ANNUAL REPORT
2021
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 1
The Century Mine remains the
largest hydro-mining operation
in Australia’s history and we
are paving the way for further
innovative approaches to
economic rehabilitation of
mined land
CONTENTS
CORPORATE DIRECTORY
CORPORATE GOVERNANCE
COMPANY PROFILE
CHAIRMAN’S MESSAGE
OPERATING AND FINANCIAL REVIEW
MINERAL RESOURCES AND ORE RESERVES STATEMENT
SUSTAINABILITY
DIRECTORS' REPORT
REMUNERATION REPORT
AUDITOR'S INDEPENDENCE DECLARATION
FINANCIAL REPORT
DIRECTORS' DECLARATION
INDEPENDENT AUDITOR'S REPORT
SHAREHOLDER INFORMATION
4
4
5
6
8
28
33
36
46
65
66
119
120
126
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 3
CORPORATE DIRECTORY
COMPANY PROFILE
Directors
Robert McDonald
Patrick Walta
Nick Cernotta
Kerry Gleeson
Peter Watson
(Chairman)
Registered office and business address
Level 4, 360 Collins Street
(Managing Director)
Melbourne, Victoria 3000
(Non-Executive Director)
Australia
(Non-Executive Director)
(Non-Executive Director)
Telephone:
+61 3 9070 3300
Company secretary
Thomas Wilcox
Securities exchange
Australian Securities Exchange
Code:
ASX
NCZ
Country of incorporation and domicile
Australia
Email:
Website:
info@newcenturyresources.com
www.newcenturyresources.com
Auditors
Deloitte Touche Tohmatsu
477 Collins Street
Melbourne, Victoria 3000
Share registry
Automic Registry Services
126 Phillip Street
Sydney, New South Wales 2000
Telephone: +61 2 9698 5414
CORPORATE GOVERNANCE
New Century Resources Limited (New Century or the Company)
operates the Century Mine, located at Lawn Hill, 250 kilometres
The acquisition of the Century assets by New Century in February
2017 led to the restart of operations based on re-treatment of
north-west of Mount Isa in the Lower Gulf of Carpentaria. The mine
tailings, commencing in August 2018. The rapid reinvigoration of
began open pit production in 1999. During its initial 16 years of
operations established Australia’s largest ever hydraulic mining
operation, Century was one of the largest zinc mines in the world,
operation.
producing an average of 472,000 tonnes per annum of zinc metal
and 53,000 tonnes per annum of lead metal, with the product
The restarting of operations at Century, initially via tailings
being transferred in slurry form via a 304 kilometres underground
reprocessing, allows much of the scheduled rehabilitation to be
pipeline to the Port facility at Karumba for shipping to smelters in
achieved through cash flow generating site activities. In the case
Australia, Europe and Asia.
of the Century tailings deposit, after reprocessing of the tailings
has occurred, all waste material is relocated back into the existing
The cessation of processing operations at Century in early 2016,
open pit, which allows for final encapsulation via subaqueous
due to depletion of the Century Big Zinc Ore Reserves, presented
deposition and eliminates the need for capping of the tailings dam
an opportunity to monetise valuable remaining mineral assets.
on surface.
These included over 2,200,000 tonnes of JORC compliant zinc
equivalent metal in Mineral Resources located within mineralised
The reprocessing of tailings and encapsulation within the open
tailings, and over 1,000,000 tonnes of zinc and lead in JORC
pit also provides a significant reduction in the overall footprint
compliant Mineral Resources in the Silver King, South Block and
of disturbance of the Century mining operations, allowing for a
East Fault Block base metal deposits. In addition, Century hosts
progressive reduction in the Estimated Rehabilitation Cost for the
several other substantial base metal and phosphate mineral
site.
deposits, such as those at Watson’s Lode, which require further
drilling and studies to determine the best method of value
In addition to tailings reprocessing, extraction of defined in-
generation.
situ base metal deposits, phosphate deposits and regional toll
treatment opportunities will also be assessed, potentially providing
Beyond the mineral assets, Century includes world-class
further economic benefits and assistance toward scheduled site
processing and logistics infrastructure:
rehabilitation.
•
at the mine site, a scalable and adaptable mineral flotation
In September 2021, the Company released the results of its
processing plant, heavy vehicle workshops, stores and
feasibility study into the potential development of in-situ deposits
logistics facilities, water infrastructure, a 400-person
at Century. The Study identified a strongly value accretive
accommodation camp, offices, airport, full laboratory and grid
proposition for development of in-situ operations at Silver King and
New Century’s 2021 Corporate Governance Statement was released to ASX on 27 October 2021 and is available on the Company’s
power connection;
East Fault Block alongside current tailings operations.
website www.newcenturyresources.com
•
at Karumba, a large-scale port facility with concentrate
dewatering and drying operations, an 80,000 tonne
The Company continually reviews other growth opportunities
mechanised environmentally secure storage shed, ship-
involving tailings reclamation and the use of existing processing
loading facility, and a 5,000 tonne self-propelled, self-
facilities and established infrastructure to produce minerals for the
discharging maritime transhipment vessel (the M.V. Wunma);
new economy.
and
•
a 304 kilometre underground slurry pipeline which connects
the mine and the Karumba port.
With the final processing of open pit ore from Century in early
2016, the focus of the previous owner turned to the progressive
rehabilitation and ultimate closure of the mine site. Significant
rehabilitation activities had already been undertaken, with over
$70 million spent on rehabilitation to that date. A comprehensive
plan of work was also in place to progressively take the mine site,
the pipeline and the port facility to full closure.
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 5
CHAIRMAN’S MESSAGE
Dear Shareholders
Your Board is pleased to present the 2021 Annual Report.
On 1 July 2020 your Company declared commercial production
at its Century operation in Northern Queensland. The financial
statements in this Annual Report show for the first time the results
for New Century as a commercially operating entity.
For the financial year ended 30 June 2021, New Century reported
earnings before interest, tax, depreciation and amortisation
(EBITDA) of $73.5 million. No dividend has been declared.
Production for the year was 128,200 tonnes of zinc in concentrate,
consolidating the Century operation’s position as a major global
zinc producer. Production at Century was not at the level we had
planned at the beginning of the financial year. Once it became
clear that our initial projections were optimistic, we revised our
guidance which was subsequently met. Our guidance for the
2022 year is to produce between 130,000 and 145,000 tonnes of
zinc in concentrate. Work is ongoing to optimise our metallurgical
and plant reliability programs, and this will be a key task for the
coming year.
Notwithstanding the persistence of the COVID-19 pandemic the
Company enjoyed an improving international macroeconomic
environment. When I wrote to you last year the zinc price was
around US$1.15 per pound, up from its lows of US$0.85 per pound
reached during the previous year. Today, in late-October spot
zinc prices have reached levels as high as US$1.73 per pound. In
June New Century had taken partial advantage of the rebounding
zinc price by protecting future cash flows with the hedging of
approximately 25 percent of Century’s expected production for the
next three years.
Your Board is proud of the Company’s many achievements over
the last year, on several fronts:
•
•
•
The safety performance of the team at Century has been
outstanding, and this will continue as a major Company focus.
Our highly respected “Safety Starts With You” and “Project
Zero” programs have been continually reinforced with a total
recordable incident frequency rate (TRIFR) of 1.4 at 30 June
2021. This is materially lower than the Queensland industry
average of 7.5 – an industry leading performance of which our
team should be proud. Ongoing focus is required to maintain
this position.
The profitable recovery of minerals contained in tailings from
previous milling operations, together with the associated
site rehabilitation plans, have received acknowledgement
from other mining companies and stakeholders as a value
generating industry model. Over the coming years we will fully
complete the successful rehabilitation of the Century open pit
mine developed and mined for 16 years by previous owners.
All New Century’s activities are undertaken in accordance with
State and Commonwealth legislation always being mindful of
the wishes of traditional owners on whose land the Company
operates. New Century seeks to engage on a regular basis
with local indigenous representatives.
• Halfway through the financial year existing and new
shareholders supported the plan to strengthen your
Company’s balance sheet by participating in a $35 million
equity raising at $0.15 per share. This additional equity
allowed the Company to accelerate debt repayment.
Management is working on several exploration and development
initiatives to extend the operating life at Century beyond the
current remaining tailings resource. Post the end of the financial
year, shareholders will have noted the positive results of our
feasibility work at two of our in-situ resources; development
activities at the high-grade Silver King and East Fault Block
deposits adjacent to the Century open pit mine is expected to
commence during fiscal year 2022.
Development of these resources and other in-situ resources at
Watson’s Lode, South Block and potential underground extensions
at Silver King underpins a pathway for Century mine life extension
to 2030 and beyond.
As well, New Century has a small team looking to secure additional growth
and diversification, as illustrated by the consideration of the opportunity
that was assessed during the year to acquire Vale’s nickel cobalt Goro
operation in New Caledonia. We will continue to focus on tailings retreatment
opportunities, particularly those where we can utilise sunk capital to
recover valuable new economy minerals.
More recently, at the beginning of October, New Century advised that it is
finalising a material strategic transaction involving an asset acquisition, an
equity raise and new environmental bonding arrangements. The Company's
shares entered a period of suspension from trading while the details
of the strategic transaction were being finalised. Trading of
the Company's shares on the Australian Securities
Exchange is anticipated to resume once full details
of the material strategic transaction and the Annual
Report including the audited full year accounts
are released. I look forward to further discussing
the strategic transaction in my presentation
to shareholders at the Company’s upcoming
Annual General Meeting.
During the year our share price fluctuated
between $0.15 and $0.25, and as the date of
suspension of trading New Century’s share
price was closer to $0.16, capitalising your
Company at approximately $200 million.
The Company did not meet its target to re-
join the S&P/ASX 300 index in fiscal year
2021.
Your Board and Management are united
in their determination to execute various
plans to both create new value and
unlock existing value in a sustainable
manner.
I know that you would want me to give
your special thanks to our team, and their
families, for keeping the New Century ship
on a steady course during a year when the
COVID-19 pandemic raged.
Thank you for your continued support.
Yours sincerely,
Rob McDonald
CHAIRMAN
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 7
OPERATING AND FINANCIAL REVIEW
Highlights
Continued industry leading
safety performance, with a total
recordable incident frequency rate
(TRIFR) reduced from 3.9 (30 June
2020) to 1.4 (1 July 2021) against
a Queensland industry average of
7.51
The Company recorded no cases
of COVID-19 during the financial
year and implemented rigorous
COVID-19 Management Plans
which include all precautions
recommended by local, state and
federal health authorities
Record annual zinc metal
production of 128,200 tonnes (10
percent increase on the previous
financial year – 116,900 tonnes)
Record annual C1 costs of
US$0.90 per pound (2.2 percent
decrease on the previous financial
year – US$0.92 per pound)
Annual EBITDA (earnings before
interest, tax, depreciation and
amortisation) of $73.5 million
Exploration delivering incremental
growth opportunities at Silver
King, as well as the larger scale
potential for identification of
ongoing Millennium targets and
other potential SEDEX deposits on
the Century tenement package
Execution of a major long-term
zinc hedging program with
Macquarie Bank with the following
terms:
•
Fixed AUD zinc price of
A$3,717 per tonne (equivalent
to US$1.32 per pound at
US$0.78/A$ exchange rate)
• 90,000 tonnes of payable
metal over three years
(approximately 25 percent of
production)
In-Situ Feasibility Study released
in September 2021 identified
value accretive proposition for
development of in-situ operations
(initially Silver King and East Fault
Block) alongside current tailings
operations at Century
1. As at 31 March 2021. Source: https://www.data.qld.gov.au/dataset/quarterly-mines-and-quarries-safety-statistics-data/
resource/60fc8acd-7e7c-48ac-808d-0c4dc3ca87e7
Figure 1: New Century monthly TRIFR compared to the Queensland
industry average.
Operations
Health and Safety
During the financial year the TRIFR at the Century Mine and
Karumba Port has decreased from 3.9 (30 June 2020) to 1.4
(1 July 2021), which is well below the current Queensland industry
average of 7.5.
There were no recordable injuries in the last ten months of the
year, with the number of incidents trending down over the period.
The reporting culture at Century Mine and Karumba Port has been
maintained at a strong level, leading to continued improvement in
all safety aspects of the operations.
The Company continues its focus on strengthening its safety
culture and refining the Safety and Health Management System,
with the goal of ensuring all employees and contractors go home
safely, every day.
COVID-19 management
New Century recorded no cases of COVID-19 at the Century Mine,
Karumba Port or in the broader workforce, and no significant
disruption to operations, during the financial year. The Company
continues to proactively minimise the potential for the introduction
and transmission of COVID-19 to our operations and the local
communities in which we operate. This action involves exercising
all precautions recommended by local, state and federal health
authorities, which are incorporated in our COVID-19 Management
An exciting aspect of the operations during the year has been
the reinvigoration of the feasibility assessment of in-situ Mineral
Resources within the Century tenement package, with the aim of
conversion into Ore Reserves and inclusion into our Life of Mine
mill feed. This involved contributions from every department on
site, and included 7,286 metres of drilling, significant metallurgical
test work, geotechnical analysis, mine design optimisation and
subsequent flowsheet and processing plant design. The outcome
of all this work was released to the market on 15 September 2021.
Plant performance and production
The annual performance of the processing plant showed a
continuation of reliable production in the vicinity of 10,500 tonnes
of zinc metal per month. Fluctuations above or below this monthly
average can be largely attributed to the zinc head grade of the
tailings ore feed, planned operational shutdowns and interruptions
experienced during the wet season which typically runs from
October through March.
Figure 2: Annual zinc metal make (tonnes) since the restart of Century
operations
Plans.
The safety and wellbeing of our employees, contractors and other
stakeholders has been at the forefront of the Company’s response
to the COVID-19 pandemic. The safety-first culture of the Company
and its people has been an enduring feature of our performance,
with all health and safety requirements being met and exceeded
during the financial year.
The zinc mining sector has seen a number of operations
suspended or closed since the onset of the COVID-19 pandemic.
The Company has experienced increased demand for its product
during the COVID-19 pandemic, in recognition that New Century’s
integrated mine and port facilities provide a strong platform for
safe and uninterrupted operation. New Century operations are
well positioned to maintain continuity of supply as tight market
conditions continue.
Whilst the COVID-19 pandemic has not materially adversely
impacted the asset recoverability or financial results of the
Company during the financial year, the potential for increased
volatility in commodity prices and foreign exchange rates and
restrictions on the movement of people and materials remain key
risks that will require close management in the future.
Operational performance
Over the course of the financial year New Century made a
successful transition to an Owner-Operator model, having taken
over from the previous contractors just prior to July 2020. This
model was adopted due to the financial impact of the worsening
COVID-19 pandemic, and the desire to develop a whole-of-value-
chain asset and operational management system.
As part of the transition to the new operating model, the teams
at Century and Karumba developed a robust framework and
associated systems to manage all aspects of the operations more
effectively, from water saving initiatives at the Hydraulic Mining
operations, through to concentrate loading of the M.V. Wunma in
the Gulf of Carpentaria.
8
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 9
While the recovery performance has continued to fall short of
expectations, after in-depth consultation with industry experts
Mineralis, New Century has commenced a number of improvement
projects. Work continues to unlock the bottleneck in the
cleaner section of the plant, with our teams working closely and
methodically with Mineralis towards lifting our overall recovery
performance.
Hydraulic Mining Performance
Our Hydraulic Mining performance continues to strengthen, with
the team delivering consistently in line with budget through the
year. Figure 3 below shows performance against overall budgeted
throughput for the financial year.
In order to manage the macroeconomic environment created by
COVID-19, a strategic decision was made during the first half of the
year to target maximum metal to the mill through mining higher-
grade sections of the tailings dam and thus maximising metal
output. This strategy successfully achieved average grade of 3.12
percent in the first half of the year and 2.88 percent in the second
half of the year, giving an overall annual grade of 3.00 percent
against a budget of 2.99 percent. This demonstrates the team’s
accuracy in mine scheduling and grade reconciliation against the
block model.
Concentrate product quality
and treatment charges
Concentrate quality was stable throughout the year, with the
delivery of an annual average of 48 percent zinc in concentrates
to the ocean-going vessels destined for our customers. This zinc
content is the current optimal set point along the grade recovery
curve for the processing plant flow sheet, when coupled with the
nature of our mill feed. Century concentrate continues to achieve
relatively low impurity penalty rates from customers and is now a
well-established brand in the market.
The 2021 financial year saw an upturn in zinc concentrate prices
and a downturn in treatment charges levied on zinc concentrates.
By mid-2020, COVID-19 had spread rapidly and become a
worldwide pandemic. Control measures implemented around
the world resulted in a rapid decrease of refined zinc and mine
production, creating a shortage of supply. As a consequence, the
annual benchmark treatment charge of US$299.75 per tonne,
which had been set on the expectation of a large surplus, was
overtaken by events and was no longer appropriate for market
conditions. By early 2021 the spot treatment charge had fallen to
below US$100 per tonne. In expectation of a continued shortage
of concentrate supply, the annual benchmark treatment charge for
2021 was set at US$159 per tonne of concentrate (effective from
The management of wet season impacts progressed significantly
1 January 2021).
during the year. The Company has improved upon trigger action
response plans (TARPS) for the Hydraulic Mine in conjunction with
the processing plant. It is expected that the Company will see the
benefit of these learnings and actions in coming wet seasons.
Figure 3: Annual Hydraulic Mining production
Silver King and East Fault Block
The Silver King deposit was discovered in 1887, with mining
commencing soon after. By 1900 three shafts had been sunk into
the deposit and small-scale, intermittent, underground production
occurred from the mine through to 1980.
The maximum depth of the known excavations is approximately
60 metres from the current surface and it is estimated no more
than 50,000 tonnes of ore was extracted in total. The historic
workings lie approximately 1 kilometre south of the southernmost
extent of the Century Open pit, just 2 kilometres from the Century
processing facilities.
The works demonstrated good continuity of the mineralisation
within this zone, and greatly improved the geological model and
confidence across the shallow resource. In combination with assay
results, this supported the detailed mine design informing the In-
Situ Feasibility Study outcomes released in September 2021.
Silver King exploration targets
Following a review and testing of historical IP targets around the
Silver King deposit, exploration drilling confirmed the presence of
prospective mineralisation along the untested strike extent of Vein
No.4, 200m north-west of the main lode. Two diamond drill holes
were drilled prior to demobilisation of the drill rig in late June 2021
Mineralisation at Silver King consists of a series of moderately to
with both intersecting a previously untested mineralised structure.
steeply dipping quartz-galenasphalerite-siderite hydrothermal
This area is a priority target for further drilling in financial year
veins and breccias associated with a northeast trending sinistral
2022.
strike-slip fault.
The system extends vertically across the stratigraphic units H2,
southwest of the Silver King historical workings targeting down
H3, and H4r within the Lawn Hill formation of the Upper McNamara
Group, in the footwall to the adjacent Century stratiform ZnPb-Ag
deposit.
dip and along strike extensions of shallow surface diggings. Three
holes intersected economic grades and one appeared to glance
the edge of the mineralised zone showing elevated but low levels
A further four reverse circulation (RC) drill holes were drilled to the
of zinc.
The main lode at Silver King remains open along strike with
extension drilling currently planned to be completed from
underground to both mitigate hole deviation issues from surface,
and reduce drilling costs.
Silver King resource definition
The majority of works at Silver King in the 2021 financial year
focussed on resource definition infill drilling, the purpose of which
was to increase the confidence level at Silver King within an
updated Mineral Resource estimate.
During the financial year, a total of 7,543 metres was drilled at
the deposit from 44 holes. The shallow portion of the deposit
was infilled to approximately 20 metres x 20 metres drill-spacing,
consistent with independent recommendations.
Hole ID
From
SK21_038
SK21_039
SK21_040
SK21_041
SK21_042
61.2
67.0
38.0
43.0
64.0
51.0
66.0
15.0
To
62.3
68.0
38.9
45.2
64.9
57.0
69.0
18.0
Interval
(m)
1.1
True width
(m)
0.9
1.0
0.9
2.2
0.9
6.0
3.0
3.0
0.9
0.8
2.0
0.8
5.4
2.7
2.7
Pb
1.8%
13.5%
12.2%
3.9%
10.7%
20.7%
2.5%
19.8%
Zn
6.4%
17.6%
0.2%
7.9%
13.1%
5.1%
21.8%
0.1%
Ag g/t
15
214
37
34
36
109
46
225
SK21_043
No economic grades encountered.
Table 1: Silver King exploration drilling summary of results
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 11
Figure 4: Silver King exploration drilling - collar locations and target zones
Figure 5: Century tenements, mineral occurrences and prospects 2021
In-Situ Feasibility Study
During the year, the Company undertook a feasibility study into the
potential development of known in-situ resources at Century.
The study investigated the incorporation of Silver King and East
Fault Block in-situ deposits into the existing mine plan (in addition
to the current tailings reprocessing) to produce zinc concentrate
and a new lead concentrate. The study aimed to:
increase metal production at a lower average C1 cost while
maintaining the current tailings mining rate; and
increase the overall cashflow generated by the project.
•
•
12
The study, released on 15 September 2021 revealed a strongly
value accretive proposition for the development of Silver King and
East Fault Block alongside current tailings operations at Century.
As a result of the study, the Company declared a Maiden Ore
Reserve for Silver King and East Fault Block: 2.5Mt @ 5.3% Pb
(133kt), 5.6% Zn (140kt), 68g/t Ag (5.4Moz) - (Probable).
A Final Investment Decision is expected to follow the necessary
amendments to existing environmental approvals and completion
of financing and joint venture assessment processes.
Exploration
The Century Mine lies within the mining leases ML90045 and
ML90058 which are 100 percent owned by New Century. The
Company also holds two exploration tenements. All leases and
tenements are in good standing.
The leases and tenements encompass many historically identified
base metal occurrences at various stages of prospect testing and
development. New Century remains focused on the conversion of
these prospects to Mineral Resources, and in turn to Ore Reserves,
to support future operations.
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 13
The Millennium Project
The Millennium Project remains a focus for the Company with
potential to discover large scale (>10Mt) SEDEX style mineralisation
within the current tenement package. The project targets
dislocated blocks of the Century Deposit owing to the effects of a
meteorite impact some 470 million years ago.
Geophysical works across October and November 2020,
conducted in collaboration with the Queensland Government
under its Collaborative Exploration Initiative (CEI), included four
survey lines totalling 23.8 line kilometres of dipole-dipole Induced
Polarisation (DD-IP) data adjacent to the historic Century Mine
open pit.
This work generated drill targets including chargeable blocks
indicating the potential for economic sulphide minerals, and
interpreted crater terrace structures where detachments of the
Century orebody may exist.
Drill testing of the targets was completed in May and June 2021
and consisted of ten diamond drill holes totalling over 2,500
metres. The drilling did not identify any mineralisation with
economic potential instead encountering, somewhat unexpectedly,
stratigraphic units deep below the Century host level.
The Termite Range formation was regularly encountered in holes
directly north of the open pit. This formation underlies the Lawn
Hill formation which hosts Century – however in this location, this
equates to an almost 1,000 metres vertical offset in stratigraphy
from the level of the Century orebody over a distance of several
hundred metres laterally.
This offset cannot be attributed to conventional fault-tectonics and
can only be resolved by low-angle sliding of mega-scale blocks
over kilometre scales into the crater void. This process also raises
the potential for vertical stacking of subsequent slides, and in
turn inversion of the stratigraphy. The complexity of the process,
and interaction between blocks means there is some difficulty
in extrapolating geology over distance and even assuming
stratigraphic succession down-hole.
The scale, speed, and sequence of the events following the
Figure 6: Simplified interpreted event sequence with relative Century orebody location
meteor impact result in a somewhat challenging exploration
target. The significant works to date have failed to discount the
opportunity for discovery within the crater, and our understanding
of this unique opportunity continues to evolve.
The refinement of the understanding of the pre-impact geology
at New Century is guiding the search for analogous Century
systems across the region. A level of ambiguity within the historical
geological interpretation means that previous investigations could
easily have missed or overlooked areas where detachments of the
orebody may be preserved - an opportunity which the Company
continues to pursue.
Phantom Hills
phosphate
Century Deposit
Silver King
< Figure 7: Millennium Project major
structures and prospectivity status
Tested
FY22 focus areas
Newly defined
crater fault
FY21 Drill collar
Vein prospects
14
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 15
Watson's Lode
Owing to the recent success of resource definition and exploration
Drilling is planned at Watson’s Lode in financial year 2022 to test
works associated with the Silver King Project, the New Century
the model with a maiden Mineral Resource also anticipated for
Exploration team has refined the Company’s strategy and
reporting in the period.
objectives in the southern portion of the tenement package.
The geology across the southern prospects is considered
vein-style mineralisation as well as larger Century-style sediment
The Company considers the area to have prospectivity for both
analogous to the Century-Silver King system, with both mineralised
hosted (SEDEX) deposits.
epithermal veins and Century-host rocks present in the area.
The focus of historic works has been at the conspicuously
Non-core assets – Kodiak Coal Project
In February 2021, New Century sold its interest in the Kodiak
outcropping Watson’s Lode gossan, with over 20,000 metres of
Coking Coal Project. Total proceeds on disposal were
drilling completed historically, and sporadic high-grade intercepts.
approximately $0.1 million.
Technical review of the prospect during the period has resulted
in a re-interpretation of the broader ore system model, and more
locally, resulted in an improved understanding of the controls on
high-grade mineralisation within the vein structure.
Figure 8: Historic drill results at the Watson’s Lode epithermal vein deposit
16
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 17
Financial Performance
The Company commenced commercial production on 1 July
2020 making the 2021 financial year the Company’s first as a
commercially operating entity. The Company’s maiden EBITDA
result was $73.5 million. The inclusion of depreciation and
financing costs reduced Net Profit After Tax (NPAT) to a loss
of $10.8 million. These results include one-off expenditure on
exploration and development including costs associated with
detailed assessment of the Goro Nickel Mine which did not
progress beyond due diligence.
Due in part to the capitalisation of operating losses through
the pre-commercial production phase, the Company expects
depreciation expenses (which are non-cash) to remain elevated
over the life of the Century tailings operation. Therefore, cash
earnings are likely to continue to significantly exceed NPAT in
future reporting periods.
The macroeconomic environment was severely impacted by
the onset of the COVID-19 pandemic in the 2021 financial year.
However, throughout the period it became evident that demand
for zinc concentrate remained stronger than expected whilst global
supply was severely impeded. The Company benefitted through
both the elevated prices for refined zinc and a large reduction in
treatment charges levied on zinc concentrates.
Figure 9: Underlying NPAT, financial year 2021 vs 2020
The Company’s existing customers continued to operate largely
without interruption. Further disruption in the zinc concentrate
market presented opportunities for the Company to forge
relationships with new customers and to build on the already
strong global appetite for New Century concentrate. Bulk
carriers have served the Australian shipping market throughout
the COVID-19 pandemic and the Company continued to deliver
product to customers without incurring delays or other logistical
issues.
The COVID-19 pandemic presented the Company with an
opportunity to restructure and reduce costs. In May 2020, the
Company terminated various 'operate and maintain' contracts and
assumed full operational and maintenance responsibility of both
Century Mine and the Karumba Port Facility. The Company is now
well positioned to manage its operations and costs through the
next phase of optimisation and growth.
Operating margins
The Company’s EBITDA margin for the financial year was
27 percent. Depreciation expense reduced the EBIT margin to
4 percent whilst net financing expenses of $18.2 million reduced
the PBT and NPAT margins to 4 percent.
276.7
-206.0
8.4
-63.7
-8.1
-18.2
-
-10.8
NPAT for
year ended 30
June 2020
Net
revenue
Production
costs inc.
employee
benefits -
labour costs
Other
costs
Depreciation
Net
financing
expense
Income &
tax expense
NPAT for
year
ended 30 June
2021
300.0
250.0
200.0
150.0
100.0
50.0
-
-50.0
n
o
i
l
l
i
m
$
18
Revenue and sales costs
Revenue from the sale of concentrate totalled $277.9 million for
Operating and other costs
Total production costs of zinc concentrate sold (including salaries
the financial year. Fair value movements in trade receivables of
and corporate costs) were $209.9 million. Business development
$5.6 million and a (non-cash) gain of $4.2 million on the disposal
and exploration costs were $7.0 million with activities focused on
of the Kodiak Coking Coal Project were offset by losses on zinc
due diligence on the potential acquisition of the Goro Nickel Mine
hedging of $6.9 million taking total income to $280.9 million.
and the In-Situ Feasibility Study and the Millennium exploration
Additionally, $6.5 million of proceeds relating to concentrate sold
program at Century.
during the pre-commercial production phase were recorded as
credits against the previously capitalised mine development costs
Other costs of $74.9 million included $63.8 million of depreciation,
and were not recognised as revenue during the reporting period.
$20.6 million of finance costs and a foreign exchange gain of
$9.3 million. The Company accounts for leases within depreciation
A total of 256,000 tonnes of zinc concentrate was sold during the
and finance costs in accordance with the Accounting Standards.
year at an average realised price of US$2,769 per payable tonne
of zinc and an average A$/US$ exchange rate of 0.75.
The Company’s C1 costs for the financial year were US$0.91 per
payable pound of zinc metal produced.
The zinc concentrate benchmark treatment charge is negotiated
annually between Teck Resources and Korea Zinc Co. Ltd and
traditionally forms the basis for pricing of zinc concentrate
smelting contracts between global zinc concentrate producers and
smelters. In April 2021 the benchmark treatment charge for zinc
concentrate was reduced from US$299.75 to US$159 per tonne
of zinc concentrate, effective from 1 January 2021. The Company
bases approximately 85 per cent of its sales on the benchmark
treatment charge and achieved an average treatment charge of
US$223 per tonne of zinc concentrate for the full year. Average
treatment charges in the second half of the financial year were
US$166 per tonne of zinc concentrate, some 40 percent lower
than the US$278 per tonne of zinc concentrate average achieved
in the first half.
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 19
38.2
-17.9
-24.7
40.0
35.7
Cash flow
n
o
i
l
l
i
m
$
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0
30 June 2020
Balance
Cash flow from
Operations
Cash flow from
Investing
Cash flow from
Financing
30 June 2021
Balance
Figure 10: Cash balance and cash flow
Cash flow from operating activities
Operating cash flow for the year totalled $38.2 million, an
improvement of $46.7 million on the previous financial year due to
the commencement of commercial production. An additional $6.5
million was received from customers and recognised as cash flow
from investing activities as it related to sales completed before
entering commercial production. Cash finance costs of $7.5 million
(including deemed interest on leases) were recognised within
operating cash flow as were $7.0 million of business development
and exploration costs.
Cash flow from investing activities
Cash outflows from investing activities for the year totalled $17.9
million. A total of $17.5 million was recognised as investments
in property, plant and equipment including the Jameson Cell
refurbishment and implementation and various other capital
improvements across the Century Mine and Karumba Port Facility.
Approximately $3.6 million was capitalised against exploration
and development of near-mine deposits including Silver King
and Millennium. In January 2021, the Company changed its
electricity generation provider and was required to increase its
refundable security guarantees by a net amount of $3.6 million.
Approximately $6.5 million was received from customers for sales
made during the Century Mine’s development phase. This was
recognised as a credit against property, plant and equipment and
therefore improved investing cash flows.
