ASX Code: NAE
Annual Report
For the year ended 30 June 2020
New Age Exploration Ltd
ACN 004 749 508
Level 2, 480 Collins Street
Melbourne, VIC 3000
+61 3 9614 0600
info@nae.net.au
Phone:
Email:
NAE Annual Report 30 June 2020
CONTENTS
CORPORATE DIRECTORY ............................................................................................................ 3
DIRECTORS’ REPORT ................................................................................................................ 19
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................. 28
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................. 29
STATEMENT OF FINANCIAL POSITION ..................................................................................... 30
STATEMENT OF CHANGES IN EQUITY ...................................................................................... 31
STATEMENT OF CASH FLOWS .................................................................................................. 32
DIRECTORS’ DECLARATION ...................................................................................................... 51
INDEPENDENT AUDITOR’S REPORT ......................................................................................... 52
SHAREHOLDER INFORMATION ................................................................................................ 56
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CORPORATE DIRECTORY
NAE Annual Report 30 June 2020
Directors
Mr A Broome AM (Non-Executive Chairman)
Mr Joshua Wellisch (Executive Director)
Mr Adrien Wing (Non-Executive Director)
Company Secretaries
Mr A M Wing
Ms P Moffatt
Registered Office
Share Register
Auditor
Level 2
480 Collins Street
Melbourne VIC 3000
+61 3 9614 0600
Link Market Services Limited
Level 12
250 St George’s Terrace
Perth WA 6000
+61 1300 554 474
RSM Australia Partners
Level 21
55 Collins Street
Melbourne VIC 3000
Solicitors
Quinert Rodda & Associates
Suite 1, Level 6
50 Queen Street
Melbourne VIC 3000
Stock Exchange Listing
New Age Exploration Limited shares are listed on the Australian
Securities Exchange (ASX code: NAE)
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CHAIRMAN’S LETTER
NAE Annual Report 30 June 2020
Dear Shareholders,
This has been another year of change with the Company focusing primarily on gold exploration during the
period and divesting some other assets.
In July, the Company secured a strategic gold exploration project in the Central Pilbara district of Western
Australia through Exploration Licence applications. The applications cover a large area located ~50km south
of De Grey Mining’s exciting Hemi Gold discovery and contain granitic intrusions with comparable magnetic
signatures and age to those in the Hemi discovery. Following the grant of these Exploration Licences, we
look forward to progressing exploration for intrusive-related (Hemi-style) and structurally hosted gold
targets on this project which we have named the ‘Quartz Hill Gold Project’.
During the year we have made significant progress with our gold exploration projects in Otago, New Zealand.
A follow up soil sampling program over the Otago Pioneer Quartz (OPQ) target undertaken in September
generated further anomalous gold results between 0.1 g/t and 2.5 g/t Au from shallow man-portable
drillholes which were able to penetrate the thin cover. This extended the total number of such anomalous
gold results obtained by NAE to 10 and confirmed ~6km strike length where potential exists for one or more
narrow zones of high-grade gold mineralization over the OPQ gold target.
In December NAE was granted the Lammerlaw Prospecting Permit after winning a competitive application
process. An initial soil hand-auger sampling program was undertaken on the Lammerlaw Permit in June
following completion of an updated geophysical and structural interpretation used to target the soil
sampling lines. Results from the initial soil sampling program in June have been encouraging with 7
anomalous gold and arsenic results received indicating potential for Macraes-style shear hosted gold
mineralization within the Lammerlaw Permit. We were not able to sample a further 14 planned soil sampling
lines at higher altitude on the Lammerlaw Permit which were snow covered in June. Our technical team are
planning to complete these lines in the December Quarter now that weather conditions have improved.
An optimisation study was completed this year on our Lochinvar Coking Coal Project in the UK, identifying a
number of improvement opportunities for the project including the potential to use a more flexible and
lower capital cost ‘Bord and Pillar” underground mining technique at Lochinvar which the Company plans to
study further. We have had continued investor interest in the Lochinvar project this year and will continue
to progress opportunities for funding of the Lochinvar Project with interested parties.
The sale of our 50% share of the Redmoor Tin-Tungsten Project to Strategic Minerals Plc completed during
the year with $3.0m in cash payments being made to NAE. A further $2.0m in royalties are also payable
to NAE after the project is in production.
The $3.0m received during the year from the Redmoor transaction has placed NAE in a strong financial
position with a cash balance of $2.8m at the end of the year. Going forward, we will focus on advancing
our gold exploration projects in the Pilbara Gold district and in Otago and will also strengthen efforts to
acquire new opportunities which establish shareholder value.
The Company continues to maintain a strong focus on health, safety, environment and community in all of
its activities and this is a crucial part of everything we do.
The Board would like to thank all stakeholders who have supported the Company this year and we look
forward to the exciting developments underway during the year ahead.
Yours faithfully,
Alan Broome AM
Non-executive Chairman
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ACTIVITIES REPORT
KEY MILESTONES
Pilbara Gold Project, Western Australia
NAE Annual Report 30 June 2020
• Post year end in July 2020, NAE’s technical team identified and secured the strategic ‘Quartz Hill Gold Project’ in
the Central Pilbara district of Western Australia via new Exploration Licence applications
• The Quartz Hill Gold Project is located ~50km south of De Grey Mining’s (ASX: DEG) Hemi Gold discovery and
immediately adjacent to Kairos Mineral’s (ASX: KAI) Croydon project
• The Exploration Licence applications are 100% NAE owned and comprises a total area of 1,319km2
• The applications include granitic rocks of the Sisters Supersuite intrusion and gold exploration targets have been
identified with comparable magnetic signatures and age to those in the Hemi discovery.
• Prospective for both intrusive-related (Hemi style) and structurally hosted gold mineralisation
Lammerlaw Gold Exploration Project (PP 60544), New Zealand
• Prospecting Permit granted to NAE in December 2019 covering the 265 km 2 Lammerlaw area in Otago, New
Zealand which is prospective for Macraes-style shear hosted gold targets
• The Lammerlaw Permit contains historic gold, scheelite and antimony workings along with minor occurrences of
copper, silver and mercury. New Zealand’s largest alluvial gold deposit, Gabriels Gully (>0.5Moz produced), is
located ~3km directly to the south of the Lammerlaw Permit and the source of the gold remains unidentified
• Updated geophysical and structural interpretations completed by NAE’s technical team in March 2020 identified
new Macraes-style shear hosted gold targets within the Lammerlaw Permit
•
Successful exploration program undertaken in June 2020 over the Lammerlaw and OPQ Permits with 217 soil
samples by hand auger, 52 rock chip samples and 61 structural measurements collected
• Results from the June 2020 program included 7 anomalous results (12-33 ppb Au / 10-100ppm As) indicating
potential for shear hosted gold mineralization along metamorphic boundaries in both Lammerlaw & OPQ Permits
•
Four of the anomalous June 2020 gold and arsenic results are located near the historic Bella mine within the
Lammerlaw Permit and extend a soil anomaly previously defined by Macraes Mining Company in this location to
>1.5km strike length
Otago Pioneer Quartz Gold Exploration Project (EP 60502), New Zealand
• Work has continued this year on the Otago Pioneer Quartz (“OPQ”) Gold Exploration Project within Exploration
Permit 60502 granted to NAE in January 2019 which contains the historic OPQ reef mined over 100 years ago
averaging 2m wide, to a depth of 65m, over a strike length of at least 1,200m at an average of around 13 g/t Au.
•
Successful exploration program undertaken in September 2019 over the OPQ permit with 223 soil samples by
hand auger, 22 samples from man-portable drillholes and 93 rock chip samples collected.
• Results from the September 2019 program included anomalous gold results ranging between 0.1 g/t and 2.5 g/t
Au obtained in 5 shallow man-portable drillholes over the OPQ gold target. This extended the total number of
anomalous gold results obtained to 10 and confirmed ~6km strike length where potential exists for one or more
narrow zones of high-grade gold mineralization over the OPQ gold target.
• Results from the June 2020 exploration program also indicated the potential for shear hosted gold mineralization
along metamorphic boundaries within the OPQ Permit.
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
Lochinvar Coking Coal Project, UK
•
In September 2019, technical consultants Palaris completed an Optimisation Study which identified several
opportunities for improvement in the Lochinvar Project including the potential for extended use of the ‘Bord and
Pillar’ underground mining method which may offer significant advantages including; significantly lower start -up
capital costs, increased flexibility to accommodate faulting and geological and coal quality variation and
increased ability to scale production rate.
• The main Lochinvar licence held by NAE ended its maximum 8-year term on 17 July 2020. A new application for
the Lochinvar licence was made by NAE in April 2020 and NAE management is confident of the Coal Authority
granting the Lochinvar licence to NAE over the next few months.
•
Investor interest in the Lochinvar project has continued over the past year and the Board continues to progress
opportunities for funding of the Lochinvar Project with interested parties.
Redmoor Transaction Completed and $3.0M Cash Payments Received
•
In July 2019, a transaction was finalized to sell NAE’s 50% share of the Redmoor Tin-Tungsten Project to its joint
venture partner, Strategic Minerals Plc (“SML”), for a total consideration of $5.0m.
• The $3.0m cash payments due between June 2019 and June 2020 have been paid in full, with the final $1.8m cash
payment received in the June Quarter 2020.
• A further $2.0m in royalties are payable to NAE in 2 equal $1m payments when Net Smelter Sales from Redmoor
production reach A$50m and A$100m respectively.
Corporate
• Well-funded with $2.8million cash in bank at 30 June 2020
• NAE will focus on advancing its gold exploration projects in the Pilbara Gold district and in Otago and will
strengthen efforts to acquire new opportunities which establish shareholder value.
• Appointment of Mr Adrien Wing as Non-Executive Director
• Between May and June 2020, NAE Directors Adrien Wing, Stephen Layton and Joshua Wellisch significantly
increased their shareholding in the Company with Adrien Wing and Stephen Layton becoming substantial
shareholders.
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
QUARTZ HILL GOLD PROJECT1
Post year end in July 2020, NAE’s technical team identified and secured the strategic ‘Quartz Hill Gold Project’ in
the Central Pilbara district of Western Australia via new Exploration Licence applications.
The newly named ‘Quartz Hill Project’ comprises six NAE Exploration Licence applications (E47/4406, E47/4407,
E47/4408, E45/5724, E45/5725 and E45/5726) covering an area of 1,319km² located ~50km south of De Grey
Mining’s (ASX: DEG) Hemi Gold discovery and immediately adjacent to Kairos Mineral’s (ASX: KAI) Croydon project.
Previous Gold exploration on these licence areas has been minimal, although geological mapping of the area has
been completed by the Geological Survey of Western Australia.
