Annual Report
2020
Contents
Corporate Directory ................................................................................................................................ ii
Chairman’s Message .............................................................................................................................. iii
Review of Operations .............................................................................................................................. v
Corporate Governance ........................................................................................................................... xii
New Century in the Community ........................................................................................................... xiii
Mineral Resource Statement ................................................................................................................ xix
Directors’ Report ..................................................................................................................................... 4
Auditor’s Independence Declaration .................................................................................................... 24
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................... 25
Consolidated Statement of Financial Position ...................................................................................... 26
Consolidated Statement of Changes in Equity ...................................................................................... 27
Consolidated Statement of Cashflows .................................................................................................. 28
Notes to the Financial Statements ........................................................................................................ 29
Directors’ Declaration ........................................................................................................................... 73
Independent Auditor’s Report .............................................................................................................. 74
ASX Additional Information .................................................................................................................. 79
i
Corporate Directory
Directors
Robert McDonald (Chairman)
Patrick Walta (Managing Director)
Registered and business address
Level 4, 360 Collins Street
Melbourne, Victoria 3000
Nick Cernotta (Non-Executive Director)
Australia
Bryn Hardcastle (Non-Executive Director)
Telephone: +61 3 9070 3300
Peter Watson (Non-Executive Director)
Email: info@newcenturyresources.com
Website: www.newcenturyresources.com
Company secretary
Oonagh Malone
Auditors
Deloitte Touche Tohmatsu
550 Bourke Street
Melbourne, Victoria 3000
Securities exchange
Share registry
Australian Securities Exchange (ASX)
Automic Registry Services
Code:
NCZ
Home office:
Perth
126 Phillip Street
Sydney, New South Wales 2000
Telephone: +61 2 9698 5414
Country of incorporation and domicile
Australia
ii
Chairman’s Message
Dear Shareholder,
Your Company is now established as a significant base metals producer.
Much of what we set out to achieve with the Company’s Century operations was completed during
the fiscal year, with the Declaration of Commercial Production made at year’s end. There remain a
few bugs to iron out during the current 2020/21 fiscal year to get production and cost performance
to our targeted levels; this work is well in hand.
While we were investing in the ramp-up of Century, for much of the year the macroeconomic
environment with lower zinc prices and higher treatment charges created some financing challenges.
Your Board was delighted with the support the Company received from fellow Shareholders in its two
equity raisings during the past year, the second being at a premium to the Company’s prevailing share
price, and from our debt providers.
While we managed to partially offset the macroeconomic headwinds with our incessant focus on
driving down operating costs, the Company’s share price nonetheless weakened during the year. We
are determined to re-enter the S&P/ASX 300 Index during the coming year.
The macroeconomic environment rebounded later in the 2019/20 fiscal year and has continued since.
For example, current zinc prices at the time I am writing to you now stand around US$1.15/lb
compared to around US$0.85/lb at their low point during the past fiscal year.
Now that we have declared Commercial Production, our plan is to apply our cash flow from operations
to both reduce our partner’s environmental bond and to bolster the strength of our balance sheet to
make it resilient to normal industry volatility.
The normal industry volatility was compounded during the year by the impact of COVID-19 and its
impact on global economic conditions. I am pleased to report that we had been able to safely continue
our operations and development programs at the remote Century mine and at our Karumba port
facility in Northern Queensland. We are supportive of all the various State measures to contain the
virus. With the assistance of the Commonwealth Government’s Job Keeper scheme, full employment
was maintained. On behalf of our Shareholders I acknowledge the inconvenience the virus imposed
on the family life of some of our team. Morale nonetheless remains high. I applaud the dedication of
the full team to the Company.
With the bringing in-house of several important activities otherwise undertaken by contractors, the
total number of our employees appreciably increased during the year. We welcome our new
employees. We thank our contractors for facilitating the start-up of operations.
We acknowledge the Gulf Communities as the traditional owners of the Century region. Our
commercial activities help to return their land to its original state. I am pleased to report that during
the year we have successfully divested our share of the pastoral leases covering the Century
tenements to the local communities with whom we have a strong and respectful relationship.