Cash flow from financing activities
Financing cash outflows for the period totalled $24.7 million. Over
the course of the financial year the Company substantially de-
leveraged its balance sheet with debt reduced by approximately
$44.3 million. In October 2020 the Board elected to further
strengthen the Company’s balance sheet and conducted an equity
raise which raised $33.2 million after fees and costs. In addition to
de-leveraging the Company’s balance sheet, funds were used to
advance growth projects including the In-Situ Feasibility Study and
investments in other sustaining and growth capital projects.
Financing cash flows included $13.8 million of lease repayments.
Under AASB 16, principal repayments against leases are
recognised as financing cash flows.
Business strategy and prospects
Building from this fundamental belief, New Century’s strategic
objectives are to:
• Grow our reputation as an industry leader in sustainable
resource management, which includes the incorporation of
economic rehabilitation into our operating philosophy.
• Monetise our knowhow via service-based models for
reprocessing, rehabilitation, and tailings management.
•
Build a diverse multi-asset and commodity portfolio of projects
which allow us to grow our business.
• Generate shareholder returns at any stage of commodity
cycles by:
-
-
operating at sustainable positions on the cost curve in the
markets the Company operates in; and
considered capital deployment, mitigating risk where
prudent and pursuing growth opportunistically.
Material business risks
Key risks which may materially impact the execution and
achievement of the business strategies and financial prospects
for the Company are summarised below and are risks largely
inherent in the resources industry. This should not be taken to be
a complete or exhaustive list of risks nor are risks disclosed in any
particular order. Many of the risks are outside the control of New
Century and its officers. In the course of normal operations the
Company may face additional risks and uncertainties, including
those not presently known.
The Board, its Committees and management identify, manage
and monitor current and emerging risks through the Company’s
risk management framework. The framework is applied across the
Group to provide protection from potential negative impacts as
well as to contextualise the residual risks and strategic rewards
available. The framework is designed to provide timely responses
with which the Board and management can make and implement
decisions.
The day-to-day operation of the Company’s risk management
system is vested with management and regular updates are
provided to the Board and its Committees.
Business strategy
New Century’s vision is to build a diversified resource
management company, respected by stakeholders and
investment communities for our proven ability to manage long-
term sustainable operations whilst generating strong shareholder
returns via application of innovation, capability, and stewardship.
We believe that sustainable resource management drives the
creation of significant value for all stakeholders.
From a solid foundation of the globally significant operation at
Century, New Century is developing an agile and sustainable
resources business. Using a growing track record in
environmentally focused project development, execution, and
operations, the Company will target the acquisition of resource
projects to deliver sustainable mine life extension and optimisation.
Beyond Century, the Company is focused on projects with the
potential for extending the life of aging mining operations and
extracting value from tailings or remanent in-situ resources.
Using the Company’s development approach, it will increase
economic returns and improve outcomes for stakeholders while
implementing world class rehabilitation.
Aims and focus
Economic rehabilitation is a critical stage in the life cycle of all
resource projects. The need for active rehabilitation planning and
progressive execution in every stage of a mine’s life is growing
in significance as traditional attitudes to the mining life cycle are
challenged.
Conventionally, at the deemed exhaustion of the resource’s life,
infrastructure, permits and licenses to operate have negligible
value. This provides a unique opportunity to leverage sunk capital
with limited incremental investment. The value of established
processing and logistics supply chains is key to extending mine
life. This allows lower grade material to be economically processed
and for rapid project development thus delivering positive
outcomes for communities, governments, and shareholders alike.
New Century is commodity agnostic, with a focus on metals
with established and transparent markets. The combination
of metallurgical competency and diverse experience across
commodities affords the ability to apply our business model across
the industry. We will also utilise innovative corporate solutions and
multi-commodity revenue streams to reduce risk and maximise
value.
20
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 21
Commodity prices, treatment charges and exchange rate risk
Production failure of the Company’s operating plant and
In addition, the Company constantly assesses opportunities to
No assurances can be made that appropriate capital or funding,
The Company principally derives its revenue from the sale of
equipment and general unanticipated operational and technical
hedge commodity prices and foreign exchange depending on
if and when needed, will be available on terms favourable to the
zinc and silver contained in its zinc concentrates. Consequently,
difficulties may adversely affect the Company’s operations. The
market conditions and has recently taken steps to hedge a portion
Company or at all. If the Company is unable to obtain additional
any future earnings will be closely related to the price of these
Company’s ability to sustain or increase its proposed forecast
of its future production as a key mitigation.
financing as needed, or if operations do not generate sufficient
commodities, the treatment charges imposed by refiners or traders
levels of production is dependent on its ability to achieve forecast
revenues, this could have a material adverse effect on the
for zinc concentrate as well as the other terms of any off-take
geological interpretations, to attain anticipated mining rates and
The Company’s funding requirements are continuously
Company’s activities and financial performance.
agreements that the Company has entered into or enters into.
plant operating levels to conform to set budgets and plans, and
reviewed through detailed internal cash flow models that are
the success of development projects associated with the life of
updated as required for external and internal factors. New
The world market for minerals is subject to many variables outside
business plan.
Century endeavours to ensure that the best source of funding
MMG Limited (MMG) has procured and stands behind the ongoing
provision of bank guarantees of $179.1 million to meet the Century
of the control of the Company and may fluctuate markedly.
to maximise shareholder benefits and having regard to prudent
Project financial assurance bond (lodged with the Queensland
Material price declines in the market price of zinc, material rises in
The business of mining, exploration and development is subject to
risk management is obtained and is supported by economic and
government) until 31 December 2023. Pursuant to arrangements
treatment charges and/or material rises in the Australian dollar /
a variety of risks and hazards such as mining accidents, flooding,
commercial analysis of all business undertakings.
with MMG, the Company is required to replace in full the MMG-
United States dollar exchange rate could cause material decreases
environmental hazards, the discharge of toxic chemicals and
backed bank guarantees by 31 December 2023. At this date, the
in forecasted revenue and profitability or even cause production
other hazards. Such occurrences may delay production, increase
Changes in capital and operating costs
level of the assurance bonding required will have reduced with
from the Company’s operations to be rendered uneconomic.
production costs or result in the suspension or termination of
Any significant unforeseen increases or decreases in the capital
ongoing rehabilitation activities. The replacement of the bonding
Metals are principally traded throughout the world in US dollars.
properties or production facilities, personal injury, environmental
impact the Company’s future cash flow and profitability. Capital
with the Queensland government if the Company can meet the
The Company’s cost base is substantially priced in Australian
damage and legal liability. The Company’s ability to sustain or
and operating costs for the development of major projects in
credit requirements, bonding facilities from other parties which
dollars with a much smaller contribution in US dollars for such
increase its proposed forecast levels of production is dependent
Australia can be highly sensitive to changes, positive or negative,
could be in the form of a fee-based arrangement or alternatively
items as reagents and shipping. As a result, any significant and/
on its ability to achieve forecast geological interpretations, to attain
in raw material prices as well as in labour and contractor costs.
through cash backing or through the form of a surety bond.
mining leases or licences, damage to, and destruction of, mineral
and operating costs associated with the Century Mine would
provided by MMG could be by way of a fee-paying arrangement
or sustained rise in the exchange rate between the Australian
anticipated mining rates and plant operating levels to confirm to
dollar and the US dollar will have a materially adverse effect on
set budgets and plans, and the success of development projects
To mitigate cost risks, the Company continues to focus on
There is no guarantee the Company will generate sufficient
the Company’s financial position. Conversely any significant and/
associated with the life of mine business plan.
streamlining its operations and developing strong relationships
operating profits from operations to completely cover this
or sustained fall in the exchange rate between the Australian dollar
with its people, business partners and suppliers. As with all
obligation assuming it is not replaced by an alternative mechanism
and the US dollar will have a material benefit on the Company’s
The Company has plans in place to mitigate against production
capital-intensive mining operations, Century’s unit costs are highly
in this period. If the Company is unsuccessful in generating
financial position.
and development risks which are subject to regular review by
susceptible to production rates. The Company invests heavily in
sufficient operating profits it will need to seek alternative coverage
senior management and the Board. In addition to the Company’s
preventative maintenance to maximise equipment availability and
for the bond.
While many of these risks are outside of the control of the
internal production and development expertise, the Company
productivity.
Company and its officers, the Company constantly assesses
engages external experts and contractors in relation to production
opportunities to hedge commodity prices and foreign exchange
and development performance at Century.
Compliance with debt facility
The Company’s funding requirements are continuously reviewed
through detailed internal cash flow models that are updated
depending on market conditions and has recently taken steps to
The Company’s is required to comply with the terms of its debt
as required for external and internal factors. The Company
hedge a portion of its future production as a key mitigation. The
Liquidity position and availability of funding
facility with Varde Partners, many of which are standard for a
endeavours to ensure that the best source of funding to
Company endeavours to manage its exposure to material changes
Given the Company’s sensitivity to movements in the Australian
facility of this type. Non-compliance with the terms, may constitute
maximise shareholder benefits and having regard to prudent
in treatment charges by incorporating a mix of benchmark and
dollar price for its zinc concentrate production, if market conditions
an event of default. The occurrence of an event of default may
risk management is obtained and is supported by economic and
spot treatment charges into its sales contracts.
deteriorate the Company may need to raise additional funds via
entitle Varde Partners to exercise certain rights (unless waived),
commercial analysis of all business undertakings.
either debt or equity markets. There can be no assurance that
including the acceleration of repayment of outstanding moneys
Production and development risks
sufficient debt or equity funding will be available on acceptable
on the facility and the enforcement of security interests. The
Business development initiatives
The prospects of the Company should be considered in light of
terms or at all.
exercise of such rights could have a material adverse effect on the
The Company maintains an ongoing process for reviewing a range
the risks, expenses and difficulties frequently encountered by
Company’s activities and financial condition.
of resource assets within the base, precious and minor metals
companies at a similar stage of production and development.
The Company’s funding requirements are continuously
The Company’s initiatives to improve its production performance
reviewed through detailed internal cash flow models that are
Future capital requirements
and/or meet its production schedule may not proceed to plan,
updated as required for external and internal factors. New
In order to achieve the Company’s strategic objectives, the
sectors for the purposes of assessing the suitability of these
opportunities for potential corporate transactions.
with potential for delay in the timing of targeted production and
Century endeavours to ensure that the best source of funding
Company may require additional financing in the future. Any
As part of this strategy, the Company may make acquisitions or
metallurgical recoveries and/or a failure to achieve the level
to maximise shareholder benefits and having regard to prudent
additional equity financing may be dilutive to shareholders
significant investments in companies, joint ventures, tenements
of targeted production and recoveries. If such circumstances
risk management is obtained and is supported by economic and
or may be undertaken at lower prices than the then market
or resource projects. In addition, the Company may also elect to
occurred in conjunction with adverse market factors such as low
commercial analysis of all business undertakings.
price. Debt financing, if available, may involve restrictions on
issue shares or engage in capital raisings to fund investments,
zinc prices or high smelter treatment charges, this would adversely
impact the Company’s financial performance.
financing and operating activities, in addition to those that the
mergers or acquisitions that the Company may decide to
Company is already obliged to comply with under existing finance
undertake or if the opportunity arises. Any such future transactions
arrangements.
would be accompanied by the risks commonly encountered
22
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 23
in making acquisitions of companies or mining projects. This
Environmental risks
includes the potential dilution of shareholders’ holdings, an
The Company’s operations are subject to rules and regulations
increase of the current debts of the Company or the imposition
regarding environmental matters and the discharge of
of further obligations on the Company subject to any contractual
hazardous wastes and materials. As with all mineral projects,
agreements, and the usual risks associated with mining projects.
the Company’s projects have a variety of environmental impacts.
Health and safety
Ongoing operations are dependent on the Company satisfying
environmental guidelines and, where required, obtaining relevant
Mining activities have inherent health risks and hazards. The
approvals from government authorities.
health and safety of our personnel, contractors and visitors
remains the Company’s highest priority. The Company provides
The Company conducts and intends to continue to conduct
appropriate instructions, equipment, preventative measures, first
its activities in an environmentally responsible manner and in
aid information, medical facilities and training to all stakeholders
accordance with all applicable laws but may still be subject to
through its occupational health and safety management systems.
accidents or other unforeseen events which may compromise its
While the Company has a strong record in achieving high quality
environmental performance and which may have adverse financial
safety performance at its sites, a serious site safety incident may
implications.
expose the Company to significant penalties and the Company
may be liable for compensation to any injured persons.
The Company’s founding value and core ethos is economic mining
rehabilitation. As such, the Company is committed to reducing
It is not possible to anticipate the effect on the Company’s
negative impacts on the environments in which it operates. The
business from any changes to workplace occupational health
Company has a rigorous environmental management system in
and safety legislation or directions or necessitated by concern for
place which is designed to meet and exceed the extensive statutory
the health of the workforce. Such changes may have an adverse
and regulatory obligations that our operations are subject to.
impact on the financial performance and/or financial position of the
Company.
Native Title
Climate change risks
Climate change is a risk the Company has considered, particularly
related to its operations in the mining industry. The climate change
Century Mining Limited (a subsidiary of the Company) is a party to
risks particularly attributable to the Company include:
the Gulf Communities Agreement and other cultural heritage and
associated community Native Title agreements in connection with
•
The emergence of new or expanded regulations associated
the Century Mine. The Company maintains a record of compliance
with the transitioning to a lower-carbon economy and market
with the Gulf Communities Agreement and associated community
changes related to climate change mitigation. The Company
agreements and has no current need to negotiate any agreement
may be impacted by changes to local or international
to allow for the continuation of current activities or any future
compliance regulations related to climate change mitigation
mining developments within the existing mining leases.
efforts, or by specific taxation or penalties for carbon
Issues may arise within local communities with potential to affect
•
Climate change may cause certain physical and environmental
the Company’s operations materially and adversely. A failure
risks that cannot be predicted by the Company, including
to successfully resolve any local community issues could have
events such as increased severity of weather patterns and
a material and adverse effect upon the Company’s business,
incidence of extreme weather events and longer-term physical
prospects, financial condition, and results of operations.
risks such as shifting climate patterns.
emissions or environmental damage.
Regulatory risks
Insurance risks
The Company will incur ongoing costs and obligations associated
The Company maintains insurance coverage that is substantially
with compliance with necessary regulations. Any failure to comply
consistent with mining industry practice. However, there is no
with regulations may result in additional costs for corrective
guarantee that such insurance or any future necessary coverage
measures, penalties or in restrictions on the Company’s proposed
will be available to the Company at economically viable premiums
business operations. In addition, changes in regulations could
(if at all) or that, in the event of a claim, the level of insurance
require extensive changes to the Company’s operations, increased
carried by the Company now or in the future will be adequate, or
compliance costs or give rise to material liabilities, which could
that a liability or other claim would not materially and adversely
have a material adverse effect on the business, results of
affect the Company’s business.
operations and financial condition of the Company.
Offtake risks
Licences and permits
The Company has numerous offtake contracts in place for the
The Company’s mining and exploration activities are dependent
sale of zinc concentrate. There is a risk the Company is unable to
upon the maintenance of appropriate licences, leases, permits and
consistently meet product specifications or delivery obligations under
regulatory consents which may be withdrawn or made subject to
those agreements. In those circumstances, the Company’s cash flow
conditions. The maintaining of licences and approvals, obtaining
may be adversely affected or curtailed.
renewals, or getting licences or approvals granted, often depends
on the Company being successful in obtaining required statutory
The Company’s cash flow and financial position will also depend on
approvals for its proposed activities. There is no assurance that
the performance by counterparties of their contractual obligations,
renewals or amendments to the Company’s licences and permits
including the timely payment in full of their purchases of product
will be obtained in a timely manner, or at all, and there is no
from the Company on the agreed terms and conditions. Title to the
assurance that new conditions will not be imposed.
product typically does not transfer to the customer until the initial
provisional payment is made. Typically, this will be between 80% and
Estimation of Mineral Resources and Ore Reserves
100% of the value of the product based on prices at the time of the
There is a degree of uncertainty to the estimation of Mineral
sale.
Resources and Ore Reserves and corresponding grades being
mined or dedicated to future production. Until Mineral Resources
Finalisation of these purchases of concentrate are payable in arrears,
or Ore Reserves are actually mined and processed, the quantity
based on a reassessment of the quantity and specification of the
of Mineral Resources and Ore Reserves must be considered as
product delivered and the zinc and silver prices over the quotational
estimates only. In addition, the grade of Mineral Resources and
period. Any delay in receipt, or inability or refusal to pay in full by a
Ore Reserves may vary depending on, among other things, zinc,
customer of a finalised amount owing to the Company, will negatively
lead and silver prices. Any material change in quantity and grades
impact the Company’s cash flow and financial position.
of Mineral Resources or Ore Reserves may affect the economic
viability of the properties.
The Company may be required to pay additional amounts at the time
of the finalisation of the contract if the final quantity, grade or market
Fluctuation in the price of commodities including zinc, lead and
price has moved against the Company, or alternatively, receive
silver, results of drilling, metallurgical testing and the evaluation
additional amounts if the quantity, grade or market price has moved
of mine plans subsequent to the date of any mineral resource
favourably for the Company.
estimate may require revision of such estimate. Any material
reductions in estimates of Mineral Resources and/or Ore Reserves,
could have a material adverse effect on the Company’s financial
In managing these risks, the Company has developed and
The Company adopts a risk management approach to address
implements management plans to address social impacts, engage
the risks to its operations associated with climate change. Risk
condition.
with key stakeholder groups and ensure effective and lawful
management approaches including improving operational
management of cultural heritage aspects.
responses to the wet-season impacts on hydraulic mining
operations, and maintaining close engagement with the Karumba
Port Authority to ensure channel maintenance and dredging is
undertaken in a manner that will ensure the potential impacts of
severe weather are managed and addressed.
The Company mitigates this risk by ensuring its Mineral Resource
and Ore Reserve estimates are subject to appropriate levels of
governance and internal controls. See the Mineral Resources and
Ore Reserves Statement below for further details.
24
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 25
Operational risks
COVID-19
Government and legal risk
Key personnel and labour market risk
In common with other enterprises in the minerals and mining
The outbreak of, and response to, COVID-19 is having a
Changes in government, monetary policies, taxation and other
The ability of the Company to achieve its strategic objectives
industry, the Company’s mineral production, development and
material effect on global economic markets and the operation
laws can have a significant impact on the Company’s assets,
depends upon the retention of key management and operational
related mining activities, including the delivery of supplies and
of a wide variety of businesses, including those in the mining
operations and ultimately the financial performance of the
employees who constitute its technical, operational, marketing
consumables and the transportation of products to customers
industry. The global economic outlook is facing uncertainty due
Company. Such changes are likely to be beyond the control of
and corporate expertise. If the Company cannot secure and retain
are subject to conditions beyond the Company’s control that
to the pandemic, which has had and may continue to have a
the Company and may affect industry profitability as well as the
this expertise or if the services of key employees cease to be
can reduce production and sales and/or increase costs. These
significant impact on the industry dynamics, the macro-economic
Company’s capacity to explore and mine.
available to the Company, this may adversely affect the Company’s
conditions include, but are not limited to:
environment, capital markets and valuations.
performance.
The Company is not aware of any reviews or changes that would
•
changes in legislative requirements (including those made in
The Company’s share price may be adversely affected by the
adversely affect its permits. However, changes in community
The ability of the Company to achieve its objectives also depends
relation to COVID-19);
• market conditions;
economic uncertainty or specific requirements for the operations
attitudes on matters such as taxation, competition policy and
upon the retention of certain key external contractors that provide
triggered by the response to COVID-19. Further, any measures to
environmental issues may bring about reviews and possibly
a number of important services and operational capabilities
•
•
•
•
•
supply constraints and disruptions;
limit the transmission of the virus implemented by national, state
changes in government policies. There is a risk that such changes
(for example, hydraulic mining, exploration, operation of the
government policies;
exchange rates;
and local governments around the world (such as travel bans and
may affect the Company’s operations or development plans
processing plant and maintenance) which are an important part
quarantining) or deemed necessary by the Company to protect
or its rights and obligations in respect of its permits. Any such
of the Company’s overall technical and operational expertise. If
abnormal or severe weather or climatic conditions;
the health of its workforce may adversely impact the Company’s
government action may also require increased capital or operating
the Company cannot secure and retain this technical expertise
natural disasters;
operations and affect its ability to continue as a going concern.
expenditures and could prevent or delay certain operations by the
or if the services of such key external contractors cease to be
• weather-related disruption to the Karumba channel
Company.
available to the Company, this may adversely affect the Company’s
unexpected maintenance, equipment or other technical
The Company has COVID-19 management plans in place to ensure
performance.
problems;
key equipment failures;
industrial disruption; and
the safety of its people and business partners, with extensive
The Company monitors legislative and regulatory developments
preventative and contingency measures in place.
in Australia and overseas and works to ensure that all stakeholder
Whilst the ability of the Company to achieve its objectives may be
concerns are addressed fairly and managed.
affected by the matters mentioned above, the Company believes
•
•
•
•
that generally appropriately skilled and experienced professionals
and external contractors are available to provide services to the
Company at market levels in the event some key management
and operational personnel and external contractors cease to be
available. This may not always be the case with the travel and
other restrictions imposed at a national, state and local level as a
result of the COVID-19 crisis.
variations in geological conditions.
Through the implementation of these measures and the effort of
our people and business partners, the Company has continued to
An inability to secure ongoing supply of goods and services
operate at full capacity, aided by the remoteness of the Century
at prices assumed within production budgets and targets,
project and the complete integration of the mine-to-port logistics
or a disruption to the supply chain when delivering goods to
infrastructure.
customers, could potentially impact the results of the Company’s
operations, and in a worst-case scenario, result in the shutdown of
the operation.
The Company has management systems in place to mitigate these
risks, including in relation to inventory management, maintenance
systems, contractor management and crisis and emergency
response plans.
26
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 27
MINERAL RESOURCES AND ORE RESERVES
STATEMENT
The following information is provided in accordance with Listing Rule 5.21 and as at 30 June 2021.
Century Mine - Mineral Resources and Ore Reserves at 30 June 2021:
Category
(Mt)
Zn (%)
Pb (%)
Ag (g/t)
Zn (kt)
Pb (kt)
Ag (MOz)
Measured
53.0
Silver King
Measured
Project
Century
Tailings
Deposit
Total
East Fault
Block
South
Block
Watson’s
Lode
Global
Mineral
Resources
Indicated
Inferred
Indicated
Inferred
Inferred
1.0
2.1
0.6
3.7
0.6
6.2
1.7
Measured &
Indicated
Inferred
Total
62.9
2.3
65.2
3.0
5.1
5.0
2.5
4.5
9.8
5.4
7.7
3.4
6.5
3.5
-
5.7
5.2
6.0
5.5
1.1
1.5
2
0.4
3.1
0.5
14
58
44
32
44
51
43
10
19
16
19
1,604
48
106
16
170
63
335
134
2,156
150
2,306
-
54
111
37
202
7
93
35
265
72
337
24.0
1.8
3.0
0.6
5.4
1.1
8.6
0.6
38.5
1.2
39.7
Note:
1. Differences may occur in totals due to rounding.
2. Mineral Resources are reported inclusive of Ore Reserves
Century Mine - Mineral Resources as at 30 June 2020:
Project
Century
Tailings
South
Block
Silver
King
East Block
Fault
Global
Mineral
Resources
Category
(Mt)
Zn (%)
Pb (%)
Ag (g/t)
Zn (kt)
Pb (kt)
Ag (MOz)
Measured
64.0
Indicated
Inferred
Indicated
Measured &
Indicated
Inferred
Total
6.1
2.7
0.6
70.7
2.7
73.4
3.0
5.3
6.9
9.8
3.4
6.9
3.4
-
1.5
12.5
1.1
0.4
12.5
0.6
13
43
120
51
19
120
20
1,935
322
186
63
2,320
186
2,506
-
90
338
7
97
338
435
27.0
8.6
10.5
1.1
36.7
10.5
47.2
Note:
1. Differences may occur in totals due to rounding.
2. Mineral Resources are reported inclusive of Ore Reserves
Mineral Resources at the Century Tailings deposit have been adjusted for mining depletion only, no update to the Century Tailings
Mineral Resource estimate was made during the period.
Significant in-fill drilling was completed at the Silver King deposit during the period with the works culminating in an updated Mineral
Resource estimate for the deposit. The increase in data density greatly improved the confidence in the updated estimate, which is
reflected in the definition of Measured and Indicated Mineral Resources for the deposit.
Additional drilling data, a refinement of the geological model, and greater constraints in the estimation parameters all contributed to
greater tonnes and lower grades being reported in the 30 June 2021 Mineral Resource estimate for Silver King.
A maiden Mineral Resource was reported for the Watson’s Lode deposit in September 2021, with all data closed out prior to 30 June
2021. The works leveraged the learnings from the works at the analogous Silver King deposit during the period, with the Watson’s Lode
deposit showing potential for future growth of the Mineral Resource with additional drilling.
No changes to the South Block or East Fault block Mineral Resource estimates were made during the period.
Ore Reserves as at 30 June 2021:
Category
(Mt)
Zn (%)
Pb (%)
Ag (g/t)
Zn (kt)
Pb (kt)
Ag (MOz)
Project
Century
Tailings
Open Pit
Proved
49.3
Silver King
Underground
Probable
Open Pit
Probable
Deposit Total
East Fault
Block
Open Pit
Global Ore
Reserves
Probable
Proved
Probable
Total
1.7
0.6
2.3
0.3
49.3
2.5
51.8
3.0
4.7
8.5
5.5
5.1
3.1
5.6
3.1
-
6.9
0.9
5.2
5.1
3.0
5.3
0.3
14
83
36
70
42
14
68
17
1,473
78
49
127
13
1,473
140
1,613
-
114
5
119
13
0
133
133
22.0
4.5
0.7
5.2
0.4
22.0
5.4
27.4
Note:
1. Differences may occur in totals due to rounding.
Ore Reserves as at 30 June 2020:
Project
Century
Tailings
Open Pit
Category
(Mt)
Zn (%)
Pb (%)
Ag (g/t)
Zn (kt)
Pb (kt)
Ag (MOz)
Proved
Total
62.3
62.3
2.9
2.9
-
-
13
13
1,837
1,837
-
-
25.4
25.4
Note:
1. Differences may occur in totals due to rounding.
28
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 29
Competent Person’s Statement
The information in this Annual Report which relates to Exploration
Targets, Exploration Results, Mineral Resources and Ore Reserves
is based on information compiled by Damian O’Donohue, a
Competent Person who is a Member of The Australasian Institute
of Mining and Metallurgy. Damian O’Donohue is a full-time
employee of the Company. Damian O’Donohue has sufficient
experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the
JORC Code. Damian O’Donohue consents to the inclusion in the
report of the matters based on his information in the form and
context in which it appears.
The decrease in Ore Reserves at the Century tailings deposit in
the 2021 financial year is a result of mining depletion (-9.3Mt),
with an additional one-off tonnage adjustment relating to mine
reconciliations (-3.8Mt). The adjustment is a function of an
underlying variance within the bulk-density value along with mining
loss and dilution. No adjustments to grade were considered
necessary based on the mine reconciliations. The Competent
Person considers the adjustment to be within the error margins of
the relevant Ore Reserve category. Updated revenue and metal
recovery factors were applied at 30 June 2021 as part of the
broader In-Situ Feasibility Study however this had no impact on the
tailings Ore Reserve.
The addition of Ore Reserves at Silver King and the East Fault
Block was a result of the In-Situ Feasibility Study. The study
considers the integration of hard rock operations fed in parallel to
the existing tailings operation. The Silver King and East Fault Block
Ore Reserves as reported are dependent on the ongoing mining at
the Century tailings.
The In-Situ Feasibility Study was reported in September 2021, with
all input data closed off at 30 June 2021.
Governance and internal controls
New Century ensures that its Mineral Resource and Ore Reserve
estimates are subject to appropriate levels of governance
and internal controls. The Company’s Mineral Resources and
Ore Reserves have been generated by independent external
consultants and internal employees who are experienced in best
practices in modelling and estimation methods. Where applicable,
the consultants have also undertaken review of the quality and
suitability of the underlying information used to generate the
resource estimations. The Mineral Resource and Ore Reserves
estimates follow standard industry methodology using geological
interpretation and assay results from samples won through drilling.
The Company reports its Mineral Resources and Ore Reserves
in accordance with the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’ (the JORC Code). Competent Persons named by the
Company qualify as Competent Persons as defined in the JORC
Code.
In addition to the arrangements and internal controls established
by the Company, the Board oversees the governance of Mineral
Resources and Ore Reserves. This includes the annual review
and approval of the publicly reported Mineral Resources and Ore
Reserves Statement.
30
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 31
New Century Resources has a commitment to
operate our business in line with principles of
sustainable development, to deliver on the needs
of the present, without compromising the needs of
future generations and to integrate environmental,
social and governance considerations into our
decision making
SUSTAINABILITY
Highlights
Development and adoption of
standalone Sustainability Policy
Environmental, Social and
Governance (ESG) Committee of the
Board of Directors established
The Company achieved recognition
of its economic rehabilitation model
with a $14.1 million reduction in
Estimated Rehabilitation Cost for
the Century Mine to $183.9 million
Sustainability reporting and
transparency regime endorsed by
the Board on the recommendation
of the ESG Committee with
inaugural Sustainability Report to be
released in the first half of the 2022
financial year
Overview
The Company formally adopted a Sustainability Policy during the
Environment
There were no reportable environmental incidents at the mine or
reporting period.
New Century’s vision is to build a diversified mining company,
respected by stakeholders and investment communities because
of our proven ability to manage long-term sustainable operations
whilst generating strong shareholder returns via application of
innovation, capability, and stewardship. This vision comes with
a commitment to operate our business in line with principles of
sustainable development, to deliver on the needs of the present,
without compromising the needs of future generations and to
integrate environmental, social and governance considerations
port operations during the reporting period. The Company has
maintained its focus on progressive rehabilitation works at the
Century Mine, including additional exposure of native earth below
the tailings dam, allowing rehabilitation flushing to continue in
coming wet seasons. Sections of the evaporation dam and other
areas around site that have been ripped and seeded as part of
their final rehabilitation are experiencing strong regrowth.
Further reporting on environmental performance and
achievements will be included in the Company’s inaugural
Sustainability Report to be published during the first half of the
into our decision making. Our Sustainability Policy aligns with our
2022 financial year.
values of: Teamwork, Open & Honest, Respect, Can Do, Innovate &
Learn and Owner’s Mindset.
The Board has also resolved to adopt a more comprehensive
approach to sustainability reporting and the Company will release
its inaugural Sustainability Report in the 2022 financial year. The
Environmental Rehabilitation
As part of the acquisition of the closed Century Mine and Karumba
Port Facility in 2017 the Group assumed the requirement to provide
Financial Assurance to the Queensland Government to guarantee
the future costs to rehabilitate Century Mine and the Karumba Port
Company will adopt an approach of aligning its activities with
Facility.
the United Nations Sustainable Development Goals (UNSDGs)
and will report on how aspects of the Company’s activities and
performance have contributed to the achievement of the UNSDGs.