The applications include granitic rocks of the Sisters Supersuite intrusion and are prospective for both intrusive-
related (Hemi style) and structurally hosted gold mineralisation.
Figure 1 shows the location of the NAE Exploration Licence applications over the Quartz Hill Gold Project relative to
other significant gold occurrences in the Central Pilbara district and includes the tenure held by DEG and KAI.
Figure 1 Location of Quartz Hill Gold Project NAE Exploration Licence Applications
1 NAE announcement 30 July 2020, NAE Secures Strategic Pilbara Gold Project - WA
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
Geologically the applications overlie a pre-dominantly greenstone sequence of mafic and ultramafic rocks belonging
to the East Pilbara Granite-Greenstone Terrane (EPGGT) and Granitoid Complexes comprising the Yule Granitoid
Complex and the Sister Supersuite. Some of the granitic intrusions (Yule and Sister granitoids) have magnetic
signatures and are of comparable age to those in the Hemi discovery. Figure 2 highlights the magnetic targets within
the NAE Exploration Licence applications over the Quartz Hill Gold Project.
Figure 2 New licence applications including magnetic targets
During the September quarter, NAE will take steps to progress the grant of these Exploration Licences and plan to
conduct site inspections of specific target areas.
The Quartz Hill Project represents a substantial footprint for NAE in the well-endowed Central Pilbara Gold district
of Western Australia. The company is reviewing additional opportunities in the region to further expand its project
portfolio.
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
LAMMERLAW GOLD EXPLORATION PROJECT (PROSPECTING PERMIT 60544)
In December 2019, following a competitive application process, NAE was granted a 265 km2 Prospecting Permit
(PP60544) covering the prospective Lammerlaw area in Otago, New Zealand.
The Lammerlaw Prospecting Permit adjoins NAE’s Otago Pioneer Quartz Exploration Permit 60502 to the southeast.
Figure 3 NAE Gold Exploration Permits in Otago, New Zealand
Historic Mining
The Lammerlaw Permit contains the historically mined Bella Lode where gold was mined in the late 1800’s with an
average grade of 15 g/tonne Au over 0.6-1.8m thickness. The Permit also contains a historically mined antimony
lode and scheelite (tungsten) workings along with minor copper, silver and mercury occurrences.
New Zealand’s largest alluvial gold deposit, Gabriels Gully (>0.5 Moz produced), is located approximately 3km
directly to the south of the Permit the source of the gold remains unidentified.
Macraes Style Shear Hosted Gold Exploration Targets
The regional geology is dominated by the Otago Schist, a high-grade metamorphic schist, which has a long history
of both hard rock and alluvial gold mining. The Otago Schist is divided into structural blocks or zones of increasing
metamorphic grade known as; Sub-Greenschist Facies, Lower Greenschist Facies, Upper Greenschist Facies and
Amphibolite Facies. Gold mineralisation at the >10Moz Au Macraes deposits, hosted in the Hyde Macraes Shear
Zone (“HMSZ”), occurs entirely within the Lower Greenschist Facies zone in the northeast of the Otago Schist belt.
MacKenzie and Craw (2016) identified the potential for Macraes-style shear zone hosted gold deposits to occur in
the southern part of the Otago Schist belt within the Lower Greenschist Facies zone, inside NAE’s Lammerlaw and
OPQ Permit areas. These southern shear zone gold exploration targets have been identified as being a ‘mirror
image’ of the geology present in the northern margin of the Otago Schist belt (approximately 60km to the
northeast) containing the Hyde Macraes Shear Zone (“HMSZ”) which hosts the Macraes gold mine (>10 Moz).
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
Gold mineralisation such as that found along the HSMZ on the northeastern side of the Otago Schist belt may
therefore also be present on the southwestern side of the Otago Schist belt within the Permit (see Figures 4 and 5).
Figure 4 Geological Map - Shear Zone Hosted Gold Mineralisation within the Otago Schist Belt
Figure 5 Geological Cross section - Otago Schist Belt & Southern Shear Zone Gold Exploration Targets
Comparison with Macraes Gold Deposit
The Macraes gold deposit, including the Frasers Open Pit and Underground mine, is the largest gold mine in New
Zealand and has produced more than 4 million ounces of gold since opening in 1990. It has a current mineral
resource of >6 Moz making the deposit >10 Moz in total. The Macraes mine is developed in a regionally continuous
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
shear zone known as the Hyde Macraes Shear Zone (“HMSZ”). The HMSZ is up to 150m thick and dips at
approximately 20° to the northeast.
The mineralised HMSZ and associated cross faults correlate with conductivity highs (resistivity lows) from an
airborne geophysical survey flown for Glass Earth NZ Ltd in 2007. Conductivity/resistivity lineaments may therefore
be used as a tool to help identify the occurrence of potentially mineralised shear zones in the ‘mirror image’
geological setting within Lower Greenschist Facies target zone in the southern part of the Otago Schist belt within
NAE’s Lammerlaw and OPQ Permits.
Priority Gold Exploration Targets Identified by Geophysical Data Review2
In March 2020, NAE commissioned Anthony Coote (APSAR Ltd) to examine regional geophysical and other data
over the Lammerlaw and OPQ Permits. Priority targets for follow up exploration were identified based on contacts
between contrasting metamorphic rocktypes comprising carbonaceous pelitic schists overlying psammitic mafic
schists which preferentially host mineralised shearing and veining in other deposits in Otago. These areas are
identified by sharp boundaries between high and low response on airborne EM surveys as shown in Figure 6.
Figure 6 Target Areas on Airborne Resistivity
The culmination of the geological setting being analogous to the Hyde Macraes Shear Zone, the presence of
conductivity/resistivity lineaments similar to the Hyde Macraes Shear Zone to target exploration, the close
proximity of New Zealand’s largest alluvial gold deposit (Gabriels Gully), and historic mines being located on the
Permit make it particularly prospective for gold exploration.
June 2020 Exploration Program3
In June 2020, following restrictions due to COVID19 being lifted, NAE’s NZ based technical team completed the first
phase of follow up ground exploration targeting Macraes style shear hosted gold targets on the Lammerlaw Permit.
2 NAE announcement 23 April 2020, NZ Gold Project Exploration Update
3 NAE announcement 11 August 2020, NZ Gold Results Indicated Potential Shear Hosted Mineralisation
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
Further ground exploration was also completed at the same time on the OPQ Permit targeting Macraes style shear
hosted gold targets.
Work completed in June 2020 included soil and rock chip sampling and geological mapping completed over 7 of 21
planned soil lines identified by the APSAR geophysical data review. The 7 soil lines completed were located withing
the OPQ Permit and within the lower-lying south eastern end of the Lammerlaw permit around the Bella Lode. Poor
weather and early snow cover prevented sampling at the other 14 soil lines on the Lammerlaw Permit. In total;
• 217 soil samples were collected for analysis by pXRF and fire assay for Au.
• 52 rock chip samples were collected for analysis by pXRF and fire assay for Au.
•
Structural measurements & lithological descriptions collected at 61 outcrop locations
Results from the June 2020 program included 7 anomalous results (12-33ppb Au and 10-100ppm As) indicating
potential for shear hosted gold mineralization along metamorphic boundaries in both Lammerlaw & OPQ Permits.
Four of the anomalous gold and arsenic results are located near the historic Bella Lode mine in the Lammerlaw
Permit and extend a soil anomaly in this area previously defined by Macraes Mining Company to >1.5km strike
length, extending up to 600m from the metamorphic boundary.
Bella Lode
Figure 7 June 2020 Soli Sampling Results – Gold
Lammerlaw Permit – Forward Work Program
The remaining 14 soil lines are planned to be sampled in the December Quarter 2020, with drilling expected to
follow, subject to further soil sampling results.
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
OTAGO PIONEER QUARTZ GOLD EXPLORATION PROJECT (EXPLORATION PERMIT 60502)
In January 2019, NAE was granted a 71.6 km2 Exploration Permit (EP 60502) covering the Otago Pioneer Quartz
(“OPQ”) Gold Target located in the Mahinerangi area of Otago, New Zealand (see Figure 3). The OPQ Permit
contains two gold exploration targets:
1. The OPQ Reef Gold Target
2. Macraes Style Shear Hosted Gold Exploration Targets
Otago Pioneer Quartz Reef Historic Gold Mine
Historic records indicate that the Otago Pioneer Quartz (OPQ) reef was mined over 100 years ago averaging 2m
wide, to a depth of 65m, over a strike length of > 1,200m and yielding an average of around 13 grams per tonne Au.
OPQ Reef Gold Target – Exploration Results
Exploration around the OPQ historic mine area by Macraes Mining Company between 1991 and 1997 further
demonstrated As and Au soil anomalies over ~1km strike length above the area of the OPQ Reef historically mined.
In February 2018 and September 2018 NAE undertook soil sampling programs over the OPQ Reef gold target using
a man-portable drill and hand auger in with key results including:
• 1.4 g/t Au and 0.6 g/t Au located ~700m SE and along strike of the OPQ Reef historic mine
• 0.66 g/t Au located ~2,700m SE and along strike of the OPQ Reef historic mine
• 0.55 g/t Au and 0.25 g/t Au located ~3,000m NW and along strike of the OPQ mine and north of Lake Mahinerangi
In September 20194, NAE undertook further soil sampling over the OPQ Reef gold target with 223 soil samples from
hand auger, 22 samples from man-portable drillholes and 93 rock chip samples collected. Key results included:
• 5 high-grade anomalous gold results ranging between 0.1 g/t and 2.5 g/t gold in man-portable drilholes
• A further 3 soil and man-portable drill results showed anomalous gold above background levels
The December 2019 results extend the total number of high-grade anomalous gold results obtained by NAE over
the OPQ Reef gold target to 10 results ranging between 0.1 g/t and 2.5 g/t gold. A further 5 high-grade anomalous
gold results between 0.1 g/t and 0.31 g/t gold were also previously obtained by Macraes Mining Company above
the historic OPQ Gold Mine area, increasing the number of high-grade anomalous gold results >0.1 g/t gold over
the OPQ Reef gold target to a total of 15.
Results to date confirm a ~6 km potential strike length for the OPQ Reef gold target defined by anomalous gold
soil results highlighting the potential for one or more narrow zones of high-grade gold mineralization.
Results from the June 2020 exploration program also indicated the potential for shear hosted gold mineralization
along metamorphic boundaries within the OPQ Permit.
OPQ Reef Gold Target – Forward Work Program
A follow up Phase 2 exploration program comprising of drilling and trenching over the OPQ gold target was planned
to be undertaken in 2020. Commencement has been delayed due to COVID 19 however is now being reviewed
again by NAE after lifting of NZ COVID restrictions. A follow up Phase 3 program, comprising of deeper RC and/or
diamond drilling (>50m deep holes), is also planned subject to the results of Phase 2.
