20
21
ANNUAL
report
Contents page
ABOUT US
VISION
VALUES
KEY POINTS FOR FINANCIAL YEAR 2020
FY2020 SIGNIFICANT EVENTS
LETTER FROM THE CHAIR OF THE BOARD
LETTER FROM THE MANAGING DIRECTOR
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL REPORT
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED BALANCE SHEET
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ADDITIONAL ASX INFORMATION
SCHEDULE OF TENEMENTS
RESOURCES AND RESERVES
CORPORATE DIRECTORY
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6
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114
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119
2 | PANORAMIC RESOURCES LIMITED
ABOUT
PANORAMIC
Panoramic Resources Limited (ASX: PAN)
is a Western Australian company which
owns the Savannah Nickel Project in the
East Kimberley.
Panoramic successfully commissioned and operated
the Project from 2004 until 2016 before the mine
was placed on care and maintenance. Following the
discovery of the Savannah North orebody, the mine
was recommissioned in 2018 before operations were
temporarily suspended in 2020.
Panoramic has completed an updated Mine Plan
for Savannah which has outlined an attractive
near-term nickel sulphide mine restart opportunity.
Following the completion of a ventilation shaft for
the Savannah North deposit, additional underground
capital development and ancillary works, the Board of
Panoramic approved the restart of Savannah in April
2021 with a target of first concentrate shipment by
the end of 2021.
Competent person
The information in this report that relates to Mineral Resources
and exploration results is based on information compiled by
Andrew Shaw-Stuart. Andrew Shaw-Stuart is a member of the
Australian Institute of Geoscientists (AIG) and is a full-time
employee of Panoramic Resources Limited.
The aforementioned has sufficient experience that is relevant
to the style of mineralisation and type of target/deposit under
consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2012 Edition
of the Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves. Mr Shaw-Stuart consents
to the inclusion in the release of the matters based on the
information in the form and context in which it appears.
VISION
Discover
We aim to grow our in-ground resources to
ensure a sustainable business
Develop
We will de-risk and develop our operations
to maximise value for shareholders.
Deliver
We will produce high quality nickel, copper
and cobalt products safely, economically
and efficiently from our operations.
VALUES
PEOPLE
We always work safely.
We lead and act with fairness, integrity,
trust and respect.
We respect our people and support their
growth.
PROUD
We take pride in the way we work, embrace
our responsibilities and are accountable for
our actions.
We support the culture and heritage of the
environment and communities in which we
operate.
We seek to be an organisation that our
people and stakeholders are proud to be a
part of.
PERFORMANCE
We are focussed on creating sustainable
shareholder growth, efficient operations
and being a reliable supplier.
PROGRESS
We collaborate and invest in our future
through innovation to help sustain a
profitable and efficient mining operation.
We look for continuous improvement
opportunities to be a better business
tomorrow.
2021 ANNUAL REPORT | 3
KEY POINTS
FROM 2021
• Completion of FAR #3 ventilation
raise and four levels of underground
development, critical to mining
operations at Savannah North
• Completed 12-month review of
operational strategies to de-risk
operations at Savannah
• Updated 12-year mine plan with
annual average production target of
9,072t nickel, 4,683t copper and
676t cobalt in concentrate
• Completed update of financial
model which demonstrated
attractive financial returns.
• Implemented contractor strategy to
further de-risk operations
• Received Board approval for the
restart of operations at Savannah
• Signed and executed four-
year underground mining and
development contract with
Barminco
• Signed and executed three-
year mineral processing and
maintenance contract with Primero
• Secured an attractive five-
year nickel and copper offtake
agreement with Trafigura
• Secured a US$45 million secured
finance facility with Trafigura
• Commenced mining operations
at Savannah ahead of schedule
following early mobilisation of
contractors and new equipment
• Completed divestment of non-core
Panton PGM Project for a total of
A$15 million (before fees)
• Received C$3.75 million related
to the sale of Thunder Bay North
Project
• Requisite conditions precedent met
for the Trafigura-funded US$45
million Savannah finance facility
with first draw-down expected in
the September 2021 quarter
4 | PANORAMIC RESOURCES LIMITED
Total Savannah Project Mineral
Resources at 30 June 2021 stand at
13.45Mt @ 1.56% Ni, 0.70% Cu and
0.10% Co for 209.8Kt Ni, 94.2Kt Cu and
13.7Kt Co contained metal
Total Savannah Ore Reserve (including
Savannah North) at 30 June 2021 stand
at 8.3Mt @ 1.23% Ni, 0.59% Cu and
0.08% Co for 102kt Ni, 48.5kt Cu and
7kt Co contained metal
2021 ANNUAL REPORT | 5
FY2021
SIGNIFICANT EVENTS
September 2020 Grant Dyker appointed as Chief Financial Officer.
October 2020
Development drive intersecting Savannah North
ventilation raise complete.
October 2020
- June 2021
Agreement to sell up to 100% of Panton PGM
Project. Initial interest of 80% acquired by Dubai
2020 for A$12 million cash with option for
remaining 20% interest for A$3 million exercised
in June 2021.
November 2020
FAR#3 ventilation raise completed.
April 2021
Board approval received for restart of Savannah
operations following 12-month technical and
financial review.
April 2021
Letters of intent issued to contractors Primero
and Barminco.
April 2021
Five-year offtake agreement and US$45 million
finance facility secured with Trafigura.
6 | PANORAMIC RESOURCES LIMITED
May 2021
C$3.75 million payment for Thunder Bay North
received following receipt of clearance certificate
from Canadian Revenue Agency.
July 2021
July 2021
July 2021
Underground mining and development operations
commence at Savannah following early
mobilisation of contractors and new equipment.
Satisfaction of conditions precedent for US$45
million finance facility with Trafigura.
Four-year underground mining and development
contract worth $280 million executed with
Barminco.
August 2021
Three-year mineral processing and maintenance
contract executed with Primero.
2021 ANNUAL REPORT | 7
LETTER FROM
THE CHAIR OF THE BOARD
Dear fellow shareholders,
I am pleased to report that
your company successfully
proceeded down the path
set by the Board more than
12 months ago, to return the
Savannah Nickel Operations
(Savannah) back into
production.
As I conveyed to you this
time last year, your Board is
steadfast in its commitment
to shareholders by ensuring
our actions support the key
objective of realising the
longer intrinsic value of the
Savannah asset. Core to this is
undertaking careful planning
and assessment to progress
Savannah to the point where
we are confident in executing
a sustainable restart of the
operation. We had aimed to be
in this position by mid-2021 and
I am proud to say that the hard
work of our management team,
led by our CEO Victor, meant
the Board was able to approve
the restart of Savannah in April
2021.
We are bringing the asset back
into production at an opportune
time. Nickel prices have gone
through multi-year highs and
copper fundamentals look
attractive on both the demand
and supply sides. Corporate
interest has also been rising in
the nickel space and highlights
the strategic value of Savannah
as the next Australian nickel
sulphide asset in production.
Just as importantly, nickel and
copper have important roles
to play in the decarbonisation
of our energy and transport
sectors which we are pleased to
be on the verge of contributing
to once again.
Organisationally, we have
enjoyed a period of greater
stability with the addition of
Grant Dyker as our new Chief
Financial Officer, being the only
NicHOLAS Cernotta
Chair OF THE BOARD
8 | PANORAMIC RESOURCES LIMITED
change at a Board or executive
management level. We have
continued to manage through
the global pandemic with no
material adverse impact on our
staff or local community which
we remain acutely focussed on
as we restart operations and
increase our workforce.
Your Board is conscious of
the increased expectations of
our investors and important
stakeholders across a range
of areas which are more
and more acknowledged as
business critical imperatives
for our sustainability. To
support our increased focus
and transparency in this
area, we have reinstated the
Sustainability Report during
the period. The report provides
detailed information about
safety, our energy usage,
carbon emissions, water
management, biodiversity,
workforce diversity, community
engagement and supply chain
policies. This information can be
used to benchmark our future
performance in these areas and
commitment to continuous and
sustainable improvement across
our business.
On behalf of the Board, I
would like to extend our
thanks to our shareholders, our
employees and our partners.
The Board and I believe we
have progressed the business
to a stronger position during
the past 12 months and we look
forward to updating you on our
continued progress in FY2022.
Yours sincerly,
Nicholas Cernotta
Chair of the Board
2021 ANNUAL REPORT | 9
LETTER FROM THE
MANAGING DIRECTOR
Dear fellow shareholders,
During FY2021 we worked hard
to complete the operational and
financial reset of the business
to prepare the business for a
transition back to concentrate
production from the Savannah
Nickel Operation (Savannah).
This objective was achieved
through a number of imperatives.
First and foremost was the safety
of our people. I am pleased to
say we have kept our people and
our communities safe, with no
impact of COVID-19 in the period.
Secondly was the completion
of the updated Mine Plan and
Ore Reserve for Savannah which
occurred early in July 2020.
This confirmed an Ore Reserve
(including Savannah North) of
8.3Mt at 1.23% nickel, 0.59%
copper and 0.08% cobalt for
102kt contained nickel, 48.5kt
contained copper and 7kt
contained cobalt.
The next imperative was the
completion of ancillary works
at Savannah. The establishment
of the FAR#3 ventilation raise
was the most critical piece of
infrastructure which provides
life of mine ventilation into the
Savannah North underground
mine. This work was completed
on budget, approximately three
months ahead of schedule, in
December 2020.
After completing or advancing
various workstreams, we
undertook an assessment of the
optimal operating strategy to
support a decision to resume
operations. Past learnings
clearly highlighted the human
Victor Rajasooriar
Managing Director
and CEO
10 | PANORAMIC RESOURCES LIMITED
LETTER FROM THE
MANAGING DIRECTOR
resourcing risks, amplified by
the tight labour market being
experienced in the industry. This
led us to pursue a contracted
services strategy for both mining
and processing. After engaging
with a number of parties, leading
underground miner Barminco
was appointed on the mining
side and Primero was appointed
on the processing side.
Securing a financing solution
which minimised or removed
any additional dilution on our
shareholders was another
priority.
Led by our Chief Financial
Officer Grant Dyker, we were
able to link the necessary restart
funding with a five-year offtake
agreement starting in 2023 when
our original offtake agreement
expired. The offtake agreement
and US$45 million finance
package with Trafigura contains
attractive terms for Panoramic
and we are pleased to have
achieved this outcome.
In April, an updated Mine Plan
and financial model was
completed that demonstrated
attractive financial returns.
These estimates were made
by applying commodity prices
that were materially lower than
the prevailing price at the end of
the period. The improving trend
for nickel, copper and cobalt
demand provides positive
sentiment and opportunity to
potentially outperform the base
case outcomes over the 12-year
mine life.
2021 ANNUAL REPORT | 11
To say that I am pleased with the
Company’s achievements this
year is an understatement. Having
progressed through significant
bodies of work, de-risking and
readying the project throughout
the year, receiving strong Board
support and approval for the restart
of operations with top-tier partners
and then commencing mining and
development in early FY2022, all in
a safe manner, is a significant credit
to our team. We aim to continue this
momentum as we push towards the
first shipment of concentrate by the
end of CY2021 and the ramp up of
production. We remain committed
to ensuring we hit our targets
and reach our objectives, safely,
efficiently and sustainably.
Along with our dedicated employees
and contracting partners, I would like
to sincerely thank our shareholders,
local community, stakeholders and
Board of Directors for their collective
commitment to Panoramic’s future
success. We have worked hard to
get the business in this position
and hope this effort continues to
reward our shareholders as we move
forward.
Yours faithfully,
Victor Rajasooriar
Managing Director and CEO
12 | PANORAMIC RESOURCES LIMITED
We aim to continue this
momentum as we push
towards the first shipment
of concentrate by the end
of CY2021 and the ramp up of
production.
2021 ANNUAL REPORT | 13
SAVANNAH NICKEL
COPPER COBALT PROJECT
The Savannah nickel-
copper-cobalt Project
is located 240km south
of Kununurra in the
East Kimberley region of
Western Australia.
Savannah was constructed
in 2003 and commissioned
in late 2004 with more than
$100 million invested in
mining, processing and site
infrastructure including an
underground mine, processing
plant with annual processing
capacity of one million tonnes,
a paste fill plant, a 180-room
accommodation village,
workshops, office buildings,
tailings and water storage
facilities and other associated
infrastructure. Ore was initially
sourced from an open-pit for 18
months at which time mining
transitioned underground.
The Company’s tenement
holdings are shown at the back
of this Annual Report.
14 | PANORAMIC RESOURCES LIMITED
UPDATED MINE PLAN/
RESTART DECISION
Following the completion of an
updated Ore Reserve and Life
of Mine Plan in July 2020 (refer
to ASX announcement dated 31
July 2020), the financial model
supporting the Savannah restart
was updated to reflect more up-
to-date consensus commodity
price and exchange rate
assumptions, current industry
cost inflation levels, the adoption
of a contractor processing
strategy and the completion of
early works.
The price estimates used a nickel
price of A$9.63/lb, a copper
price of A$5.25/lb, a cobalt price
of A$30.40/lb and an AUD:USD
exchange rate of 0.76.
The outcomes demonstrate
attractive financial returns over
the 12 year mine life. The
Company believes potential
upside exists in the commodity
price assumptions based on the
expected impact on nickel and
copper markets of the growing
electrification of vehicles and
uptake of renewable energy in
the medium-term.
Figure 2: SAVANNAH PROJECT LOCATION
2021 ANNUAL REPORT | 15
Figure 3 – Savannah North EXPLORATION TARGETS
FY2021
EXPLORATION
REVIEW
Following the Company’s
decision to suspend operations
at Savannah in April 2020,
exploration activities in FY2021
were limited as the Company
focused on the restart of mining
operations in the second half of
2021.
Savannah mine (underground)
exploration activity during
FY2021 involved a single drill
hole to test the area of strong
electromagnetic (EM) anomalies
located to the west of Savannah
North that have been modelled
and interpreted to reflect the
westward continuation of the
Savannah North Upper Zone
resource (Figure 3).
Regional surface exploration
activities conducted during
FY2021 involved preliminary
prospectivity assessments of
the Oxide, Northern Ultramafic
Granulite and the recently
identified Stoney Creek
intrusion (Figure 4). A planned
prospectivity assessment on
the Norton intrusion was not
able to be completed in FY2021
due to delays in completing
heritage access. The regional
prospectivity assessments
involved a combination of
diamond drilling, down hole
electromagnetic (DHEM) and
surface electromagnetic survey
techniques.
FIGURE 4 – SAVANNAH MINING COMPLEX
16 | PANORAMIC RESOURCES LIMITED
Figure 5 - Savannah north section 5500me
Savannah Mine
A series of large, strong
overlapping EM anomalies
identified to the west of
Savannah North are interpreted
to reflect the continuation of
the Upper Zone resource. An
initial drill test (KUD1733C)
of the area was completed in
FY2021. However, drilling issues
prevented the drill hole from
intersecting the nominated target
position, instead falling short
to penetrate the 500 Fault at
the base of the Savannah North
intrusion located around Section
5500mE (Figure 5).
On the underside of the 500
Fault which was intersected by
drill hole KUD1733C, several thin
bands of high-tenor, remobilised
massive sulphide mineralisation
grading up to 3.08% Ni, 0.11% Cu
and 0.16% Co were intersected.
The entire zone returned an
overall intersection of 4.0m
grading 0.85% Ni, 0.11% Cu and
0.05% Co.
The KUD1733C intersection does
not in any way diminish the
significance of the strong DHEM
anomalies that exists in this area.
Based on the known orientation
of the 500 Fault structure and
its 150-metre reverse thrust
displacement, the sulphide
mineralisation intersected by
KUD1733C is projected to have
originated from a source located
between 100 to 150 metres to
the north-west near the planned
target position for the drill hole
(Figure 5).
Further drill testing of this area is
a high priority exploration target
once the Savannah mine is fully
operational.
2021 ANNUAL REPORT | 17
Regional Savannah
At Oxide, surface drill hole
SMD187 intersected a series of
mafic to ultramafic lithologies
prior to exiting the intrusion at
404 metres and terminating at
a depth of 625 metres within
a broad intercalated sequence
of Tickalara Metamorphics and
aplitic dykes. No significant
magmatic nickel sulphide
mineralisation was intersected
by SMD187 and subsequent
downhole and surface EM surveys
completed over the intrusion
during FY2021 failed to identify
any prospective anomalies. No
immediate exploration follow-up
at Oxide is planned in FY2022.
The Stoney Creek intrusion
located immediately north
of Subchamber D was only
recognised as a discrete intrusion
when Company geologists
mapped the area in 2018/19.
Apart from a small outcropping
area of ultramafic located on its
eastern contact, the intrusion
is composed mostly of non-
18 | PANORAMIC RESOURCES LIMITED
cumulate gabbro-gabbronorite
rock types.
In FY2021 surface drill hole
SMD188 was completed at
Stoney Creek and encountered
a consistent gabbroic rock type
prior to exiting the intrusion
at a depth of 392 metres
and terminating in Tickalara
Metamorphics at a depth of 529
metres. No significant magmatic
nickel sulphides were intersected
by SMD188 and the planned
DHEM survey of the hole was
unable to be completed due
to blocked casing. However,
subsequent EM soundings and
fixed loop electromagnetic
(FLEM) surveys completed over
the intrusion have identified a
strong, discrete anomaly at depth
within the intrusion. This Stoney
Creek anomaly is considered to
be a high-priority exploration
target for follow-up in FY2022.
Located along the trend of the
Savannah and Savannah North
deposits to the northwest, drill
hole SMD189 tested an historical
EM anomaly proximal to the
Northern Ultramafic Granulite.
Apart from minor iron-rich
sulphides intersected at a depth
of 440 metres, no evidence for
the source of the historic EM
anomaly was apparent at the
target depth of 550 metres.
SMD189 terminated in Tickalara
Metamorphics at a depth of 628
metres.
The subsequent DHEM survey
of SMD189 identified a highly
conductive source below and
to the right of the drill hole.
When jointly interpreted
with the historic EM data, the
SMD189 DHEM data indicate
SMD189 passed subparallel to a
series of bedrock conductor(s)
located between 300 metres
and 500 metres down hole.
The conductors are modelled
to be located to the right of
SMD189, starting above and
migrating below the hole at
depth. The conductors identified
by the SMD189 DHEM survey are
considered to be a high-priority
exploration target for follow-up
in FY2022.
In addition to the work
completed on the three
intrusions described above FLEM
surveys were also conducted
over Anomaly A and Three
Nuns (Figure 6). No significant
EM anomalies were detected
consequently no follow-up work
is planned on either intrusion in
FY2022.
Figure 6 - Savannah TENEMENT PACKAGE
2021 ANNUAL REPORT | 19
TABLE A: KEY OUTCOMES OF PLAN/FINANCIAL MODEL
28
29
27
Ni
nickel
Price1
base case (april 2021)
US$16,055/t
spot case (JULY 2021)
US$19,533/t
Cu
copper
Price
US$8,750/t
US$9,664/t
Co
cobalt
Price
US$50,692/t
US$52,431/t
Ore mined
& treated
(kt)1
base case (april 2021)
10,628
spot case (JULY 2021)
10,628
$AM
mine
revenue3
2,369
2,852
mine costs4
1,718
1,740
upfront
capital
costs
average
aic5
(A$/lb)
FX
(AUD:USD)
life of mine
(years)
41
41
6.36
6.14
0.76
0.75
12
12
Refer to the announcement “Updated Savannah Ore Reserve and Mine Plan” dated 31 July 2020. All material assumptions
underpinning theproduction targets, and the forecast financial information derived from those production targets, which are
referred to in the original announcement, continue to apply and have not materially changed.
1. Life of mine production of 10,628 kt @ 1.23% Ni, 0.54% Cu, and 0.08%% Co
2. Pricing based on 28 July 2021 (i.e. Ni US$19,533/t, Cu US$9,664/t, Co US$52,431/t) and AUD:USD 0.75 FX .
3. Nickel + copper + cobalt
4. Total capital and operating costs
5. Payable Ni, inclusive of all site and transport operating costs, capital costs, royalties, and net of by-product credits, but exclusive
of corporate, funding and exploration costs
FIGURE A: PRODUCTION PROFILE
Contained Metal
Tonnes
25,000
Contained Cobalt
Contained Nickel
Contained Copper
Contained Nickel Eq
Nickel Price - Spot 29 July 2021 (RHS)
Nickel Price - Base Case (RHS)
20,000
15,000
10,000
A$/lb
14.00
12.00
10.00
8.00
6.00
5,000
NiEq grade and NiEq contained metal in Mineral Resource and Reserves for all projects calculated based on prevailing spot metal prices 28 July
2021 (i.e. Ni US$19,533/t, Cu US$9,664/t, Co US$52,431/t) and AUD:USD 0.75 FX. Refer to the announcement “Updated Savannah Ore Reserve
and Mine Plan” dated 31 July 2020. All material assumptions underpinning the production targets, and the forecast financial information derived
from those production targets, which are referred to in the original announcement, continue to apply and have not materially changed.
2.00
4.00
-
-
FY22
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
FY32
FY33
20 | PANORAMIC RESOURCES LIMITED
2021 ANNUAL REPORT | 21
FOCUS FOR THE
YEAR AHEAD
The focus of the business this year will be centred around the ramping-up of mining and
processing at Savannah.
The safety of our people is
ingrained in our core values
and is always a primary focus,
particularly as the Company
progresses toward its first
concentrate shipment since the
resumption of operations.
Exploration
Additional areas of the focus will
include:
•
• Drawdown and prudent
management of Trafigura
project financing facility.
• Ongoing safe mobilisation
of contractors to site, as
operations continue to ramp
up.
Implementation and
execution of processing
improvements identified by
Primero.
• Completion of ancillary
capital works.
FY2022 is focused on a series
of underground drill programs
that aim to infill and expand
the Savannah and Savannah
North Resource. The programs
include grade control, resource
definition drilling and testing the
open eastern and upper central
sections of the Savannah North
orebody. In addition, resource
definition drilling above and
below the 900 Fault in the
Savannah Resource is planned
during the year. The drilling
schedule is as follows:
• Grade control infill drilling in
the 1381 and 1361 Savannah
North ore development drives
– currently underway.
• A dedicated drill platform to
the east of the 1381 level to
provide access and extend
the eastern margin of the
Savannah North orebody.
• Resource definition drilling
in the central and upper
margins of Savannah North
orebody between the 1200
and 1500 levels.
• Resource definition drilling
above and below the 900
Fault at Savannah. New
development in these areas
will provide optimal angles to
test the mineralisation above
and below the Fault.
22 | PANORAMIC RESOURCES LIMITED
2021 ANNUAL REPORT | 23
24 | PANORAMIC RESOURCES LIMITED
INVESTMENT
PROPOSITION
Panoramic’s focus is on safely and successfully restarting nickel production
at Savannah, ramping up production to full capacity AND, in turn, generating
sustainable cashflows and returns for shareholders
• First shipment concentrate
December 2021.
• Demand and strong nickel price
outlook driven by electric vehicles.
• The nickel market is already
estimated to be in a supply-
demand deficit.
• Electric vehicle production is
expected to be the source of the
vast majority of demand growth in
the next decade.
• Long life, high quality nickel sulphide
asset with significant Ore Reserves
and Mineral Resources.
• More than $100 million invested
in mining, processing and site
infrastructure with +13 years of
operating history.
• A largely untouched orebody at
Savannah North which remains open
along strike and at depth.
• Updated Mine Plan has outlined a 12
year mine life with attractive financial
outcomes.
• Underground development underway
and underground exploration
recommenced in September 2021.
2021 ANNUAL REPORT | 25
DIRECTORS’
REPORT
Directors' Report
The directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of
Panoramic Resources Limited and the entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
Nicholas L Cernotta (Independent Non-Executive Chair)
BEng (Mining)
Appointed 2 May 2018, Independent Non-Executive Chair from 25 May 2020
Nicholas (Nick) is a mining engineer with over 35 years’ experience in the mining industry, spanning various
commodities and operations in Australia and Overseas. Nick has held senior executive roles with extensive
operational experience in both the public and private sectors of the mineral resources industry, including as Director
of Operations at Fortescue Metals Group Ltd, Chief Operating Officer at MacMahon Contracting and Director of
Operations at Barrick Gold.
During the past three years, Nick has also served as a director of the following listed companies:
•
Pilbara Minerals Limited (Non-Executive Director from 6 February 2017)*
• New Century Resources Limited (Non-Executive Director from 28 March 2019)*
• Northern Star Resources Limited (Non-Executive Director from 1 July 2019)*
* Denotes current directorship
Victor Rajasooriar (Managing Director)
B.Eng (Mining) AusIMM, MAICD
Appointed 11 November 2019
Victor is a mining engineer with more than 25 years’ operational and technical experience in multiple disciplines
across both underground and open pit operations. Victor was Managing Director and CEO of Echo Resources
Limited prior to its takeover by Northern Star Resources Limited in September 2019. Prior to joining Echo, Victor
held the role of Chief Operating Officer for leading underground mining contractor, Barminco Underground
Contractors. In that role, Victor had responsibility for the tendering and execution of contracts and for overseeing
the achievement of strict safety, cost and production targets. He was also the Managing Director of Breakaway
Resources Limited and held senior operational positions for a range of mining companies including Newmont,
Grange Resources and Bass Metals.
During the past three years, Victor has also served as a director of the following listed companies:
•
Echo Resources Limited (Managing Director from October 2018 to September 2019)
• Horizon Gold Limited (Non-Executive Chair from 20 November 2019 to 9 April 2020)
Peter R Sullivan (Non-Executive Director)
BE, MBA
Appointed 1 October 2015
Peter is an engineer with an MBA and has been involved in the management and strategic development of resource
companies and projects for more than 30 years. His work experience includes periods in project engineering,
corporate finance, investment banking, corporate and operational management and public company directorships.
During the past three years, Peter has also served as a director of the following listed companies:
• GME Resources Limited (Managing Director from 24 June 1996 to 1 October 2004, Non-Executive Director
from 1 October 2004 and Non-Executive Chairman from 2017)*
• Copper Mountain Mining Corporation (Non-Executive Director from 30 October 2020)*
•
Zeta Resources Limited (Non-Executive Chairman from 7 June 2013)*
• Horizon Gold Limited (Non-Executive Chair from 7 July 2020)*
• Resolute Mining Limited (Managing Director from 14 February 2001 to 30 June 2015 and Non-Executive
Director from 30 June 2015 to 27 May 2021)
•
Bligh Resources Limited (Non-Executive Director from 13 July 2017 to 14 August 2019)
* Denotes current directorship
2021 ANNUAL REPORT | 27 Directors (continued)
Rebecca J Hayward (Independent Non-Executive Director)
LLB
Appointed 21 June 2018
Rebecca is an experienced infrastructure and resources lawyer, with a strong background in mining, energy and
large scale infrastructure transactions. Rebecca currently manages the legal, contracts and procurement function
for the Projects division of Fortescue Metals Group. Rebecca was a Senior Associate at Clayton Utz in the
Melbourne Construction and Major Projects team, where she had a lead role in a number of large infrastructure
projects for both the private and public sectors.
