ABN: 47 095 792 288 | ASX Code: PAN
ANNUAL REPORT
Competent Person
The information in this release that relates to Exploration Drilling at Savannah 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.
CONTENTS
01
02
03
04
05
06
07
08
09
who we are
Managing Director’s letter
Letter from the Chair
A TRANSFORMATIONAL YEAR
HIGHLIGHTS FROM 2022
SAVANNAH NICKEL-COPPER-COBALT PROJECT
FOCUS FOR 2023
INVESTMENT HIGHLIGHTS
FINANCIAL report
DIRECTORS’ REPORT
consolidated financial statements
consolidated INCOME STATEMENT
2
4
6
7
8
9
19
21
22
23
55
56
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 57
CONSOLIDATED BALANCE SHEET
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
Independent Auditor’s Report
Auditor’s Declaration
10
11
12
13
Additional Shareholder Information
Mineral Resources and Ore Reserves
Schedule of Mining Tenements
Corporate DIRECTORY
58
59
60
61
96
97
102
103
106
108
109
2022 ANNUAL REPORT 1
01.
WHO
WE ARE
Panoramic Resources Limited (ASX: PAN) is
a company headquartered in Perth, Western
Australia, which owns the Savannah Nickel
Project in the East Kimberley (Savannah
or the Project). Operations at Savannah
were restarted in 2021 and the Project
was successfully recommissioned with first
concentrate shipment achieved in December
2021. Savannah has a 12-year mine life
with clear potential to further extend this
through ongoing exploration. The Project
provides excellent leverage to the nickel,
copper and cobalt markets which are heavily
linked to global decarbonisation and vehicle
electrification.
2 PANORAMIC RESOURCES LIMITED
VISION &
VALUES
VISION
Values
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.
People
We always work safely.
We lead and act with fairness, integrity, trust and respect.
We respect our people and support their growth.
Performance
We are focused on creating sustainable shareholder growth, efficient
operations and to be 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.
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.
2022 ANNUAL REPORT 3
02.
MANAGING
DIRECTOR’S
LETTER
Victor Rajasooriar
Managing Director & CEO
Dear fellow shareholders,
It is with great pleasure that I provide this
update on our activities in FY2022 on behalf of
our team.
It has been a transformative year for the
Company with our dedicated and hardworking
team successfully restarting all facets of the
Savannah operation and achieving commercial
production during the period.
Underground mining recommenced at Savannah
in July 2021, following the execution of a four-
year mining contract with contractor Barminco.
Ore processing then commenced in October
2021 once a stockpile of 100,000 tonnes of
ore was established at surface to ensure the
successful commissioning of the processing
plant.
The first shipment of concentrate departed
the Port of Wyndham on 26 December 2021 to
our offtake partner Jinchuan. In FY2022, four
shipments carrying a total of 42,692 tonnes of
concentrate containing 3,044 tonnes of nickel,
1,908 tonnes of copper and 205 tonnes of cobalt
metal were made.
I am pleased to say that we have generally
hit the key physical outcomes we modelled
to support the operational restart in areas
like mining dilution and mined ore grade..
Underground development rates and ore
production were impacted by restrictions to
accessing underground mining personnel due to COVID
border restrictions. This impact was lessened towards the
end of the period after the welcome relaxation of Western
Australia’s state border restrictions in the March 2022
quarter. On-site, staff and contractors increased from 15 to
approximately 400 people throughout the period with more
than 90% of the targeted mining roles filled by the end of
FY2022.
As operations restarted, we unfortunately recorded two
injuries which required offsite medical attention in the
first half of FY2022. From here on, an improvement in
our safety leadership and performance saw our Total
Recordable Injury Frequency Rate steadily reduce over the
second half of the period which was pleasing. More details
on our safety performance are included in our FY2022
Sustainability Report which I encourage you to review.
To support the restart of mining operations at Savannah,
the majority of our geology and exploration resourcing
focussed on underground grade control and resource
definition drill programs. These activities were successful
in confirming and building confidence in the orebody while
also extending it. Drilling in the eastern zone of Savannah
North in the March quarter 2022 resulted in the discovery
of a new mineralised splay close to existing underground
workings. This area is likely to be included in the Savannah
mine plan and highlights the potential to discover new
areas as the density of underground drilling increases.
Regional exploration focused on surface exploration drilling
of the Stoney Creek and Northern Ultramafic Granulite
regional targets with downhole electromagnetic surveys
planned in FY2023.
4 PANORAMIC RESOURCES LIMITED
From a financial perspective, we completed the
drawdown of the US$30 million Prepayment
Loan Facility with Trafigura in the period and
ended the financial year with A$22 million in
cash and an undrawn US$15 million Revolving
Credit Loan Facility. Our balance sheet is in good
condition and should improve during FY2023 as
operations ramp up.
After a big year of many achievements, I would
like to sincerely thank every member of our
workforce including employees, contractors
and suppliers for their tremendous efforts and
sacrifice. We have tried hard to make a positive
contribution in our local community in the
Kimberley and will continue this focus in the
coming year. I look forward to leading our team
as together we continue the safe and efficient
ramp-up of the Savannah operation in FY2023.
Yours faithfully
Victor Rajasooriar
Managing Director and CEO
2022 ANNUAL REPORT 5
03.
LETTER FROM
THE CHAIR
Nick Cernotta
chair
Dear fellow shareholders,
support during the year.
I am pleased to present this report to you on
behalf of the Board of Panoramic Resources
Limited (“Panoramic” or the “Company”) after
a year where the Sanvanah Nickel Operations
(“Savannah”) resumed production and the
Company took great strides forward.
Having taken the time to comprehensively
re-evaluate our restart strategy for Savannah
leading into the decision to proceed in April
2021, we successfully executed our plans in the
first half of FY2022 and ramped up production
rates over the remainder of the period.
As a Board we have a strong belief in the
intrinsic and strategic value of Savannah. In an
Australian nickel sector which has continued
to consolidate further in the past 12 months,
Savannah’s status as an established producing
nickel sulphide asset with a +10 year mine life
is extremely valuable to our shareholders. The
outlook for nickel, copper and cobalt – which
are all produced at Savannah – has continued
to strengthen as the decarbonisation of energy
production and transport gathers momentum
across the world.
It has not been a period without challenges. As well as
the usual issues which arise during the restart and ramp
up of any mining operation, we have also dealt with the
ongoing impacts of the COVID-19 pandemic including
periodic closures to the Western Australian border which
disrupted our ability to move some of our people to and
from site. I am pleased to say we have had no significant
health impacts on our workforce or the local community, as
operations have restarted.
Separately to this Annual Report we have released a
second Sustainability Report which covers our activities
in FY2022. I would encourage shareholders to review this
document to see detailed information about our safety,
energy usage, carbon emissions, water management,
biodiversity, community engagement and supply chain
policies. This information provides a benchmark for our
operational performance going forward. It also includes a
number of initiatives that we are exploring with a view to
continuously improve our sustainability outcomes.
Finally, on behalf of the Company I would like to extend
our gratitude to our shareholders for their support and to
reiterate our commitment to taking the business forward in
a way which we believe will grow the value of Panoramic.
The Board and Management of the Company
has been unchanged throughout the period,
reflecting our collective commitment to delivering
on our objectives. In FY2022 we have grown our
workforce to support the restart of Savannah in
a challenging labour market. On behalf of the
Board, I would like to extend my appreciation
and congratulations to our team of employees,
contractors and suppliers for their achievements
and also for demonstrating their continued
Yours sincerely,
Nick Cernotta
Chair
6 PANORAMIC RESOURCES LIMITED
04.
A TRANSFORMATIONAL
YEAR
team to site
mining at Savannah
Jul 2021 Commencement of underground
Aug 2021 Mobilisation of processing plant
Oct 2021 First production of nickel-copper-
Dec 2021 First shipment from Savannah to
Mar 2022 New nickel zone discovered in
Apr 2022 Commercial production achieved at
Savannah North resource drilling
Jinchuan completed
cobalt concentrate
Savannah
Wyndham
Port
Wyndham
Kununurra
Savannah
Project
Port Hedland
Western Australia
Perth
Kalgoorlie
“The Savannah Operation
is located 240km south
of Kununurra in the East
Kimberley region of
Western Australia and
operates under a co-
existence agreement with
the Malarngowem People
and the Purnululu People. “
Figure 1 - Regional Project Location
2022 ANNUAL REPORT 7
05.
HIGHLIGHTS
FROM 2022
Resumption of nickel-copper-cobalt production and export from the
Savannah Operations in the Kimberley region of Western Australia
Successful mobilisation of team to site and growth in total headcount
to 400 employees and contractors
Four concentrate shipments to offtake partner Jinchuan completed safely
during the year
Achievement of commercial production at Savannah from 1 April 2022
Completion and partial drawdown of the US$45 million financing
package with Trafigura to support the Savannah restart
The discovery of a new zone of potentially economic nickel
mineralisation at Savannah North in an area previously thought to be
infertile
Resumption of surface exploration drilling of the Stoney Creek and
Northern Ultramafic Granulite regional targets
Provision of production guidance of 6,600 – 7,100t of nickel, 4,100t –
4,500t of copper and 400 – 500t of cobalt in concentrate in FY23
Details of the Company’s safety, environmental, community and
sustainability performance are contained in the FY22 Sustainability
Report released separately to this Annual Report.
8 PANORAMIC RESOURCES LIMITED
06.
SAVANNAH
NICKEL-COPPER-COBALT
PROJECT
MINERAL RESOURCE
AND ORE RESERVE
An updated Mineral Resource and Ore Reserve is expected to be released in October 2022
RESOURCE METAL
RESOURCE
DATE
MEASURED
INDICATED
INFERRED
TOTAL
TONNES
(%)
TONNES
(%)
TONNES
(%)
TONNES
(%)
METAL
TONNES
Savannah
Above
900F
Savannah
Below
900F
Savannah
North
Total
Savannah
Project
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Apr-20 1,010,000 1.44
565,000
Jun-15
-
0.80
0.07
-
-
-
1.77
1.44
0.08
-
-
-
-
1,575,000 1.56
24,500
1.03
0.07
16,200
1,200
780,000
1.64
125,000
1.72
905,000 1.65
14,900
0.75
0.09
0.76
0.10
6,900
900
Apr-20 1,885,000 1.48 6,117,000
1.60 2,972,000
1.49
10,974,000 1.55
170,400
0.65
0.11
0.71
0.11
0.53
0.09
0.65
0.11
71,100
11,600
13,454,000 1.56 209,800
0.70
0.10
94,200
13,700
The Savannah North orebody remains open along strike and at depth, providing significant potential to bring
more material into future Ore Reserves and life of mine plan with additional diamond drilling. During the period
infill and extensional drilling was successful in identifying new zones of mineralisation close to the existing mine
infrastructure as well as proving extensions to the resource at both Savannah North and Savannah.
PROVED
PROBABLE
TOTAL
ORE RESERVE METAL
TONNES
Savannah
Nickel
1,233,000
Savannah
North
Copper
Cobalt
Nickel
Copper
Cobalt
1,795,000
Total
Nickel
3,028,000
Copper
Cobalt
(%)
0.95
0.66
0.05
1.21
0.54
0.09
1.10
0.59
0.07
TONNES
(%)
TONNES
(%)
METAL TONNES
-
5,246,000
5,246,000
-
-
-
1.28
0.57
0.09
1.28
0.57
0.09
1,233,000
7,041,000
8,274,000
0.95
0.66
0.05
1.28
0.57
0.09
1.23
0.59
0.08
11,700
8,100
600
90,100
40,400
6,400
101,800
48,500
7,000
2022 ANNUAL REPORT 9
SAVANNAH
NICKEL-COPPER-COBALT
PROJECT (CONT’D)
savannah north
Figure 2 - Schematic of Savannah North Resource and Reserve shapes with current and proposed development.
10 PANORAMIC RESOURCES LIMITED
OPERATIONS
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 1 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.
Underground mining operations recommenced at
Savannah in July 2021 following the execution
of a four-year mining contract with contractor
Barminco (a subsidiary of Perenti Global Limited).
This timeline was brought forward after new
equipment arrived on site earlier than planned
and the recruitment of technical staff and
underground operators having progressed well in
an otherwise difficult labour market.
Underground mining and development
commenced with the objective of establishing a
surface ore stockpile of approximately 100,000
tonnes to support the restart of the processing
plant whilst underground mining activities
continued to build momentum. This was targeted
for November 2021 but was again achieved
ahead of schedule in October 2021.
In August 2021 a three-year contract was
executed with Primero (a subsidiary of NRW
Holdings Limited) for the restart, operation
and maintenance of the Savannah processing
plant. The recruitment of the key technical
and leadership roles progressed well and all
roles were filled by the December quarter
2021. The processing plant was successfully
recommissioned with first concentrate produced
in October 2021.
The logistics route from Savannah to the Port
of Wyndham is well established and was
seamlessly reinstated. Concentrate was trucked
from Savannah to the Company’s storage shed
at the port where it is stockpiled for ship loading
and export. The first ship arrived at the Port of
Wyndham on 21 December 2021 and was loaded
over four days by local stevedoring contractor
CGL. The ship departed on 26 December 2021
sailing to the Port of Lianyungang in China for
delivery to offtake partner Jinchuan.
Following these important milestones, activities
progressively scaled up across all areas of the
operations throughout FY22.
An overall increase in equipment and people at site over
the period supported underground mining, however the
inability for interstate workers to travel freely into Western
Australia between October 2021 and March 2022 impacted
the accessibility of the underground workforce. Accordingly,
the underground mining schedule was modified in the
December quarter 2021 to reflect the labour issues. The
focus of the site team was maintaining development rates
with lower than planned ore production from stopes.
Pleasingly, the impact to processing was mitigated by
the earlier decision to establish the ore stockpile at the
restart of underground mining. Jumbo development of the
Savannah decline below historical workings recommenced
in the June quarter 2022 to support exploration and
potential future production activities.
Following the reopening of the border, ore mining rates
steadily increased quarter-on-quarter, as did waste
movement to support the opening of new levels and
underground drill drives in Savannah North and Savannah.
Absenteeism levels increased in the second half due to
higher numbers of COVID-19 case numbers in the WA
community but continued to be managed by our site team.
A single ore mining front was in place during the period
with additional ore mining areas to be opened in FY23
to further de-risk the operation. Dilution to date in the
stopes has been minimal and development drive dilution is
well under the Feasibility Study assumption, with several
improvement projects in place to further minimise dilution.
The grades mined to date are in line with expectations
based on the end of month reconciliation process.
The crushing, milling and flotation circuits and tailings
processing all achieved operational stability in the
September quarter 2021 following recommissioning of the
processing plant. Nickel, copper, and cobalt recoveries
all trended upwards throughout the period. Concentrate
production was building throughout the period however
was impacted by an 11-day shutdown and several
unplanned power outages in April 2022. Measures were
taken to increase power reliability and performance
returned to expectations in May and June.
2022 ANNUAL REPORT 11
SAVANNAH
NICKEL-COPPER-COBALT
PROJECT (CONT’D)
In the period, a total of 42,692 tonnes of
concentrate containing 3,044 tonnes of nickel,
1,908 tonnes of copper and 205 tonnes of cobalt
metal was produced.
AREA
Mining
DETAILS
UNITS
FY2022
m
dmt
%
dmt
%
%
4,772
404,156
1.05
4,256
0.54
0.07
dmt
398,952
Jumbo development
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
Ni grade
Ni Metal contained
Cu grade
%
%
%
%
%
%
dmt
%
dmt
%
Milling
Concentrate
Production
Cu Metal contained
dmt
Co grade
Co Metal contained
Concentrate
Shipments
Concentrate
Ni grade
Ni Metal contained
Cu grade
%
dmt
dmt
%
dmt
%
Cu Metal contained
dmt
Co grade
%
Co Metal contained
dmt
1.05
0.54
0.07
72.34
88.53
78.46
42,692
7.13
3,044
4.47
1,908
0.48
205
37,545
7.23
2,713
4.63
1,737
0.46
174
Port operations and shipments were conducted
safely and to plan throughout the period. Four
shipments were completed in FY22 from the
Port of Wyndham to offtake partner Jinchuan.
After total shipments of 37,545 tonnes (dmt)
of concentrate were made in the period, unsold
concentrate stocks on hand were 3,567wmt at
the port and 1,926wmt at the mine site
A summary of all mining and processing
physicals achieved in FY22 are contained in the
following table.
The achievement of commercial production
from 1 April 2022 was an important milestone
for the Project following the first production of
concentrate in October 2021. The ramp-up of
underground mining will continue throughout
FY23 as development of additional levels opens
up new areas for production, from Savannah
North.
12 PANORAMIC RESOURCES LIMITED
EXPLORATION
With the restart of mining operations at Savannah in
FY22, geology and exploration activities in FY22 focussed
mainly on several underground grade control and resource
definition drill programs necessary to support the smooth
resumption of mining over the critical first few years of
production.
Regional surface exploration was restricted to the
completion of three surface exploration diamond drill
holes targeting previously defined “electromagnetic” (EM)
conductors at the Northern Ultramafic Granulite and
Stoney Creek intrusions.
Underground Grade Control Drilling
To facilitate development of the initial mine production
levels in Savannah North, detailed grade control drill
programs were completed on five levels located between
1321 to 1401mRL (Figure 3). Strong and continuous
mineralisation was achieved in all areas providing certainty
to the locations of these development drives.
Select highlights from the grade control drilling program
include:
• KUD1790: 24.15m @ 1.90% Ni; 0.59% Cu; 0.14% Co
• KUD1777: 21.80m @ 1.88% Ni; 0.66% Cu; 0.14% Co
• KUD1778: 20.05m @ 1.38% Ni; 0.47% Cu; 0.11% Co
• KUD1910: 18.90m @ 1.96% Ni; 0.95% Cu; 0.15% Co
• KUD1789: 18.90m @ 1.67% Ni; 0.59% Cu; 0.13% Co
• KUD1792: 16.75m @ 1.63% Ni; 0.87% Cu; 0.13% Co
• KUD1803: 14.75m @ 1.91% Ni; 0.53% Cu; 0.15% Co
• KUD1769a: 14.35m @ 2.10% Ni; 0.79% Cu; 0.16% Co
Figure 3 - Long-section of grade control drilling at Savannah North featuring historic Resource definition drilling intercepts, development
drives, life of mine stoping plan and the current mineralisation shape
2022 ANNUAL REPORT 13
SAVANNAH
NICKEL-COPPER-COBALT
PROJECT (CONT’D)
Underground Resource
Definition Drilling
Throughout FY22 resource definition drilling
was completed on the Western, Central and
Eastern Zones of the Upper Mineralisation Lens
at Savannah North. Later in the period the
drilling focus was temporarily shifted to the area
immediately below the current mining levels due
to short-term access interactions with mining
activities in the immediate area.
Assay results for the first two holes completed in this
area have been received and returned with better-than-
expected results with all holes returning thicker and higher-
grade intersections than predicted.
The standout drill result was drill hole KUD1891 which
returned a combined Upper and Lower Mineralisation
Lens intersection of 40.55m at 1.96% Ni, 0.75% Cu and
Figure 4 - Oblique cross section showing drill hole KUD1891 and KUD1871 with updated mineralisation model
14 PANORAMIC RESOURCES LIMITED
0.15% Co. The junction (bifurcation) between the Upper
and Lower Mineralisation lenses at Savannah North is
often an area of increased mineralisation thickness and
grade. The previous best Savannah North intersection near
the junction between the two mineralisation lenses was
achieved by drill hole KUD1533 in 2015 which returned an
intersection of 37.2m at 1.58% Ni, 0.67% Cu and 0.12% Co.
Resource definition drilling in the Upper Mineralisation Lens
at Savannah North in areas of Inferred Resources between
the 1250 and 1500 RL levels returned a series of thick
zones of mineralisation which will support future mining
and an updated Mineral Resource estimate in October
2022. Better results from the program included:
• KUD1750: 30.50m @ 1.58% Ni; 0.53% Cu; 0.11% Co
• KUD1871: 16.00m @ 2.08% Ni; 0.80% Cu; 0.16% Co
• KUD1764: 15.15m @ 1.30% Ni; 0.20% Cu; 0.09% Co
• KUD1746: 11.70m @ 1.56% Ni; 0.71% Cu; 0.12% Co
• KUD1760: 10.50m @ 2.02% Ni; 0.46% Cu; 0.14% Co
• KUD1828: 9.30m @ 1.46% Ni; 0.20% Cu; 0.07% Co
• KUD1757: 8.55m @ 1.50% Ni; 0.25% Cu; 0.10% Co
• KUD1747: 8.50m @ 1.80% Ni; 1.03% Cu; 0.14% Co
• KUD1829: 7.70m @ 3.50% Ni; 0.29% Cu; 0.16% Co
• KUD1833: 7.65m @ 2.46% Ni; 0.58% Cu; 0.17% Co
• KUD1831: 7.10m @ 1.88% Ni; 0.63% Cu; 0.14% Co
In addition to the above, an infill resource definition drilling
was commenced in the poorly drilled area of the Savannah
orebody located just above the 900 Fault (Figure 5).
This program commenced at year end and will continue
into FY23. Initial drill results for the Savannah program
above the 900 Fault have been particularly encouraging
with most mineralised intersections achieved to date
being typically twice the width predicted by the existing
Savannah resource model in this area. Preliminary modelling
of these results suggests the Savannah resource in this
area will increase once the drill program is completed and
the results fully modelled.
Figure 5 - Schematic longsection showing grade control and resource
definition drilling areas in FY22 and planned drill areas for FY23
2022 ANNUAL REPORT 15
SAVANNAH
NICKEL-COPPER-COBALT
PROJECT (CONT’D)
New Upper Splay
Discovery at
Savannah North
During the March quarter FY22, drilling was
conducted to infill and test extensions to the
eastern zone of the Savannah North resource
where it remains open. The first hole in the
program, KUD1875, was completed in the 1381
Drill Drive East and was designed to test the
northerly trending Upper Mineralisation Lens in
this area.
A mineralised intersection was achieved at the
target depth of 63.2m however KUD1875 also
intersected an unanticipated 5.7m zone of semi-
massive breccia sulphide mineralisation near the
start of hole from 3.3m downhole now known as
the Upper Splay.
Assay results from KUD1875 confirmed:
• 5.7m @ 1.47% Ni, 0.63% Cu and 0.07% Co from 3.3m
(Upper Splay)
• 2.6m @ 1.70% Ni, 0.26% Cu and 0.06% Co from 63.2m
(Upper Mineralisation Lens)
Further drilling intersected the Upper Splay zone which
indicated good potential for mineable grades and widths in
a new area close to existing infrastructure.
The discovery of the Upper Splay zone demonstrates
the strong probability of identifying new zones of
mineralisation within the Savannah North and Savannah
areas as drilling density increases over time.
Figure 6 - Oblique cross section at approximately 6200mE orientated 015 degrees grid showing drill hole
KUD1875 trace, assayed grade and proposed mineralisation model
16 PANORAMIC RESOURCES LIMITED
REGIONAL
EXPLORATION
Figure 7 - Ultramafic intrusions of the Savannah Intrusive Complex showing recent drilling and modelled EM conductors
drilled in 2022
2022 ANNUAL REPORT 17
SAVANNAH
NICKEL-COPPER-COBALT
PROJECT (CONT’D)
Drill hole SMD190 at Stoney Creek was
drilled to test a strong discrete EM anomaly.
The anomaly was modelled as a steep
west-dipping conductor located below
the intrusion. After exiting the intrusion
at 284m, SMD190 encountered a broad
sequence of Tickalara Metamorphics that
contained a series of cherty and graphitic
sediments located between 384 to 390m, at
the approximate modelled depth of the EM
conductor. These sediments therefore are
possibly the source of the Stoney Creek EM
anomaly. SMD190 was cased to facilitate a
future DHEM survey of the drill hole.
At the NUG, drill hole SMD191 was also
targeted at an historical EM anomaly, this
time located at depth near the eastern
margin of the intrusion. After exiting the
NUG at 310m, SMD191 intersected a sulphide
bearing graphitic horizon between 457.9
to 458.3m which coincides well with the
modelled position of the NUG EM conductor
and therefore may also explain the source of
the conductor.
Drill hole SMD192 was drilled as part of
the Company’s ongoing evaluation of the
prospectivity of the NUG by creating a
new DHEM platform for future testing and
providing samples for litho-geochemical study
of the intrusion.
In FY23 the Company intends to complete
down hole (DHEM) surveys on all three
NUG and Stoney Creek drill holes as well as
complete further litho-geochemical studies on
both intrusions. In addition to this work, new
programs involving heritage surveys, drilling
and DHEM surveying are planned for the Frog
Hollow and Norton intrusions.
18 PANORAMIC RESOURCES LIMITED
07.
FOCUS
FOR 2023
Continue to operate safely and sustainably
Advance the ramp-up of the Savannah operation
Deliver on our FY23 production and cost guidance
Support our people and the communities where we operate
Following the achievement of commercial production at Savannah from 1 April 2022, the focus for FY23 will be
on the continued safe and efficient ramp-up of mining, processing and shipping activities at Savannah.
Production and cost guidance for FY23 reflects a consolidation of a progressive ramp-up into FY23. Guidance
further reflects the impact the preceding 12 months has had on the Project with tight labour availability,
inflationary cost pressures and border closures all adversely affecting the day-to-day running of the business
and the ramp up schedule.
METRIC
GUIDANCE / ASSUMPTION
Nickel in concentrate production
Copper in concentrate production
Cobalt in concentrate production
C1 cost per pound of payable nickel
Sustaining Mine Development
Capital and Growth Expenditure
6,600 – 7,100t
4,100 – 4,500t
400 – 500t
A$7.30 – A$8.30/lb
A$20 – 28M
A$14 – 18M
2022 ANNUAL REPORT 19
07.
FOCUS
FOR 2023
(CONT’D)
The FY23 guidance contains assumptions
for future commodity prices, exchange rates,
costs and mine scheduling. Achievement of
this guidance is dependent on the ramp-up
plan at Savanah North being executed as
planned. Unit cash costs will continue to vary
quarter-on-quarter and will be influenced by the
relative proportions of nickel coming from ore
development and stope production, with these
variations reducing as the ramp-up progresses
towards nameplate capacity by the end of
FY23. The guidance range provided reflects a
forecast average for the year. Performance is
generally expected to improve each quarter
as the Savannah Operation ramps up to full
capacity. Ongoing performance is subject to
several factors including labour availability and
the impact of COVID-19.
Nickel in Concentrate: FY23 production guidance
reflects a blended production of ore from
Savannah (remnants) and Savannah North (new
mine). Savannah North provides approximately
62% of the ore feed, with Savannah providing
the balance.
C1 Costs: Includes operating cash costs that are
directly incurred in producing concentrate and
includes grade control drilling, offsite treatment
costs and royalties.
Sustaining Mine Development: Sustaining mine
development expenditure is carried out in both
Savannah and Savannah North during the year.
The productive benefits of this expenditure are
realised over the following 12 months.
Capital and Growth Expenditure: is investment/
start-up/improvement expenditure where the
productive benefits are derived over a period
exceeding 12 months and includes advance
lateral development expenditure where
production in the developed area commences in
a period exceeding 12 months. This expenditure
also includes resource definition drilling carried
out at both Savannah and Savannah North.
20 PANORAMIC RESOURCES LIMITED
08.
INVESTMENT
HIGHLIGHTS
Safe restart of Savannah operations completed, backed by
significant body of preparatory work to de-risk
Offtake agreements in place until 2028 with financing package
and strong balance sheet
LOM1 All-in Cost of A$6.87/lb Ni provides significant leverage to
the demand outlook for nickel
High quality, cash generative nickel sulphide asset with 12 year
mine life and near mine Resource extension potential
Attractive financial outcomes at June 2022 commodity prices2
including NPV 8 of $1.2 billion and $1.8 billion in cashflow
Focus on safe ramp-up of operations throughout FY23 with
steady state production in FY24
1. Life of mine production of 10,628 kt @ 1.23% Ni, 0.54% Cu, and 0.08%% Co
2. Pricing based on June 2022 metal prices (i.e. Ni US$26,000/t, Cu US$9,500/t, Co US$70,000/t), AUD:USD 0.72 FX and June cost forecast.
2022 ANNUAL REPORT 21
09.
FINANCIAL
REPORT
for the financial year
ended 30 June 2022
This Financial Report is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.3A.
Current Reporting Period: Financial Year Ending 30 June 2022 | Previous Reporting Period: Financial Year Ending 30 June 2021
22 PANORAMIC RESOURCES LIMITED
DIRECTORS’
REPORT
2022 ANNUAL REPORT 23
2022 FINANCIAL REPORT
DIRECTORS’ REPORT
The Directors present their report on the consolidated entity (referred to as the Group) consisting of the parent entity,
Panoramic Resources Limited (Panoramic or the Company), and the entities it controlled at the end of, or during, the
year ended 30 June 2022 (the reporting period) and the auditor’s report thereon.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report are
set out below.
Name
Mr Nicholas Cernotta
Independent Non-Executive Chair
Period of Directorship
Appointed 2 May 2018, Chair from 25 May 2020
Mr Victor Rajasooriar
Managing Director & Chief Executive Officer
Appointed 11 November 2019
Mr Peter Sullivan
Non-Executive Director
Ms Rebecca Hayward
Independent Non-Executive Director
Ms Gillian Swaby
Independent Non-Executive Director
Appointed 1 October 2015
Appointed 21 June 2018
Appointed 8 October 2019
The qualifications, experience, other directorships and special responsibilities of the Directors in office for the financial
year ending 30 June 2022 and up to the date of this report are detailed below.
Nicholas Cernotta, age 60
Independent Non-Executive Chair
Qualifications
Experience
B.Eng (Mining)
Mr Cernotta 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.
Other current listed company directorships Northern Star Resources Limited - Non-Executive Director (since 1 July
2019)
New Century Resources Limited - Non-Executive Director (since 28
March 2019)
Pilbara Resources Limited - Non-Executive Director (since 6 February
2017)
Former listed company directorships in
last three years three years
No prior directorships
Special responsibilities
Member of the Remuneration Committee
Member of the Risk and Sustainability Committee
Victor Rajasooriar, age 47
Managing Director and Chief Executive Officer
Qualifications
Experience
Former listed company directorships in
last three years three years
B.Eng (Mining), AusIMM,MAICD
Mr Rajasooriar is a mining engineer with more than 25 years’ operations
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. 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.
Echo Resources Limited - Managing Director (October 2018 to
September 2019)
Horizon Gold Limited - Non-Executive Chair (20 November 2019 to 9
April 2020)
Special responsibilities
Member of the Risk and Sustainability Committee
24 PANORAMIC RESOURCES LIMITED
Directors (continued)
Peter Sullivan, age 66
Non-Executive Director
Qualifications
Experience
BE, MBA
Other current listed company directorships Copper Mountain Mining Corporation - Non-Executive Director (since 30
Mr Sullivan holds a Bachelor of Engineering degree from the University
of Western Australia and an MBA from the Australian Graduate School
of Management. Mr Sullivan has been involved in the management and
strategic development of resource companies and projects for more than
30 years in Australia and overseas. His work experience includes periods
in project engineering, corporate finance, investment banking, corporate
and operational management and public company directorships. Mr
Sullivan previously held the role of Managing Director at Resolute Mining
Limited for 14 years and was subsequently appointed a Non-Executive
Director.
October 2020)
Horizon Gold Limited - Non-Executive Chair (since 7 July 2020)
Zeta Resources Limited - Non-Executive Chair (since 7 June 2013)
GME Resources Limited - Non-Executive Director (since 1 October
2004), Non-Executive Chair (since 20 March 2017), Managing Director
(24 June 1996 to 1 October 2004)
Former listed company directorships in
Resolute Mining Limited - Non-Executive Director (30 June 2015 to 27
May 2021), Managing Director (14 February 2001 to 30 June 2015)
Chair of the Remuneration Committee.
Member of the Audit and Governance Committee
Gillian Swaby, age 62
Independent Non-Executive Director
last three years
Special responsibilities
Qualifications
Experience
BBus, FAICD, FGIA, AAusIMM
Ms Swaby is an experienced mining executive with over 35 years’
experience in the resources sector and has 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. Ms Swaby 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.
Other current listed company directorships Deep Yellow Limited - Executive Director (since 29 June 2017)
Comet Ridge Limited - Non-Executive Director (since 9 January 2004)
Former listed company directorships in
last three years
Special responsibilities
No prior directorships
Chair of the Audit and Governance Committee
Member of the Remuneration Committee
Rebecca Hayward, age 40
Independent Non-Executive Director
Qualifications
Experience
LLB
Ms Hayward is an experienced infrastructure and resources lawyer, with
a strong background in mining, energy and large scale infrastructure
transactions. Ms Hayward is currently the global head of contracts,
procurement and supply chain for Fortescue Future Industries. Ms
Hayward was a Senior Associate at Clayton Utz in the Melbourne
Construction and Major Projects team, where she had a role in a number
of large infrastructure projects for both the private and public sectors.
Other current listed company directorships No other current directorships
Former listed company directorships in
last three years
Special responsibilities
No prior directorships
Chair of the Risk and Sustainability Committee
Member of the Audit and Governance Committee
DIRECTORS’ REPORT
Directors (continued)
Peter Sullivan, age 66
Non-Executive Director
Qualifications
Experience
BE, MBA
Mr Sullivan holds a Bachelor of Engineering degree from the University
of Western Australia and an MBA from the Australian Graduate School
of Management. Mr Sullivan has been involved in the management and
strategic development of resource companies and projects for more than
30 years in Australia and overseas. His work experience includes periods
in project engineering, corporate finance, investment banking, corporate
and operational management and public company directorships. Mr
Sullivan previously held the role of Managing Director at Resolute Mining
Limited for 14 years and was subsequently appointed a Non-Executive
Director.
Other current listed company directorships Copper Mountain Mining Corporation - Non-Executive Director (since 30
October 2020)
Horizon Gold Limited - Non-Executive Chair (since 7 July 2020)
Zeta Resources Limited - Non-Executive Chair (since 7 June 2013)
GME Resources Limited - Non-Executive Director (since 1 October
2004), Non-Executive Chair (since 20 March 2017), Managing Director
(24 June 1996 to 1 October 2004)
Former listed company directorships in
last three years
Resolute Mining Limited - Non-Executive Director (30 June 2015 to 27
May 2021), Managing Director (14 February 2001 to 30 June 2015)
Special responsibilities
Chair of the Remuneration Committee.