4 NAE announcement 12 December 2019, Otago Pioneer Quartz Gold Project Update
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
Figure 8 OPQ Reef Gold Exploration Project Results - 2019 Program Results Highlighted
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
LOCHINVAR COKING COAL PROJECT, UK
The Lochinvar Coking Coal Project is located on the Scottish / English border and comprises of the main Lochinvar
Licence along with the adjacent Lochinvar South and Lochinvar North Licences as shown in Figure 9.
Figure 9 Lochinvar Coking Coal Project Licences, Mineral Resource and Exploration Targets, and Boreholes
The Lochinvar North and Lochinvar South licences are good standing. The main Lochinvar licence held by NAE ended
its maximum 8-year term on 17 July 2020. A new application for the Lochinvar licence was made by NAE in April
2020 and NAE management is confident of the Coal Authority granting the Lochinvar licence to NAE over the next
few months as NAE’s application was first-in time, no competitive applications were received and processing of the
application by The Coal Authority is well advanced.
Lochinvar Mineral Resource5
A 49Mt maiden Indicated Resource and 62Mt Inferred Resource was defined for the Nine Foot and Six Foot Seams
within the Lochinvar licence in August 2014.
Lochinvar Scoping Study Update6
In March 2017, NAE announced the results of an update of the Lochinvar Scoping Study, which showed a substantial
improvement in the project economics. The March 2017 Scoping Study Update showed the Lochinvar project has a
base-case NPV 9%, determined to an accuracy of ±40%, of approximately US$410M, an IRR of approximately 27%
and a payback period of approximately 4 years. The Scoping Study Update results also demonstrate that the
Lochinvar Project is robust to changes in Coking Coal price and other key assumptions (break even HCC price is
US$100/t).
5 NAE announcement 29 August 2014, Lochinvar Resource Upgrade and Product Quality
6 NAE announcement 15 March 2017, Lochinvar Coking Coal Project Scoping Study Update
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
The Scoping Study Update has been undertaken for the purpose of ascertaining whether a business case can be
made to proceed to more definitive studies on the viability of the Lochinvar Coking Coal Project. It is a preliminary
technical and economic study of the potential viability of the Lochinvar Coking Coal Project. It is based on low
level technical and economic assessments that are not sufficient to support the estimation of ore reserves. Further
exploration and evaluation work and appropriate studies are required before NAE will be in a position to estimate
any ore reserves or to provide any assurance of an economic development case.
While the current (21 September 2020) spot HCC Benchmark Price of US$129/t has fallen below the long term HCC
Benchmark price assumption of US$160/t used in the March 2017 Scoping Study Update, NAE expects that HCC
prices will further recover. The HCC Benchmark price forecast published by KPMG in June/July 2020 shows an
average long-term HCC Benchmark price of US$137/t and a range of between US$110/t and US$160/t based on 20
external coal price forecasts7
These results show the potential for the Lochinvar project to deliver strong returns on investment with lowest
quartile operating costs resulting from short rail transport distances, low labour costs, high coal yield (71%), low
royalties, and low taxes. Lochinvar sits comfortably in the lowest quartile of the 2017 Wood Mackenzie Global
Seaborne Coking Coal FOB cost curve and has the potential to deliver a low-cost, long life operation which is ideally
located to supply the European steel industry.
Lochinvar North
NAE was granted the Lochinvar North licence In April 2019, and soon after defined an Exploration Target for the
Lochinvar North Licence ranging from 77-142 million tonnes based on historic drilling within the licence.
The potential quantity and quality of the Exploration Targets is conceptual in nature. Insufficient exploration has
been undertaken to estimate a Mineral Resource and it is uncertain that further exploration will result in the
estimation of a Mineral Resource.
Lochinvar North has the potential to extend the Lochinvar resource, reduce the depth to first coal from surface
therefore reducing the length and capital cost of the decline, increase mining production rate and increase mine
life for the total Lochinvar project.
The initial work program for the Lochinvar North licence will be aimed at defining a JORC compliant Resource based
on existing drilling and geological information.
Lochinvar Optimisation Study8
An optimisation Study for the Lochinvar Project was completed by technical consultants Palaris in September 2019.
The Optimisation Study identified several opportunities for improvement in the project including;
• Opportunity to reduce ventilation shaft construction cost based on revised contractor quotes
• Opportunity to reduce costs of initial underground roadway development to reach first longwall mining panel based
on updated estimates by Palaris
• Addition of a single Bord and Pillar mining panel to produce saleable coal during the 2-year project construction
period and prior to coal production from the first longwall panel
The study further highlighted the potential for extended use of the ‘Bord and Pillar’ underground mining method
which may offer significant advantages including; significantly lower start-up capital costs, increased flexibility to
accommodate faulting and geological and coal quality variation and increased ability to scale production rate.
7 KPMG June/July 2020, Coal Price and FX market forecasts
8 NAE announcement 24 September 2019, Lochinvar Bord and Pillar Mining Potential
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
REDMOOR TRANSACTION ($3.0M CASH RECEIVED THIS YEAR)
In July 2019, a transaction was finalised to sell NAE’s 50% share of the Redmoor Tin-Tungsten Project, located in
Cornwall, United Kingdom to its joint venture partner, Strategic Minerals Plc (“SML”), for a total consideration of
$5.0m as follows:
• $3.0m in cash payments due between June 2019 and June 2020 which have been paid in full, with the final $1.8m
cash payment received in the June Quarter 2020.
•
$2.0m in royalty payments payable as follows:
o $1,000,000 on Net Smelter Sales arising from Redmoor production reaching $50m, and
o $1,000,000 on Net Smelter Sales arising from Redmoor production reaching $100m.
CORPORATE
Strategy
The $3.0m in cash payments received during the year from the Redmoor transaction has placed NAE in a strong
financial position with a cash balance at 30 June 2020 of $2.8m.
This will enable NAE to focus on advancing its gold exploration projects in Otago and now in the Pilbara Gold district,
and to strengthen efforts to acquire new opportunities which establish shareholder value moving forward. NAE will
focus its search for new value adding opportunities on gold projects both in New Zealand and the Pilbara W.A.
The Company will also continue to progress opportunities for funding of the Lochinvar Project with interested
parties.
Changes in Non-Executive Directors
On 3 July 2020, the Company announced the appointment of Mr Adrien Wing as Non-Executive Director.
In line with NAE’s renewed focus, Mr Stephen Layton resigned on 29 September 2020 to meet other business
commitments. Mr Layton has played a pivotal role in the Company’s transition, both as a director and shareholder.
His contributions are much appreciated and the board wishes him all the best with his future endeavours.
Changes in Director’s Interest
In May 2020, Adrien Wing increased his shareholding in NAE to a total of 80,959,027 shares (including shares held
by related parties), becoming a substantial shareholder.
In May and June 2020, Stephen Layton increased his shareholding in NAE to a total of 45,000,000 shares (including
those held by related parties), becoming a substantial shareholder.
In May 2020, Joshua Wellisch increased his shareholding in NAE to a total of 22,777,692 shares.
NAE Office Move
On 25 May 2020, NAE moved office. The new office address is:
Level 2
480 Collins Street
Melbourne Victoria 3000
Phone: +61 3 9614 0600
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ACTIVITIES REPORT
NAE Annual Report 30 June 2020
FORWARD LOOKING STATEMENTS
This report contains “forward-looking information” that is based on the Company’s expectations, estimates and
forecasts as of the date on which the statements were made. This forward-looking information includes, among other
things, statements with respect to the Company’s business strategy, plans, objectives, performance, outlook, growth,
cash flow, earnings per share and shareholder value, projections, targets and expectations, mineral reserves and
resources, results of exploration and related expenses, property acquisitions, mine development, mine operations,
drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for
environmental matters, life of mine, completion dates, commodity prices and demand, and currency e xchange rates.
Generally, this forward-looking information can be identified by the use of forward-looking terminology such as
“outlook”, “anticipate”, “project”, “target”, “likely”, “believe”, “estimate”, “expect”, “intend”, “may”, “would”,
“could”, “should”, “scheduled”, “will”, “plan”, “forecast” and similar expressions. The forward looking information is
not factual but rather represents only expectations, estimates and/or forecasts about the future and therefore need
to be read bearing in mind the risks and uncertainties concerning future events generally.
SUPPORTING INFORMATION AND CAUTIONARY STATEMENTS
This report has been prepared as a summary only, and does not contain all information about NAE’s projects or its
assets and liabilities, financial position and performance, profits and losses, prospects, and the rights and liabilities
attaching to NAE’s securities. The securities issued by NAE are considered speculative and there is no guarantee that
they will make a return on the capital invested, that dividends will be paid on the shares or that there will be an
increase in the value of the shares in the future. NAE does not purport to give financial or investment advice. No
account has been taken of the objectives, financial situation or needs of any recipient of this report. Recipients of this
report should carefully consider whether the securities issued by NAE are an appropriate investment for them in light
of their personal circumstances, including their financial and taxation position.
Page | 18
DIRECTORS’ REPORT
NAE Annual Report 30 June 2020
The Directors present their report, together with the consolidated financial statements of the Group comprising of New Age
Exploration Limited (the Company) and its subsidiaries, for the financial year ended 30 June 2020 and the auditor’s report
thereon.
Directors
The following persons were Directors of the Company during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Mr A Broome AM (Non-Executive Chairman)
Mr J Wellisch (Executive Director)
Mr A Wing (Non-Executive Director) – appointed 3 July 2020
Mr S Layton (Non-Executive Director) – resigned 29 September 2020
Company Secretaries
Mr Adrien Wing (B.Bus, CPA) was the company secretary of the Company during the whole of the financial year and up to the
date of this report. Mr Wing is CPA qualified. He practised in the audit and corporate divisions of a chartered accounting firm
before working with a number of public companies listed on the ASX as a corporate/accounting consultant and company
secretary.
Ms Pauline Moffatt is a graduate of the Australian Institute of Company Directors (GAICD) and a fellow GIA ICSA of the
Governance Institute of Australia. Ms Moffatt has a wealth of experience, providing specialised accounting and company
secretary services to public companies for over 20 years.
Meetings of directors
The number of meetings of the Company's Board of Directors held during the year ended 30 June 2020, and the number of
meetings attended by each director were:
Mr A Broome AM
Mr J Wellisch
Mr S Layton
Full Board
Held
8
8
8
Attended
7
8
8
‘Held’ represents the number of meetings held during the time the Director held office or was a member of the relevant
committee. The table includes decisions by circular resolutions.