During the past three years, Rebecca has not served as a director of any other listed company.
Gillian Swaby (Independent Non-Executive Director)
BBus, FAICD, FGIA, AAusIMM
Appointed 8 October 2019
Gillian is an experienced mining executive with over 30 years’ experience in the resources sector and a broad
skillset across a range of corporate, finance and governance areas having held senior roles including Chief
Financial Officer, Company Secretary, Director and corporate advisor. She worked at Paladin Energy Limited
between 1993 and 2005, including 10 years as an executive director, at a time when that uranium company was
growing rapidly through mine development, operation, acquisition and exploration in multiple African countries.
During the past three years, Gillian has served as a director of the following listed companies:
• Deep Yellow Limited (Executive Director from 29 June 2017)*
• Comet Ridge Limited (Non-Executive Director from 9 January 2004)*
•
Firefinch Limited (formerly Birimian Limited) (Non-Executive Director from 26 April 2017, until 13 November
2018)
* Denotes current directorship
Company Secretary
Susan Park
BCom; ACA; F Fin; FGIA; FCG; GAICD
Appointed 9 April 2020
Ms Park has 24 years’ experience in the corporate finance industry and extensive experience in Company
Secretarial and Non-Executive Director roles with ASX, AIM and TSX listed companies. She is founder and
Managing Director of boutique consulting firm Park Advisory which specialises in the provision of corporate
governance and company secretarial advice to ASX listed companies and has held senior executive roles at Ernst
& Young and PricewaterhouseCoopers in their Corporate Finance divisions and at BankWest in their Strategy and
Ventures division.
Meetings of Directors
The number of meetings of directors (including committee meetings of directors) held during the year ended 30
June 2021, and the number of meetings attended by each director are as follows:
Board Meetings
Audit and
Governance
Committee
Remuneration
Committee
Risk and
Sustainability
Committee
N. Cernotta
V. Rajasooriar
P. Sullivan
R. Hayward
G. Swaby
Held
11
Attended Held
-
11
11
11
11
11
11
11
11
11
-
6
6
6
Attended Held
-
-
6
6
6
2
-
2
-
2
Attended Held
3
2
Attended
3
-
2
-
2
3
-
3
-
3
-
3
-
2021 ANNUAL REPORT | 28 Committee Membership
As at the date of this report, the Company has an Audit and Governance Committee, a Remuneration Committee
and a Risk and Sustainability Committee. The full Board acts as the Nomination Committee.
Members acting on the sub-committees of the Board at the date of this Directors’ Report are:
Audit and Governance Committee Remuneration Committee
G. Swaby (Chair)
P. Sullivan (Chair)
R. Hayward
P. Sullivan
N. Cernotta
G. Swaby
The company secretary acts as the secretary on each of the committees of the Board.
Risk and Sustainability
Committee
R. Hayward (Chair)
N. Cernotta
V. Rajasooriar
Directors' Interests
The relevant interest of each director in the share capital as notified by the directors to the Australian Securities
Exchange (ASX) in accordance with S205G(1) of the Corporations Act 2001, as at the date of this Directors’ Report
is as follows:
Name of Director
N Cernotta
V Rajasooriar
P Sullivan
R Hayward
G Swaby
Ordinary Shares
Performance rights over
Direct
-
-
-
107,500
Indirect
107,500
1,791,666
-
-
ordinary shares
-
7,416,488(1)
-
-
107,500
-
(i) Does not include an award of rights to Mr Rajasooriar (Managing Director) post 30 June 2021 totalling 3,992,813
that is subject to shareholder approval at the Company’s upcoming 2021 annual general meeting of shareholders.
Securities
Options
At the date of this report, unissued ordinary shares of the Company under option are:
Number of options
28,520,525
Exercise price
$0.16
Expiry date
30 June 2023
No options have been granted during the financial year or subsequent to the reporting date and to the date of signing
this report.
Performance Rights
On 11 September 2020 the Company issued 5,316,748 performance rights to employees. These performance
rights are subject to performance conditions and expire on 30 June 2025. On the 30 September 2020, performance
rights (included in the above issue) totalling 3,235,844 were forfeited and cancelled following the resignation of Mr
Michael Ball.
On 21 October 2020 the Company issued 1,936,910 performance rights to the Chief Financial Officer Mr Grant
Dyker. These performance rights are subject to performance conditions over the period to 30 June 2023 and expire
on 30 June 2025.
On 17 November 2020, following shareholder approval, the Company issued 7,416,488 performance rights to the
Managing Director and CEO Mr Victor Rajasooriar. These performance rights are subject to performance
conditions over the period to 30 June 2023 and expire on 30 June 2025.
No shares were issued on exercise of performance rights during the year. A reconciliation of performance rights
outstanding at the date of this report appears below.
2021 ANNUAL REPORT | 29
Operating and Financial Review (continued)
Rights outstanding at 30 June 2020
Rights issued during the year
Rights vested during the year
Rights lapsed during the year
Rights forfeited during the year
Rights issued post year end(i)
Rights forfeited post year end
Number of rights
-
14,670,146
-
-
(3,235,844)
7,563,220
(1,164,033)
Rights outstanding at the date of this report
17,833,489
(i) Includes an award of rights to Mr Rajasooriar (Managing Director) totalling 3,992,813 that is subject to
shareholder approval at the Company’s upcoming 2021 annual general meeting of shareholders. These LTI awards
will be subject to testing including the Company’s performance against total shareholder return measures. The
awards have a three-year performance period ending on 30 June 2024.
Dividends
No final dividend has been declared for the financial year ended 30 June 2021 (2020: nil).
Principal Activities
The principal activities of the consolidated entity during the course of the financial year comprised care and
maintenance activities at the Savannah Nickel Project together with capital infrastructure works within the
underground mine and on surface, aimed at de-risking the Project in preparation for a restart of operations during
the second half of CY2021.
Business Divisions
Previously, the Group had identified the following four operating segments:
(1)
(2)
(3)
(4)
Nickel - the Savannah Nickel Project;
Gold - 51% equity interest in Horizon Gold Limited (divested 29 June 2020);
Platinum Group Metals (PGM) - the Panton PGM Project (80% equity interest divested 17 December
2020, remaining 20% divested 16 June 2021); and
Exploration - greenfield exploration activities.
For the year ended 30 June 2021, the Company has reduced the number of business divisions to one segment
comprising Nickel. This change aligns with the Company’s stated goal of focusing on the Group’s core assets being
Nickel and is supported by the divestment of equity interests in Horizon Gold Limited and Panton Sill Pty Ltd. As at
30 June 2021, the Company had no ownership interest in Horizon Gold Limited and Panton Sill Pty Ltd. Exploration
is no longer viewed as a separate segment as all activities are focused on the tenements surrounding the Savannah
Nickel Project.
Operating and Financial Review
Operating Results for the Year
The Group recorded a profit after tax for the financial year ending 30 June 2021 of $295,000 (2020: after tax loss
of $87,888,000).
2021 ANNUAL REPORT | 30
Operating and Financial Review (continued)
Financial Performance
The Group's performance during the financial year ended 30 June 2021 and for the four previous financial years,
are set out in the table below. The financial results shown below were all prepared under the Australian Accounting
Standards.
Year Ended 30 June
Revenue and other income ($'000)
Cost of sales of goods ($'000)
Royalties ($'000)
Exploration and evaluation ($'000)
Care and maintenance expenses ($'000)
Fair value change of financial assets ($'000)
Corporate and marketing costs ($'000)
Other (expenses)/income ($'000)
EBITDA (before impairment) ($'000)
Depreciation and amortisation ($'000)
Net reversal/(impairment) of assets ($'000)
Finance costs ($'000)
Profit/(Loss) before tax ($'000)
Income tax (expense)/benefit ($'000)
Net Profit/(Loss) after tax ($'000)
(Loss)/earnings per share (cents)
Dividends per share (cents)
Dividends pay out ratio (%)
Market capitalisation ($'000)
Closing share price ($ per share)
Return on equity (%)
2021
10,677
-
-
(945)
(11,442)
(121)
(5,656)
(956)
(8,443)
(5,028)
14,187
(422)
295
-
295
0.0
-
-
2020
80,345
(87,000)
(3,402)
(484)
(619)
(190)
(7,695)
(15,864)
(34,909)
(18,656)
(27,063)
(7,260)
(87,888)
-
(87,888)
(8.8)
-
-
2019
27,885
(20,900)
(1,904)
(671)
(847)
(1,511)
(4,929)
2,273
(604)
(7,039)
18,255
(1,383)
9,229
-
9,229
1.4
-
-
2018
1,714
-
-
(487)
(5,474)
-
(4,022)
114
(8,155)
(430)
(38,511)
(943)
2017
9,666
(8,473)
(490)
(493)
(7,539)
-
(5,365)
(4)
(12,698)
(760)
9,178
(490)
(48,039)
(4,770)
-
(48,039)
(9.1)
-
-
-
(4,770)
(1.0)
-
-
94,285
0.220
(2.8)
307,637
166,124
163,307
304,788
0.15
0.1
0.081
(31.2)
0.295
4.6
0.620
(26.8)
Note (1): Comparative information has not been restated for the impact of AASB 9 Financial Instruments, AASB 15 Revenue from contracts with
customers (adopted in 2019) and AASB 16 Leases (adopted in 2020).
Note (2): EBITDA (before impairment) is non-IFRS information and has not been audited by the Company's auditor, Ernst & Young (EY). The table
above shows how it is reconciled to the Consolidated Income Statement. EBITDA (before impairment) has been included for the purpose of
reconciling earnings without impairment.
Revenue and Other Income
Operations at the Savannah Nickel Project remained suspended during the year on care and maintenance. As a
result, there were no concentrate sales during the year (2020: $69,097,000). Other income totalled $10,677,000
(2020: $11,248,000) which included a gain on the sale of the subsidiary Panton Sill Pty Ltd $7,659,000, gain on
the sale of shares in listed investments Horizon Gold Limited and GME Resources Limited $870,000, Job Keeper
income $1,279,000, interest and other income of $869,000.
Cost of Production
No direct production costs were incurred during the year (2020: 82,547,000) as operations at the Savannah Nickel
Project remained suspended on care and maintenance.
Care and Maintenance Costs
Costs associated with care and maintenance activities during the year totalled $11,442,000 (2020: $619,000).
Capital works were undertaken during the year to progress the de-risking of the project for a restart. The capitalised
cost of these activities totalled $13.611 million (2020: nil) and included the successful completion of raise bore
works for the FAR#3 ventilation shaft, underground level development within the Savannah North orebody, paste
fill infrastructure (on surface and underground), and surface electrical and ventilation works.
2021 ANNUAL REPORT | 31 Operating and Financial Review (continued)
Corporate and Marketing Costs
Corporate and marketing costs of $6,014,000 (2020: $7,695,000) were lower than the previous reporting period.
The prior year included costs for the restructure and recapitalisation of the Groups funding position and employee
termination costs associated with the suspension of operations at the Savannah Nickel Project.
Exploration Costs
Exploration costs in the period totalled $996,000 (2020: $1,720,000). This expenditure was incurred on areas of
interest where reserves have not yet been established.
Impairment
In the prior financial year end 30 June 2020, a net impairment loss of $27.063 million was recorded. This comprised
an impairment of $32.948 million which was recorded against the nickel cash generating unit as a result of the
suspension of operations at the Savannah Nickel Mine, netted off against an impairment reversal relating to the
disposal of the Thunder Bay North PGM Project totalling $5.332 million.
On 6 April 2021, the Company announced to the ASX that a decision to re-start operations at the Savannah
Nickel Project in the second half of CY2021 had been made. The decision was underpinned by a combination of
improving commodity and foreign exchange pricing and the completion of de-risking capital project works on site.
The decision to restart operations at the Savannah Nickel Project was considered to be a reversal indicator for
impairment losses recognised in prior periods and, as such, a formal estimate of the recoverable amount of the
nickel cash generating unit (CGU) was performed. The financial assessment inclusive of updated commodity and
foreign exchange prices together with appropriate sensitivity analysis indicated that the carrying values of the nickel
CGU’s assets were supported by the valuation (within a sensitivity range) and no further impairment adjustment
(loss / reversal) was required in the current financial year. Refer to note 10 for further details on impairment.
Review of Financial Condition
Balance Sheet
Net Working Capital - current assets less current liabilities
In the prior financial year, the Group undertook a recapitalisation of its funding position which resulted in the
repayment of its debt facilities and the strengthening of its balance sheet. At that time, sufficient funding was
secured to allow the Savannah Nickel Project to remain on care and maintenance for an extended period of time.
Operations were suspended in April 2020 and the Group since then has not generated operating cash flows from
the project.
During the year ended 30 June 2021 the Group has incurred care and maintenance expenditure and undertaken
several capital works programs to prepare the project for a restart in the second half CY2021. This expenditure has
been partially offset by the receipt of income from the disposal of Panton Sill Pty Ltd, Thunder Bay sale proceeds
instalments and the sale of shares in listed investments. As a result of the net outflow of cash from the Group,
the working capital position has reduced by $14,153,000. The Group’s working capital position is
$21,682,000 (2020: $35,835,000).
Net Tax Balances
At balance date, the consolidated entity had an unrecognised deferred tax asset value of $67,042,000 (2020:
$74,445,000). Until such time as the Savannah Nickel Project is generating sustainable taxable income, this asset
is not being recognised in the consolidated statement of financial position.
Net Assets/Equity
The net asset position of the consolidated entity increased 0.36% to $166,682,000 (2020: $166,085,000), primarily
due to the expenditures on care and maintenance activities at the Savannah Nickel Project, expensing of
exploration and corporate office costs.
Capital Structure
The debt to equity ratio (borrowings on contributed equity) at 30 June 2021 was 2% (2020: 2%).
2021 ANNUAL REPORT | 32 Review of Financial Condition (continued)
Business and Financial Risks
Exposure to movements in nickel, copper, cobalt and diesel (input) prices and the Australian dollar exchange rate
to the United States dollar (A$:US$) are significant business and financial risks in the Nickel Division. As a price-
taker, the consolidated entity has no ability to control the global spot prices it receives for the sales of nickel
concentrate and nickel ore. Any negative commodity price movement directly impacts the business by reducing the
sales revenue the consolidated entity receives in United States dollars. Similarly, the conversion of sales revenue
received in United States dollars into Australian dollars exposes the consolidated entity to movements in the foreign
exchange rate between the Australian dollar and the United States dollar. If the Australian dollar is strong relative
to the United States dollar at the time of conversion, the consolidated entity will receive less Australian dollar
revenue.
On 6 April 2021 the Company announced to the ASX a decision had been made to re-start operations at the
Savannah Nickel Project in the second half of CY2021. The commodity prices mentioned above, and the A$:US$
exchange rate has had a significant bearing on this decision and timing of the restart of operations at the Savannah
Nickel Project.
In the prior financial year, the Group was significantly affected by the impact of Covid-19, with the impact of Covid-
19 being a significant factor in the decision to suspend operations at the Savannah Nickel Project on 15 April 2020.
The Project is located in the Kimberley region which has previously been subjected to heightened travel restrictions
under the Biosecurity Act (2015). In response to Covid-19 the Company developed a specific Covid-19
management plan and implemented a range of measures to minimise the risk of potential transmission of Covid-
19 to the Company’s employees and the communities in which it operates. The Company is closely monitoring
Covid-19 related developments including the potential for stricter travel restrictions in the Kimberley or broader
regions in which the Company’s workforce and suppliers live and operate in. As a result of the suspension of
operations at the Savannah Nickel Project in the prior financial year, onsite presence reduced to a minimum to
allow the necessary care and maintenance activities and pre-production capital works to be carried out. The
company has put in place contractual measures to provide flexibility and minimise the potential cost of the impact
of any further restrictions or changes to existing restrictions.
The impact of Covid-19, including any restrictions on travel and the movement of supplies to Savannah has the
potential to impact the activities of the Company by reducing productivities and/or increasing the cost of performing
the Company’s activities. The potential impact of Covid-19 has been a significant factor that was considered in the
decision to restart the operations at Savannah. The timing of the restart and possibility for unforeseen delays due
to Covid-19 also has the potential to impact the carrying value of the Company’s assets or certain liabilities such
as rehabilitation and restoration costs. Further disclosures around the potential impact of Covid-19 are contained
in the Review of Operations and in the notes to the financial statements.
Commodity and US$ Foreign Currency Hedging
To limit the exposure to commodity price risk and foreign exchange currency risk between the Australian dollar and
United States dollar, the consolidated entity utilises commodity and United States dollar foreign exchange
derivatives.
All commodity and United States dollar foreign exchange derivatives were closed out in the 30 June 2020 financial
year. During the year there were no derivative transactions.
Risk Management
Other business risks can have an impact on the profitability of the consolidated entity. The recognition,
management and control of these risks are key elements of the Group enterprise-wide risk management
framework, as detailed in the Corporate Governance Statement.
2021 ANNUAL REPORT | 33 Review of Operations
The activities of the Group during the year included capital works that were undertaken to progress the de-risking
of the Savannah Nickel Project for a restart and included the successful completion of raise-bore works for the
FAR#3 ventilation shaft, underground level development within the Savannah North orebody, paste fill infrastructure
(on surface and underground), and surface electrical and ventilation works.
The Group recorded a profit from continuing operations after income tax for the full-year ended 30 June 2021 of
$0.295 million (2020: loss after tax of $87.89 million).
The results, in comparison to the previous corresponding full-year, reflect:
• a 100% decrease in sales revenue. The operation did not produce or sell concentrate in the period as the Project
is on care and maintenance. As a result, concentrate sales income for the full-year is recorded as nil, whereas
the corresponding prior year achieved $69.1 million in sales.
• Cost of goods sold and gross margin on sale of goods have a recorded value for the year of nil (prior
corresponding full-year, gross margin was a loss of $39.58 million). This result reflects the suspension of
operations at the Project.
• During the financial year the Group sold a 100% equity interest in Panton Sill Pty Ltd (PGM project), recording
a profit on sale of $7.66 million.
As the COVID-19 pandemic continues to impact Australia and the world, the Group’s focus remains on keeping its
people well, and maintaining safe and reliable operations. The Group has been proactive in its response to the
COVID-19 pandemic and has implemented a range of protective and preventative measures. The Savannah Nickel
Project, through its COVID-19 management plan, is continuing to operate unaffected by the pandemic, however, a
number of changes have been made at the operations such that persons employed at the site have reduced
exposure to potential sources of COVID-19, are able to abide by social distancing requirements and improve
hygiene standards. To date, the impact of border and travel restrictions on the Group’s ability to employ and move
employees and contractors into and out of the project has been minimal.
Savannah Nickel Project – Operating Activities
On 15 April 2020, the Company announced to the ASX a decision to suspend operations at the Savannah Nickel
Project. A number of factors contributed to this decision including the reduced operating performance of the mine,
lower prevailing commodity prices and the impact of Covid-19 related restrictions.
The Savannah Nickel Project was subject to travel restrictions that commenced late March 2020 and ended in June
2020. These restrictions were imposed as part of the government’s measures to manage the impact of Covid-19 on
the indigenous communities in the Kimberley. There were no further travel restrictions imposed during the financial
year ended 30 June 2021. This allowed the Company to continue with existing onsite care and maintenance
activities and undertake capital and ancillary works with the aim of de-risking the project for a restart in the second
half of CY2021. These capital works commenced in August 2020.
2021 ANNUAL REPORT | 34 Review of Operations (continued)
The following table summarises the production results.
Area
Details
Units
Mining
Milling
Ore mined
Ni grade
Ni metal contained
Cu grade
Co grade
Ore milled
Ni grade
Cu grade
Co grade
Ni Recovery
Cu Recovery
Co Recovery
Concentrate
Production
Concentrate
Concentrate
Shipments1
Ni grade
Ni metal contained
Cu grade
Cu metal contained
Co grade
Co metal contained
Concentrate
Ni grade
Ni metal contained
Cu grade
Cu metal contained
Co grade
dmt
%
dmt
%
%
dmt
%
%
%
%
%
%
dmt
%
dmt
%
dmt
%
dmt
dmt
%
dmt
%
dmt
%
Financial Year
Ended
30 June 2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial Year
Ended
30 June 2020
372,842
1.05
2,446
0.60
0.05
388,759
1.05
0.61
0.05
83.7
93.7
88.3
45,883
7.45
3,417
4.82
2,215
0.39
176
50,535
7.15
3,613
4.23
2,137
0.38
1
dmt
Mining and processing activities finished around 15 April 2020. The final concentrate shipment for 1,687 tonnes departed
Wyndham Port in June 2020.
Co metal contained
190
-
On 31 July 2020, the Company released to the ASX an updated Savannah ore reserve and mine plan. Based on a
mining inventory (inclusive of some Inferred Resources located near Ore Reserves) of 10.4Mt @ 1.22% Ni, 0.54% Cu
and 0.08% Co for 127kt Ni, 56kt Cu and 8.5kt Co contained metal, the new mine plan has a mine life of
approximately 13 years, with the majority of ore sourced from the Savannah North orebody. This results in average
annual production for years 1 to 12 of 8,810t Ni, 4,579t Cu and 659t Co in concentrate. The project economics
presented in this announcement indicate an attractive, near-term nickel sulphide mine restart opportunity. The
Savannah Ore Reserve (including Savannah North) at the time of this announcement was 8.3Mt @ 1.23% Ni,
0.59% Cu and 0.08% Co for 102kt Ni, 48.5kt Cu and 7kt Co contained metal.
Underground development works recommenced in August 2020, with mining contractor Barminco mobilising to
site. The key priority for the contractor was to complete a 468m horizontal development drive to intersect the
Savannah North FAR #3 ventilation raise. This development work was successfully completed on 1 October 2020,
allowing Barminco to undertake and complete other incline, decline and development work, primarily aimed at
opening up additional working levels in Savannah North. Barminco completed the assigned tasks, opening up four
mining levels in Savannah North ahead of schedule. They demobilised from site late December 2020. The
completion of the FAR #3 ventilation works together with the on-surface fan infrastructure will provide the required
ventilation to support future full-scale mining operations within the Savannah North ore body.
2021 ANNUAL REPORT | 35 Review of Operations (continued)
The raise boring contractor, RUC Mining, mobilised to site in late September 2020 and commenced work in mid-
October back-reaming the FAR #3 ventilation rise. A total of 354m of back reaming at a diameter of 3.85m was
successfully completed three months ahead of schedule. This work finished on 30 November 2020 with the
contractor demobilising from site in December 2020.
In January 2021, capital works commenced on the following projects that are a continuation of the de-risking
strategy that prepares the project for a restart of operations.
-
-
-
Drilling of paste lines into Savannah North and installation of pipes;
Surface power reticulation upgrade; and
Surface return air raise fan refurbishment, civil construction and installation.
As at 30 June 2021, the surface power reticulation upgrade had been completed, with work on the other projects
scheduled to be completed by the end of August 2021.
On 6 April 2021 the Company announced to the ASX a decision had been made to re-start operations at the
Savannah Nickel Project in the second half of CY2021. The announcement referred to the following positive
developments which underpinned the decision.
-
-
-
-
-
-
-
-
Improved commodity and foreign exchange pricing and sentiment.
Updated financial model confirming attractive financial outcomes over an optimised twelve-year mine life.
Completion of capital works that de-risk the restart of operations, primarily the raise bore works associated
with FAR #3.
Additional underground development to open up four new mining levels at Savannah North.
Updated process schedule based on additional metallurgical test work.
Evaluation of owner-operate and contractor-operated mining and processing models, which resulted in:
Letter of Intent signed with underground mining contractor Barminco Limited for mining services.
Letter of Intent signed with Primero Group Pty Ltd to operate the processing plant.
o
o
US$45 million debt facility secured with Trafigura Pte Ltd.
New offtake terms secured for the period February 2023 to February 2028 with Trafigura Pte Ltd.
On 6 April 2021, the results from an updated financial model that supported the Savannah restart were announced
to the ASX. The update included latest consensus commodity price and exchange rate assumptions, cost inflation
allowances that reflect current industry pricing conditions, the adoption of a contractor processing strategy and the
completion of some early capital works. The commodity price forecasts used in the model included a nickel price
of A$9.63/lb, a copper price of A$5.25/lb, a cobalt price of A$30.40/lb and an AUD:USD exchange rate of 0.76. The
outcome of this model update demonstrated attractive financial returns. The Company believes potential upside
exists in the commodity price assumptions based on the expected impact on nickel and copper markets of the
growing electrification of vehicles and uptake of renewable energy in the medium-term.
The following table and graph provide a summary of the key physical and financial metrics from the updated life of
mine model.
2021 ANNUAL REPORT | 36 April 2021
(Consensus Case)
April 2021
(Base Case)
April 2021
(Base Case +
20 % Ni Price)
10,628
10,628
10,628
Review of Operations (continued)
Key Metrics
Ore mined & treated
Ni grade
Cu grade
Co grade
Mine Revenue (Ni + Cu + Co)
Mine Costs (total capital and operating)
Upfront capital costs
Average AIC (payable Ni, net of byproduct credits)
Life of Mine (LOM)
Average nickel production (contained in concentrate)
Average copper production (contained in concentrate)
Average cobalt production (contained in concentrate)
Nickel price
Copper price
Cobalt price
FX: AUD:USD
kt
%
%
%
A$M
A$M
A$M
A$/lb
years
t
t
t
USD/t
USD/t
USD/t
1.23
0.54
0.08
2,386
1,717
41
6.73
12
9,072
4,683
676
16,976
7,629
45,947
AUD:USD
0.76
1.23
0.54
0.08
2,369
1,718
41
6.36
12
9,072
4,683
676
16,055
8,750
50,692
0.76
1.23
0.54
0.08
2,753
1,735
41
6.37
12
9,072
4,683
676
19,266
8,750
50,692
0.76
A separate financial model has been prepared for the purpose of assessing impairment at 30 June 2021. This
model has used financial inputs that vary to those used in the table above. These inputs include changes to
commodity and foreign exchange pricing, taxation, exploration expenditure and debt funding. Refer to note 10 for
further information.
On 3 April 2021, the Company entered into a secured loan agreement of up to US$45.0 million from Trafigura
Pte Ltd. The facility has two secured tranches comprising a US$30 million five-year Prepayment Loan Facility
(PLF) and a US$15 million Revolving Credit Loan Facility (RCF). The PLF has a five-year term from
drawdown with interest-only repayments required in the first 12 months. Debt repayments begin in the second
year and are sculpted to align with project cash flows.
The RCF has an 18-month term from 1 July 2021, and has the option (at the Company’s election) to be repayable
by way of a final bullet repayment of US$15 million at the end of the facility term.