The amount of this Financial Assurance, described formally as
the Estimated Rehabilitation Cost (ERC) under the Environmental
Protection Act 1994 (Qld), is calculated by reference to a detailed
methodology set out in the relevant legislation. Using a measure
of the land disturbed at the time of the calculation (and not at the
end of the mine life) this methodology calculates a theoretical
rehabilitation cost based on third party providers undertaking the
work. It excludes any residual value for the mining tenement or
remaining facilities and equipment and takes no account of the
actual plan for mine closure.
32
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 33
As of 30 June 2021, the Queensland Government required
•
The Company could undertake the rehabilitation work using
Financial Assurance of $183,916,150 to be provided for the
its own workforce and equipment, rather than the higher
Century Mine under this ERC requirement. The Group provided
costs associated with using government appointed third party
this assurance by way of $4,875,000 of direct (secured) cash and
providers.
$179,041,150 of bonds from the Bank of China made available
•
The reduction in final closure costs as a consequence of
by Century’s previous owner, MMG Limited, under the Bank
capital expended in developing existing in-situ resources at
Guarantee Support Agreement executed between MMG and the
Century
Group in 2017.
The ERC calculation is determined by reference to the theoretical
•
•
Postponing final site rehabilitation plans due to Century life
extensions from the mining of existing in-situ deposits.
Compensating cashflow attained from the sale to third parties
legal obligation that would accrue to the Group to rehabilitate the
of (amongst other things) residual inventory and stores, camp
disturbed land on the basis that all activities have immediately and
and equipment, salvage value of the processing plant, mining
permanently ceased at the Century Mine and Karumba Port as at
and exploration leases including valuable (pipeline) easement
the date of the calculation.
rights, substantial port facility at Karumba and the sale of the
transhipment vessel, M.V. Wunma.
The Group operates with a unique closure strategy of the Century
Mine which differs considerably from a normal open pit mining
It should be noted that as the Company progressively rehabilitates
operation. The largest component of the immediate closure cost
the Century Mine site as part of its normal operating activities
for the Century Mine in the ERC calculation is the rehabilitation of
there will be a corresponding reduction in the level of Financial
the Tailings Storage Facility using a complex layering of materials
Assurance required and consequently, after formal evaluation and
comprising at least 2,800mm of cover on top of the current surface
acceptance by the Queensland Government, a reduction in the
of the tailings.
ERC calculation triggering a return to the Company of any excess
bonds or cash provided to secure the ERC calculation.
However, the current and planned Century operations involves
the removal of the tailings using hydraulic mining methods,
reprocessing the tailings to profitably recover zinc within the
Community
New Century has maintained strong commitment to engaging
tailings and redeposition of the tailings in the existing Century
with the local communities that host our operations. In 2021 we
open pit where they are permanently stored under water in
have continued initiatives to build on our record and respond to
accordance with good industry practice.
the unique challenges presented by the COVID-19 pandemic.
The Company has continued its commitment to fulfilling the
As the tailings are progressively removed over the remaining
obligations within the Gulf Communities Agreement, a Native
life of mine, the existing Tailings Storage Facility is stripped back
Title Agreement executed in 1997 which facilitates benefits to the
to the natural surface such that only the base of the Tailings
Traditional Owners of the lands impacted by Century’s operations.
Storage Facility footprint requires rehabilitation. This is achieved
The Company continues to actively engage with the communities
by shaping and dozing the surface to create natural drainage,
of the Lower Gulf of Carpentaria to implement this agreement and
breaching the embankment, and spreading it over the surface
the associated initiatives in a manner designed by the impacted
and finally ripping and seeding the surface. The cost of this
communities to support the sustainable development of those
New Century's Head of Corporate Affairs and Social Responsibility, Shane
Goodwin with the Board of the Aboriginal Development Benefits Trust,
final procedure is substantially lower than the calculated ERC
communities. Our Community Sponsorship Program, where the
which receives annual funding from New Century.
for rehabilitating the Tailing Storage Facility in its current state,
Company invites community organisations to submit applications
primarily as it does not require the 2,800mm layer of cover.
for sponsorship initiatives, continued for its second year in 2021
with successful sponsorship recipients located throughout the Gulf
As well as the lower cost implications of the Group’s unique
of Carpentaria.
closure strategy there are a number of further possible material
cost savings and offsets on site closure to the Company not taken
Further reporting on social performance and achievements will be
into account in the ERC calculation including:
included in the Company’s inaugural Sustainability Report to be
published in the first half of the 2022 financial year.
34
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 35
DIRECTORS’ REPORT
The Directors present their report, together with the Financial Statements, on the consolidated entity (referred to hereafter as the Group)
consisting of New Century Resources Limited (referred to hereafter as New Century or the Company) and the entities it controlled for the
Director
Experience and
expertise
financial year ended 30 June 2021.
Directors
The Directors who held office during or since the end of the financial year and until the date of this report are set out below. Directors
were in office for the entire period unless otherwise stated.
Director
Experience and
expertise
Other current
listed entity
directorships
Robert
McDonald
Chairman
Appointed on
17 July 2019
B.Comm
MBA (Honours)
Robert McDonald has more than 40 years of broad experience
in the international mining sector. His early career within
the Rio Tinto Group involved various operational business
development, deal making and strategic planning roles for
Hamersley Iron, RTZ Services and Rio Tinto Minera SA.
Cobalt Blue
Holdings
Limited
This experience was followed by 20 years of investment
banking, initially with BA Australia, then as director and principal
of Resource Finance Corporation, and subsequently as a
Managing Director of N.M. Rothschild & Sons. In these roles he
was responsible for a wide range of advisory services including
company formation, mergers and acquisitions, business
origination, strategic advice on value creation/recognition, risk
management, fairness opinions, debt and equity capital raisings
and corporate restructurings.
Over the most recent decade Mr McDonald has continued as
a trusted investment banking advisor to a selected group of
major international mining and investment companies. He has
also maintained an active involvement in publicly listed and
private mining and mining service companies through various
board roles including as non-executive director and chairman.
Former
listed entity
directorships
in last three
years
None
New Century
special
reponsibilities
Member of
Remuneration
& Nomination
Committee
Member of
Audit & Risk
Committee (until
25 November
2020)
Patrick Walta
Managing
Director
Patrick Walta is a qualified metallurgist, mineral economist
and board executive with experience across both technical
and commercial roles within the mining and water treatment
industries.
None
None
Managing
Director
Mr Walta’s experience within the mining industry includes
public and private company management, mineral processing,
mergers and acquisitions, initial public offerings, project
management, feasibility studies, exploration activities,
competitive intelligence and strategic planning. Mr Walta also
has a broad level of resource industry experience through
Rio Tinto, Citic Pacific Mining, Cradle Resources, Carbine
Resources, Primary Gold and Clean TeQ.
Appointed on
13 July 2017
Degrees in
Chemical
Engineering
and Science
MBA
Masters of
Science
(Mineral
Economics)
Diploma
of Project
Management
36
Former
listed entity
directorships
in last three
years
None
Other current
listed entity
directorships
Northern Star
Resources
Limited
Panoramic
Resources
Limited
Pilbara Minerals
Limited
St Barbara
Limited
None
New Century
special
reponsibilities
Chair of
Remuneration
& Nomination
Committee
Member of
Audit & Risk
Committee
Member of
Environmental,
Social &
Governance
Committee
Member of
Technical
Oversight
Committee
Chair of
Environmental,
Social &
Governance
Committee
Member of
Remuneration
& Nomination
Committee
Member of
Audit & Risk
Committee
Nick Cernotta
Non-Executive
Director
Appointed on
28 March 2019
B.Eng (Mining)
Nick Cernotta is a mining engineer who has held senior
operational and executive roles in Australia and overseas over
a 35 plus year period. Mr Cernotta has considerable experience
in the management and operation of large resource projects,
having served as Director of Operations at Fortescue Metals
Group, Chief Operating Officer (Underground, International and
Engineering) at MacMahon Holdings Limited and as Director of
Operations for Barrick (Australia Pacific) Pty Ltd, a subsidiary of
Barrick Gold Corporation.
Mr Cernotta’s particular operational expertise is in managing
safety, culture, production and cost efficiency, and
organisational effectiveness.
Kerry Gleeson
Non-Executive
Director
Appointed on
30 November
2020
LLB (Hons)
FAICD
Kerry Gleeson is an experienced Non-Executive Director
following a 30-year career as a senior executive and as a
lawyer in both UK and Australia. Ms Gleeson has significant
experience in international governance, strategic mergers and
acquisitions and complex corporate finance transactions, as
well as in risk and crisis management.
Ms Gleeson was previously a member of the Group Executive
at Incitec Pivot Limited (ASX: IPL) for ten years until 2013,
including as Company Secretary and General Counsel, with
involvement across its international operations in explosives
and chemicals, mining, transport and logistics. Ms Gleeson led
Incitec Pivot’s Corporate Affairs function across government,
media and regulatory affairs as well as leading international
crises responses and major environmental remediation
projects, and the Group’s Culture & Values and Diversity
programs.
Earlier in her career, Ms Gleeson was a senior corporate lawyer
with Australian law firm, Blake Dawson Waldron (now Ashurst)
in Melbourne which followed a 10-year career in the UK where
she practised as a corporate finance lawyer focussing on M&A,
IPOs and on debt and equity financing.
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 37
Other current
listed entity
directorships
Strandline
Resources
Limited
Paladin Energy
Limited
Former
listed entity
directorships
in last three
years
Resource
Generation
Limited (to 30
November
2018)
Director
Experience and
expertise
Peter Watson
Non-Executive
Director
Appointed on
22 January
2018
B.Eng
(ChemEng)
(Hons)
Dip Acc & Fin
Mgmt
FIEAust
GAICD
Peter Watson is a chemical engineer with over 30 years’
experience in the resources sector, both in Australia and
overseas. He has held technical and executive roles with a
number of companies throughout his career, culminating in his
appointment as the Managing Director & Chief Executive Officer
of Sedgman Limited, a market leading engineering and mining
services firm. Initially joining Sedgman as Chief Operating
Officer Metals Division in 2010, Mr Watson successfully led and
supported the development and execution of Engineering,
Procurement and Construction as well as Operations Contracts
in excess of $2 billion as he progressed through roles as
Executive General Manager (2011 – 2012) and Global Executive
Director (2012 – 2014), before being made Managing Director &
Chief Executive Officer (2014 – 2016).
During his time at Sedgman, Mr Watson provided leadership
and guidance across a suite of over ten large scale mine
operations contracts and over 30 EPC contracts across a broad
spectrum of commodities.
Former Directors
Bryn Hardcastle is a partner of Allens, specialising in corporate,
commercial and securities law. Mr Hardcastle advises on equity
capital markets, takeovers, schemes and corporate acquisitions,
reconstructions and disposals predominantly in the energy and
resources sector.
None
None
New Century
special
reponsibilities
Chair of Audit &
Risk Committee
Chair of
Technical
Oversight
Committee
Member of
Environmental,
Social &
Governance
Committee
Former Chair of
Environmental,
Social &
Governance
Committee
Former
member of
Remuneration
& Nomination
Committee
Thomas Wilcox, Company Secretary
Thomas Wilcox is an experienced legal and corporate governance executive with significant Australian and international experience
in the resources sector. Mr Wilcox has extensive experience in areas including M&A, joint ventures, business development, corporate
governance, ESG, business integrity, risk management and compliance, regulatory investigations and financing transactions.
Prior to joining New Century, Mr Wilcox has worked in a range of senior legal and governance roles at Newcrest Mining Limited, Kidman
Resources Limited, CSG Limited and Rio Tinto Limited (including its ASX-listed subsidiary Energy Resources of Australia Limited).
Mr Wilcox holds a Master of Laws, a Bachelor of Laws and a Bachelor of Commerce from The University of Melbourne and is a graduate
of the Australian Institute of Company Directors.
Directors’ meetings
The number of Board and Committee meetings held, and the number of meetings attended by each of the Directors of the Company,
during the financial year are shown below:
Director
Board of Directors
Audit & Risk Committee
Remuneration &
Nomination Committee
Environmental, Social &
Governance Committee
Current
directors
Robert
McDonald1
Patrick
Walta
Nick
Cernotta
Kerry
Gleeson2
Peter
Watson
Former directors
Bryn
Hardcastle3
Evan
Cranston4
Scheduled
Supplementary
Scheduled
Supplementary
Scheduled
Supplementary
Scheduled
Supplementary
6/6
6/6
6/6
2/2
6/6
3/3
1/1
13/14
14/14
14/14
4/4
14/14
8/10
0/1
3/3
-
5/5
2/2
5/5
-
-
-
-
-
-
-
-
-
3/3
-
3/3
1/1
-
1/2
-
3/3
-
3/3
-
-
3/3
-
-
-
1/1
1/1
1/1
-
-
-
-
-
-
-
-
-
Evan Cranston is an experienced mining executive with a
background in corporate and mining law. He is the principal of
corporate advisory and administration firm Konkera Corporate
and has extensive experience in the areas of equity capital
markets, corporate finance, structuring, asset acquisition,
corporate governance and external stakeholder relations.
African Gold
Resources Ltd
Boss Resources
Limited (to 5
June 2020)
None
2. Appointed on 30 November 2020.
3. Resigned on 30 November 2020.
4. Resigned on 9 July 2020.
1.
Ceased to be a member of the Audit & Risk Committee on 25 November 2020.
Carbine
Resources
Limited
Vital Metals
Limited
In addition to the meetings of Directors and Committees specified above, Directors attended additional meetings with Management in
consideration of key strategic matters for the Company.
Principal activities
The principal activities of the Group for the financial year were the mining and processing of tailings dam materials containing zinc, sales
of concentrate, undertaking mineral exploration activities and exploring business development opportunities.
Dividends
No dividend has been declared or paid by the Group during the financial year and the Directors do not at present recommend a dividend
(30 June 2020: Nil).
Operating and financial review
Details of the review and results of New Century’s operational and financial performance, which forms part of the Directors’ Report, are
set out in the Operating and Financial Review section.
Bryn
Hardcastle
Non-Executive
Director
Appointed on
8 December
2011 and
resigned on
30 November
2020
LLB
Evan Cranston
Non-Executive
Director
Appointed on
10 October
2012 and
resigned on 9
July 2020
B.Comm, LLB
38
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 39
Matters subsequent to the end of the financial year
On 15 September 2021, the Company announced the results of its feasibility study into the potential development of various in-situ
deposits at the Century Mine (the Feasibility Study). The Feasibility Study investigated the incorporation of the Silver King and East Fault
Block in-situ deposits into the existing mine plan (incremental to the current tailings reprocessing activities) to produce zinc concentrate
and a new lead concentrate. The Feasibility Study revealed a strongly value accretive proposition for the development of Silver King
and East Fault Block alongside current tailings operations at the Century Mine. As a result of the Feasibility Study, the Group declared a
Maiden Ore Reserve (probable) for Silver King and East Fault Block of 2.5Mt @ 5.3 percent Pb (133Kt), 5.6 percent Zn (140Kt), 68g/t Ag
Environmental Bonding:
The existing environmental bond provided to the Queensland government for the Century Mine is backed by MMG Limited (MMG)
pursuant to the Bank Guarantee Support Agreement that was entered into at the time of the initial acquisition of the Century Mine by
the Group. This will be replaced by the A$180,000,000 Environmental Bond Facility (EBF) to be issued by Macquarie Bank Limited
(Macquarie) and backed by an A$160,000,000 surety provided through Argonaut Insurance Group (Argo Group) and A$20,000,000 of
cash backing to be provided directly by the Group. The EBF will amortise over 21 equal monthly payments from January 2023 through to
(5.4Moz). Further details of the results of the Feasibility Study are set out in the Company’s ASX announcement, which is located at the
final maturity of the facility in September 2024.
Company’s website. A final investment decision is expected to be made in due course.
On 1 October 2021, the Company entered into a period of suspension of quotation of its shares on the Australian Securities Exchange as
The Group has decided to expand the Group’s total hedging book. This additional hedging is a condition precedent of the EBF. Existing
hedging comprises 82,500 tonnes of zinc metal to settle in fixed monthly proportions of 2,500 tonnes per month to June 2024 at an
it finalises a material strategic transaction involving an asset acquisition, an equity raise and new environmental bonding arrangements.
average price of A$3,717 per tonne.
Further details are set out in the Company’s ASX announcement, which is located at the Company’s website.
Option Agreement for the acquisition of the Mt Lyell Copper Mine
Since 30 June 2021, the Group obtained a number of deferrals of certain repayments due to Värde pending completion of the
Environmental Bonding and Equity Raising Package. Further, it was agreed that silver royalties payable to Värde under the Loan Note
Subscription Agreement would be extinguished in exchange for fixed payments of A$3,724,890 (US$2,800,000) on 4 January 2022 and
A$3,724,890 (US$2,800,000) on 1 April 2022 together with applicable withholding tax.
Since 30 June 2021, the Group obtained a number of deferrals of payments for the reduction in the bonding facilitated by MMG Limited
(MMG) with the Queensland government due under the Group’s Bank Guarantee Support Agreement with MMG, pending completion of
the Environmental Bonding and Equity Raising Package.
The Group is finalising binding agreements for an Environmental Bonding and Equity Raising Package (the “Package”) which entails a
major revision of the Group’s capital structure going forward. Key elements of the Package include:
Equity Raising:
A$79,802,904 (US$59,987,843) fully committed equity raising consisting of:
•
An Unconditional Placement to raise A$32,918,192 (US$24,744,605):
The Group has entered into a binding term sheet for an option agreement with Monte Cello B.V. (MCBV), a subsidiary of Vedanta Limited
(Vedanta) for the acquisition of Copper Mines of Tasmania Pty Ltd (CMT), owner of the Mt Lyell Copper Mine (Mt Lyell) in Tasmania.
Mt Lyell is one of the most significant copper mines in Australian history, having first started operations in the 1890’s. Mt Lyell was
acquired by Vedanta in 1999, who thereafter profitably produced almost 400kt of copper, 1.8moz of silver and 220koz of gold until 2014
when the mine was placed into care and maintenance. A significant copper / gold resource remains.
The option agreement allows the Group to evaluate the potential for restart of operations at Mt Lyell. The Group will investigate the
refurbishment or replacement of the existing infrastructure for tailings reprocessing and integration of sustainable in-situ ore processing.
The option agreement includes a minimum expenditure commitment of A$13,482,540 (US$10,000,000) over a two-year option period
towards development, exploration and a capped reimbursement of care and maintenance costs. Should the option to acquire be
exercised, the acquisition consideration will be by way of a capped royalty paid over time from successful operations.
There have been no other events that have occurred subsequent to the reporting date which have significantly affected or may
- A$21,638,706 (US$16,265,816) from a subsidiary of Sibanye-Stillwater Limited (Sibanye-Stillwater) whereby Sibanye-Stillwater
significantly affect the Group’s operations or results in future financial years.
takes an initial 9.8% equity interest in the Group; and
- A$11,279,486 (US$8,478,790) from existing shareholders.
•
The simultaneous launch of a fully underwritten Entitlement Offer to raise A$46,884,712 (US$35,243,238) consisting of a 1 for 4
pro rata non renounceable allocation to existing shareholders. Any entitlements not taken up by existing shareholders will be
underwritten by the joint lead managers to the Entitlement Offer, with sub-underwriting by Sibanye-Stillwater up to a limit of Sibanye-
Stillwater taking a 19.99% interest in the Group.
Should Sibanye-Stillwater’s investment in the Group be less than 19.99% following the Entitlement Offer, a Conditional Placement will be
undertaken to bring Sibanye-Stillwater’s total interest to 19.99%. Sibanye-Stillwater has committed to a total investment in New Century
Resources Limited of A$53,441,616 (US$40,172,063). The Conditional Placement is subject to shareholder approval at the Company’s
2021 Annual General Meeting.
The Unconditional Placement, Entitlement Offer and Conditional Placement will be conducted at an offer price of A$0.155 per New Share
(Offer Price) being the closing price on 30 September 2021.
In summary the equity raising will generate a minimum of A$79,802,904 (US$59,987,843) before costs estimated of $4,211,258. If
there is a full take up of the Entitlement Offer by existing shareholders, the equity raise could generate a further A$39,748,669
(US$29,879,074) to a maximum of A$119,551,573 (US$89,866,917) before costs estimated at $4,231,709 once the Conditional Placement
is complete.
40
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 41
Future developments, prospects and business strategies
Disclosure of further information regarding likely developments in the operations of the Group in future financial years and the expected
results of those operations are set out in the Operating and Financial Review section as well as on the Company’s ASX announcements
which are located at the Company’s website.
Share options and performance rights
At the date of this report, the Group had the following options over ordinary shares and performance rights on issue:
Types of options and performance rights
Unquoted options issued to Vendors
Unquoted options issued to Director
Unquoted options issued to Director
Unquoted options issued under the ESOP
Unquoted options issued to Director
Unquoted options issued to Director
Unquoted options issued to Varde
Unquoted options issued to Tectonic Advisory
Class A performance rights
Class B performance rights
Class C performance rights
Class D performance rights
Performance rights
Performance rights
Performance rights
Performance rights
TOTAL
Number of
options
30,000,000
1,000,000
1,000,000
250,000
1,000,000
1,000,000
25,000,000
10,000,000
4,374,007
1,249,716
624,858
1,390,729
13,422,963
3,829,322
7,309,502
3,524,655
104,975,752
Exercise
Price $
0.25
1.20
1.50
0.95
0.56
0.70
0.25
0.25
-
-
-
-
-
-
-
-
Expiry
Date
13/07/2022
28/03/2022
28/03/2022
06/06/2022
18/09/2022
18/09/2022
17/07/2023
04/12/2023
01/07/2024
01/07/2024
01/07/2024
01/07/2024
01/07/2024
01/07/2025
01/07/2026
01/07/2026
Directors’ interests
The relevant interest of each Director in the share capital of the Group as at the date of this report is:
Directors
Ordinary shares fully paid
Direct
Indirect
Total
Direct
Options
Indirect
Performance Rights
Total
Direct
Indirect
Total
Robert
McDonald
-
733,513
733,513
-
2,000,000
2,000,000
-
Patrick Walta
33,421,788
-
33,421,788
7,000,000
-
7,000,000
5,826,961
Nick
Cernotta
Kerry
Gleeson
Peter Watson
-
-
-
778,386
778,386
-
-
320,628
320,628
-
-
-
2,000,000
2,000,000
-
-
-
-
-
-
-
Total
33,421,788
1,832,527
35,254,315
7,000,000
4,000,000
11,000,000
5,826,961
-
-
-
-
-
-
-
5,826,961
-
-
-
5,826,961
Indemnifying officers or auditor
The Company’s Constitution provides that, to the extent permitted by law, the Company must indemnify any person who is, or has been,
a Director or Officer of the Company against any liability incurred by that person as a Director or Officer of the Company or a subsidiary
of the Company and legal costs incurred by that person in defending an action for such liabilities. The Constitution further provides that
the Company may enter into an agreement with any person who is, or has been, a Director or Officer of the Company or a subsidiary of
the Company to indemnify the person against such liabilities. The Company has entered into Deeds of Indemnity, Insurance and Access
with current and former Directors and Officers. The deeds address the matters set out in the Constitution.
The Company has paid premiums to insure all Directors and Officers against liabilities for costs and expenses incurred by them in
defending any legal proceedings arising out of their conduct while acting in their capacity as Directors or Officers of the Company, other
than conduct involving a wilful breach of duty in relation to the Company.
Disclosure of the nature and the amount of the premium is prohibited by the confidentiality clause of the insurance contract.
No indemnities have been given or agreed to be given or insurance premiums paid or agreed to be paid, during or since the financial
year ended 30 June 2021, to any person who is or has been an auditor of the Company.
Auditor
Deloitte Touche Tohmatsu has been appointed as auditor of the Group in accordance with section 327 of Corporations Act 2001.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in
Note 38 to the Financial Statements. The Directors are of the opinion that the non-audit services as disclosed in Note 38 to the Financial
Statements do not compromise the external auditor’s independence.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the
Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings.
The Group was not a party to any such proceedings during the financial year.
Environmental regulations
The Group is required to carry out its activities in accordance with legislation and regulations in the areas in which it undertakes its
exploration and development activities. The Group is not aware of any matter which requires disclosure with respect to any significant
environmental regulation in respect of its operating activities.
Remuneration report
The remuneration report which has been audited by Deloitte Touche Tohmatsu forms part of the Directors’ Report.
42
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 43
Auditor’s independence declaration
The lead auditor’s independence declaration for the financial year ended 30 June 2021 has been received.
Going concern
Refer to the Going Concern note under the Summary of significant accounting policies in Note 1 to the Financial Statements for a matter
emphasised in relation to the Going Concern assumption.
Made and signed in accordance with a resolution of the Directors.
Robert McDonald
CHAIRMAN
27 October 2021
44
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 45
REMUNERATION REPORT
The Remuneration Report, which has been audited, outlines the Director and executive remuneration arrangements for the Company in
accordance with the requirements of the Corporations Act 2001 (Cth) (Corporations Act) and its Regulations.
Principles used to determine the nature and amount of remuneration
This Remuneration Report is set out under the following main headings:
Key management personnel covered in this report
Principles used to determine the nature and amount of remuneration
•
•
• Details of remuneration
Service agreements
•
Share-based compensation
•
Additional disclosures relating to key management personnel
•
Key management personnel covered in this report
The Corporations Act and relevant Accounting Standards require disclosures in respect of “key management personnel” (KMP), being
those persons having authority and responsibility for planning, directing and controlling the activities of the Company.
The KMP of the Group are listed below. Throughout this Remuneration Report the KMP who are not Non-Executive Directors are
collectively referred to as Executive KMP.
Remuneration governance
The Board recognises that the success of the business depends on the quality and engagement of its people. To ensure the Company
continues to succeed and grow, it must attract, motivate and retain skilled Directors, executives and employees. The Board’s aim is to
ensure that people and performance are a priority.
The Remuneration & Nomination Committee is responsible for the oversight of the Company’s remuneration framework and policies.
The Board, upon recommendation of the Remuneration & Nomination Committee, determines the remuneration and key performance
indicators for the Managing Director and other Executive KMP.
The objective of the Remuneration & Nomination Committee is to ensure that the remuneration framework and policies are suitable to
attract and retain Directors, executives and employees who are incentivised to create sustained value for shareholders.
Remuneration philosophy
The remuneration framework and policies of the Company have been designed to be simple and transparent, to align employee and
executive reward with the achievement of the Company’s strategic objectives over the medium and long term, and to encourage a ‘pay
for performance’ culture.
TABLE 1 – KEY MANAGEMENT PERSONNEL
The following guiding principles direct the Company’s remuneration approach. The remuneration structure aims to:
Name
Current
Position
Period of KMP during the year
Robert McDonald
Non-Executive Chairman
All of financial year 2021
Patrick Walta1
Nick Cernotta
Kerry Gleeson
Peter Watson
Managing Director
All of financial year 2021
Non-Executive Director
All of financial year 2021
Non-Executive Director
From 30 November 2020
Non-Executive Director
All of financial year 2021
Mark Chamberlain1
Chief Financial Officer
All of financial year 2021
Barry Harris1
Former
Bryn Hardcastle
Evan Cranston
1.
Executive KMP.
Chief Operating Officer
All of financial year 2021
Non-Executive Director
Until 30 November 2020
Non-Executive Director
Until 9 July 2020
•
•
•
•
attract, retain and motivate the right calibre of people for the business;
provide strong linkage between incentive rewards and creation of value for shareholders;
reward the achievement of financial and strategic objectives; and
comply with applicable legal requirements and appropriate standards of governance.
Remuneration positioning
The Company’s approach to Total Fixed Remuneration (TFR) in the 2021 financial year has typically been positioned at the median of the
market for a fully proficient and capable performer, whilst the total remuneration package (including both fixed and at-risk pay) reflects
more typically the upper quartile pay position when superior levels of performance have been met or exceeded.
External benchmarking and market data
The Remuneration & Nomination Committee uses external benchmarking and market data in assessing the positioning and
competitiveness of remuneration packages for KMP (both Non-Executive Directors and Executive KMP). For the purposes of assessing
the appropriate levels of remuneration, the Remuneration & Nomination Committee considers the Company’s peers in the Australian
resources sector in terms of a range of factors, including size, financial metrics, location, operational complexity and risk profile, and
which are representative of those with which the Company may compete for talent.
46
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 47
Long Term Incentives
The Company’s remuneration and incentive plans for Executive KMP and other executives and employees for the 2021 financial year
were reviewed by the Remuneration & Nomination Committee and approved by the Board. The review was undertaken to ensure
appropriateness of performance conditions (over the short and longer term), vesting scales, targets and gates to the circumstances
that are anticipated to prevail over the measurement period and the expectations of shareholders and to also consider the strategic
objectives of the Company going forward.
In October 2019, the Company received shareholder approval for the establishment of two employee incentive schemes, the General
Employee Share Plan (GESP) and the Employee Share Incentive Plan (ESIP). Under these plans the Board may offer to eligible persons
the opportunity to subscribe for such number of equity securities in the Company as the Board may determine, on the terms set out in the
rules of the relevant plan. Both plans provide eligible employees with the opportunity to participate in the future growth of the Company.
The GESP allows for eligible persons to subscribe for shares that may be subject to income tax exemptions or deferral, while the ESIP is a
broader plan under which the Board may offer eligible persons to subscribe for shares and/or equity securities.
The Company is in an important stage of development with significant opportunities and challenges in both the near and longer term.
The Board believes that incentivising the Company’s Executive KMP and other executives with performance rights under the ESIP is a
prudent means of conserving the Company’s available cash reserves and aligning the efforts of those individuals in seeking to achieve
growth of the share price and in the creation of shareholder value. The Board believes it is important to offer performance rights to
continue to attract and maintain highly experienced and qualified employees and executives in a competitive market.
The Company issued 13,422,963 performance rights under the ESIP to Executive KMP and other executives during the 2021 financial
year which are subject to the achievement of various conditions which must be achieved on or before the end of the assessment period
on 1 July 2023. The performance rights expire on 1 July 2025. A summary of the vesting conditions of performance rights granted to
Executive KMP and other executives under the ESIP for the 2021 financial year is set out in Table 3. Performance rights issued to the
Managing Director were approved at the 2020 Annual General Meeting.
If a change of control event occurs in relation to the Company, or the Board determines that such an event is likely to occur, the Board
may in its discretion determine the manner in which any or all of the performance rights issued under the ESIP will be dealt with,
including, without limitation, in a manner that allows the holder to participate in and/or benefit from any transaction arising from or in
connection with the change of control event.
Where a holder of performance rights becomes a “leaver” (as defined in the ESIP rules) all unvested performance rights will automatically
be forfeited, unless the Board otherwise determines in its discretion to permit some or all of the performance to vest. The Board may
exercise its discretion where “special circumstances” (as defined in the ESIP rules) exist, which include a person becoming a leaver as a
result of death, total or permanent disability, retirement or redundancy.
Executive KMP remuneration framework
Executive KMP remuneration is comprised of fixed and at-risk components, the purpose of which is to align executive reward with
performance, shareholder outcomes and the Company’s goal of retaining and promoting high calibre people. TFR and at-risk
remuneration are benchmarked annually by the Remuneration & Nomination Committee. An overview of the different components within
the Executive KMP remuneration framework is set out in Table 2 below.