Member of the Audit and Governance Committee
Gillian Swaby, age 62
Independent Non-Executive Director
Qualifications
Experience
BBus, FAICD, FGIA, AAusIMM
Ms Swaby is an experienced mining executive with over 35 years’
experience in the resources sector and has 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. Ms Swaby 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.
Other current listed company directorships Deep Yellow Limited - Executive Director (since 29 June 2017)
Comet Ridge Limited - Non-Executive Director (since 9 January 2004)
Former listed company directorships in
last three years
No prior directorships
Special responsibilities
Chair of the Audit and Governance Committee
Member of the Remuneration Committee
Rebecca Hayward, age 40
Independent Non-Executive Director
Qualifications
Experience
LLB
Ms Hayward is an experienced infrastructure and resources lawyer, with
a strong background in mining, energy and large scale infrastructure
transactions. Ms Hayward is currently the global head of contracts,
procurement and supply chain for Fortescue Future Industries. Ms
Hayward was a Senior Associate at Clayton Utz in the Melbourne
Construction and Major Projects team, where she had a role in a number
of large infrastructure projects for both the private and public sectors.
Other current listed company directorships No other current directorships
Former listed company directorships in
last three years
No prior directorships
Special responsibilities
Chair of the Risk and Sustainability Committee
Member of the Audit and Governance Committee
2022 ANNUAL REPORT 25
DIRECTORS’ REPORT
Company Secretary
Susan Park
Qualifications
Experience
Company Secretary
B.Com, ACA, FFin, FGIA, FCG, GAICD
Ms Park has 25 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. Ms Park’s is the
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.
26 PANORAMIC RESOURCES LIMITED
Committee structure and membership
Members acting on the committees of the Board as at the date this report are set out below.
Audit and Governance Committee
Remuneration Committee
Risk and Sustainability Committee
The company secretary acts as the secretary on each of the committees of the Board.
P. Sullivan (Chair)
N. Cernotta
G. Swaby
R. Hayward (Chair)
N. Cernotta
V. Rajasooriar
G. Swaby (Chair)
R. Hayward
P. Sullivan
Directors’ meetings
The number of meetings of Directors (including meetings of Committees of Directors) held during the year and the
number of meetings attended by each Director are detailed below:
Meetings of Committees
Board Meetings
Remuneration
Audit and
Governance
Risk and
Sustainability
A
9
9
9
9
9
B
9
9
9
9
9
A
-
-
3
3
3
B
-
-
3
3
3
A
3
-
3
-
3
B
3
-
3
-
3
A
2
2
-
2
-
B
2
2
-
2
-
N. Cernotta
V. Rajasooriar
P. Sullivan
R. Hayward
G. Swaby
A Number of meetings attended.
B Number of meetings held during the time the Director held office or was a member of the relevant committee during the year.
1
Independent non-executive director Ms G. Swaby is Chair of the Audit and Governance Committee and the members of the
committee are independent non-executive director Ms R Hayward and non-executive director Mr P Sullivan
2 Non-executive director Mr P. Sullivan is chair of the Remuneration Committee and the members of the committee are independent
non-executive director Ms G. Swaby and independent chair of the board Mr N. Cernotta
3
Independent non-executive director Ms R. Hayward is chair of the Risk and Sustainability Committee and the members of the
committee are independent chair of the board Mr N. Cernotta and Managing Director Mr V. Rajasooriar.
Directors’ Interests
Interests in the shares of the Company and related bodies corporate
As at the date of this report, the interests of the Directors in the shares of Panoramic Resources Limited were:
Number of
Ordinary shares
Performance rights over
ordinary shares
107,500
1,791,666
-
107,500
107,500
11,409,301 (1)
-
-
-
(i) Does not include an award of rights to Mr Rajasooriar (Managing Director) post 30 June 2022 totalling 2,837,838 that is subject to
shareholder approval at the Company’s upcoming 2022 annual general meeting of shareholders.
Nicholas L Cernotta
Victor Rajasooriar
Peter Sullivan
Rebecca Hayward
Gillian Swaby
Securities
Options
At the date of this report, unissued ordinary shares of the Company under option are:
Number of Options
Exercise Price
28,520,525
$0.16
Expiry Date
30 June 2023
Performance Rights
On 3 September 2021 the Company issued 3,570,406 performance rights to employees. These performance rights are
subject to performance conditions to 30 June 2024 and expire on 30 June 2026.
On 20 October 2021, following shareholder approval, the Company issued 3,992,813 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 2024 and expire on 30 June 2026.
DIRECTORS’ REPORT
Committee structure and membership
Members acting on the committees of the Board as at the date this report are set out below.
Audit and Governance Committee
G. Swaby (Chair)
R. Hayward
P. Sullivan
The company secretary acts as the secretary on each of the committees of the Board.
Remuneration Committee
P. Sullivan (Chair)
N. Cernotta
G. Swaby
Risk and Sustainability Committee
R. Hayward (Chair)
N. Cernotta
V. Rajasooriar
Directors’ meetings
The number of meetings of Directors (including meetings of Committees of Directors) held during the year and the
number of meetings attended by each Director are detailed below:
Meetings of Committees
Board Meetings
A
9
B
9
Audit and
Governance
B
A
-
-
Remuneration
Risk and
Sustainability
A
3
B
3
A
2
B
2
N. Cernotta
V. Rajasooriar
P. Sullivan
R. Hayward
G. Swaby
A Number of meetings attended.
B Number of meetings held during the time the Director held office or was a member of the relevant committee during the year.
2
-
2
-
2
-
2
-
-
3
3
3
-
3
3
3
9
9
9
9
9
9
9
9
-
3
-
3
-
3
-
3
1
Independent non-executive director Ms G. Swaby is Chair of the Audit and Governance Committee and the members of the
committee are independent non-executive director Ms R Hayward and non-executive director Mr P Sullivan
2 Non-executive director Mr P. Sullivan is chair of the Remuneration Committee and the members of the committee are independent
3
non-executive director Ms G. Swaby and independent chair of the board Mr N. Cernotta
Independent non-executive director Ms R. Hayward is chair of the Risk and Sustainability Committee and the members of the
committee are independent chair of the board Mr N. Cernotta and Managing Director Mr V. Rajasooriar.
Directors’ Interests
Interests in the shares of the Company and related bodies corporate
As at the date of this report, the interests of the Directors in the shares of Panoramic Resources Limited were:
Performance rights over
ordinary shares
Number of
Ordinary shares
107,500
1,791,666
-
107,500
107,500
Nicholas L Cernotta
Victor Rajasooriar
Peter Sullivan
Rebecca Hayward
Gillian Swaby
(i) Does not include an award of rights to Mr Rajasooriar (Managing Director) post 30 June 2022 totalling 2,837,838 that is subject to
11,409,301 (1)
-
-
-
shareholder approval at the Company’s upcoming 2022 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
Performance Rights
On 3 September 2021 the Company issued 3,570,406 performance rights to employees. These performance rights are
subject to performance conditions to 30 June 2024 and expire on 30 June 2026.
On 20 October 2021, following shareholder approval, the Company issued 3,992,813 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 2024 and expire on 30 June 2026.
2022 ANNUAL REPORT 27
DIRECTORS’ REPORT
Performance Rights (continued)
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.
Operational and financial review
Financial Performance
Rights outstanding at 30 June 2021
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
Rights outstanding at the date of this report(i)
Number of rights
11,434,302
7,563,219
-
-
(1,164,033)
5,377,969
-
23,211,457
(i)
Includes an award of rights to Mr Rajasooriar (Managing Director) totalling 2,837,838 that is subject to shareholder approval at the
Company’s upcoming 2022 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 2025.
Dividends
No final dividend has been declared for the financial year ended 30 June 2022 (2021: nil):
Principal activities
The principal activities of the consolidated Group during the year were:
• Production and sale of nickel concentrate, containing copper and cobalt by-products from the Group’s 100%
owned Savannah Nickel Mine in Western Australia.
• Exploration, evaluation and development of mineral tenements and projects in Western Australia.
The Group's performance during the financial year ended 30 June 2022 and for the four previous financial years, are set
out in the table below. The financial results shown below were prepared under the Australian Accounting Standards.
Year Ended 30 June
Revenue and other income
Cost of sales of goods
Royalties
Exploration and evaluation expenditure written off
Care and maintenance expenses
Fair value change of financial assets
Corporate and marketing costs
Other income / (expenses)
EBITDA (before impairment)
Depreciation and amortisation
Net impairment reversal / (impairment) of assets
Finance costs
Profit / (Loss) before tax
Income tax (expense) / benefit
Net Profit / (Loss) after tax
Earnings / (Loss) per share
Dividends per share
Market capitalisation
Closing share price
Return on equity
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
cents
cents
$’000
2022
2021
2020
2019
91,242
10,677
80,345
27,885
2018
1,714
(65,760)
(4,869)
-
-
(87,000)
(20,900)
(3,402)
(1,904)
(844)
(945)
-
(11,442)
(121)
(5,656)
(484)
(619)
(190)
(7,695)
(956)
(15,864)
(8,443)
(5,028)
(34,909)
(18,656)
14,187
(27,063)
(422)
(7,260)
(671)
(847)
(1,511)
(4,929)
2,273
(604)
(7,039)
18,255
(1,383)
-
1.4
-
(487)
(5,474)
-
(4,022)
114
(8,155)
(430)
(38,511)
(943)
-
-
(9.1)
295
(87,888)
9,229
(48,039)
(87,888)
9,229
(48,039)
-
-
(8.8)
4,745
(6,102)
1,525
19,937
(8,152)
(5,525)
6,260
-
-
6,260
0.3
-
0.205
1.8
295
0.0
-
-
0.15
0.1
420,437
307,637
166,124
163,307
304,788
$ per share
%
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.
The Group recorded a profit after tax for the year ended 30 June 2022 of $6,260,000 (2021: profit after tax of $295,000).
The results for the year reflect the re-commencement of operations at Savannah Nickel Project from July 2021. Prior
year onsite activities compromised care and maintenance and capital works undertaken to de-risk the restart of the
project. The Savannah Nickel Project achieved commercial production from 1 April 2022, the financial results for the year
ended 30 June 2022 reflect this transition.
Revenue and other income
prior year.
Revenue includes concentrate sales and other income. Total revenue increased by $90.4 million when compared to the
Concentrate revenue is subject to a quotational period (QP) adjustment in a defined period following shipment and
provisional invoicing. A QP adjustment may arise in future months where the final sales value of the shipment differs
from the provisional revenue received. Where there is a difference, either the Company or the offtake partner is required
to financially settle this amount. The value of the unrealised QP loss adjustment included in revenue as at 30 June 2022
totals $9.764 million and results from a net decrease in commodity prices during the quotational period.
28 PANORAMIC RESOURCES LIMITED
DIRECTORS’ REPORT
Operational and financial review
Financial Performance
The Group's performance during the financial year ended 30 June 2022 and for the four previous financial years, are set
out in the table below. The financial results shown below were prepared under the Australian Accounting Standards.
Year Ended 30 June
Revenue and other income
Cost of sales of goods
Royalties
Exploration and evaluation expenditure written off
Care and maintenance expenses
Fair value change of financial assets
Corporate and marketing costs
Other income / (expenses)
EBITDA (before impairment)
Depreciation and amortisation
Net impairment reversal / (impairment) of assets
Finance costs
Profit / (Loss) before tax
Income tax (expense) / benefit
Net Profit / (Loss) after tax
Earnings / (Loss) per share
Dividends per share
Market capitalisation
Closing share price
Return on equity
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
cents
cents
$’000
$ per share
%
2022
91,242
(65,760)
(4,869)
(844)
-
4,745
(6,102)
1,525
19,937
(8,152)
-
(5,525)
6,260
-
6,260
0.3
-
420,437
0.205
1.8
2021
10,677
-
-
(945)
(11,442)
(121)
(5,656)
(956)
(8,443)
(5,028)
14,187
(422)
295
-
295
0.0
-
307,637
0.15
0.1
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)
-
166,124
0.081
(31.2)
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
-
163,307
0.295
4.6
2018
1,714
(487)
(5,474)
-
(4,022)
114
(8,155)
(430)
(38,511)
(943)
(48,039)
-
(48,039)
(9.1)
-
304,788
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.
The Group recorded a profit after tax for the year ended 30 June 2022 of $6,260,000 (2021: profit after tax of $295,000).
The results for the year reflect the re-commencement of operations at Savannah Nickel Project from July 2021. Prior
year onsite activities compromised care and maintenance and capital works undertaken to de-risk the restart of the
project. The Savannah Nickel Project achieved commercial production from 1 April 2022, the financial results for the year
ended 30 June 2022 reflect this transition.
Revenue and other income
Revenue includes concentrate sales and other income. Total revenue increased by $90.4 million when compared to the
prior year.
Concentrate revenue is subject to a quotational period (QP) adjustment in a defined period following shipment and
provisional invoicing. A QP adjustment may arise in future months where the final sales value of the shipment differs
from the provisional revenue received. Where there is a difference, either the Company or the offtake partner is required
to financially settle this amount. The value of the unrealised QP loss adjustment included in revenue as at 30 June 2022
totals $9.764 million and results from a net decrease in commodity prices during the quotational period.
2022 ANNUAL REPORT 29
DIRECTORS’ REPORT
Operational and financial review (continued)
Revenue and other income (continued)
Operational and financial review (continued)
Depreciation and amortisation (continued)
The following table provides a breakdown of concentrate revenue by commodity.
The following table shows the carrying value of assets that are subject to depreciation or amortisation charges.
Revenue breakdown by commodity
Revenue from sales of nickel
Revenue from sales of copper
Revenue from sales of cobalt
30 Jun 2022
%
79.6
30 Jun 2021
%
-
12.8
7.6
100.0
-
-
-
There was no revenue from concentrate sales in the prior year as the project was on care and maintenance.
Other income totalled $2,665,000 (2021: $10,158,000) which included the sale of obsolete inventory totalling $240,000.
Prior year income 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, JobKeeper income $1,279,000,
interest and other income of $869,000.
Cost of production
Costs of goods sold were incurred during the year totalling $78.78 million (2021: nil) which resulted from the
recommencement of operations at the Savannah Nickel Project. For the period 1 July 2021 to 31 March 2022 the project
returned to operations in stages across mining, processing, concentrate handling and paste fill production. During this
time, the project was in the pre-commercial production stage of its return to full production. Commercial production was
achieved from 1 April 2022 when the project demonstrated the required performance at steady or increasing levels on a
sustained basis. At this time, the capitalisation of certain operating costs ceased and amortisation of mine properties
commenced.
The project was in care and maintenance in the prior financial year and did not incur any cost of sales.
$14.186 million at 30 June 2021.
Royalties
Government royalties are levied at a rate of 2.5% on the contained metals sold for nickel, copper and cobalt in
concentrate. A traditional owner royalty is also payable on concentrate revenue net of certain off site logistic and
transportation costs.
The combined cost of these royalties on the concentrate sold during the year totalled $4.87 million (2021: nil). There
were no concentrate sales in the prior financial year and no royalty costs were incurred.
Exploration and evaluation
For the year ended 30 June 2022 the Group’s exploration and evaluation expenses totalled $0.844 million (2021: $0.945
million). The increase in expenditure coincides with the Savannah Nickel Project’s return to production. Exploration
activities include near mine and regional work on areas of interest where reserves have not yet been established. These
areas include Stoney Creek and Northern Ultramafic Granulite.
Care and maintenance costs
There was no expenditure on care and maintenance activities during the year (2021: $16.111 million). A decision was
made in April 2021 approving the restart of operations at the Savannah Nickel Project. The return to production
commenced with the start of underground mining operations in July 2021. As a result, care and maintenance activities
ceased in the prior financial year. During the prior financial year, capital works were undertaken to progress the de-risking
of the project for a restart. The capitalised cost of these activities totalled $13.611 million 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.
Corporate and other costs
Corporate and other costs of $6.618 million (2021: $6.992 million) were lower than the previous reporting period, and
result from costs associated with the restart of operations at the Savannah Nickel Project.
Depreciation and amortisation
Amortisation of mine properties and depreciation of property, plant & equipment and right-of-use assets commenced
from 1 April 2022 following the achievement of commercial production at the Savannah Nickel Project. Initial amortisation
and depreciation of these assets resulted in an expense of $8.668 million for the three months to 30 June 2022. Other
assets not subject to pre-commercial production accounting treatment were depreciated or amortised for the full year.
30 PANORAMIC RESOURCES LIMITED
Plant and equipment, including assets under construction
Mine properties
Right-of-use assets
Impairment
Carrying value
Carrying value
amortisation
June 2022
June 2021
during the year
Depreciation and
$000
193,566
25,686
29,819
249,071
$000
136,076
25,711
4,195
165,982
$000
4,588
1,499
2,581
8,668
In the financial year ended 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 at 30 June 2021. The financial assessment inclusive of updated commodity and foreign exchange
prices together with appropriate sensitivity analysis indicated that the valuation supported an impairment reversal totalling
An impairment assessment was undertaken at 30 June 2022 which considered the progress made with the ramp-up of
production at the Cash Generating Unit (CGU) together with updated capital and operating costs, improvements in
commodity prices and foreign exchanges rates for AUD:USD. The assessment concluded that there were no indicators
of impairment for the year ended 30 June 2022 and no requirement to recognise an impairment charge. There were
reversal indicators with respect to prior year impairment charges (not yet reversed). A financial model was prepared to
assess the valuation of the CGU. The results from the model concluded that the valuation supported the carrying value
of the CGU at 30 June 2022. As a result, no impairment reversal was recognised in the financial year. Refer to Note 22
for further information on Impairment.
Finance costs
following.
Finance expenses increased in the current year to $5.525 million (2021: $0.422 million). The higher costs result from the
Interest on leases increased by $0.84 million due to the addition of new right of use assets during the year.
Foreign exchange losses increased by $3.08 million as a result of the revaluation of USD borrowings (Trafigura debt)
and USD trade receivables (concentrate sales).
Interest on debt and borrowings together with facility fees and charges increased by $1.139 million resulting from interest
costs on the US$30.0 million secured loan facility with Trafigura Pte Ltd that was drawn down on 24 September 2021.
Interest costs $1.098 million were capitalised to mine properties during the Savannah Nickel Project pre-commercial
production stage. From 1 April 2022 these charges totalling $0.769 million were expensed to profit and loss.
Tax expense
Financial Position
period.
The Group has not brought to account net deferred tax assets as it’s not probable as at 30 June 2022 that the Group will
generate sufficient future taxable profit to utilise the unrecognised net deferred tax asset. The value of unutilised tax
losses not brought to account at 30 June 2022 totals $68.46 million (2021: $70.51 million).
The net assets of the Group have increased by $6.9 million to $173.6 million (2021: $166.7 million) during the reporting
Net working capital - current assets less current liabilities
As at 30 June 2022 the Group had a working capital deficit of $3.41 million (2021: nil) The deficit includes a current
liability for scheduled debt repayments totalling US$4.95 million to paid over the period August 2022 to June 2023.
Concentrate produced in the month of June 2022 was not sold by year end. Available and unsold concentrate stocks at
30 June 2022 totalled 4,923dmt containing 344t nickel, 182t copper and 26t cobalt, which is higher as a result of the
planned June shipment arriving late, departing Wyndham on 9 July 2022 with a concentrate cargo of 6,438dmt. The
provisional value of this shipment was US$9.97 million, of which a substantial portion of the sale value is on account of
June 2022 concentrate production.
DIRECTORS’ REPORT
Operational and financial review (continued)
Depreciation and amortisation (continued)
The following table shows the carrying value of assets that are subject to depreciation or amortisation charges.
Mine properties
Plant and equipment, including assets under construction
Right-of-use assets
Impairment
Carrying value
June 2022
$000
193,566
Carrying value
June 2021
$000
136,076
Depreciation and
amortisation
during the year
$000
4,588
25,686
29,819
249,071
25,711
4,195
165,982
1,499
2,581
8,668
In the financial year ended 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 at 30 June 2021. The financial assessment inclusive of updated commodity and foreign exchange
prices together with appropriate sensitivity analysis indicated that the valuation supported an impairment reversal totalling
$14.186 million at 30 June 2021.
An impairment assessment was undertaken at 30 June 2022 which considered the progress made with the ramp-up of
production at the Cash Generating Unit (CGU) together with updated capital and operating costs, improvements in
commodity prices and foreign exchanges rates for AUD:USD. The assessment concluded that there were no indicators
of impairment for the year ended 30 June 2022 and no requirement to recognise an impairment charge. There were
reversal indicators with respect to prior year impairment charges (not yet reversed). A financial model was prepared to
assess the valuation of the CGU. The results from the model concluded that the valuation supported the carrying value
of the CGU at 30 June 2022. As a result, no impairment reversal was recognised in the financial year. Refer to Note 22
for further information on Impairment.
Finance costs
Finance expenses increased in the current year to $5.525 million (2021: $0.422 million). The higher costs result from the
following.
Interest on leases increased by $0.84 million due to the addition of new right of use assets during the year.
Foreign exchange losses increased by $3.08 million as a result of the revaluation of USD borrowings (Trafigura debt)
and USD trade receivables (concentrate sales).
Interest on debt and borrowings together with facility fees and charges increased by $1.139 million resulting from interest
costs on the US$30.0 million secured loan facility with Trafigura Pte Ltd that was drawn down on 24 September 2021.
Interest costs $1.098 million were capitalised to mine properties during the Savannah Nickel Project pre-commercial
production stage. From 1 April 2022 these charges totalling $0.769 million were expensed to profit and loss.
Tax expense
The Group has not brought to account net deferred tax assets as it’s not probable as at 30 June 2022 that the Group will
generate sufficient future taxable profit to utilise the unrecognised net deferred tax asset. The value of unutilised tax
losses not brought to account at 30 June 2022 totals $68.46 million (2021: $70.51 million).
Financial Position
The net assets of the Group have increased by $6.9 million to $173.6 million (2021: $166.7 million) during the reporting
period.
Net working capital - current assets less current liabilities
As at 30 June 2022 the Group had a working capital deficit of $3.41 million (2021: nil) The deficit includes a current
liability for scheduled debt repayments totalling US$4.95 million to paid over the period August 2022 to June 2023.
Concentrate produced in the month of June 2022 was not sold by year end. Available and unsold concentrate stocks at
30 June 2022 totalled 4,923dmt containing 344t nickel, 182t copper and 26t cobalt, which is higher as a result of the
planned June shipment arriving late, departing Wyndham on 9 July 2022 with a concentrate cargo of 6,438dmt. The
provisional value of this shipment was US$9.97 million, of which a substantial portion of the sale value is on account of
June 2022 concentrate production.
2022 ANNUAL REPORT 31
DIRECTORS’ REPORT
Operational and financial review (continued)
Cash balance
Group cash on hand at 30 June 2022 was $21.8 million (2021: $24.2 million). The change in cash during the year reflects
the staged recommencement of operations at the Savannah Nickel Project where production output has not yet reached
design, cost escalation due to inflation and market conditions, impact of COVID-19 absenteeism on the workforce, offset
in part by higher commodity prices and lower AUD:USD foreign exchange rates. The delayed departure of the June 2022
scheduled concentrate shipment to 9 July 2022 impacted cash on hand by transferring the provisional invoice cash inflow
totalling US$9.97 million from late June 2022 to mid-July 2022.
Trade and other receivables
Trade and other receivables include the final instalment from the sale of the Thunder Bay North Project (sold in the 2020
financial year), this amount is due to be received in May 2023.
Inventories
Current inventories increased in the reporting period by $12.3 million to $12.8 million. The recommencement of operations
at the Savannah Nickel Project has required an increase in stock holdings for consumables, parts, equipment and diesel
fuel. Inventories also include unsold concentrate stocks on hand totalling $9.34 million (2021: nil), the higher value is the
result of the delayed concentrate shipment (scheduled for June 2022) that departed Wyndham on 9 July 2022.
Derivative financial instruments
The Group actively manages USD nickel price risk for each concentrate shipment by protecting a portion of the nickel
cash flow received from provisional invoicing (up to 80% of the payable volume in each shipment). Outstanding USD
nickel derivatives (forward contracts) at 30 June 2022 total 900t, representing 50% of the contained metal in shipments
that have not been finalised. The average derivative price achieved for these shipments is US$27,942/t. The carrying
value of derivative financial instruments represent the mark to market gain on unsettled USD nickel forward derivative
contracts. The unrealised gain on these derivatives as at 30 June 2022 is A$5.0 million (2021: nil).
Mine properties
The Company invested a total of $65.55 million in mine development activities during the year. This includes Savannah
Nickel Project expenditure for underground mine development totalling $22.58 million and the capitalisation of pre-
commercial production costs totalling $42.97 million. Mine property amortisation commenced 1 April 2022 following the
achievement of commercial production at the Savannah Nickel Project. For the period 1 April 2022 to 30 June 2022 these
charges totalled $0.769 million.
Property, plant and equipment, including assets under construction
The carrying value of property, plant and equipment, including assets under construction, is $25.69 million (2021: $25.71
million) at the end of the year. Additions for the year totalled $7.78 million with major items of expenditure comprising
processing plant refurbishment $0.94 million, waste water treatment plant $0.51 million. Offsetting additions were
depreciation charges for the year totalling $1.49 million.
Right-of-use (ROU) assets
The carrying value of right-of-use (ROU) assets has increased by $25.62 million to $29.82 million at the end of the year.
Additions for the year totalled $30.93 million with major additions comprising Barminco mining equipment, buses, loaders
and fuel storage system. Offsetting additions were depreciation charges for the year totalling $2.72 million.
Net tax balances
At balance date, the Group had an unrecognised deferred tax asset value of $68.46 million (2021: $70.5 million).
Until such time as the Savannah Nickel Project is expected to generate future taxable profit, this asset will not be
recognised in the consolidated statement of financial position.
Provisions
Total current and non-current provisions for the Group have decreased by $2.55 million to $21.73 million as at 30 June
2022. The Group’s provisions predominately relate to future mine rehabilitation activities see Note 24, and employee
entitlements for long service and annual leave. The decrease in the value in the reporting period is due to the change in
the discount rate applied to the mine rehabilitation provision.
Capital Structure
The debt to equity ratio (borrowings on contributed equity) at 30 June 2022 was 22% (2021: 2%).
Cash Flows
Operating activities
Net cash from operating activities was $26.21 million inflow (2021: $17.42 outflow) for the year. Cash inflows received
from the sale of concentrate net of QP adjustments and derivative settlements totalled $80.84 million (2021: nil).
Concentrate cash inflows were received from four shipments comprising 37,545dmt of concentrate.
32 PANORAMIC RESOURCES LIMITED
Operational and financial review (continued)
Investing activities
Bay Project.
Financing activities
Net cash outflow from investing activities was $58.98 million (2021: $11.50 million inflow) for the financial year. This
included payments for property, plant and equipment of $4.69 million and payments for mine development of $56.23
million. A deferred settlement instalment totalling $1.65 million was received in May 2022 from the sale of the Thunder
Net cash from financing activities totalled $30.29 million inflow (2021: $1.00 million outflow). During the year, the
Company received US$30.0 million in funding from the first tranche of the secured loan facility with Trafigura Group Pte
LTD (Trafigura). Debt service cash outflows totalled $1.94 million for the year largely comprising interest costs on the
Trafigura debt facility. Other financing outflows included the repayment of lease liabilities and interest (under AASB 16
Leases - right of use assets) totalling $10.06 million.
COVID-19 Business Response
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 COVID-19 border controls in Western Australia during the financial year have impacted labour
accessibility and increased associated costs for the Savannah Nickel Project. Workforce absenteeism continues to be
an operational challenge due to COVID-19. In response to this, the Company modified its short term mine plan activities
and production forecasts. The Savannah Nickel Project’s return to design production levels had not been achieved by
the end of the financial year. Given the potential for ongoing operational impacts from COVID-19, the Company plans to
continue the ramp-up of production volumes to full design over the period to June 2023.
Safety Performance
The Total Recordable Injury Frequency Rate (TRIFR) for the Group at the end of the 30 June 2022 was 4.5 compared
with 16.4 in FY2021. The improvement in the reporting period is due to the continued development of safety systems
and the ongoing focus by management on work practices, behaviours and education within the workforce.
Review of Operations - Savannah Nickel Project
The Savannah Nickel Project located in the East Kimblery of Western Australia restarted operations in July 2021 having
spent the prior year in care and maintenance. The Savannah project has a 11-year mine life with clear potential to further
extend this through ongoing exploration.
Overview
Underground mining commenced in July 2021, ore treatment commenced in October 2021 with processing activities
producing concentrate for the first time in that month. First concentrate shipment was achieved in December 2021.
Key production achievements for the 12 months to 30 June 2022 are summarised in the table below:
FY2022 Key Production Statistics
Mined ore
Milled ore
Concentrate produced (dmt)
Concentrate sales (dmt)
Tonnes
404,155
398,952
42,692
37,545
Grade
(% Ni)
Contained
Nickel (t)
Contained
Copper (t)
Contained
Cobalt (t)
1.05
1.05
7.13
7.23
4,256
4,207
3,044
2,716
2,175
2,183
1,908
1,745
250
264
205
174
The Savannah Nickel Project was accounted for on a commercial production basis in the June 2022 quarter for the first
time since restarting the operation. The transition to commercial production was achieved 1 April 2022 (ASX
announcement 20 July 2022). Total site expenditure for the quarter net of by-product credits was $38.8 million.
Savannah operating C1 expenditure (cash basis net of by-product credits) for the quarter was $24.3 million, which results
in a C1 cash cost per pound of payable nickel of $14.02/lb.
Costs were impacted during the quarter by ongoing tight labour availability, inflationary cost pressures and COVID-19
related costs and workforce absenteeism. Unit costs reflect the impact of these external issues combined with lower than
design production performance resulting from the continuation of ramp up activities in the underground mine.
Expenditure on sustaining capital inclusive of plant & equipment and mine development totalled $6.3 million, which results
in a AISC unit cost per pound of payable nickel of $17.63/lb.
Growth expenditure and on-mine exploration costs were $8.2 million which results in an AIC unit cost per pound of
payable nickel of $22.35/lb.
DIRECTORS’ REPORT
Operational and financial review (continued)
Investing activities
Net cash outflow from investing activities was $58.98 million (2021: $11.50 million inflow) for the financial year. This
included payments for property, plant and equipment of $4.69 million and payments for mine development of $56.23
million. A deferred settlement instalment totalling $1.65 million was received in May 2022 from the sale of the Thunder
Bay Project.
Financing activities
Net cash from financing activities totalled $30.29 million inflow (2021: $1.00 million outflow). During the year, the
Company received US$30.0 million in funding from the first tranche of the secured loan facility with Trafigura Group Pte
LTD (Trafigura). Debt service cash outflows totalled $1.94 million for the year largely comprising interest costs on the
Trafigura debt facility. Other financing outflows included the repayment of lease liabilities and interest (under AASB 16
Leases - right of use assets) totalling $10.06 million.
COVID-19 Business Response
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 COVID-19 border controls in Western Australia during the financial year have impacted labour
accessibility and increased associated costs for the Savannah Nickel Project. Workforce absenteeism continues to be
an operational challenge due to COVID-19. In response to this, the Company modified its short term mine plan activities
and production forecasts. The Savannah Nickel Project’s return to design production levels had not been achieved by
the end of the financial year. Given the potential for ongoing operational impacts from COVID-19, the Company plans to
continue the ramp-up of production volumes to full design over the period to June 2023.
Safety Performance
The Total Recordable Injury Frequency Rate (TRIFR) for the Group at the end of the 30 June 2022 was 4.5 compared
with 16.4 in FY2021. The improvement in the reporting period is due to the continued development of safety systems
and the ongoing focus by management on work practices, behaviours and education within the workforce.
Review of Operations - Savannah Nickel Project
The Savannah Nickel Project located in the East Kimblery of Western Australia restarted operations in July 2021 having
spent the prior year in care and maintenance. The Savannah project has a 11-year mine life with clear potential to further
extend this through ongoing exploration.
Overview
Underground mining commenced in July 2021, ore treatment commenced in October 2021 with processing activities
producing concentrate for the first time in that month. First concentrate shipment was achieved in December 2021.
Key production achievements for the 12 months to 30 June 2022 are summarised in the table below:
FY2022 Key Production Statistics
Mined ore
Milled ore
Concentrate produced (dmt)
Concentrate sales (dmt)
Tonnes
404,155
398,952
42,692
37,545
Grade
(% Ni)
Contained
Nickel (t)
Contained
Copper (t)
Contained
Cobalt (t)
1.05
1.05
7.13
7.23
4,256
4,207
3,044
2,716
2,175
2,183
1,908
1,745
250
264
205
174
The Savannah Nickel Project was accounted for on a commercial production basis in the June 2022 quarter for the first
time since restarting the operation. The transition to commercial production was achieved 1 April 2022 (ASX
announcement 20 July 2022). Total site expenditure for the quarter net of by-product credits was $38.8 million.
Savannah operating C1 expenditure (cash basis net of by-product credits) for the quarter was $24.3 million, which results
in a C1 cash cost per pound of payable nickel of $14.02/lb.
Costs were impacted during the quarter by ongoing tight labour availability, inflationary cost pressures and COVID-19
related costs and workforce absenteeism. Unit costs reflect the impact of these external issues combined with lower than
design production performance resulting from the continuation of ramp up activities in the underground mine.
Expenditure on sustaining capital inclusive of plant & equipment and mine development totalled $6.3 million, which results
in a AISC unit cost per pound of payable nickel of $17.63/lb.
Growth expenditure and on-mine exploration costs were $8.2 million which results in an AIC unit cost per pound of
payable nickel of $22.35/lb.
2022 ANNUAL REPORT 33
DIRECTORS’ REPORT
Operational and financial review (continued)
Underground Mining
Operational and financial review (continued)
Processing (continued)
Underground development and ore production commenced at the Savannah Nickel Project in July 2021 which was ahead
of the August 2021 planned commencement that was announced to the Australian Stock Exchange (ASX) on 6 April
2021. Mining activities are being undertaken by leading underground mining contractor Barminco, a subsidiary of Perenti
Global Limited (ASX:PRN), with which the Company has executed a four-year contract worth approximately $280 million.