2021 ANNUAL REPORT | 37 Review of Operations (continued)
The proceeds from the facility can be used for project-related expenditure and corporate purposes. Ongoing
covenants are typical for a facility of this nature. Both facilities use the 3-month LIBOR as a base interest rate plus
a favourable interest margin. There is no mandatory hedging requirement with either tranche. Both facilities are
secured by the Savannah project assets (including mining and exploration leases), the assets of the other
applicable operating subsidiary PAN Transport Pty Ltd and the shareholding held by Panoramic Resources Ltd in
Savannah Nickel Mines Pty Ltd. Ongoing covenants are light and typical for a facility of this nature. Both tranches
permit early repayment without penalty.
All conditions precedent to first draw down were satisfied on 2 July 2021 and all registrations with respect to security
were completed in June 2021. The Company anticipates drawing the PLF in the September 2021 quarter.
On 3 April 2021, the Company entered into a new five-year nickel and copper concentrate offtake agreement for
the period February 2023 to February 2028 with Trafigura Group Pte Ltd (Trafigura), which aligns with the expiry
of the existing offtake agreement with Jinchuan Group Co. Ltd / Sino Nickel Pty Ltd. The Trafigura offtake
agreement was concluded following a competitive tender process and reflects terms and payabilities which are in
line with, or more favourable than, the existing offtake agreement. This agreement is subject to and conditional
upon the drawing of the first tranche of debt (US$30 million) from Trafigura.
On 6 April 2021 mining contractor Barminco, a subsidiary of the Perenti Group (ASX:PRN), was awarded a four-
year underground mining contract under a binding Letter of Intent. Initial mobilisation to site occurred in June 2021.
Underground mining activities commenced in July 2021 one month ahead of the announced scheduled
commencement. Ore will initially be sourced from both the Savannah and the Savannah North deposits. By October
2021, it is anticipated that more than 50% of underground ore is scheduled to be consistently sourced from
Savannah North, rising to more than 60% by mid-CY2022 and continuing to increase as the Savannah remnants
are depleted. The contract will be serviced by new underground mining equipment including the use of teleremote
mining equipment which is expected to deliver both safety and productivity benefits. Based on Barminco’s previous
working knowledge at Savannah, opportunities to increase ore production and reduce dilution have also been
identified. A formal contract with Barminco was signed on 8 July 2021.
The Company signed a non-binding Letter of Intent on 6 April 2021, with specialist mineral processing engineering
group, Primero Group Pty Ltd (which is owned by NRW Holdings (ASX:NRW)). The non-binding Letter of Intent
envisaged a three-year agreement, and relates to all processing and maintenance work at the Savannah processing
plant, which has been maintained in excellent condition during the suspension.
A number of opportunities for improved recoveries through enhanced operating practices and minor capital projects
have been identified. The non-binding Letter of Intent with Primero has been structured to incentivise achieving
higher than budget recoveries. Ore processing is forecast to restart in November 2021, allowing ore stockpiles
(from mining) to build for around three months (100,000t) to de-risk the supply of ore to the plant during the
commissioning phase. First concentrate shipment from the Wyndham Port is targeted for December 2021. A formal
contract with Primero was signed on 30 July 2021.
Savannah Nickel Project – Exploration Activities
In September 2020, a surface exploration drilling program commenced, with a combination of deep surface
diamond drilling and electromagnetic surveying being used to explore for nickel sulphide mineralisation at a number
of prospective targets in close proximity to the Savannah Mine Complex. These targets include the Northern
Ultramafic Granulite, Oxide and Stoney Creek intrusions. The aim of this surface-based exploration program was
to complete preliminary nickel prospectively assessments and initial stratigraphic drilling of these targets. On 22
October 2020 the Company announced this exploration program had been completed. The Northern Ultramafic
Granulite program resulted in a new interpretation of the Down Hole Electromagnetic (DHEM) anomaly which
requires further drill testing. At Oxide, no significant magmatic nickel sulphide mineralisation was intersected by the
drill hole. The results from Stoney Creek did not intersect any significant magmatic nickel sulphide mineralisation
however follow up DHEM is required to complete the initial assessment. The Company intends undertaking this
follow up work in FY2022.
2021 ANNUAL REPORT | 38 Review of Operations (continued)
In October 2020, additional drilling to test a potential extension to the West of the Savannah North Upper Zone
orebody commenced from underground. The program was targeting an electromagnetic conductor. This work was
completed in December 2020, however the target was not properly tested as the drilling deviated below the target.
Remobilised mineralisation was encountered in this hole (refer to ASX announcement 28 January 2021). The large
DHEM target has not been effectively tested and follow up work will be assessed by the Company with a further
program to be undertaken when new in-mine drill positions have been established in FY2022. The Company
intends to commence an expanded in-mine exploration drilling program in the September 2021 quarter (refer to
ASX announcement 28 July 2021).
There were no other significant regional exploration activities undertaken during the financial year as the
Company’s resources were primarily focussed on the restart of mining operations at Savannah. Regional
exploration activities will resume in the second half of the 2022 financial year. The Company is currently assessing
a number of regional targets including those prospects previously drilled (noted above).
On the 22 July 2021, the Company published (on the ASX) a 2021 Mineral resource and Ore Reserve Statement.
In comparison to the previously released statement, there were no material changes to the stated resource and
reserve.
Panton PGM Project
In October 2020, the Company entered into a binding agreement to sell an equity interest in Panton Sill Pty Ltd, a
subsidiary company that holds the Panton PGM Project and associated tenements in the East Kimberly of Western
Australia. The purchaser, Great Northern Palladium Pty Ltd (“Great Northern Palladium”), agreed to acquire an
80% equity interest in Panton for A$12.0 million (inclusive of a $200,000 non-refundable deposit). The sale of the
80% equity interest was completed on 17 December 2020.
The agreement gave Great Northern Palladium a right to purchase the remaining 20% of Panton from the Company
for an additional A$3.0 million within a prescribed timeframe. This timeframe comprised either a six month period
from the completion of the sale or a nine month period from the completion of the sale should there be a change
of control of Panoramic Resources Ltd. If the right expired unexercised, then the Company and Panton will
participate in an incorporated joint venture in respect of the project, with the Company participating on a free carry
basis until a decision to mine has been made.
On 14 June 2021 Great Northern Palladium exercised its right to acquire the remaining 20% interest in Panton.
The transaction was cash settled on 16 June 2021. As at 30 June 2021, the Company had no ownership interest
in Panton.
Thunder Bay North PGM Project
On 15 May 2020, the Company completed the sale of all the shares in Panoramic PGMs (Canada) Limited (PAN
PGMs) to Clean Air Metals (formerly Regency Gold Corp.) PAN PGMs owned 100% interest in the Thunder Bay
North PGM Project situated in Northern Ontario, Canada.
Under the share purchase agreement announced on 6 January 2020, the purchase price comprised total cash
consideration of C$9.0 million. A deposit of C$0.25 million was received on execution of the agreement. A further
C$4.25 million was received on closing, with C$2.25 million of that held in trust by the Company’s Canadian lawyers
pending the receipt of a Clearance Certificate as required under the Income Tax Act (Canada).
In addition, further sale consideration (on a deferred basis) totalling C$4.5 million was due to be received by the
Company in three equal instalments on the first, second and third anniversaries of the completion of the sale.
The deferred consideration payments are secured by way of a general security agreement over all of the assets of
PAN PGMs, including the Thunder Bay North Project, and a first ranking charge over the shares held by Clean Air
Metals in PAN PGMs.
On 7 May 2021, the Company received a total of C$3.75 million in deferred proceeds from the sale. This amount
comprised the release of C$2.25 million that was held in trust pending the receipt of a Clearance Certificate and
C$1.5 million being the first anniversary instalment.
2021 ANNUAL REPORT | 39 Corporate
The Company is limited by shares and is domiciled and incorporated in Australia.
Significant events of the consolidated entity during the financial period of a corporate nature were as follows:
Significant Changes in the State of Affairs
Savanah Nickel Project - Restart Decision
On 6 April 2021 the Company announced to the ASX a decision had been made to re-start operations at the
Savannah Nickel Project in the second half of CY2021. The announcement referred to the following positive
developments which underpinned the decision.
-
-
-
-
-
-
Improved commodity and foreign exchange pricing and sentiment.
Updated financial model confirming attractive financial outcomes over a twelve-year mine life.
Completion of capital works that de-risk the restart of operations, primarily the raise bore works associated
with FAR #3.
Completion of underground development works to open up four new mining levels at Savannah North.
Updated process schedule based on additional metallurgical test work.
Evaluation of owner-operate and contractor-operated mining and processing models, which resulted in;
Letter of Intent signed with underground mining contractor Barminco Limited for mining services.
Letter of Intent signed with Primero Group Pty Ltd to operate the processing plant.
o
o
On 8 July 2021, a four-year Underground Mining Services contract was executed with Barminco Limited.
On 30 July 2021, a three-year Operating and Maintenance agreement was executed with Primero Group Pty Ltd.
Debt Funding
On 6 April 2020 the Company announced it had secured a financing facility from Trafigura Pte Ltd totalling US$45
million comprising two tranches. The first tranche is a term loan facility for five years totalling US$30 million. The
second tranche is a revolving credit facility for US$15 million repayable if drawn in eighteen months from 1 July
2021. See review of operations and note 21 for further details. This funding in combination with existing cash on
hand at 30 June 2021 together with anticipated concentrate sales revenue (targeted for December 2021) position
the Company to be fully funded to recommence operations at the Savannah Nickel Project.
Offtake Funding
On 3 April 2021, the Company entered into a new five-year nickel and copper concentrate offtake agreement for
the period February 2023 to February 2028 with Trafigura Pte Ltd, which aligns with the expiry of the existing
offtake agreement with Jinchuan Group Co. Ltd / Sino Nickel Pty Ltd. This agreement is subject to and conditional
upon the drawing of the first tranche of debt (US$30 million) from Trafigura Pte Ltd.
Exploration
The Group is now sufficiently funded to allow the recommencement of both in-mine and regional exploration. As
referred in the Review of Operations, exploration programs are being planned for both drilling and geophysical
activities which are due to commence in the first half of FY 2022.
Matters Subsequent to the End of the Financial Year
The following events occurred after the end of the financial year.
On 2 July 2021, all conditions precedent were satisfied for the US$45 million secured loan facility with Trafigura
Pte Ltd including the registration of security interests.
On 8 July 2021 the four-year underground mining contract with Barminco was executed. The contract value is
approximately $280 million. Underground mining activities also commenced at the Savanah Nickel Project.
2021 ANNUAL REPORT | 40 Matters Subsequent to the End of the Financial Year (continued)
On 30 July 2021 the three-year Operating and Maintenance Agreement was executed with Primero Group Pty Ltd.
The contract value is approximately $34 million. Primero commenced initial mobilisation to the Savannah site in
August 2020.
In the interval between the end of the financial year and the date of this report, other than as disclosed above or
previously in the Review of Operations, there has not arisen any item, transaction or event of a material and unusual
nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the consolidated
entity, the results of those operations, or the state of affairs of the consolidated entity, in future financial years.
Business Strategies and Prospects
The Company’s primary goal is to explore for, develop and mine its resources profitably and return value to
shareholders through capital growth and dividends. The Company’s vision is to broaden its exploration and
production base, with the aim of becoming a major, diversified mining house.
The likely developments in the next 12 months will be the ongoing focus to restart, commission and ramp up
production activities at the Savannah Nickel Project. Current plans are targeting 100,000 tonnes of mined ore
available for the commencement of processing in November 2021, first shipment of concentrate in December 2021
and ore run rates from underground mine production (tonnes basis) fully ramped up by June 2022.
Shares Under Option
At the date of signing, there were 28,520,525 unissued ordinary shares of the Company under Option (2020:
28,520,525). Refer to note 36(a).
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify the auditors, Ernst & Young (EY), as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payments have been made to indemnify Ernst & Young (EY) during or since the financial
year.
Indemnification and Insurance of Directors and Officers
The Company has agreed to indemnify the directors and senior executives against all liabilities to another person
(other than the Company or a related body corporate) that may arise from their position as directors and officers of
the Company, except where the liability arises out of certain wrongful acts for which the Company has not agreed
to provide indemnity. The agreement stipulates that the Company will meet the full amount of any such liabilities
including costs and expenses.
During the financial year, the Company has accrued and/or paid premiums in respect of contracts insuring all the
directors and officers against legal costs incurred in defending proceedings. The insurance premiums relate to:
•
•
costs and expenses incurred by the relevant officers in defending legal proceedings, both civil and criminal
and whatever the outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty
or improper use of information or position to gain a personal advantage.
The terms of the insurance contract are confidential and do not permit the disclosure of insured amounts, the
premium cost for the policies or any other condition.
2021 ANNUAL REPORT | 41 2021 Remuneration Report (Audited)
This 2021 remuneration report outlines the remuneration arrangements in place for the directors and executives of
the Company and the Group in accordance with the Corporations Act 2001 and its Regulations (the Act). The
information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
For the purposes of this report, Key Management Personnel (“KMP”) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Group, directly
or indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term ‘executive’ encompasses the Managing Director and the individuals listed
under Named Executives below.
(a) Directors and Key Management Personnel Disclosed in this Report
(i) Directors
Nicholas Cernotta
Victor Rajasooriar
Peter Sullivan
Rebecca Hayward
Gillian Swaby
Chair (Non-Executive)
Managing Director
Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
(ii) Named Executives
Grant Dyker(i)
Michael Ball(ii)
Chief Financial Officer
Chief Financial Officer
(i) Grant Dyker was appointed Chief Financial Officer on 5 October 2020.
(ii) Michael Ball resigned from his position as Chief Financial Officer on 30 September 2020.
(b) Remuneration Philosophy
The performance of the Company depends upon the quality of its directors and executives. To prosper, the
Company must attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
•
•
•
•
provide competitive rewards to attract and retain high calibre executives;
link executive rewards to shareholder value and company profits;
structure a significant portion of executive remuneration 'at risk', dependent upon meeting pre-determined
performance hurdles; and
establish appropriate and demanding performance hurdles in relation to 'at risk' executive remuneration.
(c) Remuneration Committee
The Remuneration Committee of the Board of Directors of the Company is responsible for determining and
reviewing compensation arrangements for the Managing Director and the senior executive team.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of
executives on a periodic basis by reference to relevant employment market conditions, with the overall objective of
ensuring maximum stakeholder benefit from the retention of a high quality, high performing and committed senior
executive team.
(d) Remuneration Structure
In accordance with best practice corporate governance, the remuneration structure of the non-executive directors,
and senior management, is separate and distinct.
2021 ANNUAL REPORT | 42
2021 Remuneration Report (Audited) (continued)
(e) Use of Remuneration Consultants
Where appropriate, the Remuneration Committee and the Board seek advice from independent remuneration
consultants to ensure the remuneration paid to the non-executive directors and senior management is appropriate
and in line with the market. As defined under the Corporations Amendment (Improving Accountability on Director
and Executive Remuneration), the Remuneration Committee received remuneration advice from BDO
Remuneration and Reward Services Pty Ltd (“BDO”) in the first two months of the 2020/21 financial year, on
aspects of the design of the FY2021 Long Term Incentive (“LTI”) scheme for the Group’s KMP. For this
remuneration advice, BDO was paid a fee of $5,650 (ex GST). The Remuneration Committee also engaged
Guerdon Associates in July 2021 to provide further remuneration advice with respect to the executive remuneration
framework and the design of the FY2023 LTI scheme for the Group’s KMP. For this remuneration advice, Guerdon
Associates were paid a fee of $19,435 (ex GST).
Following the receipt of the advice and recommendations from these advisors and the ensuing discussions with
the Remuneration Committee, the final design and approval of the executive remuneration framework including the
LTI scheme for both financial years ended 30 June 2021 and 30 June 2022 was made solely by the Company’s
Non-Executive Directors, therefore the Board is satisfied that there was no undue input or influence by any member
of the KMP.
(f) Non-Executive Director Remuneration
(i) Fixed Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Company's 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 of shareholders. An amount not exceeding
the amount determined is then divided between the directors as agreed.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst directors is reviewed annually. The Board considers fees paid to non-executive directors of
comparable companies when undertaking the annual review process. Each director receives a fee for being a
director of the Company. This fee is inclusive for each Board committee on which a director is a member.
Since the date of last review of non-executive director fees on 1 September 2019, subject to the comments below,
the Non-Executive Chair’s annual remuneration was $140,000 per annum and other non-executive director’s
annual remuneration was $90,000 per annum. In addition, each Chair of a Board Sub-Committee is paid an annual
fee of $10,000.
Effective 1 May 2020 as a result of the suspension of operations at the Savannah Nickel Mine non-executive
director fees were reduced by 25%. On 1 August 2020, with the commencement of capital development activities
at the Savannah Nickel Mine, non-executive director fees were returned to pre-suspension levels.
A review of non-executive director fees was undertaken following the end of the financial year. With effect from
1 July 2021 the Non-Executive Chair’s remuneration will increase to $145,000 (an increase of $5,000 from the
previous year) and each Chair of a Board Sub-Committee will be paid an annual fee of $15,000 an increase of
$5,000 from the previous year. All other Director fees remain unchanged.
The fees paid to non-executive directors for the period ending 30 June 2021 are detailed in Table 1 on pages
50 and 51 of this report. Fees for the non-executive directors were determined within an aggregate directors’ fee
pool limit of $600,000 which was last approved by shareholders on 20 November 2007.
2021 ANNUAL REPORT | 43 2021 Remuneration Report (Audited) (continued)
(ii) Variable Remuneration
The Company does not reward non-executive directors with variable (or ‘at risk’) remuneration. Any shares in the
Company that are held by non-executive directors at the date of this report are separately purchased and held by
each director and have not been issued by the Company as part of the director’s remuneration package.
(g) Executive Remuneration
Objective
The Company aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Company so as to:
•
•
•
•
reward executives for Company and individual performance against pre-determined targets;
align the interests of executives with those of shareholders;
link reward with the strategic goals and the performance of the Company; and
ensure total remuneration is competitive by market standards.
Structure
In determining the level and composition of executive remuneration, the Remuneration Committee takes into
consideration the operational and economic circumstances the Company is facing and likely to face in the medium
term together with the current market levels of remuneration for comparable executive roles.
It is the Remuneration Committee’s policy that employment contracts are entered into with the Managing
Director and other KMP. Details of these KMP contracts are provided on pages 49 to 50.
Remuneration consists of the following key elements:
•
•
Fixed Remuneration (base salary, superannuation and non-monetary benefits); and
Variable Remuneration - Short Term Incentive (“STI”) and Long Term Incentive (“LTI”).
The proportion of fixed remuneration and variable remuneration (‘at risk’ short term and long term incentives),
is established for each senior executive by the Remuneration Committee. Table 1 on page 50 and 51 details
the variable component (%) of the Group’s KMP.
(i) Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and is competitive in the market. Fixed remuneration is reviewed by the Remuneration Committee on a
regular basis and the process consists of a review of Company-wide, business unit and individual performance, the
Company’s operational and economic circumstances, relevant comparative remuneration in the market and internal
and, when appropriate, external advice on policies and practices. As noted above, the Remuneration Committee
has access to external advice, independent of management.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating
undue cost for the Company.
2021 ANNUAL REPORT | 44 2021 Remuneration Report (Audited) (continued)
Effective 1 May 2020, as a result of the suspension of operations at the Savanna Nickel Mine, KMP and other senior
management salaries were reduced by 20%. On 1 August 2020, with the commencement of capital development
activities at the Savannah Nickel Mine, KMP and senior management salaries were returned to pre-suspension
levels.
The fixed remuneration component of the Group’s KMP is detailed in Table 1 on page 49 and 50.
(ii) Variable Remuneration - Short-term Incentive (STI)
Objective
The objective of the STI scheme is to encourage and provide an incentive to executives and senior managers to
achieve, on a consistent basis, a number of annually set, pre-determined weighted Company and Individual Key
Performance Indicators (KPIs).
Structure
The Remuneration Committee may, at its sole discretion, set the KPIs for the Executive Directors or other Executive
Officers. The KPIs are chosen to align the reward of the individual Executives to the strategy and performance of
the Company. Performance objectives, which may be financial or non-financial, or a combination of both, are
determined by the Board. No short-term incentives are payable to Executives where it is considered that the actual
performance has fallen below the minimum requirement.
In the STI scheme, each participant is entitled to receive a cash bonus calculated on a certain percentage,
depending on the participant’s level of seniority, of their Total Fixed Remuneration (TFR) provided one or more of
the KPIs is achieved.
All KMP are eligible to participate in the STI plan with awards capped at 100% of the target opportunity. The target
opportunity for KMP is 60% of total fixed remuneration for the Managing Director and 50% for other KMP. A summary
of the KPI targets which were assessed on an annual basis for FY2021 and their respective weightings is as follows:
KPI
1. Safety & Environment
Weighting
20%
Measure
The Safety Performance KPI is based on the rate of total recordable injuries
improvement against previous year's safety performance.
No significant environmental incidents leading to prosecution and / or fine.
2. Capital Works
40%
Execute planned capital works and exploration activities within budget.
Ventilation rise FAR#3 to be successfully completed during the financial year
ended 30 June 2021.
3. Personal Performance
40%
KPI measures include:
-
-
-
-
-
Leadership through vision and values.
Identify, communicate and execute strategic corporate initiatives.
Establish a leadership team to transition the business in line with
the agreed business strategy.
Implement and optimise IT / financial systems in preparation for a
restart of operations.
Establish and implement a project financing strategy that supports
the funding requirements for a restart of operations.
2021 ANNUAL REPORT | 45 2021 Remuneration Report (Audited) (continued)
Based on an assessment undertaken by the Remuneration Committee, STI awards for FY2021 to KMPs were as
follows:
Name
Position
Victor Rajasooriar
Grant Dyker(i)
Michael Ball(ii)
Managing Director & CEO
Chief Financial Officer
Chief Financial Officer
Maximum STI
opportunity
60% of TFR
50% of TFR
50% of TFR
Achieved STI
Awarded STI
96%
100%
0%
$331,200
$123,188
Nil
(i) Grant Dyker was appointed Chief Financial Officer on 5 October 2020. Eligible STI target amounts have been
reduced on a pro-rata basis for the period of time employed (being less than 12 months).
(ii) Michael Ball resigned from his position as Chief Financial Officer on 30 September 2020. No STI award was
made as the STI assessment period was not completed.
The achieved STI was in respect of the full year ended 30 June 2021 where the KPI metrics were met. The STI
outcome is generally determined after the completion of the performance period (a financial year). The above
amounts were expensed in the FY2021 and will be paid in the September 2021 quarter.
No STI was paid or awarded in the prior FY2020.
The Board retains the discretion to waive or amend any vesting or performance criteria applying to the scheme, or
to make discretionary payments outside of the scheme in limited circumstances where it is considered warranted.
(iii) Variable Remuneration - Long Term Incentive (LTI)
Objective
The objective of a LTI program is to reward and incentivise executives in a manner which aligns this element of
remuneration with the creation of long term sustainable shareholder value and to provide greater incentive to the
participant focus on the Company’s longer term goals.
The Company’s LTI Plan was revised by the Remuneration Committee with the assistance of remuneration
consultants BDO and named the “Incentive Options & Performance Rights Plan” (“2018 ES Plan”). The 2018 ES
Plan was subsequently approved for a three-year period by the Company’s shareholders at the 2018 Annual
General Meeting on 21 November 2018.
Structure
Under the 2018 ES Plan, eligible participants are able to be granted Options and/or Performance Rights (collectively
defined as “Awards”). Notwithstanding that the 2018 ES Plan includes the offer and granting of Options, in its
discretion, the Remuneration Committee has determined that the grant of performance rights is the preferred LTI
reward vehicle.
A performance right is a right to be issued or transferred an ordinary share at a future point, subject to the
satisfaction of pre-determined vesting Conditions. No exercise price is payable and eligibility to a grant of
performance rights under the 2018 ES Plan is at the Board’s discretion. If approved by the Board, a participant
under the 2018 ES Plan may be paid, as an alternative, a cash amount equal to the market value of a share as at
the date the performance right is exercised instead of being issued or transferred a Share.
The LTI dollar value that each KMP and senior managers will be entitled to receive in performance rights (or options
if applicable) is set at a fixed percentage of their annual TFR (base salary plus statutory superannuation and
benefits) and varies according to the participant’s level of seniority and ability to influence performance. The number
of performance rights to shares to be granted is determined by dividing the LTI dollar value by the volume weighted
average price of the Company’s shares over the last 20 trading days of the month of June preceding the start of
the vesting period.
2021 ANNUAL REPORT | 46 2021 Remuneration Report (Audited) (continued)
Grants of performance rights made under the 2018 ES Plan are subject to the satisfaction of a time-based service
criteria and pre-determined vesting criteria over a three-year vesting period. These vesting conditions are
established in advance of grant by the Remuneration Committee. Performance and service criteria may be varied
from year to year by the Remuneration Committee as appropriate to ensure that the criteria align with the
Company’s strategies.
The Board retains the discretion (except to the extent otherwise provided by an offer to apply for awards), by written
notice to a Participant, to resolve to waive or amend any vesting criteria applying to an award in whole or in part.
In accordance with the Listing Rules and the Corporations Act, grants of awards (performance rights or options if
applicable) under the 2018 ES Plan to the Company’s Managing Director will be subject to approval by the
Company’s shareholders. Approval by shareholders would also be necessary for any grant of Awards under the
2018 ES Plan to the non-executive directors. There are no such grants proposed to non-executive directors.
The fair value of the performance rights granted are determined using Monte Carlo simulation, a review of historical
share price volatility and correlation of the share price of the Company to its Peer Group. The fair value is allocated
to each reporting period evenly over the period from grant date to vesting date.
During the year the Company issued 12,589,242 Performance Rights to KMP in respect of the LTI component of
their FY2021 remuneration. There were no LTI awards granted to the named executives and senior managers
under the 2018 ES Plan during the FY2020. The table below shows the number of performance rights granted to
KMPs during the FY2021.
Name
Victor Rajasooriar(i)
Grant Dyker(ii)
Michael Ball(iii)
Maximum LTI
Opportunity
100% of total fixed
remuneration
75% of total fixed
remuneration
75% of total fixed
remuneration
Number of Performance Rights
granted during FY2021
7,416,488
Fair Value of
Performance Rights
$0.11
1,936,910
3,235,844
$0.07
$0.06
(i) The performance rights issued to Mr Rajasooriar were approved by shareholders on 17 November 2020.
(ii) Mr Dyker was appointed Chief Financial Officer on 5 October 2020. The eligible LTI target amount has been
reduced on a pro-rata basis for the period of time employed (being less than 12 months).
(iii) Performance rights were issued to Mr Ball on 9 September 2020. Following his resignation on 30 September
2020 these rights were forfeited.
The table below outlines the movements in performance rights during the 2021 financial year and the balance held
by each KMP at 30 June 2021.
Name
Balance at
1 July 2020
Granted in
FY2021
Victor Rajasooriar
Grant Dyker
Michael Ball
Total
-
-
-
-
7,416,488
1,936,910
3,235,844
12,589,242
Vested
Lapsed
Other
-
-
-
-
-
-
3,235,844
3,235,844
-
-
-
-
Balance at
30 June 2021
7,416,488
1,936,910
-
9,353,398
On vesting, each right automatically converts to one ordinary share. If the employee ceases employment before
the rights vest, the rights will be forfeited, except in limited circumstances that are approved by the Board.