Information on directors
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (in the last 3 years):
Special responsibilities:
Interests in shares:
First appointed to the Board:
Mr Alan Broome AM (I.Eng, F.AusIMM, FAICD, FICME, MInstD (NZ))
Non-Executive Director and Chairman
Mr Broome is a metallurgist with over 40 years’ experience in mining and
metals. A well-known figure in the Australian mining industry, Alan has
extensive board experience, both as a director and chairman, of a number
of listed and unlisted mining and mining technology companies. Over the
past 20 years, Alan has had in-depth experience in coal mining, mining
technology, equipment, services and research sectors, both in Australia
and abroad.
Strategic Minerals plc (Chairman) – August 2015 to date
Nil
Chairman of the Board
475,000 ordinary shares
18 February 2013
Page | 19
DIRECTORS’ REPORT
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (in the last 3 years):
Special responsibilities:
Interests in shares:
First appointed to the Board:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (in the last 3 years):
Special responsibilities:
Interests in shares:
First appointed to the Board:
Name:
Title:
Experience and expertise:
First appointed to the Board:
Date of resignation:
NAE Annual Report 30 June 2020
Mr Joshua Wellisch
Executive Director
Mr Wellisch is a corporate professional whose career has included several
Executive Management and Director roles in ASX listed companies. Mr
Wellisch has a breadth of experience in the acquisition, management and
development of mineral geological projects within the energy and minerals
sector. Mr Wellisch has a substantial background in Project Management
and is a member of the Project Management Institute (PMI). Mr Wellisch is
also currently a director of NRG Capital specialising in capital raisings,
corporate structuring and the facilitation of ASX listings.
Nil
Kairos Minerals Limited (resigned 4 August 2017)
Executive Director
22,777,692 ordinary shares
12 October 2018
Mr Adrien Wing
Non-Executive Director
Mr Wing is a Certified Practicing Accountant. He practiced in the audit and
corporate advisory divisions of a chartered accounting firm before working
with a number of public companies listed on the Australian Securities
Exchange as a corporate/accounting consultant and company secretary.
High Grade Metals Ltd (Non-Executive Director) - October 2018 to date
Mithril Resources Ltd (Non-Executive Director) - May 2019 to date
Red Sky Energy Ltd (Non-Executive Director) – December 2016 to date
Nil
Nil
80,959,027 ordinary shares
3 July 2020
Mr Stephen Layton
Former Non-Executive Director
Mr Layton has over 35 years' experience in equity capital markets in the UK
and Australia. Mr Layton has worked with various stockbroking firms and/or
AFSL regulated corporate advisory firms. Mr Layton specialised in capital
raising services and opportunities, corporate advisory, facilitation of ASX
listings and assisting companies grow.
12 October 2018
29 September 2020
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships in all
other types of entities, unless otherwise stated.
'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships in all other types of entities, unless otherwise stated.
Page | 20
DIRECTORS’ REPORT
Principal activities
NAE Annual Report 30 June 2020
During the financial year, the Group made significant progress with advancing its Otago South Gold project.
The Company is continuing to maintain its 100% holding in the Lochinvar coking coal project which is a low-cost major coking
coal asset, strategically located to supply the UK and European steel industry.
Dividends
There were no dividends paid or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $4,965,036 (2019: profit of $1,158,486).
Additional information on the Company’s operations is included in the detailed Activities Report preceding this Directors'
report.
Significant changes in the state of affairs
In July 2019, the Company settled the sale of its 50% interest in Cornwall Resources Ltd as initially announced in March 2019.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
Director Appointment
On 3 July 2020, Mr Adrien Wing was appointed as Non-Executive Director.
Lochinvar Licence Application
The main Lochinvar licence held by NAE ended its maximum 8-year term on 17 July 2020. A new application for the Lochinvar
licence was made by NAE in April 2020 and NAE management is confident of the Coal Authority granting the Lochinvar
licence to NAE over the next few months as NAE’s application was first-in time, no competitive applications were received
and processing of the application by The Coal Authority is well advanced.
COVID-19 Pandemic
The COVID 19 pandemic and the actions taken by governments and others to contain its spread have led to various
restrictions on movement being put in place and has affected the ability of how business take place. As at the date of this
report, the Group has not been adversely affected, however the COVID-19 outbreak continues to evolve and is therefore
uncertain as to the full impact that the pandemic could have on the Group’s financial condition, liquidity, and future results.
Management is actively monitoring the global situation and its impact on the Group.
Page | 21
DIRECTORS’ REPORT
NAE Annual Report 30 June 2020
Matters subsequent to the end of the financial year (continued)
Acquisition, Capital Raising and Board Change
On 29 September 2020 NAE announced to the ASX a significant additional ground acquisition in the highly prospective
Central Pilbara Gold district, Western Australia. The Company has secured 100% ownership of a strategic tenement package
from Monterey Minerals Inc (Monterey) (CSE: MREY), located 50km south of De Grey Mining’s (ASX: DEG) Hemi gold
discovery.
The Company entered into an asset purchase agreement to acquire the four (4) stated granted exploration licences from
Monterey, E45/5180, E47/3886, E47/3887 and E47/3891 for a total consideration of 25 million NAE shares under ASX Listing
Rule 7.1.
In addition, the Company has entered into an option and asset sale agreement to acquire a further four (4) stated granted
exploration licences from Monterey, E47/3958, E45/5064, E45/5065, E45/5063 for a total consideration of 75 million NAE
shares and 37.5 million unlisted NAE options with an exercise price of $0.02, expiring 28 September 2023. NAE will have an
exclusive right to exercise the option to acquire the tenements on or before completion of a 45 day due diligence period. NAE
was required to pay an option fee of $25,000.
New Age has received binding commitments for a Placement to sophisticated and professional investors, comprising
273,250,000 fully paid ordinary shares in the Company (New Shares) at an issue price of 0.8 cents ($0.008) per share to raise
approximately A$2.18m (before costs) (Placement).
The Placement was conducted by Candour Advisory Pty Ltd as lead manager and within the Company’s placement capacity
under ASX Listing Rule 7.1 (108,121,959 shares) and ASX Listing Rule 7.1A (88,878,041 shares). An Appendix 2A confirming the
exact allotments follows this announcement.
As part of this Placement, Directors of the Company have committed up to A$616,000 in the offer. Director (and a former
director) participation in the Placement (76,250,000 shares) will be subject to shareholder approval, to be obtained at the
Annual General Meeting scheduled to be held in November 2020. A commission of up to 2% will be paid on these funds,
instead of the 6% on the remainder of funds raised.
The Capital Raising price of A$0.008 (0.8 cents) per New Share represents a 17.1% discount to the 15 day VWAP price
(A$0.0096).
Funds raised will be used for exploration of the Company’s Pilbara and New Zealand projects, along with working capital and
to pay for the costs of the offer.
In addition, the Company will issue 15,000,000 unlisted options exercisable at $0.02 (2 cents) to Candour Advisory Pty
Ltd. These options will be subject to shareholder approval.
In line with NAE’s renewed focus, Mr Stephen Layton has resigned to meet other business commitments. Mr Layton has played
a pivotal role in the Company’s transition, both as a director and shareholder. His contribution is much appreciated and the
board wishes him all the best with his future endeavours.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
The Group is continuing to advance its portfolio of exploration projects and examine the potential for investment in new
opportunities as they arise.
Environmental regulation
The Group's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of
a State or Territory in Australia as at this date.
The Group’s exploration activities in the United Kingdom, New Zealand and Australia are subject to environmental regulations
in those countries. The Board maintains responsibility that the Group is in compliance with all relevant environmental
legislation and maintains a high standard of environmental care. During the year, there were no known breaches of tenement
conditions, and no such breaches have been notified by any government agencies.
Page | 22
DIRECTORS’ REPORT
NAE Annual Report 30 June 2020
Remuneration report (audited)
The remuneration report, which has been audited, outlines the director and other key management personnel remuneration
arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its
Regulations.
The remuneration report is set out under the following main headings:
A - Principles used to determine the nature and amount of remuneration
B - Details of remuneration
C - Service agreements
D - Share-based compensation
E - Additional information
A Principles used to determine the nature and amount of remuneration
Remuneration Policy
The Board practice for determining the nature and amount of remuneration of directors and other key management personnel
is agreed by the Board of Directors as a whole. The Board obtains professional advice where necessary to ensure that the Group
attracts and retains talented and motivated Directors and employees who can enhance Group performance through their
contributions and leadership.
Remuneration consists of a fixed remuneration, performance-based bonuses and long-term share options as considered
appropriate. The Board believes that options are an effective remuneration tool which preserves the cash reserves of the
Group whilst providing valuable remuneration.
Executive Director Remuneration
Due to the limited size of the Group and of its operations and financial affairs, the use of a separate remuneration committee
is not considered appropriate. In determining the level and make-up of the Executive Director remuneration, the Board
negotiates a remuneration to reflect the market salary for a position and individual of comparable responsibility and
experience.
Remuneration is periodically compared to relevant external market conditions. This is done based on surveys of peer
companies’ Managing Director remuneration and also taking into account the increase in consumer price index. If required,
the Board may engage an external consultant to provide independent advice in the form of a written report detailing market
levels of remuneration for comparable executive roles.
No external consultant was engaged during the year for the purpose of remuneration review.
Non-Executive Director Remuneration
Non-executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to time.
Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act at the
time of the Directors retirement or termination. Non-Executive Directors remuneration may include an incentive portion
consisting of bonuses and/or options, as considered appropriate by the Board, which may be subject to shareholder approval
in accordance with the ASX Listing Rules.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers the amount of Director fees being paid by comparable companies
with similar responsibilities and the experience of the Non-Executive Directors when undertaking the annual review process.
The Group determines the maximum amount for remuneration, including thresholds for share-based remuneration, for
Directors by resolution. At the Annual General Meeting held on 28 November 2012, shareholders approved $300,000 as the
annual maximum amount of remuneration that may be allocated to all Non-Executive Directors. Further details regarding
components of Director and executive remuneration are provided in the following tables.
Page | 23
DIRECTORS’ REPORT
NAE Annual Report 30 June 2020
Group performance, shareholder wealth and director and other key management personnel remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and other key
management personnel through successfully achieving its primary objectives. During exploration project development phase,
these objectives are not linked to earnings. Instead, the successful discovery or acquisition of mineral resources and progress
with project development are the primary means of value creation and thus, are the primary objectives of the Company. The
achievement of this aim has been through the issue of options to Directors to encourage the alignment of personal and
shareholder interests. The recipients of the options are responsible for growing the Group and increasing shareholder value.
If they achieve this goal, the value of the options granted to them will also increase. Therefore, the options provide an incentive
to the recipients to remain with the Group and to continue to work to enhance the Group’s value.
In the financial year ended 30 June 2020, Mr A Wing received a bonus entitlement of $90,300 relating to the successful sale of
the 50% joint venture interest held by the Group in Cornwall Resources Ltd.