TABLE 2 - EXECUTIVE KMP REMUNERATION FRAMEWORK
Component
Vehicle
Purpose
Total Fixed Remuneration
(TFR)
Short Term Incentive
(STI)
Long Term Incentive
(LTI)
Base salary, superannuation and non-cash benefits. Pay for meeting role requirements with reference to
Cash based bonus that is set at a maximum
percentage of TFR for the achievement of individual
and Company key performance indicators (KPIs) for
the financial year.
Each year, the Board sets the KPIs for Executive
KMP which generally include a mix of Company and
individual performance objectives.
industry benchmarking, experience and skills, size
and complexity of role and proficiency.
Cash based pay for the achievement of Company
and individual performance objectives.
The Board considers appropriate KPIs to drive
performance without encouraging undue risk-taking
and align the interests of the Executive KMP with
those of shareholders.
The LTI component consists of a grant of
performance rights to Executive KMP and other
executives. Grants of performance rights are made
by way of issue at nil cost at the time of grant and
no exercise price on vesting. Vesting is contingent
on the achievement of performance conditions set
by the Board over a three-year period.
The number of performance rights issued is linked
to TFR and the share price at the commencement
of the three-year performance period.
Equity based pay for outperforming peers and
creating value for shareholders over a long term
horizon.
The Board considers that the LTI plan aligns the
interests of Executive KMP and other executives
with those of shareholders by basing rewards on
the delivery of the plan and strategic objectives for
the Company which translate into longer term value
for shareholders.
Total Fixed Remuneration
TFR is reviewed annually. Any adjustments to the TFR of Executive KMP must be approved by the Board after recommendation by
the Remuneration & Nomination Committee. The Managing Director determines the TFR of other senior executives within specified
guidelines approved by the Board, on the recommendation of the Remuneration & Nomination Committee.
In the 2021 financial year the TFR for Executive KMP was typically positioned around the median of salaries for comparable roles at
companies within the mining industry with which the Group competes for talent and equity investment, utilising datasets and specific
advice provided by independent remuneration consultants. The total remuneration package (fixed and at-risk pay), reflects the upper
quartile pay position where superior levels of performance have been achieved.
Short Term Incentives
All Executive KMP are eligible for a STI in the form of a cash bonus. The 2021 financial year STI plan for Executive KMP set a maximum
value of 30 percent of TFR for the reporting period. The STI outcomes for Executive KMP are based on the degree of achievement of a
number of metrics related to individual and Company performance.
The Managing Director’s maximum STI opportunity for the 2021 financial year is comprised of a 50 percent weighting for Company
performance and a 50 percent weighting for individual performance. For other Executive KMP, the maximum STI opportunity
is comprised of either a 60 or 70 percent weighting for Company performance and a 30 or 40 percent weighting for individual
performance.
48
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 49
TABLE 3 – 2021 FINANCIAL YEAR PERFORMANCE RIGHTS VESTING CONDITIONS
Condition type
Service Condition
Condition description
Performance right allotment
Continuous employment with the Company over
the assessment period (to 1 July 2023)
Mandatory requirement for consideration of any
performance rights
Relative Total Shareholder
Return
Performance rights will vest according to relative
Total Shareholder Return (TSR) measured for the
three-year period from 1 July 2020 to 30 June 2023
Up to 100% of total performance rights will vest as
follows:
•
The proportion of performance rights that vests will
be calculated according to the performance of the
Company relative to the performance of its Peer
Companies (as set out below)
•
•
•
Relative TSR is below the 50th percentile of
Peer Group: 0% of performance rights vest
Relative TSR is equal to 50th percentile of Peer
Group: 50% of performance rights vest
Relative TSR is between 50th and 80th
percentile of Peer Group: pro rata vesting of
performance rights between 50% and 100% of
performance rights vest
Relative TSR is above the 80th percentile of
Peer Group: 100% of performance rights vest
If the absolute TSR over the three-year period is
negative, the number of performance rights that
vest will be halved.
The relative TSR calculation for the Company and the Peer Companies will be based on the percentage change in the share price over
the three years from 1 July 2020 to 30 June 2023, including dividends (which are assumed to be reinvested). The percentage change
will be calculated by comparing the 20-trading day volume weighted average price (VWAP) of shares in the period immediately before
the start and end of the measurement period and will include the reinvestment of dividends.
The Company’s relative TSR comparative group of Peer Companies was determined with the assistance of an external remuneration
consultant. The selection criteria factored in company sector, size, complexity and risk profile to establish a representative group that
reflects peers which Company may compete with for executive talent.
TABLE 4 – RELATIVE TSR PEER COMPANIES
Peer Company
Aeris Resources Limited
Aurelia Metals Ltd
Base Resources Ltd
Galaxy Resources Ltd
Image Resources NL
Medusa Mining Ltd
Metals X Ltd
Metro Mining Ltd
Mineral Commodities Limited
Panoramic Resources Ltd
Pantoro Limited
Syrah Resources Ltd
Western Areas Ltd
ASX ticker
AIS
AMI
BSE
GXY
IMA
MML
MLX
MMI
MRC
PAN
PNR
SYR
WSA
The TSR performance of Peer Companies will be adjusted or normalised by the Board in circumstances where one or more of those
peers cease to be listed on the ASX or cease to remain a representative comparator.
A further 3,829,322 performance rights were issued to other senior employees of the Company under the ESIP which will vest and
become convertible to shares subject only to the holder remaining employed by the Company on 1 July 2023. These performance rights
will expire on 1 July 2025.
Changes for the 2022 financial year
The Board has reviewed the remuneration structure for Executive KMP for the 2022 financial year in accordance with the Company’s
remuneration philosophy and on the recommendation of the Remuneration & Nomination Committee. The Board has resolved that the
Executive KMP remuneration framework for the 2022 financial year will remain substantially comparable to previous years (comprised of
TFR, STI and LTI), however the following changes have been approved, with effect from 1 July 2021:
•
•
•
The TFR for Executive KMP will be generally positioned between the 50th and the 75th percentiles of salaries for comparable
companies within the mining industry with which the Group competes for talent and equity investment. Notwithstanding the change
in positioning, TFR has still been assessed on a case by case basis, taking account role requirements and complexity, as well as
individual experience, skills and proficiency.
The maximum STI opportunity will be increased from 30 percent of TFR to 50 percent of TFR. The Board has approved a mix of
Company and individual stretch performance objectives for Executive KMP to achieve. Further details are set out in Table 5 below.
The maximum LTI opportunity will be reduced from a range of between 120 and 145 percent of TFR, to a range of between 75
percent and 120 percent of TFR. The LTI opportunity will continue to include the issue of performance rights. In order for this
component to be realised in full, the Company must outperform its peers on a relative TSR basis, as compared against a Select
Industry Group of peer companies (50 percent) and the ASX 300 Mining and Metals Index (50 percent). Further details are set out in
Table 6 below.
In approving the changes to Executive KMP remuneration for the 2022 financial year, the Board considered a range of factors including:
•
•
•
•
•
industry benchmarking and market data comparing remuneration positioning and competitiveness against the Company’s peers in
the Australian resources sector in terms of market capitalisation, location and operational and risk profile;
the fact that there have been only minor increases (or in some cases, no increases at all) to the TFR of Executive KMP since 1 July
2019. Over this period the TFR of Executive KMP, when assessed against the Company’s peers in the Australian resources sector,
has fallen below the range targeted by the Board;
the continued growth and development of the Company, improved market conditions and the stabilisation of the Company’s
operational and financial performance;
the recent tightening of labour markets in the resources sector, and the increased competition for high calibre executives, which is
anticipated to continue in the short to medium term; and
the Board’s overall philosophy of ensuring that the Company’s remuneration framework and policies are suitable to attract, motivate
and retain talented executives who are incentivised to create sustained value for shareholders.
TABLE 5 – CHANGES TO TOTAL FIXED REMUNERATION
Executive KMP
Patrick Walta
Barry Harris
Mark Chamberlain
1.
Including superannuation.
2021 financial year1
$
2022 financial year1
$
473,000
372,000
371,694
575,000
450,000
436,000
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 51
TABLE 6 – CHANGES TO STI AND LTI
TABLE 7 – 2022 FINANCIAL YEAR PERFORMANCE RIGHTS VESTING CONDITIONS
Executive KMP
2021 financial year
2022 financial year
Maximum STI
opportunity1
%
Maximum LTI
opportunity1
%
Maximum STI
opportunity1
%
Maximum LTI
opportunity1
%
30
30
30
145
120
120
502
502
502
125
75
75
Patrick Walta
Barry Harris
Mark Chamberlain
1.
As a percentage of TFR.
2. A 50 percent uplift on the maximum STI opportunity is available in the 2022 financial year, with any uplift to be issued as equity. See further
below.
The STI measures and weightings between individual and Company performance vary for Executive KMP, depending on the
requirements of each role. The individual objectives that have been set for the 2022 financial year are stretch targets based on the key
strategic areas objectives for the Company over a 12 month horizon, and which the Board considers will underpin the Company’s growth
plans and generate value for shareholders.
The Company performance component of the STI opportunity relates to safety, production and cost metrics and is substantially aligned
to previous years.
In consideration of ongoing labour market risks for key personnel, and as a once off measure to bolster the Company’s retention
incentive objectives, the Board has determined that Executive KMP will be eligible for a 50 percent uplift of their overall STI outcome for
the 2022 financial year. Any resulting uplift being issued as equity and escrowed for 12 months.
The Board retains discretion under the STI plan rules in relation to the award, forfeiture or adjustment of any STI payment to ensure that it
is appropriate and equitable, having regard to factors including the overall business performance.
The Board considers that if the targets set for Executive KMP are successfully delivered, this will generate significant and sustained value
for shareholders.
The vesting hurdles for performance rights issued under the LTI plan for the 2021 financial year are summarised in Table 7.
Condition type
Service Condition
Relative TSR
Condition description
Performance right allotment
Continuous employment with the Company over
the assessment period (to 1 July 2024)
Mandatory requirement for consideration of any
performance rights
Performance rights will proportionately vest
according to the relative TSR of the Company
measured for the three-year period from 1 July 2021
to 30 June 2024
Up to 50% of total performance rights will vest
on the basis of relative TSR, as compared against
a selected group of peer companies. The peer
companies are substantially aligned with those in
the LTI plan for the 2021 financial year
Up to 50% of total performance rights will vest on
the basis of relative TSR, as compared against the
ASX 300 Mining and Metals Index
In both cases above, performance rights will vest as
follows:
•
Relative TSR is below the 50th percentile of
the relevant comparator: 0% of performance
rights vest
Relative TSR is equal to 50th percentile of
the relevant comparator: 50% of performance
rights vest
Relative TSR is between 50th and 80th
percentile of the relevant comparator: pro rata
vesting of performance rights between 50%
and 100% of performance rights vest
Relative TSR is above the 80th percentile of
the relevant comparator: 100% of performance
rights vest
•
•
•
There is no 50 percent reduction in vesting where
the absolute TSR over the three-year period is
negative (as there was in the LTI plan for the 2021
financial year)
52
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 53
Non-Executive Director remuneration
The Board’s policy is for fees to Non-Executive Directors to be competitive to market for comparable companies for time, commitment
and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on
market practice, duties and accountability and Company specific requirements which include a competent and seasoned Board.
Fees for Non-Executive Directors are not linked to the performance of the Group. However, to align Directors’ interests with shareholder
interests, Directors are encouraged to hold shares in the Company. Previously, some Non-Executive Directors have in limited
circumstances received incentive options to secure their initial or ongoing services.
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined
from time to time by a general meeting. At the Company’s Annual General Meeting held on 31 October 2019, shareholders approved an
increase of the aggregate remuneration fee pool to $900,000 per annum which was determined after reviewing similar companies listed
on ASX. The Directors believe that this level of remuneration remains in line with corporate remuneration of similar companies.
This shareholder approved level of permitted fees does not compel the Company to pay the entire amount in each financial year, rather
the proposed limit ensures that the Company:
• maintains its capacity to remunerate both existing and any new Non-Executive Directors joining the Board;
•
remunerates its Non-Executive Directors appropriately for the expectations placed upon them both by the Company and the
regulatory environment in which it operates;
has the ability to attract and retain Non-Executive Directors whose skills and qualifications are appropriate for a company of the size
and nature of the Company; and
has the flexibility to appoint new Non-Executive Directors as it continues to evolve the Board in line with the development of the
Company.
•
•
It is noted that the options issued to Nick Cernotta in the 2019 financial year and to Robert McDonald in the 2020 financial year are
subject to a price hurdle and, as such, could be viewed as performance-based options. The purpose of issuing these options was to:
•
•
•
attract the right calibre of individual to ensure that the Company has a skilled and experienced Board;
ensure that the Non-Executive Director is committed to the Company’s long-term aspirations by virtue of accepting such options;
and
preserve the Company’s cash holdings.
During the financial year the Board proposed that Non-Executive Directors have the option to take part of their base remuneration in the
form of shares. At the Company’s Annual General Meeting held on 30 November 2020, shareholders approved the issue of shares to
the Non-Executive Directors as payment for up to 50 percent of their base remuneration for the 2021 financial year. Shares were issued
at a price calculated as the five-day VWAP of the Company’s shares up to the date of the Notice of Annual General Meeting, which was
$0.1767. The number of shares issued to Non-Executive Directors during the financial year in lieu of base remuneration are set out in
Table 16.
Non-Executive Directors’ fees are reviewed annually by the Board. The remuneration for Non-Executive Directors during the 2021
financial year (excluding superannuation) is set out in Table 8.
Changes for the 2022 financial year
The Board has reviewed the remuneration structure for Non-Executive Directors for the 2022 financial year to ensure the
appropriateness and relevance of the fee structure and resolved that Non-Executive Directors will have the option to receive up to 50
percent of their base remuneration in the form of shares (subject to shareholder approval). To ensure alignment with the framework for
issuing performance rights to Executive KMP, the number of shares to be issued will be calculated using the 20-trading day VWAP of the
Company’s shares up to 1 July 2021. A resolution seeking approval of share-based remuneration (in lieu of fixed remuneration) will be put
to shareholders at the Company’s 2021 Annual General Meeting.
As part of its annual review of Non-Executive Directors’ fees, the Board also resolved that the structure and fees for the 2022 financial
year (inclusive of superannuation) will be adjusted as set out in Table 8.
In considering the changes to Non-Executive Directors’ remuneration, the Board took into account a number of factors including:
•
•
•
•
•
•
Industry benchmarking and market data comparing remuneration positioning and competitiveness against the Company’s peers in
the Australian resources sector in terms of market capitalisation, location and operational and risk profile;
that there have been no changes to Non-Executive Director fees since 1 July 2019, largely on account of the uncertainties of
COVID-19, the outlook for zinc and commodity prices generally and the Company’s operational and financial circumstances
throughout 2020;
the continued recent growth and development of the Company, improved market conditions and the stabilisation of the Company’s
operational and financial performance;
the Board’s view that the issue of options to Non-Executive Directors will not be a feature of the Company’s remuneration framework
in the future (notwithstanding that it was a relevant feature in the past, for the reasons outlined above);
the number of scheduled and unscheduled meetings of the Board during the course of the 2021 financial year and the increased
activities of the Committees of the Board; and
that Non-Executive Director fees for the 2022 financial year will be inclusive of superannuation, whereas previously they were
exclusive of superannuation.
TABLE 8 – NON-EXECUTIVE DIRECTORS’ FEES
Role
Non-Executive Director base fee
Chairman of Board1
Remuneration and Nomination Committee Chair2
Remuneration and Nomination Committee Member2
Audit and Risk Committee Chair2
Audit and Risk Committee Member2
Environmental, Social and Governance Committee Chair2
Environmental, Social and Governance Committee Member2
Technical Oversight Committee Chair2
Technical Oversight Committee Member2
2021 financial year3
$
2022 financial year4
$
90,000
120,000
10,000
-
10,000
-
10,000
-
10,000
-
90,000
185,000
20,000
10,000
20,000
10,000
20,000
10,000
10,000
5,000
1.
The Chairman does not receive any fees for his membership of the Committees of the Board.
2. With the exception of the Chairman, fees for chairing, or membership of, the Committees of the Board are payable in addition to Non-Executive
Director base fees.
3.
4.
Exclusive of superannuation, and the amortisation of the cost of previously issued options.
Inclusive of superannuation.
54
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 55
Additional information for consideration of shareholder wealth
Table 9 summarises the earnings of the Group and other factors that are considered to affect shareholder wealth for the five financial
years to 30 June 2021.
Details of remuneration
TABLE 11 – KMP REMUNERATION
TABLE 9 – GROUP FINANCIAL INFORMATION
EBITDA: Earnings before interest, tax,
depreciation and amortisation2
Loss after income tax attributable to
shareholders - $
Share price at year end - $
Movement in share price for the year - $
Total dividends declared – cents
Returns of capital – cents
20211
2020
2019
2018
2017
73,540,335
(5,616,151)
(11,797,417)
(128,029,083)
(1,378,441)
(10,817,168)
(8,107,272)
(21,502,018)
(119,021,291)
(3,785,112)
0.22
0.06
-
-
0.16
(0.33)
-
-
0.49
(0.82)
-
-
1.31
1.11
-
-
0.20
-
-
-
Basic loss per share – $
(0.0097)
(0.0123)
(0.0426)
(0.3232)
(0.0202)
1.
The Group commenced commercial production at the Century Mine on 1 July 2020.
2. Refer to Note 3 to the Financial Statements for a reconciliation of EBITDA to Net Loss After Tax.
TSR for the Company to 30 June 2021 are summarised below:
TABLE 10 – TOTAL SHAREHOLDER RETURN
New Century Resources Limited
1 Year TSR
%
39
2 Year TSR
%
(56)
3 Year TSR
%
(84)
Barry Harris4
Total
Short-term
benefits cash
salary and fees
$
Short-term
incentive
awards
$
Post-
employment
benefits super-
annuation
$
Termination
benefit
$
Share based
payments
expenses
$
Proportion of
remuneration
performance
related
%
Total
$
2021
Non-Executive Directors
Robert McDonald
Nick Cernotta
Kerry Gleeson1
Bryn Hardcastle2
Peter Watson
Evan Cranston3
Executive Director
Patrick Walta
Executive KMP
120,000
100,000
58,333
37,500
110,000
-
-
-
-
-
-
-
-
9,500
5,542
-
10,450
-
451,306
91,242
21,694
Mark Chamberlain
350,000
63,719
350,306
55,800
1,577,445
210,761
90,574
21,694
21,694
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120.000
109,500
63,875
37,500
120,450
-
-
-
-
-
-
-
266,780
831,022
43.1
175,536
610,949
173,640
601,440
615,956
2,494,736
39.2
38.1
33.1
The Board has regard to the overall performance of the Company over a number of years in assessing and ensuring proper alignment
of “at risk” remuneration to deliver fair and appropriate outcomes consistent with the Company’s performance. Full details of the
Company’s operational and financial performance are set out in the Directors’ Report, including the Operating and Financial Review
section of the Annual Report.
The Company’s ongoing environmental, social and governance (ESG) performance is critical to maintaining its licence to operate, which
in turn is fundamental to its ongoing financial performance. Details of the Company’s ESG performance will be set out in the inaugural
Sustainability Report (to be published in the 2022 financial year) and the annual Corporate Governance Statement, which is available at
www.newcenturyresources.com.
Voting and comments made at the Company’s 2020 Annual General Meeting
At the Company’s 2020 Annual General Meeting the Remuneration Report for the 2020 financial year was approved by shareholders
with 99.68 percent of votes in favour. The Company did not receive any specific feedback from shareholders at the 2020 Annual
General Meeting regarding its remuneration practices.
1.
Kerry Gleeson was appointed as a Non-Executive Director on 30 November 2020.
2. Bryn Hardcastle resigned as a Non-Executive Director on 30 November 2020.
3.
4.
Evan Cranston resigned as a Non-Executive Director on 9 July 2020.
In addition to his salary, Barry Harris cashed out annual leave entitlements of $107,955 during the financial year.
56
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 57
Short-term
benefits cash
salary and fees
$
Short-term
incentive
awards
$
Post-
employment
benefits
superannuation
$
Termination
benefit
$
Share based
payments
expenses
$
Proportion of
remuneration
performance
related
%
Total
$
2020
Non-Executive Directors
Robert McDonald
120,000
Nick Cernotta
Bryn Hardcastle
Peter Watson
Evan Cranston
Executive Director
112,500
90,000
225,000
180,000
Patrick Walta
345,998
Executive KMP
Mark Chamberlain
350,000
Barry Harris
Total
345,736
1,769,234
-
-
-
-
-
-
-
-
-
-
10,687
-
19,501
-
10,501
21,003
21,003
82,695
-
-
-
-
-
-
-
-
-
235,900
355,900
-
-
-
-
123,187
90,000
244,501
180,000
67,231
423,730
92,035
463,038
43,759
410,498
438,925
2,290,854
-
-
-
-
-
16
10
11
7
Short-term incentive awards for the KMP for the comparative year-ended 30 June 2020 are nil in the above Table 11 because they were
approved and paid subsequent to 30 June 2020 (October 2020). These payments were $75,000 to Patrick Walta, $56,087 to Mark
Chamberlain and $55,203 to Barry Harris.
Movements in annual leave and long service leave provisions for KMP are not recognised as remuneration unless they are paid in cash.
For the reporting period to 30 June 2021, STI payments for Executive KMP were determined by assessing individual performance against
the KPIs set out in Table 12 and Company performance as set out in Table 13.
TABLE 12 – STI INDIVIDUAL OBJECTIVES, WEIGHTINGS AND OUTCOMES
Patrick Walta
Summary of KPI objective
Metrics relating to the Company’s strategic planning objectives
Achievement of enhanced research coverage for the Company in accordance
with stated objectives
Total
Mark Chamberlain
Summary of KPI objective
Metrics relating to the Company’s strategic planning objectives
Restructure the Corporate Office Finance Department
Development and delivery of best practice internal cash and corporate models
Total
Barry Harris
Weighting %
Outcome %
25
25
501
25
25
50
Weighting %
Outcome %
9
9
12
301
9
9
12
30
Summary of KPI objective
Weighting %
Outcome %
Delivery of the Jameson Cell project, including overall flow sheet modification
and improvements in metal production
Progression of in-situ mining studies and advancement of works to deliver a
feasibility study that will allow a final investment decision on Silver King and East
Fault Block in FY2022
Total
15
15
301
15
15
30
1.
Percentage of maximum STI opportunity that is attributable to individual performance. The remaining percentage is attributable to Company
performance.
TABLE 13 – STI COMPANY PERFORMANCE
Weighting
Outcome
Safety %
Production %
Costs %
Total %
15
15
40
0
15
5
70
20
58
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 59
The STI plan outcomes for Executive KMP for the financial year were as follows:
TABLE 14 – STI OUTCOMES
Maximum
opportunity
(30% of TFR)
$
141,900
111,508
111,600
Actual STI awarded1
$
Awarded
%
Forfeited
%
91,242
63,719
55,800
64.3
57.1
50.0
35.7
42.9
50.0
Patrick Walta
Mark Chamberlain
Barry Harris
1.
To be paid in the 2022 financial year.
Other transactions with key management personnel
A number of KMP, or their related parties, hold positions in other entities that may result in them having control or significant influence
over the financial or operating policies of those entities. Where the Company transacts with the KMP and their related parties, the
terms and conditions of these transactions are no more favourable than those available, or which might reasonably be expected to be
available, on similar transactions to non-KMP related entities on an arm’s length basis.
Service agreements
A summary of service agreements with those individuals who were Executive KMP during the 2021 financial year is set out below.
TABLE 15 – SUMMARY OF SERVICE AGREEMENTS
KMP
Term of
agreement
Role
Base salary
or fee per
annum for 2021
including any
superannuation
(Non-
performance
based)
$
Base salary or
fee per annum
for 2022
including any
superannuation
(Non-
performance
based)
$
Patrick Walta
No specified term Managing Director
473,000
575,000
Mark Chamberlain
No specified term
Barry Harris
No specified term
Chief Financial
Officer
Chief Operating
Officer
371,694
436,000
372,000
450,000
Termination
conditions
6 month notice
period
6 month notice
period
3 month notice
period
Share-based payment compensation
Shares were issued to some Non-Executive Directors of the Company as part of their remuneration during the financial year, as set out
below.
Shares
Shares that were issued during the financial year to KMP and that resulted in the recognition of remuneration expense are set out below:
TABLE 16 – SHARES ISSUED TO KMP AS REMUNERATION
KMP
Robert McDonald
Nick Cernotta
Peter Watson
Total
Number of shares
issued
Share price
$
203,735
254,668
127,334
585,737
0.18
0.18
0.18
Remuneration
expense recognised
during the year
$
36,000
45,000
22,500
103,500
Details of options over ordinary shares in the Company and performance rights provided as remuneration to KMP are set out below.
Each option and performance right is convertible into one ordinary share of the Company upon exercise or vesting. These options and
performance rights were granted with nil additional consideration. A total of 11,750,000 options issued to current or previous KMP expired
or lapsed during the financial year.
The assessed fair value at grant date of options and performance rights granted to the individuals is allocated equally over the period
from issue date to vesting date, and the amount is included in the remuneration tables below. Fair values at grant date are independently
determined using a Black-Scholes option pricing model for options, and hybrid employee share option pricing model and a Monte Carlo
simulation exercise for performance rights. The fair valuation 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, the risk-
free interest rate for the term of the option and the liquidity of the share market. Further details are set out in Note 35 to the Financial
Statements.
Performance rights
Performance rights that were issued at the end of the financial year to KMP and that resulted in the recognition of remuneration expense
are set out below. None of the below performance rights had vested at the end of the financial year.
TABLE 17 – PERFORMANCE RIGHTS ON ISSUE
Grant date
Vesting date
Expiry date
Total fair
value of
performance
rights granted
$
Fair value of
performance
rights
recognised
during the
year $
Number
granted
17/07/2020
01/07/2022
01/07/2024
1,907,258
268,923
04/12/2020
01/07/2023
01/07/2025
3,919,703
Mark Chamberlain
20/01/2020
01/07/2022
01/07/2024
1,278,921
Mark Chamberlain
04/12/2020
01/07/2023
01/07/2025
2,549,124
20/01/2020
01/07/2022
01/07/2024
1,241,379
04/12/2020
01/07/2023
01/07/2025
2,551,222
324,005
497,802
180,328
323,739
175,034
100,846
165,934
67,623
107,913
65,638
108,002
615,956
KMP
Patrick Walta
Patrick Walta
Barry Harris
Barry Harris
Total
60
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 61
Options
Options that were provided to KMP in the previous financial years as set out in Tables 19 and 20 were fully expensed in the previous
financial years. Therefore no remuneration expenses were recognised for these options during the current financial year.
Movements
The movement in options held by each KMP of the Company during the financial year is as follows
TABLE 20 – MOVEMENTS IN OPTIONS HELD BY KMP
Balance at
beginning
of year or
appointment
Granted as
remuneration
during the
year
Options
exercised
during the
year
KMP
Lapsed during
the year
Balance at
end of year
Vested during
the year
Vested and
exercisable
Non-Executive Directors
Robert
McDonald
2,000,000
Nick Cernotta
2,000,000
Peter Watson
Kerry Gleeson
Executive Director
-
-
Patrick Walta
15,750,000
Other KMP
Mark
Chamberlain
19,750,000
250,000
Barry Harris
3,000,000
3,250,000
Total
23,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
-
-
(8,750,000)
7,000,000
(8,750,000)
11,000,000
-
250,000
(3,000,000)
-
(3,000,000)
250,000
(11,750,000)
11,250,000
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
-
-
7,000,000
11,000,000
250,000
-
250,000
11,250,000
Additional disclosures relating to key management personnel
Refer to Table 18 below for a reconciliation of the movement in all performance rights held by KMP during the financial year.
Movements
The movement in performance rights held by each KMP of the Company during the financial year is as follows:
TABLE 18 – MOVEMENTS IN PERFORMANCE RIGHTS
Balance at
beginning of
year
Granted as
remuneration
during the
year
Rights
converted
during the
year
KMP
Balance at
end of year
Vested during
the year
Vested and
convertible
Patrick Walta
1,907,258
3,919,703
Mark Chamberlain
1,278,921
2,549,124
Barry Harris
1,241,379
2,551,222
Total
4,427,558
9,020,049
-
-
-
-
5,826,961
3,828,045
3,792,601
13,447,607
-
-
-
-
-
-
-
-
Option holdings of key management personnel
Details of all options held by KMP at the end of the financial year are shown below:
TABLE 19 – OPTIONS HELD BY KMP
KMP
Grant date
Non-Executive Directors
Number
granted
Fair value of
options at
grant date $
Exercise
price $ Vesting date
Expiry date
Vested %
Robert
McDonald
Robert
McDonald
Nick Cernotta
Nick Cernotta
Executive Director
Patrick Walta
Other KMP
Mark
Chamberlain
18/09/2019
1,000,000
126,700
0.56
18/09/2019
18/09/2022
18/09/2019
1,000,000
109,200
28/03/2019
1,000,000
249,300
28/03/2019
1,000,000
201,600
0.70
1.20
1.50
18/09/2019
18/09/2022
28/03/2019
28/03/2022
28/03/2019
28/03/2022
13/07/2017
7,000,000
576,730
0.25
13/07/2017
13/07/2022
100
100
100
100
100
06/06/2019
250,000
50,200
0.95
11/06/2020
06/06/2022
100
Refer to Table 20 below for a reconciliation of the movement in all options held by KMP during the financial year.
62
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 63
Shareholdings of key management personnel
The number of shares in the Company held by each KMP of the Group and their related parties during the financial year is as follows:
TABLE 21 – SHAREHOLDINGS OF KMP
KMP
Non-Executive Directors
Balance at
beginning
of year or
appointment
Granted as
remuneration
during the year
Issued on
exercise of
options during
the year
Other changes
during the year
Balance at end
of year or date
of resignation
Robert McDonald
Nick Cernotta
Kerry Gleeson
Peter Watson
Executive Director
Patrick Walta
Other KMP
Mark Chamberlain
Barry Harris
Former KMP
Bryn Hardcastle1
Evan Cranston2
489,025
203,735
243,696
254,668
-
-
178,425
127,334
33,421,788
-
34,332,934
585,737
1,909,093
827,857
2,736,950
1,618,444
33,245,457
34,863,901
-
-
-
-
-
-
Total
71,933,785
585,737
Bryn Hardcastle resigned as a Non-Executive Director on 30 November 2020.
1.
2. Evan Cranston resigned as a Non-Executive Director on 9 July 2020.
-
-
-
-
-
-
-
-
-
-
-
-
-
40,753
733,513
280,022
778,386
-
-
14,869
320,628
-
33,421,788
335,644
35,254,315
159,092
2,068,185
(827,857)
-
(668,765)
2,068,185
115,585
1,734,029
(1,600,092)
31,645,365
(1,484,507)
33,379,394
(1,817,628)
70,701,894
AUDITOR'S INDEPENDENCE DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne VIC 3000
Australia
Tel: +61 3 9671 7000
www.deloitte.com.au
27 October 2021
The Board of Directors
New Century Resources Limited
Level 4
360 Collins Street
Melbourne, VIC, 3000
Dear Board Members
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo NNeeww CCeennttuurryy RReessoouurrcceess LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of New Century Resources Limited.