The following table details the terms and conditions of the grant and the assumptions used in estimating fair value
for performance rights issued to KMP during the 2021 financial year.
2021 ANNUAL REPORT | 47 2021 Remuneration Report (Audited) (continued)
Item
Grant date
Number of ATSR rights
Number of RTSR rights
Value of underlying security at grant date
Fair value per ATSR Right
Total ATSR Expense for the period
Fair value per RTSR Right
Total RTSR Expense for the period
Dividend yield
Risk free rate
Volatility
Performance period (years)
Commencement of measurement
period
Test date
Remaining performance period (years)
Maximum expense amount to be recognised in future period
M Ball
G Dyker
V Rajasooriar
11 September 2020
21 October 2020 17 November 2020
808,961
2,426,883
$0.081
$0.059
-
$0.057
-
0%
0.47%
80%
3.0
484,228
1,452,683
$0.100
$0.070
$8,109
$0.072
1,854,122
5,562,366
$0.095
$0.111
$52,008
$0.107
$25,023
$150,403
0%
0.30%
80%
3.0
0%
0.175%
80%
3.0
1 July 2020
1 July 2020
1 July 2020
30 June 2023
30 June 2023
30 June 2023
2.0
Nil
2.0
2.0
$101,198
$574,942
The performance rights granted to Mr Rajasooriar and Mr Dyker are subject to certain operational and market
performance conditions being met and will vest at the measurement date. The performance measures adopted
align with the Company’s objectives of restarting the Savannah Nickel project and achieving a successful ramp up
of that operation. The number of performance rights that vest will be subject to the Company’s performance against
total shareholder return and Company performance vesting conditions. The performance rights granted to Mr Ball
were forfeited in September 2020 following his resignation from the Company.
Tranche
Amount Weighting
Performance Conditions
Victor
Rajasooriar
1,854,122 25% of the Performance Rights ATSR performance. Performance rights vest on a pro-rata scale
from 25% to 100% for ATSR performance between 5% and 15%.
(measured over the 3 year period to 30 June 2023)
5,562,366 75% of the Performance Rights RTSR performance relative to a defined peer group. Performance
rights vest on a stepwise basis from 25% to 100% for RTSR
performance between 50th and 75th percentile. (measured over the 3
year period to 30 June 2023)
Grant Dyker
484,228
25% of the Performance Rights ATSR performance. Performance rights vest on a pro-rata scale
from 25% to 100% for ATSR performance between 5% and 15%.
(measured over the 3 year period to 30 June 2023)
1,452,682 75% of the Performance Rights RTSR performance relative to a defined peer group. Performance
rights vest on a stepwise basis from 25% to 100% for RTSR
performance between 50th and 75th percentile. (measured over the 3
year period to 30 June 2023)
ATSR: Absolute Total Shareholder Return measures the return received by shareholders from holding shares over
the performance period. Rights vest upon achievement of pre-specified 20-day volume weighted average price
targets. The number of rights that vest is determined pro-rata based on the level of performance achieved.
RTSR: Relative Total Shareholder Return measures the TSR performance of the Company over the performance
period relative to the TSR of each of the companies in the defined peer group. Rights, vest upon achievement of
pre-specified 20-day volume weighted average price targets as measured against a specified peer group of like
companies over the Performance Period. The number of rights that vest is determined based on whether the
performance achieved is greater than the fiftieth percentile of the peer group. If below this level, then none of the
rights vest. Above this level the number is determined stepwise in line with the relative percentile achieved.
2021 ANNUAL REPORT | 48 2021 Remuneration Report (Audited) (continued)
The peer group comprises Aeris Resources Ltd, Aurelia Metals Ltd, Blackstone Minerals Ltd, Copper Mountain
Mining Corp, Core Lithium, Liontown resources, Metals X Ltd, Mincor Resources Ltd, Neometals, New Century
Resources Ltd, Poseidon Nickel Ltd, Red River Resources Ltd, Sandfire Resources Ltd, and Western Areas Ltd.
In the period from the end of the financial year to the date of signing this Directors’ Report, the Company has granted
new performance rights totalling 7,563,220 to the named executives and senior managers under the 2018 ES Plan.
Mr Rajasooriar was awarded (subject to shareholder approval at the Company’s upcoming 2021 annual general
meeting of shareholders) 3,992,813 performance rights, Mr Dyker was awarded 1,866,640 performance rights and
senior managers were awarded 1,703,766 performance rights. These LTI awards will be subject to testing including
the Company’s performance against ATSR and RTSR. The awards have a three-year performance period ending
on 30 June 2024.
No Hedging Contracts on LTI Grants
The Company does not permit executives or senior managers to enter into contracts to hedge their exposure to
options or performance rights to shares granted as part of their remuneration package. This policy is strictly
enforced by the Managing Director under the Company’s Share Trading Policy detailed in the Corporate
Governance Statement.
(h) Employment contracts
(i) Non-Executive Directors
All non-executive directors are contracted under the following terms:
•
•
A non-executive director may resign from their position and thus terminate their contract on written notice.
The director’s appointment is subject to the provisions of the Company’s Constitution regarding retirement by
rotation and re-election and will cease at the end of any meeting at which the director is not re-elected as a
director by the shareholders of the Company.
Peter Sullivan
Non-Executive Director
Nicholas Cernotta
Annual Directors Fees
$140,000
$100,0001
$100,0001
$100,0001
1 Includes $10,000 annual fee for Chairing of Board Sub-Committee.
Rebecca Hayward
Gillian Swaby
(ii) Managing Director
The key terms of the Managing Director’s contract are as follows:
•
•
•
•
•
•
Total fixed remuneration (TFR) of $600,000 per annum inclusive of benefits and statutory superannuation.
Short Term Incentives in accordance with the STI Plan Rules that apply from time to time up to 60% of TFR.
Long Term Incentives (“LTI”) in accordance with the rules of the 2018 ES Plan of up to 100% of TFR.
The Company may terminate a directorship by providing 6 months’ written notice or provide payment in lieu of the
notice period (based on the TFR component of remuneration) if termination is initiated by the Company, except
where termination is from serious misconduct.
The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where
termination with such cause occurs, the Managing Director is only entitled to that portion of remuneration which is
fixed, and only up to the date of termination.
If at any time during the employment there is a material diminution in the position, the Managing Director will be
entitled to an immediate payment of 6 months’ severance pay.
2021 ANNUAL REPORT | 49
2021 Remuneration Report (Audited) (continued)
(iii) Named Executives
The named executives and the commencement date of their contracts are as follows:
Named Executive
Grant Dyker
Michael Ball
Date of Current
Employment Contract1
5 October 2020
12 December 2019
Position
Chief Financial Officer
Chief Financial Officer
(ceased employment on 30 September 2020)
1 Note that the date of the current employment contract is not necessarily the commencement date of employment
Employment Contracts
Mr Dyker is entitled to a total fixed remuneration (TFR) of $328,500 per annum inclusive of benefits and statutory
superannuation. He may also participate from time to time in short term incentives (up to 50% of TFR) and long
term incentives (up to 75% of TFR) in accordance with the STI plan rules and 2018 ES Plan. Mr Dyker may resign
from his position by providing 3 months’ written notice. The Company may terminate the executive employment
contract by providing 3 months’ notice, except in the case of serious misconduct in which case the contract may
be terminated immediately. If at any time during the employment there is a material diminution in the position, he
will be entitled to an immediate payment of 6 months’ severance pay.
(i) Details of Remuneration
Remuneration of Directors and Executive Officers
The remuneration in Table 1 for each named person, is the total of fixed remuneration (base salary, superannuation
and non-monetary benefits) and variable remuneration (short term and long term incentives).
Excluding the cash component of remuneration, the total remuneration shown is the amount expensed by the
Company and does not, in every case, represent what each named individual ultimately received in cash.
Table 1: Remuneration of Directors and Executive Officers
2021
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Bonus Other
Super-
annuation(b)
Annual and
Long Service
Leave(c)
Cash
salary
and
fees(a)
($)
($)
($)
($)
($)
($)
($)
($)
(%)
Share
based
payments
Rights to
shares
Termination /
Resignation
payments
Total
Performance
related(d)
Name
Non-Executive
Directors
P R Sullivan
N L Cernotta
R J Hayward
G Swaby
Executive Directors
R V Rajasooriar
Executives
G Dyker (e)
M B Ball (f)
97,917
126,202
89,422
89,422
-
-
-
-
-
-
-
-
-
10,881
8,495
8,495
-
-
-
-
-
-
-
-
526,922 331,200 3,486
25,000
43,821
226,039
-
-
-
-
-
97,917
137,083
97,917
97,917
1,156,468
48%
216,727 123,188 2,522
2,101
-
71,414
19,194
17,111
17,008
5,817
37,291
-
-
82,125
415,928
178,568
39%
-
1,218,025 454,388 8,109
89,176
66,645
263,330
82,125
2,181,798
33%
(a) Short term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
(b) Post-employment benefits are provided through superannuation contributions.
(c) Other long-term benefits as per Corporations Regulations 2M.3.03(1) Item 8.
(d) Calculated as bonus (short term benefits) and share based payments divided by total remuneration.
(e) Mr G Dyker joined the Company on 5 October 2020.
(f) Mr M Ball resigned on 30 September 2020.
2021 ANNUAL REPORT | 50
2021 Remuneration Report (Audited) (continued)
2020
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Super-
annuation(b)
Annual and
Long Service
Leave(c)
Share
based
payments
Rights to
shares
Termination /
Resignation
payments
Total
Performance
related(d)
Bonus(r) Other
($)
($)
($)
($)
($)
($)
($)
(%)
Cash
salary
and
fees(a)
($)
89,802
115,587
84,573
62,479
55,555
Non-executive
directors
N Cernotta
P Sullivan
R Hayward
G Swaby (e)
B Phillips (f)
Executive directors
V Rajasooriar (g)
-
-
-
-
-
-
-
-
-
-
315,542 100,000 4,281
P Harold (h)
201,414
-
2,483
Executives
M Ball (i)
J Hicks
T Eton (j)
B Timler (k)
B Robinson (l)
T Mason (m)
R Lampard (n)
S Park (o)
D Edwards (p)
153,822
222,864
172,926
178,494
36,291
111,409
100,000
11,950
34,235
50,000
-
-
-
-
-
-
-
-
2,835
6,782
3,929
3,039
-
3,076
3,336
-
-
8,531
-
8,035
5,935
-
39,476
19,134
19,363
21,172
16,428
16,957
3,448
10,726
9,500
-
3,252
-
-
-
-
-
25,407
7,442
10,401
458
17,384
13,741
2,781
-
622
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
465,326
-
-
-
109,500
107,125
-
-
-
-
98,333
115,587
92,608
68,414
55,555
484,707
695,799
236,421
251,276
210,667
321,731
149,645
125,261
113,458
11,950
37,487
-
-
-
-
-
21%
-
21%
-
-
-
-
-
-
-
-
681,951
3,068,899
5%
1,946,993 150,000 29,761
181,957
78,236
B Phillips retired from the Board on 20 November 2019.
(a) Short term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
(b) Post-employment benefits are provided through superannuation contributions.
(c) Other long-term benefits as per Corporations Regulations 2M.3.03(1) Item 8.
(d) Calculated as bonus (short term benefits) and share based payments divided by total remuneration.
(e) G Swaby was appointed to the Board on 8 October 2019.
(f)
(g) V Rajasooriar joined the Company on 11 November 2019.
(h) P Harold ceased employment on 11 November 2019.
(i) M Ball joined the Company on 12 December 2019.
(j)
T Eton retired on 28 January 2020.
(k) B Timler resigned on 11 December 2019.
B Robinson resigned on 14 August 2019.
(l)
(m) T Mason resigned on 13 December 2019.
(n) R Lampard resigned on 27 December 2019.
(o) S Park was appointed Company Secretary on 9 April 2020. S Park is remunerated through Park Advisory Pty Ltd.
(p) D Edwards was appointed Company Secretary on 23 January 2020 and resigned on 9 April 2020.
(q) Certain Board members participated as sub underwriters in the entitlement offer completed in January 2020 in accordance
with the Corporations Act. The directors participated on the same terms as other sub underwriters’ of the same class. The
sub-underwriting arrangement was not linked to the performance of the Company or the Board member.
(r) A discretionary payment, not linked to the performance of the Company, was approved for Mr Rajasooriar and Mr Ball as a
result of their personal and professional contributions to the recapitalisation of the Company in the prior financial year.
(j) Overview of Company performance
The table below sets out information about the Company’s earnings and movements in shareholders wealth for the
past five years up to and including the current financial year. Comparative information has not been restated for
the impact of AASB 9 Financial Instruments, AASB 15 Revenue from contracts with customers adopted in FY19
and AASB 16 Leases adopted in FY20
Year Ended 30 June
Earnings/(Loss) per share (cents)
Dividends per share (cents)
Dividends pay out ratio (%)
Closing share price ($ per share)
Return on equity (%)
2021
-
-
-
0.15
-
2020
(8.8)
-
-
0.081
(31.2)
2019
1.4
-
-
0.295
4.6
2018
(9.1)
-
-
0.620
(26.8)
2017
(1.0)
-
-
0.220
(2.8)
2021 ANNUAL REPORT | 51
2021 Remuneration Report (Audited) (continued)
(k) Details of share-based compensation and bonuses
(i) Securities granted as part of remuneration
Performance Rights to Shares
Performance rights were issued to KMP totalling 12,589,242 in the financial year ended 30 June 2021 (30 June 2020:
nil). No options to shares were granted as compensation to KMP in the financial year ended 30 June 2021 (30 June
2020: nil).
There were no ordinary shares issued to KMP on the exercise of securities during the financial year (2020: Nil).
(ii) Equity instrument disclosures relating to KMP
Securities provided as remuneration
Details of securities provided as remuneration are shown in Table 2.
Security holdings
A total of 9,353,398 securities (performance rights) over ordinary shares in the Company were held by the Managing
Director of Panoramic Resources Limited and other KMP of the Group, including their personally related parties at 30
June 2021. No comparative table has been provided as there were no performance right issues or holdings for the
previous financial year.
Table 2: Securities holdings of Managing Director and specified executives
2021
Performance Rights
Balance at
start of the
year
(number)
Granted as
compen-
sation
(number)
Exercised
(number)
Other
changes
(number)
Balance at
end of the
year
(number)
Vested and
exercisable Unvested
(number)
(number)
Managing Director of Panoramic
Resources Limited
V Rajasooriar
Other KMP of the Group
G Dyker
M Ball
Shareholdings
-
7,416,488
1,936,910
3,235,844
-
-
- 12,589,242
-
-
-
-
-
7,416,488
1,936,910
-
-
(3,235,844)
(3,235,844) 9,353,398
-
-
-
-
7,416,488
1,936,910
-
9,353,398
The numbers of shares in the Company held during the financial year by each director of Panoramic Resources Limited
and other KMP of the Group, including their personally related parties, are set out below. There were no shares granted
during the reporting period as remuneration.
2021
Ordinary Shares
Balance at
the start of
the year
(number)
Received during
the year on the
exercise of options
(number)
Purchases of
shares1
(number)
Other
changes
during the
year2
(number)
Balance at
end of the
year
(number)
Directors of Panoramic Resources Limited
N Cernotta
V Rajasooriar
P Sullivan
R Hayward
G Swaby
Other KMP of the Group
G Dyker
M Ball2
107,500
1,791,666
-
107,500
107,500
-
-
2,114,166
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
107,500
1,791,666
-
107,500
107,500
-
-
2,114,166
1 Trades on market or via participation in entitlement issues during the financial year.
2 Represents the balance held by the director or KMP on cessation of employment with the Company.
2021 ANNUAL REPORT | 52 2021 Remuneration Report (Audited) (continued)
All equity transactions with KMP other than those arising from the exercise of performance rights to shares have
been entered into on terms and conditions no more favourable than those the Group would have adopted if dealing
at arm's length.
Securities granted and exercised as part of remuneration
There were no securities granted or exercised as part of remuneration during the financial year ended 30 June
2021 (2020: Nil).
There were no alterations to the terms and conditions of securities granted as remuneration from their grant date
until their vesting date.
(l) KMP Transactions
There were no loans to KMP and their related parties at any time during the year ended 30 June 2021. There were
no transactions involving key management personnel and their related parties other than compensation and
transaction concerning shares and performance rights to shares as discussed in the Remuneration Report.
This marks the end of the 2021 Remuneration Report.
Corporate Governance Statement
The Board of Panoramic Resources Limited is committed to achieving and demonstrating the highest standards of
Corporate Governance. The Board is responsible to its Shareholders for the performance of the Company and
seeks to communicate extensively with Shareholders. The Board believes that sound Corporate Governance
practices will assist in the creation of Shareholder wealth and provide accountability. In accordance with ASX Listing
Rule 4.10.3, the Company has elected to disclose its Corporate Governance policies and its compliance with them
on its website, rather than in the Annual Report. Accordingly, information about the Company’s Corporate
Governance practices and the 2021 Corporate Governance Statement is set out on the Company’s website at
https://panoramicresources.com/corporate-governance/.
Environmental Regulation and Performance
The Group’s operations are subject to significant environmental regulations under both Commonwealth and State
legislation in relation to its development, mining and exploration activities. The Group’s management monitors
compliance with the relevant environmental legislation. The directors are not aware of any serious breaches of the
legislation during the period covered by this report.
Rounding of Amounts
The amounts contained in this report and in the Financial Report have been rounded to the nearest $1,000 (where
rounding is applicable) under the option available to the Company under Australian Securities and Investments
Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016.
Auditor's Independence Declaration
Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young (EY), to provide the directors of
Panoramic Resources Limited with an Independence Declaration in relation to the audit of the Financial Report for
the year ended 30 June 2021. This Independence Declaration is attached to the Directors’ Report and forms a part
of the Directors’ Report.
2021 ANNUAL REPORT | 53 Non-audit Services
The following non-audit services were provided by the entity’s auditor, Ernst & Young (EY). The directors are
satisfied that the provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act. The nature and scope of each type of non-audit service provided means
that auditor independence was not compromised.
EY received or are due to receive the following amounts for the provision of non-audit services:
• Tax compliance and other consulting services of $49,638.
Refer to note 27 for further details regarding non-audit services.
Signed in accordance with a resolution of the directors.
Victor Rajasooriar
Managing Director
Perth, 31 August 2021
Competent Person Statements
The information in this report that relates to exploration activities has been complied or reviewed by Andrew Shaw-
Stuart. Mr Shaw-Stuart is a member of the Australian Institute of Geoscientists (AIG) and is a full-time employee of
Panoramic Resources Limited. The aforementioned has sufficient experience that is relevant to the style of
mineralisation and type of target/deposit under consideration and to the activity which he is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves. Mr Shaw-Stuart consents to the inclusion in the report of the matters based
on the information in the form and context in which it appears.
No New Information or Data
This report contains references to exploration results, Mineral Resource and Ore Reserve estimates, and feasibility
study results including production targets, all of which have been cross referenced to previous market
announcements made by the Company. The Company confirms that it is not aware of any new information or data
that materially affects the information included in the relevant market announcements and, in the case of estimates
of Mineral Resource and Ore Reserve estimates, and feasibility study results including production targets, that all
material assumptions and technical parameters underpinning the estimates in the relevant market announcement
continue to apply and have not materially changed.
2021 ANNUAL REPORT | 54 In accordance with a resolution of the directors of Panoramic Resources Limited, I state that:
1. In the directors' opinion:
(a)
the financial statements and notes set out on pages 63 to 113 are in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Consolidated entity’s financial position as at 30 June 2021 and of
its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and Corporations Regulations 2001.
(ii)
(b)
subject to the achievement of the matters set out in Note 1(b), there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with sections 295A of the Corporations Act 2001 for the financial period ending 30 June 2021.
3. In the opinion of the directors, as at the date of this declaration, subject to the achievement of the matters set out
in Note 1(b), there are reasonable grounds to believe that the members of the Closed Group identified in note 32
will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of
Cross Guarantee.
On behalf of the Board
Victor Rajasooriar
Managing Director
Perth, 31 August 2021
2021 ANNUAL REPORT | 55 Auditor’s Independence Declaration to the directors of Panoramic
Resources Limited
As lead auditor for the audit of the financial report of Panoramic Resources Limited for the financial year
ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Panoramic Resources Limited and the entities it controlled during the
financial year.
Ernst & Young
Philip Teale
Partner
31 August 2021
2021 ANNUAL REPORT | 56 Independent auditor’s report to the members of Panoramic Resources
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Panoramic Resources Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
2021, the consolidated income statement, the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, notes to the financial statements, including a summary of significant accounting policies,
and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial report. These events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
2021 ANNUAL REPORT | 57 Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For the matter below, our description of how our audit addressed
the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matter below, provide the basis for our audit opinion on the accompanying
financial report.
1.
Impairment reversal of non-current assets
Why significant
Following an impairment and impairment reversal
trigger assessment at 30 June 2021, the Group
concluded that an impairment reversal trigger had
occurred in respect of the Savannah Nickel Mine Cash
Generating Unit (“Savanah CGU”). Accordingly, the
Group evaluated the recoverable amount of the
Savannah CGU at 30 June 2021 by reference to its
fair value less costs to dispose. Based on this
assessment, an impairment reversal of $14.187
million was recognised (refer to note 10).
We considered this to be a key audit matter because
of the:
►
►
►
Significance of the carrying value of property,
plant and equipment and mine property assets in
comparison to total assets at 30 June 2021
Significant judgement involved in determining if
there was an indicator that an impairment loss
recognised in prior periods may need to be
reversed in full or in part or whether further
impairment was required
Significant judgment and estimates involved in
the determination of the recoverable amount of
the Savannah CGU including assumptions
relating to future commodity prices, foreign
currency exchange rates, operating and capital
costs, future production volumes and an
appropriate discount rate to reflect the risk
associated with the forecast cash flows having
regard to the current status of the project.
How our audit addressed the key audit matter
We assessed the reasonableness of the Group’s
impairment reversal assessment process and the
resultant recoverable value for the Savannah CGU.
Our audit procedures included the following:
►
►
►
►
Evaluated the Group’s assessment as to the
presence of indicators of an impairment reversal
Evaluated the assumptions and methodologies
used by the Group, in particular, those relating
to forecast cash flows and inputs used to
formulate them. This included assessing, with
involvement from our valuation specialists, the
foreign currency exchange rates and commodity
prices with reference to broker consensus
forecasts
Evaluated the work of the Group’s internal and
external experts with respect to the capital and
operating expenditure assumptions including
whether these expenditure assumptions were
consistent with historical performance,
information in Board reports and releases to the
market. We also examined the competence,
qualifications and objectivity of the experts
Assessed the work of the Group's experts with
respect to the reserve assumptions used in the
cash flow forecasts. This included understanding
the reserve estimation process. We also
examined the competence, qualifications and
objectivity of the Group's experts, and assessed
whether key reserve economic assumptions
were consistent with those used elsewhere in the
financial report
2021 ANNUAL REPORT | 58 Why significant
How our audit addressed the key audit matter
► With involvement from our valuation specialists,
we tested the mathematical accuracy of the
Group's discounted cash flow impairment
reversal model, including whether the discount
rate used was reasonable
►
►
Assessed the impact of a range of sensitivities to
the assumptions underpinning the Group’s
impairment reversal assessment
Evaluated the adequacy of the Group’s
disclosures relating to the impairment reversal
assessment.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 annual report but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating 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.
2021 ANNUAL REPORT | 59 Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the 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.
2021 ANNUAL REPORT | 60 We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Panoramic Resources Limited for the year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Philip Teale
Partner
Perth
31 August 2021
2021 ANNUAL REPORT | 61 FINANCIAL
REPORT
Revenue
Cost of sales of goods
Gross loss
Other income
Care and maintenance expenses
Corporate and marketing costs
Exploration expenditure written-off
Fair value losses on derivatives
Change in fair value of financial assets at fair value through profit or loss
Impairment reversal/(loss)
Other expenses
Finance costs
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Profit/(loss) for the year is attributable to:
Owners of Panoramic Resources Limited
Non-controlling interests
Consolidated income statement
For the year ended 30 June 2021
Notes
2021
$'000
2020
$'000
3
5
4
5
10
5
5
6
-
-
-
10,677
(16,111)
(6,014)
(945)
-
(121)
14,187
(956)
(422)
295
-
295
295
-
295
69,097
(108,678)
(39,581)
11,248
(619)
(7,695)
-
(10,148)
(190)
(27,063)
(6,579)
(7,261)
(87,888)
-
(87,888)
(87,366)
(522)
(87,888)
Cents
Cents
Earnings/(Loss) per share for loss attributable to
the ordinary equity holders of the Company:
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
35
35
0.0
0.0
(8.8)
(8.8)
The above consolidated income statement should be read in conjunction with the accompanying notes.
2021 ANNUAL REPORT | 63 Consolidated statement of comprehensive income
For the year ended 30 June 2021
Notes
2021
$’000
2020
$'000
Profit/(loss) for the year
Other comprehensive income
Items that may reclassified to profit or loss
Changes in fair value of cash flow hedges, net of tax
Transfer of fair value of cash flow hedges to profit and loss, net of tax
Transfer of foreign currency translation reserve relating to disposal group
Other comprehensive loss for the year, net of tax
Total comprehensive income/(loss) for the year
Total comprehensive income/(loss) for the year is attributable to:
Owners of Panoramic Resources Limited
Non-controlling interests
295
(87,888)
-
-
-
-
(9,872)
10,148
(1,200)
(924)
295
(88,812)
295
-
295
(88,290)
(522)
(88,812)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying
notes.
.