By the end of December 2021 the required mining fleet to be supplied by Barminco had been fully mobilised to site.
A total of 404,155 tonnes of ore was mined during the year comprising grades of 1.05% Ni, 0.54% Cu and 0.07% Co.
Ore was sourced from both Savannah remnants ore reserve (54% or 216,109t ore) and Savannah North (46% or
188,046t ore). Total material movement (ore and waste) for the year was 678,155t. Mine production in the July to October
2021 period delivered 102,000t of ore to the ROM stockpile ahead of the commencement of processing. This stockpile
was drawn down during the December quarter, supplemented by fresh ore from underground.
The first Savannah North stope was mined during the December quarter comprising 15,550t ore @ 1.22% Ni, 0.51% Cu
and 0.09% Co.
The following table shows the quarterly physicals achieved since the commencement of mining in July 2021.
Area
Details
Jumbo development
Units
m
Mining
Ore mined
Ni grade
Ni Metal contained
Cu grade
Co grade
dmt
%
dmt
%
%
Sep Qtr
2021
1,121
102,070
1.01
1,035
0.59
0.06
Dec Qtr
2021
1,235
Mar Qtr
2022
1,160
Jun Qtr
2022
1,255
FY2022
4,771
76,416
108,266
117,403
404,155
1.03
788
0.57
0.07
1.10
1,191
0.54
0.05
1.06
1,242
0.47
0.07
1.05
4,256
0.54
0.07
During the March quarter jumbo development in the Savannah decline recommenced for the first time since 2016. This
work will setup platforms to allow grade control drilling to commence below the historical workings of the Savannah
orebody as well as provide the initial development infrastructure to setup future production areas. In addition resource
definition and exploration drilling can be undertaken from improved locations.
Paste filling of the first Savannah North stope was successfully completed in the March 2022 quarter. A second stope in
the Savannah North orebody was successfully filled with paste in the June 2022 quarter. As a result, this progress sets
up for the first time, three production levels in the Savannah North orebody which will become active work areas (ore
producing) in the September 2022 quarter. Since the commissioning of the paste plant a total of 37,490m3 of paste has
been delivered into stopes during the year.
During the six-month period to December 2021 the mining schedule was modified to reflect labour accessibility issues
stemming from border controls in Western Australia. As a result, the focus of the site team shifted to maintaining
development rates whilst lowering the planned ore production from stopes. The impact of this change on processing was
mitigated by the ore stockpiling strategy implemented since the restart of underground mining in July 2021. Since the
reopening of the West Australian border in the March 2022 quarter, workforce levels within the underground mining
department have improved however numbers continue to be impacted by the demands within the industry and
absenteeism from the increase in COVID-19 cases in the WA community. This has impacted mine productivity as the
return to planned production rates from the modified schedule has been slower than expected.
Processing
In August 2021, the Company executed a three-year $34 million contract with leading mineral processing and engineering
specialists Primero Group Pty Ltd (Primero), a subsidiary of NRW Holdings Limited (ASX:NWH). Primero is responsible
for the restart, operation and maintenance of the existing ore processing plant and non-processing infrastructure at the
Savannah Nickel Project. Primero completed the requisite preparatory works on the processing plant throughout
September and October 2021 which resulted in the plant being commissioned three weeks ahead of schedule. The first
nickel-copper-cobalt concentrate was produced in October 2021 (ASX announcement 20 October 2021).
Ore milled during the year totalled 398,952t @ 1.05% Ni, 0.54% Cu and 0.07% Co. Nickel recoveries improved over the
year achieving a December 2021 quarter average of 63.59% increasing to a June 2022 quarter average of 76.12%. The
nickel recovery rate for the year was 72.34%. Recoveries for copper and cobalt increased over the course of the year
and were in line with expectations with the June quarter average achieving 90.50% copper and 81.62% cobalt.
Concentrate produced during the year totalled 42,692dmt grading 7.13% Ni, 4.47% Cu and 0.48% Co. The contained
metal in concentrate totalled 3,044t of nickel, 1,908t of copper and 205t of cobalt. All concentrate produced in the year
was in compliance with the required offtake specifications and limits.
34 PANORAMIC RESOURCES LIMITED
The following table shows the quarterly physicals achieved since the commencement of processing in October 2021.
Area
Details
Units Sept Qtr
2021
Milling
Ore milled
Ni grade
Cu grade
Co grade
Ni recovery
Cu recovery
Co recovery
Concentrate
Ni grade
Concentrate
Production
Ni Metal contained
Cu grade
Cu Metal contained
Co grade
Co Metal contained
dmt
%
%
%
%
%
%
dmt
%
dmt
%
dmt
%
dmt
Dec Qtr
2021
123,682
0.99
0.55
0.06
63.59
82.19
71.40
11,115
7.01
779
5.03
559
0.48
53
Mar Qtr
2022
148,709
June Qtr
FY2022
2022
YTD
126,561
398,952
1.12
0.59
0.07
75.43
91.71
81.17
17,498
7.18
1,256
4.58
802
0.46
81
14,079
42,692
1.05
0.48
0.07
76.12
90.16
82.34
7.16
1,009
3.89
547
0.51
71
1.05
0.54
0.07
72.34
88.53
78.46
7.13
3,044
4.47
1,908
0.48
205
Treatment plant performance progressed in accordance with the production ramp-up plan, with ore grade reconciliation
in line with expectations. Plant availability and utilisation improved over the year to June 2022. A planned eleven day
shutdown was undertaken in April 2022 to complete repairs and programmed maintenance including a major re-line of
the mill the first since the restart. The shutdown was completed on time achieving the completion of the planned work.
Cambridge Gulf Limited (CGL) was awarded the road haulage contract to cart concentrate from the mine at Savannah
to the port of Wyndham where the Company maintains a purpose-built storage shed and loading facility. CGL
commenced operations at the end of October 2021. Concentrate hauled for the year totalled 46,393 wet metric tonnes
(wmt). This was achieved safely and without incident.
Port Operations and Shipments
On 26 December 2021, the Company completed loading the first concentrate ship comprising a total cargo of 10,865 wet
metric tonnes (wmt) (10,029dmt) of nickel-copper-cobalt concentrate. During the year a total of four shipments were
completed which resulted in the sale of concentrate totalling 37,545dmt containing 2,716t of nickel, 1,745t of copper and
174t of cobalt.
invoicing and settlement.
The concentrate produced in June 2022 was sold in July 2022 with the ship leaving Wyndham on 9 July 2022.
As at 30 June 2022, two shipments comprising 18,547dmt had been subject to quotation period (QP) pricing, final
At the end of the year unsold concentrate stocks on hand totalled 3,567wmt at the port and 1,926wmt at the mine site.
The following table shows the quarterly physicals achieved since the commencement of shipping in December 2021.
Area
Details
Units Sept Qtr
Dec Qtr
Concentrate
Shipments
Concentrate
Ni grade
Ni Metal contained
Cu grade
Cu Metal contained
Co grade
Co Metal contained
dmt
%
dmt
%
dmt
%
dmt
2021
2021
10,029
Mar Qtr
2022
18,039
7.21
1,300
4.60
831
0.44
80
June Qtr
FY2022
2022
9,477
YTD
37,545
7.46
712
4.21
408
0.48
46
7.23
2,716
4.64
1,745
0.46
174
7.02
704
5.05
506
0.48
48
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
DIRECTORS’ REPORT
Operational and financial review (continued)
Processing (continued)
The following table shows the quarterly physicals achieved since the commencement of processing in October 2021.
Area
Details
Milling
Concentrate
Production
Ore milled
Ni grade
Cu grade
Co grade
Ni recovery
Cu recovery
Co recovery
Concentrate
Ni grade
Ni Metal contained
Cu grade
Cu Metal contained
Co grade
Co Metal contained
Units Sept Qtr
2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
dmt
%
%
%
%
%
%
dmt
%
dmt
%
dmt
%
dmt
Dec Qtr
2021
123,682
0.99
0.55
0.06
63.59
82.19
71.40
11,115
7.01
779
5.03
559
0.48
53
Mar Qtr
2022
148,709
1.12
0.59
0.07
75.43
91.71
81.17
17,498
7.18
1,256
4.58
802
0.46
81
June Qtr
2022
126,561
1.05
0.48
0.07
76.12
90.16
82.34
14,079
7.16
1,009
3.89
547
0.51
71
FY2022
YTD
398,952
1.05
0.54
0.07
72.34
88.53
78.46
42,692
7.13
3,044
4.47
1,908
0.48
205
Treatment plant performance progressed in accordance with the production ramp-up plan, with ore grade reconciliation
in line with expectations. Plant availability and utilisation improved over the year to June 2022. A planned eleven day
shutdown was undertaken in April 2022 to complete repairs and programmed maintenance including a major re-line of
the mill the first since the restart. The shutdown was completed on time achieving the completion of the planned work.
Cambridge Gulf Limited (CGL) was awarded the road haulage contract to cart concentrate from the mine at Savannah
to the port of Wyndham where the Company maintains a purpose-built storage shed and loading facility. CGL
commenced operations at the end of October 2021. Concentrate hauled for the year totalled 46,393 wet metric tonnes
(wmt). This was achieved safely and without incident.
Port Operations and Shipments
On 26 December 2021, the Company completed loading the first concentrate ship comprising a total cargo of 10,865 wet
metric tonnes (wmt) (10,029dmt) of nickel-copper-cobalt concentrate. During the year a total of four shipments were
completed which resulted in the sale of concentrate totalling 37,545dmt containing 2,716t of nickel, 1,745t of copper and
174t of cobalt.
The concentrate produced in June 2022 was sold in July 2022 with the ship leaving Wyndham on 9 July 2022.
As at 30 June 2022, two shipments comprising 18,547dmt had been subject to quotation period (QP) pricing, final
invoicing and settlement.
At the end of the year unsold concentrate stocks on hand totalled 3,567wmt at the port and 1,926wmt at the mine site.
The following table shows the quarterly physicals achieved since the commencement of shipping in December 2021.
Area
Details
Concentrate
Shipments
Concentrate
Ni grade
Ni Metal contained
Cu grade
Cu Metal contained
Co grade
Co Metal contained
Units Sept Qtr
2021
-
-
-
-
-
-
-
dmt
%
dmt
%
dmt
%
dmt
Dec Qtr
2021
10,029
7.02
704
5.05
506
0.48
48
Mar Qtr
2022
18,039
7.21
1,300
4.60
831
0.44
80
June Qtr
2022
9,477
7.46
712
4.21
408
0.48
46
FY2022
YTD
37,545
7.23
2,716
4.64
1,745
0.46
174
2022 ANNUAL REPORT 35
DIRECTORS’ REPORT
Operational and financial review (continued)
Commercial Production
The Savannah Nickel Project achieved commercial production from 1 April 2022 when the project demonstrated the
required performance at steady or increasing levels on a sustained basis.
In making this assessment the Company considered several factors, these included:
•
•
•
•
•
When the mine is substantially complete i.e. constructed, installed and / or refurbished and ready for its
intended use;
The mine has the ability to sustain ongoing production at a steady or increasing level;
The mine has reached a level of pre-determined production being a substantial percentage of design
capacity;
Mineral recoveries are at or near the expected production level; and
A reasonable period of testing of the mine, plant and equipment has been completed.
Derivatives
The Group actively manages USD nickel price risk for each concentrate shipment by protecting a portion of the nickel
cash flow received from provisional invoicing. The Group’s policy allows nickel derivative protection (forward contracts)
up to 80% of the estimated payable volume in each shipment. This leaves the Company with a modest exposure to
movements in the nickel price. The intent of these derivatives are to manage metal pricing risk and cash flow during the
period from provisional invoice / cash receipt through to final invoice following the QP.
During the year, the Company executed USD forward contracts with Macquarie Bank for 1,686t of nickel metal achieving
an average price of US$25,064/t.
As at 30 June 2022 outstanding derivatives total 900t and represent 50% of the contained metal in shipments that have
not been finalised. The average price achieved for these unsettled derivatives is US$27,942/t.
The following table shows the delivery profile for unsettled derivatives at 30 June 2022.
Nickel Derivatives
Volume
Settlement Price
t
US$/t
Jul-22
410
29,414
Sep-22
370
27,897
Oct-22
120
23,055
The unrealised mark to market gain on these derivatives at 30 June 2022 is A$5.0 million (2021: nil).
Subsequent to 30 June 2022, a further 150t of nickel derivatives has been executed at an average price of US$22,258/t,
these derivatives settle in October 2022.
Savannah Nickel Project – in mine exploration activities
In the September 2021 quarter, the first grade control drill program at Savannah North was undertaken from the 1381
footwall drive to facilitate final stope designs for the 1381 production level. The grade control drill program, which was
completed during August, involved 20 drill holes for a total of 912 drill metres with 597 samples collected and submitted
for assay. The 1381 grade control drill results confirmed the strong and continuous nature of the Savannah North
mineralisation in this area of the mine. The 1381 production level commenced stope production in late October 2021.
In the December 2021 quarter, a grade control drilling program was completed at Savannah North targeting the 1401,
1381 and 1361 levels. These holes were drilled from the footwall drive to facilitate final stope designs for the 1361, 1381
and 1401 production levels. The program involved 67 drill holes for a total of 2,946m drill metres with 1,848 samples
collected and submitted for assay. The 1361, 1381 and 1401 grade control drill results confirmed the strong and
continuous nature of the mineralisation in the upper zone of Savannah North.
In the March 2022 quarter, a broad spaced resource definition drilling program between the 1250 and 1500 RL levels in
the central and western margins of the Savannah North Resource was completed. The objective of the drilling is to
provide the framework for mine development and stopping in the central and western part of the Savannah North
Resource. The area currently hosts a zone of Inferred Resource which is included in the Savannah Mine Plan. A total of
24 drill holes for 6,889 drill metres were completed with 981 samples collected and submitted for assay. Thick zones of
mineralisation were returned from assays which support future mining in this area of the mine. Drilling was also conducted
to infill and test extensions to the eastern zone of the Savannah North resource. The first hole in this program, was
completed in the 1381 Drill Drive East and was designed to test the northerly trending Upper Mineralisation Lens in this
area. A mineralised intersection was achieved at the target depth of 63.2m in addition to an unanticipated 5.7m zone of
semi-massive breccia sulphide mineralisation near the start of hole from 3.3m downhole now known as the Upper Splay.
36 PANORAMIC RESOURCES LIMITED
Savannah Nickel Project – in mine exploration activities (continued)
In the June 2022 quarter grade control drilling within Savannah was restricted to a series of short stab holes in the 1465
development level. Eleven holes were drilled at the western end of the development drive to better define marginal LOM
stopes planned between the 1465 and 1490 Levels. A new resource definition drilling program commenced to test and
infill the poorly drilled area of the Savannah orebody located immediately below historical workings and above the 900
Fault. Results from the initial drill fan of four holes completed above the 900 fault from the 1425 drill cuddy have returned
significantly thicker mineralisation intercepts than predicted by the current Savannah resource model for this area of the
orebody.
Corporate Activities Review
Debt funding
The Company is limited by shares and is domiciled and incorporated in Australia.
Significant events of the consolidated entity during the year ended 30 June 2022 of a corporate nature were as follows:
On 29 September 2021, the Company advised the ASX that it had received US$30.0 million in funding from the first
tranche of the secured loan facility with Trafigura Group Pte LTD (Trafigura). The drawdown followed the completion of
all conditions precedent in early July 2021 (ASX announcement 2 July 2021) under the US$45.0 million secured loan
facility. The loan facility comprises two tranches.
The first tranche is a five-year Prepayment Loan Facility (PLF) totalling US$30.0 million which was fully drawn in late
September. The second tranche is a US$15.0 million Revolving Credit Loan Facility (RCF) which was undrawn and
available to the Company at 30 June 2022.
The PLF has a five-year term through to 31 July 2026. Debt service under this tranche is interest only during the period
to 31 July 2022, thereafter loan repayments commence based on a fixed schedule. These scheduled repayments are
sculpted to align with project cash flows.
The RCF is available for the period through to 24 March 2023 being 18 months from the drawdown of the PLF. The
Company can drawdown the RCF at its election and repay this facility at any time without penalty. On 24 August 2022
the Company announced to the ASX that it had commenced a US$15.0 million drawdown from the RCF. Proceeds from
the drawdown were received on 30 August 2022. See Note 32 Subsequent Events for further detail. The loan facility
incurs interest based on the three-month LIBOR as a base interest rate, plus an interest margin. Once LIBOR settings
cease to be published, the interest payable will be based on an alternative benchmark in accordance with the terms of
There are no conditions subsequent under the loan facility and there is no requirement for mandatory commodity price
the PLF.
hedging.
As a result of the drawdown of the PLF, the five-year nickel-copper-cobalt concentrate offtake agreement for the period
February 2023 to February 2028 with Trafigura became unconditional. This agreement commences on the expiry of the
existing offtake agreement with Jinchuan.
Thunder Bay North PGM Project
On 15 May 2020, the Company completed the sale of all the shares in the Panoramic PGMs (Canada) Limited (PAN
PGMs) to Clean Air Metals (formerly Regency Gold Corp). PAN PGMs owned a 100% interest in the Thunder Bay North
PGM Project situated in Northern Ontario, Canada. The purchase agreement for this transaction included in part, sale
consideration to be received on a deferred basis totalling C$4.5 million. This 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. On 9 May 2022, the
Company received C$1.5 million being the second anniversary instalment. The final deferred consideration payment of
C$1.5 million is due to be received in May 2023.
Regional exploration
In May 2022 a regional surface exploration drilling program commenced following the conclusion of the Kimberley wet
season. The focus of the drill program was to test previously modelled electromagnetic conductors at both the Stoney
Creek and Northern Ultramafic Granulite intrusions. Two surface exploration diamond drill holes, targeting previously
identified electromagnetic (EM) conductors at Stoney Creek and the Northern Ultramafic Granulite were completed during
the June 2022 quarter for a total of 1,260 drill metres. A third hole, designed to further assess the prospectively of the
Northern Ultramafic Granulite was also completed at a depth of 452 metres, bringing the total drilled metres for the
quarter to 1,712 metres with a total of 57 samples. Downhole electromagnetic surveys are planned for the first half of the
2023 financial year.
There were no other significant regional exploration activities during the year.
DIRECTORS’ REPORT
Savannah Nickel Project – in mine exploration activities (continued)
In the June 2022 quarter grade control drilling within Savannah was restricted to a series of short stab holes in the 1465
development level. Eleven holes were drilled at the western end of the development drive to better define marginal LOM
stopes planned between the 1465 and 1490 Levels. A new resource definition drilling program commenced to test and
infill the poorly drilled area of the Savannah orebody located immediately below historical workings and above the 900
Fault. Results from the initial drill fan of four holes completed above the 900 fault from the 1425 drill cuddy have returned
significantly thicker mineralisation intercepts than predicted by the current Savannah resource model for this area of the
orebody.
Corporate Activities Review
The Company is limited by shares and is domiciled and incorporated in Australia.
Significant events of the consolidated entity during the year ended 30 June 2022 of a corporate nature were as follows:
Debt funding
On 29 September 2021, the Company advised the ASX that it had received US$30.0 million in funding from the first
tranche of the secured loan facility with Trafigura Group Pte LTD (Trafigura). The drawdown followed the completion of
all conditions precedent in early July 2021 (ASX announcement 2 July 2021) under the US$45.0 million secured loan
facility. The loan facility comprises two tranches.
The first tranche is a five-year Prepayment Loan Facility (PLF) totalling US$30.0 million which was fully drawn in late
September. The second tranche is a US$15.0 million Revolving Credit Loan Facility (RCF) which was undrawn and
available to the Company at 30 June 2022.
The PLF has a five-year term through to 31 July 2026. Debt service under this tranche is interest only during the period
to 31 July 2022, thereafter loan repayments commence based on a fixed schedule. These scheduled repayments are
sculpted to align with project cash flows.
The RCF is available for the period through to 24 March 2023 being 18 months from the drawdown of the PLF. The
Company can drawdown the RCF at its election and repay this facility at any time without penalty. On 24 August 2022
the Company announced to the ASX that it had commenced a US$15.0 million drawdown from the RCF. Proceeds from
the drawdown were received on 30 August 2022. See Note 32 Subsequent Events for further detail. The loan facility
incurs interest based on the three-month LIBOR as a base interest rate, plus an interest margin. Once LIBOR settings
cease to be published, the interest payable will be based on an alternative benchmark in accordance with the terms of
the PLF.
There are no conditions subsequent under the loan facility and there is no requirement for mandatory commodity price
hedging.
As a result of the drawdown of the PLF, the five-year nickel-copper-cobalt concentrate offtake agreement for the period
February 2023 to February 2028 with Trafigura became unconditional. This agreement commences on the expiry of the
existing offtake agreement with Jinchuan.
Thunder Bay North PGM Project
On 15 May 2020, the Company completed the sale of all the shares in the Panoramic PGMs (Canada) Limited (PAN
PGMs) to Clean Air Metals (formerly Regency Gold Corp). PAN PGMs owned a 100% interest in the Thunder Bay North
PGM Project situated in Northern Ontario, Canada. The purchase agreement for this transaction included in part, sale
consideration to be received on a deferred basis totalling C$4.5 million. This 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. On 9 May 2022, the
Company received C$1.5 million being the second anniversary instalment. The final deferred consideration payment of
C$1.5 million is due to be received in May 2023.
Regional exploration
In May 2022 a regional surface exploration drilling program commenced following the conclusion of the Kimberley wet
season. The focus of the drill program was to test previously modelled electromagnetic conductors at both the Stoney
Creek and Northern Ultramafic Granulite intrusions. Two surface exploration diamond drill holes, targeting previously
identified electromagnetic (EM) conductors at Stoney Creek and the Northern Ultramafic Granulite were completed during
the June 2022 quarter for a total of 1,260 drill metres. A third hole, designed to further assess the prospectively of the
Northern Ultramafic Granulite was also completed at a depth of 452 metres, bringing the total drilled metres for the
quarter to 1,712 metres with a total of 57 samples. Downhole electromagnetic surveys are planned for the first half of the
2023 financial year.
There were no other significant regional exploration activities during the year.
2022 ANNUAL REPORT 37
DIRECTORS’ REPORT
Business and Financial Risks
Operational Risks
Operational disruptions and natural hazards
The Savannah Nickel Project located in East Kimberley of Western Australia is the Group’s sole operating project and
profitable operating segment and exposes the Group to concentration risk.
The Group’s operations are subject to uncertainty with respect to (without limitation): ore tonnes, mined grade, ground
conditions, metallurgical recovery or unanticipated metallurgical issues (which may affect extraction costs), infill resource
drilling, mill performance, failure of tailings facilities, transportation and logistics issues, the level of experience of the
workforce, regulatory changes, safety related incidents and other unforeseen circumstances such as unplanned
mechanical failure of plant or equipment, natural events such as storms, floods or bushfires.
The Group mitigates these risks by employing appropriately qualified technical personnel and experienced managers
that utilise formalised operating practices, processes and procedures. Continual monitoring of the underground
environment is undertaken to identify change that may require action and the Group engages specialist consultants when
technical issues are identified outside available internal skills and experience.
Panoramic’s maintenance and processing teams have developed robust procedures and practices to ensure they are
operating the Savannah processing plant with minimal disruption and at high throughput levels.
Reliance on contractors
As is common in the mining industry, many of the Group’s activities are conducted using contractors. The Group’s
operational and financial results are impacted by the performance of contractors, their efficiency, costs and associated
risks.
The Group engages with reputable contractors who have the technical and financial capability to execute required
contract work and actively manages its contractors, working within relevant agreements. Embedded performance
structures in contracts ensure that the Group appropriately mitigates risks of non-performance by contractors, while
maintaining shareholder value.
COVID-19
The COVID-19 pandemic and its various management and operational challenges have tested Panoramic’s business,
its people and culture. As the COVID-19 pandemic continues to evolve, there are emerging risks and uncertainty that
could adversely impact our business. These risks include, but are not limited to, interruptions to supply chains, travel
restrictions and border closures, adverse impacts to our people’s health and wellbeing, workforce availability and material
delays to project timelines.
The Group will continue to monitor the effects of the pandemic and develop appropriate protocols, in line with the formal
guidance of health authorities, to limit the risk to our people and impacts on operations. The Savannah Nickel Project,
has been able to maintain critical consumables and spares, while preserving our supply chains, sales routes and
customer contracts.
Further disclosures around the potential impact of COVID-19 are contained in the Review of Operations and in the notes
to the financial statements.
Environmental regulation and performance
The Group is committed to minimising the impact of its operations on the environment, with an appropriate focus placed
on ongoing monitoring of environmental matters and compliance with environmental regulations. The Group holds
environmental licences and is subject to environmental regulation in respect of its activities in Australia. The Board is
responsible for monitoring environmental exposures and compliance with these regulations and is committed to achieving
a high standard of environmental performance. The Board believes that the Group has adequate systems in place for
the management of its environmental requirements. Compliance with the environmental regulations is managed through
the integrated Environmental Management System, supported by policies and operational management plans, standard
work practices and guidelines. During the financial year, Panoramic has submitted numerous environmental reports and
statements to regulators detailing Panoramic’s environmental performance and level of compliance with relevant
instruments.
Panoramic complies with the National Greenhouse and Energy Reporting Act 2007 (Cth), under which it is required to
report energy consumption and greenhouse gas emissions for its Australian facilities for the year ended 30 June 2022
and future periods. Panoramic is committed to proactively managing energy use and reducing greenhouse gas emissions
wherever practical.
Panoramic responsibly and safely manages tailings and has an established management system to assess, monitor and
mitigate risks accordingly. Panoramic manages one active tailings storage facility at the Savannah Nickel Project.
There have been no significant known breaches of the Group’s licence conditions or any environmental regulations during
the financial year.
38 PANORAMIC RESOURCES LIMITED
Strategic Risks
Exploration
Panoramic’s ability to achieve its strategic initiatives are impacted (in part) by the Group’s ability to discover new mineral
prospects. Exploration activities are speculative in nature and often require substantial expenditure on exploration
surveys, drilling and sampling as a basis on which to establish the presence, extent and estimated grade (metal content)
of mineralised material.
Once mineralisation is discovered, it may take several years to determine whether adequate Ore Reserves and / or
Mineral Resources exist to support a development decision and to obtain necessary ore body knowledge to assess the
technical and economic viability of the mining project. During that time the economic viability of the project may change
due to fluctuations in factors that affect both revenue and costs, including metal prices, foreign exchange rates, the
required return on capital, regulatory requirements, tax regimes and future cost of development and mining operations.
These factors are uncertain and could have an impact on revenue, cash and other operating results, as well as the
process used to estimate Mineral Resources and Ore Reserves.
Mineral Resources, Ore Reserve and Mine Life
The estimation of the Group’s Mineral Resources and Ore Reserves involve subjective judgements regarding a number
of factors (but not limited to) analysis of drilling results, associated geological and geotechnical interpretations,
metallurgical performance evaluation, mining assessment, operating cost and business assumptions as well as a reliance
on commodity price assumptions. As a result, the assessment of Mineral Resources and Ore Reserves involve areas of
significant estimation and judgement. The ultimate level of recovery of minerals and commercial viability of deposits
cannot be guaranteed.
The mine life of the Group’s operation is based on the Mineral Resources and Ore Reserves estimate which heavily
dictates the financial and operational performance of the Group.
As at the date of this report, the Savannah Nickel Project’s mine life based on the most recent Ore Reserve and mine
inventory extends to June 2033.
The Group’s Ore Reserves and Mineral Resources estimates are reported in accordance with the 2012 Joint Ore Reserve
Committee (JORC) Code and estimated by Competent Persons as defined by the JORC Code. The Group employs
Competent Persons to complete Group estimates and in certain circumstances, independent Competent Persons are
also used to compile or verify estimates for the Group.
Fluctuations in commodity prices and foreign exchange currency
The Group’s revenues and cash flows are largely derived from the sale of nickel, copper and cobalt. For the 2022 financial
year, Savannah derived approximately 79.6% of its revenue from the sale of nickel, copper and cobalt contained within
concentrate. The financial performance of Panoramic is exposed to fluctuations in the market price for these commodities.
Fluctuations in metal prices can occur due to numerous factors beyond Panoramic’s control, including macroeconomic
and geopolitical factors (such as financial and banking stability, global and regional political events and policies, changes
in inflationary expectations, interest rates and global economic growth expectations), speculative positions taken by
investors or traders and changes in supply and demand for nickel, copper and cobalt. Material and / or prolonged declines
in the market price of these commodities could have a material adverse effect on the Group’s business, results of
operations and financial position.
The Group is an Australian business that reports in Australian dollars. However, Panoramic’s revenue is derived from
the sale of commodities that are priced in US dollars, though the majority of costs, as they relate to the Savannah Nickel
Project, are primarily denominated in Australian dollars. The impact of exposure to movements in foreign exchange rates
(particularly, AUD:USD) cannot be predicted reliably.
The Group has an active derivatives policy to mitigate USD commodity price risks with respect to sold nickel in
concentrate. The application of the derivative policy has been in the form of quotational period (QP) derivatives via USD
nickel swaps to fix the price of sales at the time of shipment, therefore reducing the short term exposure to the market
price of nickel for completed or imminent shipments. Details of the derivatives executed during the 2022 financial year
are included in the Review of Operations and Note 16.
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
Risk Management
Corporate Governance Statement.
Significant changes in the state of affairs
In the opinion of the Directors there were no other significant changes in the state of affairs of the Group that occurred
during the financial year, other than those described in this report under ‘operational and financial review’.
DIRECTORS’ REPORT
Strategic Risks
Exploration
Panoramic’s ability to achieve its strategic initiatives are impacted (in part) by the Group’s ability to discover new mineral
prospects. Exploration activities are speculative in nature and often require substantial expenditure on exploration
surveys, drilling and sampling as a basis on which to establish the presence, extent and estimated grade (metal content)
of mineralised material.
Once mineralisation is discovered, it may take several years to determine whether adequate Ore Reserves and / or
Mineral Resources exist to support a development decision and to obtain necessary ore body knowledge to assess the
technical and economic viability of the mining project. During that time the economic viability of the project may change
due to fluctuations in factors that affect both revenue and costs, including metal prices, foreign exchange rates, the
required return on capital, regulatory requirements, tax regimes and future cost of development and mining operations.
These factors are uncertain and could have an impact on revenue, cash and other operating results, as well as the
process used to estimate Mineral Resources and Ore Reserves.
Mineral Resources, Ore Reserve and Mine Life
The estimation of the Group’s Mineral Resources and Ore Reserves involve subjective judgements regarding a number
of factors (but not limited to) analysis of drilling results, associated geological and geotechnical interpretations,
metallurgical performance evaluation, mining assessment, operating cost and business assumptions as well as a reliance
on commodity price assumptions. As a result, the assessment of Mineral Resources and Ore Reserves involve areas of
significant estimation and judgement. The ultimate level of recovery of minerals and commercial viability of deposits
cannot be guaranteed.
The mine life of the Group’s operation is based on the Mineral Resources and Ore Reserves estimate which heavily
dictates the financial and operational performance of the Group.
As at the date of this report, the Savannah Nickel Project’s mine life based on the most recent Ore Reserve and mine
inventory extends to June 2033.
The Group’s Ore Reserves and Mineral Resources estimates are reported in accordance with the 2012 Joint Ore Reserve
Committee (JORC) Code and estimated by Competent Persons as defined by the JORC Code. The Group employs
Competent Persons to complete Group estimates and in certain circumstances, independent Competent Persons are
also used to compile or verify estimates for the Group.
Fluctuations in commodity prices and foreign exchange currency
The Group’s revenues and cash flows are largely derived from the sale of nickel, copper and cobalt. For the 2022 financial
year, Savannah derived approximately 79.6% of its revenue from the sale of nickel, copper and cobalt contained within
concentrate. The financial performance of Panoramic is exposed to fluctuations in the market price for these commodities.
Fluctuations in metal prices can occur due to numerous factors beyond Panoramic’s control, including macroeconomic
and geopolitical factors (such as financial and banking stability, global and regional political events and policies, changes
in inflationary expectations, interest rates and global economic growth expectations), speculative positions taken by
investors or traders and changes in supply and demand for nickel, copper and cobalt. Material and / or prolonged declines
in the market price of these commodities could have a material adverse effect on the Group’s business, results of
operations and financial position.
The Group is an Australian business that reports in Australian dollars. However, Panoramic’s revenue is derived from
the sale of commodities that are priced in US dollars, though the majority of costs, as they relate to the Savannah Nickel
Project, are primarily denominated in Australian dollars. The impact of exposure to movements in foreign exchange rates
(particularly, AUD:USD) cannot be predicted reliably.
The Group has an active derivatives policy to mitigate USD commodity price risks with respect to sold nickel in
concentrate. The application of the derivative policy has been in the form of quotational period (QP) derivatives via USD
nickel swaps to fix the price of sales at the time of shipment, therefore reducing the short term exposure to the market
price of nickel for completed or imminent shipments. Details of the derivatives executed during the 2022 financial year
are included in the Review of Operations and Note 16.
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.
Significant changes in the state of affairs
In the opinion of the Directors there were no other significant changes in the state of affairs of the Group that occurred
during the financial year, other than those described in this report under ‘operational and financial review’.
2022 ANNUAL REPORT 39
DIRECTORS’ REPORT
Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, 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 2022. This Independence Declaration is attached to the independent auditor’s report and forms part of the
Directors’ Report.
Non-audit services
There were no non-audit services provided to the Group by the Company’s auditor, Ernst & Young during the year.
Significant events after the balance date
Auditor's Independence Declaration
On the 24 August 2022 the Company announced to the ASX it had commenced a US$15.0 million drawdown from the
Revolving Credit Facility (RCF) held with Trafigura Pte Ltd. Proceeds from the drawdown were received on the 30 August
2022. Following the drawdown, the RCF will be fully drawn. Funding under this revolving facility is held for a period of
three months where it is either repaid (fully or partially) or rolled over on a cashless basis for a further three month period.