B Details of remuneration
Details of the remuneration of the Directors and other key management personnel (defined as those who have the authority
and responsibility for planning, directing and controlling major activities) of the Group are set out in the following tables.
Short-term benefits
Salary/Fees (5) Bonus
$
$
Post-employment
benefits
Superannuation
$
Termination
Payments
$
Total
$
Performance
Related
%
2020
Non-Executive Directors:
Mr A Broome AM
Mr S Layton
Executive Directors:
Mr J Wellisch
Company Secretary:
Mr A M Wing
72,000
48,000
181,375
-
-
-
60,000
361,375
90,300
90,300
2019
$
$
$
Non-Executive Directors:
Mr A Broome AM
Mr S Layton (1)
Mr N Hutchison (2)
Mr M Amundsen (3)
Executive Directors:
Mr J Wellisch (1)
Mr G Fietz (4)
Company Secretary:
Mr A M Wing
68,000
34,000
20,375
10,817
112,954
79,963
80,335
406,444
-
-
-
-
-
-
-
-
(1) Appointed 12 October 2018
(2) Appointed 12 October 2018 and resigned 13 December 2018
(3) Resigned 12 October 2018
(4) Resigned 12 October 2018
(5) Includes any salary sacrifice
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
72,000
48,000
181,375
150,300
451,675
$
%
68,000
34,000
20,375
10,817
-
6,250
-
6,250
-
290,449
112,954
376,662
-
290,449
80,335
703,143
-
-
-
60.1
-
-
-
-
-
-
-
-
-
Page | 24
DIRECTORS’ REPORT
C Service agreements
NAE Annual Report 30 June 2020
NAE has no existing service agreements as at 30 June 2020. Its Executive Service Agreement (ESA) with former Managing
Director, Mr Gary Fietz, ended when Mr Fietz resigned on 12 October 2018.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
D Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year ended
30 June 2020.
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel, including their personally related parties, is set out below:
2020
Ordinary shares
Alan Broome AM
Joshua Wellisch
Stephen Layton
Adrien Wing
2019
Ordinary shares
Alan Broome AM
Joshua Wellisch (1)
Stephen Layton (1)
Neil Hutchison (3)
Gary Fietz (2)
Michael Amundsen (2)
Adrien Wing
Balance at the
start of the year
Received as part
of remuneration
Additions
Disposals/
Other
Balance at the
end of the year
475,000
17,777,692
15,000,000
29,999,998
63,252,690
475,000
-
-
-
445,000
450,000
9,900,000
11,270,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
30,000,000
50,959,029
85,959,029
-
17,777,692
15,000,000
-
-
-
20,099,998
52,877,690
-
-
-
-
-
475,000
22,777,692
45,000,000
80,959,027
149,211,719
-
-
-
-
(445,000)
(450,000)
-
(895,000)
475,000
17,777,692
15,000,000
-
-
-
29,999,998
63,252,690
(1) Appointed 12 October 2018
(2) Resigned 12 October 2018
(3) Appointed 12 October 2018, resigned 13 December 2018
Page | 25
DIRECTORS’ REPORT
NAE Annual Report 30 June 2020
Options
There were no options issued to Directors or other key management personnel as part of compensation during the year ended
30 June 2020.
Options holdings
There were no options over ordinary shares in the Company held by Directors and other members of key management
personnel, including their personally-related parties, during the financial year.
E Additional information
The earnings of the Group for the five years to 30 June 2020 are summarised below:
2016
$
*restated
2017
$
2018
$
2019
$
2020
$
Revenue
Net profit/(loss) before tax
Net profit/(loss) after tax
944,794
547,997
547,997
1,746,521
689,623
689,623
1,776,869
960,492
960,492
51,835
(1,158,486)
(1,158,486)
109,677
(4,965,036)
(4,965,036)
The factors that are considered to affect total shareholders return (TSR) are summarised below:
Share price at start of year ($)
Share price at end of year ($)
Basic earnings/(loss) per share
(cents per share)
Diluted earnings/(loss) per share
(cents per share)
2016
*restated
0.004
0.009
0.17
0.17
2017
2018
2019
2020
0.009
0.010
0.17
0.17
0.010
0.006
0.21
0.21
0.006
0.004
0.004
0.007
(0.15)
(0.56)
(0.15)
(0.56)
This concludes the remuneration report, which has been audited.
Page | 26
DIRECTORS’ REPORT
Shares under option
NAE Annual Report 30 June 2020
There were no unissued ordinary shares of the Company under option at the balance date.
Shares issued on the exercise of options
No shares of the Company were issued during the year ended 30 June 2020 on the exercise of options granted.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives for costs incurred in their capacity as a Director or executive for
which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives against
a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of
liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the Company or
any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on
behalf of the Group for all or part of those proceedings.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
the following page.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________________________________
Joshua Wellisch
Executive Director
30 September 2020
Melbourne
Page | 27
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of New Age Exploration 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:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
R J MORILLO MALDONADO
Partner
Dated: 30 September 2020
Melbourne, Victoria
Page | 28
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For The Year Ended 30 June 2020
Revenue from continuing operations
Other revenue
Expenses
Corporate expenses
Occupancy expenses
Employee benefits expenses
Exploration and evaluation expenses
Exploration and evaluation impairment
Administrative expenses
Legal expenses
Travel and accommodation
Note
4
(Loss)/profit before tax from continuing operations
Income tax expense
6
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Consolidated
30 June 2020
$
Consolidated
30 June 2019
$
109,677
109,677
(184,572)
(13,758)
(360,221)
(17,491)
(4,214,308)
(141,957)
(30,730)
(21,376)
(4,984,413)
(4,874,736)
-
51,835
51,835
(329,851)
(22,353)
(655,784)
(8,250)
-
(112,591)
(23,192)
(31,401)
(1,183,422)
(1,131,587)
-
(Loss)/profit after tax from continuing operations
(4,874,736)
(1,131,587)
Discontinued operations
(Loss)/profit after tax from discontinued operations
10
(90,300)
(26,899)
(Loss)/profit for the year
(4,965,036)
(1,158,486)
Other comprehensive income for the year
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign
operations
Other comprehensive income for the year, net of tax
(127,905)
(127,905)
150,732
150,732
Total comprehensive (loss)/income for the year
(5,092,941)
(1,007,754)
Earnings/(loss) per share from continuing operations
attributable to the owners of New Age Exploration Limited
Basic per share
Diluted per share
Earnings/(loss) per share from discontinued operations
attributable to the owners of New Age Exploration Limited
Basic per share
Diluted per share
Earnings/(loss) per share attributable to the owners of New
Age Exploration Limited
Basic per share
Diluted per share
21
21
21
21
21
21
Cents
Cents
(0.55)
(0.55)
(0.15)
(0.15)
Cents
Cents
(0.01)
(0.01)
(0.00)
(0.00)
Cents
Cents
(0.56)
(0.56)
(0.15)
(0.15)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes.
Page | 29
STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note
Consolidated
30 June 2020
Consolidated
30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other financial assets
Non-current Asset held for sale
Total current assets
Non–current assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
7
8
9
10
11
12
13
14
$
2,795,592
18,806
9,272
25,000
-
2,848,670
2,925
2,960,098
2,963,023
5,811,693
219,246
-
219,246
219,246
$
693,506
34,387
9,003
25,000
3,000,000
3,761,896
-
7,064,325
7,064,325
10,826,221
122,828
18,005
140,833
140,833
5,592,447
10,685,388
27,990,778
740,578
(23,138,909)
27,990,778
868,483
(18,173,873)
5,592,447
10,685,388
The above statement of financial position should be read in conjunction with the accompanying notes.
Page | 30
STATEMENT OF CHANGES IN EQUITY
For The Year Ended 30 June 2020
Consolidated
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Contributed
Equity
$
Reserves
$
Accumulated Losses
$
Total
$
At 1 July 2018
26,220,788
717,751
(17,015,387)
9,923,152
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
-
-
-
-
150,732
150,732
(1,158,486)
-
(1,158,486)
(1,158,486)
-
(1,007,754)
Transactions with owners in their
capacity as owners:
Issue of shares
Share issue costs
As at 30 June 2019
1,941,500
(171,510)
-
-
-
-
1,941,500
(171,510)
27,990,778
868,483
(18,173,873)
10,685,388
At 1 July 2019
27,990,778
868,483
(18,173,873)
10,685,388
Loss for the year
Other comprehensive loss
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Issue of shares
As at 30 June 2020
-
-
-
-
-
(127,905)
(4,965,036)
-
(4,965,036)
(127,905)
(127,905)
(4,965,036)
(5,092,941)
-
-
-
27,990,778
740,578
(23,138,909)
5,592,447
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Page | 31
STATEMENT OF CASH FLOWS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Cash flows from operating activities
Payments to suppliers and employees
Other receipts
Interest received
Note
Consolidated
30 June 2020
$
Consolidated
30 June 2019
$
(825,324)
3,934
109,458
(1,195,558)
22,275
7,814
Net cash flows used in operating activities
20 (a)
(711,932)
(1,165,469)
Cash flows from investing activities
Payments for contribution in joint venture
Payments for exploration and evaluation assets
Proceeds from deposit
Proceeds from joint venture sale negotiations
Payments for plant and equipment
Proceeds from sale of non-current asset held for sale
10
-
(153,011)
-
-
(2,999)
2,990,000
(842,253)
(157,463)
10,000
10,000
-
-
Net cash flows provided by/(used in) investing activities
2,833,990
(979,716)
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
20 (b)
20 (b)
-
(19,227)
1,812,560
(25,091)
Net cash flows (used in)/provided by financing activities
(19,227)
1,787,469
Net increase/(decrease) in cash and cash equivalents held
2,102,831
(357,716)
Cash and cash equivalents at beginning of the year
Effects of foreign exchange rate changes on cash
693,506
(745)
1,053,352
(2,130)
Cash and cash equivalents at the end of the year
7
2,795,592
693,506
The above statement of cash flows should be read in conjunction with the accompanying notes
Page | 32
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
General information
The consolidated financial report of New Age Exploration Limited as at and for the year ended 30 June 2020 comprises the
Company and its subsidiaries (together referred to as the “Group”).
The financial report is presented in Australian dollars, which is New Age Exploration Limited's functional and presentation
currency.
New Age Exploration Limited is a listed for-profit public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Level 2
480 Collins Street
Melbourne VIC 3000
A description of the nature of the Group's operations and its principal activities are included in the Directors' report.
The financial report was authorised for issue, in accordance with a resolution of directors, on the date of the signing of the
Directors’ declaration.