2021 ANNUAL REPORT | 64 ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Receivables
Financial assets at fair value through profit or loss
Property, plant and equipment
Exploration and evaluation
Development properties
Mineral properties
Right-of-use assets
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Non-controlling interests
Total equity
Consolidated statement BALANCE SHEET
AS AT 30 June 2021
Notes
2021
$'000
2020
$'000
7
8
9
12
17
13
16
16
16
14
17
18
19
20
21
23
24,237
1,942
557
1,494
28,230
1,536
12
25,711
5,551
136,052
24
4,195
221
173,303
201,533
4,388
1,445
714
6,547
4,738
23,566
28,304
34,851
166,682
31,164
11,426
-
872
43,462
2,787
767
51,178
12,535
86,673
22
5,958
251
160,171
203,633
3,396
1,827
2,404
7,627
5,423
24,498
29,921
37,548
166,085
24
25(a)
353,550
22,476
(209,345)
-
353,550
22,172
(209,637)
-
166,682
166,085
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
2021 ANNUAL REPORT | 65 1
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2021 ANNUAL REPORT | 67
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Other revenue
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payment of development costs
Exploration and evaluation expenditure
Disposal of cash from sale of subsidiaries
Proceeds from sale of subsidiary (net of cost)
Return of proceeds from cash backed performance bonds
Proceeds from sale of property, plant and equipment
Proceeds from sale of financial assets at fair value through profit or loss
Interest received
Net cash from/(used) in investing activities
Cash flows from financing activities
Proceeds from issues of shares (net of share issue costs)
Proceeds from borrowings
Repayment of borrowings
Payments for leased assets
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of year
Consolidated statement of CASH FLOWS
For the year ended 30 June 2021
Notes
34
4
21(a)
7
2021
$'000
2,556
(23,150)
3,337
(167)
(17,424)
(460)
(11,397)
(1,025)
-
22,384
-
22
1,815
162
11,501
-
-
-
(1,004)
(1,004)
(6,927)
31,164
24,237
2020
$'000
68,201
(100,040)
4,412
(6,225)
(33,652)
(19,041)
(23,831)
(1,913)
(160)
8,252
(70)
822
-
168
(35,773)
143,441
18,500
(69,138)
(4,947)
87,856
18,431
12,733
31,164
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
2021 ANNUAL REPORT | 68 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies
The consolidated Financial Report of Panoramic Resources Limited and its subsidiaries (collectively, the Group) for
the year ended 30 June 2021 was authorised for issue in accordance with a resolution of the directors on 25 August
2021, subject to final review.
Panoramic Resources Limited (the Parent or the Company) is a for-profit company limited by shares incorporated
and domiciled in Australia whose shares are publicly traded on the Australian Stock Exchange. The Group's
registered office is Level 9, 553 Hay Street, Perth WA 6000.
The principal activities of the Group during the financial year consisted of onsite care and maintenance and capital
mine infrastructure works at the Savannah Nickel Project. Exploration and evaluation activities were also
undertaken on tenements at the Savannah project.
(a) Basis of preparation
The Financial Report is a general-purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared on
a historical cost basis, except for derivative financial instruments, and certain financial assets, which have been
measured at fair value. The financial report complies with International Financial Reporting Standards (IFRS)
as issued by International Accounting Standards Board.
(b) Going concern basis
The Group had cash outflows from operating and investing activities of $5.92 million for the year ended 30 June 2021
(2020: $69.43 million). At 30 June 2021, the Group had cash on hand of $26.45 million (2020: $31.16 million).
These financial statements have been prepared on a going concern basis which assumes the Group will be able
to meet its liabilities as they fall due for the foreseeable future. The Savannah Nickel Project continued to be on care
and maintenance during the financial year. The Group undertook additional evaluation work on the economics of a
restart of the Savannah Nickel Project, producing an updated financial model in April 2021 that demonstrates that
the Project is economic at current nickel prices. On 6 April 2021 the Company announced to the ASX a decision had
been made to re-start operations at the Savannah Nickel Project in the second half of CY2021. The announcement
referred to the following positive developments which underpinned the decision.
-
-
-
-
-
-
Improved commodity and foreign exchange pricing and sentiment.
Updated financial model confirming attractive financial outcomes over an optimised twelve-year mine life.
Completion of capital works that de-risk the restart of operations, primarily the raise bore works associated
with FAR #3.
Completion of underground development works to open up four new mining levels at Savannah North.
Updated process schedule based on additional metallurgical test work.
Evaluation of owner-operate and contractor-operated mining and processing models, which resulted in:
Letter of Intent signed with underground mining contractor Barminco for mining services.
Letter of Intent signed with Primero Group Pty Ltd to operate the processing plant.
o
o
On 3 April 2021 the Company announced it had secured a financing facility from Trafigura Pte Ltd totalling US$45
million comprising two tranches. The first tranche is a term loan facility for five years totalling US$30 million. The second
tranche is a revolving credit facility for $US$15 million repayable if drawn in eighteen months from 1 July 2021. This
funding in combination with existing cash on hand at 30 June 2021 together with anticipated concentrate sales revenue
(targeted for December 2021) position the Company to be fully funded to recommence operations at the Savannah
Nickel Project.
On 3 April 2021, the Company entered into a new five-year nickel and copper concentrate offtake agreement for the
period February 2023 to February 2028 with Trafigura Group Pte Ltd (Trafigura), which aligns with the expiry of the
existing offtake agreement with Jinchuan Group Co. Ltd / Sino Nickel Pty Ltd. This agreement is subject to and
conditional upon the drawing of the first tranche of debt (US$30 million) from Trafigura.
The impact of Covid-19, including any restrictions on travel and the movement of supplies to Savannah has the
potential to impact the activities of the Company by reducing productivities and/or increasing the cost of performing the
Company’s activities. The potential impact of Covid-19 has been a significant factor that was considered in the decision
to restart the operations at Savannah. The timing of the restart and possibility for unforeseen delays due to Covid-19
also has the potential to impact the carrying value of the Company’s assets or certain liabilities such as rehabilitation
and restoration costs. Further disclosures around the potential impact of Covid-19 are contained in the Review of
Operations and in the notes to the financial statements.
2021 ANNUAL REPORT | 69 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
The Directors consider the going concern basis of preparation to be appropriate based on the cash flow forecasts. The
Group is expected to start generating revenue from the Savannah Nickel Project in the first half of FY2022. The
achievement of cash flow forecasts is dependent upon the Group achieving forecast targets for concentrate revenue,
mining operations and processing activities that are in accordance with management’s plans and forecast commodity
pricing (nickel, copper and cobalt) and foreign exchange assumptions to enable the cash flow forecast to be achieved.
Critical to achieving forecast cash flows is the Group’s ability to achieve forecast concentrate production in accordance
with Board approved forecasts. Should this not occur it is likely that the Group will require additional capital to fund the
restart of operations at the Savannah Nickel Project. The Directors are satisfied there is a reasonable basis that the
Group will be able to secure additional funds as required and thus it is appropriate to prepare the financial statements
on a going concern basis. In the event that the Company is unable to obtain sufficient funding for ongoing operating
and capital requirements, there is material uncertainty whether it will continue as a going concern and therefore whether
it will realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the
financial statements.
The financial statements do not include any adjustment relating to the recoverability or classification of recorded asset
amounts or to the amounts or classification of liabilities that may be necessary should the Company not be able to
continue as a going concern.
(c) Changes in accounting policies and disclosures
Since 1 July 2020, the Group has adopted all Accounting Standards and Interpretations effective from 1 July 2020.
Accounting policies adopted by the group are consistent with those of the previous financial year. The Group has not
early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The new and amended Accounting Standards and Interpretations applied for the first time from 1 July 2020, but did not
have an impact on the consolidated financial statements of the Group and, hence, have not been disclosed. There is
no material impact of any new and amended accounting standards issued but not yet effective.
(d) Significant accounting judgments, estimates and assumptions
In the process of applying the Group's accounting policies, management has made the following judgments, and
estimations which have the most significant effect on the amounts recognised in the financial statements.
Key judgments
(i) Revenue
For sales sold under Cost, Insurance and Freight ("CIF") Incoterms, the Group is responsible for providing
freight/shipping services. Whilst the Group does not actually provide nor operate the vessels, the Group has determined
that it is the principal in these arrangements because it has concluded it controls the specified services before they are
provided to the customer. The terms of the Group’s contract with the service provider give the Group the ability to direct
the service provider to provide the specified services on the Group’s behalf.
The Group has also concluded that revenue for freight/shipping services is to be recognised over time because the
customer simultaneously receives and consumes the benefits provided by the Group. The fact that another entity would
not need to re-perform the freight/shipping services that the Group has provided to date demonstrates that the customer
simultaneously receives and consumes the benefits of the Group’s performance as it performs. The Group determined
that the output method is the best method for measuring progress of the freight/shipping services because there is a
direct relationship between the Group’s effort and the transfer of services to the customer. The Group recognises
revenue on the basis of the time elapsed relative to the total expected time to complete the service.
(ii) Determining the beginning of production
Judgment is required to determine when capitalisation of development costs cease, with amortisation of the associated
mine assets commencing upon the start of commercial production. This is based on the specific circumstances of the
project and takes into consideration when the specific asset is substantially complete and becomes ‘available for use’
as intended by management. This includes consideration of the following factors:
• completion of reasonable testing of the mine plant and equipment;
• mineral recoveries, availability and throughput levels at or near expected levels;
• the ability to produce nickel concentrate in saleable quantity and form; and
• the achievement of continuous production.
On 15 April 2020 operations at the Savannah Nickel Mine were suspended resulting in the halting of production. Since
then, on-site care and maintenance activities have been undertaken together with capital works that de-risk and prepare
the mine for a restart of operations. The Company announced on 6 April 2021 a decision to restart the mine in the first
half of FY2022.
2021 ANNUAL REPORT | 70 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(d) Significant accounting judgments, estimates and assumptions (continued)
(iii) Lease term for contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by
an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate
the lease, if it is reasonably certain not to be exercised.
The Group applies judgment in evaluating whether it is reasonably certain to exercise the option to renew. That is, it
considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement
date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its
control and affects its ability to exercise (or not to exercise) the option to renew (e.g. a change in business strategy).
The Group included the renewal period as part of the lease term for leases of plant and machinery due to the
significance of these assets to its operations.
(iv) Incremental borrowing rate for lease liabilities
In measuring the present value of the lease liability, the standard requires that the lessee’s incremental borrowing rate
is used if the rate implicit in the lease cannot be readily determined. Panoramic uses a consistent approach reflecting
the Group’s borrowing rate and the duration of the lease term, which requires the use of judgment.
(v) Determination of mineral resources and ore reserves
The Group estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’) as a minimum standard. The information
on mineral resources and ore reserves were prepared by or under the supervision of a Competent Person(s) as defined
in the JORC Code. The amounts presented are based on the mineral resources and ore reserves determined under
the 2012 edition of the JORC Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are
valid at the time of estimation may change significantly when new information becomes available. Significant judgment
is required in assessing the available reserves. Factors that must be considered in determining reserves and resources
are the Company's history of converting resources to reserves and the relevant time frame, market conditions and likely
future developments.
Changes in the forecast prices of commodities, foreign currency exchange rates, production costs or recovery rates
may change the economic status of reserves and may ultimately result in the reserves being restated. Such changes
in reserves could impact future depreciation and amortisation rates, asset carrying values and the provision for
decommissioning and restoration.
Key estimates
(vi) Impairment of capitalised exploration and evaluation expenditure
The Group assesses impairment of all exploration and evaluation assets at each reporting date by evaluating conditions
specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger exists, the
recoverable amount of the asset is determined. The future recoverability of capitalised exploration and evaluation
expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself
or, if not, whether it is likely to be able to successfully recover the related exploration and evaluation asset through sale.
Factors which could impact the future recoverability include the level of proved and probable reserves and mineral
resources, future technological changes which could impact the cost of mining, future legal changes (including changes
to environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future,
this will reduce profits and net assets in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached
a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.
To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce
profits and net assets in the period in which this determination is made.
Capitalised exploration and evaluation expenditure that suffered an impairment are tested for possible reversal of the
impairment whenever events or changes in circumstances indicate that the impairment may have reversed.
2021 ANNUAL REPORT | 71 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(d) Significant accounting judgments, estimates and assumptions (continued)
(vii) Impairment of property, plant and equipment, capitalised mine development expenditure and mine properties
expenditure
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and
to the particular asset that may lead to impairment. If indications of impairment exist, the recoverable amount of the
asset is determined. Where a review for impairment is conducted, the recoverable amount is assessed by reference to
the higher of ‘value in use’ (being the net present value of expected future cash flows of the relevant cash-generating
unit ("CGU") and ‘fair value less costs to dispose ("FVLCD").
In determining value in use, future cash flows were based on:
• estimates of the quantities of ore reserves and mineral resources for which there is a sufficient degree of confidence
of economic extraction;
spot commodity prices at balance date;
• estimates of future production levels based on current operating capacity;
•
• estimates of future cash costs of production; and
• estimates of the impact of COVID-19 on the expected timing of restart of operations and on costs.
Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any impairment
losses recognised, if any, which could in turn impact future financial results.
Property, plant and equipment that suffered an impairment is tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed. Refer to note 13 for further
information.
(viii) Provision for decommissioning and rehabilitation
Decommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is
incurred at the end of a mine’s life. In determining an appropriate level of provision, consideration is given to the
expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the
mine), and the estimated future level of inflation.
The ultimate cost of decommissioning and restoration is uncertain, and costs can vary in response to many factors
including changes to the relevant legal requirements, the emergence of new restoration techniques, discount rates and
cost inflation applied, the timing that activities are expected to be undertaken and experience at other mine sites. The
expected timing of expenditure can also change, for example in response to changes in mineral inventory or to
production rates. To the extent cost of decommissioning and restoration increase or decrease by 10%, there would be
a +/- $2.5 million impact on the provision.
The carrying amount of the provision for decommissioning and rehabilitation as at 30 June 2021 was $23.556 million
(2020: $24.498 million). The Group estimates that the costs will be incurred towards the end of the respective mine
lives (being 12 years to FY2034) and calculates the provision using the discounted cash flow method based on expected
costs to be incurred to rehabilitate the disturbed area. These costs have been discounted at the Government bond rate
for a comparable period which is 1.58% (2020: 1.06%).
Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in
turn impact future financial results.
(e) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 30
June 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with
the investee and can affect those returns through its power over the investee. Specifically, the Group controls an
investee if and only if the Group has:
• power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
• exposure, or rights, to variable returns from its involvement with the investee; and
•
the ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
•
•
•
the contractual arrangement with the other vote holders of the investee;
rights arising from other contractual arrangements; and
the Group’s voting rights and potential voting rights.
2021 ANNUAL REPORT | 72 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(e) Basis of consolidation (continued)
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from
the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it:
• de-recognises the assets (including goodwill) and liabilities of the subsidiary;
• de-recognises the carrying amount of any non-controlling interests;
• de-recognises the cumulative translation differences recorded in equity;
•
•
•
•
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in profit or loss; and
reclassifies the parent’s share of components previously recognised in other comprehensive income to profit or loss
or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets
or liabilities.
(f) Revenue
(i) Revenue from contracts with customers
The Group was engaged in the business of producing nickel concentrate. Revenue from contracts with customers was
recognised when control of the goods or services was transferred to the customer at an amount that reflected the
consideration to which the Group expected to be entitled in exchange for those goods or services. The Group has
concluded that it was the principal in its revenue contracts because it typically controlled the goods or services before
transferring them to the customer.
For metal-in-concentrate sales under CIF international commercial terms, the performance obligations were the delivery
of the concentrate and the provision of shipping services. Based on the contractual terms, revenue from the sale of
nickel concentrate was recognised when control passes to the customer, which occurred at a point in time when the
nickel concentrate was physically transferred onto a vessel.
The Group’s sales of nickel concentrate allowed for price adjustments based on the market price at the end of the relevant
Quotational Period (“QP”) stipulated in the contract. These are referred to as provisional pricing arrangements and are
such that the selling price for nickel concentrate was based on prevailing spot prices on a specified future date after
shipment to the customer. Adjustments to the sales price occurred based on movements in quoted market prices up to
the end of the QP. The period between provisional invoicing and the end of the QP can be up to two months.
Revenue from the sale of nickel concentrate was measured at the amount to which the Group expected to be entitled
being the forward price at the date the revenue was recognised, net of treatment and refining charges, and a
corresponding trade receivable was recognised.
2021 ANNUAL REPORT | 73 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(f) Revenue (continued)
For the provisional pricing arrangements, any future changes that occurred over the QP were embedded within the
provisionally priced trade receivable. Given the exposure to the commodity price, these provisionally priced trade
receivables failed the cash flow characteristics test and were classified and measured at fair value through profit or loss
from initial recognition and until the date of settlement. Subsequent changes in fair value of the receivable were
recognised in the profit or loss each period and presented separately from revenue from contracts with customers as
part of ‘fair value gains/losses on provisionally priced trade receivables. Changes in fair value over, and until the end
of, the QP, are estimated by reference to updated forward market prices for nickel as well as taking into account relevant
other fair value considerations, including interest rate and credit risk adjustments.
Revenue was initially recognised based on the most recently determined estimate of nickel concentrate using the
expected value approach based on initial internal assay and weight results. The Group has determined that it was highly
unlikely that a significant reversal of the amount of revenue recognised will occur due to variations in assay and weight
results. Subsequent changes in the fair value based on the customer’s final assay and weight results were recognised
in revenue at the end of the QP.
For CIF arrangements, the transaction price (as determined above) was allocated to the nickel concentrate and shipping
services using the relative stand alone selling price method. The consideration was received from the customer at, or
around, the date of shipment under a provisional invoice. Therefore, some of the upfront consideration that related to
the shipping services yet to be provided was deferred. This was generally not material at the balance sheet date.
Shipping revenue was recognised over time using an output method (being days of shipping/transportation elapsed) to
measure progress towards complete satisfaction of the service as this best represented the Group’s performance. This
was on the basis that the customer simultaneously received and consumed the benefits provided by the Group as the
services were being provided. The costs associated with these freight/shipping services were also recognised over the
same period of time as incurred.
(ii)
Interest income and dividends
Interest income
Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial
asset to the net carrying amount of the financial asset.
Dividends
Dividends are recognised as revenue when the right to receive payment is established.
(g) Borrowing costs
Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary
costs incurred in connection with arrangement of borrowings, and finance charges in respect of finance leases.
Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, which is generally taken to be
more than twelve months. In these circumstances, borrowing costs are capitalised to the costs of the assets. Where
funds are borrowed specifically for the acquisition, construction or production of a qualifying asset, the amount of
borrowing costs capitalised is those incurred in relation to that borrowing, net of any interest earned on those
borrowings. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average
capitalisation rate to the extent that they relate to the qualifying asset. The weighted average capitalisation rate applied
during the year was 6.02% (2020: 9.34%).
Exploration and evaluation expenditure carried forward relating to areas of interest which have not reached a stage
permitting reliable assessment of economic benefits are not qualifying assets.
2021 ANNUAL REPORT | 74 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(h) Cash and cash equivalents
Cash on hand and in banks and short-term deposits are stated at nominal value.
For the purpose of the statement of cash flows, cash includes cash on hand and at banks and on short term deposits
with an original maturity not exceeding three months.
(i)
Inventories
(i) Raw materials and stores, work in progress and finished goods
Inventories are valued at the lower of cost (determined based on the weighted average cost) and net realisable value.
Costs incurred in bringing inventory to its present location and condition are accounted for as follows:
• ore stocks - cost of direct mining and a proportion of site overheads; and
•
concentrates and work in progress - cost of direct mining, processing, transport and labour and a proportion of site
overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
(ii) Spares for production
Inventories of consumable supplies and spare parts expected to be used in production are valued at the weighted
average cost. Obsolete or damaged inventories of such items are valued at net realisable value.
(j) Derivative financial instruments and hedging
The Group used derivatives such as United States Dollar nickel and copper forward sales contracts, United States
Dollar nickel options, United States denominated currency options and United States denominated forward currency
sales contracts to manage its risks associated with foreign currencies and commodity price fluctuations. These
derivative financial instruments were stated at fair value.
Derivatives were not held for speculative purposes.
Derivatives were initially recognised at fair value on the date a derivative contract was entered into and were
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss was recognised in profit or
loss immediately unless the derivative was designated and effective as a cash flow hedging instrument, in which event,
the timing of the recognition in profit or loss depended on the nature of the hedge relationship.
A hedge of the foreign currency risk and commodity price risk of a firm commitment was accounted for as a cash flow
hedge.
At the inception of a hedge relationship, the Group formally designated and documented the hedge relationship to which
the Group wished to apply hedge accounting and the risk management objective and strategy for undertaking the
hedge. The documentation included identification of the hedging instrument, the hedged item or transaction, the nature
of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure
to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges were expected to
be highly effective in achieving offsetting changes in the fair value or cash flows and were assessed on an ongoing basis
to determine that they actually have been highly effective throughout the financial reporting periods for which they were
designated.
2021 ANNUAL REPORT | 75 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(j) Derivative financial instruments and hedging (continued)
The hedges that met the strict criteria for cash flow hedge accounting were accounted for as follows:
Cash flow hedges
Cash flow hedges were hedges of the Group’s exposure to variability in cash flows that was attributable to a particular
risk associated with a highly probable forecast transaction and that could affect profit and loss. The effective portion of
changes in the fair value of derivatives that were designated and qualified as cash flow hedges were deferred in equity.
The gain or loss relating to the ineffective portion was recognised immediately in the income statement.
Amounts deferred in equity were recycled in the income statement in the periods when the hedged item was recognised
in the income statement.
Hedge accounting was discontinued when the hedging instrument was expired or sold, terminated, or exercised, or no
longer qualified for hedge accounting. At that time, any cumulative gain or loss deferred in equity remained in equity
and was recognised when the forecast transaction was ultimately recognised in the income statement. When a forecast
transaction was no longer expected to occur, the cumulative gain or loss that was deferred in equity was recognised
immediately in the income statement.
The Group tested each of the designated cash flow hedges for effectiveness at the inception of the hedge and then
again at each reporting date, both prospectively and retrospectively, using the dollar offset method. This was done by
comparing the changes in present value of the cash flows arising from the hedged forecast sales at the forward rates,
compared to changes in the fair values of those forward contracts. Measurement of the cash flow changes was based
on the respective forward curves over the hedge horizon.
At each balance sheet date, the Group measured ineffectiveness using the ratio offset method. For cash flow hedges
if the risk was over-hedged, the ineffective portion was taken immediately to income/expense in the income statement.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments did not qualify for hedge accounting. Changes in the fair value of any derivative
instruments that did not qualify for hedge accounting were recognised immediately in the income statement.
(k) Foreign currency translation
Both the functional and presentation currency of the Company and its Australian subsidiaries is Australian dollars.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency
spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of
exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of
monetary items that are designated as part of the hedge of the Group’s net investment of a foreign operation. These
are recognised in other comprehensive income until the net investment is disposed of, at which time, the cumulative
amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary
items are also recorded in other comprehensive income.
2021 ANNUAL REPORT | 76 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(l)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided for using the full liability method on temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
•
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:
• except where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
•
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred tax assets and liabilities are reassessed at each balance sheet date and reduced to the extent
that it is no longer probable that future taxable profit will allow the deferred tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
(i) Tax consolidation legislation
The Company and its wholly owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Panoramic 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 stand alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled
entities in the tax consolidated group.
2021 ANNUAL REPORT | 77 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(l)
Income tax (continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the Company.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement
are recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.
(m) Other taxes
Revenue, expenses and assets are recognised net of the amount of goods and services taxation ("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 balance sheet.
Cash flows are included in the statement of cash flows on a gross basis and where 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.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(n) Property, plant and equipment
Items of plant and equipment are stated at cost less accumulated depreciation and any impairment in value. The cost
of plant and equipment constructed for and by the consolidated entity, where applicable, includes the cost of materials
and direct labour. The proportion of overheads and other incidental costs directly attributable to its construction are also
capitalised to the cost of plant and equipment.
Costs incurred on plant and equipment subsequent to initial acquisition are capitalised when it is probable that future
economic benefits, in excess of the originally assessed performance of the asset will flow to the consolidated entity in
future years. Where these costs represent separate components of a complex asset, they are accounted for as separate
assets and are separately depreciated over their useful lives. Costs incurred on plant and equipment that do not meet
the criteria for capitalisation are expensed as incurred.
(i) Depreciation and amortisation
Depreciation and amortisation are calculated on a straight line basis or units of production over the estimated useful
lives of the asset. The estimated useful lives used for each class of asset are as follows:
Office equipment
Office furniture and fittings
Process plant and buildings
3 - 4 years
5 years
Lesser of life of mine and life of asset
(ii) Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amount.
2021 ANNUAL REPORT | 78 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(n) Property, plant and equipment (continued)
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
The recoverable amount of plant and equipment is the greater of fair value less costs to dispose 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.
Property, plant and equipment that suffered an impairment are tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed.
(iii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between net disposal proceeds and
the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(o) Exploration, evaluation, development, mine properties and rehabilitation expenditure
(i) Exploration and evaluation expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method.
Acquisition costs are carried forward at cost where rights to tenure of the area of interest is current and it is expected
that expenditure will be recouped through successful development and exploitation of the area of interest or alternatively
by its sale and/or; exploration and evaluation activities are continuing in an area of interest but at reporting date have
not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves.
Exploration and Evaluation expenditure subsequent to acquisition on an area of Interest which has not reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves is
capitalised as incurred
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated and a
decision to develop has been made, any capitalised exploration and evaluation expenditure is reclassified as capitalised
mine development. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for
impairment.
Impairment
The carrying value of capitalised exploration expenditure is assessed for impairment at the cash-generating unit level
whenever circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.
(ii) Mine development expenditure
Mine development expenditure represents the costs incurred in preparing mines for production and includes stripping
and waste removal costs incurred before production commences. These costs are capitalised to the extent they are
expected to be recouped through successful exploitation of the related mining leases. Once production commences,
these are amortised using the units of production method based on the estimated economically recoverable reserves
to which they relate or are written off if the mine property is abandoned.
Impairment
The carrying value of capitalised mine development is assessed for impairment whenever circumstances suggest that
the carrying amount of the asset may exceed its recoverable amount.
2021 ANNUAL REPORT | 79 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(o) Exploration, evaluation, development, mine properties and rehabilitation expenditure (continued)
(iii) Mineral properties expenditure
Mineral properties expenditure represents the costs incurred in the acquisition of a mining lease, and represents the
excess of the cost of acquisition over the fair value of the net identifiable assets of the acquired mining lease at the date
of acquisition. These costs are capitalised to the extent they are expected to be recouped through successful
exploitation of the related mining leases. Once production commences, these costs are amortised using the units of
production method based on the estimated economically recoverable reserves to which they relate or are written off if
the mine property is abandoned.
Impairment
The carrying value of capitalised mine properties expenditure is assessed for impairment whenever circumstances
suggest that the carrying amount of the asset may exceed its recoverable amount.
(iv) Provision for decommissioning and rehabilitation
The Group is required to decommission and rehabilitate mines and processing sites at the end of their producing lives
to a condition acceptable to the relevant authorities.
The expected costs of any approved decommissioning or rehabilitation programs, discounted to their net present
values, are provided for in the period in which the associated obligations arise. The costs are capitalised when they
relate to the development of an asset, whether the rehabilitation activity is expected to occur over the life of the operation
or at the time of closure. Over time, the liability is increased for changes in net present values based on pre-tax discount
rates appropriate to the risks inherent in the liabilities. Discount rates are risk adjusted to the extent the risks are not
adjusted in the cash flow. The unwinding of the discounts are included in financing costs. Expected decommissioning
and rehabilitation costs are based on the discounted values of the estimated future costs of detailed plans prepared for
each site. Where there are changes in the expected decommissioning and rehabilitation costs, the values of the
provisions and any related assets are adjusted and the effect is recognised in the income statement on a prospective
basis over the remaining life of the operations.
(p) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use
and is determined on an individual asset basis, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be
close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is written down to its recoverable amount.