The Company continues to experience material changes in the timing of shipments and therefore concentrate revenue
as a result of the ongoing tightness in shipping (sea freight) markets. The availability and arrival of ships when required
continues to provide challenges in managing short-term working capital funding. The likely late arrival of the planned
shipment in August 2022 has required the Company to draw on the RCF in order to manage changes in the short-term
working capital funding position of the business.
Likely developments and expected results
The Group will continue to monitor developments and impacts from the COVID-19 pandemic to our operations and
business practices. Further comments on likely developments and expected results of operations of the Group are
included in this financial report under ‘operational and financial review’.
Indemnification and insurance of Directors, Officers and Auditors
Indemnification
The Company indemnifies each of its Directors and Officers, including the Company Secretary, to the maximum extent
permitted by the Corporations Act from liability to third parties and in defending legal and administrative proceedings and
applications for such proceedings, except where the liability arises out of conduct involving lack of good faith.
The Company must use its best endeavours to insure a Director or Officer against any liability, which does not arise out
of a conduct constituting a wilful breach of duty or a contravention of the Corporations Act 2001. The Company must also
use its best endeavour to insure a Director or Officer against liability for costs and expenses incurred in defending
proceedings whether civil or criminal. The Directors of the Company are not aware of any such proceedings or claim
brought against Panoramic Resources Ltd as at the date of this report.
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
However, the indemnity does not apply to any loss in respect of any matters which are finally determined to have resulted
from Ernst & Young’s negligent, wrongful or wilful acts or omissions. No payment has been made to indemnify Ernst &
Young during or since the end of financial year.
Insurance premiums
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.
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 2022
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
The amounts contained in this financial report have been rounded to the nearest $1,000 (where rounding is applicable)
where noted ($000) under the option available to the Company under ASIC Corporations (Rounding in Financial /
Directors’ Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.
40 PANORAMIC RESOURCES LIMITED
DIRECTORS’ REPORT
Auditor's Independence Declaration
Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, 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 2022. This Independence Declaration is attached to the independent auditor’s report and forms part of the
Directors’ Report.
Non-audit services
There were no non-audit services provided to the Group by the Company’s auditor, Ernst & Young during the year.
2022 ANNUAL REPORT 41
DIRECTORS’ REPORT
Remuneration report (audited)
1.
Remuneration report overview
The Directors of Panoramic Resources Ltd present the Remuneration Report (the Report) for the Company and its
controlled entities for the year ended 30 June 2022. This Report for the Group forms part of the Directors’ Report and
has been audited in accordance with section 300A of the Corporations Act 2001.
The Report details the remuneration arrangements for Panoramic’s key management personnel (KMP) and include:
•
•
the Company’s Non-Executive Directors (NEDs); and
the Group’s Executive Directors and Senior Executives (collectively the Executives).
KMP are those persons who, directly or indirectly, have authority and responsibility for planning, directing and controlling
the major activities of the Company and Group.
The table below outlines the KMP of the Group and their movements during FY2022.
Name
Position
Non-Executive Directors
Nicholas Cernotta
Independent Non-Executive Chair
Peter Sullivan
Non-Executive Director
Rebecca Hayward
Independent Non-Executive Director
Gillian Swaby
Independent Non-Executive Director
Executive Director
Term as KMP
Full financial year
Full financial year
Full financial year
Full financial year
Victor Rajasooriar
Managing Director and Chief Executive Officer
Full financial year
Senior Executives
Grant Dyker
Chief Financial Officer
Full financial year
reward executives for Company and individual performance against pre-determined targets;
2.
2.1
How remuneration is governed
Remuneration Committee
The Remuneration Committee (Committee) consists of at least three members and operates under a Board-approved
Charter. Non-committee members, including the MD, only attend meetings of the Committee at the invitation of the
Committee Chair as appropriate, and do not vote on matters before the Committee.
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.
2.2
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.
In fulfilling its role, the Committee is specifically concerned with ensuring that Panoramic’s remuneration framework will:
•
•
•
•
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
More details on the Company’s governance framework including Board committee structures and related committee
charters are available on the Corporate Governance page of the Company’s website at www.panoramicresources.com.
2.3
Remuneration structure
In accordance with best practice corporate governance, the remuneration structure of the NEDs, and senior management
is separate and distinct.
2.4
Remuneration advisors
The Committee has access to adequate resources to perform its duties and responsibilities, including the authority to
seek and consider advice from independent remuneration professionals to ensure that they have all of the relevant
information at their disposal to determine KMP remuneration.
The Committee has established protocols to ensure that if remuneration recommendations, as defined by the
Corporations Act 2001, are made by independent remuneration advisors they are free from bias and undue influence by
members of the KMP to whom the recommendations relate. The Committee directly engages the remuneration
consultants (without management involvement) and receives all reports directly from the remuneration consultants.
42 PANORAMIC RESOURCES LIMITED
2.
2.4
How remuneration is governed (continued)
Remuneration advisors (continued)
The Remuneration Committee engaged Guerdon Associates in July 2021 to provide remuneration advice on aspects of
the executive remuneration framework and the design of the FY2023 LTI scheme for the Group’s Executive. For this
remuneration advice, Guerdon Associates were paid a fee of $19,435 (ex GST). The Remuneration Committee had
access to remuneration benchmarking and market data when making its remuneration decisions.
Following receipt of the advice and recommendations from the advisor 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 30 June 2022 and 30 June 2023 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 Executive.
2.5
Securities Trading Policy
Panoramic Securities Trading Policy provides clear guidance on how Company securities may be dealt with and applies
to the NEDs, Executives and all other personnel of the Company including employees and contractors.
The Securities Trading Policy details acceptable and unacceptable periods for trading in Company securities including
the consequences of breaching the policy. The policy also sets out a specific governance approach for how Directors
and Executives can deal in Company securities.
The policy can be found on the Corporate Governance page of the Company’s website at www.panoramicresources.com.
Executive remuneration
3.
3.1
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:
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.
3.2
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 50 to 51.
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 52 details the variable
component (%) of the Group’s KMP.
3.3
Total Fixed Remuneration (TFR)
TFR acts as a base-level reward which is both appropriate to the position and is competitive in the market and includes
cash, compulsory superannuation and any salary-sacrificed items (including FBT if applicable). TFR levels for the
Executives are reviewed annually by the Board using market benchmarking data provided by independent remuneration
advisors. The Board considers variations to the benchmark based on:
the size and complexity of the role, including role accountabilities;
the criticality of the role to successful execution of the business strategy;
skills and experience of the individual;
period of service; and
• market pay levels for comparable roles.
•
•
•
•
•
•
•
•
•
•
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.
The fixed remuneration component of the Group’s KMP is detailed in Table 1 on page 52.
DIRECTORS’ REPORT
2.
2.4
How remuneration is governed (continued)
Remuneration advisors (continued)
The Remuneration Committee engaged Guerdon Associates in July 2021 to provide remuneration advice on aspects of
the executive remuneration framework and the design of the FY2023 LTI scheme for the Group’s Executive. For this
remuneration advice, Guerdon Associates were paid a fee of $19,435 (ex GST). The Remuneration Committee had
access to remuneration benchmarking and market data when making its remuneration decisions.
Following receipt of the advice and recommendations from the advisor 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 30 June 2022 and 30 June 2023 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 Executive.
2.5
Securities Trading Policy
Panoramic Securities Trading Policy provides clear guidance on how Company securities may be dealt with and applies
to the NEDs, Executives and all other personnel of the Company including employees and contractors.
The Securities Trading Policy details acceptable and unacceptable periods for trading in Company securities including
the consequences of breaching the policy. The policy also sets out a specific governance approach for how Directors
and Executives can deal in Company securities.
The policy can be found on the Corporate Governance page of the Company’s website at www.panoramicresources.com.
3.
3.1
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.
3.2
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 50 to 51.
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 52 details the variable
component (%) of the Group’s KMP.
3.3
Total Fixed Remuneration (TFR)
TFR acts as a base-level reward which is both appropriate to the position and is competitive in the market and includes
cash, compulsory superannuation and any salary-sacrificed items (including FBT if applicable). TFR levels for the
Executives are reviewed annually by the Board using market benchmarking data provided by independent remuneration
advisors. The Board considers variations to the benchmark based on:
the size and complexity of the role, including role accountabilities;
the criticality of the role to successful execution of the business strategy;
skills and experience of the individual;
period of service; and
•
•
•
•
• market pay levels for comparable roles.
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.
The fixed remuneration component of the Group’s KMP is detailed in Table 1 on page 52.
2022 ANNUAL REPORT 43
DIRECTORS’ REPORT
3.
3.4
Executive remuneration (continued)
Short Term Incentive (STI) Plan: Key questions and answers on how it works
Short Term Incentive (STI) Plan: Key questions and answers on how it works (continued)
Why does the Board
consider a STI Plan
is appropriate?
How is it paid?
What
the
is
performance period
and how much can
the Executive earn?
How is performance
assessed and what
are the performance
measures?
The purpose 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).
STI awards for Executives are paid in cash calculated on a certain percentage, depending on
the participant’s level of seniority, of their Total Fixed Remuneration (TFR) according to the
extent of achievement of the applicable performance measures.
STI awards are assessed over a 12-month performance period aligned with the Company’s
financial year.
The target STI opportunity for KMP is 60% of total fixed remuneration for the Managing Director
and 50% for other KMP. STI award potentials are pro-rated for the period of service and the
actual outcome depends on the extent of achievement of the applicable performance measure.
Performance measures include Group and individual KPIs. KPIs include financial and non-
financial measures that align with the Group’s strategic plan and core values.
The Board with the assistance of the Remuneration Committee sets and assesses the KPIs
applicable for the Group and KMP. The outcome of the assessment determines the STI amount
payable for the KMP and the Group. No short-term incentives are payable where it is considered
that the actual performance has fallen below the minimum requirement.
The Group-wide KPI areas for FY2022, their weightings and link to strategy are listed below.
Group KPI
Area
Safety
20%
Weighted
opportunity
(% of STI) KPI target, rationale why chosen and link to strategy
Environment
10%
Metal
Produced
30%
Cost of
Production
30%
Personal
Performance
10%
The Safety Performance KPI is based on the total recordable injury
(TRI’s) improvement against the previous year's safety performance.
100% of the STI weighting is payable if TRI’s for the year is 7 or
below, 75% is payable if TRI’s for the year is 8, 50% is payable if
TRI’s for the year is 9, and 0% is payable if TRI’s for the year is 10
or above. The percentage of the STI payable is not linear and
absolute. This KPI encourages behaviours and actions that keep our
people safe.
Environment performance KPI
is based on no significant
environmental incidents that lead to prosecution and / or the issue of
a fine. The percentage of the STI payable is not linear and absolute.
This KPI encourages responsible behaviour that underpins the
Group’s core values and sustainability strategy.
The Metal Produced performance KPI is based on the delivery of
Board set payable nickel produced targets for 100% payability of the
STI weighting. If the target is not reached then 50% payability will be
applied if more than 90% of the target is met (for payable nickel
produced). The percentage of the STI payable increases linearly
between bands. This KPI is aligned with execution and delivery of
production performance being a strategic imperative in facilitating the
achievement of medium and longer term shareholder value.
is based on
The Cost of Production performance KPI
the
achievement of a Board set maximum cost target per tonne of ore
milled for 100% payability of the STI weighting. If the target is not
reached then 50% payability will be applied if costs are less than
105% of the target. The percentage of the STI payable increases
linearly between bands. This KPI is aligned with cost control and
financial performance being a strategic imperative in facilitating the
achievement of medium and longer term shareholder value.
Personal performance KPI is based on individual targets set by
the Board for the KMP, with immediate managers setting targets for
all other positions within the workforce. The individual KPIs are
specific to the key tasks, functions and targets appropriate to assess
the performance of the individual in the areas they control and
influence. While assessing individual performance, individual KPIs
remain tied to Group strategy and objectives that drive the success
of the Group.
This KPI recognises individual performance where behaviours and
outcomes are aligned with the Group’s plans, strategy and core
values.
100%
Refer to section below for further detail on the KMPs’ performance and assessment against
KPIs for FY2022.
44 PANORAMIC RESOURCES LIMITED
Executive remuneration (continued)
3.
3.4
Are there STI
Yes. Each KPI is assessed individually against the target that determines the performance
payment hurdles?
measure for that KPI.
The outcome from the assessment of targets for one KPI does not affect the outcome for the
other KPIs. As a result, the value of the STI payment is the cumulative value (weighted % basis)
from of each individual KPI where targets have been met.
Where a KPI target has not been met, no STI payment (weighted % basis) arises for that KPI
measure.
The achievement of KPI performance hurdles are assessed by the Remuneration Committee
with recommendations made to the Board. The Board (excluding the Managing Director) has
sole determination of the achievement of KPI performance hurdles.
What happens to
STI awards when
an Executive
ceases
employment?
If the Executive’s employment is terminated for cause, no STI will be paid.
If the Executive resigns before the end of the performance period, then all entitlements under
the STI Plan will be forfeited, unless the Board determines otherwise or in the case of a special
circumstance. Where a special circumstance is determined by the Board, then entitlements will
be determined taking into account both the portion of the performance period completed and
Company performance achieved as at the date of cessation. The Board may also at its discretion
make a payment of an STI over any period of termination required to be provided by the
Can the Board
amend or vary the
terms of the STI
Plan?
The Board has the power to terminate, suspend or amend the STI Plan, the terms of participation
for individual participants or to increase or decrease the STI Plan performance hurdles or STI
Plan outcomes should factors determined by the Board in its absolute discretion warrant such a
change. Any determinations made by the Board are binding on participants, including the
payment of STI’s or achievement of performance hurdles. Any dispute or difference of any
nature relating to the STI Plan will be referred to the Board and its decision will be final and
Company.
binding.
Limitation on
payments?
The Company is not required to make any STI payment under the STI Plan to a participant which
would cause the Company to infringe the Australian Securities Exchange Listing Rules, the
Corporations Act 2001 (Cth) or any other applicable law (Applicable Laws) and any payments
or benefits to be provided to a participant shall be reduced to a level (as determined by the
Company) that does not infringe such Applicable Laws.
Short term incentive (STI) awards
Based on an assessment undertaken by the Remuneration Committee, STI awards for FY2022 to KMPs were as follows:
Name
Position
Victor Rajasooriar
Managing Director & CEO
Grant Dyker
Chief Financial Officer
Maximum STI
Achieved
opportunity
60% of TFR
50% of TFR
STI
38%
38%
STI
forfeited
62%
62%
Awarded
STI
$136,800
$71,060
The achieved STI was in respect of the full year ended 30 June 2022 where the following KPI metrics were met.
KPI Area
Opportunity
KPI target
Weighted
(%of STI)
Actual KPI
Performance
Achieved
STI %
Safety
20%
for the year is 8, 50% is payable if TRI for the
5 TRI
KPI met – 20% STI
value
100% of the STI weighting is payable if TRI for
the year is 7 or below, 75% is payable if TRI
year is 9, and 0% is payable if TRI for the year
is 10 or above.
Environment
10%
No significant environmental incidents that
No incidents or
KPI met – 10% STI
lead to prosecution and / or the issue of a fine.
fines.
value
Metal Produced
30%
If the target is not reached then 50% payability
Delivery of Board-set payable nickel produced
target for 100% payability of the STI weighting.
Board set target for
will be applied if more than 90% of the target
is met.
Board set maximum cost target per tonne of
ore milled for 100% payability of the STI
Board set
payable nickel
KPI not met – 0% STI
produced not
achieved.
value
Cost of Production
30%
weighting. If the target is not reached then 50%
payability will be applied if costs are less than
105% of the target.
maximum cost
KPI not met - 0% STI
target - $ / tonnes
milled not achieved.
value
Personal Performance
10%
Various individual targets
Various achieved
V Rajasooriar – 8%
STI value
G Dyker – 8% STI
value
DIRECTORS’ REPORT
3.
3.4
Executive remuneration (continued)
Short Term Incentive (STI) Plan: Key questions and answers on how it works (continued)
Are there STI
payment hurdles?
What happens to
STI awards when
an Executive
ceases
employment?
Can the Board
amend or vary the
terms of the STI
Plan?
Limitation on
payments?
Yes. Each KPI is assessed individually against the target that determines the performance
measure for that KPI.
The outcome from the assessment of targets for one KPI does not affect the outcome for the
other KPIs. As a result, the value of the STI payment is the cumulative value (weighted % basis)
from of each individual KPI where targets have been met.
Where a KPI target has not been met, no STI payment (weighted % basis) arises for that KPI
measure.
The achievement of KPI performance hurdles are assessed by the Remuneration Committee
with recommendations made to the Board. The Board (excluding the Managing Director) has
sole determination of the achievement of KPI performance hurdles.
If the Executive’s employment is terminated for cause, no STI will be paid.
If the Executive resigns before the end of the performance period, then all entitlements under
the STI Plan will be forfeited, unless the Board determines otherwise or in the case of a special
circumstance. Where a special circumstance is determined by the Board, then entitlements will
be determined taking into account both the portion of the performance period completed and
Company performance achieved as at the date of cessation. The Board may also at its discretion
make a payment of an STI over any period of termination required to be provided by the
Company.
The Board has the power to terminate, suspend or amend the STI Plan, the terms of participation
for individual participants or to increase or decrease the STI Plan performance hurdles or STI
Plan outcomes should factors determined by the Board in its absolute discretion warrant such a
change. Any determinations made by the Board are binding on participants, including the
payment of STI’s or achievement of performance hurdles. Any dispute or difference of any
nature relating to the STI Plan will be referred to the Board and its decision will be final and
binding.
The Company is not required to make any STI payment under the STI Plan to a participant which
would cause the Company to infringe the Australian Securities Exchange Listing Rules, the
Corporations Act 2001 (Cth) or any other applicable law (Applicable Laws) and any payments
or benefits to be provided to a participant shall be reduced to a level (as determined by the
Company) that does not infringe such Applicable Laws.
Short term incentive (STI) awards
Based on an assessment undertaken by the Remuneration Committee, STI awards for FY2022 to KMPs were as follows:
Name
Position
Victor Rajasooriar
Grant Dyker
Managing Director & CEO
Chief Financial Officer
Maximum STI
opportunity
60% of TFR
50% of TFR
Achieved
STI
38%
38%
STI
forfeited
62%
62%
Awarded
STI
$136,800
$71,060
The achieved STI was in respect of the full year ended 30 June 2022 where the following KPI metrics were met.
KPI Area
Weighted
Opportunity
(%of STI)
KPI target
Safety
20%
100% of the STI weighting is payable if TRI for
the year is 7 or below, 75% is payable if TRI
for the year is 8, 50% is payable if TRI for the
year is 9, and 0% is payable if TRI for the year
is 10 or above.
Actual KPI
Performance
Achieved
STI %
5 TRI
KPI met – 20% STI
value
Environment
10%
No significant environmental incidents that
lead to prosecution and / or the issue of a fine.
No incidents or
fines.
KPI met – 10% STI
value
Metal Produced
30%
Cost of Production
30%
Delivery of Board-set payable nickel produced
target for 100% payability of the STI weighting.
If the target is not reached then 50% payability
will be applied if more than 90% of the target
is met.
Board set maximum cost target per tonne of
ore milled for 100% payability of the STI
weighting. If the target is not reached then 50%
payability will be applied if costs are less than
105% of the target.
Board set target for
payable nickel
produced not
achieved.
Board set
maximum cost
target - $ / tonnes
milled not achieved.
Personal Performance
10%
Various individual targets
Various achieved
KPI not met – 0% STI
value
KPI not met - 0% STI
value
V Rajasooriar – 8%
STI value
G Dyker – 8% STI
value
2022 ANNUAL REPORT 45
DIRECTORS’ REPORT
3.
3.4
Executive remuneration (continued)
Executive remuneration (continued)
Short Term Incentive (STI) Plan: Key questions and answers on how it works (continued)
Long Term Incentive (LTI) Plan: Key questions and answers on how it works (continued)
The STI outcome is generally determined after the completion of the performance period (a financial year).
The above amounts were expensed in the FY2022 and will be paid in the September 2022 quarter.
A STI was paid to KMP in the prior FY2021 totalling $454,388.
The Board retains the discretion to waive or amend any vesting or performance criteria applying to the scheme, or to
make discretionary payments outside of the scheme in limited circumstances where it is considered warranted.
Overview of Company performance
The table below sets out information about the Company’s earnings and movements in shareholders’ wealth for the past
five years up to and including the current financial year. Comparative information has not been restated for the impact of
AASB 9 Financial Instruments, AASB 15 Revenue from contracts with customers adopted in FY19 and AASB 16 Leases
adopted in FY20.
Year Ended 30 June
Earnings / (Loss) per share (cents)
Dividends per share (cents)
Closing share price ($ per share)
Return on equity (%)
COVID-19 Business response
2022
0.3
-
0.20
-
2021
-
-
0.15
-
2020
(8.8)
-
0.081
(31.2)
2019
1.4
-
0.295
4.6
2018
(9.1)
-
0.620
(26.8)
The global COVID-19 pandemic and its various management and operational challenges have tested the Company’s
business, its people and culture, and it is pleasing to note that the Company’s performance during FY2022 has remained
strong and resilient throughout this challenging period. The Group has dealt professionally with the direct and indirect
risks, impacts and challenges that the pandemic has brought.
The Board has recognised and understands the importance of applying discretion where appropriate in these times,
particularly to the outcomes of incentive awards, whilst ensuring that performance is acknowledged and the Company is
able to retain key employees. Upon review, taking into consideration all of the factors as detailed above, the Board
determined that no discretion needed to be applied to any form of remuneration for FY2022 as a result of COVID-19.
3.5
Long Term Incentive (LTI) Plan: Key questions and answers on how it works
The Company’s LTI Plan was revised by the Remuneration Committee during the year and is named the “Equity Incentive
Plan” (“2021 Plan”). The 2021 Plan was subsequently approved for a three-year period by the Company’s shareholders
at the 2021 Annual General Meeting on 20 October 2021. This plan replaces the “Incentive Options & Performance
Rights Plan” (“2018 ES Plan”) approved by shareholders at the 2018 Annual General Meeting on 21 November 2018.
Why does the Board
consider the LTI Plan
is appropriate?
The Board believes that the LTI Plan can:
• Reward and incentivise executives with the creation of long-term sustainable shareholder
value;
To provide greater incentive to the participant, to focus on the Company’s longer term goals;
•
• Be consistent with remuneration governance guidelines;
• Be consistent and competitive with current practices of comparable companies; and
• Create an immediate ownership mindset among the Executive participants, linking a
substantial portion of the potential reward to Panoramic’s share price and returns to
shareholders.
Who is eligible?
Executives and selected senior managers who are responsible for setting the strategic direction for
projects and functions of the Group.
How is the award
delivered?
The LTI award for FY2022 is in the form of performance rights and is a right to be issued or
transferred ordinary shares at a future point in time subject to the satisfaction of a time-based
service criteria and pre-determined vesting conditions.
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 2021 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 2021 Plan to the non-executive directors. There are
no such grants proposed to non-executive directors.
No exercise price is payable and eligibility to a grant of performance rights under the 2021 Plan
is at the Board’s discretion. If approved by the Board, a participant under the 2021 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 performance
rights carry neither rights to dividends nor voting.
46 PANORAMIC RESOURCES LIMITED
3.
3.5
How often are
awards made and
was an award
made in FY2022?
It is the current intention of the Board to have an annual LTI grant cycle.
The FY2022 LTI allocation represents a three-year LTI opportunity to tie Executives’ awards to
the strategic performance cycle of the Group whilst creating a strong retention mechanism.
The performance period for the FY2022 LTI award is 1 July 2021 to 30 June 2024. The grant of
FY2022 LTI award - performance rights, to the KMP and senior managers (other than the
Managing Director) occurred on 2 September 2021. The Managing Director was granted
FY2022 LTI award - Performance Rights, following shareholder approval at the Company’s 2021
AGM on 20 October 2021.
What is the
quantum of the
award and what
allocation
methodology is
used?
The LTI dollar value that each Executive 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.
The maximum LTI opportunity for Executives is 100% of TFR.
What is the expiry
Performance Rights will expire no more than two (2) years after the acquisition date.
date for the
Performance
Rights?
What are the
performance
conditions?
Service condition - The service condition is met if employment / engagement with Panoramic
is continuous for the period commencing on or around the grant date until the date the
performance rights vest. The service condition for performance rights on issue at 30 June 2022
is three (3) years.
Performance conditions – The performance conditions for the FY2022 LTI award are
Absolute Total Shareholder Return (ATSR) and Relative Total Shareholder Return (RTSR).
Measure
Rationale why chosen and link to strategy
Absolute Total Shareholder
25% of the Performance Rights will be performance tested
Return (ATSR)
against the TSR for the Company over the performance period
as defined in the following section.
Relative Total Shareholder
75% of the Performance Rights will be performance tested
Return (RTSR)
against the TSR for the Company over the performance period
relative to the TSR of each of the companies in the Peer Group
over that same performance period on the basis set out in the
following section.
These performance measures are linked to the returns
shareholders receive over the performance period and align
executive performance with the strategic objective of creating
shareholder value.
What is ATSR and
how is it measured?
Absolute Total Shareholder Return (ATSR) is a method for calculating the return shareholders
would earn if they held a notional number of shares over the performance period where the
share price at the start and end of the performance period is determined by a 20-day Volume
Weighted Average Price (VWAP) at the relative measure points.
TSR measures the return received by shareholders from holding shares over the
performance period.
For the FY2022 LTI award, the performance period is three (3) years being 1 July 2021 to
30 June 2024 with 25% of the total tranche issued to Executives to be measured against the
following ATSR performance criteria.
ATSR of Panoramic
Percentage of Performance Rights that vest
Annualised TSR below 0%
0% vest
Annualised TSR of 5%
Annualised TSR of 10%
Annualised TSR of 15% or
above
25% vest
50% vest
100% vest
The ATSR will be prorated between levels, once the final annualised percentage growth value
The Company will engage an independent advisor to calculate the ATSR of the Company to
has been calculated.
ensure an objective assessment.
DIRECTORS’ REPORT
3.
3.5
Executive remuneration (continued)
Long Term Incentive (LTI) Plan: Key questions and answers on how it works (continued)
How often are
awards made and
was an award
made in FY2022?
What is the
quantum of the
award and what
allocation
methodology is
used?
What is the expiry
date for the
Performance
Rights?
What are the
performance
conditions?
What is ATSR and
how is it measured?
It is the current intention of the Board to have an annual LTI grant cycle.
The FY2022 LTI allocation represents a three-year LTI opportunity to tie Executives’ awards to
the strategic performance cycle of the Group whilst creating a strong retention mechanism.
The performance period for the FY2022 LTI award is 1 July 2021 to 30 June 2024. The grant of
FY2022 LTI award - performance rights, to the KMP and senior managers (other than the
Managing Director) occurred on 2 September 2021. The Managing Director was granted
FY2022 LTI award - Performance Rights, following shareholder approval at the Company’s 2021
AGM on 20 October 2021.
The LTI dollar value that each Executive 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.
The maximum LTI opportunity for Executives is 100% of TFR.
Performance Rights will expire no more than two (2) years after the acquisition date.
Service condition - The service condition is met if employment / engagement with Panoramic
is continuous for the period commencing on or around the grant date until the date the
performance rights vest. The service condition for performance rights on issue at 30 June 2022
is three (3) years.
Performance conditions – The performance conditions for the FY2022 LTI award are
Absolute Total Shareholder Return (ATSR) and Relative Total Shareholder Return (RTSR).
Measure
Rationale why chosen and link to strategy
Absolute Total Shareholder
Return (ATSR)
25% of the Performance Rights will be performance tested
against the TSR for the Company over the performance period
as defined in the following section.
Relative Total Shareholder
Return (RTSR)
75% of the Performance Rights will be performance tested
against the TSR for the Company over the performance period
relative to the TSR of each of the companies in the Peer Group
over that same performance period on the basis set out in the
following section.
These performance measures are linked to the returns
shareholders receive over the performance period and align
executive performance with the strategic objective of creating
shareholder value.
Absolute Total Shareholder Return (ATSR) is a method for calculating the return shareholders
would earn if they held a notional number of shares over the performance period where the
share price at the start and end of the performance period is determined by a 20-day Volume
Weighted Average Price (VWAP) at the relative measure points.
TSR measures the return received by shareholders from holding shares over the
performance period.
For the FY2022 LTI award, the performance period is three (3) years being 1 July 2021 to
30 June 2024 with 25% of the total tranche issued to Executives to be measured against the
following ATSR performance criteria.
ATSR of Panoramic
Percentage of Performance Rights that vest
Annualised TSR below 0%
0% vest
Annualised TSR of 5%
Annualised TSR of 10%
Annualised TSR of 15% or
above
25% vest
50% vest
100% vest
The ATSR will be prorated between levels, once the final annualised percentage growth value
has been calculated.
The Company will engage an independent advisor to calculate the ATSR of the Company to
ensure an objective assessment.
2022 ANNUAL REPORT 47
DIRECTORS’ REPORT
3.
3.5
Executive remuneration (continued)
Executive remuneration (continued)
Long Term Incentive (LTI) Plan: Key questions and answers on how it works (continued)
Long Term Incentive (LTI) Plan: Key questions and answers on how it works (continued)
What is RTSR and
how is it measured?
Is there a gateway?
How is performance
assessed?
Relative total shareholder return (RTSR) is a method for calculating the return shareholders
would earn if they held a notional number of shares over a period of time measured against a
peer group based on a 20-day VWAP at the relative measure points.
TSR measures the return received by shareholders from holding shares over the performance
period.
For the FY2022 LTI award, the performance period is three (3) years being 1 July 2021 to 30
June 2024 with 75% of the total tranche issued to Executives to be measured against the
following RTSR performance criteria.
RTSR of Panoramic relative
to peer group
Less than 50th percentile
Percentage of Performance Rights that vest
Nil
At or above the 50th but
below 60th percentile
Pro rata (on a straight line basis) between 25% and 49%
vest.
At or above the 60th percentile
but below the 75th percentile
Pro rata (on a straight line basis) between 50% and 99%
vest.
At or above the 75th percentile 100% vest.
The Company will engage an independent advisor to calculate the RTSR ranking to ensure an
objective assessment.
Yes. A Service Condition must first be met. Each Performance Condition is then assessed
individually against the target for that condition.
The performance rights are subject to certain operational and market performance conditions
being met and will vest at the measurement date. 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 outcome from the assessment of targets for one Performance Condition does not affect
the outcome for the other Performance Conditions. As a result, the value of the LTI award at
vesting, is the cumulative value (weighted % basis) from satisfying each Performance Condition
where targets have been met.
Where a Performance Condition target has not been met, no LTI award (weighted % basis)
arises for that Performance Condition.
The achievement of LTI Performance Conditions are assessed by the Remuneration
Committee with recommendations made to the Board. The Board (excluding the Managing
Director) has sole determination of the achievement of LTI Performance Hurdles.
The Remuneration Committee will engage an independent advisor to report on the market
performance conditions for ATSR and RTSR.
How is fair value of
Performance rights
determined?
The fair value of performance rights granted are determined using a 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.
How are dividends
treated during the
performance period
and deferral
period?
What happens to
Performance rights
when an Executive
ceases
employment?
the underlying Performance Rights vest, and
the Company distributes a dividend during the Performance Period.
No dividends are paid on Performance Rights prior to vesting. No cash payment will be made
in respect of dividends on awards which do not vest.
Where the Company pays a dividend during the Performance Period, a Dividend Adjustment
Performance Right (DAPR) will be issued. The conditions for the issue of the DAPRs are:
(i)
(ii)
The number of DAPRs that are issued is determined by dividing the notional value of the
dividends distributed on the underlying shares by the 20-day VWAP of the shares ending on
the day prior to the date the relevant dividend is announced. If no dividends are paid during the
Performance Period, the Dividend Adjustment Performance Rights will not be issued.
At the Company’s AGM held on 20 October 2021, shareholders approved a contingent
entitlement for Mr V Rajasooriar to receive up to 600,000 DAPR. The entitlement is subject to
conditions (noted above) and has not resulted in the issue of any DAPR to Mr Rajasooriar at
the date of this report. At 30 June 2022 there were no DAPR on issue and no Performance
Right holder had met the required conditions for a DAPR issue.
If the Executive’s employment is terminated for cause, or due to resignation, all unvested
Performance Rights will lapse, unless otherwise determined by the Board.
48 PANORAMIC RESOURCES LIMITED
3.
3.5
What happens in
the event of a
change of control?
In the event a change of control occurs the following terms apply.
Mr Victor Rajasooriar: vesting conditions are waived and awards automatically vest.
Other plan participants: Board retains the discretion to waive vesting conditions and awards do
not automatically vest, unless the participants employment contract states otherwise.
Are there malus or
Yes. The Board using discretion in certain circumstances where the Executive has breached
clawback
provisions?
the conditions of the 2021 Plan with respect to conduct or eligibility to hold office may lapse or
cancel unvested or vested but unexercised awards or require the Executive to cancel any
shares issued on exercise of the Executive’s award.
Why does the
Board consider
Board discretion to
be appropriate?
The Board acknowledges that formulaic incentive awards and selected performance measures
are unable to provide the right remuneration result in every situation, leading to occasions
where the incentive does not reflect true performance. It is at this point that discretion becomes
necessary, such that the Board can adjust outcomes up or down as warranted.
The Board will continue to ensure discretion is only applied in a manner that aligns Executive
rewards from incentive plans to shareholder value creation.
Long Term Incentive (LTI) Awards
During the year the Company issued 7,563,220 Performance Rights in total of which 5,859,543 Performance Rights were
issued to KMP in respect of the LTI component of their FY2022 remuneration. The LTI awards for FY2022 were granted
to KMP and senior managers under the 2021 Plan. The table below shows the number of performance rights granted to
KMPs during the FY2022.
Name
Maximum LTI Opportunity
Number of Performance Rights
Fair Value of
granted during FY2022
Performance Rights
Victor Rajasooriar(i)
Grant Dyker
100% of total fixed
remuneration
75% of total fixed
remuneration
3,992,813
1,866,640
$598,762
$281,653
(i)
The performance rights issued to Mr Rajasooriar were approved by shareholders on 20 October 2021.