With the plan for Century well underway we took the opportunity during the year to pursue the giant
Goro nickel/cobalt operation in New Caledonia. This opportunity built on our established strengths in
tailings management, energising tired assets and working with local communities. Goro would have
propelled your company into the Battery Storage and Electric Vehicle space. Your management did a
iii
fine job in securing an exclusivity position, and negotiating the better part of a US$1 billion funding
package; eventually management’s recommendation not to complete the acquisition was accepted
because of several outstanding loose ends which, to resolve in a timely manner, would have imposed
unacceptable financial risk for the Company’s Shareholders. There were important learnings from the
Goro initiative which will be applied to any new major initiative.
While open to new opportunities that play to our strengths, our continued focus on Century and the
Northern Queensland region continues unabated. Not only do we have existing in-situ resources to
complement our tailings recovery operations, but our exploration potential also around established
infrastructure is promising.
As part of our continuous board renewal program, soon after the end of the year the Board accepted
the resignation of Evan Cranston, a founding chairman and non-executive director of the Company.
Evan found that his various business engagements made it difficult for him to devote the attention he
wanted to give your Company. I appreciated his wise counsel. Evan remains an important shareholder.
We are well advanced in appointing a new non-executive director, an appointment which will
underscore the independence, skill set and diversity of the Board.
We introduced a new remuneration structure during the year for senior executives where an
important part of executive remuneration is at risk and dependent on the Company’s share price
performance relative to the Company’s peers. This new structure better identifies long run managerial
out-performance at the same time as aligning executive remuneration with shareholder returns.
Most recently, on 28 October 2020, we announced a share placement, in conjunction with our
intention to make an entitlement offer to all Shareholders during November 2020. The proceeds of
this raising will be used to strengthen your Company’s balance sheet and, through debt retirement,
alleviate the current disproportionate near-term debt repayment profile, allowing management to
focus on growing profitability and regional exploration opportunities around the Century mine.
On behalf of your Board I look forward to receiving your ongoing support.
Robert McDonald
Chairman
iv
Review of Operations
Over the course of FY20 Century has emerged as a significant zinc operation, now established within
the top-10 global zinc producers. With no material impact on operations from Covid-19 interruptions,
Century has continued to supply zinc concentrate to all our valued customers.
The Directors of New Century are pleased to present a summary of operations to Shareholders.
Ramp Up Progress to Date
Since the start of operations in August 2018, operations at Century have continued to ramp up, with
consistent increases in quarterly zinc production. The ramp up of operations is scheduled to continue
throughout FY21 to a forecast 12Mtpa.
Highlights
Highlights from operations include:
•
•
•
Consistent increase in quarterly metal production, with the Company achieving an FY20
production of 116,948t zinc metal and on track to achieve current FY21 guidance of 140,000t to
160,000t zinc metal
Zinc production rates increased consistently across the 12 months, with a Q4 FY20 exit
rate an exceptional 64% increase year-on-year
Consistent reduction in quarterly C1 costs throughout the year, with Q4 FY 20 C1 costs
decreased to U&0.79/lb representing a year-on-year 33% reduction, and tracking to achieve
current FY21 guidance of US$0.65/lb to US$0.75/lb.
• Over 270,000t of zinc concentrate shipments (China, Europe & Australia) since the
commencement of operations
•
Average impurity penalties and treatment charges continue to be maintained in line with
standard market pricing and remain competitive with other miners
• Hydraulic mining continues to ramp up, benefiting from transition to owner/operator model, with
operations now delivering an ~10Mtpa mining rate
•
Continued strong reconciliation of mining grade to the ore reserve model, with the ore grade
mined during the June 2019 quarter averaging 3.09% Zn
Mining & Production Performance
The figures below provided a detailed review of the operational performance data from the Century
operations for the year.