Note 1 Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted
In the year ended 30 June 2020, the Directors have reviewed all of the new and revised Standards and Interpretations issued
by the AASB that are relevant to the Group and effective for the current annual reporting period. There has been no material
impact on the Group.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020 reporting
periods and have not been early adopted by the group. These standards are not expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001. These financial
statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards
Board (‘IASB’).
Historical cost convention
The financial statements have been prepared on an accrual basis under the historical cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at fair value through profit or loss.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are
disclosed in Note 2.
Principles of Consolidation
The consolidated financial statements are those of the consolidated entity, comprising the company (the ‘parent entity’) and
its controlled entities (the ‘Group’). Details of the controlled entities are contained in Note 18.
Control is achieved when the Company:
• has power over the investee;
•
• has the ability to use its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement with the investee; and
Page | 33
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 1 Significant accounting policies (cont’d)
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains
control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation. Financial statements for controlled entities are prepared for the same reporting
period as the parent entity, using consistent accounting policies. Controlled entities are fully consolidated from the date on
which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of
the Group.
Changes in the Group's ownership interests in existing subsidiaries
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries
are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the
Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred
to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under AASB 139 Financial Instruments: Recognition and Measurement, when applicable, the cost on initial recognition of an
investment in an associate or a joint venture.
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control over those policies. A joint venture is
a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint
arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements
using the equity method of accounting, except when the investment, or a portion thereof, is classified as disposal group held
for sale, in which case it is accounted for in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued
Operations. Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated
statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other
comprehensive income of the associate or joint venture. When the Group's share of losses of an associate or a joint venture
exceeds the Group's interest in that associate or joint venture (which includes any long-term interests that, in substance, form
part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further
losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee
becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the
cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is
recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the
net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised
immediately in profit or loss in the period in which the investment is acquired.
Page | 34
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 1 Significant accounting policies (cont’d)
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
The requirements of AASB 9 are applied to determine whether it is necessary to recognise any impairment loss with respect to
the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment
(including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing
its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount, Any impairment
loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in
accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint
venture, or when the investment is classified as held for sale. When the Group retains an interest in the former associate or
joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date
and the fair value is regarded as its fair value on initial recognition in accordance with AASB 9. The difference between the
carrying amount of the associate or joint venture at the date the equity method was discontinued, and the fair value of any
retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the
determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts
previously recognised in other comprehensive income in relation to that associate or joint venture on the same basis as would
be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss
previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss
on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture
or an investment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such
changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity
method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other
comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss
on the disposal of the related assets or liabilities. When a group entity transacts with an associate or a joint venture of the
Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group's
consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the
Group.
Foreign Currency
Functional and Presentation Currency
The financial statements of each group entity are measured using its functional currency, which is the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars,
as this is the parent entity’s functional and presentation currency.
Transactions and Balances
Transactions in foreign currencies of entities within the consolidated entity are translated into functional currency at the rate
of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign
currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate
at the end of financial year.
Resulting exchange differences arising on settlement or re-statement are recognized as revenues and expenses for the financial
year.
Group Companies
The financial statements of foreign operations whose functional currency is different from the group’s presentation currency
are translated as follows:
•
•
•
Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
Income and expenses are translated at average exchange rates for the period where this rate approximates the rate at
the date of the transaction; and
All resulting exchange differences are recognized as a separate component of equity.
Page | 35
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 1 Significant accounting policies (cont’d)
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency
translation reserve as a separate component of equity in the statement of financial position.
On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving
loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or
an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange
differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to
profit or loss.
In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group
losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-
controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or
joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the
accumulated exchange differences is reclassified to profit or loss.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
Interest Revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and unused tax losses and under and over provision in prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
• When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for 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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying
amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there
are future taxable profits available to recover the asset.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade and other receivables are recognised at amortised cost, less any allowance for impairment.
Page | 36
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 1 Significant accounting policies (cont’d)
Other Financial Assets
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.
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.
Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over its expected useful life as follows:
Plant and equipment: 3-5 years
•
Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at the reporting date.
An item of 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.
Exploration and Evaluation Assets
Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward at cost where rights to
tenure of the area of interest are current and:
It is expected that expenditure will be recouped through successful development and exploitation of the area of interest or
alternatively by its sale; and/or
Exploration and evaluation activities are continuing in an area of interest but at reporting date have not yet reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.
•
•
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest. Where uncertainty exists as to the future viability of certain areas, the value of the area of
interest is written off or impaired.
Page | 37
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 1 Significant accounting policies (cont’d)
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit
level whenever facts and circumstances suggest that its carrying amount may exceed its recoverable amount.
An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount.
The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in the
profit and loss.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those
cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain that reimbursement will be received, and the amount of the
receivable can be measured reliably.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature, they are measured at amortised cost and not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
Employee benefits
Wages and salaries, annual leave and sick leave
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave,
and sick leave when it is probable that settlement will be required, and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the remuneration
rate expected to apply at the time of settlement. Liabilities recognised in respect of long-term employee benefits are measured
as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by
employees up to reporting date.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is
determined by reference to the share price.
The costs of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option, together with non-vesting conditions that do not determine whether the Group
receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The costs of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Page | 38
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 1 Significant accounting policies (cont’d)
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying the Black-
Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The
cumulative charge to profit or loss until settlement of the liability is calculated as follows:
•
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by
the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
Contributed equity
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.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of New Age Exploration Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax (GST) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case, it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows from investing or financing activities which are
recoverable from, or payable to, the tax authority are presented as operating cash flows.
Commitments and contingencies are disclosed net of the GST recoverable from, or payable to, the tax authority.
Page | 39
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 1 Significant accounting policies (cont’d)
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at
the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising
from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under
insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group),
but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the
date of the sale of the noncurrent asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for
sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are
presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately in the statement of profit or loss.
Note 2 Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenues and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, which management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions 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
Exploration and evaluation expenditure is capitalised if the activities in the area of interest have not yet reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is
determined in the future that this capitalised expenditure is not recoverable and should be written off, profits and net assets
will be reduced in the period in which this determination is made.
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including
whether economically recoverable minerals are proven and whether the consolidated entity decides to exploit the related
lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.
Factors that would impact the future recoverability include the level of reserves and resources, future technological changes
(which would impact the cost of mining), future legal changes (including changes to environmental restoration obligations) and
changes to commodity prices.
The term of the Lochinvar exploration project licences ended on 17 July 2020 and the licences are currently in the process of
being renewed. The Directors have lodged an application for the licences to be renewed and are confident of being successful.
Page | 40
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 3 Operating segments
The Group operated predominately as an explorer with the view to identify attractive mineral deposits of sufficient grade and
size to provide sustainable returns to shareholders.
The directors do not believe that there are any reportable segments that meet the requirements of Accounting Standard AASB
8 Segment Reporting, on the basis that the chief operating decision maker, being the Board of Directors, review geological
results and other qualitative measures as a basis for decision making.
Types of products and services
The Group currently has no significant revenue from products or services.
Major customers
The Group has no reliance on major customers.
Geographical areas
The Group’s exploration assets and assets held for sale are located as follows:
• United Kingdom
• New Zealand
Total
$2,600,000 (2019: $9,848,623)
$360,098 (2019: $215,702)
$2,960,098 (2019: $10,064,325)
Note 4 Other income
Interest from financial assets measured at amortised cost
Management fees to related entities
Other income
Consolidated
2020
$
Consolidated
2019
$
109,677
-
-
109,677
7,831
33,232
10,772
51,835
Note 5 Expenses
(Loss)/profit before income tax includes the following expenses:
Superannuation expense (defined contribution)
Depreciation
Note
Consolidated
2020
$
Consolidated
2019
$
1,710
74
17,599
3,425
Page | 41
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 6 Income tax expense
(a) Components of Tax expense
Current tax expense/(benefit)
Deferred tax expense
(b) Numerical reconciliation of income tax expense to prima
facie tax payable
(loss)/profit before income tax expense
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Non-assessable items
Non-deductible items
Current year tax losses not recognised
Income tax expense
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary
differences attributable to:
Tax losses
Capital losses
Temporary differences
Total deferred tax assets not recognised
Consolidated
2020
$
Consolidated
2019
$
(168,357)
168,357
-
(302,540)
302,540
-
(4,965,036)
(1,158,486)
(1,365,385)
(318,584)
-
1,197,028
(168,357)
168,357
-
-
16,044
(302,540)
302,540
-
3,204,066
1,382,833
22,041
4,608,940
3,090,644
1,382,833
37,575
4,511,052
The above potential tax benefit has not been recognised in the statement of financial position as the recovery of this benefit
is uncertain.
The taxation benefits of tax losses and temporary differences not brought to account will only be obtained if:
(i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised;
the Group continues to comply with the conditions for deductibility imposed by law; and
(ii)
(iii) no change in tax legislation adversely affects the Group in realising the benefits from deducting the losses.
Note 7 Cash and cash equivalents
Cash at bank
Short-term deposits
Consolidated
2020
$
Consolidated
2019
$
2,285,566
511,958
-
2,797,524
684,328
9,178
693,506
Page | 42
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 8 Trade and other receivables
Trade receivables – related party (i)
Interest receivable
GST and VAT receivable
Other receivables
Consolidated
2020
$
Consolidated
2019
$
-
219
18,587
-
18,806
-
4,921
-
16,581
12,885
34,387
Due to the short-term nature of the receivables, their carrying value is assumed to approximate their fair value. Given the
nature of the receivables as detailed, exposure to credit risk is not considered material.
(i)
These are receivables from Cornwall Resources Ltd for which NAE held a 50% interest (see Note 18).
Note 9 Other financial assets
Bank guarantee deposit
Consolidated
2020
$
Consolidated
2019
$
25,000
25,000
Note 10 Non-current Asset held for sale and discontinued operations
In March 2019, NAE entered into an agreement to sell its 50% share in Cornwall Resources Ltd (“CRL”) to Strategic Minerals plc
(“SML”). As a result, the Company reclassified the investment to assets held for sale.
The transaction was completed in July 2019 for a total consideration of $5.0m with the following terms:
- $3.0m in cash payments between June 2019 and June 2020 payable with a 5% p.a. interest payable on outstanding
balances calculated on a daily basis. The payments were secured by charges over CRL shares and property and an option
to NAE to convert any outstanding balances due to SML shares at a 10% discount to market price in the event of default.
An initial $10,000 payment was received in the 2019 financial year.
- $2.0m in royalty payments payable with $1m falling due when net smelter sales arising from Redmoor production reaches
A$50m and the final $1m falling due when net smelter sales arising from Redmoor production reaches A$100m.