On vesting, each right automatically converts to one ordinary share.
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.
The table below outlines the movements in performance rights during the 2022 financial year and the balance held by
each KMP at 30 June 2022.
Name
Victor Rajasooriar
Grant Dyker
Total
Balance at
1 July 2021
7,416,488
1,936,910
9,353,398
Granted in
FY2022
3,992,813
1,866,640
5,859,453
Vested
Lapsed
Other
-
-
-
-
-
-
-
-
-
Balance at 30
June 2022
11,409,301
3,803,550
15,212,851
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 2022 financial year.
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
V Rajasooriar
G Dyker
20 October 2021
3 September 2021
998,203
2,994,610
$0.235
$0.142
$41,331
$0.152
$133,156
0%
0.67%
80%
3.0
466,660
1,399,980
$0.205
$0.143
$19,742
$0.153
$62,618
0%
0.67%
80%
3.0
1 July 2021
30 June 2024
2.0
$212,747
1 July 2021
30 June 2024
2.0
$100,089
DIRECTORS’ REPORT
3.
3.5
Executive remuneration (continued)
Long Term Incentive (LTI) Plan: Key questions and answers on how it works (continued)
What happens in
the event of a
change of control?
In the event a change of control occurs the following terms apply.
Mr Victor Rajasooriar: vesting conditions are waived and awards automatically vest.
Other plan participants: Board retains the discretion to waive vesting conditions and awards do
not automatically vest, unless the participants employment contract states otherwise.
Are there malus or
clawback
provisions?
Yes. The Board using discretion in certain circumstances where the Executive has breached
the conditions of the 2021 Plan with respect to conduct or eligibility to hold office may lapse or
cancel unvested or vested but unexercised awards or require the Executive to cancel any
shares issued on exercise of the Executive’s award.
Why does the
Board consider
Board discretion to
be appropriate?
The Board acknowledges that formulaic incentive awards and selected performance measures
are unable to provide the right remuneration result in every situation, leading to occasions
where the incentive does not reflect true performance. It is at this point that discretion becomes
necessary, such that the Board can adjust outcomes up or down as warranted.
The Board will continue to ensure discretion is only applied in a manner that aligns Executive
rewards from incentive plans to shareholder value creation.
Long Term Incentive (LTI) Awards
During the year the Company issued 7,563,220 Performance Rights in total of which 5,859,543 Performance Rights were
issued to KMP in respect of the LTI component of their FY2022 remuneration. The LTI awards for FY2022 were granted
to KMP and senior managers under the 2021 Plan. The table below shows the number of performance rights granted to
KMPs during the FY2022.
Name
Maximum LTI Opportunity
Number of Performance Rights
granted during FY2022
Fair Value of
Performance Rights
Victor Rajasooriar(i)
Grant Dyker
100% of total fixed
remuneration
75% of total fixed
remuneration
3,992,813
1,866,640
$598,762
$281,653
(i)
The performance rights issued to Mr Rajasooriar were approved by shareholders on 20 October 2021.
On vesting, each right automatically converts to one ordinary share.
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.
The table below outlines the movements in performance rights during the 2022 financial year and the balance held by
each KMP at 30 June 2022.
Name
Victor Rajasooriar
Grant Dyker
Total
Balance at
1 July 2021
7,416,488
1,936,910
9,353,398
Granted in
FY2022
3,992,813
1,866,640
5,859,453
Vested
Lapsed
Other
-
-
-
-
-
-
-
-
-
Balance at 30
June 2022
11,409,301
3,803,550
15,212,851
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 2022 financial year.
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
V Rajasooriar
20 October 2021
998,203
2,994,610
$0.235
$0.142
$41,331
$0.152
$133,156
0%
0.67%
80%
3.0
1 July 2021
30 June 2024
2.0
$212,747
G Dyker
3 September 2021
466,660
1,399,980
$0.205
$0.143
$19,742
$0.153
$62,618
0%
0.67%
80%
3.0
1 July 2021
30 June 2024
2.0
$100,089
2022 ANNUAL REPORT 49
DIRECTORS’ REPORT
3.
Executive remuneration (continued)
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 are
summarised in the following table.
Tranche
Amount Weighting
Victor
Rajasooriar
998,203
25% of the Performance
Rights
2,994,610
75% of the Performance
Rights
466,660
25% of the Performance
Rights
Grant Dyker
1,399,980
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 2024)
RTSR performance
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 2024)
relative
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 2024)
RTSR performance
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 2024)
relative
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, Venture Minerals, and Develop 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 5,377,969 to KMP and senior managers under the 2021 Plan. Mr Rajasooriar was
awarded (subject to shareholder approval at the Company’s upcoming 2022 annual general meeting of shareholders)
2,837,838 performance rights. Mr Dyker was awarded 1,334,586 performance rights and senior managers were awarded
1,205,545 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 2025.
4.
4.1
Employment contracts
Non-Executive Directors
Panoramic’s Non-Executive Director remuneration objective is designed to attract and retain suitably skilled Directors
who can discharge the roles and responsibilities required in terms of good governance, oversight, independence, and
objectivity. The Board seeks to attract directors with different skills, experience, expertise, and diversity.
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.
Non-Executive Directors do not receive retirement or termination benefits and do not participate in any incentive
plans.
Under 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.
A review of Non-Executive Director fees was undertaken during 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.
The payment of Chair committee fees recognises the additional time commitment required by Non-Executive Directors
who serve in those positions. The Chair of the Board does not receive additional fees for being a member of any Board
committee.
4.
4.1
Employment contracts (continued)
Non-Executive Directors (continued)
The fees paid to Non-Executive Directors for the period ending 30 June 2022 are detailed in Table 1 on pages 52 and
53 of this report. Fees for the Non-Executive Directors were determined within an aggregate directors’ fee pool limit of
$800,000 which was approved by shareholders on 20 October 2021.
4.2
Managing Director
The key terms of the Managing Director’s contract are as follows:
•
•
•
•
•
•
Total fixed remuneration (TFR) of $630,000 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 2021 Plan of up to 100% of TFR.
Refer to section 3 of the Remuneration Report for the treatment of STI’s and LTI’s on cessation of employment.
The Company may terminate the Managing Director’s contract 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.
4.3
Named executives
The named executives and the commencement date of their contracts are as follows:
Named Executive
Date of Current Employment Contract1
Position
Grant Dyker
5 October 2020
Chief Financial Officer
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 $395,038 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 the LTI 2021 Plan. Refer to section 3 of the
Remuneration Report for the treatment of STI’s and LTI’s on cessation of employment. 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.
4.4
Termination payments
The Company did not make any termination payments to KMP during FY2022. All contractual termination benefits comply
with the provisions of the Corporations Act 2001.
Non-Executive Director
Nicholas Cernotta
Annual Directors Fees
$145,000
$105,0001
$105,0001
$105,0001
Gillian Swaby
1 Includes $15,000 annual fee for Chairing of Board Sub-Committee.
Peter Sullivan
Rebecca Hayward
50 PANORAMIC RESOURCES LIMITED
DIRECTORS’ REPORT
4.
4.1
Employment contracts (continued)
Non-Executive Directors (continued)
The fees paid to Non-Executive Directors for the period ending 30 June 2022 are detailed in Table 1 on pages 52 and
53 of this report. Fees for the Non-Executive Directors were determined within an aggregate directors’ fee pool limit of
$800,000 which was approved by shareholders on 20 October 2021.
4.2
Managing Director
The key terms of the Managing Director’s contract are as follows:
•
•
•
Total fixed remuneration (TFR) of $630,000 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 2021 Plan of up to 100% of TFR.
Refer to section 3 of the Remuneration Report for the treatment of STI’s and LTI’s on cessation of employment.
•
•
•
The Company may terminate the Managing Director’s contract 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.
4.3
Named executives
The named executives and the commencement date of their contracts are as follows:
Named Executive
Date of Current Employment Contract1
Position
Grant Dyker
5 October 2020
Chief Financial Officer
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 $395,038 per annum inclusive of benefits and statutory
superannuation. He may also participate from time to time in short term incentives (up to 50% of TFR) and long term
incentives (up to 75% of TFR) in accordance with the STI plan rules and the LTI 2021 Plan. Refer to section 3 of the
Remuneration Report for the treatment of STI’s and LTI’s on cessation of employment. Mr Dyker may resign from his
position by providing 3 months’ written notice. The Company may terminate the executive employment contract by
providing 3 months’ notice, except in the case of serious misconduct in which case the contract may be terminated
immediately. If at any time during the employment there is a material diminution in the position, he will be entitled to an
immediate payment of 6 months’ severance pay.
4.4
Termination payments
The Company did not make any termination payments to KMP during FY2022. All contractual termination benefits comply
with the provisions of the Corporations Act 2001.
2022 ANNUAL REPORT 51
DIRECTORS’ REPORT
5.
Remuneration of Directors and Executive Officers
The remuneration in Table 1 (FY2021 – Table 3) for each named person, is the total of fixed remuneration (base salary,
superannuation and non-monetary benefits) and variable remuneration (short term and long term incentives) calculated
in accordance with statutory accounting requirements. Excluding the cash component of remuneration, the total
remuneration shown is the amount expensed by the Company and does not, in every case, represent what each named
individual ultimately received in cash.
Table 1: Remuneration of Directors and Executive Officers FY 2022
2022
Short-term benefits
Post-
employment
benefits
Name
Cash salary
and fees(a)
Bonus Other(e)
Super-
annuation(b)
($)
($)
($)
($)
Long- term
benefits
Annual and
Long
Service
Leave(c)
($)
Share-
based
payments Termination /
Resignation
payments
Rights to
shares
Total
Performance
related(d)
($)
($)
($)
(%)
Non-Executive
Directors
P R Sullivan
N L Cernotta
R J Hayward
G Swaby
Executive Directors
R V Rajasooriar
Executives
G Dyker
105,000
135,114
95,454
95,454
-
-
-
-
-
-
-
-
-
9,886
9,546
9,546
-
-
-
-
-
-
-
-
572,500 136,800
8,961
27,500
41,819
461,958
346,500
71,060
10,288
1,350,022 207,860
19,249
27,500
83,978
22,182
132,689
64,001
594,647
-
-
-
-
-
-
-
105,000
145,000
105,000
105,000
-
-
-
-
1,249,538
48%
610,219
2,319,758
33%
43%
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Short term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
Post-employment benefits are provided through superannuation contributions.
Other long-term benefits as per Corporations Regulations 2M.3.03(1) Item 8.
Calculated as bonus (short term benefits) and share based payments divided by total remuneration.
Benefits and allowances include the value of health insurance and parking provided to Mr Rajasooriar and Mr Dyker.
Relates to the cash component of the FY2022 STI award based on achievement of KPIs in accordance with the STI Plan.
The fair value of rights to shares is calculated at the date of grant using the Monte Carlo Simulation model and recognised over the period in which
the minimum service conditions are fulfilled (the vesting period). The fair value is not related to or indicative of the benefit (if any) that the individual
Executive may in fact receive.
Executive cash value of remuneration realised in FY2022
The actual remuneration earned during the year in accordance with the Corporations Act 2001 and accounting standards
is outlined in Table 1 above. The cash value of remuneration realised by Executive KMP in FY2022 is set out below. This
information is considered to be relevant as it provides shareholders with a view of the ‘take home pay’ received by
Executive KMP in FY2022 and may differ from the remuneration disclosure in the statutory remuneration table.
Table 2: Executive cash value of remuneration realised in FY2022
Salary and
fees(a)
Benefits and
allowances(b)
Cash STI(c)
LTI Plan
rights(d)
Long service
leave(e)
Total actual
remuneration
V Rajasooriar
($)
600,000
($)
8,961
($)
136,800
($)
-
($)
-
($)
745,761
G Dyker
(a)
(b)
(c)
(d)
(e)
10,288
374,000
71,060
Salary and fees comprise base salary and superannuation entitlements. It reflects the total of “Salary and fees” and “Superannuation” in the statutory
remuneration table.
Benefits and allowances include the value of health insurance and parking benefits provided to the Executive’s. It reflects the same figure that is
disclosed in the statutory remuneration table under “Benefits and allowances”.
Cash STI represents the cash component of the FY2022 STI award to Executives. It reflects the same figure that is disclosed in the statutory
remuneration table under “Cash STI“.
No LTI Plan awards granted to Executives in prior years vested during the current financial year. This differs from the amount disclosed in the
statutory remuneration table under “Share-based payments”, which includes the fair value of LTI grants which may or may not vest in future years.
Relates to the payment of accrued long-service leave benefits to the Executive. This differs to the amount disclosed in the statutory remuneration
table under “Long service leave”, which includes the value of the movement in the long service leave provision relating to KMP.
455,348
-
-
52 PANORAMIC RESOURCES LIMITED
5.
Remuneration of Directors and Executive Officers (continued)
Table 3: Remuneration of Directors and Executive Officers FY 2021
2021
Short-term benefits
Post-
employment
benefits
Long- term
benefits
Annual and
Share-
based
payments Termination /
Resignation
payments
Total
Performance
related(d)
Name
Cash salary
and fees(a)
Bonus Other(e)
Super-
annuation(b)
Long
Rights to
shares
Service
Leave(c)
($)
($)
($)
($)
($)
($)
($)
($)
(%)
Non-Executive
Directors
P R Sullivan
N L Cernotta
R J Hayward
G Swaby
Executive Directors
97,917
126,202
89,422
89,422
-
-
-
-
-
-
-
-
-
-
10,881
8,495
8,495
-
-
-
-
97,917
137,083
97,917
97,917
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
R V Rajasooriar
526,922 331,200
3,486
25,000
43,821
226,039
1,156,468
48%
216,727 123,188
71,414
1,218,025 454,388
2,522
2,101
8,109
19,194
17,111
89,176
17,008
37,291
5,817
82,125
415,928
178,568
66,645
263,330
82,125
2,181,798
39%
-
33%
Short term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
Post-employment benefits are provided through superannuation contributions.
Other long-term benefits as per Corporations Regulations 2M.3.03(1) Item 8.
Calculated as bonus (short term benefits) and share based payments divided by total remuneration.
Benefits and allowances include the value of parking provided to Mr Rajasooriar, Mr Dyker and Mr Ball.
Mr G Dyker joined the Company on 5 October 2020.
(g) Mr M Ball resigned on 30 September 2020.
5.1
Securities granted as part of remuneration
their vesting date during the financial year.
Performance Rights to Shares
There were no alterations to the terms and conditions of securities granted as remuneration from their grant date until
Performance rights were issued to KMP totalling 5,859,453 in the financial year ended 30 June 2022 (30 June 2021:
12,589,242). Refer to section 3 of the Remuneration Report for further detail on the issue of Performance Rights.
No options to shares were granted as compensation to KMP in the financial year ended 30 June 2022 (30 June 2021:
There were no ordinary shares issued to KMP on the exercise of securities during the financial year (2021: Nil).
Equity instrument reporting
Performance Rights holdings of Executives
The table below discloses the movements in Performance Rights held by Executives issued under the LTI Plan (refer
section 3). The table excludes entitlements to Dividend Adjustment Performance Rights that are unissued and subject to
conditions.
Table 4: Performance rights - LTI Plan
Balance at
Granted as
1 Jul 21
remuneration
Vested Lapsed
Balance at
30 Jun 22
Unvested
Value of
unvested
Rights(a)
V Rajasooriar
7,416,488
G Dyker
1,936,910
3,992,813
1,866,640
-
-
-
-
11,409,301 11,409,301
$1,399,803
3,803,550
3,803,550
$420,212
(a)
This is based on the fair value, at grant date, of Rights that have yet to vest. The fair value is not related to or indicative of the
benefit (if any) that the individual Executive may in fact receive.
The Rights ‘on foot’ are disclosed in the table below. Should the Rights not vest, the award will expire.
Executives
G Dyker(f)
M Ball(g)
Total
(a)
(b)
(c)
(d)
(e)
(f)
Options
nil).
Shares
6.
6.1
DIRECTORS’ REPORT
5.
Remuneration of Directors and Executive Officers (continued)
Table 3: Remuneration of Directors and Executive Officers FY 2021
2021
Short-term benefits
Post-
employment
benefits
Name
Cash salary
and fees(a)
Bonus Other(e)
Super-
annuation(b)
($)
($)
($)
($)
Long- term
benefits
Annual and
Long
Service
Leave(c)
($)
Share-
based
payments Termination /
Resignation
payments
Rights to
shares
Total
Performance
related(d)
($)
($)
($)
(%)
Non-Executive
Directors
P R Sullivan
N L Cernotta
R J Hayward
G Swaby
Executive Directors
R V Rajasooriar
Executives
G Dyker(f)
M Ball(g)
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
71,414
-
2,522
2,101
8,109
19,194
17,111
89,176
17,008
37,291
5,817
-
82,125
415,928
178,568
66,645
263,330
82,125
2,181,798
39%
-
33%
1,218,025 454,388
Total
(a)
(b)
(c)
(d)
(e)
(f)
(g) Mr M Ball resigned on 30 September 2020.
Short term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
Post-employment benefits are provided through superannuation contributions.
Other long-term benefits as per Corporations Regulations 2M.3.03(1) Item 8.
Calculated as bonus (short term benefits) and share based payments divided by total remuneration.
Benefits and allowances include the value of parking provided to Mr Rajasooriar, Mr Dyker and Mr Ball.
Mr G Dyker joined the Company on 5 October 2020.
5.1
Securities granted as part of remuneration
There were no alterations to the terms and conditions of securities granted as remuneration from their grant date until
their vesting date during the financial year.
Performance Rights to Shares
Performance rights were issued to KMP totalling 5,859,453 in the financial year ended 30 June 2022 (30 June 2021:
12,589,242). Refer to section 3 of the Remuneration Report for further detail on the issue of Performance Rights.
Options
No options to shares were granted as compensation to KMP in the financial year ended 30 June 2022 (30 June 2021:
nil).
Shares
There were no ordinary shares issued to KMP on the exercise of securities during the financial year (2021: Nil).
6.
6.1
Equity instrument reporting
Performance Rights holdings of Executives
The table below discloses the movements in Performance Rights held by Executives issued under the LTI Plan (refer
section 3). The table excludes entitlements to Dividend Adjustment Performance Rights that are unissued and subject to
conditions.
Table 4: Performance rights - LTI Plan
Balance at
1 Jul 21
Granted as
remuneration
Vested Lapsed
Balance at
30 Jun 22
Unvested
Value of
unvested
Rights(a)
V Rajasooriar
7,416,488
G Dyker
1,936,910
3,992,813
1,866,640
-
-
-
-
11,409,301 11,409,301
$1,399,803
3,803,550
3,803,550
$420,212
(a)
This is based on the fair value, at grant date, of Rights that have yet to vest. The fair value is not related to or indicative of the
benefit (if any) that the individual Executive may in fact receive.
The Rights ‘on foot’ are disclosed in the table below. Should the Rights not vest, the award will expire.
2022 ANNUAL REPORT 53
DIRECTORS’ REPORT
6.
6.1
Equity instrument reporting (continued)
Performance Rights holdings of Executives (continued)
Table 5: Details of Rights ‘on foot’ – LTI Plan
Grant date
Number of
Rights
Fair value
of Right(a)
V Rajasooriar
20 Oct 2021
3,992,813
$0.15
17 Nov 2020
7,416,488
$0.11
G Dyker
2 Sep 2021
1,866,640
$0.15
5 Oct 2020
1,936,910
$0.07
Performance
and service
period
1 Jul 2021 to
30 Jun 2024
1 Jul 2020 to
30 Jun 2023
1 Jul 2021 to
30 Jun 2024
1 Jul 2020 to
30 Jun 2023
Vesting
Outcome
Expiry date
30 June 2024
30 June 2026
Maximum
expense to be
recognised in
future periods
424,334
30 June 2023
30 June 2025
287,471
30 June 2024
30 June 2026
199,633
30 June 2023
30 June 2025
50,599
(a) The fair value of Rights is calculated at the date of grant using the Monte Carlo Simulation model and recognised over the period in
which the minimum service conditions are fulfilled (the vesting period). The fair value is not related to or indicative of the benefit (if
any) that the individual Executive may in fact receive.
6.2
Shareholdings of KMP
The following table discloses the movements in the number of ordinary shares in the Company held, directly, indirectly
or beneficially, by each KMP, including their related parties. There were no shares granted during the reporting period
as remuneration.
Table 6: Shareholdings of KMP
Balance at 1 July
2021 or date
becoming a KMP
Purchases
Received during
the year on the
exercise of Rights
and Options
Net other
movements
Balance at
30 June 2022
or date ceasing
to be a KMP
Non-Executive
Directors
N Cernotta
P Sullivan
R Hayward
G Swaby
Executive Directors
V Rajasooriar
Executives
G Dyker
7.
KMP Transactions
107,500
-
107,500
107,500
1,791,666
-
2,114,166
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
107,500
-
107,500
107,500
1,791,666
-
2,114,166
There were no loans to KMP and their related parties at any time during the year ended 30 June 2022. There were no
transactions involving key management personnel and their related parties other than compensation and transactions
concerning shares and performance rights to shares as discussed in the Remuneration Report.
Signed in accordance with a resolution of the Directors.
Nick Cernotta
Victor Rajasooriar
Independent Non-Executive Chair
Managing Director and Chief Executive Officer
Perth, 31 August 2022
54 PANORAMIC RESOURCES LIMITED
DIRECTORS’ REPORT
CONSOLIDATED
FINANCIAL STATEMENTS
2022 ANNUAL REPORT 55
Net profit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
Attributable to:
Equity holders of the parent
2022
$000
6,260
-
6,260
6,260
6,260
2021
$000
295
-
295
295
295
The consolidated statement of other comprehensive income should be read in conjunction with the accompanying notes.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022
Revenue
Cost of sales
Gross Profit
Other income
Care and maintenance costs
Corporate and other expenses
Exploration and evaluation expenditure written off
Gain on commodity forward contracts
Change in fair value of financial assets at fair value through profit
or loss
Impairment reversal
Profit before net finance expense and income tax expense
Finance income
Finance expense
Profit before income tax expense
Income tax expense
Net profit for the year
Attributable to:
Owners of Panoramic Resources Limited
Earnings per share (EPS):
Basic EPS attributable to ordinary equity holders (cents)
Diluted EPS attributable to ordinary equity holders (cents)
Note
3
5
4
5
22
6
6
7
8
8
2022
$000
90,394
(78,781)
11,613
2,665
-
(6,618)
(844)
4,745
-
-
11,561
224
(5,525)
6,260
-
6,260
6,260
6,260
0.3
0.3
2021
$000
139
-
139
10,158
(16,111)
(6,992)
(945)
-
(121)
14,186
314
403
(422)
295
-
295
295
295
0.0
0.0
The consolidated income statement should be read in conjunction with the accompanying notes.
56 PANORAMIC RESOURCES LIMITED
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Net profit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
Attributable to:
Equity holders of the parent
2022
$000
6,260
-
6,260
6,260
6,260
2021
$000
295
-
295
295
295
The consolidated statement of other comprehensive income should be read in conjunction with the accompanying notes.
2022 ANNUAL REPORT 57
Option and
Contributed
share-based
Accumulated
equity
payment reserve
Note
$000
353,550
$000
22,476
353,550
668
23,145
losses
$000
Total
equity
$000
(209,342)
166,682
6,260
6,260
6,260
-
6,260
668
(203,085)
173,610
losses
$000
295
295
-
Total
equity
$000
295
295
304
-
-
-
-
Option and
Contributed
share-based
Accumulated
equity
payment reserve
Note
$000
353,550
$000
22,172
(209,637)
166,085
-
-
-
-
-
-
At 1 July 2022
Profit for the year
Total comprehensive income
for the period
Performance rights issued
Balance at 30 June 2022
At 1 July 2021
Profit for the year
Total comprehensive income
for the period
Performance rights issued
Balance at 30 June 2021
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
353,550
(209,342)
166,682
304
22,476
CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 30 JUNE 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Derivative financial instruments
Total current assets
NON CURRENT ASSETS
Receivables
Financial assets at fair value through profit or loss
Exploration and evaluation assets
Property, plant and equipment
Development and mineral properties
Right-of-use assets
Other financial assets
Total non-current assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
Provisions
Total current liabilities
NON CURRENT LIABILITIES
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Note
9
17
18
16
17
19
20
19
21
10
11
12
24
11
12
24
30
31
2022
$000
21,757
3,797
12,835
2,509
4,992
45,890
-
6
5,551
25,686
193,566
29,819
291
254,919
300,809
28,937
8,644
9,886
1,833
49,300
36,072
21,929
19,898
77,899
127,199
2021
$000
24,237
1,942
557
1,494
-
28,230
1,536
12
5,551
25,711
136,076
4,195
221
173,302
201,532
4,388
-
1,445
714
6,547
-
4,738
23,566
28,304
34,851
173,610
166,682
353,550
23,145
(203,085)
173,610
353,550
22,476
(209,345)
166,682
The consolidated balance sheet should be read in conjunction with the accompanying notes.
58 PANORAMIC RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
At 1 July 2022
Profit for the year
Total comprehensive income
for the period
Performance rights issued
Balance at 30 June 2022
At 1 July 2021
Profit for the year
Total comprehensive income
for the period
Performance rights issued
Balance at 30 June 2021
Note
Contributed
equity
$000
353,550
-
-
-
353,550
Option and
share-based
payment reserve
$000
22,476
-
-
668
23,145
Accumulated
losses
$000
Total
equity
$000
(209,342)
166,682
6,260
6,260
6,260
-
(203,085)
6,260
668
173,610
Note
Contributed
equity
$000
353,550
-
-
-
353,550
Option and
share-based
payment reserve
$000
22,172
-
-
Accumulated
losses
$000
Total
equity
$000
(209,637)
166,085
295
295
295
295
304
22,476
-
(209,342)
304
166,682
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
2022 ANNUAL REPORT 59
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Note
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Other revenue
Interest paid
Net cash inflow / (outflow) from operating activities
9
Cash flows from investing activities
Payments for exploration and evaluation assets
Proceeds from sale of property, plant and equipment
Payments for plant and equipment, including assets under construction
Payments for development costs
Proceeds from sale of subsidiary (net of cost)
Proceeds from sale of financial assets at fair value through profit or loss
Interest received
Net cash (outflow) / inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payments for leased assets
Net cash inflow / (outflow) from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
9
2022
$000
100,332
(73,089)
-
(1,033)
26,210
(844)
2,568
(4,697)
(56,230)
-
-
224
(58,979)
41,113
(763)
(10,061)
30,289
(2,480)
24,237
21,757
2021
$000
2,556
(23,150)
3,337
(167)
(17,424)
(1,025)
22
(460)
(11,397)
22,384
1,815
162
11,501
-
-
(1,004)
(1,004)
(6,927)
31,164
24,237
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Group structure and related party information
25. Information relating to Panoramic Resources Limited (the Parent)
26. Information relating to subsidiaries
Index – notes to the Consolidated Financial Statements
Corporate information and basis of preparation
13. Financial risk management objectives and policies
1. Corporate information
2. Basis of preparation
Results for the year
3. Revenue
4. Other income
5. Expenses
6. Finance income and finance expense
7.
Income tax
8. Earnings per share (EPS)
Capital and debt structure
9. Cash and cash equivalents
10. Trade and other payables
11. Borrowings
12. Lease liabilities
14. Fair value measurement
15. Dividends paid and proposed
Invested capital
16. Derivative financial instruments
17. Trade and other receivables
18. Inventories
19. Exploration and evaluation assets
20. Property, plant and equipment
21. Right-of-use assets
22. Impairment of non-financial assets
23. Commitments
24. Provisions
27. Deed of Cross Guarantee
28. Related party disclosures
Other notes
29. Share-based payments
30. Contributed equity
31. Reserves
32. Significant events after the reporting date
33. Accounting standards and interpretations issued but not yet effective
34. Auditor remuneration
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60 PANORAMIC RESOURCES LIMITED
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Index – notes to the Consolidated Financial Statements
Corporate information and basis of preparation
1. Corporate information
2. Basis of preparation
Results for the year
3. Revenue
4. Other income
5. Expenses
6. Finance income and finance expense
7.
8. Earnings per share (EPS)
Income tax
Capital and debt structure
9. Cash and cash equivalents
10. Trade and other payables
11. Borrowings
12. Lease liabilities
13. Financial risk management objectives and policies
14. Fair value measurement
15. Dividends paid and proposed
Invested capital
16. Derivative financial instruments
17. Trade and other receivables
18. Inventories
19. Exploration and evaluation assets
20. Property, plant and equipment
21. Right-of-use assets
22. Impairment of non-financial assets
23. Commitments
24. Provisions
Group structure and related party information
25. Information relating to Panoramic Resources Limited (the Parent)
26. Information relating to subsidiaries
27. Deed of Cross Guarantee
28. Related party disclosures
Other notes
29. Share-based payments
30. Contributed equity
31. Reserves
32. Significant events after the reporting date
33. Accounting standards and interpretations issued but not yet effective
34. Auditor remuneration
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2022 ANNUAL REPORT 61
Corporate information and basis of preparation
1.
Corporate information
2.
(a)
Basis of preparation (continued)
Going concern basis (continued)
Panoramic Resources Limited is a for profit company incorporated in Australia whose shares are publicly traded on the
Australian Stock Exchange (ASX). The consolidated financial statements of Panoramic Resources Limited incorporate
Panoramic Resources Limited (the Parent) as well as its subsidiaries (collectively, the Group) as outlined in Note 26. The
financial statements of the Group for the year ended 30 June 2022 were authorised for issue in accordance with a
resolution of the Directors on 30 August 2022.
The nature of the Group’s operations and principal activities are described in the Directors’ Report. Information on the
Group’s structure is provided in Note 26. Information on other related party relationships of the Group is provided in Note
28.
2.
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, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report also complies with IFRS as issued by the International Accounting
Standards Board.
The financial report has been prepared on a historical cost basis, except for trade receivables and equity investments which
have been measured at fair value.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000)
unless otherwise stated.
The accounting policies adopted are consistent with those of the previous financial year and corresponding reporting
period except for the policies stated below.
(a)
Going concern basis
These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
The Group held cash on hand as at 30 June 2022 of $21.76 million (30 June 2021: $24.24 million).
As at 30 June 2022 the Group has a working capital deficit of $3.41 million (2021: nil). The deficit includes a current
liability for scheduled bank debt repayments totalling $7.522 million to paid over the period August 2022 to June 2023.
Concentrate produced in the month of June 2022 was not sold by year end. Available and unsold concentrate stocks at
30 June 2022 totalled 4,923dmt containing 344t nickel, 128t copper and 26t cobalt, which is higher as a result of the
planned June shipment arriving late, departing Wyndham on 9 July 2022 with a concentrate cargo of 6,438dmt. The
provisional value of this shipment was US$9.97 million, of which a substantial portion of the sale value is on account of
June 2022 concentrate production.
For the year ended 30 June 2022 the Group made an after tax profit of $6.260 million. At 30 June 2022 the group had
total assets of $300.81 million. Cash outflows from operations and investment activities were $32.77 million. This includes
pre-commercial production expenditure capitalised to development costs for the period up to 31 March 2022.
Underground mining operations commenced in July 2021 with ore treatment started in October 2021. First concentrate
was produced in October 2021 and the first concentrate sale was achieved on 26th December 2022.
Four concentrate shipments have been achieved in FY2022 totalling 37,454dmt of concentrate for a sale value of
$100.16 million (includes shipping revenue, provisional and / or final invoicing). Subsequent shipments have been
scheduled and confirmed for July (departed 9 July 2022) and August 2022. The Company is planning for eleven
concentrate shipments in the FY2023.
Over the financial year the Savannah Nickel Project progressed the ramp-up of underground mining and processing
operations. During the six-month period to December 2021 the mining schedule was modified to reflect labour
accessibility issues stemming from COVID-19 related border controls in Western Australia. Since the reopening of the
West Australian border in the March 2022 quarter, workforce levels within the underground mining department have
improved however numbers continue to be impacted by the demands within the industry and absenteeism from the
increase in COVID-19 cases in the WA community. This has impacted mine productivity as the return to planned
production rates from the modified schedule has been slower than expected. The Company will continue to progress the
ramp-up over the period to June 2023.
The Savannah Nickel Project achieved commercial production from 1 April 2022.
On 3 April 2021 the Company announced it had secured a financing facility from Trafigura Pte Ltd totalling US$45.0
million comprising two tranches. The first tranche is a five-year Prepayment Loan Facility (PLF) totalling US$30.0 million.
The second tranche is a Revolving Credit Loan Facility (RCF) for US$15.0 million, is repayable if drawn in eighteen
months from the drawdown of the PLF. The facility reached financial close on 2 July 2021. The PLF was drawn on 24
September 2021 totalling A$41.1 million (US$30.0 million).
62 PANORAMIC RESOURCES LIMITED
Subsequent to the end of the financial year on the 24 August 2022, the Company announced to the ASX it had
commenced a US$15.0 million drawdown from the RCF. Proceeds from the drawdown were received on
30 August 2022. The Company continues to experience material changes in the timing of shipments and therefore
concentrate revenue as a result of the ongoing tightness in shipping (sea freight) markets. The availability and arrival of
ships when required continues to provide challenges in managing short-term working capital funding. The likely late
arrival of the planned shipment in August 2022 has required the Company to draw on the RCF in order to manage
changes to the short-term working capital funding position of the business. The financing facility from Trafigura Pte Ltd
totalling US$45.0 million will be fully drawn following the completion of the drawdown from the RCF. Scheduled PLF fixed
monthly repayments commence in August 2022. There were no breaches of facility terms, conditions or covenants during
the year and the Company is in compliance with facility covenants at the date of this report.
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. COVID-19 may also impact the Company’s ability to transport and ship concentrate efficiency which
could result in a reduction to revenue.
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 positive cashflow from the Savannah Nickel Project in FY2023. 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 ongoing 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.
(b)
Changes in accounting policies and disclosures
The Group has adopted all of the new or amended accounting standards or interpretations issued by the Australian
Accounting Standards Board that are mandatory for the current reporting period. The adoption of the new or amended
accounting standards or interpretations during the year did not have a material impact on the Group’s financial report.