v
Table 1: 2020 Production and Costs for Century Operations
Production & Costs
Units
Q4 FY20
Q3 FY20
Q2 FY20
Q1 FY20
Q4FY20 vs
Q4FY19
Ore Mined
‘000t
2,456
2,102
2,010
1,868
+55%
Zinc Head Grade
Silver Head Grade
Zinc Recovery
Silver Recovery
Concentrate Grade
Zinc Metal Production
Total
Payable
Total
Payable
Silver Production
Total
Payable
Costs (payable basis)
%
g/t
%
% Zn
g/t Ag
t
t
Mlb
Mlb
oz
3.09
11.9
45.3
31.0
48.6
128
2.93
14.1
45.9
31.7
48.7
163
2.87
13.7
48.7
31.9
49.1
162
2.96
14.1
47.6
30.7
49.0
150
34,363
28,712
75.8
63.3
28,291
23,645
62.4
52.1
28,123
23,542
62.0
51.9
26,171
21,891
57.7
48.3
292,076
56,141
301,861
89,355
283,078
77,029
259,906
69,576
C1
AISC
US$/lb
0.79
0.89
0.95
1.07
0.96
1.07
0.99
1.12
+6%
-13%
+3%
+1%
+1%
-15%
+68%
+19%
+12%
-33%
-37%
Figure 1: Century quarterly production and cost performance
vi
Safety Performance
Figure 2: Overview of hydraulic mining at the Century
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Century TRIFR (3mth Av)
Industry TRIFR (2019 Av - QLD Surface Mines)
Figure 3: Total Recordable Incident Frequency Rate (TRIFR)
During FY20, the total recordable
incident frequency rate (TRIFR) at the
Century Mine & Karumba Port dropped
from a high of 10.8 (September 2019)
to 3.9 (June 2020).
No recordable incidents occurred in
the June quarter, which is a significant
achievement given the Company also
transitioned from contractor services
to full owner-operator during the
period.
With continued focus on strengthening New Century’s Health and Safety Management System, in
February 2020 the Company launched an internal safety initiative known as Project Zero. Project Zero
is focused on achieving a 0.00 TRIFR and has gained significant support from all personnel, with the
Company’s incident reporting culture being maintained as the TRIFR has reduced.
Concentrate Product Quality & Treatment Charges
Century operations have continued to produce good product quality, with Century concentrate being
delivered to all major zinc consuming markets. Century concentrate has continued to experience
limited, low impurity, penalty rates.
Spot treatment charges whilst high for the first half, began to steeply fall in response to supply
constraints imposed by Covid-19 to major zinc producing nations. This trend has accelerated post
close of FY20, with TC’s plummeting to
Citicorp Nominees Pty Limited
Zero Nominees Pty Ltd
Pacreef Investments Pty Ltd
Mr John Carr
Mr Patrick Christopher Andrew Walta
Konkera Pty Ltd
HSBC Custody Nominees (Australia) Limited
Woodross Nominees Pty Ltd
Sparta AG
Delphi Unternehmensberatung Aktiengesellschaft
Kitara Investments Pty Ltd
Kingslane Pty Ltd
Kingslane Pty Ltd
HSBC Custody Nominees (Australia) Lmited – A/C 2
Little Cove Capital Pty Ltd
National Nominees Limited
Kingslane Pty Ltd
Delphi Unternehmensberatung Aktiengesellschaft
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
124,604,055
99,499,559
50,558,337
38,750,000
38,042,480
33,833,333
33,421,788
31,545,457
31,414,034
23,234,573
21,500,000
19,700,273
15,066,666
14,889,762
12,914,150
10,810,678
10,100,000
9,614,537
7,598,356
7,350,000
634,448,038
12.73
10.17
5.17
3.96
3.89
3.46
3.42
3.22
3.21
2.37
2.20
2.01
1.54
1.52
1.32
1.10
1.03
0.98
0.78
0.75
64.83
There are 978,598,739 ordinary fully paid shares currently listed and trading on the Australian Securities
Exchange. There is no current on-market buy back taking place.
Voting Rights - Fully Paid Ordinary Shares
Every shareholder present in person or by proxy, attorney or representative has one vote on a show of hands,
and on a poll, one vote for each fully paid share.