(a) Non-current Asset held for sale
Consolidated
2020
$
Consolidated
2019
$
Investment in joint venture - Cornwall Resources Ltd
-
3,000,000
(b) Discontinued operations
Summarised financial information for joint ventures and associates
The following table includes, in aggregate, NAE’s share of profit and OCI of joint ventures and associates:
Share of net gain of joint venture
Impairment loss
Corporate sale commission
(Loss)/profit from discontinued
operations
Consolidated
2020
$
Consolidated
2019
$
-
-
(90,300)
182,886
(209,785)
-
(90,300)
(26,899)
Page | 43
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 10 Non-current Asset held for sale and discontinued operations (cont’d)
The net cash flows incurred from discontinued operations are as follows:
Operating activities
Investing activities
Note 11 Exploration and evaluation assets
Consolidated
2020
$
Consolidated
2019
$
(36,300)
2,990,000
-
(842,253)
Consolidated
2020
$
Consolidated
2019
$
Exploration and evaluation assets
2,960,098
7,064,325
Reconciliations
Reconciliations of the written down values are set out below:
Balance at 1 July 2018
Additions
Effect of foreign currency movements
Balance at 30 June 2019
Additions
Impairment
Effect of foreign currency movements
Balance at 30 June 2020
Exploration and
evaluation
$
6,777,775
130,010
156,540
7,064,325
237,241
(4,214,308)
(127,160)
2,960,098
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the continuation of the
Group's rights to tenure of the interests, results of future exploration and successful development or alternatively, sale of the
respective areas of interest.
In the current year, the Directors conducted a review of the capitalised exploration and evaluation assets and determined that,
in light of current market conditions, there are indications of impairment relevant to the carrying value of the Lochinvar
exploration asset. A valuation was undertaken in September 2020 in accordance with a market-based valuation technique and
considered appropriate for the project’s current stage of development. Inputs under level 2 of the fair value hierarchy within
Accounting Standard AASB 13 ‘Fair Value Measurement’ were used for the valuation whereby observed similar market
transaction multiples were considered. The valuation supported a fair value of $2,600,000 and, as a result, an impairment
expense of $4,214,308 was incurred during the year.
Note 12 Provisions
Employee benefits
Consolidated
2020
$
Consolidated
2019
$
-
18,005
Page | 44
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 13 Contributed equity
Consolidated
2020
Number
Consolidated
2019
Number
Consolidated
2020
$
Consolidated
2019
$
Ordinary shares – fully paid
888,780,410
888,780,410
27,990,778
27,990,778
Movements in Ordinary Share Capital
Balance 1 July 2018
Issue of shares
Issue of shares
Issue costs
Balance 30 June 2019
Balance 30 June 2020
No. of Shares
Issue Price
$
562,857,333
148,923,077
177,000,000
-
888,780,410
888,780,410
$0.0065
$0.0055
26,220,788
968,000
973,500
(171,510)
27,990,778
27,990,778
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Group in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value.
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and, upon a poll, each share
shall have one vote.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell
assets to reduce debt.
Note 14 Reserves
Foreign exchange reserve
Consolidated
2020
$
Consolidated
2019
$
740,578
868,483
The foreign exchange reserve is used to record exchange differences arising on translation of foreign controlled subsidiaries
with functional currency different from the Groups’ presentation currency.
Movements in reserve
Balance at beginning of the year
Foreign currency translation differences for foreign operations
Balance at end of the year
Consolidated
2020
$
Consolidated
2019
$
868,483
(127,905)
740,578
717,751
150,732
868,483
Page | 45
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 15 Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk, and foreign
currency risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and foreign
exchange risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by the Board. The policies employed to mitigate risk include identification and analysis of the
risk exposure of the Group and appropriate procedures, controls and risk limits. The Board identifies risk and evaluates the
effectiveness of its responses.
Market risk
Interest rate risk
The Group's main exposure to interest rate risk is in relation to deposits held.
As at the reporting date, the Group had the following variable rate cash balances.
Cash and cash equivalents
Other financial assets
Consolidated
2020
$
2,795,592
25,000
Consolidated
2019
$
693,506
25,000
An increase/decrease in interest rate of 1 percent would have a favourable/adverse effect on loss before tax of $28,206 per
annum (2019: $7,185). The percentage change relates to the expected volatility of interest rates using market data and
analysts’ forecasts.
Credit risk
Credit risk is managed on a Group basis. Credit risk refers to the risk that the counterparty will default on its contractual
obligations resulting in financial loss to the Group. The Group has minimal exposure to credit risk as its only receivables relate
to security deposits, interest receivable, and GST refunds due. Deposits are held with reputable banking financial institutions.
Foreign Currency Risk
As a result of operations in the United Kingdom and New Zealand, the Group’s Statement of Financial Position can be affected
significantly by movements in the British Pound (GBP)/ Australian Dollar (AUD) exchange rate as well as the New Zealand Dollar
(NZD)/AUD exchange rate. The Group does not have a formal policy or strategy implemented to mitigate the effects of its
foreign currency exposure. As the majority of the Group’s operations occur within subsidiaries located in foreign countries,
foreign currency risk is considered to be an inherent risk of the Group. At 30 June, the Group had the following exposure to
GBP and NZD foreign currency that is not designated as cash flow hedges:
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
Net Exposure
2020
$
2019
$
GBP
NZD
14,586
-
54,546
-
(2,808)
-
(10,835)
-
11,778
-
43,711
-
Note 16 Remuneration of auditors
During the financial year, the following audit fees were paid or payable:
Audit and review of the financial reports
RSM Australia Partners
Consolidated
2020
$
Consolidated
2019
$
37,370
36,470
Page | 46
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 17 Commitments for expenditure
The Group pays minimal annual licence and lease fees related to its Lochinvar and Otago tenements. These payments are
discretionary; however, the Company intends to make these payments and maintain the licences in good standing.
Note 18 Related party disclosures
Key Management Personnel Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment benefits
Termination benefits
Controlled entities
Name of entity
Consolidated
2020
$
Consolidated
2019
$
451,675
-
-
451,675
406,444
6,250
290,449
703,143
Country of
incorporation
Class of
shares
Equity holding
%
2020
Equity holding
%
2019
Cornwall Resources Ltd (1)
Lochinvar Coal Limited
United Kingdom
United Kingdom
Ordinary
Ordinary
-
100
50
100
(1)
In March 2019, NAE entered into an agreement with its joint venture partner, Strategic Minerals plc (SML), to sell its 50% interest in
Cornwall Resources. This transaction was completed in July 2019. Mr Alan Broome is a director of SML.
Transactions with related parties
Services provided to/(from) the Group made on normal commercial terms and
conditions and at market rates:
Cornwall Resources Ltd, for management fees, hire of vehicle and reimbursement
of expenses (1)
Consolidated
2020
$
Consolidated
2019
$
-
33,232
(1) Cornwall Resources Ltd was a 50% owned subsidiary of NAE until the disposal completed in July 2019.
Receivable from and payable to related parties
At 30 June 2020, the consolidated entity had trade receivables from CRL of $nil (2019: $4,921).
Other transactions
NAE’s Chairman of the Board, Mr Alan Broome, is also Chairman of the Board for Strategic Minerals plc (“SML”). SML and NAE
each owned 50% interest in the joint venture over Cornwall Resources Ltd until the sale completed in July 2019 under terms
as disclosed in Note 10 to the financial statements.
Page | 47
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
Note 19 Events occurring after the reporting date
Director Appointment
On 3 July 2020, Mr Adrien Wing was appointed as Non-Executive Director.
Lochinvar Licence Application
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
The main Lochinvar licence held by NAE ended its maximum 8-year term on 17 July 2020. A new application for the Lochinvar
licence was made by NAE in April 2020 and NAE management is confident of the Coal Authority granting the Lochinvar
licence to NAE over the next few months as NAE’s application was first-in time, no competitive applications were received
and processing of the application by The Coal Authority is well advanced.
COVID-19 Pandemic
The COVID 19 pandemic and the actions taken by governments and others to contain its spread have led to variou s
restrictions on movement being put in place and has affected the ability of how business take place. As at the date of this
report, the Group has not been adversely affected, however the COVID-19 outbreak continues to evolve and is therefore
uncertain as to the full impact that the pandemic could have on the Group’s financial condition, liquidity, and future results.
Management is actively monitoring the global situation and its impact on the Group.
Acquisition, Capital Raising and Board Change
On 29 September 2020 NAE announced to the ASX a significant additional ground acquisition in the highly prospective
Central Pilbara Gold district, Western Australia. The Company has secured 100% ownership of a strategic tenement package
from Monterey Minerals Inc (Monterey) (CSE: MREY), located 50km south of De Grey Mining’s (ASX: DEG) Hemi gold
discovery.
The Company entered into an asset purchase agreement to acquire the four (4) stated granted exploration licences from
Monterey, E45/5180, E47/3886, E47/3887 and E47/3891 for a total consideration of 25 million NAE shares under ASX Listing
Rule 7.1.
In addition, the Company has entered into an option and asset sale agreement to acquire a further four (4) stated granted
exploration licences from Monterey, E47/3958, E45/5064, E45/5065, E45/5063 for a total consideration of 75 million NAE
shares and 37.5 million unlisted NAE options with an exercise price of $0.02, expiring 28 September 2023. NAE will have an
exclusive right to exercise the option to acquire the tenements on or before completion of a 45 day due diligence period. NAE
was required to pay an option fee of $25,000.
New Age has received binding commitments for a Placement to sophisticated and professional investors, comprising
273,250,000 fully paid ordinary shares in the Company (New Shares) at an issue price of 0.8 cents ($0.008) per share to raise
approximately A$2.18m (before costs) (Placement).
The Placement was conducted by Candour Advisory Pty Ltd as lead manager and within the Company’s placement capacity
under ASX Listing Rule 7.1 (108,121,959 shares) and ASX Listing Rule 7.1A (88,878,041 shares). An Appendix 2A confirming the
exact allotments follows this announcement.
As part of this Placement, Directors of the Company have committed up to A$616,000 in the offer. Director (and a former
director) participation in the Placement (76,250,000 shares) will be subject to shareholder approval, to be obtained at the
Annual General Meeting scheduled to be held in November 2020. A commission of up to 2% will be paid on these funds,
instead of the 6% on the remainder of funds raised.
The Capital Raising price of A$0.008 (0.8 cents) per New Share represents a 17.1% discount to the 15 day VWAP price
(A$0.0096).
Funds raised will be used for exploration of the Company’s Pilbara and New Zealand projects, along with working capital and
to pay for the costs of the offer.
In addition, the Company will issue 15,000,000 unlisted options exercisable at $0.02 (2 cents) to Candour Advisory Pty
Ltd. These options will be subject to shareholder approval.