The Group has elected to adopt the AASB 2020-3 amendment to Australian Accounting Standard AASB 116 Property,
Plant and Equipment- Proceeds before Intended Use (“AASB 116 Amendment”) with respect to the accounting treatment
for pre-commercial production revenue and costs.
The AASB 116 Amendment prohibits an entity deducting from the cost of an item of property, plant and equipment any
proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable
of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items,
and the cost of producing those items, in profit or loss. The Group’s previous policy was to capitalise all pre-commercial
production revenue and costs to mine properties.
In accordance with the transitional provisions, the AASB 116 Amendment has been applied retrospectively to items of
property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating
in the manner intended by management on or after 1 July 2020, being the beginning of the comparative period presented
in the consolidated financial statements.
With respect to the Savannah Nickel Project, a decision was made in April 2021 approving the restart of operations which
were previously on care and maintenance. Underground mining commenced in July 2021 and during the period July
2021 to 31 March 2022 the project returned to operations in stages across mining, processing and concentrate handling.
As set in Note 19, the Savannah Nickel Project achieved Commercial Production on 1 April 2022. Accordingly, adoption
of the AASB 116 Amendment had no impact on the Consolidated Balance Sheet as at 30 June 2021 or on the
Consolidated Income Statement for the year then ended. The impact of the AASB 116 Amendment on the Consolidated
Income Statement for the year ended 30 June 2022 is disclosed in Note 3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
(a)
Basis of preparation (continued)
Going concern basis (continued)
Subsequent to the end of the financial year on the 24 August 2022, the Company announced to the ASX it had
commenced a US$15.0 million drawdown from the RCF. Proceeds from the drawdown were received on
30 August 2022. The Company continues to experience material changes in the timing of shipments and therefore
concentrate revenue as a result of the ongoing tightness in shipping (sea freight) markets. The availability and arrival of
ships when required continues to provide challenges in managing short-term working capital funding. The likely late
arrival of the planned shipment in August 2022 has required the Company to draw on the RCF in order to manage
changes to the short-term working capital funding position of the business. The financing facility from Trafigura Pte Ltd
totalling US$45.0 million will be fully drawn following the completion of the drawdown from the RCF. Scheduled PLF fixed
monthly repayments commence in August 2022. There were no breaches of facility terms, conditions or covenants during
the year and the Company is in compliance with facility covenants at the date of this report.
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. COVID-19 may also impact the Company’s ability to transport and ship concentrate efficiency which
could result in a reduction to revenue.
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 positive cashflow from the Savannah Nickel Project in FY2023. 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 ongoing 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.
(b)
Changes in accounting policies and disclosures
The Group has adopted all of the new or amended accounting standards or interpretations issued by the Australian
Accounting Standards Board that are mandatory for the current reporting period. The adoption of the new or amended
accounting standards or interpretations during the year did not have a material impact on the Group’s financial report.
The Group has elected to adopt the AASB 2020-3 amendment to Australian Accounting Standard AASB 116 Property,
Plant and Equipment- Proceeds before Intended Use (“AASB 116 Amendment”) with respect to the accounting treatment
for pre-commercial production revenue and costs.
The AASB 116 Amendment prohibits an entity deducting from the cost of an item of property, plant and equipment any
proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable
of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items,
and the cost of producing those items, in profit or loss. The Group’s previous policy was to capitalise all pre-commercial
production revenue and costs to mine properties.
In accordance with the transitional provisions, the AASB 116 Amendment has been applied retrospectively to items of
property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating
in the manner intended by management on or after 1 July 2020, being the beginning of the comparative period presented
in the consolidated financial statements.
With respect to the Savannah Nickel Project, a decision was made in April 2021 approving the restart of operations which
were previously on care and maintenance. Underground mining commenced in July 2021 and during the period July
2021 to 31 March 2022 the project returned to operations in stages across mining, processing and concentrate handling.
As set in Note 19, the Savannah Nickel Project achieved Commercial Production on 1 April 2022. Accordingly, adoption
of the AASB 116 Amendment had no impact on the Consolidated Balance Sheet as at 30 June 2021 or on the
Consolidated Income Statement for the year then ended. The impact of the AASB 116 Amendment on the Consolidated
Income Statement for the year ended 30 June 2022 is disclosed in Note 3
2022 ANNUAL REPORT 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
(c)
Basis of preparation (continued)
Key estimates and judgements
The preparation of the Group’s consolidated financial statement requires management to make judgments in the process
of applying the Group’s accounting policies and estimates that effect the reported amounts of revenue, expenses, assets
and liabilities. Other than key judgments and estimates disclosed elsewhere in the financial report, other key judgements
and estimates which are material to the financial report are found in the following notes.
Note
Note 3
Revenue
Note 7
Income tax
Note 12
Lease term for
contracts with
renewal options
Note 12
Incremental
borrowing rate for
lease liabilities
Key estimate or judgement
•
•
Price adjustment for estimate of concentrate specifications.
Fair value of receivables is based on the closing forward LME metal price.
•
•
•
•
The recognition of deferred tax asset depends on the probability of future taxable profits.
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).
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.
Note 14 Fair value
measurement
• Where the fair value of an instrument is not determinable with reference to active market
prices, an alternative valuation technique is used to estimate the fair value of the instrument.
Note 19 Exploration and
evaluation assets
Note 22
Impairment of non-
financial assets
Note 24 Provisions
•
•
•
•
The application of the Group’s accounting policy for assessing capitalised exploration and
evaluation assets for impairment requires judgment to determine whether future economic
benefits are likely from either future exploitation or sale.
An exploration and evaluation asset shall be reclassified to mine development when the
technical feasibility and commercial viability of extracting a mineral resource are
demonstrable and a decision has been made to develop and extract the resource.
The recoverable amount of mine development is assessed for impairment whenever
circumstances suggest that the carrying amount of the asset may exceed its recoverable
amount.
Rehabilitation, restoration and dismantling provisions are reassessed at the end of each
reporting period. The estimated costs include judgement regarding the Group’s expectation
of the level of rehabilitation activities that will be undertaken, technological changes,
regulatory obligations, cost inflation and discount rates.
(d)
Basis of consolidation and business combinations
The consolidated financial statements comprise the financial statements of Panoramic Resources Limited and the
subsidiaries it controls (as outlined in Note 26) as at 30 June 2022. 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. Specially, 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 return.
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.
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.
64 PANORAMIC RESOURCES LIMITED
2.
(d)
subsidiary.
Basis of preparation (continued)
Basis of consolidation and business combinations (continued)
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date the Group gains control until the date the Group ceases to control the
Profit or loss and each component of other comprehensive income (OCI) 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 in 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 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 derecognises the related assets (including goodwill), liabilities, non-
controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
(e)
Foreign currencies
Functional and presentation currency
statements are presented in Australian dollars.
Transactions and balances
The functional currency of Panoramic Resources Ltd and its Australian subsidiaries is Australian dollars. The financial
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. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
are recognised in the income statement.
rate as at the date of the initial transaction.
(f)
Goods and services taxes (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except:
• When 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;
• When 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. Commitments and contingencies are disclosed net of the amount of GST recoverable
from, or payable to, the taxation authority.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part
of operating cash flows.
(g)
Other accounting policies
(h)
Segment Information
Significant and other accounting policies that summarise the measurement basis used and are relevant in understanding
the financial statements are provided throughout the notes to the financial statements.
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board
of Directors in assessing the performance and determining the allocation of resources.
The Group is organised into one operating segment, being mineral production, exploration and development at the
Savannah Nickel Project. Accordingly, all significant operating decisions are based upon an analysis of the Group as one
segment. The financial results of this segment are equivalent to the consolidated financial statements as a whole.
The Company operated in one geographical area being Australia.
The Group’s revenue (refer to Note 3 for details) arises from sales to customers located in China. In 2022, one customer
individually accounted for 100% of total revenue during the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
(d)
Basis of preparation (continued)
Basis of consolidation and business combinations (continued)
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements 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 (OCI) 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 in 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 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 derecognises the related assets (including goodwill), liabilities, non-
controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
(e)
Foreign currencies
Functional and presentation currency
The functional currency of Panoramic Resources Ltd and its Australian subsidiaries is Australian dollars. The financial
statements are presented in 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. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction.
(f)
Goods and services taxes (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except:
• When 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;
• When 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. Commitments and contingencies are disclosed net of the amount of GST recoverable
from, or payable to, the taxation authority.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part
of operating cash flows.
(g)
Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant in understanding
the financial statements are provided throughout the notes to the financial statements.
(h)
Segment Information
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board
of Directors in assessing the performance and determining the allocation of resources.
The Group is organised into one operating segment, being mineral production, exploration and development at the
Savannah Nickel Project. Accordingly, all significant operating decisions are based upon an analysis of the Group as one
segment. The financial results of this segment are equivalent to the consolidated financial statements as a whole.
The Company operated in one geographical area being Australia.
The Group’s revenue (refer to Note 3 for details) arises from sales to customers located in China. In 2022, one customer
individually accounted for 100% of total revenue during the year.
2022 ANNUAL REPORT 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Results for the year
This section focuses on the results and performance of the Group. It includes information on profitability and the resultant
return to shareholders via earnings per share.
3.
Revenue
Revenue
Revenue from sale of concentrate
Revenue from shipping services
Total revenue
Realised fair value gain on receivables subject to QP adjustment
2022
$000
83,679
4,691
88,370
11,788
2021
$000
-
-
-
139
Unrealised fair value loss on receivables subject to QP adjustment
Total Revenue
(i)
(ii) The Group has reclassified the QP adjustment from other income to revenue in the current financial year to be consistent with the
Pre-commercial production revenue included in total above is $44.4 million.
(9,764)
90,394
139
-
presentation adopted by the Group’s industry peers.
Recognition and measurement
The Group’s principal revenue is from the sale of concentrate containing nickel, copper and cobalt. The Group also earns
revenue from the provision of shipping services. Revenue from contracts with customers is recognised when control of
the goods or services is transferred to the customer and at the amount that reflects the consideration to which the Group
expects to receive in exchange for those goods or services.
The Group has concluded that it is the principal in its revenue contracts because it typically controls the goods or services
before transferring them to the customer.
4.
Other income
Concentrate sales
For metal-in-concentrate sales under CIF incoterms, the performance obligations are the delivery of the concentrate and
the provision of shipping services. Based on the contractual terms, revenue from the sale of nickel-copper-cobalt
concentrate is recognised when control passes to the customer, which occurred at a point in time when the concentrate
is physically transferred onto a vessel.
The Group’s sales of nickel-copper-cobalt concentrate allow for price adjustments based on the market price (see below)
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 ultimate selling price for nickel-copper-cobalt concentrate is based on the prevailing
spot price averaged over a future contractually specified month following shipment to the customer. Adjustments to the
sales price therefore occur based on movements in market prices of the contained metal up until the end of the QP. The
period between initial recognition of the sale transaction and the end of the QP is generally between one to three months
Revenue from the sale of nickel-copper-cobalt concentrate is measured at the amount to which the Group expects to be
entitled, being the one month average forward price for the expected month of settlement at the date the sales transaction
is initially recognised, net of treatment and refining charges. A corresponding trade receivable is then recognised.
For provisional pricing arrangements, any future changes that occur over the QP are embedded within the trade
receivables. Given the exposure to the commodity price, these provisionally priced trade receivables are measured at
fair value through profit or loss from initial recognition until the date of settlement. Subsequent changes in fair value of
the receivable are recognised in the profit or loss each period and presented separately as other revenue.
Shipping services
Under CIF incoterms, the Group is responsible for providing freight / shipping services after the date that the Group
transfers control of the concentrate to its customers. The Group, therefore, has a separate performance obligation for
freight / shipping services which are provided solely to facilitate the sale of the concentrate it produces.
For CIF arrangements, the transaction price (as determined above) is allocated to concentrate revenue and shipping
services using the relative stand-alone selling price method. The consideration is received from the customer at, or
around the date of shipment under a provisional invoice. Some of the upfront consideration that related to the shipping
services yet to be provided was deferred. This is generally not material at the balance date. Shipping revenue is
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 represents the Group’s performance. This is on the basis that
the customer simultaneously receives and consumes the benefits provided by the Group as the services are being
provided. The costs associated with these freight/shipping services are also recognised over the same period of time as
incurred.
66 PANORAMIC RESOURCES LIMITED
3.
Revenue (continued)
Key estimates and judgements – Revenue
Application of the variable consideration constraint
Under the sales contract, adjustments are made to the transaction price for variations in assay and weight between the
time of dispatch of the nickel-copper-cobalt concentrate and the time of final settlement. The Group estimates the amount
of consideration receivable using the expected value approach based on internal assays. Management consider that it
is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur due to
variations in assay and weight.
Measurement of the transaction price:
The transaction price for metal concentrate is based on the average forward metal prices quoted on the London Metals
Exchange (LME) at the date of shipment of the concentrate to the customer. The customer makes a provisional payment
to the Group against a provisional invoice for the estimated payable value of the nickel, copper and cobalt dispatched in
the shipment. Final settlement of the sales transaction is based on the average LME metal price over a subsequent
pricing period as specified by the terms of the sales contract.
The period commencing on the date of shipment to the end of the pricing period is known as the Quotational Period
(QP). The QP historically reflects the average time to elapse (generally one to three months) between the shipment
arriving at the discharge port and the date of processing at the final destination. This pricing methodology is standard
within the industry and represents an embedded derivative under AASB 9 Financial Instruments. Accordingly subsequent
changes in fair value of the receivable is recognised within realised and unrealised price adjustments in the income
statement in each period until final settlement. The revaluation of the receivable is performed up until the final invoice is
issued. If the receivable goes into a credit balance it is reclassified at trade payables.
As at 30 June 2022, an unrealised fair value loss adjustment totalling $9.764 million (2021: nil) had been recognised for
concentrate shipments that had not reached final settlement.
Net gain on sale of subsidiary
Net gain on sale of investment
Net gain on sale of property, plant & equipment
Foreign exchange gains / (loss)
Sundry Income
Total other income
2022
$000
-
-
1,817
489
359
2,665
2021
$000
7,659
870
23
(127)
1,733
10,158
In the prior 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 the Company on 16 June 2021 for a cash consideration of $3.0 million before costs.
Foreign exchange gains includes the revaluation of a Canadian dollar receivable due from Clear Air Metals. The
receivable forms part of the deferred consideration form 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 sale.
During the year the Company sold obsolete inventory items for a gain of $240,000. In the prior year, the Company
received JobKeeper income from the Australian Government totalling $1.279 million. These amounts are included in
Sundry Income.
In the prior 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.
Accounting policy for 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
Revenue (continued)
Key estimates and judgements – Revenue
Application of the variable consideration constraint
Under the sales contract, adjustments are made to the transaction price for variations in assay and weight between the
time of dispatch of the nickel-copper-cobalt concentrate and the time of final settlement. The Group estimates the amount
of consideration receivable using the expected value approach based on internal assays. Management consider that it
is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur due to
variations in assay and weight.
Measurement of the transaction price:
The transaction price for metal concentrate is based on the average forward metal prices quoted on the London Metals
Exchange (LME) at the date of shipment of the concentrate to the customer. The customer makes a provisional payment
to the Group against a provisional invoice for the estimated payable value of the nickel, copper and cobalt dispatched in
the shipment. Final settlement of the sales transaction is based on the average LME metal price over a subsequent
pricing period as specified by the terms of the sales contract.
The period commencing on the date of shipment to the end of the pricing period is known as the Quotational Period
(QP). The QP historically reflects the average time to elapse (generally one to three months) between the shipment
arriving at the discharge port and the date of processing at the final destination. This pricing methodology is standard
within the industry and represents an embedded derivative under AASB 9 Financial Instruments. Accordingly subsequent
changes in fair value of the receivable is recognised within realised and unrealised price adjustments in the income
statement in each period until final settlement. The revaluation of the receivable is performed up until the final invoice is
issued. If the receivable goes into a credit balance it is reclassified at trade payables.
As at 30 June 2022, an unrealised fair value loss adjustment totalling $9.764 million (2021: nil) had been recognised for
concentrate shipments that had not reached final settlement.
4.
Other income
Net gain on sale of subsidiary
Net gain on sale of investment
Net gain on sale of property, plant & equipment
Foreign exchange gains / (loss)
Sundry Income
Total other income
2022
$000
-
-
1,817
489
359
2,665
2021
$000
7,659
870
23
(127)
1,733
10,158
In the prior 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 the Company on 16 June 2021 for a cash consideration of $3.0 million before costs.
Foreign exchange gains includes the revaluation of a Canadian dollar receivable due from Clear Air Metals. The
receivable forms part of the deferred consideration form 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 sale.
During the year the Company sold obsolete inventory items for a gain of $240,000. In the prior year, the Company
received JobKeeper income from the Australian Government totalling $1.279 million. These amounts are included in
Sundry Income.
In the prior 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.
Accounting policy for 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.
2022 ANNUAL REPORT 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.
Expenses
Profit before income tax includes the following expenses:
Cost of sales
Cash costs of production
Shipping costs
Royalties
Inventory movement
Depreciation and Amortisation
Total cost of sales
(i)
Pre-commercial production cost of sales included in the total above is $47.2 million
Recognition and measurement
Cash costs of production
2022
$000
67,610
7,490
4,869
(9,340)
8,152
78,781
2021
$000
-
-
-
-
-
-
Cash costs of production include ore and waste mining costs, processing costs, and site administration and support
costs.
Inventory movement
Inventory movement represents the movement in the balance sheet inventory for run of mine ore stocks, concentrate
stocks and consumables and stores items.
Refer to Note 18 for further details on the Group’s accounting policy for inventory.
Corporate and other expenses
Corporate and administration
Employee remuneration and benefits expensed
Depreciation – property, plant and equipment not used in
production
Total Corporate and other expense
Recognition and measurement
Employee remuneration
2022
$000
3,653
2,449
516
6,618
2021
$000
3,418
3,209
365
6,992
Wages, salaries and superannuation contribution expenses are recognised as and when employees render their
services.
Refer to Note 24 for the accounting policy relating to short-term and long-term employee benefits.
Employee share-based payments
The accounting policy, key estimates and judgements relating to employee share-based payments are set out in Note 29.
Depreciation
The accounting policy relating to depreciation method’s and estimated useful life is set out in Note 20.
6.
Finance income and finance expense
Finance income
Interest income calculated using the effective interest rate method
Total finance income
Finance expense
Interest on lease liabilities
Interest on debt and borrowings
Accretion interest on rehabilitation provision
Foreign exchange loss
Facility fees and charges
Other financing charges
Total finance expense
(i)
Borrowing cost capitalised during the year amounted to $1.098 million
68 PANORAMIC RESOURCES LIMITED
2022
$000
224
224
(1,030)
(927)
(278)
(3,078)
(212)
-
(5,525)
2021
$000
403
403
(187)
-
(201)
-
-
(54)
(422)
6.
Finance income and finance expense (continued)
Recognition and measurement
Interest income is recognised as interest accrues using the effective interest method.
Finance 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 4.99%
(2021: nil).
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.
Provisions and other payables are discounted to their present value when the effect of the time value of money is
significant. The impact of the unwinding of these discounts is reported in finance costs. For accounting policy, key
estimates and assumptions on provisions refer to Note 24
7.
Income tax
Tax Expense
Current tax expense
Deferred tax expense
Total income tax expense per income statement
Reconciliation of income tax benefit to prima facie tax
Profit before income tax
Income tax expense / (benefit) at the Australian tax rate of 30% (2021: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating
2022
$000
-
-
-
2022
$000
6.260
1,878
212
(34)
(2,056)
-
-
2022
$000
244
431
944
5,736
-
4,136
12,861
207
24,559
(24,559)
-
2021
$000
-
-
-
2021
$000
295
88
97
1,941
(2,126)
-
-
2021
$000
193
2,852
-
5,585
596
4,136
6,257
235
19,855
(19,855)
-
taxable income:
Non-deductible expenses
Disposal of subsidiary
Non-assessable income
Recognition of tax losses
Income tax expense / (benefit)
Recognised tax assets and liabilities
Deferred tax assets:
Employee provisions
Other provisions & accruals
Unrealised FX movements
Rehabilitation liabilities
Right-of-use assets
R&D carry forward tax offsets
Tax losses
Other DTAs
Gross deferred tax assets
Set-off of deferred tax liabilities
Net deferred tax assets
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6.
Finance income and finance expense (continued)
Recognition and measurement
Interest income is recognised as interest accrues using the effective interest method.
Finance 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 4.99%
(2021: nil).
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.
Provisions and other payables are discounted to their present value when the effect of the time value of money is
significant. The impact of the unwinding of these discounts is reported in finance costs. For accounting policy, key
estimates and assumptions on provisions refer to Note 24
7.
Income tax
Tax Expense
Current tax expense
Deferred tax expense
Total income tax expense per income statement
Reconciliation of income tax benefit to prima facie tax
Profit before income tax
Income tax expense / (benefit) at the Australian tax rate of 30% (2021: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Non-deductible expenses
Disposal of subsidiary
Non-assessable income
Recognition of tax losses
Income tax expense / (benefit)
Recognised tax assets and liabilities
Deferred tax assets:
Employee provisions
Other provisions & accruals
Unrealised FX movements
Rehabilitation liabilities
Right-of-use assets
R&D carry forward tax offsets
Tax losses
Other DTAs
Gross deferred tax assets
Set-off of deferred tax liabilities
Net deferred tax assets
2022
$000
-
-
-
2022
$000
6.260
1,878
212
-
(34)
(2,056)
-
2022
$000
244
431
944
5,736
-
4,136
12,861
207
24,559
(24,559)
-
2021
$000
-
-
-
2021
$000
295
88
97
1,941
-
(2,126)
-
2021
$000
193
2,852
-
5,585
596
4,136
6,257
235
19,855
(19,855)
-
2022 ANNUAL REPORT 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
Income tax (continued)
7.
Income tax (continued)
2022
$000
2021
$000
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
Deferred tax liabilities:
The balance comprises temporary differences attributable to:
Prepayments
Plant & equipment
Right-of-use assets
Exploration and evaluation, and mine properties
Inventory
Derivative assets
Other DTLs
Gross deferred tax liabilities
Set-off of deferred tax assets
Net deferred tax liability
Recognition and measurement
Current income tax
(27)
(2,046)
(84)
(18,860)
(2,044)
(1,498)
-
(24,559)
24,559
-
(20)
(1,616)
-
(15,755)
(2,462)
-
(2)
(19,855)
19,855
-
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.
Current income tax relating to items recognised directly in equity are recognised in equity and not in the income statement.
Management periodically evaluates tax positions taken with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
Deferred tax
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.
70 PANORAMIC RESOURCES LIMITED
same taxation authority.
Key estimates and assumptions – Income tax
Judgement is required to determine whether deferred tax assets are recognised on the balance sheet. Deferred tax
assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognised only
where it is considered more likely than not that they will be recovered, which is dependent on the timing and generation of
sufficient future taxable profits in the same taxing jurisdiction to offset future expenditure such as rehabilitation costs.
Determining if there will be future taxable profits depend on management's estimates of the timing and quantum of future
cash flows, which in turn depend on estimates of future production, sales volumes, exploration discoveries, economics
commodity prices, operating costs, rehabilitation costs, capital expenditure, dividends and other capital management
transactions.
These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in
circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities
recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In
such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require
adjustment, resulting in a corresponding credit or charge to income tax expense within the income statement.
The Group has unrecognised temporary differences and carry forward losses for which no deferred tax asset is
recognised on the balance sheet of A$68.46 million (2021: A$70.51 million) that have not been recognised as at reporting
date as the Group has not yet determined if there will be sufficient future taxable profits available to recover these losses.
Tax Consolidation
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 standalone 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. Members of the tax consolidated group have entered into a tax sharing agreement that
provides for the allocation of income tax liabilities between entities should the head entity default on its tax payment
obligations.
8.
Earnings per share
Basic profit per share
Company
From continuing operations attributable to the ordinary equity holders of the
Diluted profit per share
Company
From continuing operations attributable to the ordinary equity holders of the
Reconciliation of profit used in calculating earnings per share
Net profit attributable to equity holders of the parent
Weighted average number of shares used as denominator
2022
Cents
0.3
2022
Cents
0.3
2022
$000
6,260
2021
cents
0.0
2021
cents
0.0
2021
$000
295
Weighted average number of ordinary shares used as the denominator in:
Calculating - basic and diluted loss per share
Calculating - diluted loss per share
2022
Number
2021
Number
2,050,914,004
2,050,914,004
2,060,492,595
2,060,492,595
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 calculate basic (loss) / earnings per share.
There are 29,630,644 performance rights on issue at 30 June 2022 (2021: 17,833,488) which are contingently issuable
and have not been included in the calculation of diluted earnings per share. There were 28,520,525 options on issue at
30 June 2022 (2021: 28,520,525) which have an exercise price lower than the average market price of the ordinary
shares this has resulted in a dilution to the calculation weighted average number of shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
Income tax (continued)
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.
Key estimates and assumptions – Income tax
Judgement is required to determine whether deferred tax assets are recognised on the balance sheet. Deferred tax
assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognised only
where it is considered more likely than not that they will be recovered, which is dependent on the timing and generation of
sufficient future taxable profits in the same taxing jurisdiction to offset future expenditure such as rehabilitation costs.
Determining if there will be future taxable profits depend on management's estimates of the timing and quantum of future
cash flows, which in turn depend on estimates of future production, sales volumes, exploration discoveries, economics
commodity prices, operating costs, rehabilitation costs, capital expenditure, dividends and other capital management
transactions.
These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in
circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities
recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In
such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require
adjustment, resulting in a corresponding credit or charge to income tax expense within the income statement.
The Group has unrecognised temporary differences and carry forward losses for which no deferred tax asset is
recognised on the balance sheet of A$68.46 million (2021: A$70.51 million) that have not been recognised as at reporting
date as the Group has not yet determined if there will be sufficient future taxable profits available to recover these losses.
Tax Consolidation
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 standalone 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. Members of the tax consolidated group have entered into a tax sharing agreement that
provides for the allocation of income tax liabilities between entities should the head entity default on its tax payment
obligations.
8.
Earnings per share
Basic profit per share
From continuing operations attributable to the ordinary equity holders of the
Company
Diluted profit per share
From continuing operations attributable to the ordinary equity holders of the
Company
Reconciliation of profit used in calculating earnings per share
Net profit attributable to equity holders of the parent
Weighted average number of shares used as denominator
2022
Cents
0.3
2022
Cents
0.3
2022
$000
6,260
2021
cents
0.0
2021
cents
0.0
2021
$000
295
Weighted average number of ordinary shares used as the denominator in:
Calculating - basic and diluted loss per share
Calculating - diluted loss per share
2022
Number
2021
Number
2,050,914,004
2,050,914,004
2,060,492,595
2,060,492,595
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 calculate basic (loss) / earnings per share.
There are 29,630,644 performance rights on issue at 30 June 2022 (2021: 17,833,488) which are contingently issuable
and have not been included in the calculation of diluted earnings per share. There were 28,520,525 options on issue at
30 June 2022 (2021: 28,520,525) which have an exercise price lower than the average market price of the ordinary
shares this has resulted in a dilution to the calculation weighted average number of shares.
2022 ANNUAL REPORT 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Capital and debt structure
This section contains information which will help users understand the management of the Group’s capital and debt
structure.
9.
Cash and cash equivalents (continued)
Reconciliation of liabilities arising from financing activities
9.
Cash and cash equivalents
Cash at bank and on hand
Short-term deposits
Recognition and measurement
2022
$000
21,757
-
21,757
2021
$000
15,160
9,077
24,237
Cash and cash equivalents in the consolidated balance sheet and consolidated statement of cash flows comprise of cash
at bank and on hand and short-term deposits that are readily convertible to known amounts of cash with insignificant risk
of change in value. The carrying amount for cash and cash equivalents equals the fair value.
Cash at bank earns interest at floating rates based on daily bank deposit rates. The weighted average interest rate
achieved for the year was 0.26% (2021: 0.37%).
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 assets. The weighted
average interest rate achieved for the year was 0.89% (2021: 0.91%).
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.
Cash flow information
A reconciliation between cash and cash equivalents and net cash inflow from operating activities is as follows:
Cash and cash equivalents in the statement of cash flows
Reconciliation of net profit after tax to net cash flows from operations:
Profit for the period
Adjustments for:
Depreciation and amortisation included in the income statement
(Gain) on disposal of plant and equipment
Property, plant and equipment written off
Reversal of impairment of assets
Interest income
Unrealised (gain) / loss on foreign currency exchange
Exploration and evaluation written off
Share- based payment
Unrealised QP price adjustments and foreign currency adjustments
Gain on sale of investments
Gain on sale of subsidiary
Other non-cash
FV movement in derivative financial instruments and foreign currency
Unrealised loss on foreign currency
Finance cost
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in prepayments
Increase / (decrease) in trade creditors
Increase in inventories
Increase / (decrease)Increase in provisions
Net cash inflow / (outflow) from operating activities
72 PANORAMIC RESOURCES LIMITED
2022
$000
21,757
2021
$000
24,237
6,260
295
8,668
(1,817)
-
-
-
-
844
668
10,413
-
-
-
(4,745)
3,078
1,308
(318)
(1,015)
14,136
(12,278)
1,008
26,210
5,028
(22)
648
(14,187)
(403)
127
945
304
-
(870)
(7,659)
-
-
-
422
1,071
(622)
(309)
(557)
(1,635)
(17,424)
Non-cash charges
Leases
recognised
during the
Loans
Foreign
recognised
exchange
during the
1 July
2021
$000
Cash
flows
Interest
$000
$000
Interest bearing liabilities - Trafigura
Interest bearing liabilities - Insurance
-
-
41,113
(763)
52
29
year
$000
Other
$000
-
1,850
-
-
30 June
2022
$000
43,600
1,116
Lease liabilities
6,183
(10,061)
1,320
36,677
-
(2,302)
31,815
Total liabilities from financing
activities
6,183
30,289
1,401
36,677
2,435
1,850
(2,302)
76,532
1 July
Cash
2020
$000
flows
Interest
$000
$000
Leases
recognised
during the
Loans
Foreign
recognised
exchange
during the
year
$000
movement
$000
year
$000
Other
$000
30 June
2021
$000
-
-
-
-
(64)
6,183
Interest bearing liabilities
-
-
-
Lease liabilities
7,251
(1,171)
167
7,251
(1,171)
167
-
(64)
6,183
movement
$000
2,435
year
$000
-
-
-
-
Non-cash charges
-
-
-
-
-
-
Trade and other payables at amortised cost 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. The amounts are generally unsecured and are usually paid within 60 days
of recognition. They are initially measured at fair value and subsequently carried at amortised cost. The carrying value
of these payables approximates their fair value.
Trade payable carried at fair value, include reclassified trade receivables that are in credit at balance sheet date (Refer
to Note 3 and 17). The fair value of the liability has been estimated using forward market commodity prices at
30 June 2022 for nickel US$22,676/t, copper US$8,264/t and cobalt US$70,239/t which comprises contained metal
totalling nickel 1,366t, copper 819t and cobalt 89t. This liability is payable to the Company’s offtake customer. Refer to
Total liabilities from financing
activities
10.
Trade and other payables
Current
Trade and other payables – at amortised cost
Trade payables – at fair value
Accrued expenses
Total
Recognition and measurement
Note 17 for further information.
11.
Borrowings
Current liabilities
External loan
Other loans
Total current liabilities
Non-current liabilities
External loan
Other loans
Total non-current liabilities
2022
$000
3,768
10,413
14,756
28,937
2022
$000
7,528
1,116
8,644
36,072
-
36,072
2021
$000
1,700
-
2,688
4,388
2021
$000
-
-
-
-
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9.
Cash and cash equivalents (continued)
Reconciliation of liabilities arising from financing activities
Non-cash charges
1 July
2021
$000
-
-
Cash
flows
$000
41,113
(763)
Interest
$000
52
29
Leases
recognised
during the
year
$000
-
-
Interest bearing liabilities - Trafigura
Interest bearing liabilities - Insurance
Lease liabilities
6,183
(10,061)
1,320
36,677
Foreign
exchange
movement
$000
2,435
-
-
Loans
recognised
during the
year
$000
-
1,850
Other
$000
-
-
30 June
2022
$000
43,600
1,116
-
(2,302)
31,815
Total liabilities from financing
activities
6,183
30,289
1,401
36,677
2,435
1,850
(2,302)
76,532
Non-cash charges
1 July
2020
$000
Cash
flows
$000
Interest
$000
Leases
recognised
during the
year
$000
Foreign
exchange
movement
$000
Loans
recognised
during the
year
$000
Interest bearing liabilities
-
-
-
Lease liabilities
7,251
(1,171)
167
Total liabilities from financing
activities
7,251
(1,171)
167
-
-
-
-
-
-
10.
Trade and other payables
Current
Trade and other payables – at amortised cost
Trade payables – at fair value
Accrued expenses
Total
Recognition and measurement
Other
$000
-
30 June
2021
$000
-
(64)
6,183
-
-
-
(64)
6,183
2022
$000
3,768
10,413
14,756
28,937
2021
$000
1,700
-
2,688
4,388
Trade and other payables at amortised cost 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. The amounts are generally unsecured and are usually paid within 60 days
of recognition. They are initially measured at fair value and subsequently carried at amortised cost. The carrying value
of these payables approximates their fair value.
Trade payable carried at fair value, include reclassified trade receivables that are in credit at balance sheet date (Refer
to Note 3 and 17). The fair value of the liability has been estimated using forward market commodity prices at
30 June 2022 for nickel US$22,676/t, copper US$8,264/t and cobalt US$70,239/t which comprises contained metal
totalling nickel 1,366t, copper 819t and cobalt 89t. This liability is payable to the Company’s offtake customer. Refer to
Note 17 for further information.
11.
Borrowings
Current liabilities
External loan
Other loans
Total current liabilities
Non-current liabilities
External loan
Other loans
Total non-current liabilities
2022
$000
7,528
1,116
8,644
36,072
-
36,072
2021
$000
-
-
-
-
-
-
2022 ANNUAL REPORT 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11.
Borrowings (continued)
Recognition and measurement
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.