As lead audit partner for the audit of the financial statements of New Century Resources Limited for the year
ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions
of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Suzana Vlahovic
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
64
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 65
FINANCIAL
REPORT
Consolidated statement of profit or loss and other comprehensive income
Note
4
4
4
5
5
5
6
7
35
8
9
10
10
11
12
13
14
Revenue
Fair value movements in trade receivables
Net fair value loss on zinc derivatives
Production costs
Employee benefits expense – labour costs
Change in zinc concentrate inventory
Depreciation and amortisation expense
Exploration and evaluation expenditure
Employee benefits – share based payments
Professional expenses
Foreign exchange gains /(losses)
Finance income
Finance expenses
Gain on disposal of investments
Other income
Other expenses
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Cash flow hedges change in fair value
Exchange loss on translation of foreign controlled
entities
Other comprehensive loss for the year
Total comprehensive loss for the year
Loss for the year attributable to:
Members of the parent entity
Total comprehensive loss for the year attributable to:
Members of the parent entity
Loss per share
Basic and diluted loss per share
36
The accompanying notes form part of these Financial Statements.
2021
$
277,981,813
5,621,245
(6,854,981)
(181,375,095)
2020
$
-
-
-
-
(37,879,441)
(3,324,857)
10,734,311
(63,834,779)
(674,014)
(1,390,889)
(6,337,140)
9,258,373
52,312
-
(174,911)
(1,271,707)
(555,268)
(4,083,179)
(3,943,491)
317,255
(20,575,036)
(2,633,465)
4,232,252
223,901
-
(10,817,168)
-
9,750,000
461,503
(2,649,152)
(8,107,272)
-
(10,817,168)
(8,107,272)
(15,450,738)
-
(15,450,738)
-
(43,303)
(43,303)
(26,267,906)
(8,150,575)
(10,817,168)
(8,107,272)
(26,267,906)
(8,150,575)
$
(0.0097)
$
(0.0123)
66
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 66
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 67
Consolidated statement of financial position
Consolidated statement of changes in equity
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Property, plant and equipment
Right-of-use assets
Exploration and evaluation assets
Financial assets – security guarantees
Total non-current assets
TOTAL ASSETS
Trade and other payables
Borrowings
Financial liability at fair value through profit or loss
Derivative financial instruments
Lease liabilities
Employee benefit provisions
Total current liabilities
Environmental rehabilitation provisions
Borrowings
Financial liability at fair value through profit or loss
Derivative financial instruments
Lease liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Issued capital
Accumulated losses
Cash flow hedge reserve
Foreign currency translation reserve
TOTAL EQUITY
The accompanying notes form part of these Financial Statements.
Note
15
16
17
18
19
20
21
22
23
24
25
26
20
27
28
24
25
26
20
29
26
30
2021
$
35,696,665
6,102,558
24,030,514
3,566,880
69,396,617
275,788,162
33,692,477
3,631,381
19,007,882
332,119,902
401,516,519
66,216,906
25,834,224
3,127,663
7,350,005
10,143,098
4,022,460
116,694,356
176,146,970
13,226,824
3,704,246
9,945,477
24,097,611
227,121,128
343,815,484
57,701,035
436,644,145
2020
$
40,005,053
13,499,524
6,072,000
2,109,998
61,686,575
361,286,868
44,430,521
-
16,189,837
421,907,226
483,593,801
76,716,927
40,945,834
3,127,663
-
11,205,730
2,642,422
134,638,576
215,587,408
41,185,191
5,672,286
-
33,934,515
296,379,400
431,017,976
52,575,825
402,588,543
(363,492,372)
(354,066,093)
(15,450,738)
-
57,701,035
-
4,053,375
52,575,825
2021
Ordinary shares
$
Accumulated
losses
$
Cash flow hedge
reserve
$
Foreign currency
translation
reserve $
Total
$
Balance at 1 July 2020
402,588,543
(354,066,093)
Comprehensive income
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners recorded
directly in equity
Amounts recognised in the profit
and loss on disposal of subsidiary
-
-
-
-
Issue of shares – Note 29
Share issue costs – Note 29
35,902,725
(1,847,123)
(10,817,168)
-
(15,450,738)
(10,817,168)
(15,450,738)
-
-
-
Share based payment – Note 35
-
1,390,889
Balance at 30 June 2021
436,644,145
(363,492,372)
(15,450,738)
-
-
-
-
-
-
4,053,375
52,575,825
-
-
-
(10,817,168)
(15,450,738)
(26,267,906)
(4,053,375)
(4,053,375)
-
-
-
-
35,902,725
(1,847,123)
1,390,889
(57,701,035)
2020
Ordinary shares
$
Accumulated
losses
$
Cash flow hedge
reserve
$
Foreign currency
translation
reserve $
Total
$
Balance at 1 July 2019
312,052,963
(346,514,089)
Comprehensive income
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners recorded
directly in equity
-
-
-
(8,107,272)
-
(8,107,272)
Issue of shares – Note 29
Share issue costs – Note 29
94,726,624
(4,191,044)
-
-
Share based payment – Note 35
-
555,268
Balance at 30 June 2020
402,588,543
(354,066,093)
The accompanying notes form part of these Financial Statements.
-
-
-
-
-
-
-
-
4,096,678
(30,364,448)
-
(8,107,272)
(43,303)
(43,303)
(43,303)
(8,150,575)
-
-
-
94,726,624
(4,191,044)
555,268
4,053,375
52,575,825
68
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 69
Consolidated statement of cashflows
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Payments for financing expenses
Payments for exploration and evaluation expenses
Net cash inflow/(outflow) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Receipts from customers during development phase
Payments for property, plant and equipment
Payments for exploration and evaluation assets
Payments for borrowing costs capitalised
Payments for security guarantees
Proceeds from disposal of investments
Proceeds from disposal of property, plant and
equipment
Net cash (outflow) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for Varde borrowing – facility A
Payments for financial liability at fair value through
profit and loss – facility A
Proceeds from Varde borrowing – facility B
Payments for Varde borrowing – facility B
Payments for financial liability at fair value through
profit and loss – facility B
Payments for transaction cost for Varde borrowing –
facility B
Proceeds from share issues
Payments for share issue costs
Payments for lease liabilities
Proceeds from borrowings – Equipment finance
Repayments of borrowings – Equipment finance
Proceeds from MMG funding support
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
The accompanying notes form part of these Financial Statements.
Note
10
7
37
19
21
19
11
12
24
25
24
24
25
24
29
29
20
24
24
7
2021
$
280,082,162
(233,740,059)
52,312
(7,485,213)
(674,014)
38,235,188
6,484,154
(17,461,283)
(3,631,381)
-
(3,569,766)
113,276
2020
$
-
(7,581,691)
317,255
-
(1,271,707)
(8,536,143)
170,592,050
(258,154,314)
-
(8,736,191)
(3,023,139)
9,750,000
176,007
111,419
(17,888,993)
(89,460,175)
(30,174,998)
(16,590,057)
(708,471)
-
(12,770,421)
(605,164)
-
35,058,765
(1,847,123)
(13,824,600)
295,100
(77,671)
-
(24,654,583)
(4,308,388)
40,005,053
35,696,665
(1,587,731)
40,000,000
-
-
(900,000)
94,629,624
(4,191,044)
(13,392,190)
-
-
5,750,000
103,718,602
5,722,284
34,282,769
40,005,053
Notes to the Financial Statements
The Financial Statements and notes represent those of New
Century Resources Limited (the Company) and its controlled
entities (the Group). The separate Financial Statements of the
parent entity have not been presented within this financial report
as permitted by the Corporations Act 2001.
The Financial Statements for the Group were authorised for issue
in accordance with a resolution by the Board of Directors on
27 October 2021.
Note 1. Summary of significant
accounting policies
Basis of preparation
The Financial Statements are general purpose Financial
Statements that have been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations,
other authoritative pronouncements of the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001. The
Group is a for-profit entity for financial reporting purposes under
Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that
the AASB has concluded would result in Financial Statements
containing relevant and reliable information about transactions,
events and conditions. Compliance with Australian Accounting
Standards ensures that the Financial Statements and notes
also comply with International Financial Reporting Standards as
issued by the IASB. Material accounting policies adopted in the
preparation of these Financial Statements are presented below
and have been consistently applied unless stated otherwise.
Except for cash flow information, the Financial Statements have
been prepared on an accruals basis and are based on historical
costs, modified, where applicable, by the measurement at fair
value of selected non-current assets, financial assets and financial
liabilities.
Going concern
The Financial Statements have been prepared on the going
concern basis which assumes the continuity of normal business
activity and the realisation of assets and the settlement of liabilities
in the normal course of business for a period of at least 12 months
from the date of signing the Financial Statements.
The principal activities of the Group for the financial year
were the operation of the Century Mine which entered
commercial production on 1 July 2020. The operation involves
the reprocessing of ore from the tailings storage facility and
subsequent sale of zinc concentrates together with standard
maintenance and minor capital growth activities. The Group also
undertook mineral exploration activities and explored business
development opportunities.
The Group incurred a net loss of $10,817,168 during the Financial
Year. However, earnings before interest, income tax, depreciation
and amortisation (EBITDA) for the year were $73,540,335. Net cash
inflows from operating activities were $38,235,188 for the year.
As of 30 June 2021, the Group had a net current asset deficiency
of $47,297,739.
The Group expects to generate positive EBITDA and positive
operating net cash inflows for financial year ending 30 June
2022. Expectations of continued positive operating cashflows are
supported by the Group’s track record of net cash inflows from
operating activities and a buoyant macro-economic environment.
In addition, the Directors note the following considerations
relevant to the Group’s ability to continue as a going concern:
All US dollar amounts are translated into Australian dollar
amounts at the exchange rate of 0.7517
As of 30 June 2021, the Group had total unrestricted cash and
cash equivalents of $35,696,665 in addition to $4,697,924 of trade
receivables and $10,734,311 of zinc concentrate inventories.
As of 30 September 2021, the Group’s unrestricted cash and
cash equivalents were $34,542,075. Additionally, the Group had
$8,567,795 of trade and other receivables and $8,771,720 of zinc
concentrate inventories.
Proposed Environmental Bonding and Equity Package
The Group is finalising binding agreements for an Environmental
Bonding and Equity Raising Package (the “Package”) which entails
a major revision of the Group’s capital structure going forward. Key
elements of the Package include:
Equity Raising:
A$79,802,904 (US$59,987,843) fully committed equity raising
consisting of:
•
An Unconditional Placement to raise A$32,918,192
(US$24,744,605):
•
- A$21,638,706 (US$16,265,816) from a subsidiary of
Sibanye-Stillwater Limited (Sibanye-Stillwater) whereby
Sibanye-Stillwater takes an initial 9.8% equity interest in
the Group; and
- A$11,279,486 (US$8,478,790) from existing
shareholders.
The simultaneous launch of a fully underwritten Entitlement
Offer to raise A$46,884,712 (US$35,243,238) consisting of
a 1 for 4 pro rata non renounceable allocation to existing
shareholders. Any entitlements not taken up by existing
shareholders will be underwritten by the joint lead managers
to the Entitlement Offer, with sub-underwriting by Sibanye-
Stillwater up to a limit of Sibanye-Stillwater taking a 19.99%
interest in the Group.
Should Sibanye-Stillwater’s investment in the Group be less than
19.99% following the Entitlement Offer, a Conditional Placement
will be undertaken to bring Sibanye-Stillwater’s total interest to
19.99%. Sibanye-Stillwater has committed to a total investment in
New Century Resources Limited of A$53,441,616 (US$40,172,063).
The Conditional Placement is subject to shareholder approval at
the Company’s 2021 Annual General Meeting.
The Unconditional Placement, Entitlement Offer and Conditional
Placement will be conducted at an offer price of A$0.155 per New
Share (Offer Price) being the closing price on 30 September 2021.
70
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 71
In summary the equity raising will generate a minimum of
A$79,802,904 (US$59,987,843) before costs estimated of
$4,211,258. If there is a full take up of the Entitlement Offer by
existing shareholders, the equity raise could generate a further
A$39,748,669 (US$29,879,074) to a maximum of A$119,551,573
(US$89,866,917) before costs estimated at $4,231,709 once the
Conditional Placement is complete.
Environmental Bonding:
The existing environmental bond provided to the Queensland
government for the Century Mine is backed by MMG Limited
(MMG) pursuant to the Bank Guarantee Support Agreement that
was entered into at the time of the initial acquisition of the Century
Mine by the Group. This will be replaced by the A$180,000,000
Environmental Bond Facility (EBF) to be issued by Macquarie Bank
Limited (Macquarie) and backed by an A$160,000,000 surety
provided through Argonaut Insurance Group (Argo Group) and
A$20,000,000 of cash backing to be provided directly by the
Group. The EBF will amortise over 21 equal monthly payments
from January 2023 through to final maturity of the facility in
September 2024.
The Group has decided to expand the Group’s total hedging
book. This additional hedging is a condition precedent of the EBF.
Existing hedging comprises 82,500 tonnes of zinc metal to settle
in fixed monthly proportions of 2,500 tonnes per month to June
2024 at an average price of A$3,717 per tonne.
In the event the Environmental Bonding and Equity Raising
Package described above is completed as expected, the funds
raised together with existing available cash, will be partially used
to:
•
•
terminate the Loan Note Subscription Agreement with Värde
Partners (Värde) for total consideration of A$41,897,121
(US$31,494,065); and
extinguish the Bank Guarantee Support Agreement with MMG
and provide cash backing for the first A$20,000,000 of the
replacement A$180,000,000 EBF
Following the expected completion of the Package the Group will
be debt free except for long dated prepayments owing to a major
customer, Ausinmet Limited which stood at A$4,646,795 as at 30
September 2021 and the settlement of two additional payments of
A$3,724,890 (US$2,800,000) on 4 January 2022 and A$3,724,890
(US$2,800,000) on 1 April 2022) to Värde, both subject to
applicable withholding tax.
Risk Analysis
There are a number of risks associated with completing the
Package. These include the following:
With respect to the Unconditional Placement
•
The ASX failing to reinstate quotation (as that term is defined
in the Listing Rules) of the Company’s shares by no later than
7.00am (Perth time) on 2 November 2021.
In the event the Unconditional Placement is not completed,
and therefore the Entitlement Offer and Conditional Placement
cannot proceed, the Group’s operating cashflows will not provide
sufficient funds to meet the current financial obligations to Värde
and MMG as detailed below. In such circumstances the Group will
be required to commence negotiations with Värde and /or MMG
seeking an amendment to the timing of future obligations as well
as considering a future equity raising.
In the event that the Group is unable to successfully complete the
Package, the following financial obligations are due and payable:
•
•
Principal repayments and fees totalling A$21,753,510
(US$16,352,114) to the Group’s senior secured lender, Värde.
The principal balance outstanding of the loan facility to Värde
of A$18,661,700 (US$14,028,000) will remain subject to the
existing schedule of repayments.
A reduction of A$31,546,880 in the bonding currently
facilitated by MMG to the benefit of the Queensland state,
either by way of cash-backed bond or a cash deposit with the
Queensland state. The underlying Bank Guarantee Support
Agreement with MMG will remain in place.
In the event that only the Unconditional Placement completes,
the funds raised of A$32,918,192 (US$24,744,605), together with
internally generated cashflow is forecast to meet the Group’s
above mentioned financial obligations to Värde and MMG totalling
to A$53,300,390.
With respect to the Entitlement Offer
•
•
•
The failure to complete the Unconditional Placement.
The failure to complete execution of full long form
documentation for the EBF and related documents.
The occurrence of any of the specified termination events
listed in the Underwriting Agreement for the Entitlement Offer.
The specified events are those generally seen with a listed
entity of similar nature to the Group and include:
-
-
-
-
A fall in the S&P/ASX200 of more than 10 percent from
the level seen at the end of the trading day prior to the
date of the Underwriting Agreement.
A breach of existing debt facilities.
New circumstances arising that would require to be
detailed in the prospectus had such circumstances arisen
before the lodging of the prospectus.
A material adverse change occurring.
With respect to the Conditional Placement
•
•
A duly convened general meeting of the Company having
failed to approve the issue and allotment of the shares to the
Sibanye-Stillwater by the requisite majorities under Listing
Rule 7.1 and otherwise in accordance with the Corporations
Act and the Listing Rules.
The ASX failing to reinstate quotation (as that term is defined
in the Listing Rules) of the Company’s shares by no later than
7.00am (Perth time) on 2 November 2021.
With respect to the EBF
•
•
•
Execution of full long form documentation for the EBF and
related documents.
Confirmation of additional hedging for a minimum average
hedged price.
Completion of the equity raising and receipt by the Group of
at least $80,000,000 (net of costs).
In the event the EBF is not concluded, due to the conditions
precedent not being achieved or for any other reason, it is likely
that the underwriting of the Entitlement Offer would be terminated.
Should that occur, and only the Unconditional Placement
completes, the funds raised from the Unconditional Placement of
A$32,918,192 (US$24,744,605), together with internally generated
cashflow is forecast to meet the Group’s above mentioned
financial obligations to Värde and MMG totalling A$53,300,390.
Further, subject to receiving shareholder approval, the Company
is still able to undertake the Conditional Placement which
would provide up to a further A$27,735,044 (US$20,571,082) in
unrestricted cash.
The Directors believe that there is a high probability that the
Package, which is well progressed, will be successfully completed.
As a result, the Directors are of the view that the Group will be able
to meet its debts as and when they fall due and accordingly the
Directors have prepared the Financial Statements on the going
concern basis.
In the event that the Group is unable to successfully complete the
Environmental Bonding and Equity Raising Package and is unable
to successfully negotiate with Värde and /or MMG an amendment
to the timing of future obligations, a material uncertainty would
exist that may cast significant doubt on the ability of the Group
to continue as a going concern and therefore whether the Group
will be able to realise its assets and extinguish its liabilities in
the normal course of business and at the amounts stated in the
financial report.
The financial report does not include any adjustments relating to
the recoverability and the classification of recorded asset amounts
or to the amounts and classification of liabilities that might be
necessary should the Group not continue as a going concern.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits
held at call with financial institutions which are readily convertible
to known amounts of cash and which are subject to an insignificant
risk of changes in value.
Revenue and provisionally priced contracts
The Group is principally engaged in the business of producing
zinc concentrate and in some instances, provides freight/shipping
services. Revenue from contracts with customers is recognised
when control of the goods or services is transferred to the
customer at an amount that reflects the consideration to which
the Group expects to be entitled in exchange for those goods or
services.
Revenue from the sale of zinc concentrate is recognised when the
Group satisfies its performance obligations under its contract with
the customer by transferring such goods to the customer’s control.
The customer is generally deemed to have control when risk and
title to the zinc concentrate passes to the customer.
Zinc concentrate revenue is generally recognised upon receipt
of the bill of lading when the goods are delivered for shipment
under Cost, Insurance and Freight (CIF) Incoterms. The terms of
metal-in-concentrate sales contracts with third parties contain
provisional pricing arrangements whereby the selling price for
metal-in-concentrate is based on prevailing prices on a specified
future date after shipment to the customer (quotation period).
Adjustments to the sales price occur based on movements in
quoted market prices up to the date of the final settlement period.
The period between provisional invoicing and final settlement
is typically between one and four months. Revenue and trade
debtors on provisionally priced sales is recognised based on
the estimated fair value of the total consideration receivable and
is net of deductions related to treatment and refining charges.
Subsequent changes in fair value are recognised in the Statement
of profit or loss and other comprehensive income each period
until final settlement and presented as fair value movements in
trade receivables. Refer to accounting policy for Trade receivables
disclosed below.
The freight service on sales contracts with CIF Incoterms
represents a separate performance obligation and is separately
disclosed as revenue from freight service where material.
Inventories
Zinc concentrate inventories are measured or estimated and
valued at the lower of cost and net realisable value. Cost
represents the weighted average cost and includes direct costs
and an appropriate portion of fixed and variable production
overhead expenditure, including depreciation and amortisation,
incurred in converting materials into finished goods. Net realisable
value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and estimated costs
necessary to make the sale.
Spare parts and consumables are valued at cost. Any allowance
for obsolescence is determined by reference to stock items
identified.
Trade and other payables
These amounts represent liabilities for goods, services and
deferred proceeds provided to the Company prior to the end of
financial year which are unpaid. The amounts are unsecured and
are usually paid within 30 days of recognition. Deferred proceeds
generally have a longer settlement period.
Property, plant and equipment
Each class of property, plant and equipment is carried at cost or
fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Property, plant and equipment are measured on the cost basis
and therefore carried at cost less accumulated depreciation and
any accumulated impairment. In the event the carrying amount
of property, plant and equipment is greater than the estimated
recoverable amount, the carrying amount is written down
immediately to the estimated recoverable amount and impairment
losses are recognised in the statement of profit and loss and other
comprehensive income. A formal assessment of recoverable
amount is made when impairment indicators are present.
The carrying amount of property, plant and equipment is
reviewed annually by the Group to ensure it is not in excess of the
recoverable amount from these assets.
The cost of fixed assets constructed within the Group includes the
cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads. Any proceeds during
the development phase are offset against property, plant and
equipment.
72
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 73
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other costs including repairs and maintenance are
recognised as expenses in the statement of profit or loss and other
comprehensive income during the financial year in which they are
incurred.
increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been
recognised for the asset (or cash-generating unit) in prior financial
years. A reversal of an impairment loss is recognised immediately
in the statement of profit or loss and other comprehensive income
to the extent that it eliminates the impairment loss which has been
recognised for the asset in prior financial years. Any increase in
excess of this amount is treated as a revaluation increase.
Depreciation
Depreciation of assets commences when the assets are ready
for their intended use. Capital Work in Progress, which relates
mainly to Century Mine, is not depreciated until the mine reaches
commercial production. Once the mine reaches commercial
production, Capital Work in Progress is reclassified to relevant
categories within property, plant and equipment, and depreciation
commences from that time on the units of production basis over
the life of the mine. All other assets are depreciated on a straight-
line basis.
Items of property, plant and equipment initially recognised are
derecognised upon disposal or when no future economic benefits
are expected from their continued use. Any gain or loss arising on
the disposal of an asset are determined as the difference between
the net disposal proceeds and the carrying amount of the asset
and are recognised as other income or other expenses in the
statement of profit or loss and other comprehensive income.
Impairment of assets
At each reporting date, the Group reviews the carrying amounts
of its property, plant and equipment to determine whether there
is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the
asset is estimated to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset
belongs. When a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable
and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of
disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount
of the asset (or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised immediately in
statement of profit or loss and other comprehensive income,
unless the relevant asset is carried at a revalued amount, in which
case the impairment loss is treated as a revaluation decrease and
to the extent that the impairment loss is greater than the related
revaluation surplus, the excess impairment loss is recognised in
the profit or loss and other comprehensive income.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the
•
Leases
At inception of a contract, the Group assesses whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an
identified asset, the Group uses the definition of a lease in
AASB 16 Leases.
The Group recognises a right-of-use asset and a lease liability at
the lease commencement date. The right-of-use assets are initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the
commencement date.
The right-of-use assets are subsequently amortised using either
straight line or units of production method as relevant to the
type of asset. In addition, the right-of-use assets are periodically
adjusted by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the
lease payments that are not paid at the commencement date,
discounted using an incremental borrowing rate. The lease liability
is subsequently measured by increasing the carrying amount to
reflect interest on the lease liability and by reducing the carrying
amount to reflect the lease payments made. The lease liability is
remeasured when there is a modification in the lease contract,
which can include a change in future lease payments or lease
terms. When the lease liability is remeasured, a corresponding
adjustment is made to the carrying amount of the right-of-use
assets.
The Group presents the right-of-use assets and lease liabilities
separately in the statement of financial position.
Exploration and evaluation expenditure
Exploration and evaluation expenditure is recognised in the
statement of profit and loss and other comprehensive income
as incurred, unless the expenditure is expected to be recouped
through successful development and exploitation of the area of
interest, or alternatively by its sale, in which case it is recognised
as an asset on an area of interest basis.
When exploration and evaluation assets are capitalised they are
classified as tangible or intangible according to the nature of
the assets. As the assets are not yet ready for use they are not
depreciated.
Exploration and evaluation assets are assessed for impairment if:
•
sufficient data exists to determine technical feasibility and
commercial viability; or
other facts and circumstances suggest that the carrying
amount exceeds the recoverable amount.
For the purposes of impairment testing, exploration and evaluation
assets are allocated to cash-generating units to which the
exploration activity relates. The cash generating units (CGU) are
not larger than the area of interest.
The costs of the restoration are brought to account in the
statement of profit and loss and other comprehensive income
through depreciation of the associated assets over the economic
life of the mine which these costs are associated.
Once the technical feasibility and commercial viability of
the extraction of mineral reserves in an area of interest are
demonstrable, exploration and evaluation assets attributable
to that area of interest are first tested for impairment and then
reclassified to relevant categories within property, plant and
equipment.
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 that
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 reporting date, 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 the effect of the time value of money is material).
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.
Mine rehabilitation, restoration and dismantling obligations
Provisions relating to mine rehabilitation, restoration and
dismantling obligations are recognised at the commencement
of the mining project and/or construction of the assets where a
legal or constructive obligation exists at that time. Provisions are
made for the estimated cost of rehabilitation, decommissioning
and restoration relating to areas disturbed during mining and
exploration operations up to the reporting date but not yet
rehabilitated.
Provision has been made in full for all the disturbed areas at the
reporting date based on current estimates of costs to rehabilitate
such areas, discounted to their present value based on expected
future cash flows. The estimated costs include the current cost of
rehabilitation necessary to meet legislative requirements. Changes
in estimates are dealt with on a prospective basis as they arise.
These costs are based on judgements and assumptions regarding
removal dates, technologies and industry practice. The capitalised
cost of this asset is recognised in property, plant and equipment
and is amortised over the life of the mine.
A corresponding asset is included in mine property and
development assets, only to the extent that it is probable
that future economic benefits associated with the restoration
expenditure will flow to the Group.
Changes in the liability relating to mine rehabilitation, restoration
and dismantling obligations are added to or deducted from the
related asset (where it is probable that future economic benefits
will flow to the Group). Over time the liability is increased for the
present value based on the risk adjusted pre-tax discount rate
appropriate to the risk inherent in the liability. The unwinding of the
discount is recorded as an accretion charge within finance costs.
The provisions referred to above do not include any amounts
related to remediation costs associated with unforeseen
circumstances.
Employee benefits
A provision is made for the Group’s liability for employee benefits
arising from services rendered by employees to balance date.
Short-term employee benefits are expensed as the related service
is provided. A liability is recognised for the amount expected to
be paid if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably. Employee
benefits that are expected to be settled wholly within one financial
year have been measured at the amounts expected to be paid
when the liability is settled plus related on costs. Employee
benefits not expected to be wholly settled within one financial
year have been measured at the present value of the estimated
future cash outflows to be made for those benefits. In determining
the liability, consideration is given to employee wages increases
and the probability that the employee may satisfy vesting
requirements. Those cash flows are discounted using market
yields on high quality corporate bonds with terms to maturity that
match the expected timing of cash flows.
Equity-settled compensation
Share-based payments to employees are measured at the fair
value of the instruments on grant dates and amortised over the
vesting periods. Share-based payments to non-employees are
measured at the fair value of goods or services received or the
fair value of the equity instruments issued, if it is determined the
fair value of the goods or services cannot be reliably measured,
and are recorded at the date the goods or services are received.
The corresponding amount is recorded in accumulated losses, a
component of equity. The number of shares and options expected
to vest is reviewed and adjusted at the end of each reporting
period such that the amount recognised for services received
as consideration for the equity instruments granted is based on
the number of equity instruments that eventually vest. The Group
measures fair value for share based payments using the Black-
Scholes model or hybrid employee share option pricing model.
Share based payments
Equity-settled share-based payments are measured at fair value
at the date of grant. Fair value is measured by use of a Black-
Scholes model or hybrid employee share option pricing model.
The expected life used in the models is adjusted, based on
management’s best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over
the vesting period, based on the Company’s estimate of shares
that will eventually vest.
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 75
Income tax
The income tax expense benefit for the financial year comprises
current income tax expense (income) and deferred tax expense
(income). Current income tax expense recognised in the statement
of profit and loss and other comprehensive income is the tax
payable on taxable income. Current tax liabilities (assets) are
therefore measured at the amounts expected to be paid to
(recovered from) the relevant taxation authority. Deferred income
tax expense reflects movements in deferred tax asset and
deferred tax liability balances during the financial year as well
unused tax losses.
Current and deferred income tax expense (income) is recognised
or credited outside the statement of profit and loss and other
comprehensive income when the tax relates to items that are
recognised outside the statement of profit and loss and other
comprehensive income.
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured
using the currency of the primary economic environment in which
that entity operates. The Financial Statements are presented in
Australian dollars, which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the
financial year-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at the
date of the transaction. Non-monetary items measured at fair value
are reported at the exchange rate at the date when fair values
were determined.
Except for business combinations, no deferred income tax is
recognised from the initial recognition of an asset or liability, where
there is no effect on accounting or taxable profit or loss.
Exchange differences arising on the translation of monetary
items are recognised in the statement of profit and loss and other
comprehensive income, except where deferred in equity as a
qualifying cash flow or net investment hedge.
Deferred tax assets and liabilities are calculated at the tax rates
that are expected to apply to the period when the asset is realised
or the liability is settled and their measurement also reflects the
manner in which management expects to recover or settle the
carrying amount of the related asset or liability. With respect to
non-depreciable items of property, plant and equipment measured
at fair value and items of investment property measured at fair
value, the related deferred tax liability or deferred tax asset is
measured on the basis that the carrying amount of the asset will
be recovered entirely through sale.
Deferred tax assets relating to temporary differences and unused
tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in
subsidiaries, branches, associates, and joint ventures, deferred tax
assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the
respective asset and liability will occur.
Deferred tax assets and liabilities are offset where: (a) a legally
enforceable right of set-off exists; and (b) the deferred tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability
will occur in future financial years in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or
settled.
Exchange differences arising on the translation of non-monetary
items are recognised directly in other comprehensive income
to the extent that the underlying gain or loss is recognised in
other comprehensive income; otherwise the exchange difference
is recognised in the statement of profit and loss and other
comprehensive income.
Group companies
The financial results and position of foreign operations, whose
functional currency is different from the Group’s presentation
currency, are translated as follows:
•
assets and liabilities are translated at exchange rates
prevailing at the end of the financial year;
income and expenses are translated at average exchange
rates for the financial year; and
retained earnings are translated at the exchange rates
prevailing at the date of the transaction.
•
•
Exchange differences arising on translation of foreign operations
with functional currencies other than Australian dollars are
recognised in other comprehensive income and included in the
foreign currency translation reserve in the statement of financial
position. These differences are recognised in the statement of
profit and loss and other comprehensive income in the financial
year in which the operation is disposed of.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalised as part of the cost of the asset. All other borrowing
costs are expensed in the period in which they occur. Borrowing
costs consist of interest and other costs that the Group incurs in
connection with the borrowing of funds.
Financial instruments
Recognition
The Group recognises financial assets and financial liabilities on
the date that they are originated. All other financial assets are
recognised initially on the trade date at which the Group becomes
a party to the contractual provisions of the instrument.
