploration in the specific area is neither budgeted or planned • decision or intent by the Consolidated Entity to discontinue activities in the specific area of interest due to lack of commercially viable quantities of resources; and • data indicating that, although a development in the specific area is likely to proceed, the carrying amount of the exploration asset is unlikely to be For personal use only recovered in full from successful development or sale. • We assessed the appropriateness of the related disclosures in note 10 to the financial statements. Other Information The directors are responsible for the other information. The other information comprises the information included in the Company’s annual report for the year ended 30 June 2020, but does not include the financial report and our 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. Directors’ Responsibility 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 Note 2, the directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards. In preparing the financial report, the directors are responsible for assessing the ability of the Company 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 Company or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our responsibility is to express an opinion on the financial report based on our audit. 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. For personal use only As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Consolidated Entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Consolidated Entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Consolidated Entity’s audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. For personal use only Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of the Company, 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 s 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. CRITERION AUDIT PTY LTD ELIZABETH LOUWRENS CA Director DATED at PERTH this 12th day of August 2020 For personal use only ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES As at 4 August 2020 Issued Securities Fully paid ordinary shares $0.20 unlisted options expiring 20-Nov-21 $0.08 unlisted options expiring 14-Feb-22 $0.08 listed options expiring 07-Jul-22 Unlisted performance rights expiring 20-Nov-21 Total Distribution of Listed Ordinary Fully Paid Shares Listed on ASX 114,802,142 Unlisted Total - 4,000,000 - 3,614,458 - 114,802,142 4,000,000 3,614,458 - 30,990,156 1,500,000 - 1,500,000 145,792,298 9,114,458 154,906,756 30,990,156 Spread of Holdings 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - and over Total Number of Holders 29 49 191 468 181 918 Number of Units 3,383 191,472 1,657,784 18,142,061 94,807,442 114,802,142 % of Total Issued Capital -% 0.17% 1.44% 15.80% 82.59% 100.00% Top 20 Listed Ordinary Fully Paid Shareholders Rank Shareholder 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CROESUS MINING PTY LTD CAIRNGLEN INVESTMENTS PTY LTD MR GAVIN JEREMY DUNHILL AJAVA HOLDINGS PTY LTD MR ROBERT ANDREW JEWSON CROESUS MINING PTY LTD SABA NOMINEES PTY LTD MR JONATHAN IAN LANGTON & MRS KERRY ANNE LANGTON ROCK THE POLO PTY LTD CAMPBELL KITCHENER HUME & ASSOCIATES PTY LTD Shares Held % Issued Capital 5,297,222 4.61% 4,374,635 3,266,668 3,150,000 3,000,000 2,550,000 2,074,635 1,901,649 3.81% 2.85% 2.74% 2.61% 2.22% 1.81% 1.66% 1,701,019 1.48% 1,658,684 1.44% 1,620,000 1.41% Nelson Resources Limited and Controlled Entities 57 For personal use only ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES (continued) 12. 13. 14. 15. 16. R J & A INVESTMENTS PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED KYRIACO BARBER PTY LTD MR CHRISTOPHER ADAM SIDDONS SCHOFIELD BURLFALLS PTY LTD 17. MR RICHARD FARLEIGH 18. ARGONAUT SECURITIES (NOMINEES) PTY LTD 19. METALS X LIMITED ALTOR CAPITAL MANAGEMENT PTY LTD 20. Total 1,500,000 1.31% 1,382,334 1,333,658 1.20% 1.16% 1,315,789 1.15% 1,301,204 1,250,000 1,147,799 1,113,541 1.13% 1.09% 1.00% 0.97% 1,052,630 41,991,467 0.92% 36.58% The number of shareholdings held in less than marketable parcels is 130. The Company has the following substantial shareholders listed in its register as at 4 August 2020: Rank Shareholder CROESUS MINING PTY LTD , CROESUS MINING PTY LTD , MANSMAR INVESTMENTS PTY LTD & MARK DAVID STEINEPREIS HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 1. 2. Shares Held % Issued Capital 6,749,270 5.88% 6,679,556 5.82% Ordinary Shares Voting Rights - Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:  each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;  on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and  on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited). Nelson Resources Limited and Controlled Entities 58 For personal use only ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES (continued) Distribution of Listed Options Spread of Holdings 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - and over Total Number of Holders Number of Units 1,010 2 174,065 48 45 347,332 4,963,526 125 25,504,223 73 30,990,156 293 % of Total Options -% 0.56% 1.12% 16.02% 82.30% 100.00% Top 20 Listed Option Holders Rank Optionholder HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CROESUS MINING PTY LTD APAM HOLDINGS PTY LTD CAIRNGLEN INVESTMENTS PTY LTD MR JONATHAN IAN LANGTON & MRS KERRY ANNE LANGTON CAMPBELL KITCHENER HUME & ASSOCIATES PTY LTD AJAVA HOLDINGS PTY LTD KYRIACO BARBER PTY LTD MR CHRISTOPHER ADAM SIDDONS SCHOFIELD ROCK THE POLO PTY LTD CROESUS MINING PTY LTD MR GAVIN JEREMY DUNHILL MR DAVID FAGAN MR BRENT EARDLEY WHEELER SANDWICH HOLDINGS PTY LTD JAMES TRACK INVESTMENTS PTY LTD MR CAMERON STEWART COX RUMLER SUPERANNUATION MANAGEMENT PTY LTD JETOSEA PTY LTD ANNA CARINA PTY LTD MR MICHAEL SOUCIK & MRS HEATHER SOUCIK MRS HEATHER SOUCIK MR ARIEL EDWARD KING MR MARK RONALD WILKINSON 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 11. 12. 13. 14. 15. 15. 15. 15. 16. 17. 18. 19. 20. Total Options Held 1,260,000 % of Total Options 4.07% 1,037,317 1,000,000 966,667 825,509 810,000 750,000 666,829 657,895 576,842 575,000 575,000 542,000 541,023 525,000 500,000 500,000 500,000 500,000 487,840 443,145 434,210 430,000 428,640 15,532,917 3.35% 3.23% 3.12% 2.66% 2.61% 2.42% 2.15% 2.12% 1.86% 1.86% 1.86% 1.75% 1.75% 1.69% 1.61% 1.61% 1.61% 1.61% 1.57% 1.43% 1.40% 1.39% 1.38% 50.12% The Company has no restricted securities on issue as at the date of this report. Nelson Resources Limited and Controlled Entities 59 For personal use only ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES (continued) Schedule of Exploration Tenements Project Socrates Socrates South Grindall Grindall North Grindall South Redmill Yarri Yarri Yarri Bullen West Harvey Harvey South Tempest Tenement E28/2633 E28/2873 E28/2679 E28/2768 E28/2769 E28/2874 P31/2085 P31/2086 P31/2087 E52/3695 E28/2923 E63/1971 E28/2805 Interest Held 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Nelson Resources Limited and Controlled Entities 60 For personal use only 

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