External loan
The Group has a secured loan facility with Trafigura Pty Ltd for US $45.0 million. 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 was drawn down on 24 September 2021 and has a five-year term from 1 July 2021 with interest-
only repayments required in the first 12 months. Debt repayments begin in August 2022 and are sculpted to align with
project cash flows.
The RCF has an 18-month term from the drawdown of the PLF 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 being 24 March 2023 (RCF
Tranche only). The RCF was undrawn at 30 June 2022. Subsequent to the end of the financial year on the
24 August 2022 the Company announced to the ASX, it had commenced a US$15.0 million drawdown from the RCF.
Proceeds from the drawdown were received on the 30 August 2022. Further information is provided in Subsequent
Events Note 32.
Both facilities are subject to the same interest rate which comprises the three-month LIBOR plus an interest margin. The
facilities have no ongoing commitment fees. There are no requirements to undertake commodity hedging. At the
Company’s election, the facility can be repaid in full (ahead of schedule) without penalty.
The security pledge to Trafigura for the two facility limits comprise a fixed and floating charge over all the assets and
undertakings of Savannah Nickel Mines Pty Ltd (Savannah) and Pan Transport Pty Ltd together with a mining mortgage
over six key project tenements. Panoramic Resources Ltd (Panoramic) has provided a security pledge over both the
shares it holds in Savannah and the intercompany loan receivable due from Savannah. A corporate guarantee has also
been provided by Panoramic to Trafigura.
The facility has a limited number of financial and reporting covenants that are largely aligned with the ASX disclosure
requirements for half year and full year reporting. At 30 June 2022, the Company was in compliance with these
requirements.
The carrying value of the PLF at 30 June 2022 is A$43.6 million (US$30.0 million). A $2.435 million (2021: nil) unrealised
foreign currency loss has been recognised in the income statement at 30 June 2022 as a result of AUD:USD exchange
rate movements since the PLF was drawn down.
During the year, the Group incurred interest expenses totalling US$1.9 million (AUD$2.6 million) on account of this loan
facility. Interest expense capitalised during the year amounted to $1.098 million.
Other loans
The Group has arranged a facility with Attvest Finance Pty Ltd to fund Insurance Premiums totalling $1.85 million. The
facility commenced on 31 March 2022 to fund the Group’s FY2023 insurance program. The term of the facility is 10
months to December 2022 with monthly repayments of $0.19 million. As at 30 June 2022 the remaining loan balance to
be repaid was $1.12 million.
12.
Lease liabilities
Current
Non-current
Total
2022
$000
9,886
21,929
31,815
In the 2022 financial year, lease liabilities had an average term of 3.3 years (2021: 6 years)
Movement in Lease Liabilities
Additions
Interest expense
Payments
Disposals
Adjustment
Total
74 PANORAMIC RESOURCES LIMITED
2022
$000
36,677
1,320
(9,707)
(2,658)
-
31,815
2021
$000
1,445
4,738
6,183
2021
$000
-
167
(1,171)
-
(64)
6,183
12.
Lease liabilities (continued)
Recognition and measurement
Lease liabilities – Group as Lessee
The Group has lease contracts for various items of plant, machinery, vehicles and other equipment used in its operations.
Leases of plant and machinery generally have lease terms between one and ten years, while motor vehicles and other
equipment generally have lease terms between one and five years.
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
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. For a contract that contains a lease component and one or more additional
lease or non-lease components, the Group shall allocate the consideration in the contract to each lease component on
the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease
components. 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 applies the short-term lease recognition exemption 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 to leases that are considered of low value. 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.
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.
Lease liabilities include right-of-use assets for the onsite power station at the Savanah Nickel Project, Barminco mining
equipment, buses, loaders, fuel storage system, storage and ship loading facilities at the Wyndham port and the rental
of the corporate office space in Perth.
13.
Financial risk management objectives and policies
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.
To manage exposure to commodity prices and exchange rates the Group uses derivative instruments, principally USD
fixed forward metal swaps and forward foreign currency exchange rate contracts. The purpose is to manage commodity
price and currency rate risks arising from the Group’s operations. These derivatives are entered into based on limits set
by the Board. The main risks arising from the Group's financial instruments are commodity price risk, foreign currency
risk, interest rate risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different
types of risk to which it is exposed. These include monitoring levels of exposure to commodity prices, interest rate and
foreign currency exchange risks and assessments of market forecasts for commodity prices and foreign exchange.
Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is
monitored through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for the identification and control of these 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.
The Group uses different methods to measure and manage different types of risks to which it is exposed.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12.
Lease liabilities (continued)
Recognition and measurement
Lease liabilities – Group as Lessee
The Group has lease contracts for various items of plant, machinery, vehicles and other equipment used in its operations.
Leases of plant and machinery generally have lease terms between one and ten years, while motor vehicles and other
equipment generally have lease terms between one and five years.
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
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. For a contract that contains a lease component and one or more additional
lease or non-lease components, the Group shall allocate the consideration in the contract to each lease component on
the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease
components. 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 applies the short-term lease recognition exemption 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 to leases that are considered of low value. 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.
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.
Lease liabilities include right-of-use assets for the onsite power station at the Savanah Nickel Project, Barminco mining
equipment, buses, loaders, fuel storage system, storage and ship loading facilities at the Wyndham port and the rental
of the corporate office space in Perth.
13.
Financial risk management objectives and policies
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.
To manage exposure to commodity prices and exchange rates the Group uses derivative instruments, principally USD
fixed forward metal swaps and forward foreign currency exchange rate contracts. The purpose is to manage commodity
price and currency rate risks arising from the Group’s operations. These derivatives are entered into based on limits set
by the Board. The main risks arising from the Group's financial instruments are commodity price risk, foreign currency
risk, interest rate risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different
types of risk to which it is exposed. These include monitoring levels of exposure to commodity prices, interest rate and
foreign currency exchange risks and assessments of market forecasts for commodity prices and foreign exchange.
Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is
monitored through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for the identification and control of these 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.
The Group uses different methods to measure and manage different types of risks to which it is exposed.
2022 ANNUAL REPORT 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
Financial risk management objectives and policies (continued)
13.
Financial risk management objectives and policies (continued)
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. For the year ended 30 June 2022, 100% of the Group’s sales were denominated in United
States Dollars ("USD") (2021: nil), whilst most of the costs are denominated in Australian Dollars ("AUD"). All entities in
the Group have an Australian dollar functional currency.
The Group’s income statement and balance sheet can be affected significantly by movement 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.
It is the Group’s policy to, where practical, enter into derivative instruments to manage foreign currency exposures once
the likelihood of such exposures is highly probable, and to negotiate the terms of the derivatives to exactly match the
terms of the underlying transaction. The Group will follow its currency policy of matching and hedging up to 80% of sales
revenues in USD where practical.
As at 30 June 2022, the Group had the following exposure to foreign currencies:
Cash at bank (USD)
Trade creditors at fair value (USD)
Other receivables (CAD)
External loan (USD)
Derivatives (USD)
Net Exposure
2022
$000
7,825
(10,413)
1,603
(43,600)
4,992
(39,593)
2021
$000
-
-
2,769
-
-
2,769
The other receivable relates to deferred sale proceeds arising from the sale of a wholly owned subsidiary in the 2020
financial year (Thunder Bay North Project).
Sensitivity analysis
The following sensitivities are based on the foreign currency risk exposures in existence at the balance sheet date.
USD: The +/- 10% (2021: +/- 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 2022, the Group had $3.44 million USD currency risk exposures.
CAD: The +/- 10% (2021: +/- 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. As at 30 June 2022, the Group had $1.5 million CAD currency risk exposures.
At 30 June 2020, had the currencies moved as illustrated in the table below, with all other variables held constant, post
tax profit and equity would have been affected as follows:
Judgements of reasonably possible movements
AUD to USD +10% (2021: 10% increase)
AUD to USD +10% (2021: 10% increase)
AUD to CAD +10% (2021: 10% increase)
AUD to CAD +10% (2021: 10% decrease)
Effect on profit before tax
2021
$000
-
-
126
(103)
2022
$000
6,682
(8,380)
(146)
178
Impact on other equity
2022
$000
-
-
-
-
2021
$000
-
-
-
-
Management believes the balance sheet date risk exposures are a representative estimate of the risk inherent in the
financial instruments.
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 the following exposure
at 30 June 2022.
2022
Weighted average
interest rate
%
0.8%
0.9%
3-month LIBOR + interest margin
2021
Weighted average
interest rate
%
0.2%
0.6%
-
Balance
$'000
21,757
291
(43,600)
(21,552)
Balance
$'000
24,237
221
-
24,458
Deposits at call
Cash restricted or pledged
External loans
76 PANORAMIC RESOURCES LIMITED
Interest rate risk (continued)
Sensitivity analysis
Increase 1.0% (2021: 1.0%)
Decrease 1.0% (2021: 1.0%)
Commodity price risk
Exchange.
are actively monitored.
risk.
The following sensitivities are based on 100 basis point change in interest rates at the reporting date.
Judgements of reasonably possible movements
Effect on profit before tax
Impact on other equity
2022
$000
216
(216)
2021
$000
-
-
2022
$000
-
-
2021
$000
-
-
The Group’s exposure to commodity metal prices is very high as the majority of total revenue comes from the sale of
nickel, copper and cobalt. Nickel, copper and cobalt is sold on the basis of USD prices quoted on the London Metal
The Group’s profit and loss account and balance sheet can be affected significantly by movements in metal prices on the
London Metal Exchange. The Group seeks to mitigate the effect of its metal price exposure by using derivative
instruments, principally forward sales contracts and put and call options. The limits of hedging are set by the Board, and
The following table summaries the sensitivity of the Group’s financial assets and financial liabilities to commodity price
Commodity price risk
-30%
+30%
Gross
exposure
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
47,096
4,992
52,088
(10,124)
(5,090)
(15,214)
9,890
6,618
16,508
Commodity price risk
-30%
+30%
Gross
exposure
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 30 June 2022
Judgements of reasonably possible
movements:
QP mark to market
Derivatives
Total decrease
At 30 June 2021
Judgements of reasonably possible
movements:
Accounts receivable
Derivatives
Total increase / (decrease)
Credit risk
The +/- 30% sensitivity is based on reasonably possible changes, over a financial year, using the observed range of
actual historical prices for the preceding 5-year period and management's expectation of future movements.
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.
Cash and cash deposits are held in banks and financial institutions with high credit ratings.
At 30 June 2022, 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 2022, there were no receivables due from the offtake counterparty.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
Financial risk management objectives and policies (continued)
Interest rate risk (continued)
Sensitivity analysis
The following sensitivities are based on 100 basis point change in interest rates at the reporting date.
Judgements of reasonably possible movements
Increase 1.0% (2021: 1.0%)
Decrease 1.0% (2021: 1.0%)
Commodity price risk
Effect on profit before tax
2021
$000
-
-
2022
$000
216
(216)
Impact on other equity
2022
$000
-
-
2021
$000
-
-
The Group’s exposure to commodity metal prices is very high as the majority of total revenue comes from the sale of
nickel, copper and cobalt. Nickel, copper and cobalt is sold on the basis of USD prices quoted on the London Metal
Exchange.
The Group’s profit and loss account and balance sheet can be affected significantly by movements in metal prices on the
London Metal Exchange. The Group seeks to mitigate the effect of its metal price exposure by using derivative
instruments, principally forward sales contracts and put and call options. The limits of hedging are set by the Board, and
are actively monitored.
The following table summaries the sensitivity of the Group’s financial assets and financial liabilities to commodity price
risk.
At 30 June 2022
Judgements of reasonably possible
movements:
QP mark to market
Derivatives
Total decrease
At 30 June 2021
Judgements of reasonably possible
movements:
Accounts receivable
Derivatives
Total increase / (decrease)
Commodity price risk
-30%
+30%
Gross
exposure
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
47,096
4,992
52,088
(10,124)
(5,090)
(15,214)
-
-
-
9,890
6,618
16,508
-
-
-
Commodity price risk
-30%
+30%
Gross
exposure
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
Impact on
post tax
profit
$’000
Impact
on other
equity
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The +/- 30% sensitivity is based on reasonably possible changes, over a financial year, using the observed range of
actual historical prices for the preceding 5-year period and management's expectation of future movements.
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.
Cash and cash deposits are held in banks and financial institutions with high credit ratings.
At 30 June 2022, 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 2022, there were no receivables due from the offtake counterparty.
2022 ANNUAL REPORT 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
Financial risk management objectives and policies (continued)
14.
Fair value measurement
Credit risk (continued)
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
10 and 17 for disclosures in relation to expected credit losses on financial assets carried at amortised cost.
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. 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.
Equity risk
During the prior financial year the Group disposed of all share investments held in listed entities. The Group was exposed
to equity securities price risk prior to the disposal.
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 2022.
Trade receivables at fair value through profit and loss
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.
Less than
1 year
$’000
Between
1 and 5
years
$’000
Over 5
years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
liabilities
$’000
28,937
11,103
10,751
1,143
51,934
-
22,174
39,842
-
-
1,038
-
-
28,937
34,315
50,593
1,143
28,937
31,124
43,600
1,116
62,016
1,038
114,988
104,777
Less than
1 year
$’000
Between
1 and 5
years
$’000
Over 5
years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
liabilities
$’000
4.388
1,755
6,143
-
3,835
3,835
-
1,711
1,711
4,388
7,301
11,689
4,388
6,183
10,571
At 30 June 2022
Contractual maturities of financial
liabilities
Trade payables
Lease liabilities
Secured loan facility
Insurance premium funding
At 30 June 2021
Contractual maturities of financial
liabilities
Trade payables
Lease liabilities
78 PANORAMIC RESOURCES LIMITED
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement and for
disclosure purposes.
Level 1
Level 2
Disclosure of fair value measurements is by level using the following fair value measurement hierarchy:
Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable, and
Level 3
Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
The following table represents the fair value measurement hierarchy of the Group’s assets and liabilities at 30 June 2022
and 30 June 2021 carried at fair value.
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Financial assets at fair value measure at fair value
Trade receivables at fair value through profit and loss-
Financial assets at fair value measure at fair value
Trade Payables (unrealised QP loss – at fair value)
At 30 June 2022
Financial assets
Derivative instruments
Total assets
At 30 June 2021
Financial assets
Total assets
At 30 June 2022
Financial liabilities
Total liabilities
At 30 June 2021
Financial liabilities
Trade payables
Total liabilities
-
-
6
6
-
12
12
-
-
-
-
4,992
4,992
-
-
-
-
-
-
-
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
10,413
10,413
10,413
10,413
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
-
-
-
-
-
-
-
4,992
-
6
4,998
-
12
12
-
-
The carrying value of other financial assets and liabilities as at 30 June 2022 approximate fair value.
The fair values of trade receivables / payables 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.
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. 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.
Key estimates and assumptions – Fair value measurement
When the fair values of assets or liabilities are recorded in the balance sheet cannot be measured based on quoted prices
in active markets, their fair value is measured using valuation techniques including discounted cash flow models. The inputs
to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement
is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and
volatility.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14.
Fair value measurement
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 using the following fair value measurement hierarchy:
Level 1
Level 2
Level 3
Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable, and
Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
The following table represents the fair value measurement hierarchy of the Group’s assets and liabilities at 30 June 2022
and 30 June 2021 carried at fair value.
At 30 June 2022
Financial assets
Trade receivables at fair value through profit and loss
Derivative instruments
Financial assets at fair value measure at fair value
Total assets
At 30 June 2021
Financial assets
Trade receivables at fair value through profit and loss-
Financial assets at fair value measure at fair value
Total assets
At 30 June 2022
Financial liabilities
Trade Payables (unrealised QP loss – at fair value)
Total liabilities
At 30 June 2021
Financial liabilities
Trade payables
Total liabilities
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
6
6
-
4,992
-
4,992
-
-
-
-
-
4,992
6
4,998
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
12
12
-
-
-
-
-
-
-
12
12
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
10,413
10,413
-
-
10,413
10,413
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
-
-
-
-
The carrying value of other financial assets and liabilities as at 30 June 2022 approximate fair value.
The fair values of trade receivables / payables 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.
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. 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.
Key estimates and assumptions – Fair value measurement
When the fair values of assets or liabilities are recorded in the balance sheet cannot be measured based on quoted prices
in active markets, their fair value is measured using valuation techniques including discounted cash flow models. The inputs
to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement
is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and
volatility.
2022 ANNUAL REPORT 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17.
Trade and other receivables (continued)
Recognition and measurement
Receivables are classified at initial recognition, and subsequently measured at amortised cost or fair value through profit
or loss. The classification of receivables at initial recognition depends on the receivable’s contractual cash flow
characteristics and the Group’s business model for managing them. Except for trade receivables the Group initially
measures a receivable 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 initially measured at the transaction price determined in accordance with the
accounting policy for revenue.
In order for a receivable to be classified and measured at amortised cost, it needs to give rise to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
There are no contract assets, for which consideration is conditional that have been recognised from contracts with
All receivables are current and not past due.
customers.
Trade receivables
Trade receivables are subject to provisional pricing and are exposed to the commodity price risk which causes such trade
receivables to fail the SPPI test. As a result, these receivables are measured at fair value through profit or loss from the
date of the recognition of the corresponding sale, with the subsequent movements in fair value being recognised in the
comprehensive income statement.
Under the current offtake agreement, on presentation of ship loading documents and the provisional invoice, the customer
settles 100% of the provisional sales invoice value within approximately 7 days. At the conclusion of the provisional
pricing period a final invoice is issued with the difference between the provisional value and final value settled in
approximately 5 days upon presentation of the final invoice. Sales are invoiced and received in US dollars (US$).
As at 30 June 2022, there were no (2021: nil) trade receivables due to the Company. A current liability has been
recognised for the fair value measurement of provisional concentrate sales not finalised at year end. The liability has
been estimated using forward market commodity prices at 30 June 2022 for nickel US$22,676/t, copper US$8,264/t and
cobalt US$70,239/t. A unrealised fair value loss adjustment totalling $9.764 million (2021: nil) is payable to the Company’s
offtake customer. See Note 10 for further details.
The amount of realised fair value changes recognised in the income statement during the year ended 30 June 2022 (on
account of current year concentrate sales) was $11.79 million (2021: $0.139 million).
15.
(a)
Dividends
Ordinary shares
No final dividend was paid for the year ended 30 June 2022 (30 June 2021: Nil)
(b)
Dividends not recognised at the end of the reporting period
No dividend has been declared since the end of the reporting period.
Franking credits
Franking credit balance
The amount of franking credits available for the subsequent financial
year are:
Franking account balance at the end of the financial year at 30% (2021: 30%)
Invested capital
This section provides information on how the Group invests and manages its capital.
16.
Derivative financial instruments
Current Assets:
Forward commodity contracts
Total current derivative financial instrument assets
Recognition and measurement
2022
$000
10,503
10,503
2022
$000
4,992
4,992
2021
$000
10,503
10,503
2021
$000
-
-
The Group uses derivatives such as USD nickel and copper forward sales contracts, USD nickel options, USD
denominated currency options and USD denominated forward currency sales contracts to manage its risks associated
with foreign currencies and commodity price fluctuations. These derivative financial instruments are stated at fair value.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately.
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
The Group actively manages USD nickel price risk for each concentrate shipment by protecting a portion of the nickel
cash flow received from provisional invoicing. The Group’s policy allows the Group to enter into derivatives to protect up
to 80% of the estimated payable volume in each shipment. This leaves the company with a modest position with full
exposure to movements in the nickel price. The intent of these derivatives are to manage metal pricing risk and cash flow
during the period from provisional invoice / cash receipt through to final invoice following the QP.
During the year, the Company executed USD forward contracts with Macquarie Bank for 1,686t of nickel metal achieving
an average price of US$25,064/t.
As at 30 June 2022 outstanding derivatives total 900t and represents 50% of the contained metal in shipments that have
not been finalised. The average price achieved for this unsettled hedging is US$27,942/t.
The unrealised gain on these derivatives at 30 June 2022 was A$5.0 million (2021: nil).
17.
Trade and other receivables
Other receivables include the final instalment from the sale of the Thunder Bay North Project (sold in the 2020 financial
year) totalling C$1.5 million. This amount is due to be received in May 2023. The consideration receivable is measured
using the effective interest rate method.
Foreign currency exchange rate and interest rate risk
Trade receivables is exposed to movements in AUD:USD exchange rates and commodity prices during the quotational
Information on foreign currency exchange and interest rate risk is provided in Note 13.
Information on fair value and credit risk is provided in Note 13 and 14.
Current
Trade receivables – at fair value
GST and fuel tax credit receivable – at amortised cost
Other receivables – at amortised cost
Total current
Non-current
Trade receivables – at fair value
Other receivables – at amortised cost
Total non-current
80 PANORAMIC RESOURCES LIMITED
2022
$000
-
2,090
1,707
3,797
-
-
-
2021
$000
-
504
1,438
1,942
-
1,536
1,536
2022
$000
-
9,340
3,495
12,835
2021
$000
-
-
557
557
Stores, consumables, ore and concentrate stocks are stated at the lower of cost and net realisable value.
For ore and concentrate inventory, costs are assigned to individual items of inventory on the basis of weighted average
costs. Costs include direct materials, direct labour and a proportion of variable and fixed overhead expenditure which is
directly related to the production of inventories to the point of sale.
Other receivables
internal credit assessment.
period.
Fair value and credit risk
18.
Inventories
Current
Nickel ore stocks on hand
Concentrate stocks on hand
Stores and consumables
Total
Recognition and measurement
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17.
Trade and other receivables (continued)
Recognition and measurement
Receivables are classified at initial recognition, and subsequently measured at amortised cost or fair value through profit
or loss. The classification of receivables at initial recognition depends on the receivable’s contractual cash flow
characteristics and the Group’s business model for managing them. Except for trade receivables the Group initially
measures a receivable 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 initially measured at the transaction price determined in accordance with the
accounting policy for revenue.
In order for a receivable to be classified and measured at amortised cost, it needs to give rise to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
There are no contract assets, for which consideration is conditional that have been recognised from contracts with
customers.
All receivables are current and not past due.
Trade receivables
Trade receivables are subject to provisional pricing and are exposed to the commodity price risk which causes such trade
receivables to fail the SPPI test. As a result, these receivables are measured at fair value through profit or loss from the
date of the recognition of the corresponding sale, with the subsequent movements in fair value being recognised in the
comprehensive income statement.
Under the current offtake agreement, on presentation of ship loading documents and the provisional invoice, the customer
settles 100% of the provisional sales invoice value within approximately 7 days. At the conclusion of the provisional
pricing period a final invoice is issued with the difference between the provisional value and final value settled in
approximately 5 days upon presentation of the final invoice. Sales are invoiced and received in US dollars (US$).
As at 30 June 2022, there were no (2021: nil) trade receivables due to the Company. A current liability has been
recognised for the fair value measurement of provisional concentrate sales not finalised at year end. The liability has
been estimated using forward market commodity prices at 30 June 2022 for nickel US$22,676/t, copper US$8,264/t and
cobalt US$70,239/t. A unrealised fair value loss adjustment totalling $9.764 million (2021: nil) is payable to the Company’s
offtake customer. See Note 10 for further details.
The amount of realised fair value changes recognised in the income statement during the year ended 30 June 2022 (on
account of current year concentrate sales) was $11.79 million (2021: $0.139 million).
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 include the final instalment from the sale of the Thunder Bay North Project (sold in the 2020 financial
year) totalling C$1.5 million. This amount is due to be received in May 2023. The consideration receivable is measured
using the effective interest rate method.
Foreign currency exchange rate and interest rate risk
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 13.
Fair value and credit risk
Information on fair value and credit risk is provided in Note 13 and 14.
18.
Inventories
Current
Nickel ore stocks on hand
Concentrate stocks on hand
Stores and consumables
Total
Recognition and measurement
2022
$000
-
9,340
3,495
12,835
2021
$000
-
-
557
557
Stores, consumables, ore and concentrate stocks are stated at the lower of cost and net realisable value.
For ore and concentrate inventory, costs are assigned to individual items of inventory on the basis of weighted average
costs. Costs include direct materials, direct labour and a proportion of variable and fixed overhead expenditure which is
directly related to the production of inventories to the point of sale.
2022 ANNUAL REPORT 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18.
Inventories (continued)
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale. Inventories expected to be processed or sold within twelve months
after the balance sheet date, are classified as current assets.
Key judgement - Cost of inventory produced prior to commercial production
The determination of cost of inventory produced prior to Commercial Production requires judgement and was based on
estimated mining and processing cost per tonne expected to be achieved over the life of mine.
Amounts recognised in profit or loss
Product inventory movement during the year ended 30 June 2022 amounted to an expense of $66.42 million (2021: nil)
and is disclosed as part of cost of sales in Note 5.
19.
Exploration and evaluation and mine development
Reconciliation of the carrying amounts for each class of property, plant and equipment is set out below.
2022
Opening net carrying amount
Additions
Depreciation charge
Transfers between other asset classes
Written-off to profit and loss
Reversal of impairment loss
Remeasurement of rehabilitation provision
Closing net carrying amount
At 30 June 2022
Gross carrying amount – at cost
Accumulated amortisation and impairment
Net carrying amount
2021
Opening net carrying amount
Additions
Assets disposed
Depreciation charge
Transfers between other asset classes
Written off to profit and loss
Reversal of impairment loss
Remeasurement of rehabilitation provision
Closing net carrying amount
At 30 June 2021
Gross carrying amount – at cost
Accumulated amortisation and impairment
Net carrying amount
Mine
development
expenditure
$000
136,076
65,555
(4,588)
503
-
-
(3,980)
193,566
383,487
(189,921)
193,566
Mine
development
expenditure
$000
86,695
-
-
39,101
11,423
(1,143)
136,076
321,462
(185,386)
136,076
Exploration
expenditure
$000
5,551
844
-
-
(844)
-
-
5,551
Total
$000
141,627
66,399
(4,588)
503
(844)
-
(3,980)
199,117
5,551
-
5,551
392,580
(193,463)
199,117
Exploration
expenditure
$000
12.535
996
(7,035)
-
-
(945)
-
-
5,551
Total
$000
99,230
996
(7,035)
-
39,101
(945)
11,423
(1,143)
141,627
5,551
-
5,551
327,013
(185,386)
141,627
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful development
and commercial exploitation of areas of interest and the sale of minerals, or the sale of the respective areas of interest.
Recognition and measurement
Mine Development
Mine development assets include costs incurred in accessing the ore body and costs to develop the mine to the production
phase once the technical feasibility and commercial viability of a mining operation has been established. At this stage,
exploration and evaluation assets are reclassified to mine properties and tested for impairment.
Mine property and development assets are stated at historical cost less accumulated amortisation and any accumulated
impairment losses recognised. The initial cost of an asset comprises its purchase price or construction cost, any costs
directly attributable to bringing the asset into operation, the estimate of the rehabilitation costs, and for qualifying assets
(where relevant), borrowing costs. Any ongoing costs associated with mining which are considered to benefit mining
operations in future periods are capitalised.
82 PANORAMIC RESOURCES LIMITED
19.
Exploration and evaluation and mine development (continued)
Commercial Production
The determination of when a mine and processing facility (“Mine”) is in the condition necessary for it to be capable of
operating in the manner intended by management (referred to as “commercial production”) is a matter of significant
judgement. Management considers several factors in determining when a Mine has reached levels of operating capacity
intended by management, these include;
• When the Mine is substantially complete i.e. constructed, installed and / or refurbished and ready for its intended
use;
•
•
•
The Mine has the ability to sustain ongoing production at a steady or increasing level;
The Mine has reached a level of pre-determined production being a substantial percentage of design capacity;
• Mineral recoveries are at or near the expected production level; and
A reasonable period of testing of the mine, plant and equipment has been completed.
Once in Commercial Production, the capitalisation of certain mine development and construction costs cease, and
amortisation of the mine property commences. Subsequent costs are either regarded as forming part of the cost of
inventory or are expensed. Any costs relating to mining asset additions or improvements, or mineable reserve
development, are assess to determine whether capitalisation is appropriate.
The Savannah Nickel Project achieved Commercial Production from 1 April 2022.
Rehabilitation asset
The present value of the expected cost for the decommissioning, restoration and dismantling of an asset after its use is
included in the cost of the respective asset if the recognition criteria for a provision are met. Refer to Note 24 Provisions
for further information about the recognised decommissioning provision.
Depreciation and amortisation
Exploration and Evaluation
Depreciation and amortisation are calculated on units of ore extracted basis over the life of the mine.
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 are current and it is expected
that expenditure will be recouped through successful development and exploitation of the area of interest or alternatively
by its sale and / or exploration and evaluation activities are continuing in an area of interest but at reporting date have
not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically
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
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
recoverable reserves.
as incurred.
impairment.
Pledged as security
Impairment
Refer to Note 11 Borrowings for information on exploration tenements that are subject to a security pledge.
The carrying value of capitalised mine development 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.
The Group’s policy for the impairment of non-financial assets is disclosed in Note 22.
Key estimates and assumptions – Ore Reserve and Mineral Resource
The recoverable amount of property, plant and equipment including mine development is dependent on the Group’s
estimate of the Ore Reserve that can be economically and legally extracted. The Group estimates its Ore Reserve and
Mineral Resource based on information compiled by appropriately qualified persons relating to the geological data on the
size, depth and shape of the ore body, and requires complex geological judgments to interpret the data. The estimation of
Ore Reserves is based on factors such as estimates of foreign exchange rates, commodity prices, future capital
requirements, and production costs along with geological assumptions and judgments made in estimating the size and
grade of the ore body and removal of waste material. Changes in these estimates may impact upon the carrying value of
mine properties, property, plant and equipment, provision for rehabilitation, recognition of deferred tax assets, inventory as
well as depreciation and amortisation charges during the period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19.
Exploration and evaluation and mine development (continued)
Commercial Production
The determination of when a mine and processing facility (“Mine”) is in the condition necessary for it to be capable of
operating in the manner intended by management (referred to as “commercial production”) is a matter of significant
judgement. Management considers several factors in determining when a Mine has reached levels of operating capacity
intended by management, these include;
• When the Mine is substantially complete i.e. constructed, installed and / or refurbished and ready for its intended
use;
The Mine has the ability to sustain ongoing production at a steady or increasing level;
The Mine has reached a level of pre-determined production being a substantial percentage of design capacity;
•
•
• Mineral recoveries are at or near the expected production level; and
•
A reasonable period of testing of the mine, plant and equipment has been completed.
Once in Commercial Production, the capitalisation of certain mine development and construction costs cease, and
amortisation of the mine property commences. Subsequent costs are either regarded as forming part of the cost of
inventory or are expensed. Any costs relating to mining asset additions or improvements, or mineable reserve
development, are assess to determine whether capitalisation is appropriate.
The Savannah Nickel Project achieved Commercial Production from 1 April 2022.
Rehabilitation asset
The present value of the expected cost for the decommissioning, restoration and dismantling of an asset after its use is
included in the cost of the respective asset if the recognition criteria for a provision are met. Refer to Note 24 Provisions
for further information about the recognised decommissioning provision.
Depreciation and amortisation
Depreciation and amortisation are calculated on units of ore extracted basis over the life of the mine.
Exploration and Evaluation
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 are current and it is expected
that expenditure will be recouped through successful development and exploitation of the area of interest or alternatively
by its sale and / or exploration and evaluation activities are continuing in an area of interest but at reporting date have
not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves.
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.
Pledged as security
Refer to Note 11 Borrowings for information on exploration tenements that are subject to a security pledge.
Impairment
The carrying value of capitalised mine development 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.
The Group’s policy for the impairment of non-financial assets is disclosed in Note 22.
Key estimates and assumptions – Ore Reserve and Mineral Resource
The recoverable amount of property, plant and equipment including mine development is dependent on the Group’s
estimate of the Ore Reserve that can be economically and legally extracted. The Group estimates its Ore Reserve and
Mineral Resource based on information compiled by appropriately qualified persons relating to the geological data on the
size, depth and shape of the ore body, and requires complex geological judgments to interpret the data. The estimation of
Ore Reserves is based on factors such as estimates of foreign exchange rates, commodity prices, future capital
requirements, and production costs along with geological assumptions and judgments made in estimating the size and
grade of the ore body and removal of waste material. Changes in these estimates may impact upon the carrying value of
mine properties, property, plant and equipment, provision for rehabilitation, recognition of deferred tax assets, inventory as
well as depreciation and amortisation charges during the period.
2022 ANNUAL REPORT 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
Property, plant and equipment
20.
Property, plant and equipment (continued)
Reconciliation of the carrying amounts for each class of property, plant and equipment is set out below.
2022
Opening net carrying amount
Additions
Transfers between other asset classes
Depreciation charge through profit or loss
Depreciation charge transfer to Mine
Development
Disposals
Closing net carrying amount
At 30 June 2022
Gross carrying amount – at cost
Accumulated depreciation
Net carrying amount
Land and
buildings
$000
Plant and
equipment
$000
6,268
18,167
-
383
(403)
(1,405)
-
4,843
-
3,402
(1,096)
(1,484)
(404)
18,585
Capital WIP
$000
1,276
4,767
(3,785)
-
-
-
2,258
Total
$000
25,711
4,767
-
(1,499)
(2,889)
(404)
25,686
48,297
98,277
2,258
148,832
(43,454)
(79,692)
-
(123,146)
4,843
18,585
2,258
25,686
2021
Opening net carrying amount
Additions
Transfers between other asset classes
Depreciation charge
Impairment reversal
Disposals
Land and
buildings
$000
Plant and
equipment
$000
13,905
16,220
-
(6,589)
(1,048)
-
-
-
1,506
(1,876)
2,317
-
Closing net carrying amount
6,268
18,167
Capital WIP
$000
21,053
14,834
Total
$000
51,178
14,834
(34,016)
(39,099)
-
53
(648)
1,276
(2,924)
2,370
(648)
25,711
At 30 June 2021
Gross carrying amount – at cost
Accumulated depreciation
Net carrying amount
Recognition and measurement
Plant and equipment
49,319
(43,051)
102,147
(83,980)
1,276
152,742
-
(127,031)
6,268
18,167
1,276
25,711
Plant and equipment is stated at historical cost, less accumulated depreciation and accumulated impairment losses, if
any. Historical cost includes expenditure that is directly attributable to the acquisition of the items and costs incurred in
bringing the asset into use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item flow to the Group and the cost of the item can be
measured reliably. Where an asset undergoes a rebuild, the carrying amount of a replaced part is de-recognised. All
other repairs and maintenance costs are recognised in the income statement as incurred.