Classification and subsequent measurement
Financial instruments are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or
issue of financial assets or financial liabilities (other than financial
assets and liabilities at fair value through profit or loss) are added
to or deducted from the fair value of the financial assets or
liabilities. Transaction costs directly attributable to the acquisition
of financial assets or liabilities at fair value through profit or loss
are recognised immediately in the statement of profit and loss and
other comprehensive income. All recognised financial instruments
are subsequently measured at fair value or amortised cost using
the effective interest method.
Amortised cost
Amortised cost is calculated as the amount at which the financial
asset or financial liability is measured at initial recognition less
principal repayments and any reduction for impairment, and
adjusted for any cumulative amortisation of the difference between
that initial amount and the maturity amount calculated using the
effective interest method.
The effective interest method
The effective interest method is used to allocate interest income
or interest expense over the relevant period and is equivalent to
the rate that discounts estimated future cash payments or receipts
(including fees, transaction costs and other premiums or discounts)
over the expected life (or when this cannot be reliably predicted,
the contractual term) of the financial instrument to the net carrying
amount of the financial asset or financial liability. Revisions to
expected future net cash flows will necessitate an adjustment to
the carrying amount with a consequential recognition of an income
or expense item in the statement of profit and loss and other
comprehensive income.
Fair value
The Group measures some of its assets and liabilities at fair value
on either a recurring or non-recurring basis, depending on the
requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or
would have to pay to transfer a liability in an orderly (i.e. unforced)
transaction between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent
observable market pricing information is used to determine fair
value. Adjustments to market values may be made having regard
to the characteristics of the specific asset or liability. The fair values
of assets and liabilities that are not traded in an active market
are determined using one or more valuation techniques. These
valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from either
the principal market for the asset or liability (ie the market with the
greatest volume and level of activity for the asset or liability) or,
in the absence of such a market, the most advantageous market
available to the entity at the end of the reporting period (ie the
market that maximises the receipts from the sale of the asset or
minimises the payments made to transfer the liability, after taking
into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes
into account a market participant’s ability to use the asset in its
highest and best use or to sell it to another market participant that
would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments
(excluding those related to share based payment arrangements)
may be valued, where there is no observable market price in
relation to the transfer of such financial instruments, by reference
to observable market information where such instruments are held
as assets. Where this information is not available, other valuation
techniques are adopted and, where significant, are detailed in the
respective note to the Financial Statements.
Embedded derivatives
An embedded derivative is a component of a hybrid contract
that also includes a non-derivative host – with the effect that
some of the cash flows of the combined instrument vary in a
way similar to a stand-alone derivative. Derivatives embedded
in hybrid contracts with a financial asset host within the scope
of AASB 9 Financial Instruments are not separated. The entire
hybrid contract is classified and subsequently measured as either
amortised cost or fair value as appropriate. Derivatives embedded
in hybrid contracts with hosts that are not financial assets within
the scope of AASB 9 Financial Instruments (e.g. financial liabilities)
are treated as separate derivatives when they meet the definition
of a derivative, their risks and characteristics are not closely
related to those of the host contracts and the host contracts are
not measured at fair value through profit or loss. If the hybrid
contract is a quoted financial liability, instead of separating the
embedded derivative, the Group generally designates the whole
hybrid contract at fair value through profit or loss. An embedded
derivative is presented as a non-current asset or non-current
liability if the remaining maturity of the hybrid instrument to which
the embedded derivative relates is more than 12 months and is not
expected to be realised or settled within 12 months.
Valuation techniques
In the absence of an active market for an identical asset or liability,
the Group selects and uses one or more valuation techniques to
measure the fair value of the asset or liability. The Group selects a
valuation technique that is appropriate in the circumstances and
for which sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily depends on the
specific characteristics of the asset or liability being measured. The
valuation techniques selected by the Group are consistent with
one or more of the following valuation approaches:
• Market approach: valuation techniques that use prices and
other relevant information generated by market transactions
for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated
future cash flows or income and expenses into a single
discounted present value.
Cost approach: valuation techniques that reflect the current
replacement cost of an asset at its current service capacity.
•
•
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 77
Each valuation technique requires inputs that reflect the
assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting
a valuation technique, the Group gives priority to those techniques
that maximise the use of observable inputs and minimise the use
of unobservable inputs. Inputs that are developed using market
data (such as publicly available information on actual transactions)
and reflect the assumptions that buyers and sellers would
generally use when pricing the asset or liability are considered
observable, whereas inputs for which market data is not available
and therefore are developed using the best information available
about such assumptions are considered unobservable.
Fair value hierarchy
AASB 13 Fair Value Measurement requires the disclosure of
fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible
levels based on the lowest level that an input that is significant to
the measurement can be categorised into as follows:
Financial assets
Financial assets are classified, at initial recognition, and
subsequently measured at amortised cost, fair value through OCI,
or fair value through profit or loss.
The classification of financial assets at initial recognition that are
debt instruments depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing
them. With the exception of trade receivables that do not contain
a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a
financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs. Trade
receivables that do not contain a significant financing component
or for which the Group has applied the practical expedient for
contracts that have a maturity of one year or less, are measured
at the transaction price as disclosed in accounting policy for Trade
receivables note below.
Level 1
Measurements
based on quoted
prices (unadjusted)
in active markets
for identical assets
or liabilities that the
entity can access at
the measurement
date.
Level 2
Measurements
based on inputs
other than quoted
prices included
in Level 1 that are
observable for the
asset or liability,
either directly or
indirectly.
Level 3
Measurements
based on
unobservable
inputs for the asset
or liability.
In order for a financial asset to be classified and measured at
amortised cost or fair value through OCI, it needs to give rise to
cash flows that are ‘solely payments of principal and interest (SPPI)’
on the principal amount outstanding. This assessment is referred
to as the SPPI test and is performed at an instrument level.
Financial assets with cash flows that are not SPPI are classified and
measured at fair value through profit or loss, irrespective of the
business model.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses
on investments in debt instruments that are measured at amortised
cost or at fair value through other comprehensive income
(FVTOCI), lease receivables, other receivables and contract
assets, as well as on financial guarantee contracts. The amount
of expected credit losses (ECL) is updated at each reporting date
to reflect changes in credit risk since initial recognition of the
respective financial instrument. The Group always recognises
lifetime ECL for other receivables, contract assets and lease
receivables. The expected credit losses on these financial assets
are estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for factors that are
specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction
of conditions at the reporting date, including time value of money
where appropriate. For all other financial instruments, the Group
recognises lifetime ECL when there has been a significant increase
in credit risk since initial recognition. However, if the credit risk
on the financial instrument has not increased significantly since
initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month ECL. Lifetime
ECL represents the expected credit losses that will result from
all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of
lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the
reporting date.
The fair values of assets and liabilities that are not traded in
an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data. If all significant inputs
required to measure fair value are observable, the asset or liability
is included in Level 2. If one or more significant inputs are not
based on observable market data, the asset or liability is included
in Level 3.
The Group would change the categorisation within the fair value
hierarchy only in the following circumstances:
•
if a market that was previously considered active (Level 1)
became inactive (Level 2 or Level 3) or vice versa; or
if significant inputs that were previously unobservable (Level
3) became observable (Level 2) or vice versa.
•
When a change in the categorisation occurs, the Group recognises
transfers between levels of the fair value hierarchy (ie transfers
into and out of each level of the fair value hierarchy) on the date
the event or change in circumstances occurred.
The Group has no assets or liabilities measured at fair value,
except for financial liabilities at fair value through profit or
loss. While assets acquired and liabilities assumed in business
combinations have been measured at their acquisition date fair
values, in accordance with AASB 3 Business Combinations, these
initial measurements have formed the costs of the assets acquired
and liabilities assumed for the purpose of other accounting
standards.
Financial liabilities
All financial liabilities are measured subsequently at amortised cost
using the effective interest method or at fair value through profit
or loss. A financial liability is designated as at fair value through
profit or loss upon initial recognition if it forms part of a contract
containing one or more embedded derivatives, and AASB 9
Financial Instruments permits the entire combined contract to be
designated as at fair value.
•
•
•
there is an economic relationship between the hedged item
and the hedging instrument;
the effect of credit risk does not dominate the value changes
that result from that economic relationship; and
the hedge ratio of the hedging relationship is the same as that
resulting from the quantity of the hedged item that the Group
actually hedges and the quantity of the hedging instrument
that the entity actually uses to hedge that quantity of hedged
item.
Derecognition
Financial assets are derecognised when the contractual rights to
receipt of cash flows expire or the asset is transferred to another
party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset.
Financial liabilities are derecognised when the related obligations
are discharged, cancelled or have expired. The difference
between the carrying amount of the financial liability extinguished
or transferred to another party and the fair value of consideration
paid, including the transfer of non-cash assets or liabilities
assumed, is recognised in the statement of profit and loss and
other comprehensive income.
Trade receivables
Trade receivables (subject to provisional pricing) are non-interest
bearing, but as discussed in accounting policy for Financial
Assets above, are exposed to future commodity price movements
over the quotation period and, hence, fail the SPPI test and are
measured at fair value up until the date of settlement. These trade
receivables are initially measured at the amount which the Group
expects to be entitled, being the estimate of the price expected
to be received at the end of the quotation period. Approximately
90 percent of the provisional invoice (based on the provisional
price which is calculated as the average price in the week prior
to delivery) is received in cash when the goods are loaded onto
the ship, which reduces the initial receivable recognised under
AASB 15 Revenue from Contracts with Customers. The quotational
periods can range between one and three months post shipment
and final payment is due between 30-120 days from the end of the
quotational period.
Derivatives
Derivatives are initially recognised at fair value at the date when
derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of the reporting period.
The resulting gain or loss is recognised in profit or loss unless the
derivative is designated and effective as a hedging instrument, in
which event the timing of the recognition in profit or loss depends
on the nature of the hedge relationship.
At the inception of the hedging relationship the Group documents
the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for
undertaking the hedge transactions. Furthermore, at the inception
of the hedge and on an ongoing basis, the Group documents
whether the hedging instrument is effective in offsetting changes
in cash flows of the hedged item attributable to the hedged risk.
For hedge effectiveness assessment, the Group considers whether
the hedging instrument is effective in offsetting changes in cash
flows of the hedged item attributable to the hedged risk, which is
when the hedging relationships meet all of the following hedge
effectiveness requirements:
The effective portion of changes in the fair value of the hedging
instrument designated as cash flow hedges is recognised in other
comprehensive income and accumulated under the heading of
cash flow hedge reserve, limited to the cumulative change in fair
value of the hedged item from inception of the hedge. The gain or
loss relating to the ineffective portion is recognised immediately in
profit or loss.
As to cash flow statements disclosure, cashflow resulting from
commodity hedge is part of ‘operating activities’.
Fair values for derivative instruments are determined using
assumptions based on market conditions existing at the reporting
date. Derivatives embedded in non-derivative contracts are
recognised separately unless they are closely related to the host
contract, in which case they are accounted together with the host
contract.
Goods and Services Tax (GST) and other indirect taxes
Revenues, expenses and assets are recognised net of the amount
of GST except:
• where the GST incurred on a purchase of goods and services
is not recoverable from the taxation authority, in which case
the GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST
included.
•
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables in
the statement of financial position.
Cash flows are included in the statement of cash flows on a gross
basis and the GST component of cash flows arising from investing
and financing activities, which is recoverable from, or payable
to, the taxation authority, are classified as operating cash flows
included in receipts from customers or payments to suppliers.
Commitments and contingencies are disclosed net of the amount
of GST recoverable from, or payable to, the taxation authority.
Dividends
The Company recognises a liability to pay a dividend when
the distribution is authorised and the distribution is no longer
at the discretion of the Company. As per Section 254T(1) of
the Corporations Act 2001, a distribution is authorised when it
is approved by the shareholders. A corresponding amount is
recognised directly in equity.
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 79
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.
Principles of consolidation
The Financial Statements incorporate all of the assets, liabilities
and results of the parent (New Century Resources Limited) and all
of the subsidiaries (including any structured entities). Subsidiaries
are entities the parent controls. The parent controls an entity
when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power over the entity. A list of the subsidiaries
is provided in Note 32 to the Financial Statements.
The assets, liabilities and results of all subsidiaries are fully
consolidated into the Financial Statements of the Group from the
date on which control is obtained by the Group. The consolidation
of a subsidiary is discontinued from the date that control ceases.
Intercompany transactions, balances and unrealised gains or
losses on transactions between Group entities are fully eliminated
on consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure
uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or
indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling interests
that are present ownership interests in subsidiaries and are
entitled to a proportionate share of the subsidiary’s net assets on
liquidation at either fair value or at the non-controlling interests’
proportionate share of the subsidiary’s net assets. Subsequent
to initial recognition, non-controlling interests are attributed
their share of profit or loss and each component of other
comprehensive income. Non-controlling interests are shown
separately within the equity section of the statement of financial
position and statement of profit or loss and other comprehensive
income.
Parent entity financial information
The financial information for the parent entity, New Century
Resources Limited, disclosed in Note 31 to the Financial
Statements has been prepared on the same basis as the Group
Financial Statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounted for at the lower of
cost and recoverable amount in the Financial Statements of New
Century Resources Limited.
Tax consolidation legislation
New Century Resources Limited and its wholly-owned Australian
controlled entities have implemented the tax consolidation
legislation. The Group is now treated as a consolidated tax entity.
The head entity, New Century Resources Limited, and the
controlled entities in the tax consolidated group account for their
own current and deferred tax amounts. These tax amounts are
measured as if each entity in the tax consolidated group continues
to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, New
Century Resources Limited also recognises the current tax
liabilities (or assets) and the deferred tax assets arising from
unused tax losses and unused tax credits assumed from the
controlled entity in the tax consolidated group.
New Century Resources Limited will be responsible for any current
tax payable, current tax receivable and deferred tax assets relating
to unused tax losses or unused tax credits of the wholly owned
subsidiary, which are transferred to New Century Resources
Limited under tax consolidation legislation.
The head entity may also require payment of interim funding
amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising with the tax consolidated entity are
recognised as current amounts receivable from or payable to other
entity in the Group.
Any difference between the amounts assumed and amounts
receivable or payable are recognised as a contribution to (or
distribution from) wholly-owned tax consolidated entity.
New and amended accounting policies adopted by the Group
No new Accounting Standards or Interpretations were applied by
the Group during the year.
New accounting standards for application in future years
Accounting Standards and Interpretations issued by the AASB that
are not yet mandatorily applicable to the Group, together with an
assessment of the potential impact of such pronouncements on
the Group when adopted in future financial years, are discussed
below:
•
Property, Plant and Equipment - Proceeds before Intended
Use (applicable from 1 July 2022 for the Group)
In May 2020, the International Accounting Standards Board (Board)
issued Property, Plant and Equipment - Proceeds before Intended
Use, which made amendments to AASB 116 Property, Plant and
Equipment. The amendments prohibit a company from deducting
from the cost of property, plant and equipment amounts received
from selling items produced while the company is preparing the
asset for its intended use. Instead, a company will recognise
such sales proceeds in the statement of profit and loss and
other comprehensive income. Given the Century Mine achieved
commercial production on 1 July 2020, the proposed amendments
will not have any financial impact on the Group in future periods,
except where the Group undertakes any development work on
other projects.
• Other mandatory Accounting Standards and Interpretations
Other mandatory Accounting Standards and Interpretations issued
and available for early adoption but not applied by the Group or
not available for early adoption which will become mandatory
in subsequent financial years have not been included above as
they are not expected to have a material impact on the Financial
Statements.
Restatement of comparative information
Some amounts in the comparative financial year have been
reclassified to conform to the current financial year disclosure.
Note 2. Critical accounting judgements,
estimates and assumptions
Estimates and judgements are continually evaluated and are
based on experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
participant would place on any resources which have yet to be
proven as reserves associated with the CGU.
A change in any of the critical assumptions listed will alter the
value as initially determined and may therefore impact the carrying
value of assets in the future.
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates may differ from the
actual results. The critical estimates and judgements that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
discussed below.
Going concern
For the reasons detailed in Note 1, the financial report is prepared
on a going concern basis.
Mine rehabilitation, restoration and dismantling obligations
Provision is made for the anticipated costs of future restoration
and rehabilitation of mining areas from which natural resources
have been extracted in accordance with the accounting policy.
These provisions which include future cost estimates associated
with reclamation, plant closures, waste site closures, monitoring,
demolition of equipment, decontamination, water purification and
permanent storage of historical residues, are discounted to their
present value.
At each reporting date the rehabilitation liability is remeasured in
line with changes in discount rates, and timing or amounts of the
costs to be incurred. Rehabilitation, restoration and dismantling
provisions are adjusted for changes in estimates. Adjustments
to the estimated amount and timing of future rehabilitation and
restoration cash flows are a normal occurrence in light of the
significant judgements and estimates involved.
Uncertainty exists as to the amount of rehabilitation obligations
which will be incurred due to the impact of changes in
environmental legislation, and many other factors, including
future developments, changes in technology, price increases and
changes in interest rates.
The calculation of these provision estimates requires assumptions
such as application of environmental legislation, plant closure
dates, available technologies, engineering cost estimates and
discount rates. A change in any of the assumptions used may
have a material impact on the carrying value of mine rehabilitation,
restoration and dismantling provisions. The provision at reporting
date represents management’s best estimate of the present value
of the future rehabilitation costs required.
Recoverability of assets
At the end of each reporting period, the Group assesses whether
there is any indication that an asset may be impaired. If any such
indication exists, the recoverable amount of the asset is estimated
to determine the extent of the impairment loss (if any).
The recoverable amount of each cash-generating unit (CGU) is
determined as the higher of the asset’s fair value less costs to sell
and its value in use. The recoverable amount assessments require
the use of estimates and assumptions including discount rates,
exchange rates, commodity prices, future capital requirements and
future operating performance, as well as the value that a market
Status of asset commissioning
The Group exercised judgment in assessing the status of
commissioning of the Century Mine for accounting purposes in
order to determine whether the mining project was substantially
completed and ready for its intended purpose. The key criteria
used to determine the status of commissioning of the mining
project related to the achievement of ‘commercial levels of
production’, including but not limited to the following:
•
•
Completion of a reasonable period of testing of the mine plant
and equipment;
Level of capital expenditure incurred compared with the
original cost estimate;
• Majority of the assets making up the mining project are
substantially complete and ready for use;
Completion of a reasonable period of testing of the mine plant
and equipment;
The percentage grade of metal content is sufficiently
economic and consistent with the overall mine plan;
The ability to produce metal in saleable form (within
specifications); and
The ability to sustain continuous production of metal.
•
•
•
•
As a result of this assessment, the Group determined that Century
Mine commenced commercial production for accounting purposes
on 1 July 2020.
When a mine development/construction project moves into the
production phase, the capitalisation of certain mine development/
construction costs ceases. At this point all related amounts are
reclassified from Capital work in progress to relevant categories
within Property, Plant and Equipment and depreciation/
amortisation commences. Subsequent costs are either regarded as
forming part of the cost of inventory or expensed, except for costs
that qualify for capitalisation relating to mining asset additions or
improvements.
Commencement of commercial production on 1 July 2020 has
had a direct impact on the following items in the consolidated
statement of profit or loss and other comprehensive income and
consolidated statement of financial position:
Revenue – refer note 4;
Fair value movements in trade receivables – refer note 4;
Production costs – refer note 5;
Employee benefits – refer note 5;
•
•
•
•
• Depreciation and amortisation expense – refer note 6;
•
•
•
•
Finance expenses – refer note 10;
Trade debtors – refer note 16:
Inventories – refer note 17; and
Property, plant and equipment – refer note 19.
Development expenditure is capitalised, provided commercial
viability conditions continue to be satisfied. Proceeds from the
sale of the product extracted during the development phase are
netted against development expenditure. Upon completion of
development and commencement of commercial production,
80
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 81
Note 3. Operating segments
The Group has determined the operating segments based
on the reports reviewed by the Board of Directors in order to
make strategic decisions. The Board considers how resources
are allocated and performance is assessed and has identified
two reportable segments being Australia (which constitutes the
Century Mine, pipeline and Karumba Port Facility) and United
States of America (which constitutes the Kodiak Project that was
disposed of in February 2021) .
Unless stated otherwise, all amounts reported to the Board of
Directors, being the chief operating decision maker with respect
to operating segments, are determined in accordance with
accounting policies that are consistent to those adopted in the
annual Financial Statements of the Group.
Segment assets and liabilities are presented net of any
intersegment borrowings.
capitalised development costs are further transferred as required,
to the appropriate plant and equipment asset category and
depreciated using the unit of production method (UOP) basis.
Income tax and deferred tax assets and liabilities
The Group is subject to income taxes of Australia and jurisdictions
where it has foreign operations. Significant judgement is required
in determining the group provision for income taxes. There are
many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is
uncertain for which provisions are based on estimated amounts.
Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact
the current and deferred tax provision in the period in which the
determination is made.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable profits will be available to utilise those temporary
differences and losses, and the tax losses continue to be available
having regard to the nature and timing of their origination and
compliance with the relevant tax legislation associated with their
recoupment.
Assumptions about the generation of future taxable profits depend
on estimates of future cash flows. These estimates are based on
future production and sales volumes, operating costs, restoration
costs, capital expenditure and other capital transactions.
Judgements are also required about the application of income
tax legislation. These judgements and assumptions are subject
to risk and uncertainty, which may impact the amount of deferred
tax assets and liabilities recognised and the amount of other tax
losses and temporary differences not yet recognised.
Contingencies
By their nature, contingencies will only be resolved when one or
more uncertain future events occur or fail to occur. Determination
of the Group’s contingent liabilities disclosed in the Financial
Statements requires the exercise of significant judgement
regarding the outcome of future events.
COVID-19
Whilst the COVID-19 pandemic has not materially adversely
impacted the asset recoverability or financial results of the Group
during the financial year, the potential for increased volatility in
commodity prices and foreign exchange rates and restrictions
on movement of people and materials remains and may cause
adverse impacts in the future.
Segment information
Revenue
Fair value movements in trade
receivables
Australia
2021
$
277,981,813
5,621,245
Net fair value loss in zinc derivatives
(6,854,981)
Production costs
(181,375,095)
Employee benefits exoense –
labour costs
Change in zinc concentrate
inventory
Exploration and evaluation
expenditure
Employee benefits expense – share
based payments
(37,879,441)
10,734,311
USA
2021
$
Total
2021
$
Australia
2020
$
USA
2020
$
Total
2020
$
-
-
-
-
-
-
277,981,813
5,621,245
(6,854,981)
(181,375,095)
-
-
-
-
(37,879,441)
(3,324,857)
10,734,311
-
-
-
-
-
-
-
-
-
-
-
(3,324,857)
-
(102,664)
(571,350)
(674,014)
(119,853)
(1,151,854)
(1,271,707)
(1,390,889)
-
(1,390,889)
(555,268)
-
(555,268)
Professional expenses
(6,214,551)
(122,589)
(6,337,140)
(4,077,291)
(5,888)
(4,083,179)
Foreign exchange gains/(losses)
9,258,373
-
9,258,373
(3,943,491)
Gain on disposal of investments
-
4,232,252
4,232,252
9,750,000
-
-
-
(3,943,491)
9,750,000
461,503
223,901
-
-
-
223,901
461,503
-
(2,644,515)
(4,637)
(2,649,152)
Other income
Other expenses
Earnings/(loss) before interest,
income tax, depreciation and
amortisation ('EBITDA')
Depreciation and amortisation
expenses
Earnings/(loss) before interest and
income tax ('EBIT')
70,002,022
3,538,313
73,540,335
(4,453,772)
(1,162,379)
(5,616,151)
(63,834,779)
-
(63,834,779)
(174,911)
-
(174,911)
6,167,243
3,538,313
9,705,556
(4,628,683)
(1,162,379)
(5,791,062)
Net financing (expense)/income
(20,522,862)
138
(20,522,724)
(2,323,189)
6,979
(2,316,210)
Earnings/(loss) before income tax
('EBT')
(14,355,619)
3,538,451
(10,817,168)
(6,951,872)
(1,155,400)
(8,107,272)
Income tax expense
-
-
-
-
-
-
Net loss for the year attributable
to equity holders of New Century
Resources Limited
(14,355,619)
3,538,451
(10,817,168)
(6,951,872)
(1,155,400)
(8,107,272)
The total revenue of $277,981,813 comprises sales to customers in Australia of $44,466,060 and in Asia of $233,515,753. All customers
individually accounted for more than 10 percent of revenue. Revenue information is presented based on the location of the customers’
operations.
82
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 83
Segment assets and liabilities
Note 6. Depreciation and amortisation expense
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Australia
2021
$
69,396,617
332,119,902
401,516,519
116,694,356
227,121,128
343,815,484
USA
2021
$
Total
2021
$
Australia
2020
$
USA
2020
$
Total
2020
$
-
-
-
-
-
-
69,396,617
61,621,906
64,669
61,686,575
332,119,902
421,055,717
851,509
421,907,226
401,516,519
482,677,623
916,178
483,593,801
116,694,356
(134,491,385)
(147,191)
(134,638,576)
227,121,128
(295,551,625)
(827,775)
(296,379,400)
343,815,484 (430,043,010)
(974,966)
(431,017,976)
Note 4. Revenue and other related items
Revenue from sale of zinc concentrates
Other related items:
Fair value movements in trade receivables
Net fair loss on zinc derivatives (refer Note 26)
2021
$
277,981,813
5,621,245
(6,854,981)
2020
$
-
-
-
Depreciation and amortisation of property, plant and equipment – refer note 19
Amortisation of right-of-use assets – refer note 20
Total
Note 7. Exploration and evaluation expenditure
Kodiak Project costs
Century Project costs
Total
2021
$
(52,470,400)
(11,364,379)
(63,834,779)
2021
$
(571,350)
(102,664)
2020
$
(21,590)
(153,321)
(174,911)
2020
$
(1,151,854)
(119,853)
(674,014)
(1,271,707)
In accordance with the Group’s accounting policy, exploration and evaluation expenditure is either expensed as incurred or capitalised
based on facts and circumstances in relation to each area of interest.
Note 8. Professional expenses
2021
$
2020
$
(6,337,140)
(4,083,179)
The Group commenced commercial production at the Century Mine on 1 July 2020. From 1 July 2020, revenue from the sale of
zinc together with the associated costs of producing zinc has been recognised in the income statement. In the prior year, the pre-
commissioning sales and associated costs were being recognised as part of property, plant and equipment.
Professional expenses
Fair value movements in trade receivables arise from subsequent changes in provisionally priced zinc sales and are recognised in the
income statement.
The professional expenses during the year are mainly attributable to business development opportunities including the Group’s proposal
to acquire Goro Nickel & Cobalt Mine in New Caledonia. On 8 September 2020, the Company announced it had elected not to proceed
with the proposed transaction.
Note 5. Production costs and other related items
Note 9. Foreign exchange gains/(losses)
Production costs
Employee benefits expense – labour costs
Change in zinc concentrate inventory (refer Note 17)
Total
2021
$
(181,375,095)
2020
$
-
(37,879,441)
(3,324,857)
10,734,311
-
(208,520,225)
(3,324,857)
Foreign exchange gains/(losses)
2021
$
2020
$
9,258,373
(3,943,491)
Foreign exchange gains during the year are mainly due to revaluation of US dollar denominated borrowings (note 24) and deferred
proceeds (note 23).
The production costs represent all costs directly incurred in the production of zinc concentrate. The majority of the employee benefits
expense are labour costs which directly relate to the production of zinc concentrate.
84
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 85
Note 10. Finance income/expenses
Finance income
Interest received
Finance expenses
2021
$
2020
$
52,312
317,255
Kodiak operation
In the prior financial years, a strategic decision was made by the Group to suspend work on the definitive feasibility study for the
Kodiak Coking Coal Project, which is located in Alabama, USA. The Project had been put in care and maintenance and the Group was
considering its options with regards to the future of the Project. In February 2021, the Group sold its interest in the Kodiak Coking Coal
Project.
The Kodiak Coking Coal Project constituted a reportable segment, the USA segment, as set out in Note 2 to the Financial Statements. A
gain of $4,232,252 was recognised as follows:
Unwind of discount relating to mine restoration provisions – refer note 28
(1,392,771)
(2,603,289)
Unwind of discount relating to lease liabilities – refer note 20
Amortisation for effective borrowing rate – Facility A – refer Note 24
Amortisation for effective borrowing rate – Facility B – refer Note 24
Interest expense - Facility A
Interest expense - Facility B
Loan amendment fee – Varde
Interest on deferred proceeds
Interest on MMG bank guarantee support
Other
Note 11. Gain on disposal of investments
Gain on disposal – Kodiak operation
Gain on disposal – Pastoral interests
Total
(2,298,729)
(4,382,750)
(2,395,572)
(2,103,943)
(2,619,714)
(2,620,000)
(1,016,201)
(1,596,577)
(148,779)
(30,176)
-
-
-
-
-
-
-
-
(20,575,036)
(2,633,465)
2021
$
4,232,252
2020
$
-
-
9,750,000
4,232,252
9,750,000
Proceeds from disposal
Carrying value of financial guarantee bonds
Carrying value of rehabilitation provision
Net carrying value of other assets and liabilities
Foreign currency translation reserve released to income statement
Net gain on disposal
$
113,276
(751,721)
827,774
(10,452)
4,053,375
4,232,252
Pastoral interests
In the prior year in January 2020, the Group sold its non-controlling minority interest of 49 percent in the Lawn Hill and Riversleigh
Pastoral Holding Company to Waanyi SPC Pty Ltd which owned the 51 percent controlling interest in the Lawn Hill and Riversleigh
Pastoral Holding Company.
Waanyi SPC Pty Ltd was established in 1998 in accordance with the Gulf Communities Agreement, the Native Title Agreement for the
Century Mine. The role of Waanyi SPC Pty is to be the corporate representative of the Waanyi People, particularly in relation to the
ownership and management of pastoral companies.
Proceeds from the agreed sale price of $9,750,000 was received during the prior year. The carrying value of the investment as at the
date of disposal was nil. There was also no operational income, expense, or operational cashflow associated with this investment in the
comparative or current year. The gain on sale of $9,750,000 was recognised in the income statement in the prior year in January 2020.
Note 12. Other income
Gain on sale of property, plant and equipment
Other income
Total
2021
$
176,007
47,894
223,901
2020
$
111,419
350,084
461,503
The carrying value of property, plant and equipment disposed of was nil, hence the proceeds from sale equates to a gain on sale.
Note 13. Other expenses
Contract termination expenses
2021
$
-
2020
$
(2,649,152)
86
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 87
Note 14. Income tax expense
Note 15. Cash and cash equivalents
Numerical reconciliation of income tax loss to prima facie tax payable
Cash at bank
Loss from operations before income tax expense
(10,817,168)
8,107,272
The effective interest rate on cash at bank is disclosed in Note 41 to the Financial Statements.
2021
$
2020
$
2021
$
2020
$
35,696,665
40,005,053
Tax at the Australian tax rate of 30% (2020: 30%)
(3,245,150)
(2,432,182)
The amount of cash and cash equivalents held as USD at 30 June 2021 was valued at A$12,181,750 at reporting date (2020:
A$2,2854,215).