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. Impairment
losses relating to continuing operations are recognised in those expense categories consistent with the function of the
impaired asset unless the asset is carried at a revalued amount (in which case the impairment loss is treated as a
revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would be determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit and loss unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods
to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful
life. Non-financial assets that suffered an impairment are tested for possible reversal of the impairment whenever events
or changes in circumstances indicate that the impairment may have reversed.
2021 ANNUAL REPORT | 80 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(q) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged
to make future payments in respect of the purchase of these goods and services.
(r)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value net of issue costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or
premium on settlement.
Gains and losses are recognised in the income statement when the liabilities are derecognised and through the
amortisation process.
(s) Provisions
Provisions are recognised when the economic entity has a present obligation (legal or constructive) to make a future
sacrifice of economic benefits to other entities as a result of past transactions or other past events, it is probable that a
future sacrifice of economic benefits will be required and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the income statement net of any reimbursement.
The effect of the time value of money is material and provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the
risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
(t) Employee benefits
(i) Short term benefits
Liabilities for short term benefits expected to be wholly settled within 12 months of the reporting date are recognised in
other payables in respect of employees' services up to the reporting date. They are measured at the amounts expected
to be paid when the liabilities are settled.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures, and periods of service. Expected future payments are discounted using market yields at the
reporting date of corporate bond rates with terms of maturity and currencies that match, as closely as possible, the
estimated future cash outflows.
(iii) Share-based payments
Equity-settled transactions
The Group provides benefits to employees (including executive directors) of the Group in the form of share-based
payment transactions, whereby employees render services in exchange for rights over shares ("equity-settled
transactions").
2021 ANNUAL REPORT | 81 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(t) Employee benefits (continued)
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted. The fair value is determined using a Monte-Carlo simulation model or binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of shares of Panoramic Resources Limited if applicable.
The cost of equity-settled transactions is recognised, together with the corresponding increase in reserve, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award ("vesting date").
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i)
the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of
the Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No
adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The income statement charge or credit for a period represents
the movement in cumulative expense recognised as at the beginning and end of that period. There is a corresponding
entry to equity.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
If the terms of an equity-settled award are subsequently modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair
value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award
and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if
they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings
per share.
(iv) Bonus plans
When applicable, the Company recognises a liability and an expense for bonuses based on a formula that takes into
consideration the performance and service criteria, where relevant, and the likelihood that the criteria will be met. The
Company recognises a provision where contractually obliged or where there is a past practice that has created a
constructive obligation.
(u) Contributed equity
Issued and paid-up capital is recognised at the fair value of the consideration received by the Group. Incremental costs
directly attributable to the issue of new shares for the acquisition of a business are deducted from equity and not
expensed as an acquisition related cost.
(v) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at balance date.
(w) Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business
combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values of
the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the
equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business
combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate
share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.
2021 ANNUAL REPORT | 82 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(w) Business combinations (continued)
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating or
accounting policies and other pertinent conditions as at the acquisition date. This includes the separation of embedded
derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be
recognised in accordance with AASB 9 Financial Instruments either in profit or loss or in other comprehensive income.
If the contingent consideration is classified as equity, it shall not be remeasured.
(x) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the period that the related costs, for which it is intended to compensate, are expensed. When the grant
relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
(y) Financial assets
Initial recognition and measurement:
Financial assets are classified, at initial recognition, as measured at amortised cost, fair value through other
comprehensive income, 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, 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 are measured at the transaction price
determined under the Group’s accounting policy for revenue from contracts with customers (see note 1(f)).
In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive
income, it needs to give rise to cash flows that are "solely payments of principal and interest" ("SPPI") on the principal
amount outstanding. This assessment referred to as the SPPI test is performed at an instrument level.
Subsequent measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
•
•
financial assets at amortised cost (debt instruments);
financial assets at fair value through other comprehensive income with recycling of cumulative gains and losses
(debt instruments);
financial assets designated at fair value through other comprehensive income with no recycling of cumulative gains
and losses upon derecognition (equity instruments); or
financial assets at fair value through profit or loss.
•
•
2021 ANNUAL REPORT | 83 1 Summary of significant accounting policies (continued)
(y) Financial assets (continued)
Financial assets at amortised cost (debt instruments)
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
The Group measures financial assets at amortised cost if both of the following conditions are met:
•
the financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
•
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are
subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired.
The Group’s financial assets at amortised cost include cash and cash equivalents, short term deposits and other
receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, or financial assets
mandatorily required to be measured at fair value. Financial assets with cash flows which do not pass the SPPI test are
classified and measured at fair value through profit or loss, irrespective of the business model. Debt instruments may
be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an
accounting mismatch.
Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair
value recognised in profit or loss.
This category also includes trade receivables subject to provisional pricing (QP adjustment), and listed equity
investments.
Impairment of financial assets
The Group recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within
the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in
credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).
For receivables other than those subject to provisional pricing, and due in less than 12 months, the Group does not
track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each
reporting date. The Group has established a provision matrix for these receivables that is based on its historical credit
loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For any
other financial assets carried at amortised cost (which are due in more than 12 months), the ECL is based on the 12-
month ECL when there has not been a significant increase in credit risk since origination. The 12-month ECL is the
proportion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months
after the reporting date.
2021 ANNUAL REPORT | 84 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
1 Summary of significant accounting policies (continued)
(y) Financial assets (continued)
When there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime
ECL. When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available
without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the
Group’s historical experience and informed credit assessment including forward-looking information. The Group
considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the
Group may also consider a financial asset to be in default when internal or external information indicates that the Group
is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements
held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A
financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
(z) Lease liabilities
(i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less
any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the
end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term (where the entity does not have a purchase option at the end of the lease term).
Right-of-use assets are subject to impairment. The Group’s right-of-use assets include the onsite power station at the
Savanah Nickel Project, storage and ship loading facilities at the Wyndham port and the rental of the corporate office
space in Perth.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of
a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease,
if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend
on an index or a rate are recognised as an expense in the period on which the event or condition that triggers the
payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term,
a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
The Group’s lease liabilities include on-road haulage prime movers at the Savannah Nickel Project and IT equipment.
(iii) Short term leases and leases of low value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e.
those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low value assets recognition exemption. Lease payments on short term leases and
leases of low value assets are recognised as an expense on a straight-line basis over the lease term.
(iv) Depreciation
Depreciation is calculated on a straight-line basis over the estimated useful lives of the asset. The estimated useful
lives used for each class of asset are as follows:
Plant and equipment under lease - Lesser of the lease term and useful life (which range between 3 - 8 years)
o
2021 ANNUAL REPORT | 85 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
2 Segment information
(a) Reporting segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
executive management team (the chief operating decision makers) in assessing performance and in determining the
allocation of resources.
Previously, the Group had identified the following four operating segments:
(1) Nickel - the Savannah Nickel Project;
(2) Gold - 51% equity interest in Horizon Gold Limited (divested 29 June 2020);
(3) Platinum Group Metals (PGM) - the Panton PGM Project (80% equity interest divested 17 December 2020 and
remaining 20% equity interest divested 14 June 2021); and
(4) Exploration - greenfield exploration activities.
For the current year, the Company has reduced the number of business divisions to one segment comprising Nickel.
This change aligns with the Company’s stated goal of focusing on the Group’s core assets being Nickel and is supported
by the divestment of equity interests in Horizon Gold Limited and Panton Sill Pty Ltd. Exploration is no longer viewed
as a separate segment as all activities are focused on supporting the Savannah Nickel Project.
All Group assets are within the Nickel segment located in the East Kimberley region of Western Australia as at 30 June
2021 and 30 June 2020.
The reportable segment is represented by the primary statements forming these financial statements.
3 Revenue
Revenue from contracts with customers
Sale of nickel concentrate
4 Other income
Net gain on sale of subsidiary
Debt forgiveness
Net gain on sale of investment
Quotational period (QP) price adjustments relating to current period
Quotational period (QP) price adjustments relating to prior period
Interest income calculated using the effective interest rate method
Foreign exchange loss
Sundry income
2021
$'000
2020
$'000
-
69,097
2021
$'000
7,659
-
870
-
139
403
(127)
1,733
2020
$'000
3,812
3,719
-
1,678
737
171
(97)
1,228
10,677
11,248
During the financial year the Group sold a 100% equity interest in Panton Sill Pty Ltd (PGM project), recording a profit
on sale of $7.66 million. The sale comprised the disposal of an 80% interest on 17 December 2020 for a cash
consideration of $12.0 million before costs. Great Northern Palladium exercised its option to acquire the remaining 20%
equity interest from the Company on 16 June 2021 for a cash consideration of $3.0 million before costs.
Foreign exchange loss includes the revaluation of a Canadian dollar receivable due from Clean Air Metals. The
receivable forms part of the deferred consideration from the sale of Thunder Bay North PGM project that was settled
on 15 May 2020. Sale proceeds (in part) are to be received by the Company in three equal instalments on the first,
second and third anniversaries of the completion of the sale.
During the year, the Company received Job Keeper income from the Australian Government totalling $1.279 million.
This amount has been included in Sundry Income.
During the year the Company sold its remaining shareholding in listed companies Horizon Gold Limited and GME
Resources Ltd. Consideration received from the sale of these investments totalled $1.8 million.
2021 ANNUAL REPORT | 86 5 Expenses
Loss/(profit) before income tax includes the following specific
expenses:
Cost of sales of goods
Cost of goods sold
Shipping costs
Royalties
Depreciation - property, plant and equipment
Amortisation - deferred development costs
Amortisation - mineral properties
Care and Maintenance costs
Depreciation – property, plant and equipment
Property, plant and equipment written off
Site maintenance costs
Finance costs
Finance charges
Interest paid on leases
Accretion interest on rehabilitation provision
Other financing costs
Derivative financial instruments
Fair value losses on derivatives instruments which are not in an
effective hedge relationship or recycled through profit and loss (note 11)
Other
Net realisable value of write down spares
Depreciation - property, plant and equipment not used in production
Other expenses
Net foreign exchange loss
Net gain on disposal of property, plant and equipment
Breakdown of total employee benefits
Employee remuneration and benefits expensed
Termination benefits on restructure
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
2021
$'000
2020
$'000
-
-
-
-
-
-
-
82,545
4,455
3,402
9,240
9,034
2
108,678
4,669
648
10,794
16,111
2021
$'000
-
167
201
54
422
-
-
619
619
2020
$'000
5,276
1,154
375
456
7,261
-
10,148
-
371
607
-
(22)
956
6,571
139
6,710
6,618
382
484
203
(1,108)
6,579
31,974
1,248
33,222
2021 ANNUAL REPORT | 87 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
6
Income tax
(a) Numerical reconciliation of income tax benefit to prima facie tax
Profit/(Loss) from continuing operations before income tax benefit
Tax expense/(benefit) at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Entertainment expense
Share-based payment
Disposal of subsidiary
Other
(Benefits arising from previously unrecognised deferred tax assets)/Deductible
temporary differences not recognised
Income tax expense/(benefit)
(b) Tax losses
Unused tax losses for which no deferred tax asset
has been recognised
Capital losses
Income tax losses transferred to Panoramic Resources Limited
upon purchase of subsidiary on tax consolidation
Income tax losses of Panoramic Resources Limited
Potential tax benefit @ 30%
7 Current assets - Cash and cash equivalents
Cash at bank and in hand
Short term deposits
2021
$'000
2020
$'000
295
88
(87,888)
(26,366)
4
91
1,941
2
3
137
(5,549)
(108)
(2,126)
31,883
-
-
-
6,708
23,639
23,639
197,345
66,295
207,861
71,462
2021
$'000
15,160
9,077
24,237
2020
$'000
10,179
20,985
31,164
(a) Reconciliation to cash at the end of the year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement
of cash flows as follows:
Cash at bank and in hand and deposits at call
(b) Cash at bank and on hand
2021
$'000
2020
$'000
24,237
31,164
Cash at bank earns interest at floating rates based on daily bank deposit rates. The weighted average interest rate
achieved for the year was 0.37% (2020: 0.64%).
2021 ANNUAL REPORT | 88 7 Current assets - Cash and cash equivalents (continued)
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
(c) Short term deposits
Short term deposits are made for varying periods typically between one day and three months depending on the
immediate cash requirements of the Group and earn interest at short term rates. If short term deposits have original
maturity greater than three months, principal amounts must be able to be redeemed in full prior to scheduled maturity
with no significant interest penalty otherwise the amounts will be classified as other financial non-current assets. The
weighted average interest rate achieved for the year was 0.91% (2020: 1.01%).
Deposits are held with various financial institutions with short term credit ratings of A-1+ (S&P). As these instruments
have maturities of less than twelve months, the Group has assessed the credit risk on these financial assets using
lifetime expected credit losses. In this regard, the Group has concluded that the probability of default on the deposits is
relatively low. Accordingly, no impairment allowance has been recognised for expected credit losses on the term
deposits.
(d) Fair value
The carrying amount for cash and cash equivalents equals the fair value.
8 Current assets - Trade and other receivables
Trade receivables - at fair value
Other receivables - at amortised cost
(a) Trade receivables
2021
$'000
-
1,942
1,942
2020
$'000
2,417
9,009
11,426
Trade receivables were non-interest bearing and are generally on 30 to 90 day terms. Under the current offtake
agreement, on presentation of ship loading documents and the provisional invoice, the customer settled 100% of the
provisional sales invoice value within approximately 7 days and the final sales invoice value was settled in approximately
5 days upon presentation of the final invoice. Sales were invoiced and received in US dollars (US$).
As at 30 June 2021 all trade receivables with respect to nickel concentrate sales had been collected and all adjustments
with respect to QP pricing had been settled within the financial year (2020: 1,687 tonnes of nickel concentrate were
subject to QP pricing and settlement remeasured to an average forward nickel price of US$6.40 per pound). There are
no copper and cobalt exposures at 30 June 2021 (2020: nil). The amount of fair value changes recognised in the income
statement during the year ended 30 June 2021 (on account of prior year concentrate sales) was $0.139 million (2020:
$0.308 million).
All receivables are current and not past due.
(b) Other receivables
Sundry debtors are non-interest bearing and have repayment terms between 30 and 90 days. There is an insignificant
probability of default as sundry debtors are short term, have no history of default and customers have passed the
Group’s internal credit assessment.
Other receivables (current and non-current) include deferred sale proceeds arising from the sale of a wholly owned
subsidiary in the prior year. The Company completed the sale of 100% owned Canadian entity, Panoramic PGMs
(Canada) Limited, the owner of the Thunder Bay North PGM Project, to Clean Air Metals Inc on 15 May 2020. Under
the terms of the sale agreement, the purchase price comprised total cash consideration of $9.0 million Canadian dollars,
of which $4.5 million Canadian dollars comprised deferred consideration. The deferred consideration is receivable in
three equal instalments on the first, second and third anniversaries of the completion of the sale. On 6th May 2021 the
first instalment of the deferred consideration was received. At 30 June 2021, the deferred consideration receivable
balance totalled C$3.0 million. The consideration receivable is measured using the effective interest rate method. Clean
Air Metals and PAN PGM’s have granted first ranking charges over the shares in PAN PGM’s and the Project to secure
the deferred consideration payments.
(c) Foreign currency exchange rate and interest rate risk
The balance of trade receivables is exposed to movements in AUD:USD exchange rates and commodity prices during
the quotational period.
Information on foreign currency exchange and interest rate risk is provided in note 38.
(d) Fair value and credit risk
Information on fair value and credit risk is provided in note 38.
2021 ANNUAL REPORT | 89 9 Current assets - Inventories
Spares for production
- at lower of cost or net realisable value
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
2021
$'000
2020
$'000
557
557
-
-
No provision was recorded at 30 June 2021 to write down inventories to their recoverable value (2020: $6.619 million).
Spares for production include diesel and other consumable items. Inventory recognised as an expense during the
period totalled $3.7 million (2020: $40.5 million).
10 Impairment
An impairment reversal of $14.187 million was recorded in the current period (2020: net impairment loss of $27.063
million which comprises an impairment of the nickel cash generating unit of $32.948 million and an impairment reversal
relating to the disposal of the Thunder Bay North PGM Project totalling $5.885 million). The impairment reversal is
attributable to the nickel cash generating unit, refer to the following section for details.
Nickel cash generating unit
On 6 April 2021, the Company announced to the ASX a decision had been made to re-start operations at the Savannah
Nickel Project in the second half of CY2021. The announcement referred to the following positive developments which
underpinned the decision.
-
-
-
-
-
-
-
-
Improved commodity and foreign exchange pricing and sentiment.
Updated financial model confirming attractive financial outcomes over an optimised twelve-year mine life.
Completion of capital works that de-risk the restart of operations, primarily the raise bore works associated with
FAR #3.
Additional underground development to open up four new mining levels at Savannah North.
Updated process schedule based on additional metallurgical test work.
Evaluation of owner-operate and contractor-operated mining and processing models, which resulted in:
Letter of Intent signed with underground mining contractor Barminco for mining services.
Letter of Intent signed with Primero Group Pty Ltd to operate the processing plant.
o
o
US$45 million debt facility secured with Trafigura Pte Ltd.
New offtake terms secured for the period February 2023 to February with Trafigura Pte Ltd.
The decision to restart operations at the Savannah Nickel Project and the improved commodity prices were
considered to be impairment reversal indicators for impairment losses recognised in prior periods, and as such, a
formal estimate of the recoverable amount of the Nickel cash generating unit (CGU) was performed.
In assessing whether an impairment reversal is required, the carrying amount of the CGU is compared with its estimated
recoverable amount. The recoverable amount is the higher of the CGU’s fair value less costs of disposal (FVLCD) and
value in use (VIU). Given the nature of the Group’s activities, the FVLCD for the CGU was estimated based on
discounted future cash flows (expressed in real terms) expected to be generated from the continued use of the CGU
using market-based commodity price and exchange assumptions, estimated quantities of recoverable minerals,
production levels, operating costs and capital requirements, and the latest life of mine plans. The cash flows were
discounted using a real post tax discount rate that reflected market assessments of the time value of money and the
risks specific to the CGU. Price sensitivities were considered in the assessment which included both consensus, high
and low value inputs into the financial model. A valuation range was developed which then formed the basis for the
accounting treatment.
The determination of FVLCD for the CGU is considered to be a Level 3 fair value measurement as it is derived from
valuation techniques that involve inputs that are not based on observable market data. The Group considers the inputs
and the valuation approach to be consistent with the approach taken by market participants.
The FVLCD valuation exceeded the $146.811 million carrying amount (before impairment reversal) of the Nickel CGU’s
assets and as such an impairment reversal of $14.187 million was recorded in the current year. The reversal has been
allocated against property, plant and equipment, development properties and mineral properties on a proportional
allocation basis with reference to the treatment of the prior year impairment loss (refer to notes 13, 14 and 16 for further
information.)
2021 ANNUAL REPORT | 90 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
10 Impairment (continued)
(a) Nickel cash generating unit (continued)
(i) Key assumptions
The determination of FVLCD is most sensitive to the following key assumptions:
• production volumes;
•
•
• discount rates.
commodity prices and exchange rates;
capital and operating costs; and
Production Volumes
In calculating FVLCD, production volumes and grades were derived from the latest mineral resource estimate and ore
reserve estimates and represent the estimated recoverable mining inventory incorporated into a detailed mine design
and life of mine plan as part of the long-term planning process. The production volume incorporated into the cash flow
model was 10.6 million tonnes ore at an average grade of 1.23% per tonne (%/t) nickel, 0.54%/t copper and 0.08%/t
cobalt for an approximate 12-year mine life.
Production volumes are dependent on a number of variables, such as the underlying resource and reserve estimation,
estimates of mining dilution and recoveries, geotechnical assumptions, assessments of ventilation requirements, the
production profile, mining productivity, estimates of the costs of extraction and processing, metallurgical recoveries, the
contractual duration of mining rights, refining and offtake terms, and the selling price of the commodities extracted.
These assumptions are then assessed to ensure they are consistent with what a market participant would estimate.
Commodity Prices and Exchange Rate
Forecast commodity prices and exchange rates (US Dollar to Australian Dollar) are based on management’s estimates
and are derived from forward price curves and long terms views of global supply and demand, interest and inflation
rates, building on past experience of the industry and consistent with external sources. Estimated long term nickel and
copper prices and USD:AUD exchange rates used in the estimation of future revenues were as follows:
Economic Assumptions
Nickel (USD per tonne)
Copper (USD per tonne)
USD to AUD exchange rate
FY2022
16,013
FY2023
15,423
FY2024
15,287
FY2025 FY2026 On
16,314
15,357
8,436
0.77
7,871
0.76
7,474
0.75
6,962
0.76
7,165
0.75
Capital and Operating Costs
Capital and operating costs have been derived from a recent mining study prepared by specialist consultants with input
where required by Management and referencing historical data where relevant. Costs have been benchmarked against
industry experience and current contracts for the supply of goods and services where applicable.
Estimates have been incorporated into the discounted cash flow analysis for corporate costs and corporate taxation
that a purchaser would incur.
Discount Rates
In determining FVLCD, a real post-tax discount rate of 7.5% was applied to the post tax cash flows expressed in real
terms. The discount rate is derived from an estimate of the post-tax market rate based on a market participant’s weighted
average cost of capital. The WACC takes into account an estimation of the mix of debt and equity funding and
associated costs of each funding source. The cost of equity is derived from the expected return on investment by the
Group’s investors. The cost of debt is based on an estimate of the funding debt cost that the Group would be able to
secure, with reference to past costs. Risk is incorporated by applying beta factors.
2021 ANNUAL REPORT | 91 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
10 Impairment (continued)
(a) Nickel cash generating unit (continued)
Timing of Restart Decision
The discounted cash flow analysis assumes that operations at the Savannah Nickel Project will proceed to a restart in
the first half of the 2022 financial year. The decision to restart operations at Savannah is dependent on a range of factors
including commodity prices and exchange rates, travel and other restrictions in place related to Covid, the completion
of pre-production development works and the ability to secure the necessary funding required on terms that the Company
considers reasonable.
(ii) Sensitivities
The FVLCD is most sensitive to the following assumptions, with sensitivity based on management’s assessments of
reasonably possible changes to inputs over the period of the discounted cash flow analysis.
Commodity Price
Exchange Rate
Operating and Capital Costs
Discount Rate
High1
Low1
+10%
+10%
-5%
-2%
-10%
-10%
+5%
+2%
Impact
High1
$000's
124,005
129,537
75,031
32,979
Impact
Low1
$000's
(135,166)
(106,503)
(75,614)
(27,260)
1 High indicates a higher valuation and lower (or nil) impairment and low indicates a lower valuation with a greater
impairment. Impact indicates the change to the FVLDC.
(iii) Prior year nickel CGU impairment loss
On 15 April 2020, as a result of the combination of significant operational uncertainty, disruption and cost escalation
caused by COVID-19 restrictions, a slower ramp up than planned and depressed commodity prices the Company
elected to suspend operations at the Savannah Nickel Mine.
The suspension of operations was deemed to be an indicator of impairment, and as such, a formal estimate of the
recoverable amount of the Nickel cash generating unit (CGU) was performed at 30 June 2020.
The recoverable amount of the Savannah Nickel Project CGU was determined based on a combination of a discounted
cash flow (DCF) calculation at 30 June 2020 using cash flow projections based on financial budgets covering the life of
the project incorporating current market assumptions approved by the Company's Directors and independent valuations
from external valuers. The fair value methodology adopted was categorised as Level 3 in the fair value hierarchy. In
determining the FVLCD, estimates were made in relation to the underlying resources/reserve and the valuation
multiples. The assessed FVLCD valuation was below the carrying amount of the Nickel CGU’s assets of $166.710
million and as such an impairment loss of $32.948 million was recorded in the prior year. The impairment was
recognised in the consolidated income statement and was allocated against property, plant and equipment,
development properties and mineral properties in the balance sheet.
2021 ANNUAL REPORT | 92
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
11 Derivative financial instruments
As at 30 June 2021 the Company did not have any derivative financial instruments in place.
On 31 March 2020, the Company closed out the nickel, copper and AUD:USD foreign exchange contracts resulting in
the crystallisation of a loss of approximately $10.148 million. As operations at the Savannah Nickel Mine were
suspended the loss was recycled from reserves to the profit and loss. As at 30 June 2020 the Company did not have
any derivative financial instruments in place.
12 Non-current assets - Receivables
Other receivables
2021
$'000
1,536
2020
$'000
2,787
Other receivables consist of the unpaid portion of the sales proceeds in relation to the sale of the Thunder Bay North
(TBN) PGM Project not due within the next twelve months. Refer to note 8 for the current portions of these receivables.
13 Non-current assets - Property, plant and equipment
Year ended 30 June 2021:
Net book amount at 30 June 2020
Additions
Depreciation charge
Impairment reversal
Transfer to other asset class
Disposals
Closing net book amount
At 30 June 2021:
Gross carrying amount - at cost
Accumulated depreciation and
impairment
Net book amount
Plant and
Equipment
$'000
Construction
in progress
$'000
30,125
-
(2,924)
2,317
(5,083)
-
24,435
21,053
14,834
-
53
(34,016)
(648)
1,276
Total
$'000
51,178
14,834
(2,924)
2,370
(39,099)
(648)
25,711
151,466
1,276
152,742
(127,031)
24,435
-
1,276
(127,031)
25,711
2021 ANNUAL REPORT | 93 13 Non-current assets - Property, plant and equipment (continued)
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
Year ended 30 June 2020:
Net book amount at 30 June 2019
Reclassification to right-of-use asset on adoption
of AASB 16 at 1 July 2019
Net book value at 1 July 2019
Additions
Depreciation charge
Impairment loss
Transfer from/(to) other asset class
Disposals
Closing net book amount
At 30 June 2020:
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net book amount
Refer to note 10 for discussion of impairment.
14 Non-current assets – Right of use assets
Right-of-use assets
As at 1 July 2020
Adjustments
Disposal
Depreciation expense
Impairment reversal (note 10)
Derecognised
As at 30 June 2021
As at 1 July 2019 on adoption of AASB 16
Additions
Depreciation expense
Impairment loss (note 10)
Derecognised
As at 30 June 2020
Plant and
equipment
$'000
Leased plant
and
equipment
$'000
Construction
in progress
$'000
Total
$'000
42,318
7,102
9,584
59,004
-
42,318
310
(3,884)
(6,923)
2,770
(4,466)
30,125
166,858
(136,733)
30,125
(7,102)
-
-
-
-
-
-
-
-
9,584
19,081
-
(4,842)
(2,770)
-
21,053
(7,102)
51,902
19,391
(3,884)
(11,765)
-
(4,466)
51,178
-
-
-
21,053
-
21,053
187,911
(136,733)
51,178
Land and
buildings
$000
1,062
12
(64)
(361)
49
-
695
1,570
-
(395)
(113)
-
1,062
Plant and
equipment
$000
4,896
-
-
(1,743)
347
-
3,500
15,782
26,482
(5,343)
(1,127)
(30,898)
4,896
Total
$000
5,958
12
(64)
(2,104)
393
-
4,195
17,352
26,482
(5,738)
(1,240)
(30,898)
5,958
The Group recognised rent expense from short term leases of $109,000 for the financial year ended 30 June 2021.