In line with NAE’s renewed focus, Mr Stephen Layton has resigned to meet other business commitments. Mr Layton has played
a pivotal role in the Company’s transition, both as a director and shareholder. His contributions are much appreciated and the
board wishes him all the best with his future endeavours.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations or the Group's state of affairs in future financial years.
Page | 48
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 20 Cash Flow statement information
Note 20 (a) Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
-
(4,965,036)
(1,158,486)
Consolidated
2020
$
Consolidated
2019
$
Adjustments for:
Depreciation and amortisation
Exploration impairment
Unrealised foreign exchange (gains)/losses
Impairment on assets/ (reversal) of impairment
Share in net (income)/loss of joint venture
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee benefits
74
4,214,308
-
-
-
15,581
(269)
41,415
(18,005)
3,425
-
(2,789)
209,785
(182,886)
(506)
(16,720)
8,150
14,206
Net cash used in operating activities
(711,932)
(739,997)
Note 20 (b) Non-cash financing activities
During the 2019 financial year, the Group issued new shares which increased contributed capital by $128,940 as consideration
for transaction costs.
Note 21 Earnings per share
Loss after income tax from continuing operations
Loss after income tax from discontinued operations
Loss after income tax
Weighted average number of ordinary shares used in calculating basic and
diluted earnings per share
Basic and diluted earnings/(loss) per share from continuing operations
Basic and diluted earnings/(loss) per share from discontinued operations
Basic and diluted earnings/(loss) per share
The company has no options on issue that can affect the calculation of diluted EPS.
Consolidated
2020
$
(4,874,736)
(90,300)
(4,965,036)
Consolidated
2019
$
(1,131,587)
(26,899)
(1,158,486)
Number
Number
888,780,410
752,143,529
Cents
Cents
(0.55)
(0.01)
(0.56)
(0.15)
(0.00)
(0.15)
Page | 49
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2020
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Note 22 Parent entity information
Financial position
Current assets
Non–current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated losses
Total equity
Financial performance
Loss for the year
Comprehensive loss for the year
2020
$
2,404,130
2,971,877
5,376,007
216,439
216,439
2019
$
707,350
10,141,923
10,849,273
129,999
129,999
5,592,446
10,719,274
27,990,778
(22,398,332)
27,990,778
(17,271,504)
5,592,446
10,719,274
(5,126,828)
(5,126,828)
(883,553)
(883,553)
The parent entity, New Age Exploration Limited, has not entered into any guarantees in respect to its controlled entities.
Capital Commitments
There are no commitments for the acquisition of plant and equipment contracted for at the reporting date.
Note 23 Contingent Assets
In March 2019, NAE entered into an agreement to sell its 50% share in Cornwall Resources Ltd (“CRL”) to Strategic Minerals plc
(“SML”). The transaction was completed in July 2019 with the consideration including $2.0m in royalty payments payable with
$1m falling due when net smelter sales arising from Redmoor production reaches A$50m and the final $1m falling due when
net smelter sales arising from Redmoor production reaches A$100m.
Note 24 Contingent Liabilities
In June 2016, NAE’s majority owned subsidiary, NAE Aurora JV Cesar SAS (liquidated in the commercial registry of the Chamber
of Commerce of Bogotá on 17 December 2015), received notice from the mining authority in Colombia for unpaid exploration
licence payments. No legal proceeding has been filed and based on legal advice, management believes that any payment on
this matter is unlikely. No liability has been recorded in the statement of financial position for this contingency.
Page | 50
DIRECTORS’ DECLARATION
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
In the directors’ opinion:
•
•
•
•
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Australian
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the Group’s financial position as at
30 June 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company 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.
Signed in accordance with a resolution of Directors, made pursuant to section 295(5) of the Corporations Act 2001.
On behalf of the Directors
Joshua Wellisch
Executive Director
30 September 2020
Melbourne
Page | 51
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NEW AGE EXPLORATION LIMITED
Opinion
We have audited the financial report of New Age Exploration Limited (“the Company”) and its subsidiaries
(together referred to as “the Group”), which comprises the consolidated statement of financial position as at
30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Page | 52
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 this matter
Exploration and evaluation assets
Refer to Note 11 in the financial statements
As at 30 June 2020, the carrying value of the Group’s
capitalised Exploration and evaluation assets
amounts to $2,960,098, after the recognition of an
impairment loss of $4,214,308. We determined this to
be a key audit matter due to the materiality of the
impairment loss recognised during the year and the
significance of these assets in the statement of
financial position (51% of the total assets of the
Group). Also, there are significant management
estimates and judgments involved in assessing the
carrying value in accordance with AASB 6 Exploration
for and Evaluation of Mineral Resources, including:
• Determination of whether expenditure can be
specific mineral
that
associated with
resources, and
expenditure is allocated to an area of interest.
the basis on which
finding
• Assessing whether any indicators of impairment
are present, and if so, the judgments applied to
determine and quantify any impairment loss.
• Determination of whether exploration activities
have progressed to the stage at which the
recoverable
existence of an economically
mineral reserve may be assessed.
• Corroborating the accuracy of the translation of
assets from GBP and NZD to AUD.
Our audit procedures in relation to the carrying value
of exploration and evaluation assets included:
• Critically assessing and evaluating management’s
assessment that some indicators of impairment
existed in relation to the Lochinvar Coking Coal
project, located in the UK and no indicator of
impairment existed in relation to the Otago Pioneer
Quartz Gold project in New Zealand;
• Enquiring with management and
reviewing
budgets and plans to determine that the Group will
further
incur
exploration for and evaluation of mineral resources
in the specific areas of interests;
expenditure
substantive
on
• Assessing management’s assumptions used in
determining the fair value of the Lochinvar Coking
Coal project. This included an assessment of the
work performed by management's expert
in
respect of this asset, which resulted in the
determination of an impairment loss of $4,214,308,
including the competency and objectivity of the
expert; and
• Discussions with management and a review of the
Group’s ASX announcements and other relevant
documentation,
assess management’s
determination that exploration activities have not
yet progressed to the point where the existence or
otherwise of an economically recoverable mineral
resource may be determined.
to
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Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2020; but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance; but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description
forms part of our auditor's report.
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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 New Age Exploration Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
R J MORILLO MALDONADO
Partner
Dated: 30 September 2020
Melbourne, Victoria
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SHAREHOLDER INFORMATION
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in the annual
report are set out below. The information was applicable as at 16 September 2020.
1. Shareholdings – Ordinary Shares
a. Distribution of Shareholders
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holdings less than a marketable parcel
b. Substantial Shareholders
Substantial holders in the Group are set out below.
Number
of holders
361
49
81
474
708
1,673
719
NORTHERN STAR NOMINEES PTY LTD
BODIE INVESTMENTS PTY LTD
c. Voting rights
The voting rights attached to ordinary shares are set out below.
Number held
% of total
shares issued
80,959,027
45,000,000
9.11
5.06
Ordinary shares
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and, upon a poll,
each share shall have one vote.
d. Restricted Securities
There are no restricted securities at 16 September 2020.
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SHAREHOLDER INFORMATION
1. Shareholdings – Ordinary Shares (cont’d)
e. Twenty largest quoted equity security holders
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
The names of the twenty largest security holders of quoted equity securities are listed below.
Number held
% of total
shares issued
NORTHERN STAR NOMINEES PTY LTD
BODIE INVESTMENTS PTY LTD
KAIROS MINERALS LIMITED
MR MICHAEL DENIS BOYD
COVENANT HOLDINGS(WA) PTY LTD
LTJ INVESTMENTS PTY LTD
MR MATE BARAC
AUTO TECH MINING PTY LTD
CITICORP NOMINEES PTY LIMITED
MATE AUTO ELECTRICAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR AARON TSAMASIROS
DC & PC HOLDINGS PTY LTD
PAND JR PTY LTD
COMSEC NOMINEES PTY LIMITED
CMC MARKETS STOCKBROKING NOMINEES PTY LIMITED
MR MICHAEL LEE
MR LANKESHWARA MADDUMA PATABANDIGE
DEVELOPMENT AND FINANCE PTY LTD
MR KIERAN LINLEY KING-RANDELL
80,959,027
45,000,000
34,230,770
20,000,000
18,000,000
17,777,692
16,047,500
14,700,478
13,920,829
11,810,000
11,300,446
11,000,000
10,587,448
9,889,283
9,862,283
9,636,157
8,333,333
7,947,234
7,025,000
6,974,348
9.11
5.06
3.85
2.25
2.03
2.00
1.81
1.65
1.57
1.33
1.27
1.24
1.19
1.11
1.11
1.08
0.94
0.89
0.79
0.78
365,001,828
41.07
2. Other
a. The name of the Company Secretaries are Adrien Wing and Pauline Moffatt.
b. The principal registered address in Australia is Level 2, 480 Collins Street, Melbourne, Victoria 3000.
c. Registers of securities are held at the following address: Link Market Services, Level 12, 250 St George’s Street, Perth
WA 6000.
d. Stock Exchange Listing: Quotation has been granted for all ordinary shares on all Member Exchanges of the ASX
Limited
Corporate Governance: A copy of the Company’s Corporate Governance Statement is available on the Company’s website at
http://www.nae.net.au.
Page | 57
SHAREHOLDER INFORMATION
NEW AGE EXPLORATION LTD
Annual Report 30 June 2020
List of Exploration Licences Held by the NAE Group as at 30 June 2020
Licence No.
Project
Country
Area
(km2)
Licence Type
NAE Group
% Interest
CA11/EXP/0515/N
Lochinvar (i)
CA11/UND/0176/N
Lochinvar (i)
United
Kingdom
United
Kingdom
CA11/EXP/0545/N
Lochinvar
South
United
Kingdom
67.5
Exploration Licence
100%
67.5
Conditional
Underground Licence
and Option
Agreement
100%
51.0
Exploration Licence
100%
CA11/UND/0182/N
Lochinvar
South
United
Kingdom
51.0
Conditional
Underground Licence
and Option
Agreement
100%
CA11/EXP/570/N
Lochinvar
North
United
Kingdom
66.5
Exploration Licence
100%
CA11/OPC/0447/N
Lochinvar
North
United
Kingdom
66.5
Conditional Surface
and Underground
Licence and Option
Agreement
100%
EP60502
PP60544
E47/4406, E47/4407
E47/4408, E45/5724
E45/5725, E45/5726
Otago Pioneer
Quartz
New Zealand
71.55
Exploration Permit
100%
Lammerlaw
New Zealand
265.38 Prospecting Permit
100%
Quartz Hill
Pilbara (ii)
Western
Australia
1,319
Exploration Licence
Application
100%
(i) The term of the Lochinvar project ended on 17 July 2020 and the licence is currently in the process of being
renewed.
(ii) The Quartz Hill Pilbara project tenements were acquired in July 2020.
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