Tax effect amounts which are not deductible in calculating taxable income:
Tax effect of different tax rate of overseas subsidiaries
Share based payments
Income tax benefits not recognised
Foreign currency translation reserve
Other
Income tax expense
Unrecognised deferred tax assets – tax losses
Gross tax losses Australia and USA
Tax benefit not recognised Australia
Tax benefit not recognised USA
Total tax benefit not recognised
Unrecognised temporary differences
14,346
417,267
28,689
166,580
4,049,392
2,236,288
(1,235,855)
-
-
-
625
-
234,065,728
193,770,193
62,282,739
50,366,230
-
7,117,759
Note 16. Trade and other receivables
Trade receivables
GST receivables
Other receivables
2021
$
4,697,924
1,404,634
2020
$
-
1,732,546
-
11,766,978
6,102,558
13,499,524
The expected credit loss was nil on the receivables. Other receivables in the prior year comprise mainly outstanding invoice amounts
relating to shipments made during the development phase.
Note 17. Inventories
62,282,739
57,483,989
Zinc concentrates – at cost
Consumables and spare parts – at cost
2021
$
10,734,311
2020
$
-
13,296,203
6,072,000
24,030,514
6,072,000
Total timing differences not recognised
46,399,028
51,487,929
Zinc concentrates and consumables inventories are carried at the lower of cost and net realisable value.
The above temporary differences and tax losses have not been brought to account as they do not meet the recognition criteria as per
the Group’s accounting policy. The benefit of these deferred tax assets will only be obtained if:
Note 18. Prepayments
•
•
•
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for
the temporary differences to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation; and
no changes in tax legislation adversely affect the entity in realising the benefit from the deductions for the temporary differences.
Prepayments
2021
$
2020
$
3,566,880
2,109,998
No franking credits are available (30 June 2020: Nil).
The increase in prepayments is mainly due to the timing of large and irregular payments including insurance policies and local
government rates.
88
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 89
Land and
buildings
$
Mining
development,
plant and
equipment
$
Capital work in
progress
$
Total
$
2020
At 30 June 2020
At cost
Land and
buildings
$
Mining
development,
plant and
equipment
$
Capital work in
progress
$
Total
$
2,171,694
15,050,038
358,667,633
375,889,365
Note 19. Property, plant and equipment
2021
At 30 June 2021
At cost
Accumulated depreciation
Movements in carrying value
-
-
-
323,103,376
5,155,186
328,258,562
(52,470,400)
-
(52,470,400)
270,632,976
5,155,186
275,788,162
Balance 1 July 2020
2,171,694
447,541
358,667,633
361,286,868
Reclassification between categories
(2,171,694)
360,839,327
(358,667,633)
-
Additions
Depreciation expense for the year
Reduction in rehabilitation provision capitalised
– Refer Note 28
Impact of change in rehabilitation discount rate
– Refer Note 28
Proceeds from sales of zinc concentrate in
development phase
Balance at 30 June 2021
-
-
-
-
-
-
8,306,097
5,155,186
13,461,283
(52,470,400)
(33,676,871)
(6,328,564)
(6,484,154)
-
-
-
-
(52,470,400)
(33,676,871)
(6,328,564)
(6,484,154)
270,632,976
5,155,186
275,788,162
All proceeds earned from the sale of pre-commissioning zinc concentrate have been offset against property, plant and equipment
in accordance with the Group’s accounting policy. The $6,484,154 of proceeds during the current year that has been offset against
property, plant and equipment relates to pre-commissioning zinc concentrate shipments made by 30 June 2020 with proceeds finalised
during the current year.
Accumulated depreciation
-
(14,602,497)
-
(14,602,497)
Movements in carrying value
Balance 1 July 2019
Additions
Capitalisation of rights-of-use assets amortisation
– refer Note 20
Capitalisation of unwind of interest on lease
liabilities – Refer Note 20
Capitalisation of adjustment for effective
borrowing rate – Facility A – refer Note 24
Capitalisation of adjustment for effective
borrowing rate – Facility B – refer Note 24
Additions to rehabilitation asset – Refer Note 28
Depreciation expense for the year
Proceeds from sale in development phase
2,171,694
447,541
358,667,633
361,286,868
2,171,694
469,131
240,860,337
243,501,162
-
-
-
-
-
-
-
-
-
-
-
-
-
-
259,432,316
259,432,316
11,029,519
11,029,519
2,888,898
2,888,898
9,056,398
9,056,398
1,254,121
1,254,121
12,139,549
12,139,549
(21,590)
-
(21,590)
-
(177,993,505)
(177,993,505)
Balance at 30 June 2020
2,171,694
447,541
358,667,633
361,286,868
No borrowing costs were capitalised during the financial year (30 June 2020: $8,736,191).
90
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 91
Note 20. Leases
As a lessee, the Group leases assets, including Corporate office space and limited mining equipment at Century Mine.
Lease liabilities are payable as follows:
Right-of-use assets
The movement in the right-of-use assets is reconciled below:
Balance at beginning of the year
Additions due to modification of lease rental rates
Recognition on first time adoption of AASB 16
Amortisation – capitalised as Property, plant and equipment – refer note 19
Amortisation – expensed during the year
Balance at end of the year
2021
$
44,430,521
626,335
2020
$
-
-
-
-
55,613,361
(11,029,519)
(11,364,379)
(153,321)
33,692,477
44,430,521
Less than one year (gross amount)
Between one and five years (gross amount)
Total (gross amount)
Less: future interest
Carrying value
Note 21. Exploration and evaluation assets
Amortisation of the leased assets at the Century Mine had been capitalised to Property, plant and equipment in the prior year.
Exploration and evaluation assets
2021
$
2020
$
11,793,310
13,480,333
26,073,989
37,554,329
37,867,299
51,034,662
(3,626,590)
(5,894,417)
34,240,709
45,140,245
2021
$
3,631,381
2020
$
-
Lease liabilities
The movement in the lease liabilities is reconciled below:
Balance at beginning of the year
Additions due to modification of lease rental rates
Recognition on first time adoption of AASB 16
Interest unwind – capitalised – refer to Note 19
Interest unwind – expensed
Lease payments
Balance at end of the year
Disclosed as
Current
Non-current
Balance at end of the year
In accordance with the Group’s accounting policy, exploration and evaluation expenditure is either expensed as incurred or capitalised
based on facts and circumstances in relation to each area of interest.
Note 22. Financial assets – security guarantees
Deposits held as security guarantees
2021
$
2020
$
19,007,882
16,189,837
Deposits held as security guarantees are for the benefit of other parties in guarantee of obligations. They may bear interest with the
interest rate dependent on the term and nature of the deposits. They are valued at the face value of the term deposits.
Note 23. Trade and other payables
Trade and other payables
Deferred proceeds
Total trade and other payables
2021
$
2020
$
45,435,168
52,414,293
20,781,738
24,302,634
66,216,906
76,716,927
2021
$
45,140,245
626,335
2020
$
-
-
-
-
55,613,361
2,888,898
2,298,729
30,176
(13,824,600)
(13,392,190)
34,240,709
45,140,245
10,143,098
11,205,730
24,097,611
33,934,515
34,240,709
45,140,245
The interest unwind relating to leased assets at Century Mine was capitalised to Property, plant and equipment in the prior year.
Proceeds of $20,781,738 against which shipment had not been made by 30 June 2021 have been treated as deferred proceeds. This
will be recognised as revenue in the income statement in the subsequent financial year when shipment is made. Deferred proceeds are
generally settled within three months.
92
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 93
Note 24. Borrowings
The details of the facilities are summarised below.
Secured - current
Varde Facility A
Varde Facility B
Other borrowings – Equipment finance
Total current
Secured – non-current
Varde Facility A
Varde Facility B
Other borrowings – Equipment finance
Total non-current
Total
Varde Facility A
Varde Facility B
Other borrowings – Equipment finance
Total borrowings at 30 June
2021
$
2020
$
14,409,828
27,082,244
11,326,897
13,863,590
97,499
-
25,834,224
40,945,834
-
17,027,223
Facility
Facility type
Facility amount
Term
Interest rate
Silver royalty
Options
Varde Facility A
A$60 million facility
Varde Facility B
A$40 million facility
Senior secured (all assets)
Senior secured (all assets)
A$60,000,000 (US$42,900,000)
A$40,000,000 (US$28,000,000)
2.5 years from February 2019
2.5 years from January 2020
8% per annum
8% per annum
20% of payable silver production limited to
4 years (capped at US$5 million)
10% of payable silver production limited to
4 years
None
25 million options at $0.25 per share, 3.5
year term
13,100,246
24,157,968
Movements during the year
126,578
-
13,226,824
41,185,191
The movement in Varde Facility A is reconciled below:
Opening balance
14,409,828
44,109,467
Adjustment for effective borrowing rate
24,427,143
38,021,558
Repayments
224,077
-
Exchange differences
39,061,048
82,131,025
Establishment fee netted of against borrowings
Description of the borrowing facilities
In February 2019, the Group secured a financing facility with Varde Partners. This comprised Varde Facility A of US$42,900,000 which
has been drawn down. This facility attracts interest at eight percent per annum, has first ranking security over all Century Project assets
and is repayable by scheduled payments over a period of 12 to 30 months after the utilisation date. The facility also includes payments
based on silver production which is capped at US$5,000,000. This has been recognised as a financial liability at fair value through profit
or loss as disclosed Note 25 to the Financial Statements.
In January 2020, the Group announced the completion of the expansion of existing working capital facilities with Varde Partners from
a total US$42,900,000 to US$70,900,000. This additional US$28,000,000 comprises Varde Facility B which has a term of 2.5 years,
carries an interest rate of eight percent per annum and first ranking security over all Century Project assets. It also includes a limited term
silver royalty and options allocation, which have been recognised as a financial liability at fair value through profit or loss as disclosed
Note 25 to the Financial Statements.
Refer to the Note 43 to the Financial Statement for matters subsequent to the end of the financial year in respect of amendments to the
Varde borrowing facilities.
Balance at end of year
The movement in Varde Facility B is reconciled below:
Opening balance
Borrowings obtained US$28,000,000
Amount disclosed as financial liability at fair value through profit or loss – silver
Amount disclosed as financial liability at fair value through profit or loss – options
Adjustment for effective borrowing rate
Repayments
Exchange differences
Establishment fee netted of against borrowings
Balance at end of year
2021
$
2020
$
44,109,467
54,100,350
4,382,750
9,056,398
(30,174,998)
(16,590,057)
(3,907,391)
1,600,670
-
(4,057,894)
14,409,828
44,109,467
2021
$
38,021,558
-
-
-
2,395,572
(12,770,421)
(3,219,566)
2020
$
-
40,000,000
(2,299,536)
(750,000)
1,254,121
-
716,973
-
(900,000)
24,427,143
38,021,558
94
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 95
The movement in Other borrowings – Equipment Finance is reconciled below:
Movements
Borrowings obtained
Interest
Repayments
Balance at end of the period
2021
$
295,100
6,648
(77,671)
224,077
2020
$
-
-
-
-
During the year, the Group acquired machinery for its Century Mine on finance from an equipment finance provider.
The movement in financial liability at fair value through profit or loss for Varde Facility A was as follows.
Opening balance
Repayments
Exchange differences
Balance at end of year
Note 25. Financial liability at fair value through profit or loss
The movement in financial liability at fair value through profit or loss for Varde Facility B was as follows.
Current
Varde Facility A – silver royalties
Varde Facility B – silver royalties
Total current
Non-current
Varde Facility A – silver royalties
Varde Facility B – silver royalties
Varde Facility B – options
Total non-current
Total
Varde Facility A – silver royalties
Varde Facility B – silver royalties
Varde Facility B – options
Balance at 30 June
Opening balance
Additions
Repayments
Exchange differences
Balance at end of year
2021
$
2020
$
1,920,000
1,920,000
1,207,663
3,127,663
1,207,663
3,127,663
2,635,381
3,821,880
318,865
750,000
1,100,406
750,000
3,704,246
5,672,286
4,555,381
5,741,880
1,526,528
2,308,069
750,000
750,000
6,831,909
8,799,949
Silver royalties - the financial liability at fair value through profit or loss represents the fair value of payments to be made under the Varde
loan facilities which is dependent on forecast silver production. Refer to Note 24 to the Financial Statements for further details.
Options - the financial liability at fair value through profit or loss represents the fair value of options issued to Varde under the Varde loan
facility. Refer to Note 24 to the Financial Statements for further details.
2021
$
5,741,880
(708,471)
(478,028)
2020
$
7,137,249
(1,587,731)
192,362
4,555,381
5,741,880
2021
$
2,308,069
2020
$
-
-
2,299,536
(605,164)
(176,377)
-
8,533
1,526,528
2,308,069
96
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 97
Note 26. Derivative financial instruments
During the year, the Group entered into various derivative instruments to hedge price risk on a portion of the Century Mine’s planned zinc
concentrate production. Century’s profitability and cash flow are sensitive to the realised Australian dollar zinc price. Having regard to the
favourable spot and forward prices at the time, hedging in the form of Australian dollar zinc swap contracts and US dollar zinc purchased
put option contracts were entered into during the year.
Income statement
The total net fair value loss on zinc derivatives recognised as expense during the year was $6,854,981. This is made up of an expense of
$1,844,744 from the zinc swap contracts and an expense of $5,010,237 from the zinc purchased put option contracts.
Zinc purchased put option contracts
The zinc purchased put option contracts were not designated for hedge accounting. These contracts were fully settled by 30 June 2021
with a loss of $5,010,237 recognised in the income statement.
Zinc swap contracts
The zinc swap contracts were designated as cash flow hedges and were assessed to be fully effective in managing the underlying risk.
The fair value movements in the zinc swap contracts were as follows:
Net fair value loss on zinc derivatives (expense)
Derivative financial instruments – current liability
Derivative financial instruments – non-current liability
Cash flow hedge reserve
Total
The movement in the Cash Flow Hedge Reserve were as follows:
Opening balance
Effective portion of gain or loss on hedging instrument
Reclassification to profit and loss as hedged item recognised in the profit and loss
Closing balance
2021
$
(1,844,744)
7,350,005
9,945,477
(15,450,738)
-
2021
$
-
(17,295,482)
1,844,744
(15,450,738)
2020
$
-
-
-
-
-
2020
$
-
-
-
-
The following table contains details of the hedging instrument(s) used in the Group’s hedging strategy:
Favourable/(Unfavourable)
changes in fair value used for
measuring ineffectiveness
Carrying
amount of
hedging
instrument
$
Hedging
instrument
$
Hedged
item
$
Settled
portion of
hedging
instrument
realised
losses
$
Amount
reclassified
from CFHR
to P&L as
hedged item
recognised in
P&L
$
Hedging loss
recognised in
CFHR
$
(17,295,482)
(17,295,482)
17,295,482
-
(1,844,744)
15,450,738
At 30 June 2021
Term
Cash flow hedges:
Zinc swap derivative
financial liabilities
July 2021 to
June 2024
The following table details the sensitivity of the Group’s financial assets to movements in commodity prices. Financial assets arising from
revenue on provisionally priced sales are recognised at the estimated fair value of the receivable and subsequently remeasured at each
reporting date. At the reporting date, if the commodity prices increased/(decreased) by 10 percent and all other variables were held
constant, the Group’s post-tax profit would have changed as set out below:
30 June 2021
30 June 2020
Commodity
price movement
(Decrease)/
increase in
profit
$
(Decrease)/
increase in OCI
$
Commodity
price
movement
Increase/
(decrease) in
profit
$
Increase/
(decrease) in
OCI
$
+10%
-10%
5,677,971
(30,312,448)
(5,677,971)
30,346,844
+10%
-10%
-
-
-
-
Commodity
Zinc
Zinc
Note 27. Employee benefit provisions
The price of zinc is determined by numerous factors and events that are beyond the control of the Group. Zinc prices fluctuate on a daily
basis and can exhibit significant volatility.
During the year ended 30 June 2021, the Group entered into a fixed for variable swap agreement with Macquarie Bank Limited to hedge
the AUD zinc price on 90,000 tonnes of zinc being a portion of forecast future sales exposure. As at 30 June 2021, the hedge position
was at 90,000 tonnes with the fixed price set at AUD3,716.86. The hedge is to be settled in equal portions of 2,500 tonnes per month
from July 2021 through June 2024 inclusive.
The fair value of $17,295,482 was recognised as a derivative financial liability at 30 June 2021.
Provision for employee entitlements - current
Balance at 1 July
Movement for the year
Balance at 30 June
2021
$
2020
$
2,642,422
1,380,038
1,269,054
1,373,368
4,022,460
2,642,422
Employee benefits provision represents the annual leave and long service leave entitlements of the employees.
98
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 99
Note 28. Environmental rehabilitation provisions
Provision for mine site restoration – non-current
2021
$
2020
$
Note 29. Issued capital
Holders of ordinary shares have the right to receive dividends as declared and in the event of winding up the parent entity, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of shares held and the amount paid up.
At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on
a show of hands.
Balance at 1 July
215,587,408
200,828,797
The movements in issued capital during the year were as follows:
Opening balance – 1 July 2020
Number of Shares
2021
$
978,598,739
402,588,543
Shares issued on 1 December 2020 at 15 cents under placement and non-renounceable
entitlement offer
226,185,578
35,058,765
Shares issued on 1 December 2020 at 15 cents in lieu of professional services fees
Shares issued on 4 December 2020 at 15 cents in lieu of professional services fees
Shares issued on 4 December 2020 at 22 cents under Employee share plan
Shares issued on 11 December 2020 at 18 cents in lieu of non-executive fees
115,585
3,900,916
541,491
585,737
17,915
604,645
117,900
103,500
Total shares issued
231,329,307
35,902,725
Costs arising from the issue of shares
-
(1,847,123)
Closing balance – 30 June 2021
1,209,928,046
436,644,145
The shares issued in lieu of professional services fees, employee share plan and non-executive fees totalling $843,960 did not result in
payments of cash. These were recognised as a debit to the income statement and credit to issued capital.
Reduction in rehabilitation provision capitalised – refer to Note 19
(33,676,871)
-
Impact of change in discount rate – refer to Note 19
(6,328,564)
12,139,549
Interest unwind
Reduction due to disposal of business
Exchange differences
Balance at 30 June
Movements in balances for the separate areas are as follows:
Century Mine
Balance at 1 July
Reduction in rehabilitation provision capitalised
Impact of change in discount rate
Interest unwind
Balance at 30 June
Kodiak Project
Balance at 1 July
Reduction due to disposal of business
Exchange differences
Balance at 30 June
1,392,771
(827,774)
-
2,603,289
-
15,773
176,146,970
215,587,408
214,759,634
200,016,796
(33,676,871)
-
(6,328,564)
12,139,549
1,392,771
2,603,289
176,146,970
214,759,634
827,774
(827,774)
-
-
812,001
15,773
827,774
The $33,676,871 reduction in the provision mainly reflects revisions in mine rehabilitation cost estimates that were approved by the
Queensland Department of Environment and Science in January 2021. A corresponding decrease in Property, plant and equipment was
recognised in accordance with the Group’s accounting policy – refer to Note 19 to the Financial Statements.
The $6,328,564 reduction in the provision reflects adjustments to the discount rate. A corresponding decrease in Property plant and
equipment was recognised in accordance with the Group’s accounting policy – refer to Note 19 to the Financial Statements.
During the year, the Group disposed of the Kodiak Project and all associated rehabilitation provisions obligation have transferred to the
purchasers. Refer to Note 11 to the Financial Statements for further details.
The Group assumes the rehabilitation will be carried out at the end of life of the Group’s mining operations in estimating the
environmental rehabilitation provisions.
The provision for mine site restoration constitutes a critical accounting judgement – refer to Note 2 to the Financial Statements.
100
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 101
Opening balance 1 July 2019
Number of Shares
2020
$
505,732,048
312,052,963
Note 30. Foreign currency translation reserve
Foreign currency translation reserve
2021
$
-
2020
$
4,053,375
The foreign currency translation reserve related to exchange differences arising on translation of the Kodiak Project foreign operation
which had a functional currency other than Australian dollars. These exchange differences were recognised as a gain in the statement
of profit and loss and other comprehensive income in February 2021 upon the disposal of the Kodiak operations. Refer Note 11 to the
Financial Statements.
Shares issued on 8 August 2019 at 33 cents under placement
73,859,807
24,373,736
Shares issued on 18 September 2019 at 33 cents under placement
54,928,072
18,126,264
Shares issued on 18 September 2019 at 33 cents under placement
Shares issued on 20 September 2019 at 33 cents under share purchase plan
Shares issued on 18 November 2019 at 36 cents under Employee Share Plan
Shares issued on 18 November 2019 at 36 cents under Employee Share Plan
Shares issued on 24 April 2020 to IGO Limited at 15 cents pursuant to subscription
agreement
Shares issued on 29 April 2020 at 15 cents to institutions under the accelerated pro rata
non-renounceable entitlement offer
1,515,153
1,333,353
270,676
215,466
500,000
440,000
97,000
78,000
158,500,000
23,775,000
33,875,087
5,081,263
Shares issued on 5 June 2020 at 15 cents under retail entitlement offer and shortfall
105,496,743
15,824,511
Shares issued on 9 June 2020 at 15 cents under retail entitlement offer and shortfall
42,872,334
6,430,850
Total shares issued
472,866,691
94,726,624
Costs arising from the issue of shares
Closing balance – 30 June 2020
-
(4,191,044)
978,598,739
402,588,543
Total proceeds from the issue of shares under placement equated to $42,500,000 being $24,373,736 on 8 August 2019 and $18,126,264
on 18 September 2019.
Total proceeds from the issue of shares under subscription agreement and retail entitlement offer equated to $51,111,624 being
$23,775,000 on 24 April 2020, $5,081,263 on 29 April 2020, $15,824,511 on 5 June 2020 and $6,430,850 on 9 June 2020.
The 270,676 shares issued on 18 November 2019 at 36 cents under the Employee Share Plan amounting to $97,000 did not result in
receipt of cash. This was recognised as a debit to employee expense and credit to issued capital. Therefore, total cash proceeds from
issue of shares during the prior financial year was $94,629,624.
Options over ordinary shares
Each option entitles the holder to subscribe for one share upon exercise of each option. Further details of the total options on issue by
the Company are disclosed in Note 35 to the Financial Statements.
Capital management
The Company’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
The Board effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of debt levels and share issues. The
Board frequently review budgets and budget variance analyses that include cash flow projections and working capital projections, to
ensure prudent management of capital budgeting requirements. There has been no change in the strategy adopted by the Board to
control the capital of the Group since the prior financial year.
102
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 103
Note 31. Parent entity
The following information has been extracted from the books and records of the parent entity (New Century Resources Limited) and has
been prepared in accordance with the Accounting Standards.
Statement of financial position
Note 32. Controlled entities
Information about principal subsidiaries
Set out below are the Group’s subsidiaries at 30 June 2021. The subsidiaries listed below have share capital consisting solely of ordinary
shares, which are held directly by the Group, and the proportions of ownership interests held equals the voting rights held by the Group.
Each subsidiary’s country of incorporation or registration is also its principal place of business.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Total equity
Statement of profit or loss and other comprehensive income
Total loss for the financial year
Total comprehensive loss
2021
$
2020
$
1,620,940
15,546,753
147,793,798
110,914,800
Name of subsidiary
Ownership interest held by the
Group
Proportion of non-controlling
interests
Principal place
of business
2021
%
2020
%
2021
%
2020
%
149,414,738
126,461,553
Attila Resources (US) Pty Ltd
Australia
100
1,535,447
2,090,364
147,493
309,617
Attila Resources Holding US Ltd
Attila Resources US LLC
1,682,940
2,399,981
Kodiak Mining Company LLC
United States of
America
United States of
America
United States of
America
-
-
-
147,731,798
124,061,572
Century Bull Pty Ltd
Australia
Century Mine Rehabilitation Project Pty Ltd
Australia
436,644,145
402,588,543
(288,912,347)
(278,526,971)
147,731,798
124,061,572
Century Mining Limited
PCML SPC Pty Ltd
SPC1 Pty Ltd
SPC2 Pty Ltd
Investment Co Pty Ltd
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
70
70
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
-
-
-
-
30
30
-
-
-
-
-
-
-
(11,776,265)
(7,500,513)
(11,776,265)
(7,500,513)
Attila Resources Holding US Ltd, Attila Resources US LLC, Kodiak Mining Company LLC were disposed of during the year as part of the
sale of the Kodiak operations. Refer to Note 11 to the Financial Statements.
Since the acquisition on 13 July 2017, the Group also owns 1 Class C share in ABDT Pty Ltd, the trustee of the Aboriginal Development
Benefits Trust (ADBT), which is a charitable trust established pursuant to the GCA for the delivery of economic benefits to the Native Title
Groups and other Aboriginal peoples living in communities across the Lower Gulf Region.
The non-current assets of the Company mainly represent its receivable from its subsidiary, Century Mining Limited. The receivable is
unsecured with no fixed repayment terms. This receivable was deemed recoverable at 30 June 2021 based on the expected positive
cash flows of Century Mining Limited.
The accumulated losses balance is reconciled as follows:
Balance at 1 July
Total loss for the financial year
Share based payments expense credited to equity
Balance at 30 June
2021
$
2020
$
(278,526,971)
(271,581,726)
(11,776,265)
(7,500,513)
1,390,889
555,268
(288,912,347)
(278,526,971)
Guarantees
The parent entity has provided guarantees to the financier of its subsidiaries. This was in relation to the borrowings from Varde as set out
in Notes 24 and 25 to the Financial Statements.
Contingent liabilities and Commitments
Refer to Note 39 for Contingent liabilities and Note 40 for Commitments.
104
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 105
Summarised financial information of subsidiaries with material non-controlling interests
Set out below is the summarised financial information for each subsidiary that had non-controlling interests that were material to the
Group. These are entities related to the Kodiak operation that were disposed of during the year.
Note 33. Significant related party transactions and balances
The significant related party transactions and balances during the financial year were as follows:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net liabilities
Carrying amount of non-controlling interests
Summarised financial performance before intra-group eliminations
Revenue
Loss before income tax
Income tax expense
Post-tax loss
Other comprehensive income
Total comprehensive income
Profit attributable to non-controlling interests
Distributions paid to non-controlling interests
Summarised cash flow information after intra-group eliminations
Cash and cash equivalents at beginning of year
Net cash flow for operating activities
Net cash flow for investing activities
Net cash flow for financing activities
Cash and cash equivalents at end of year
2021
$
-
-
-
-
-
-
2021
$
-
2020
$
64,669
851,509
(147,191)
(827,775)
(58,788)
-
2020
$
-
(693,939)
(1,155,400)
-
-
(693,939)
(1,155,400)
-
-
(693,939)
(1,155,400)
-
-
2021
$
52,116
-
-
2020
$
10,801
(565,661)
(1,451,405)
(139)
513,684
-
(297,591)
1,790,311
52,116
Kodiak’s net cash from financing activities for both 2021 and 2020 solely comprised movements in intra-group loan account balances.
Key Management Personnel (KMP)
KMP are any people having authority and responsibility for planning, controlling and directing the activities of the entity, directly or
indirectly, including any director (whether executive or otherwise). For further disclosures relating to KMP refer to Note 34 to the Financial
Statements.
Other
A number of KMP, or their related parties, hold positions in other entities that may result in them having control or significant influence
over the financial or operating policies of those entities. Where the Group transacts with the KMP and their related parties, the terms and
conditions of these transactions are no more favourable than those available, or which might reasonably be expected to be available, on
similar transactions to non-KMP related entities on an arm’s length basis.
Note 34. Interests of KMP
Refer to the remuneration report contained in the Directors’ Report for additional details of the remuneration paid or payable to each
member of the Group’s KMP for the financial year.
The totals of remuneration paid to KMP of the Company and the Group during the financial year are as follows:
Short-term
benefits
$
Short-term
incentive
awards
$
Post-
employment
benefits
$
Other long-
term benefits
$
Termination
benefits
$
Share-based
payments
$
Total KMP
compensation
$
2021 Total
1,577,445
210,761
2020 Total
1,769,234
-
90,574
82,695
-
-
-
-
615,956
2,494,736
438,925
2,290,854
Other KMP transactions
For details of other transactions with KMP, refer to Note 33 to the Financial Statements for Significant related party transactions and
balances.
106
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 107
Note 35. Share based payments
The following table summarises the share options and performance rights outstanding as at 30 June 2021:
For the financial year-ended 30 June 2020
2021
Weighted
average fair
value
2020
Weighted
average fair
value
2020
Number
2021
Number
2020
Number of
options/
rights
Exercise
price
$
Issue
date
Expiry
date
Total fair
value $
Amount
recognised
as expense
during the
year $
Outstanding at the beginning of the year
124,929,310
0.26
115,390,000
Granted during the year
Lapsed during the year
Other adjustments during the year
17,252,285
-
(17,040,000)
0.16
-
0.26
9,539,310
-
-
0.27
0.14
-
-
Outstanding at end of the year
89,141,595
0.10
124,929,310
0.26
Details of performance rights recognised as expense during the financial year are as follows:
For the financial year-ended 30 June 2021
Fair value per
right
$
Number
Total fair
value
$
Amount
recognised
as expense
during the
year
$
$0.56 3 year director options
1,000,000
0.56
12/09/2019
18/09/2022
126,700
126,700
$0.70 3 year director options
1,000,000
0.70
12/09/2019
18/09/2022
109,200
109,200
95c 3 year employee options
250,000
0.95 06/06/2019 06/06/2022
50,200
46,953
Performance rights
Performance rights
Total
5,732,062
1,907,258
- 20/01/2020
01/07/2024
820,736
205,184
-
17/07/2020
01/07/2024
268,923
67,231
555,268
In addition to above options and performance rights, the Company also issued 25,000,000 options to Varde Partners during the financial
year ended 30 June 2020, which has been recognised as a financial liability at fair value through profit or loss. Refer to Note 24 to the
Financial Statements.
These options and performance rights have been valued using the Black-Scholes model or hybrid employee share option pricing model
with the following additional parameters:
2021
Issue date
Expiry date
Performance rights
20/01/2020
01/07/2024
Performance rights
17/07/2020
01/07/2024
Performance rights
04/12/2020
01/07/2025
Performance rights
04/12/2020
01/07/2025
Performance rights
22/03/2021
01/07/2025
Total
0.15
0.15
0.16
0.22
0.17
5,732,062
820,736
307,776
1,907,258
268,923
100,846
13,422,963
2,134,251
711,417
3,578,118
769,295
256,432
251,204
43,253
14,418
2020
$0.56 3 year
director options
$0.70 3 year
director options
95c 3 year
employee options
1,000,000
1,000,000
250,000
1,390,889
Performance rights
5,732,062
Number of
options/
rights
Grant date
share price
$
Term
years
Volatility
%
Interest rate
%
Grant
date
Fair value
per option
$
Total fair
value
$
0.33
0.33
0.65
0.25
0.20
3
3
3
3
3
79
79
62
80
80
0.90
12/09/2019
0.13
126,700
0.90
12/09/2019
0.11
109,200
1.10 06/06/2019
0.20
50,200
0.30 20/01/2020
0.30
17/07/2020
0.15
0.15
820,736
268,923
These performance rights have been valued using the hybrid employee share option pricing model with the following additional
parameters:
Performance rights
1,907,258
2021
Number of
rights
Grant date
share price
$
Term
years
Volatility
%
Interest
rate
%
Grant
date
Fair value
per right
$
Performance rights
5,732,062
Performance rights
1,907,258
Performance rights
13,422,963
Performance rights
3,578,118
0.25
0.20
0.22
0.22
3
3
3
3
80
80
80
80
0.3 20/01/2020
0.3
17/07/2020
0.3 04/12/2020
0.15
0.15
0.16
0.3 04/12/2020
0.22
769,295
Total fair
value
$
820,736
268,923
2,134,251
The 251,204 performance rights granted on 22 March 2021 were valued based on the 5-day volume weighted average share price of 17
cents per share.