(a) Non-current assets pledged as security
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert
to the lessor in the event of default. At 30 June 2021, the carrying amounts of assets pledged as security for current
and non-current lease liabilities were $4.195 million (2020: $5.958 million).
2021 ANNUAL REPORT | 94 15 Non-current assets - Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Employee benefits
Provisions
Depreciation and amortisation
Sundry temporary differences
Research and development tax offset
Business related costs
Foreign exchange
Other
Financial assets
Lease liability
Deferred tax asset not recognised
Set-off of deferred tax liabilities pursuant to set-off provisions (note 22)
Net deferred tax assets
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
2021
$'000
66,295
193
9,403
(1,115)
996
4,136
1,830
3
162
35
1,560
(67,042)
16,457
(16,457)
-
2020
$'000
71,462
153
10,285
(1,747)
974
4,091
2,223
48
-
36
705
(74,445)
13,785
(13,785)
-
16 Non-current assets - Exploration and evaluation, development and mine properties
Year ended 30 June 2021
Opening net book amount
Additions
Assets disposed
Depreciation charge
Transfer from other asset class
Written off to profit and loss
Reversal of impairment loss
Remeasurement of rehabilitation provision
Closing net book amount
At 30 June 2021
Gross carrying amount - at cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2020
Opening net book amount
Additions
Assets disposed
Depreciation charge
Impairment loss
Remeasurement of rehabilitation provision
Closing net book amount
At 30 June 2020
Cost or fair value
Accumulated depreciation
Net book amount
Mine
development
expenditure
$'000
Exploration
and
evaluation
$'000
Mineral
properties
$'000
Total
$'000
86,673
-
-
-
39,101
-
11,421
(1,143)
136,052
319,667
(183,615)
136,052
84,745
28,998
(779)
(9,034)
(19,938)
2,681
86,673
273,619
(186,945)
86,673
12,535
996
(7,035)
-
-
(945)
-
-
5,551
5,551
-
5,551
27,763
1,732
(16,960)
-
-
-
12,535
12,535
-
12,535
22
-
-
-
-
-
2
-
24
99,230
996
(7,035)
-
39,101
(945)
11,423
(1,143)
141,627
1,795
(1,771)
24
327,013
(185,386)
141,627
29
-
-
(2)
(5)
-
22
112,537
30,730
(17,739)
(9,036)
(19,943)
2,681
99,230
1,795
(1,773)
22
287,948
(188,718)
99,230
2021 ANNUAL REPORT | 95 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
16 Non-current assets - Exploration and evaluation, development and mine properties
(continued)
The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the
successful development and commercial exploitation or the sale of the respective mining areas.
Refer to note 10 for further details on impairment.
Refer to note 21 for details of assets pledged as security in relation to the Groups’ non-current assets.
17 Non-current assets - Financial assets
(a) Financial assets at fair value through profit or loss
Listed securities
At beginning of year
Additions
Adjustments
Fair value loss recognised in profit or loss
At end of year
(b) Financial assets at amortised cost
Other financial assets
2021
$'000
12
767
316
(1,005)
(66)
12
2020
$'000
767
957
-
(41)
(149)
767
2021
$'000
2020
$'000
221
251
At 30 June 2021, the Company had bank guarantees with a financial institution with a face value of $0.221 million (2020:
$0.251 million) which were supported by cash backed deposits.
18 Current liabilities - Trade and other payables
Trade payables
Accrued expenses
2021
$'000
1,700
2,688
4,388
2020
$'000
1,725
1,671
3,396
Trade payables are non-interest bearing and are normally settled on 30-day terms. Due to the short-term nature of these
payables, their carrying value is assumed to approximate their fair value.
19 Current liabilities - Borrowings
Secured
Lease Liabilities (note 21)
Total secured current borrowings
2021
$'000
2020
$'000
1,445
1,445
1,827
1,827
2021 ANNUAL REPORT | 96 20 Current liabilities - Provisions
Employee benefits - annual leave
Employee benefits - long service leave
Restructuring costs
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
2021
$'000
2020
$'000
474
153
87
714
1,037
231
1,136
2,404
The current provision for long service leave includes all unconditional entitlements where employees have completed
the required period of service. Where employees have not yet completed the required period of service, their entitlement
is recognised as a non-current provision for long service leave.
As a result of the suspension of operations at the Savannah Nickel Project a provision for restructuring costs was raised
in prior financial year totalling $1.136 million. The provision was an estimate of the employee termination costs that
would result from the restructure of the Group. During the current financial year a total of $1.188 million was paid on
account of these costs.
21 Non-current liabilities – Borrowings
Secured
Lease liabilities
Total secured non-current borrowings
2021
$'000
4,738
4,738
2020
$'000
5,423
5,423
Bank loans
On the 3 April 2021, the Company entered into a secured loan agreement of up to US$45.0 million from Trafigura Pte
Ltd. The facility has two secured tranches comprising a US$30.0 million five-year Prepayment Loan Facility (PLF) and
a US$15.0 million Revolving Credit Loan Facility (RCF). The PLF has a five-year term from drawdown with interest-
only repayments required in the first 12 months. Debt repayments begin in the second year and are sculpted to align
with project cash flows.
The RCF has an 18-month term from 1 July 2021, and has the option (at the Company’s election) to be repayable by
way of a final bullet repayment of US$15.0 million at the end of the facility term.
The proceeds from the facility can be used for project related expenditure and corporate purposes. Ongoing covenants
are typical for a facility of this nature. Both facilities use the 3-month LIBOR as a base interest rate plus a favourable
interest margin. There is no mandatory hedging requirement with either tranche. Both facilities are secured by the
Savannah project assets (including mining and exploration leases), the assets of the other applicable operating
subsidiary PAN Transport Pty Ltd and the shareholding held by Panoramic Resources Ltd in Savannah Nickel Mines
Pty Ltd. Ongoing covenants are light and typical for a facility of this nature. Both tranches permit early repayment
without penalty. All conditions precedent to first draw down were satisfied on 2 July 2021 and all registrations with
respect to security were completed in June 2021. The Company anticipates drawing the PLF in the September 2021
quarter.
2021 ANNUAL REPORT | 97 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
21 Non-current liabilities – Borrowings (continued)
Lease liabilities
In the 2021 financial year, lease liabilities had an average term of 5.5 years (2020: 6 years).
Lease liabilities
As at 30 June 2020
Additions
Interest expense
Payments
Adjustments
As at 30 June 2021
As at 30 June 2019
On adoption of AASB 16 - 1 July 2019
As at 1 July 2019 (restated)
Additions
Interest expense
Payments
Derecognised
As at 30 June 2020
Non-interest bearing liabilities include trade and other payables and are generally settled on 30-day terms.
(a) Changes in liabilities arising from financing activities
1 July 2020
Repayments (Principal and Interest)
Other non-cash movements
30 June 2021
30 June 2019
On adoption of AASB16 - 1 July 2019
Proceeds - drawdowns
New Leases
Repayments - principal and Interest
Share-based payment
Disposals
Other non-cash movements
30 June 2020
Lease
liabilities
$'000
7,251
(1,004)
(64)
6,183
Bank loans
$'000
Related
party loans
$'000
Lease
liabilities
$'000
40,259
-
10,000
-
(54,313)
-
-
4,053
-
-
-
18,500
-
(18,823)
(456)
-
779
-
6,738
10,250
-
26,441
(6,103)
-
(31,229)
1,154
7,251
The other non-cash movements include the effect of accrued interest and various other adjustments.
Total
$000
7,251
-
167
(1,171)
(64)
6,183
6,738
10,250
16,988
26,441
1,154
(6,103)
(31,229)
7,251
Total
$'000
7,251
(1,004)
(64)
6,183
Total
$'000
46,997
10,250
28,500
26,441
(79,239)
(456)
(31,229)
5,986
7,251
2021 ANNUAL REPORT | 98 22 Non-current liabilities - Deferred tax liabilities
The balance comprises temporary differences attributable to:
Inventories
Rehabilitation asset
Exploration and evaluation, development expenditure and mine properties
Accrued income
Financial assets
Financial assets
Set-off of deferred tax liabilities pursuant to set-off provisions (note 15)
Net deferred tax liabilities
23 Non-current liabilities - Provisions
Employee benefits - long service leave
Rehabilitation
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
2021
$'000
2020
$'000
2,955
2,862
2,038
1,482
8,790
10,862
2
2
1,470
1,248
-
-
13,785
16,457
(16,457) (13,785)
-
-
2021
$'000
2020
$'000
10
23,556
23,566
-
24,498
24,498
The provision for rehabilitation represents the discounted value of the present obligation to restore, dismantle and
rehabilitate certain items of property, plant and equipment and to rehabilitate exploration and mining leases. The discounted
value reflects a combination of management’s assessment of the nature and extent of the work required, estimates of the
future cost of performing the work required, the expected timing of cash flows and the discount rate applied. Changes to
one or more of these assumptions is likely to result in a change to the carrying value of the provision and the related asset
or a change to profit and loss in accordance with the Group’s accounting policy stated in note 1.
(a)
Movements in provisions
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
Rehabilitation
Carrying amount at start of year
- accretion interest on unwinding of discount
- (reduction)/additional provision charged
- reversal on sale of subsidiary
Carrying amount at end of year
24 Contributed equity
(a) Share capital
Ordinary shares
Ordinary shares - fully paid
2021
$'000
2020
$'000
24,498
201
(1,143)
-
23,556
31,534
449
2,681
(10,166)
24,498
2021
Shares
2020
Shares
2021
$'000
2020
$'000
2,050,914,004
2,050,914,004
353,550
353,550
2021 ANNUAL REPORT | 99 24 Contributed equity (continued)
(b)
Movements in ordinary share capital
Date
Details
Opening balance
2 June 2020
17 January 2020
30 September 2019 Entitlement Share Issue
Entitlement Share Issue
16 December 2019
Entitlement Share Issue
Placement Share Issue
Entitlement Share Issue
Entitlement Share Issue
Transaction costs, net of tax
Balance
30 June 2020
10 June 2020
2 June 2020
Date
30 June 2021
Details
Opening balance
Balance
(c) Ordinary shares
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
Number of
shares
Issue
price
553,582,471
100,653,238
12,981,951
95,912,707
410,182,572
331,811,671
545,789,394
-
2,050,914,004
$0.28
$0.30
$0.30
$0.07
$0.07
$0.07
Number of
shares
Issue
price
2,050,914,004
2,050,914,004
-
-
$'000
210,109
28,183
3,895
28,774
28,713
23,227
38,205
(7,554)
353,550
$'000
353,550
353,550
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held. Ordinary shares entitle their holder to one vote, either in person or
by proxy, at a meeting of the Company.
(d) Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital
structure that ensures the lowest cost of capital available to the entity.
Management are constantly adjusting the capital structure to take advantage of favourable costs of capital or high returns
on assets. As the market is constantly changing, management may change the amount of dividends to be paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt or provide capital to pursue
other investments. The Group is not subject to any externally imposed capital requirements.
25 Reserves
(a)
Share-based payments
Share based payments
(b)
(i)
Nature and purpose of reserves
Share-based payments reserve
2021
$'000
22,476
22,476
2020
$'000
22,172
22,172
The share-based payments reserve is used to record the value of share-based payments provided to employees as part
of their remuneration. The reserve is also used to record share-based payments provided to third parties as part of the
consideration for services provided or for assets acquired.
2021 ANNUAL REPORT | 100 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
26 Dividends
(a) Ordinary shares
No final dividend was paid for the year ended 30 June 2021 (30 June 2020: Nil).
(b) Dividends not recognised at the end of the reporting period
No dividend has been declared since the end of the reporting period.
(c) Franking credits
Franking credits available for subsequent reporting periods
The tax rate at which paid dividends have been franked is 30% (2020: 30%).
27 Remuneration of auditors
Fees paid or payable to Ernst & Young (Australia) for:
Auditing the statutory financial report for the Group and
Review of the half year statutory financial report
space
Fees for other assurance and agreed-upon-procedures services under
other legislation or contractual arrangements where there is discretion as
to whether the service is provided by the auditor or another firm:
Fees for other services:
Tax compliance and consulting services
Subtotal other services
Total fees to Ernst & Young (Australia)
Fees paid or payable to other overseas member firms of
Ernst & Young for:
Fees for other services:
Tax consulting
Total fees to Ernst & Young (Australia) and overseas
member firms of Ernst & Young
2021
$'000
10,503
2020
$'000
10,503
2021
$
2020
$
122,000
230,000
-
34,000
49,638
49,638
171,638
104,173
138,173
368,173
-
32,904
171,638
401,077
Other services provided by the auditor during the current financial year predominately comprised the following:
•
•
•
•
•
•
the preparation and lodgement of the Group tax return;
the review and lodgement of the Group fringe benefits tax return;
provision of taxation advice for the sale of Panton Sill Pty Ltd;
provision of taxation advice with respect to the US$45 million Trafigura Pte Ltd debt facility;
taxation advice in relation to the disposal of a foreign subsidiary, Panoramic PGMs (Canada) Limited; and
other minor advisory and consulting services.
The Audit and Governance Committee closely monitors non-audit services provided by the auditor or affiliate firms to ensure
the selection of the service provider and the scope of the services provided are appropriate and do not have the potential to
compromise auditor independence.
2021 ANNUAL REPORT | 101 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
28 Guarantees and contingencies
(a) Guarantees
At 30 June 2021, the Company had bank guarantees with a financial institution with a face value of $0.221 million
(2020: $0.251 million).
Certain entities in the Group have entered into a Deed of Cross Guarantee in relation to certain liabilities and
indebtedness.
(b) Contingent assets
The Group had no contingent assets at 30 June 2021.
(c) Contingent liabilities
The Group had no contingent liabilities at 30 June 2021.
29 Commitments
(a) Exploration and mining lease expenditure commitments
In order to maintain current rights of tenure to exploration and mining tenements, the Group will be required to outlay
the amounts disclosed in the table below. These amounts are discretionary, however if the expenditure commitments
are not met then the associated exploration and mining leases may be relinquished.
Mineral tenements expenditure commitments
Not later than one year
Later than one year but not later than five years
Later than five years
30 Related party transactions
2021
$'000
2020
$'000
519
2,082
1,176
3,777
764
3,235
2,302
6,301
(a) Compensation of Directors and key management personnel of the Group
The following persons were Directors or Key management personnel of the Group during the current financial year:
N L Cernotta
V Rajasooriar
P R Sullivan
R J Hayward
G Swaby
G Dyker
M Ball
Chair (Non-Executive)
Managing Director
Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
Chief Financial Officer (appointed 5 October 2020)
Chief Financial Officer (ceased employment 30 September 2020)
The aggregate compensation made to directors and other members of KMP of the Group is set out below:
Short term employee benefits
Post employment benefits
Long term benefits
Termination benefits
Share-based payments
2021
$'000
1,681
89
67
82
263
2,182
2020
$'000
2,127
182
78
682
682
3,069
2021 ANNUAL REPORT | 102 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
30 Related party transactions (continued)
(a) Compensation of Directors and key management personnel of the Group (continued)
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to
Directors and KMP. There were no other persons employed by, or contracted to, the Group during the financial year,
having responsibility for planning, directing and controlling the activities of the Group, either directly or indirectly.
(b) Transactions with other related parties who had significant influence over the group
On 30 March 2020, the Company agreed to sell its remaining interest in Horizon Gold Limited (a former wholly owned
subsidiary of the Company) to sophisticated and professional investors, including significant shareholder and related
party Zeta Resources Limited. Zeta acquired 17,183,580 of the 18,793,580 shares sold to fully dispose of the
Company’s interests in Horizon. The balance receivable from Zeta of $3.437 million was received in early July 2020.
The sale to Zeta was subject to shareholder approval which was obtained on 29 June 2020.
Other than the transactions detailed above, there have been no other transactions with parties related to the
consolidated entity in the financial year ended 30 June 2021.
31 Subsidiaries and transactions with non-controlling interests
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries
in accordance with the accounting policy described in note 1(g):
Name of entity
Country of
incorporation
Class of shares
Savannah Nickel Mines Pty Ltd
PAN Transport Pty Ltd
Pindan Exploration Company Pty Ltd
Panton Sill Pty Ltd
Mt Henry Gold Pty Ltd
Mt Henry Mine Pty Ltd
Magma Metals Pty Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity holding
2021
%
100
100
100
-
100
100
100
2020
%
100
100
100
100
100
100
100
Refer to note 4 for details in relation to the sale of Panton Sill Pty Ltd which completed during the period.
Refer to note 32 for details on Deed of Cross Guarantee signed between Savannah Nickel Mines Pty Ltd and Panoramic
Resources Limited.
(b) Non-controlling interests (NCI)
In December 2016, the Company divested an interest in Horizon Gold Limited by way of an initial public offering (IPO)
and listing of the subsidiary, on the Australian Securities Exchange (ASX). On 18 February 2020, the Company sold
20,237,037 shares in Horizon to significant shareholder and related party Zeta Resources Limited. The sale reduced
the Company’s interest from 51% to approximately 24.6% resulting in a loss of control and deconsolidation of the
balance of Horizon from the Group in the prior financial year. On 30 March 2020, the Company agreed to sell its
remaining interest in Horizon to sophisticated and professional investors, including Zeta Resources Limited. Zeta
acquired 17,183,580 of the 18,793,580 shares sold to fully dispose of the Company’s interests in Horizon. The balance
receivable from Zeta of $3.437 million was received in early July 2020. The sale to Zeta was subject to shareholder
approval which was obtained on 29 June 2020.
There were no transactions involving non-controlling interests during the financial year ended 30 June 2021.
Horizon Gold Limited was fully divested at 30 June 2020 and was deconsolidated from the Group at that balance sheet
date.
2021 ANNUAL REPORT | 103
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
32 Deed of cross guarantee
Pursuant to ASIC Corporations (wholly owned companies) Instrument 2016/785, relief has been granted to Savannah
Nickel Mines Pty Ltd from the Corporations Act 2001 requirements for preparation, audit and lodgement of its financial
report.
As a condition of the ASIC Corporations (wholly owned companies) Instrument 2016/785, Panoramic Resources Limited
and Savannah Nickel Mines Pty Ltd (the "Closed Group"), entered into a Deed of Cross Guarantee on 29 June 2005.
The effect of the deed is that Panoramic Resources Limited has guaranteed to pay any deficiency in the event of winding
up of its controlled entity or if it does not meet its obligation under the terms of overdrafts, loans, leases or other liabilities
subject to the guarantee. The controlled entity has also given a similar guarantee in the event that Panoramic Resources
Limited is wound up or it does not meet its obligation under the terms of overdrafts, loans, leases or other liabilities subject
to the guarantee.
As at reporting date, the "Closed Group" comprised of Panoramic Resources Limited and Savannah Nickel Mines Pty
Ltd.
The entities outside of the Closed Group are dormant. The consolidated results of the Closed Group are therefore
reflective of the consolidated financial results for the Panoramic Group.
33 Events occurring after the reporting period
The following events occurred after the end of the financial year.
On 2 July 2021, all conditions precedent were satisfied for the US$45 million secured loan facility with Trafigura
including the registration of security interests.
On 8 July 2021 the four-year underground mining contract with Barminco was executed. The contract value is
approximately $280 million. Underground mining activities also commenced at the Savanah Nickel Project.
On 30 July 2021 the three-year Operating and Maintenance Agreement was executed with Primero Group Pty Ltd. The
contract value is approximately $34 million. Primero commenced initial mobilisation to the Savannah site in August
2020.
In the interval between the end of the financial year and the date of this report, other than as disclosed above, there
has not arisen any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of
the Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the
state of affairs of the consolidated entity, in future financial years.
2021 ANNUAL REPORT | 104 34 Reconciliation of profit/(loss) for the year to net cash inflow/outflow from operating activities
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
Profit/(Loss) before tax for the year
Depreciation and amortisation
(Gain)/loss on disposal of plant and machinery
Property, plant and equipment written off
Impairment loss
Reversal of impairment of assets
Interest income
Unrealised loss on foreign currency exchange
Exploration and evaluation written off
Share based payments
Gain on sale of investments
Gain on sale of subsidiary
Stock obsolescence provision
Finance cost
Change in operating assets and liabilities:
Decrease in trade debtors and others
(Increase)/decrease in prepayments
Decrease in trade creditors
(Increase)/decrease in inventories
Decrease in provisions
Net cash outflow from operating activities
35 (Loss)/earnings per share
(a) Basic loss per share
From continuing operations attributable to the ordinary
equity holders of the Company
Total basic loss per share attributable to the ordinary
equity holders of the Company
(b) Diluted loss per share
From continuing operations attributable to the ordinary
equity holders of the Company
Total diluted loss per share attributable to the
ordinary equity holders of the Company
2021
$'000
2020
$'000
295
5,028
(22)
648
-
(14,187)
(403)
127
945
304
(870)
(7,659)
-
422
1,071
(622)
(309)
(557)
(1,635)
(17,424)
(87,888)
18,436
(1,108)
-
32,948
(5,886)
(168)
203
-
-
190
(3,812)
6,619
1,325
15,512
481
(18,596)
8,415
(323)
(33,652)
2021
Cents
2020
Cents
0.0
0.0
(8.8)
(8.8)
2021
Cents
2020
Cents
0.0
0.0
(8.8)
(8.8)
2021 ANNUAL REPORT | 105 35 (Loss)/earnings per share (continued)
(c) Reconciliation of profit/(loss) used in calculating earnings/(loss) per share
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
Basic earnings/(loss) per share
Profit/(loss) from continuing operations
Earnings/(loss) attributable to the ordinary equity holders of
the Company used in calculating basic earnings/(loss) per share
Diluted earnings/(loss) per share
Profit/(loss) from continuing operations
Profit/(loss) attributable to the ordinary equity holders of
the Company used in calculating diluted earnings/(loss) per share
(d) Weighted average number of shares used as denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted loss per share
2021
$'000
2020
$'000
295
(87,366)
295
(87,366)
295
295
(87,366)
(87,366)
2021
Number
2020
Number
2,050,914,004
998,645,156
The weighted average number of ordinary shares used in the denominator in calculating diluted (loss)/earnings per
share is not materially different to that used to calculated basic (loss)/earnings per share.
There are 11,434,302 performance rights on issue at 30 June 2021 (2020: nil). There were 28,520,525 options on issue
at 30 June 2021 (2020: 28,520,525) which were anti-dilutive and therefore not taken into account when calculating the
weighted average number of shares.
36 Share-based payments
(a) Options over unissued shares
During the financial year no options over unissued shares were issued by the Company (2020: 28,520,525). The table
below shows a reconciliation of the movement of options over unissued shares during the period including weighted
average exercise price (“WAEP”).
Options outstanding at the start of the year
Options issued during the year
Options exercised during the year
30 June 2021
No.
28,520,525
-
-
Options outstanding at the end of the year
28,520,525
The terms of the unissued ordinary options at 30 June 2021 are as follows
WAEP
$0.16
$0.00
$0.00
$0.16
30 June 2020
No.
-
28,520,525
-
28,520,525
WAEP
$0.00
$0.16
$0.00
$0.16
Number of options
Exercise price
28,520,525
$0.16
Expiry date
30 June 2023
No options have been granted subsequent to the reporting date and to the date of signing this report.
2021 ANNUAL REPORT | 106 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
36 Share-based payments (continued)
(a) Options over Unissued shares (continued)
On 29 June 2020, the Company’s shareholders approved the issue of 28,520,525 options to Zeta Resources Limited.
The issue formed part of the consideration to arrange a $8.0 million unsecured subordinated loan from Zeta Resources
Limited in the prior financial year. The Options have an expiry of 3 years from date of issue and a strike price of $0.16
per Panoramic share. An expense of $0.456 million was recorded in the prior financial year in relation to the options
issued. The options have an expiry of 3 years from date of issue and a strike price of $0.16 per Panoramic share. The
options were valued using the Black and Scholes options valuation methodology using an implied volatility of 66.6%
and a risk free rate of 0.24%.
(b) Employee Share Plan
The Company’s shareholders approved the “Incentive Options & Performance Rights Plan” (“2018 ES Plan”) at the
2018 Annual General Meeting on 21 November 2018. Plan was approved for a three-year period.
Under the 2018 ES Plan, eligible participants are able to be granted Options and/or Performance Rights (collectively
defined as “Awards”). Notwithstanding that the 2018 ES Plan includes the offer and granting of Options, in its discretion,
the Remuneration Committee has determined that the grant of performance rights is the preferred LTI reward vehicle.
During the financial year 14,670,146 performance rights (30 June 2020: nil) were issued to employees (includes the
rights issued to Mr Rajasooriar as noted in the section below), pursuant to the terms of the 2018 ES Plan. These
performance rights vest on the measurement date and comprise tranches A and B in the table below. Included in the
above issue, is 3,235,844 performance rights that were forfeited and cancelled in September 2020 following the
resignation of Mr Michael Ball, the former Chief Financial Officer. A further 1,164,033 performance rights, included in
the above issue, were forfeited in July 2021 following the retirement of the Company’s geology manager Mr John Hicks.
On 17 November 2020, upon approval by the shareholders, the Company issued 7,416,488 performance rights to Mr
Victor Rajasooriar (Managing Director & CEO) as per the terms of his Executive Services Agreement and pursuant to
the terms of the 2018 ES Plan. These performance rights vest on the measurement date and comprise tranches C and
D in the table below.
The performance conditions that the Board has determined will apply to the Performance Rights are summarised below:
Tranche Amount
A
1,813,415
Weighting
25% of the Performance Rights
B
5,440,244
75% of the Performance Rights
C
1,854,122
25% of the Performance Rights
D
5,562,366
75% of the Performance Rights
Performance Conditions
ATSR performance. Performance rights vest on a
pro-rata scale from 25% to 100% for ATSR
performance between 5% and 15%. (measured
over the 3 year period to 30 June 2023)
RTSR performance relative to a defined peer group.
Performance rights vest on a stepwise basis from
25% to 100% for RTSR performance between 50th
and 75th percentile. (measured over the 3 year
period to 30 June 2023)
ATSR performance. Performance rights vest on a
pro-rata scale from 25% to 100% for ATSR
performance between 5% and 15%. (measured
over the 3 year period to 30 June 2023)
RTSR performance relative to a defined peer group.
Performance rights vest on a stepwise basis from
25% to 100% for RTSR performance between 50th
and 75th percentile. (measured over the 3 year
period to 30 June 2023)
The performance rights included in the above table do not include adjustments for the rights forfeited during the year.