79
Unquoted Equity Securities
Quantity
7,500,000
7,500,000
7,500,000
7,500,000
30,000,000
22,000,000
6,000,000
3,500,000
3,500,000
500,000
1,000,000
1,000,000
250,000
1,000,000
1,000,000
25,000,000
4,374,007
1,249,716
624,858
1,390,729
Class
Options exercisable at $0.25 each on or before 13 July 2021
Options exercisable at $0.50 each on or before 13 July 2021
Options exercisable at $0.75 each on or before 13 July 2021
Options exercisable at $1.00 each on or before 13 July 2021
Options exercisable at $0.25 each on or before 13 July 2022
Options exercisable at $0.25 each on or before 27 February 2021
Options exercisable at $0.50 each on or before 27 February 2021
Options exercisable at $0.75 each on or before 27 February 2021
Options exercisable at $1.00 each on or before 27 February 2021
Options exercisable at $1.99 each on or before 27 February 2021
Options exercisable at $1.20 each on or before 28 March 2022
Options exercisable at $1.50 each on or before 28 March 2022
Options exercisable at $0.95 each on or before 6 June 2022
Options exercisable at $0.56 each on or before 18 September 2022
Options exercisable at $0.70 each on or before 18 September 2022
Options exercisable at $0.25 each on or before 17 July 2023
Class A Performance Rights expiring 1 July 2024
Class B Performance Rights expiring 1 July 2024
Class C Performance Rights expiring 1 July 2024
Class D Performance Rights expiring 1 July 2024
Holders of Unquoted Securities Holding More than 20% of Each Class
Class
Options exercisable at $0.25 each on or before 13 July 2021
Options exercisable at $0.50 each on or before 13 July 2021
Options exercisable at $0.75 each on or before 13 July 2021
Options exercisable at $1.00 each on or before 13 July 2021
Options exercisable at $0.25 each on or before 13 July 2022
Options exercisable at $0.25 each on or before 27 February 2021
Options exercisable at $0.50 each on or before 27 February 2021
Options exercisable at $0.75 each on or before 27 February 2021
Options exercisable at $1.00 each on or before 27 February 2021
Options exercisable at $1.99 each on or before 27 February 2021
Options exercisable at $1.20 each on or before 28 March 2022
Options exercisable at $1.50 each on or before 28 March 2022
Options exercisable at $0.95 each on or before 6 June 2022
Options exercisable at $0.56 each on or before 18 Sept. 2022
Options exercisable at $0.70 each on or before 18 Sept. 2022
Options exercisable at $0.25 each on or before 17 July 2023
Class A Performance Rights expiring 1 July 2024
Class B Performance Rights expiring 1 July 2024
Class C Performance Rights expiring 1 July 2024
Class D Performance Rights expiring 1 July 2024
Holder
Kitara Investments Pty Ltd
Kitara Investments Pty Ltd
Kitara Investments Pty Ltd
Kitara Investments Pty Ltd
Mr John Carr
Longreach Capital Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr William Wise
Mr Nicholas Luigi Cernotta
Mr Nicholas Luigi Cernotta
Mr Mark Chamberlain
The Minera Group Pty Ltd
The Minera Group Pty Ltd
Aus Funding I Pte Ltd
Mark Norman Chamberlain
Mr Patrick Christopher Andrew Walta
Mark Norman Chamberlain
Mr Patrick Christopher Andrew Walta
Mark Norman Chamberlain
Mr Patrick Christopher Andrew Walta
Mr Craig Russell Delany
Number
7,500,000
7,500,000
7,500,000
7,500,000
7,000,000
7,000,000
7,000,000
5,500,000
5,500,000
5,500,000
1,500,000
1,500,000
1,500,000
875,000
875,000
875,000
875,000
875,000
875,000
500,000
1,000,000
1,000,000
250,000
1,000,000
1,000,000
25,000,000
895,245
1,335,080
255,784
381,452
127,892
190,726
339,790
80
Schedule of Mining Tenements
Project
Location
Status
Interest
Century Zinc Mine
Queensland, Australia
ML 90058
ML 90045
EPM 10544
EPM 26722
Mt Isa
Mt Isa
Mt Isa
Mt Isa
Kodiak Coking Coal Project
Alabama, USA
Coke Seam, Gurnee Property
Atkins Seam, Gurnee Property
Gholson Seam, Gurnee Property
Clark Seam, Gurnee Property
Shelby & Bibb Counties
Shelby & Bibb Counties
Shelby & Bibb Counties
Shelby & Bibb Counties
Granted
Granted
Granted
Granted
Lease
Lease
Lease
Lease
100%
100%
100%
100%
70%
70%
70%
70%
Company Secretary
Ms Oonagh Malone
Registered Office
Level 4
360 Collins Street
Melbourne VIC 3000
Telephone: +61 3 9070 3300
Share Registry
Automic Registry Services
126 Phillip Street
Sydney NSW 2000
Telephone: 1300 992 916
81
newcenturyresources.com