For the performance rights formally approved by the shareholders and granted on 17 July 2020, the vesting period commenced from 31
October 2019 for accounting purposes.
Note 36. Earnings per share
The following reflects the income used in the basic and diluted earnings per share computations:
Basic/dilutive earnings per share
Basic loss per share – dollars
Weighted average number of ordinary shares outstanding during the year used in
calculation of basic earnings per share – number of ordinary shares
2021
2020
(0.0097)
(0.0123)
1,112,273,542
661,580,317
Net loss used in the calculation of basic earnings per share - $
(10,817,168)
(8,107,272)
Due to the Group being in a loss position, the potential ordinary shares such as share options and performance rights are considered
anti-dilutive and therefore earnings per share are not diluted.
108
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 109
Note 37. Cash-flow information
Reconciliation of cashflow from operations with loss after income tax
Note 38. Remuneration of auditors
Loss after income tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of right-of-use assets
Adjustment for effective borrowing rate – Facility A
Adjustment for effective borrowing rate – Facility B
2021
$
2020
$
(10,817,168)
(8,107,272)
52,470,400
11,364,379
4,382,750
2,395,572
21,590
153,321
-
-
Interest unwind on rehabilitation provision
1,392,771
2,633,465
Interest unwind on lease liabilities
Interest unwind on equipment finance
Share based payments
Gain on sale of investment classified as investing activities
Gain on sale of subsidiary – Kodiak
Gain on disposal of property, plant and equipment
Fees and share plan settled in shares
Foreign exchange (gains/losses
Fair value loss on zinc derivatives
Changes in assets and liabilities
Trade and other receivables
Inventories
Prepayments
Trade and other payables
Employee benefits provision
Net cash inflow/(outflow) from operating activities
2,298,729
6,648
-
-
1,390,889
555,268
-
(9,750,000)
(4,232,252)
(176,007)
843,960
-
(111,419)
97,000
(7,815,359)
2,491,008
1,844,744
-
7,396,966
(4,830,628)
(17,958,514)
(1,456,882)
(6,476,476)
1,831,782
3,167,460
1,938,914
1,380,038
1,373,368
38,235,188
(8,536,143)
Non-cash financing and investing activities
The Group did not have any non-cash financing and investing activities during the financial year, except as disclosed in Note 29 to the
Financial Statements.
Deloitte Touche Tohmatsu
Audit or review of the financial report of the Group
200,000
118,800
Other assurance and agreed-upon-procedures under other legislation or contractual
arrangement
2021
$
2020
$
Taxation services
Other non-audit services
25,000
9,600
234,600
-
38,400
157,200
Note 39. Contingent liabilities
Guarantees
The Group has provided certain guarantees to third parties, primarily associated with the terms of mining financial assurance,
exploration licences, provision of electricity and office leases. At the end of the financial year, no claims have been made under any
of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the requirements of the
recipient. These guarantees are backed by restricted cash deposits which amounted to $19,007,882 as at 30 June 2021 (30 June 2020:
$16,189,837).
Deeds of indemnity
The Group has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors and
officers. Each Deed of Indemnity indemnifies the relevant director or officer to the fullest extent permitted by law for liabilities incurred
while acting as an officer of the Group, its related bodies corporate and any associated entity, where such an office is or was held at the
request of the Company. Under these indemnities, the Company meets the legal costs incurred by Company officers in responding to
investigations by regulators and may advance funds to meet defence costs in litigation, to the extent permitted by the Corporations Act
2001.
Other
The Company and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the
conduct of their business. The Group does not consider that the outcome of any of these proceedings or disputes is likely to have a
material effect on the Company’s or the Group’s financial position.
110
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 111
Note 40. Commitments
Century Mine
As part of the acquisition of Century Project, the Group has an agreement with MMG for MMG to acquire and stand behind a Financial
Assurance Bond of $179,041,150 for the benefit of Century Mining Limited to meet its financial assurance obligations with the
Queensland Government through to 31 December 2023. In addition to the $179,041,150 Financial Assurance Bond from MMG, New
Century is required to put in place further security guarantees of $4,875,000, resulting in total bonding of $183,916,150 with Queensland
Government.
From accounting commissioning of the Century Mine on 1 July 2020, the Group is required to allocate an amount equal to 40 percent
of its earnings before interest, tax, depreciation and amortisation (EBITDA), to go towards replacing the Financial Assurance Bond from
MMG. The cash allocation must occur within 90 days from the end of each financial half-year. In the event that the total balance of the
Financial Assurance Bond has not been replaced by 31 December 2023, the Group will be required to source alternative financing for
the outstanding amount. Both the Company and subsidiaries holding the Century Project have indemnified MMG against any default on
amounts owing to MMG under these agreements.
The Group has an obligation to pay MMG a fee payable quarterly in advance on the face value of the Financial Assurance Bond until
the expiry of the Financial Assurance Bond agreement on 31 December 2023. The fee payable was initially 1.35 percent per annum and
gradually rises to 2.85 percent per annum for the final year.
Community commitments
Community commitments relate to the Group’s contractual obligations under the Gulf Communities Agreement with the local
communities. In the past, this obligation was met by MMG under various support agreements. The estimated commitments in respect of
community expenses which are not recognised as liabilities as at 30 June 2021 are approximately $36,000,000 (2020: $23,500,000).
These payments are made throughout the life of the project. The increased estimate from 2020 to 2021 is due to an extended
contemplated mine life.
Take or pay contracts
The Group has entered into take or pay contracts for supply of electricity and gas for its Century Mine. The aggregate future take or pay
commitment as at 30 June 2021 was $145,000,000 (30 June 2020: $170,000,000).
Capital commitments
The Group did not have any significant commitments for capital expenditure contracted for at the reporting date that were not
recognised as liabilities.
Note 41. Financial instruments
Overview
The Group has exposure to the following financial risks from its use of financial instruments:
•
•
•
•
•
Commodity price risk
liquidity risk
credit risk
interest rate risk; and
foreign exchange risk
This note presents information about the Group’s exposure to each of the above risks.
Financial risk management policies and objectives
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk
management policies are established by the Board of Directors to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits.
The Group's activities exposes it to a variety of financial risks: market risk (including price risk and interest rate risk), credit risk and
liquidity 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 other price risks and ageing analysis for
credit risk in respect of investment portfolios to determine market risk.
Measurement of financial instruments
The following financial assets and liabilities are carried at fair value using level two valuation technique:
•
• Derivative financial instruments
•
Financial liability at fair value through profit or loss
Trade receivables
Cash and cash equivalents
The following financial assets and liabilities are carried at amortised cost which approximates the fair value:
•
• Other receivables
•
•
•
Financial assets – security guarantees
Trade and payables
Borrowings
Financial assets and liabilities
The Group had the following financial assets and liabilities at the end of the financial year:
Financial assets
Cash and cash equivalents
Trade and other receivables (excluding GST receivable)
Non-current financial assets
Total
Financial liabilities
Trade and other payables (excluding deferred proceeds)
Borrowings
Financial liability at fair value through profit or loss
Derivative financial instruments
Total
2021
$
2020
$
35,696,665
40,005,053
4,697,924
11,766,978
19,007,882
16,189,837
59,402,471
67,961,868
45,435,168
52,414,293
39,061,048
82,131,025
6,831,909
8,799,949
17,295,482
-
108,623,607
143,345,267
112
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 113
Commodity price risk
The Group is exposed to commodity price volatility on the sale of zinc concentrates which are priced on, or benchmarked to, open
market exchanges. During the year, the Group entered into various derivative instruments to hedge price risk on a portion of the Century
Mine’s planned zinc concentrate production. Refer to Note 26 to the Financial Statements for further details.
Financing activities
The table below details changes in Group’s assets and liabilities arising from financing activities, including both cash and non-cash
changes. Assets and liabilities arising from financing activities are those for which cash flows were, or future cash flows will be classified
in the Group’s consolidated cash flow statement as cash flows from financing activities.
Liquidity risk and liquidity risk management
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure that it will have sufficient
cash to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of credit facilities or other fund-raising initiatives.
The Board frequently reviews budget variance analyses that include working capital projections to monitor working capital requirements
and optimise cash utilisation.
Contractual maturities
The following are the contractual maturities of financial liabilities:
2021
Borrowings
Financial liability at fair value
through profit or loss
1 July
2020
$
Financing
cash
inflows
$
Financing
cash
outflows
$
Foreign
exchange
adjustment
$
Fair value
adjustment
$
Transaction
fee
$
30 June
2021
$
82,131,025
295,100 (43,023,089)
(7,126,958)
6,784,970
8,799,949
-
(1,313,635)
(654,405)
-
-
-
39,061,048
6,831,909
Total
90,930,974
295,100 (44,336,724)
(7,781,363)
6,784,970
- 45,892,957
1 July
2019
$
Financing
cash
inflows
$
Financing
cash
outflows
$
Foreign
exchange
adjustment
$
Fair value
adjustment
$
Transaction
fee
$
30 June
2020
$
Carrying
amount
Under 6
months
6-12
months
1-2
years
2-5
years
2020
30 June 2021
Trade and other payables
45,435,168
45,435,168
-
-
-
Financial liability at fair value
through profit or loss
7,137,249
-
(1,587,731)
200,895
3,049,536
Borrowings
54,100,350
40,000,000
(16,590,057)
2,317,643
7,260,983
(4,957,894)
82,131,025
Borrowings
39,061,048
20,121,590
5,712,634
13,201,082
25,742
MMG funding support
(5,750,000)
5,750,000
-
-
-
-
-
8,799,949
-
Financial liability at fair value through profit or loss
6,831,909
1,114,510
1,454,896
2,897,548
1,364,955
Total
55,487,599
45,750,000
(18,177,788)
2,518,538
10,310,519
(4,957,894) 90,930,974
Derivative financial instruments
17,295,482
3,759,315
3,690,562
6,206,802
4,522,387
Total
108,623,607
70,430,583
10,858,092
22,305,432
5,913,084
Credit risk
Credit risk refers to the risk that counterparties will default on their contractual obligations resulting in financial loss to the Group. The
Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where
appropriate, as a means of mitigating the risk of financial loss from defaults.
Carrying
amount
Under 6
months
6-12
months
1-2
years
2-5
years
Banks and financial institutions are chosen only if they are independently rated parties with a minimum rating of ‘A’.
30 June 2020
Trade and other payables
52,414,294
52,414,294
-
-
-
Borrowings
82,131,025
17,641,904
23,303,930
36,408,415
4,776,776
Financial liability at fair value through profit or loss
8,799,949
1,563,831
1,563,831
3,281,524
2,390,763
Total
143,345,268
71,620,029
24,867,761
39,689,939
7,167,539
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics.
The carrying amount of financial assets recorded in the Financial Statements, net of any provisions for losses, represents the Group’s
maximum exposure to credit risk without taking account of the value of any collateral or other security obtained.
114
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 115
Interest rate risk
Interest rate risk is managed with a mixture of fixed and floating rate debt. The Group’s exposure to interest rate risk and the effective
weighted average interest rate for each class of financial assets and financial liabilities is set out in the following table:
Weighted
average
interest rate
%
Floating
interest
rate
$
Fixed interest
maturing in 1
year or less
$
Fixed interest
maturing in
over 1 year
$
Non-interest
bearing
$
Total
$
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Non-current financial assets
Financial liabilities
Trade and other payables
Borrowings
Financial liability at fair value
through profit or loss
Derivative financial instruments
0.1
-
0.1
-
8.0
-
-
20,942,594
-
-
-
-
-
-
-
-
2,131,682
-
-
-
-
-
14,754,071
35,696,665
4,697,924
4,697,924
16,876,200
19,007,882
(45,435,168)
(45,435,168)
(25,834,224)
(13,226,824)
-
(39,061,048)
-
-
-
-
(6,831,909)
(6,831,909)
(17,295,482)
(17,295,482)
Net financial assets/(liabilities)
20,942,594
(23,702,542)
(13,226,824)
(33,234,364)
(49,221,136)
Weighted
average
interest rate
%
Floating
interest
rate
$
Fixed interest
maturing in 1
year or less
$
Fixed interest
maturing in
over 1 year
$
Non-interest
bearing
$
Total
$
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Non-current financial assets
Financial liabilities
Trade and other payables
Borrowings
Financial liability at fair value
through profit or loss
0.1
-
0.4
-
8.0
-
24,731,318
-
-
-
-
-
-
-
15,338,328
-
-
-
-
-
15,273,735
40,005,053
11,766,978
11,766,978
851,509
16,189,837
(52,414,293)
(52,414,293)
(40,945,834)
(41,185,191)
-
(82,131,025)
-
-
(8,799,949)
(8,799,949)
Net financial assets/(liabilities)
24,731,318
(25,607,506)
(41,185,191)
(33,322,020)
(75,383,399)
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement
in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD functional currency
of the Group. As at 30 June 2021, the group had USD denominated net financial liabilities of A$49,797,596 (2020: A$68,135,547). In
respect of this USD foreign currency risk exposure in existence at the balance sheet date a sensitivity of 10 percent higher and 10
percent lower has been applied in the US dollar against the Australia dollar. With all other variables held constant, post tax loss and
equity would have been affected by approximately $5,000,000 (2020: A$7,000,000).
Note 42. Dividends
No dividend has been declared or paid by the Group during the financial year and the Directors do not at present recommend a
dividend. No dividends were declared or paid in the comparative financial year.
Note 43. Matters subsequent to the end of the financial year
On 15 September 2021, the Company announced the results of its feasibility study into the potential development of various in-situ
deposits at the Century Mine (the Feasibility Study). The Feasibility Study investigated the incorporation of the Silver King and East Fault
Block in-situ deposits into the existing mine plan (incremental to the current tailings reprocessing activities) to produce zinc concentrate
and a new lead concentrate. The Feasibility Study revealed a strongly value accretive proposition for the development of Silver King
and East Fault Block alongside current tailings operations at the Century Mine. As a result of the Feasibility Study, the Group declared a
Maiden Ore Reserve (probable) for Silver King and East Fault Block of 2.5Mt @ 5.3 percent Pb (133Kt), 5.6 percent Zn (140Kt), 68g/t Ag
(5.4Moz). Further details of the results of the Feasibility Study are set out in the Company’s ASX announcement, which is located at the
Company’s website. A final investment decision is expected to be made in due course.
On 1 October 2021, the Company entered into a period of suspension of quotation of its shares on the Australian Securities Exchange as
it finalises a material strategic transaction involving an asset acquisition, an equity raise and new environmental bonding arrangements.
Further details are set out in the Company’s ASX announcement, which is located at the Company’s website.
Since 30 June 2021, the Group obtained a number of deferrals of certain repayments due to Värde pending completion of the
Environmental Bonding and Equity Raising Package. Further, it was agreed that silver royalties payable to Värde under the Loan Note
Subscription Agreement would be extinguished in exchange for fixed payments of A$3,724,890 (US$2,800,000) on 4 January 2022 and
A$3,724,890 (US$2,800,000) on 1 April 2022 together with applicable withholding tax.
Since 30 June 2021, the Group obtained a number of deferrals of payments for the reduction in the bonding facilitated by MMG Limited
(MMG) with the Queensland government due under the Group’s Bank Guarantee Support Agreement with MMG, pending completion of
the Environmental Bonding and Equity Raising Package.
The Group is finalising binding agreements for an Environmental Bonding and Equity Raising Package (the “Package”) which entails a
major revision of the Group’s capital structure going forward. Key elements of the Package include:
Equity Raising:
A$79,802,904 (US$59,987,843) fully committed equity raising consisting of:
•
•
An Unconditional Placement to raise A$32,918,192 (US$24,744,605):
- A$21,638,706 (US$16,265,816) from a subsidiary of Sibanye-Stillwater Limited (Sibanye-Stillwater) whereby Sibanye-Stillwater
takes an initial 9.8% equity interest in the Group; and
- A$11,279,486 (US$8,478,790) from existing shareholders.
The simultaneous launch of a fully underwritten Entitlement Offer to raise A$46,884,712 (US$35,243,238) consisting of a 1 for
4 pro rata non renounceable allocation to existing shareholders. Any entitlements not taken up by existing shareholders will
be underwritten by the joint lead managers to the Entitlement Offer, with sub-underwriting by Sibanye-Stillwater up to a limit of
Sibanye-Stillwater taking a 19.99% interest in the Group.
Should Sibanye-Stillwater’s investment in the Group be less than 19.99% following the Entitlement Offer, a Conditional Placement will be
undertaken to bring Sibanye-Stillwater’s total interest to 19.99%. Sibanye-Stillwater has committed to a total investment in New Century
Resources Limited of A$53,441,616 (US$40,172,063). The Conditional Placement is subject to shareholder approval at the Company’s
2021 Annual General Meeting.
The Unconditional Placement, Entitlement Offer and Conditional Placement will be conducted at an offer price of A$0.155 per New Share
(Offer Price) being the closing price on 30 September 2021.
116
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 117
DIRECTORS' DECLARATION
In summary the equity raising will generate a minimum of A$79,802,904 (US$59,987,843) before costs estimated of $4,211,258. If
there is a full take up of the Entitlement Offer by existing shareholders, the equity raise could generate a further A$39,748,669
(US$29,879,074) to a maximum of A$119,551,573 (US$89,866,917) before costs estimated at $4,231,709 once the Conditional Placement
is complete.
Environmental Bonding:
The existing environmental bond provided to the Queensland government for the Century Mine is backed by MMG Limited (MMG)
pursuant to the Bank Guarantee Support Agreement that was entered into at the time of the initial acquisition of the Century Mine by
the Group. This will be replaced by the A$180,000,000 Environmental Bond Facility (EBF) to be issued by Macquarie Bank Limited
(Macquarie) and backed by an A$160,000,000 surety provided through Argonaut Insurance Group (Argo Group) and A$20,000,000 of
cash backing to be provided directly by the Group. The EBF will amortise over 21 equal monthly payments from January 2023 through to
final maturity of the facility in September 2024.
The Group has decided to expand the Group’s total hedging book. This additional hedging is a condition precedent of the EBF. Existing
hedging comprises 82,500 tonnes of zinc metal to settle in fixed monthly proportions of 2,500 tonnes per month to June 2024 at an
average price of A$3,717 per tonne.
Option Agreement for the acquisition of the Mt Lyell Copper Mine
The Directors of the Company declare that:
1.
the Financial Statements and notes, as set out on pages 67 to 118 are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards, which, as stated in accounting policy Note 1 to the Financial Statements, constitutes explicit
and unreserved compliance with International Financial Reporting Standards (IFRS); and
b. give a true and fair view of the financial position as at 30 June 2021 and of the performance for the financial year ended on that
date of the Company and Group;
2.
in the Directors’ opinion there are reasonable grounds to believe that the Company and the Group will be able to pay its debts as
and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A
of the Corporations Act 2001 for the financial year ended 30 June 2021.
This declaration is made in accordance with a resolution of the Board of Directors.
The Group has entered into a binding term sheet for an option agreement with Monte Cello B.V. (MCBV), a subsidiary of Vedanta Limited
(Vedanta) for the acquisition of Copper Mines of Tasmania Pty Ltd (CMT), owner of the Mt Lyell Copper Mine (Mt Lyell) in Tasmania.
Mt Lyell is one of the most significant copper mines in Australian history, having first started operations in the 1890’s. Mt Lyell was
acquired by Vedanta in 1999, who thereafter profitably produced almost 400kt of copper, 1.8moz of silver and 220koz of gold until 2014
when the mine was placed into care and maintenance. A significant copper / gold resource remains.
Robert McDonald
CHAIRMAN
27 October 2021
The option agreement allows the Group to evaluate the potential for restart of operations at Mt Lyell. The Group will investigate the
refurbishment or replacement of the existing infrastructure for tailings reprocessing and integration of sustainable in-situ ore processing.
The option agreement includes a minimum expenditure commitment of A$13,482,540 (US$10,000,000) over a two-year option period
towards development, exploration and a capped reimbursement of care and maintenance costs. Should the option to acquire be
exercised, the acquisition consideration will be by way of a capped royalty paid over time from successful operations.
There have been no other events that have occurred subsequent to the reporting date which have significantly affected or may
significantly affect the Group’s operations or results in future financial years.
118
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 119
INDEPENDENT AUDITOR’S REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne VIC 3000
Australia
Tel: +61 3 9671 7000
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt
ttoo tthhee mmeemmbbeerrss ooff NNeeww CCeennttuurryy RReessoouurrcceess LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
OOppiinniioonn
We have audited the financial report of New Century Resources Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, 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 other explanatory information, 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 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
BBaassiiss ffoorr OOppiinniioonn
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 & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
directors of the Company, would be in the same terms if given to 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.
MMaatteerriiaall UUnncceerrttaaiinnttyy RReellaatteedd ttoo GGooiinngg CCoonncceerrnn
We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of
$10,817,168 during the year ended 30 June 2021 and, as of that date, the Group’s current liabilities exceeded its
current assets by $47,297,739.
As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a
material uncertainty exists that may cast significant doubt of the Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Our procedures in relation to going concern included, but were not limited to:
•
•
•
•
•
Evaluating management’s assessment in relation to going concern and inquiring of management and the
Directors in relation to events and conditions that may impact the assessment on the Group’s ability to
pay its debts as and when they fall due;
Obtaining an understanding of the Group’s proposed Environmental Bonding and Equity Raising Package
including conditions precedent;
Challenging the key assumptions contained in management’s cash flow forecast including the timing of
expected cash flows;
Performing stress tests for a range of reasonably possible scenarios on management’s cash flow forecast
for at least 12 months from the date of signing the financial statements; and
Assessing the appropriateness of the going concern disclosures included in Note 1 to the financial
statements.
KKeeyy AAuuddiitt MMaatttteerrss
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy
AAuuddiitt MMaatttteerr
CCoommmmeenncceemmeenntt ooff ccoommmmeerrcciiaall pprroodduuccttiioonn ooff tthhee
CCeennttuurryy MMiinnee
On 6 July 2020, the Group announced to the market
declaration of commercial production at the Century
Mine, which the board of directors determined as
effective 1 July 2020.
As disclosed in Note 2, the Group has determined that
the criteria for the assessment of when the Century
Mine achieves commercial production, being when
the Century Mine is available for use in the manner
intended by the Group’s management, includes, but is
not limited to:
•
completion of a reasonable period of testing
of the mine plant and equipment;
•
level of capital expenditure
compared with the original cost estimate;
• majority of the assets making up the mining
project are substantially complete and ready
for use;
incurred
•
•
•
•
completion of a reasonable period of testing
of the mine plant and equipment;
the percentage grade of metal content is
sufficiently economic and consistent with the
overall mine plan;
the ability to produce metal in saleable form
(within specifications); and
the ability to sustain continuous production
of metal.
Our procedures included, but were not limited to:
•
the
conclusions
assessing
reached
regarding the technical feasibility and
commercial viability of the project, which
included:
o reviewing the minutes of Board of
Directors meetings in respect of the
timing of
final commercial
production decision, associated with
the Century Mine operations;
the
o challenging the
judgements made
and the asset commissioning criteria
the
used by management and
Directors of
for
the Company
the achievement of
determining
commercial production on 1 July
2020; and
o assessing the commencement date of
1 July 2020.
We also assessed the appropriateness of the
disclosures included in Note 2 to the financial
statements.
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NEW CENTURY RESOURCES | ANNUAL REPORT 2021 121
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy
AAuuddiitt MMaatttteerr
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy
AAuuddiitt MMaatttteerr
The commencement of commercial production has a
significant impact on the accounting for the Century
Mine, and its ongoing operations, including but not
limited to:
•
•
•
recognition of
the
inventory;
zinc
concentrate
the reclassification of capital work
in
progress to property, plant and equipment
and the commencement of amortisation and
depreciation; and
the recognition of revenue and related cost
of sales.
RReeccooggnniittiioonn aanndd mmeeaassuurreemmeenntt ooff tthhee eennvviirroonnmmeennttaall
rreehhaabbiilliittaattiioonn pprroovviissiioonn
As at 30 June 2021 the Group has a mine site
restoration provision of $176,146,970 relating to the
Group’s requirement to rehabilitate
its mining
operations, as disclosed in Note 28.
Given the nature of its operations, the Group incurs
obligations to close, restore and rehabilitate its sites.
Closure and restoration activities are governed by
legislative requirements.
The calculation of the provision requires significant
judgment in relation to determining the manner in
which rehabilitation activities will be undertaken,
estimating the future costs and the timing of these
activities, and the determination of an appropriate
rate to discount the future costs to their net present
value.
Our procedures included, but were not limited to:
•
•
•
•
•
Obtaining an understanding of the key
processes
controls
management has in place to estimate the
mine site restoration provision;
relevant
and
Confirming the timing of closure and
restoration estimates are consistent with
the latest estimate of the life of mine;
the
costs
estimated
Assessing
of
rehabilitation for reasonableness against
legislative
our
requirements
understanding of the Group’s mining and
exploration areas;
and
the
updated
In conjunction with our rehabilitation
specialists, performing a qualitative review
of
environmental
rehabilitation provision following the Land
Court appeal ruling in relation to the
estimated
the
rehabilitation cost
Century Mine; and
for
Assessing the accuracy of the calculations
used to determine the environmental
the
rehabilitation provision
discount
the
appropriateness of the current and non-
current classification of the provision.
including
applied
rate
and
We also assessed the appropriateness of the
disclosures included in Notes 1, 2, 19 and 28 to the
financial statements.
DDeerriivvaattiivvee ffiinnaanncciiaall iinnssttrruummeennttss
As at 30 June 2021, derivative financial instruments
totalled $17,295,482 (current liabilities of $7,350,005
and non-current liabilities of $9,945,477).
The Group has entered into derivative financial
instruments which are recorded at fair value to
economically hedge
to
variability in cash flows due to movements in the zinc
price and the foreign exchange rate between
AUD/USD arising from highly probable forecast zinc
sales.
the Group’s exposure
The Group has applied cash flow hedge accounting for
the derivative
instruments and has
recognised $15,450,738 at 30 June 2021 representing
the effective portion of the hedges in the cash flow
hedge reserve.
financial
Significant judgement is required by management in
the valuation of and accounting for these financial
instruments including:
•
•
understanding and applying contract terms;
and
forecasting future zinc prices and AUD/USD
foreign exchange rates in the short and long
term.
Our audit procedures included, but were not limited
to:
•
•
•
Obtaining an understanding of the internal
risk management process and the relevant
controls associated with the derivative
financial instruments contracts;
Obtaining an understanding of
the
derivative financial instruments contract
terms to assess the appropriateness of the
relevant accounting applied in accordance
with AASB 9 Financial Instruments;
In conjunction with our Treasury specialists,
testing on a sample basis, the existence and
valuation of financial instruments including:
o assessing hedge effectiveness where
appropriate;
o evaluating
valuation models; and
the
integrity of
the
and
terms
o assessing the incorporation of the
the
key
contract
the valuation
assumptions
models,
including zinc prices and
foreign exchange rates by comparing
to market data.
into
We have also assessed the appropriateness of the
disclosures included in Note 1 and 26 to the financial
statements.
OOtthheerr IInnffoorrmmaattiioonn
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 2021, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
RReessppoonnssiibbiilliittiieess ooff tthhee DDiirreeccttoorrss ffoorr tthhee FFiinnaanncciiaall RReeppoorrtt
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.
122
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 123
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.
AAuuddiittoorr’’ss RReessppoonnssiibbiilliittiieess ffoorr tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
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.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
OOppiinniioonn oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
We have audited the Remuneration Report included in pages 46 to 64 of the Directors’ Report for the year ended
30 June 2021.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
In our opinion, the Remuneration Report of New Century Resources Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
RReessppoonnssiibbiilliittiieess
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.
DELOITTE TOUCHE TOHMATSU
Suzana Vlahovic
Partner
Chartered Accountants
Melbourne, 27 October 2021
124
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 125
SHAREHOLDER INFORMATION
The shareholder information set out below is based on information available as at 30 September 2021.
Distribution of equity securities
The number of equity security holders, by size of holding, in the Company is:
Voting rights
On a show of hands every shareholder present at a meeting in person or by proxy, attorney or representative shall have one vote.
On a poll every shareholder present at a meeting in person or by proxy, attorney or representative shall have one vote for each share
held.
Number of Holders
Number of Shares
Unquoted equity securities
Spread of Holders
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Holding less than a marketable parcel
349
1,025
592
1,615
515
4,096
896
154,122
3,320,815
4,625,953
58,828,738
1,142,998,418
1,209,928,046
1,401,847
Quantity
30,000,000
1,000,000
1,000,000
250,000
1,000,000
1,000,000
25,000,000
10,000,000
Class
Options exercisable at $0.25 each on or before 13 July 2022
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
Options exercisable at $0.25 each on or before 4 December 2023
Equity security holders
The names of the twenty largest registered holders of quoted equity securities are listed below:
Shareholder
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
CS Fourth Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Pacreef Investments Pty Ltd
Zero Nominees Pty Ltd
Sparta Ag
Mr John Carr
Hsbc Custody Nominees (Australia) Limited - A/C 2
Mr Patrick Christopher Andrew Walta
Konkera Pty Ltd
BNP Paribas Nominees Pty Ltd ACF Clearstream
Delphi Unternehmensberatung Aktiengesellschaft
Delphi Unternehmensberatung Aktiengesellschaft
Buttonwood Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
BNP Paribas Nominees Pty Ltd
National Nominees Limited
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Kitara Investments Pty Ltd
Number Held
% of Issued Shares
No person holds more than 20% of this class of equity securities.
156,123,452
116,463,518
95,754,815
72,573,314
68,634,167
41,212,687
35,933,333
34,474,464
33,833,333
33,589,277
33,421,788
31,545,457
22,384,132
20,191,963
19,145,297
17,890,707
11,017,629
10,989,896
9,652,819
8,999,406
12.91
9.63
7.92
6
5.68
3.41
2.97
2.85
2.8
2.78
2.76
2.61
1.85
1.67
1.58
1.48
0.91
0.91
0.8
0.74
Information on shareholding
Shareholders who require information about their shareholding should contact he Company’s share registry.
Shareholders who have changed their address should advise the change in writing to:
Automic Registry Services
126 Phillip Street
Sydney, New South Wales 2000
Telephone: +61 2 9698 5414
Sponsored shareholders should note, however, that they should contact their sponsored broker to initiate a change of address.
Schedule of mining tenements
Below is a list of mining tenements held by the consolidated entity as at the date of this report:
Project
Location
Century Zinc Mine
Queensland, Australia
ML 90058
ML 90045
EPM 10544
EPM 26722
Mt Isa
Mt Isa
Mt Isa
Mt Isa
Status
Granted
Granted
Granted
Granted
Interest
100%
100%
100%
100%
Total
873,831,454
72.27
There are 1,209,928,046 ordinary fully paid shares currently listed and trading on the Australian Securities Exchange. There is no current
on-market buy back taking place.
126
NEW CENTURY RESOURCES | ANNUAL REPORT 2021 127
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