2021 ANNUAL REPORT | 107 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
36 Share-based payments (continued)
(b) Employee Share Plan (continued)
The fair value of the performance rights granted were determined using Monte Carlo simulation, a review of historical
share price volatility and correlation of the share price of the Company to its Peer Group. The table below details the
terms and conditions of the grant and the assumptions used in estimating fair value:
Item
Grant date
Number of ATSR rights
Number of RTSR rights
Value of underlying security at grant date
Fair value per ATSR Right
Total ATSR Expense for the period
Fair value per RTSR Right
Total RTSR Expense for the period
Dividend yield
Risk free rate
Volatility
Performance period(years)
Commencement of measurement period
Test date
Remaining performance period (years)
Maximum expense amount to be recognised in future period
11 September 2020
1,329,187
3,987,561
$0.081
$0.059
$9,049
$0.057
$27,560
0%
0.47%
80%
3.0
1 July 2020
30 June 2023
2.0
$43,292
21 October 2020
484,228
1,452,683
$0.100
$0.070
$8,109
$0.072
$25,023
0%
0.30%
80%
3.0
1 July 2020
30 June 2023
2.0
$101,198
17 November 2020
1,854,122
5,562,366
$0.095
$0.111
$52,008
$0.107
$150,403
0%
0.175%
80%
3.0
1 July 2020
30 June 2023
2.0
$574,942
The movement in weighted average fair value (“WAFV”) is shown in the table below:
Rights outstanding at the start of the year
Rights issued during the year
Rights vested during the year
Rights lapsed during the year
Rights forfeited during the year
Rights outstanding at the end of the year
30 June 2020
No.
-
14,670,146
-
-
(3,235,844)
11,434,302
WAFV
-
$0.07
-
-
$0.06
$0.07
30 June 2020
No. WAFV
-
-
-
-
-
-
-
-
-
-
-
-
At 30 June 2021, there were no rights that had vested during the year and were unissued at year end. At 30 June 2020
there were no rights on issue.
The weighted average remaining contractual life of performance rights outstanding at the end of the period was 2 years
(2020: nil).
(c) Expenses arising from share-based payment transactions with employees
The cost of equity-settled transactions is recognised, together with the corresponding increase in reserve, over the
period in which performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the performance right (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i) the extent to which the vesting period has expired; and
(ii) the number of performance rights that, in opinion of the directors of the consolidated entity, will ultimately vest. This
opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood
of market performance conditions being met as the effect of these conditions is included in the determination of fair
value at grant date.
No expense is recognised for performance rights that do not ultimately vest, except for performance rights where vesting
is conditional upon a market condition.
The dilutive effect, if any, of outstanding performance rights is not reflected as additional share dilution in the
computation of earnings per share.
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were $0.304 million (2020: nil).
2021 ANNUAL REPORT | 108 37 Parent entity financial information
(a) Summary financial information
The individual financial statements for the Parent entity show the following aggregate amounts
Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Contributed equity
Reserves
Accumulated losses
Capital and reserves attributable to owners of Panoramic Resources Limited
Loss for the year
Total comprehensive (loss)/income
(b) Guarantees entered into by the parent entity
The parent entity has given financial guarantees in respect of:
(i) leases of subsidiaries amounting to $6.183 million (2020: $28.107 million); and
(ii) the Group had no drawn bank facilities as at 30 June 2021 (2020: nil).
2021
$'000
2020
$'000
23,114
144,651
167,764
1,998
4
2,002
34,785
125,174
159,959
1,556
218
1,774
353,550
22,476
(210,264)
165,763
353,550
13,391
(208,756)
158,185
(1,508)
(1,508)
22,320
22,320
No liability was recognised by the parent entity or the consolidated entity in relation to these guarantees, as the fair
value of the guarantees was immaterial.
There are cross guarantees given by Panoramic Resources Limited and Savannah Nickel Mines Pty Ltd as described
in note 32. No deficiencies of assets exist in either of these companies.
No liability was recognised by the parent entity or the Group in relation to the cross guarantees.
(c) Contingent liabilities of the parent entity
The parent entity and Group had contingent liabilities at 30 June 2021 in respect of bank guarantees put in place with
a financial institution with a face value of $0.221 million (2020: $0.251 million).
38 Financial risk management
The Group’s principal financial instruments comprise receivables, payables, leases, borrowings, cash and derivatives.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the
Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial
targets whilst protecting future financial security.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for the identification and control of financial risks rests with the Audit and Governance Committee
under the authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below,
including the setting of limits for hedging cover of commodity prices, foreign currency and interest rate risk, credit
allowances and future cash flow forecast projections.
2021 ANNUAL REPORT | 109 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
38 Financial risk management (continued)
(a) Foreign currency exchange rate risk
The Group has transactional currency exposures. Such exposure arises from sales or purchases in a currency other
than the entity’s functional currency. There were no concentrate sales during the financial year as the Group’s Nickel
operation remained on care and maintenance. For the year ended 30 June 2020, 100% of the Group’s sales were
denominated in United States Dollars ("USD"). Most of the costs of the Group are denominated in Australian Dollars
("AUD"). The Group’s functional currency is Australian Dollars.
The Group’s income statement and balance sheet can be affected significantly by movements in the AUD/USD
exchange rate. The Group seeks to mitigate the effects of its net foreign currency exposure by using derivative
instruments, principally forward foreign currency exchange rate contracts and put and call options.
It is the Group’s policy to, where practical, enter into derivative instruments to hedge foreign currency exposures once
the likelihood of such exposures are highly probable, and to negotiate the terms of the hedge derivatives to exactly
match the terms of the hedged items to maximise hedge effectiveness. The Group will follow its current policy of
matching and hedging up to 80% of sales revenues in USD, where practical.
As at 30 June 2021, the Group had the following exposure to foreign currency.
Trade receivables (USD)
Other receivables (CAD)
Net exposure
Sensitivity
2021
$'000
-
2,769
2,769
2020
$'000
2,417
6,697
9,114
The following sensitivities are based on the foreign currency risk exposures in existence at the balance sheet date.
USD: The +/- 10% (2020: +/- 10%) sensitivity is based on reasonably possible changes, over a financial year, using an
observed range of actual historical rates, for the AUD to the USD, for the preceding 5 years and management's
expectation of future movements. As at 30 June 2021, the Group had no USD currency risk exposures.
CAD: The +/- 10% (2020: +/- 10%) sensitivity is based on reasonably possible changes, over a financial year, using an
observed range of actual historical rates, for the AUD to the CAD, for the preceding 5 years and management's
expectation of future movements.
At 30 June 2021, there was no material exposure to foreign currency exchange rate risk.
Management believes the balance sheet date risk exposures are a representative estimate of the risk inherent in the
financial instruments.
(b) Interest rate risk
The Group has put in place a Cash Management Policy to ensure that excess cash holdings are invested with a range
of institutions that have sufficient financial strength to ensure the security of the investments. The Group policy is to
reduce and manage cash flow interest rate risk by ensuring a timely reduction in debt obligations through scheduled
debt repayments and non-scheduled debt repayments when excess cash is available. The Group has no material
exposure at 30 June 2021.
Deposits at call
Cash restricted or pledged
2021
2020
Weighted
average
interest rate
%
0.2%
0.6%
Weighted
average
interest rate
%
0.7%
1%
Balance
$'000
24,237
221
24,458
Balance
$'000
31,164
251
31,415
2021 ANNUAL REPORT | 110 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
38 Financial risk management (continued)
(c) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement and for
disclosure purposes.
Disclosure of fair value measurements is by level of the following fair value measurement hierarchy:
(a)
(b)
(c)
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable (level 2), and
valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable (level 3).
The following table presents the fair value measurement hierarchy of the Group's assets and liabilities at 30 June 2021
and 30 June 2020.
At 30 June 2021
Assets
Financial assets at fair value
through profit or loss:
- Equity securities
Financial assets measured at fair value:
Total assets
At 30 June 2020
Assets
Financial assets at fair value
through profit or loss:
- Equity securities
- Trade receivables
Financial assets measured at fair value:
Total assets
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
12
12
-
-
-
-
Level 1
$'000
Level 2
$'000
Level 3
$'000
767
-
767
-
2,417
2,417
-
-
-
12
12
Total
$'000
767
2,417
3,184
The fair values of trade receivables classified as financial assets at fair value through profit or loss are determined using
market observable inputs sourced from the London Metal Exchange pricing index. These instruments are included in
level 2.
2021 ANNUAL REPORT | 111 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
38 Financial risk management (continued)
(c)
Fair value measurements (continued)
The fair value of derivative financial instruments that are not traded in an active market (for example over-the-counter
derivatives) is determined using valuation techniques. The Company uses a variety of methods and makes assumptions
that are based on market conditions existing at the end of each reporting period. These techniques include comparing
contracted rates to market rates with the same length of maturity to determine the value of forward contracts and use
of option pricing models to value put options. These instruments are included in level 2. In the circumstances where a
valuation technique for these instruments is based on significant unobservable inputs, such instruments are included in
level 3.
(d) Commodity Price Risk
The Group's exposure to nickel prices was very high as approximately 80-85% of total revenue came from sale of nickel.
Nickel was sold on the basis of nickel prices quoted on the London Metal Exchange.
Going forward, as the Group expects to resume nickel sale the profit and loss and balance sheet can be affected
significantly by movements in nickel prices on the London Metal Exchange. The Group seeks to mitigate the effect of
its nickel prices exposure by using derivative instruments, principally forward sales contracts and put and call options.
The limits of hedging are set by the Board.
For the financial year ending 30 June 2021, the Group was not materially exposed to commodity price risk movements
as no concentrate sales were made during the year. The Group had no derivative instrument transactions during the
year.
(e) Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and other
receivables and derivative instruments.
The Group’s maximum exposure to credit risk at reporting date is in relation to each class of recognised financial assets,
other than derivatives. The carrying amounts of these assets are as indicated in the balance sheet.
In relation to derivative financial instruments, credit risk arises from the potential failure of counterparties to meet their
obligations under the contract or arrangement. The Group‘s maximum credit risk exposure in relation to net settled
derivatives is the total mark to market gain, should counterparts not honour their obligations. In the case of gross-settled
derivatives, the maximum exposure is the notional value. Gross-settled derivatives are held with financial institutions
with sound credit rating. As at 30 June 2021, the Group had no derivative financial instruments.
At 30 June 2020, the Group had a concentration of credit risk in that it depended on one major customer for a significant
volume of revenue. As at 30 June 2021, there were no receivables due from the offtake counterparty.
Under the Group's risk management framework, each customer is analysed individually for creditworthiness on an
ongoing basis in order to minimise the risk of default. The Group believes that its customers are of sound
creditworthiness as evidenced by the compliance with the off-take agreement's payment terms over the life of each
project. Refer to notes 7 and 8 for disclosures in relation to expected credit losses on financial assets carried at
amortised cost.
2021 ANNUAL REPORT | 112 Notes to the consolidated financial statements
30 June 2021
(CONTINUED)
38 Financial risk management (continued)
(f) Equity price risk
During the financial year ended 30 June 2021, the Group disposed of all share investments held in listed entities.
In the prior financial year, the Group was exposed to equity securities price risk. The fair value of these investments
was based on quoted market prices.
The Group was not exposed to material movement in equity risk exposures during the financial year ended 30 June
2021.
(g) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding when necessary and the ability to close-out market positions.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
loans (when required), leases and committed available credit lines.
The Group regularly monitors rolling forecasts of liquidity on the basis of expected cash flows.
The Group has put in place a Group Cash Management Policy to ensure that excess cash holdings are invested with
a range of institutions that have sufficient financial strength to ensure the security of the investment. This policy is
reviewed and approved by the Board on a regular basis. When bank loans are used the Group’s policy is to reduce and
manage cash flow interest rate risk by ensuring a timely reduction in debt obligations through scheduled debt
repayments and non-scheduled debt repayments when excess cash is available.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on the remaining period
at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.
Contractual maturities of financial liabilities
At 30 June 2021
Trade payables
Lease liabilities
Total
Contractual maturities of financial liabilities
At 30 June 2020
Trade payables
Lease liabilities
Total
Less than
1 year
Between
1 and 5
years
Over 5
years
Total
contractual
cash
flows
Carrying
amount
(assets)/
liabilities
$'000
$'000
$'000
$'000
$'000
4,388
1,775
6,163
-
3,835
3,835
-
1,711
1,711
4,388
7,321
4,388
6,183
11,709
10,571
Less than
1 year
$'000
Between
1 and 5
years
$'000
Over 5
years
$'000
Total
contractual
cash
flows
$'000
Carrying
amount
(assets)/
liabilities
$'000
3,396
1,328
4,724
-
4,885
4,885
-
2,312
2,312
3,396
8,525
3,396
7,251
11,921
10,647
2021 ANNUAL REPORT | 113 Additional ASX Information
As at 1 September 2021
Stock Exchange Listing
Panoramic Resources Limited’s shares are listed on the Australian Securities Exchange Limited (ASX).
The Company’s ASX code is PAN.
Listing of Top 20 Shareholders
As at 1 September 2021
Number of Shares
Held
Percentage of
Shares Held %
BNP Paribas Nominees Pty Ltd Six Sis Ltd
84,831,633
1.
2.
3.
4.
5.
6.
7.
8.
9.
Name of Registered Shareholder
Western Areas Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
Zeta Resources Limited
UBS Nominees Pty Ltd
National Nominees Limited
Sandhurst Trustees Ltd
10.
BNP Paribas Nominees Pty Ltd ACF Clearstream
11.
Zero Nominees Pty Ltd
12.
13.
Cs Third Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
14.
Sacavic Pty Ltd
15.
BNP Paribas Noms Pty Ltd
16.
17.
CS Fourth Nominees Pty Limited
Neweconomy Com Au Nominees Pty Limited <900
Account>
18.
Colenew Pty Limited
19.
HSBC Custody Nominees (Australia) Limited
20.
Mr Kenneth Joseph Hall
TOTAL
408,131,660
248,941,310
231,655,237
92,417,142
77,982,292
71,549,721
66,462,496
38,154,241
32,798,744
23,067,522
21,579,435
14,295,347
11,631,625
11,241,885
8,874,833
7,353,376
7,256,407
6,071,630
5,500,000
1,469,796,536
19.90
12.14
11.30
4.51
4.14
3.80
3.49
3.24
1.86
1.60
1.12
1.05
0.70
0.57
0.55
0.43
0.36
0.35
0.30
0.27
71.67
As at 1 September 2021, there were 7,385 holders of 2,050,914,004 fully paid ordinary shares of the
Company (ASX:PAN).
As at 1 September 2021, the number of parcels of shares with a value of less than $500 was 687.
2021 ANNUAL REPORT | 114
Additional Shareholder Information
As at 1 September 2021
Unquoted Securities
The number of unquoted securities on issue as at 1 September 2021 is as follows:
Unquoted Security
Options exercisable at $0.16 on or before 30 June 2023
Performance Rights
Number on Issue
28,520,525
10,270,269
Distribution schedule and number of holders of equity securities
As at 1 September 2021
Issued Securities
1 – 1,000
1,001 –
5,000
5,001 –
10,000
10,001 –
100,000
100,001 –
and over
Total
Fully Paid Ordinary Shares
(ASX:PAN)
Options exercisable at $0.16
on or before 30 June 2023
Performance Rights
251
1,511
1,229
3,311
1,083
7,385
-
-
-
-
-
-
-
-
1
3
1
3
Holder Details of Unquoted Securities
Unquoted security holders that hold more than 20% of a given class of unquoted securities as at 1
September 2021 other than the performance rights which were issued under an employee incentive scheme
are as follows:
Unquoted Security
Holder
Number Held
Options exercisable at $0.16 on or before 30 June 2023
Zeta Resources Limited
28,520,525
Substantial Shareholders
Substantial shareholders in Panoramic Resources Limited and the number of equity securities over which
the substantial shareholder has a relevant interest as disclosed in substantial holding notices provided to
the Company are listed below:
Name of Substantial
Shareholder
Total Number of Voting Shares in which
the Substantial Shareholder and its
Associates Hold a Relevant Interest
Percentage of Total
Number of Voting
Shares (%)
Date of Notice
Western Areas Limited
299,519,797
19.9%
2 June 2020
Zeta Resources Limited
340,377,448
16.60%
23 November 2020
Voting Rights
All fully paid ordinary shares carry one vote per ordinary share without restriction.
Unquoted options and performance rights have no voting rights. Voting rights will be attached to the
issued fully paid ordinary shares when options and/or performance rights have been exercised/vested.
Corporate Governance
The Board of Panoramic Resources Limited is committed to achieving and demonstrating the highest
standards of Corporate Governance. The Board is responsible to its Shareholders for the performance of
the Company and seeks to communicate extensively with Shareholders. The Board believes that sound
Corporate Governance practices will assist in the creation of Shareholder wealth and provide
accountability. In accordance with ASX Listing Rule 4.10.3, the Company has elected to disclose its
Corporate Governance policies and its compliance with them on its website, rather than in the Annual
Report. Accordingly, information about the Company's Corporate Governance practices is set out on the
Company's website at https://panoramicresources.com/corporate-governance/.
2021 ANNUAL REPORT | 115 Mineral Resources and Ore Reserves
Nickel-Copper-Cobalt Mineral Resources as at 30 June 2021
Resource
Metal
Resource
Date
Measured
Indicated
Inferred
Total
Tonnes
(%)
Tonnes
(%)
Tonnes
(%)
Tonnes
(%)
Metal
Tonnes
Savannah Above 900F
0
Savannah Below 900F
Savannah North
N
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Apr-20
1,010,000
Jun-15
-
Apr-20
1,885,000
565,000
780,000
1.44
0.80
0.07
-
-
-
1.48 6,117,000
0.65
0.11
-
125,000
1.77
1.44
0.08
1.64
0.75
0.09
1.60 2,972,000
0.71
0.11
1,575,000
905,000
10,974,000
-
-
-
1.72
1.49
0.53
0.09
24,500
16,200
1,200
14,900
6,900
900
170,400
71,100
11,600
1.56
1.03
0.07
1.65
0.76
0.10
1.55
0.65
0.11
1.56 209,800
0.70 94,200
13,700
0.10
Total
Savannah
Project
*Mineral Resource estimates have been rounded to the nearest 1,000t, 0.01% Metal grade and 100t of metal
13,454,000
Qualifying Statements and Notes:
In the period since the Mineral Resource and Ore Reserve was reported in 2020 Annual Report, operations
at Savannah were temporarily suspended and no new updates to either the Mineral Resource or Ore Reserve
for the Project were completed in this time. Therefore, both the Mineral Resource and Ore Reserve
estimates reported herein the 2021 Annual Report remain unchanged from that reported in 2020.
Figures have been rounded and therefore may not add up exactly to the reported totals. All Mineral
Resources are inclusive of Ore Reserves. Mineral Resource cut-off grade is 0.50% Ni.
Cross references to previous Company ASX announcements:
Refer to ASX announcement of 22July 2021 titled “Savannah 2021 Mineral Resource & Reserve Statement”
Savannah (above 900F) – refer to ASX announcement of 30 September 2019, titled "Mineral Resources
and Ore Reserves at 30 June 2019”
Savannah (below 900F) – refer to ASX announcement of 30 September 2015, titled "Mineral Resources
and Ore Reserves at 30 June 2015”
Savannah North – refer to ASX announcement of 24 August 2016, titled “Major Resource Upgrade for
Savannah North”
No New Information or Data
The Mineral Resource estimate tabled above for Savannah (below 900F), have been previously reported
and the relevant market announcements cross referenced. Except where stated otherwise, the Company
confirms that it is not aware of any new information or data that materially affects the information included
in the relevant market announcements and, in the case of estimate of Mineral Resources, that all material
assumptions and technical parameters underpinning the estimate in the relevant market announcement
continue to apply and have not materially changed.
Ni Equivalent References
References to Ni equivalent contained metal in Mineral Resources and Ore Reserves is based on assumed
metal prices as noted in footnotes and calculated using the formula Ni Eq kt = [(Ni grade * Ni price + Cu kt
* Cu price + Co kt * Co price) * Total Mineral Resource Tonnes] / Ni price. Ni equivalent grade % in Mineral
Resources are calculated on the formula Ni Eq % = Ni Eq kt / Total Mineral Resource tonnes. It is the
Company’s opinion that all elements included in the metal equivalent calculation have a reasonable
potential of being recovered and sold. Metallurgical recoveries for all metals are assumed to be equal.
2021 ANNUAL REPORT | 116
Mineral Resources and Ore Reserves
Nickel-Copper-Cobalt Ore Reserves as at 30 June 2021
Ore Reserve
Metal
Proved
Probable
Total
Tonnes
(%)
Tonnes
(%)
Tonnes
(%)
Metal
Tonnes
Savannah
Nickel
1,233,000
0.95
-
Copper
Cobalt
0.66
0.05
-
-
-
1,233,000
0.95
11,700
0.66
0.05
8,100
600
Savannah North
Nickel
1,795,000
1.21
5,246,000
1.28
7,041,000
1.28
90,100
Copper
Cobalt
0.54
0.09
0.57
0.09
0.57
40,400
0.09
6,400
Total
Nickel
3,028,000
1.10
5,246,000
1.28
8,274,000
1.23
101,800
Copper
Cobalt
0.59
0.07
0.57
0.09
0.59
48,500
0.08
7,000
*Calculations have been rounded to the nearest 1,000t of ore, 0.01% Metal grade and 100t of metal
Qualifying Statements and Notes:
Calculations have been rounded to the nearest 1,000t of ore, 0.01% Metal grade and 100t of metal .. . ..
Savannah and Savannah North Ore Reserve average cut-off (NSR) of $135/t.
Key Assumptions
Cut-Off Grade
The Mineral Resource block model was updated with a block value field (Net Smelter Return (NSR) $/t)
after consideration of the contained metal, payability, concentrate transport cost, and WA state
government and traditional owner royalties. Cut-off grades were calculated as a dollar per ore tonne,
based on the forecast operating costs in the financial model. Economic analysis is carried out for each
planned stope and only stopes with a positive return are included in the Ore Reserve.
Cross references to previous Company ASX announcements:
Refer to ASX announcement of 22July 2021 entitled “Savannah 2021 Mineral Resource & Reserve
Statement”
Refer to ASX announcement of 31 July 2020 entitled “Updated Savannah Ore Reserve and Mine Plan”
Competent Person Statement
The information that relates to Ore Reserves for Savannah and Savannah North is based on information
compiled by or reviewed by Shane McLeay. Mr McLeay is a fellow of the Australasian Institute of Mining
and Metallurgy (AusIMM) and is a Principal Mining Engineer and full-time employee of Entech
Consulting based in Perth, Western Australia.
The aforementioned has sufficient experience that is relevant to the style of mineralisation and type of
target/deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Mr McLeay consents to the inclusion in the release of the matters based on the
information in the form and context in which it appears.
2021 ANNUAL REPORT | 117 SCHEDULE OF MINING TENEMENTS
As at 30 June 2021
Project
Tenement
Status
Current Area
Equity
Tenement
Manager
Panoramic
Commitment
Current Registered
Holders
East Kimberley -
100%
East Kimberley -
100%
East Kimberley -
100%
East Kimberley -
Keller Creek JV
E80/4880
Live
21
BL
100%
PAN
100% of Commit,
Rents & Rates
Pindan Exploration Company
Pty Ltd
E80/5131
Live
5
BL
100%
PAN
100% of Commit,
Rents & Rates
Pindan Exploration Company
Pty Ltd
E80/5238
Live
14
BL
100%
PAN
100% of Commit,
Rents & Rates
Pindan Exploration Company
Pty Ltd
E80/4834
Live
9
BL
80% - Ora Gold
20% free carried
interest
Savannah
L80/64
Live
311
HA
100%
Savannah
M80/179
Live
241.85
HA
100%
Savannah
M80/180
Live
960.3
HA
100%
Savannah
M80/181
Live
960
HA
100%
Savannah
M80/182
Live
589.4
HA
100%
Savannah
M80/183
Live
967.05
HA
100%
Savannah -
Copernicus
Savannah -
Copernicus
Savannah -
Copernicus
L80/52
Live
140.3129
HA
100%
PAN
L80/86
Live
0.04
HA
100%
PAN
M80/540
Live
128.85
HA
100%
PAN
PAN
PAN
PAN
PAN
PAN
PAN
PAN
100% of Commit,
Rents & Rates
Pindan Exploration Company
Pty Ltd (80%)
Ora Gold Limited (20%)
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
100% of Commit,
Rents & Rates
Savannah Nickel Mines Pty
Ltd
Laverton - Focus
M38/101
Live
583.15
HA
100% Ni-Cu-PGM
rights only
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Laverton - Focus
M38/159
Live
597.15
HA
100% Ni-Cu-PGM
rights only
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Laverton - Focus
M38/342
Live
316.25
HA
100% Ni-Cu-PGM
rights only
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Laverton - Focus
M38/363
Live
5.245
HA
100% Ni-Cu-PGM
rights only
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Laverton - Focus
M38/364
Live
18.375
HA
100% Ni-Cu-PGM
rights only
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Laverton - Focus
M38/37
Live
650
HA
100% Ni-Cu-PGM
rights only
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Laverton - Focus
M38/38
Live
280.05
HA
Laverton - Focus
M38/49
Live
945.05
HA
Laverton - Focus
M38/535
Live
464.55
HA
Laverton - Focus
M38/693
Live
48.2176
HA
100% Ni-Cu-PGM
rights only
100% Ni-Cu-PGM
rights only
100% Ni-Cu-PGM
rights only
100% Ni-Cu-PGM
rights only
Focus
Focus
Nil
Nil
Focus
Nil
Focus
Nil
Focus Minerals (Laverton) Pty
Limited
Focus Minerals (Laverton) Pty
Limited
Focus Minerals (Laverton) Pty
Limited
Focus Minerals (Laverton) Pty
Limited
2021 ANNUAL REPORT | 118 Corporate Directory
BOARD OF DIRECTORS
REGISTERED OFFICE
Nicholas Cernotta
Non-Executive Chair of the
Board
Victor Rajasooriar
Managing Director & CEO
Peter Sullivan
Non-Executive Director
Rebecca Hayward
Non-Executive Director
Gillian Swaby
Non-Executive Director
MANAGEMENT
Grant Dyker
Chief Financial Officer
Susan Park
Company Secretary
Level 9, 553 Hay Street
Perth, Western Australia, 6000
T: +61 8 6374 1700
F: +61 8 9421 1008
W: www.panoramicresources.com
AUSTRALIAN BUSINESS NUMBER
47 095 792 288
AUDITOR
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia, 6000
BANKER
National Australia Bank
100 St Georges Terrace
Perth, Western Australia, 6000
SHARE REGISTRY
Computershare Investor Services
172 St Georges Terrace
Perth, Western Australia, 6000
TAX ADVISOR
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia, 6000
2021 ANNUAL REPORT | 119 Panoramic Perth Office:
Telephone: +61 8 6374 1700
Savannah Project Office:
Panoramic Resources Limited
Level 9, 553 Hay Street
Perth WA 6000
Email: info@panres.com
Savannah Nickel Mines Pty Ltd
panoramicresources.com
PMB 19
ABN: 47 095 792 288
Kununurra WA 6743
Telephone: +61 8 6103 2399