Costs incurred on plant and equipment that do not meet the criteria for capitalisation are expensed as incurred.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or
when no 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 the net disposal proceeds and the carrying amount of the asset) is included
in the income statement when the asset is derecognised.
Depreciation
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:
Category
Office equipment
Office furniture and fittings
Motor vehicles and mobile equipment
Processing plant and buildings
Depreciation method
3 – 4 years
5 years
4 – 5 years
Unit of production over life of mine / life of asset
84 PANORAMIC RESOURCES LIMITED
Refer to Note 11 Borrowings for information on plant and equipment that are subject to a security pledge.
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicated the carrying value may not be recoverable. The Group’s policy for the impairment of non-financial assets is
Pledged as security
Impairment
disclosed in Note 22.
21.
Right-of-use assets
Land and
buildings
Plant and
equipment
$000
695
806
-
-
(317)
(20)
1,184
$000
1,062
12
(64)
49
695
$000
3,500
30,119
2,515
(2,720)
(2,264)
(5,969)
28,635
$000
4,896
-
-
347
3,500
Land and
buildings
Plant and
equipment
Total
$000
4,195
30,925
2,515
(2,720)
(2,581)
(5,989)
29,819
Total
$000
5,985
12
(64)
393
4,195
(361)
(1,743)
(2,104)
As at 1 July 2021
Additions
Transfer between asset classes
Disposal
Depreciation expense through profit or loss
Depreciation expense transfer to Mine
Development
As at 30 June 2022
As at 1 July 2020
Adjustments
Disposal
Depreciation expense
Impairment reversal (Note 22)
As at 30 June 2021
Recognition and measurement
Right-of-use asset – Group as lessee
Pledged as security
Depreciation
Impairment
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 remeasurement 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. Right-of-use assets are subject to impairment.
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements to the
lessor in the event of default. At 30 June 2022, the carrying amounts of assets pledged as security for current and non-
current lease liabilities were $29.819 million (2021: $4.195 million).
The depreciation is calculated as straight line over the shorter of the lease term and life of the asset:
The Group’s policy for the impairment of non-financial assets is disclosed in Note 22.
22.
Impairment of non-financial assets testing for impairment
Recognition and measurement
The Group assesses at each reporting date, whether there is an indication that a non-financial asset may be impaired. If
any 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 an assets or cash generating unit’s (CGU)
fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When
the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
Property, plant and equipment (continued)
Pledged as security
Refer to Note 11 Borrowings for information on plant and equipment that are subject to a security pledge.
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicated the carrying value may not be recoverable. The Group’s policy for the impairment of non-financial assets is
disclosed in Note 22.
21.
Right-of-use assets
As at 1 July 2021
Additions
Transfer between asset classes
Disposal
Depreciation expense through profit or loss
Depreciation expense transfer to Mine
Development
As at 30 June 2022
Land and
buildings
$000
Plant and
equipment
$000
695
806
-
-
(317)
(20)
1,184
3,500
30,119
2,515
(2,720)
(2,264)
(5,969)
28,635
Land and
buildings
$000
Plant and
equipment
$000
As at 1 July 2020
Adjustments
Disposal
Depreciation expense
Impairment reversal (Note 22)
As at 30 June 2021
Recognition and measurement
Right-of-use asset – Group as lessee
1,062
12
(64)
(361)
49
695
4,896
-
-
(1,743)
(2,104)
347
3,500
393
4,195
Total
$000
4,195
30,925
2,515
(2,720)
(2,581)
(5,989)
29,819
Total
$000
5,985
12
(64)
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 remeasurement 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. Right-of-use assets are subject to impairment.
Pledged as security
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements to the
lessor in the event of default. At 30 June 2022, the carrying amounts of assets pledged as security for current and non-
current lease liabilities were $29.819 million (2021: $4.195 million).
Depreciation
The depreciation is calculated as straight line over the shorter of the lease term and life of the asset:
Impairment
The Group’s policy for the impairment of non-financial assets is disclosed in Note 22.
22.
Impairment of non-financial assets testing for impairment
Recognition and measurement
The Group assesses at each reporting date, whether there is an indication that a non-financial asset may be impaired. If
any 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 an assets or cash generating unit’s (CGU)
fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When
the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
2022 ANNUAL REPORT 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22.
Impairment of non-financial assets testing for impairment (continued)
22.
Impairment of non-financial assets testing for impairment (continued)
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. The Group
bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each
of the Group’s CGUs to which the individual assets are allocated. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or
other available fair value indicators.
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.
The Group has one cash generating unit (CGU) comprising the Savannah Nickel Project.
Impairment charge / reversal
A impairment assessment was undertaken at 30 June 2022 which considered the progress made with the ramp-up of
production at the CGU together with updated capital and operating costs, improvements in commodity prices and foreign
exchanges rates for AUD:USD. The assessment concluded that there were no indicators of impairment for the year
ended 30 June 2022 and no requirement to recognise an impairment charge. There were however reversal indicators
with respect to prior year impairment charges (not yet reversed).
In assessing whether an impairment reversal is required at 30 June 2022, the carrying amount of the CGU was compared
with its estimated recoverable amount at 30 June 2022. 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
(a Level 3 fair value measurement) 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 FVLCD assessment at 30 June 2022 confirmed, based on a range of reasonably possible outcomes, the results did
not support the reversal of any previous impairment.
The determination of FVLCD is most sensitive to the following key assumptions:
• production volumes;
• commodity prices and exchange rates;
• capital and operating costs; and
• discount rates.
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 9.9 million tonnes ore at an average grade of 1.23% per tonne nickel, 0.53%/t copper and 0.08%/t cobalt for
an approximate 11-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.
86 PANORAMIC RESOURCES LIMITED
Economic Assumptions
Nickel (USD per tonne)
Copper (USD per tonne)
Cobalt (USD per tonne)
USD to AUD exchange rate
Capital and Operating Costs
that a purchaser would incur.
Discount Rates
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 AUD:USD exchange rates used in the estimation of future revenues were as follows:
FY2023
FY2024
FY2025 FY2026 FY2027 On
22,086
19,320
18,063
18,047
8,785
7,995
7,354
7,439
64,551
61,354
58,731
52,668
0.73
0.75
0.75
0.75
17,637
7,716
49,515
0.75
Capital and operating costs have been derived from a review of actual expenditure by management, updated for current
market conditions and cost escalation with reference to historical data where relevant. Costs have been benchmarked
against industry experience. Current contracts for the supply of goods and services have been incorporated where
applicable. Estimates have been included in the discounted cash flow analysis for corporate costs and corporate taxation
In determining FVLCD, a real post-tax discount rate of 8.0% 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.
The discounted cash flow analysis assumes that operations at the Savannah Nickel Project will continue to ramp up over
Project Ramp-up
FY2023 to design levels of productivity.
Prior year impairment reversal
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 numerous positive developments which
underpinned the decision. 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 at 30 June
2021.
The FVLCD valuation at 30 June 2021 exceeded the $146.811 million carrying amount (before impairment reversal) of
the CGU’s assets and as such an impairment reversal of $14.186 million was recorded in the year ending 30 June 2021.
The reversal was 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.
Impairment losses / write-downs
Impairment reversal of property, plant and equipment
Impairment reversal of right-of-use assets
Impairment of reversal of mine development
Total
2022
$000
-
-
-
-
2021
$000
2,370
393
11,423
14,186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22.
Impairment of non-financial assets testing for impairment (continued)
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 AUD:USD exchange rates used in the estimation of future revenues were as follows:
Economic Assumptions
Nickel (USD per tonne)
Copper (USD per tonne)
Cobalt (USD per tonne)
USD to AUD exchange rate
Capital and Operating Costs
FY2023
FY2024
FY2025 FY2026 FY2027 On
22,086
19,320
18,063
18,047
8,785
7,995
7,354
7,439
64,551
61,354
58,731
52,668
0.73
0.75
0.75
0.75
17,637
7,716
49,515
0.75
Capital and operating costs have been derived from a review of actual expenditure by management, updated for current
market conditions and cost escalation with reference to historical data where relevant. Costs have been benchmarked
against industry experience. Current contracts for the supply of goods and services have been incorporated where
applicable. Estimates have been included in 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 8.0% 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.
Project Ramp-up
The discounted cash flow analysis assumes that operations at the Savannah Nickel Project will continue to ramp up over
FY2023 to design levels of productivity.
Prior year impairment reversal
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 numerous positive developments which
underpinned the decision. 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 at 30 June
2021.
The FVLCD valuation at 30 June 2021 exceeded the $146.811 million carrying amount (before impairment reversal) of
the CGU’s assets and as such an impairment reversal of $14.186 million was recorded in the year ending 30 June 2021.
The reversal was 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.
Impairment losses / write-downs
Impairment reversal of property, plant and equipment
Impairment reversal of right-of-use assets
Impairment of reversal of mine development
Total
2022
$000
-
-
-
-
2021
$000
2,370
393
11,423
14,186
2022 ANNUAL REPORT 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23.
Commitments
Exploration and mining lease expenditure commitments
In order to maintain 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.
24.
Provisions (continued)
If a change to the estimated provision results in an increase in the rehabilitation liability and therefore an addition to the
carrying value of the related asset, the Group considers whether this is an indication of impairment of the asset. If the
revised assets, net of rehabilitation provisions, exceed the recoverable amount, that portion of the increase to the
provision is charged directly to the income statement.
Mineral tenements’ expenditure commitments as at 30 June are as follows:
Key estimates and assumptions – Rehabilitation provisions
Within one year
After one year but not more than five years
More than five years
Total payments
24.
Provisions
Current
Employee benefits – annual leave
Employee benefits – long service leave
Provision – other
Restructuring costs
Total current
Non-current
Employee benefits
Rehabilitation, restoration and dismantling
Total non-current
Total provisions
2022
$000
555
2,080
817
3,452
2022
$000
705
59
1,069
-
1,833
43
19,855
19,898
21,737
2021
$000
519
2,082
1,176
3,777
2021
$000
474
153
-
87
714
10
23,556
23,566
24,280
The movement in the rehabilitation, restoration and dismantling provision during the financial year is set out below.
Carrying amount at start of year
Unwinding of discount
Inflation and discount rate adjustments
Carrying amount at end of year
Recognition and measurement
General
2022
$000
23,527
278
(3,950)
19,855
2021
$000
24,498
201
(1,143)
23,556
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value of the provision reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision
resulting from the unwinding of the discounting on the provision is recognised as a finance cost.
Rehabilitation, restoration and dismantling
Dismantling and restoration costs are a normal consequence of mining, and the majority of the expenditure is incurred
at the end of a mine’s life. The Group recognises a provision for the estimate of the future costs of restoration activities
on a discounted basis at the time of exploration or mining disturbance. The nature of these restoration activities includes
dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of
plant and waste sites, and restoration, reclamation and re-vegetation of affected areas.
When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the carrying
amount of the related assets to the extent that it was incurred by the development / construction of the asset.
Rehabilitation and restoration obligations arising from the Group’s exploration activities are recognised immediately in
the income statement.
88 PANORAMIC RESOURCES LIMITED
The Group assesses its rehabilitation, restoration and dismantling (rehabilitation) provision at each reporting date.
Significant estimates and assumptions are made in determining the provision as there are numerous factors that will
affect the ultimate amount payable. These factors include estimates of the extent, timing and costs of rehabilitation
activities, technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes in
discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided.
The provision at reporting date represents management’s best estimate of the present value of the future rehabilitation
costs.
The carrying amount of the provision for dismantling and restoration as at 30 June 2022 was $19.855 million (2021:
$23.556 million). The Group 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 3.37% (2021: 1.58%). The rehabilitation costs are expected to be incurred up to FY2033.
Employee Benefits
(i)
Short-term benefits
constructive obligation.
(ii)
Long-term benefit
Liabilities for wages and salaries, including non-monetary benefits and other short-term benefits expected to be settled
within 12 months of the reporting date are recognised 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.
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
The liability for long-term benefit is recognised 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 future expected wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on high quality corporate
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
Provision other
Includes an estimate of costs arising from a potential variation of the Mining Services Agreement totalling $0.60 million
and a provision for FY2022 employee short-term incentive payments totalling $0.47 million. Both amounts are expected
to be settled within 12 months of the reporting date.
Group structure and related party information
25.
Information relating to Panoramic Resources Limited (the Parent)
The consolidated financial statements of the Group include:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Limited
Capital and reserves attributable to owners of Panoramic Resources
Profit or (loss) of the Parent entity
Total comprehensive income of the Parent entity
2022
$000
3,449
171,779
175,228
1,405
463
1,868
353,550
23,145
(203,335)
173,360
6,930
6,930
2021
$000
23,114
144,651
167,764
1,998
4
2,002
353,550
22,476
(210,264)
165,763
(1,508)
(1,508)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24.
Provisions (continued)
If a change to the estimated provision results in an increase in the rehabilitation liability and therefore an addition to the
carrying value of the related asset, the Group considers whether this is an indication of impairment of the asset. If the
revised assets, net of rehabilitation provisions, exceed the recoverable amount, that portion of the increase to the
provision is charged directly to the income statement.
Key estimates and assumptions – Rehabilitation provisions
The Group assesses its rehabilitation, restoration and dismantling (rehabilitation) provision at each reporting date.
Significant estimates and assumptions are made in determining the provision as there are numerous factors that will
affect the ultimate amount payable. These factors include estimates of the extent, timing and costs of rehabilitation
activities, technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes in
discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided.
The provision at reporting date represents management’s best estimate of the present value of the future rehabilitation
costs.
The carrying amount of the provision for dismantling and restoration as at 30 June 2022 was $19.855 million (2021:
$23.556 million). The Group 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 3.37% (2021: 1.58%). The rehabilitation costs are expected to be incurred up to FY2033.
Employee Benefits
(i)
Short-term benefits
Liabilities for wages and salaries, including non-monetary benefits and other short-term benefits expected to be settled
within 12 months of the reporting date are recognised 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.
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.
(ii)
Long-term benefit
The liability for long-term benefit is recognised 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 future expected wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on high quality corporate
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
Provision other
Includes an estimate of costs arising from a potential variation of the Mining Services Agreement totalling $0.60 million
and a provision for FY2022 employee short-term incentive payments totalling $0.47 million. Both amounts are expected
to be settled within 12 months of the reporting date.
Group structure and related party information
25.
Information relating to Panoramic Resources Limited (the Parent)
The consolidated financial statements of the Group include:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
2022
$000
3,449
171,779
175,228
1,405
463
1,868
353,550
23,145
2021
$000
23,114
144,651
167,764
1,998
4
2,002
353,550
22,476
Accumulated losses
Capital and reserves attributable to owners of Panoramic Resources
Limited
Profit or (loss) of the Parent entity
Total comprehensive income of the Parent entity
(203,335)
(210,264)
173,360
6,930
6,930
165,763
(1,508)
(1,508)
2022 ANNUAL REPORT 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25.
Information relating to Panoramic Resources Limited (the Parent) (continued)
28.
Related party disclosures
Guarantees entered into by the parent entity
The parent entity has given financial guarantees in respect of:
•
•
Subsidiary company leases amounting to $31.815 million (2021: $6.183 million)
The Company has a US$45.0 million debt facility with Trafigura Pte Ltd comprising a US$30.0 million five-year
Prepayment Loan Facility (PLF) and a eighteen-month US$15.0 million Revolving Credit Loan Facility (RCF).
At 30 June 2022 the PLF was drawn to US$30.0 million (2021: nil). Security pledged to Trafigura for the two
facility limits comprise a fixed and floating charge over all the assets and undertakings of Savannah Nickel
Mines Pty Ltd (Savannah) and Pan Transport Pty Ltd together with a mining mortgage over six key project
tenements. Panoramic Resources Ltd (Panoramic) has provided a security pledge over both the shares it holds
in Savannah and the intercompany loan receivable due from Savannah. A corporate guarantee has also been
provided by Panoramic to Trafigura. See Note 11 - Borrowings for further information.
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 27. 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.
Contingent liabilities of the parent entity
The parent entity and Group had contingent liabilities at 30 June 2022 in respect of bank guarantees put in place with a
financial institution with a face value of $0.291 million (2021: $0.221 million).
26.
Information relating to subsidiaries
The consolidated financial statements of the Group include:
% equity interest
transactions).
Name
Savannah Nickel Mines Pty Ltd.
Pan Transport Pty Ltd
Pindan Exploration Company Pty Ltd
Mt Henry Gold Pty Ltd
Mt Henry Mine Pty Ltd
Magma Metals Pty Limited
27.
Deed of Cross Guarantee
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
2022
100
100
100
100
100
100
2021
100
100
100
100
100
100
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 relief has been granted to the
Savannah Nickel Mines Pty Ltd from the Corporations Act 2001 requirements for the preparation, audit and lodgement
of their 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 Panoramic Group.
As at, and throughout the financial year ended 30 June 2022, the ultimate parent entity of the Group was Panoramic
Resources Limited.
Information in relation to interest in other entities is set out in Note 26 to the consolidated financial statements.
Compensation of Key Management Personnel of the Group
2022
$
1,577
64
84
595
-
2,320
2021
$
1,681
67
89
263
82
2,182
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
Termination benefits
Total compensation
Directors.
Other notes
29.
Share-based payments
Recognition and measurement
Equity-settled transactions
The amounts disclosed in the table represent the amount expensed during the reporting period related to KMP and
The Group provides benefits to its employees (including executive directors and Key Management Personnel) in the form
of share-based payments, whereby employees render services in exchange for rights over shares (equity-settled
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made. 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 equity-settled transaction cost is recognised, together with a corresponding increase in reserve in equity, over the
period in which the performance and / or service 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 the vesting date reflects
the extent to which the vesting period has expired and 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 expenses or credit for a period represents the movement
in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which 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
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 of outstanding options is reflected as additional share dilution in the computation of diluted earnings
expense.
modification.
per share.
90 PANORAMIC RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28.
Related party disclosures
As at, and throughout the financial year ended 30 June 2022, the ultimate parent entity of the Group was Panoramic
Resources Limited.
Information in relation to interest in other entities is set out in Note 26 to the consolidated financial statements.
Compensation of Key Management Personnel of the Group
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
Termination benefits
Total compensation
2022
$
1,577
64
84
595
-
2,320
2021
$
1,681
67
89
263
82
2,182
The amounts disclosed in the table represent the amount expensed during the reporting period related to KMP and
Directors.
Other notes
29.
Share-based payments
Recognition and measurement
Equity-settled transactions
The Group provides benefits to its employees (including executive directors and Key Management Personnel) in the form
of share-based payments, whereby employees render services in exchange for rights over shares (equity-settled
transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made. 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 equity-settled transaction cost is recognised, together with a corresponding increase in reserve in equity, over the
period in which the performance and / or service 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 the vesting date reflects
the extent to which the vesting period has expired and 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 expenses or credit for a period represents the movement
in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits
expense.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which 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 of outstanding options is reflected as additional share dilution in the computation of diluted earnings
per share.
2022 ANNUAL REPORT 91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29.
(i)
Share-based payments (continued)
Options over unissued shares
29.
(ii)
Share-based payments (continued)
Employee Share Plan (continued)
During the financial year no options over unissued shares were issued by the Company (2021: nil). The table below
shows a reconciliation of the movement of options over unissued shares during the period including weighted average
exercise price (“WAEP”).
2022
No.
Options outstanding at the start of the year
28,520,525
Options issued during the year
Options exercised during the year
-
-
Options outstanding at the end of the year
28,520,525
The terms of the unissued ordinary shares at 30 June 2022 are as follows
2022
WAEP
$0.16
$0.00
$0.00
$0.16
2021
No.
WAEP
28,520,525
$0.00
-
-
$0.16
$0.00
28,520,525
$0.16
Number of options
28,520,525
Exercise price
$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.
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 2020 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%.
(ii)
Employee Share Plan
The Company’s shareholders approved the “Equity Incentive Plan” (“2021 Plan”) at the 2021 Annual General Meeting
on 20 October 2021. Plan was approved for a three-year period.
Under the 2021 Plan, eligible participants are eligible to be granted options and / or Performance Rights (collectively
defined as “Awards”). Not with standing that the 2021 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 7,563,219 performance rights (30 June 2021: 14,670,146) were issued to KMP and employees
(includes the rights issued to Mr Rajasooriar as noted in the section below), pursuant to the terms of the 2021 Plan.
These Performance Rights (excluding Mr Rajasooriar’s Performance Rights issue) vest on the measurement date and
comprise tranches A and B in the table below. Included in the prior financial year issue is 1,164,033 Performance Rights
that were forfeited and cancelled in July 2021 following the retirement of the Company’s Geology Manager Mr John
Hicks.
On 20 October 2021 upon approval by the shareholders, the company issued 3,992,813 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 2021 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 issued during the year
as summarised below:
Tranche
A
Amount
892,602
Weighting
25% of the Performance Rights
B
C
D
2,677,805
75% of the Performance Rights
998,203
25% of the Performance Rights
2,994,610
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
2024)
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
2024)
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
2024)
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
2024)
92 PANORAMIC RESOURCES LIMITED
The Performance Rights included in the above table do not include adjustments for the rights forfeited during the year.
The table also excludes entitlements to Dividend Adjustment Performance Rights granted during the year as there are
no performance conditions attached to these Performance Rights.
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
Dividend yield
Risk free rate
Volatility
Performance period (years)
20 October 2021 3 September 2021
17 November 2020
21 October 2020 11 September 2020
998,203
892,602
2,994,610
2,677,805
$0.235
$0.142
$41,331
$0.152
0%
0.67%
80%
3.0
$0.205
$0.143
$40,817
$0.153
0%
0.67%
80%
3.0
1,854,122
5,562,366
$0.095
$0.111
$73,864
$0.107
0%
0.175%
80%
3.0
484,228
1,452,683
$0.100
$0.070
$12,384
$0.072
$38,215
0%
0.30%
80%
3.0
229,218
687,653
$0.081
$0.059
$5,351
$0.057
$16,295
0%
0.47%
80%
3.0
Total RTSR Expense for the period
$133,156
$123,122
$213,607
Commencement of measurement period
1 July 2021
1 July 2021
1 July 2020
1 July 2020
1 July 2020
Test date
30 June 2024
30 June 2024
30 June 2023
30 June 2023
30 June 2023
Remaining performance period (years)
2.0
2.0
1.0
1.0
1.0
$212,747
$191,525
$287,471
$50,599
$21,645
Maximum expense amount to be
recognised in future period
Movements in Employee Share Plan during the year
The movement in the 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
2022
No.
11,434,302
7,563,219
-
-
2022
WAFV
$0.07
$0.15
-
-
2021
No.
WAFV
-
-
-
-
-
0
14,670,146
$0.07
(1,164,033)
17,833,488
$0.07
$0.12
(3,235,844)
11,434,302
$0.06
$0.07
At 30 June 2022, there were no Performance Rights that had vested during the year and were unissued at the year end.
At 30 June 2021 no Performance Rights on issue vested during the year.
(iii)
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:
the extent to which the vesting period has expired; and
i.
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 from share-based-payment transactions recognised during the period as part of employee benefit
expense were $0.668 million (2021: $0.304 million).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29.
(ii)
Share-based payments (continued)
Employee Share Plan (continued)
The Performance Rights included in the above table do not include adjustments for the rights forfeited during the year.
The table also excludes entitlements to Dividend Adjustment Performance Rights granted during the year as there are
no performance conditions attached to these Performance Rights.
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.
20 October 2021 3 September 2021
17 November 2020
21 October 2020 11 September 2020
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
998,203
892,602
2,994,610
2,677,805
$0.235
$0.142
$41,331
$0.152
$0.205
$0.143
$40,817
$0.153
1,854,122
5,562,366
$0.095
$0.111
$73,864
$0.107
Total RTSR Expense for the period
$133,156
$123,122
$213,607
Dividend yield
Risk free rate
Volatility
Performance period (years)
0%
0.67%
80%
3.0
0%
0.67%
80%
3.0
0%
0.175%
80%
3.0
484,228
1,452,683
$0.100
$0.070
$12,384
$0.072
$38,215
0%
0.30%
80%
3.0
229,218
687,653
$0.081
$0.059
$5,351
$0.057
$16,295
0%
0.47%
80%
3.0
Commencement of measurement period
1 July 2021
1 July 2021
1 July 2020
1 July 2020
1 July 2020
Test date
30 June 2024
30 June 2024
30 June 2023
30 June 2023
30 June 2023
Remaining performance period (years)
Maximum expense amount to be
recognised in future period
2.0
2.0
1.0
1.0
1.0
$212,747
$191,525
$287,471
$50,599
$21,645
Movements in Employee Share Plan during the year
The movement in the 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
2022
No.
11,434,302
7,563,219
-
-
2022
WAFV
$0.07
$0.15
-
-
2021
No.
-
WAFV
-
14,670,146
$0.07
-
-
-
0
$0.06
$0.07
Rights forfeited during the year
Rights outstanding at the end of the year
(1,164,033)
17,833,488
$0.07
$0.12
(3,235,844)
11,434,302
At 30 June 2022, there were no Performance Rights that had vested during the year and were unissued at the year end.
At 30 June 2021 no Performance Rights on issue vested during the year.
(iii)
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.
ii.
the extent to which the vesting period has expired; and
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 from share-based-payment transactions recognised during the period as part of employee benefit
expense were $0.668 million (2021: $0.304 million).
2022 ANNUAL REPORT 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32.
Significant events after the reporting date
On the 24 August 2022 the Company announced to the ASX it had commenced a US$15.0 million drawdown from the
Revolving Credit Facility (RCF) held with Trafigura Pte Ltd. Proceeds from the drawdown were received on the
30 August 2022. Following the drawdown the RCF will be fully drawn. Funding under this revolving facility is held for a
period of three months where it is either repaid (fully or partially) or rolled over on a cashless basis for a further three
month period. The Company continues to experience material changes in the timing of shipments and therefore
concentrate revenue as a result of the ongoing tightness in shipping (sea freight) markets. The availability and arrival of
ships when required continues to provide challenges in managing short-term working capital funding. The late arrival of
the planned shipment in August 2022 has required the Company to draw on the RCF in order to manage changes in the
short-term working capital funding position of the business.
33.
Accounting standards and interpretations issued but not yet effective
The standards and interpretations that have been issued or amended but not yet effective and have not been early
adopted by the Group (except for AASB 2020-3) for the annual reporting period ended 30 June 2022, have been
assessed and are not expected to have an impact on its disclosures, financial position or performance of the Group when
applied. The Group intends to adopt these standards when they become effective.
34.
Auditor remuneration
The auditor of Panoramic Resources Limited is Ernst & Young (EY) Australia.
Amounts received or due and receivable by EY (Australia) for:
Fees for auditing the statutory financial report of the parent covering the group
and auditing the financial reports of any controlled entities
268,976
122,000
2022
$
2021
$
-
-
268,976
49,638
-
171,638
Fees for other services
Taxation services
Other advisory services
Total auditor’s remuneration
consulting services.
Other services provided by the auditor during the current financial year were in relation to other minor advisory and
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.
30.
Contributed equity
Share capital
Ordinary shares
Ordinary shares – fully paid
Movements in ordinary share capital
30 June 2022
Ordinary shares
Ordinary shares – fully paid
30 June 2021
Ordinary shares
Ordinary shares – fully paid
Ordinary Shares
2022
Shares
2021
Shares
2022
$000
2021
$000
2,050,914,004
2,050,914,004
2,050,914,004
2,050,914,004
353,550 353,550
353,550 353,550
Number of
Shares
Issue price
2022
$000
2,050,914,004
2,050,914,004
-
-
353,550
353,550
Number of
Shares
Issue price
2021
$000
2,050,914,004
2,050,914,004
-
-
353,550
353,550
Ordinary shares entitles the holder to participate in dividends to ensure the entity continues as a going concern as well
as to maintain optional 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.
Recognition and measurement
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.
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.
31.
Reserves
Share-based payments
Share-based payments
Nature and purpose of reserves
a)
Share-based payments reserve
2022
$000
23,145
23,145
2021
$000
22,476
22,476
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.
94 PANORAMIC RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32.
Significant events after the reporting date
On the 24 August 2022 the Company announced to the ASX it had commenced a US$15.0 million drawdown from the
Revolving Credit Facility (RCF) held with Trafigura Pte Ltd. Proceeds from the drawdown were received on the
30 August 2022. Following the drawdown the RCF will be fully drawn. Funding under this revolving facility is held for a
period of three months where it is either repaid (fully or partially) or rolled over on a cashless basis for a further three
month period. The Company continues to experience material changes in the timing of shipments and therefore
concentrate revenue as a result of the ongoing tightness in shipping (sea freight) markets. The availability and arrival of
ships when required continues to provide challenges in managing short-term working capital funding. The late arrival of
the planned shipment in August 2022 has required the Company to draw on the RCF in order to manage changes in the
short-term working capital funding position of the business.
33.
Accounting standards and interpretations issued but not yet effective
The standards and interpretations that have been issued or amended but not yet effective and have not been early
adopted by the Group (except for AASB 2020-3) for the annual reporting period ended 30 June 2022, have been
assessed and are not expected to have an impact on its disclosures, financial position or performance of the Group when
applied. The Group intends to adopt these standards when they become effective.
34.
Auditor remuneration
The auditor of Panoramic Resources Limited is Ernst & Young (EY) Australia.
Amounts received or due and receivable by EY (Australia) for:
Fees for auditing the statutory financial report of the parent covering the group
and auditing the financial reports of any controlled entities
268,976
122,000
2022
$
2021
$
Fees for other services
Taxation services
Other advisory services
Total auditor’s remuneration
-
-
268,976
49,638
-
171,638
Other services provided by the auditor during the current financial year were in relation to 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.
2022 ANNUAL REPORT 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’
DECLARATION
In accordance with a resolution of the Directors of Panoramic Resources Limited, I state that:
1.
In the opinion of the Directors:
a)
the financial statements and notes of Panoramic Resources Limited for the financial year ended 30 June 2022
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 2022 and of its
performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001;
b)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed
in Note 2; and
c) Subject to the achievement of the matters set out in note 2 (a) there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable.
d) as at the date of this declaration, subject to the achievement of the matters set out in note 2 (a), there are
reasonable grounds to believe that members of the Closed Group identified in Note 27 will be able to meet any
liabilities to which they are, or may become, subject by virtue of the Deed of Cross Guarantee.
2. This declaration has been made after receiving the declarations required to be made to the Directors by the chief
executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the
financial year ending 30 June 2022.
On behalf of the Board
Nick Cernotta
Victor Rajasooriar
Independent Non-Executive Chair
Managing Director and Chief Executive Officer
Perth, 31 August 2022
96 PANORAMIC RESOURCES LIMITED
INDEPENDENT
AUDITOR’S REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
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
2022, the consolidated income statement, the consolidated statement of other 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 2022
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 2(a) of the financial statements, which describes the principal conditions
that raise doubt about the Group’s ability to continue as a going concern. These events or conditions
indicate that a material uncertainty exists that may cast significant doubt about the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2022 ANNUAL REPORT 97
INDEPENDENT AUDITOR’S REPORT
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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matter described below to be the key audit
matter to be communicated in our report. 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.
Capitalisation of borrowing costs ceases
► We tested that pre-commercial revenue and the
1. Accounting for the mine restart
Why significant
As disclosed in Note 19 to the financial statements,
the date of commencement of commercial production
at the Savannah Nickel Project (“Savannah Project”) is
a key judgment applied by the Group, as this is the
date at which:
Depreciation of property, plant and equipment
and mine development assets commences
►
►
►
All production costs are allocated to inventory
and recognised as cost of goods sold upon the
sale of inventory
Further, prior to achieving commercial production,
estimating the costs of sales applicable to pre
commercial production revenue and the amounts to
be capitalised to mine properties requires significant
judgment.
Australian Accounting Standard do not provide
specific guidance as to when a mine has reached the
commercial production stage – that is, when it is in a
condition necessary to operate as intended. The
determination of this date is subjective and given the
accounting consequences, it is considered a key audit
matter.
As a result of factors disclosed in Note 19 to the
financial statements, the Group determined that
commercial production was achieved on 1 April 2022.
How our audit addressed the key audit matter
Our audit procedures include the following:
► We understood and assessed the reasonableness
of the Group’s process for allocating costs
between capital and operating expenditure
during the pre-commercial production period
and once commercial production has been
determined
associated costs applicable to pre commercial
revenues were recognised and measured in
accordance with applicable Australian
Accounting Standards
►
We tested the reasonableness of management’s
depreciation calculations for property, plant and
equipment and mine property assets from 1
April 2022
► We tested the appropriateness of borrowing
costs capitalised during the pre-commercial
production period in accordance with the
requirements of Australian Accounting
Standards
► We considered the reasonableness of the
assumptions and evidence underpinning
management’s judgment and conclusion
commercial production at the Savannah Project
was achieved on 1 April 2022
► We assessed the adequacy of the disclosures
relating to the transition from pre to post
commercial production in the financial
statements, in accordance with applicable
Australian Accounting Standards
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
98 PANORAMIC RESOURCES LIMITED
INDEPENDENT AUDITOR’S REPORT
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 2022 annual report but does not include the financial report
and our auditor’s report thereon. We obtained the directors’ report that is to be included in the annual
report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the
annual report after the date of this auditor’s report.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2022 ANNUAL REPORT 99
INDEPENDENT AUDITOR’S REPORT
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 business
activities within the entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
100 PANORAMIC RESOURCES LIMITED
INDEPENDENT AUDITOR’S REPORT
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 2022.
In our opinion, the Remuneration Report of Panoramic Resources Limited for the year ended
30 June 2022, 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
Gavin Buckingham
Partner
Perth
31 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2022 ANNUAL REPORT 101
AUDITOR’S
DECLARATION
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Panoramic Resources Limited’s shares are listed on the Australian Securities Exchange Limited (ASX). The Company’s
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 2022, 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;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene 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
Gavin Buckingham
Partner
31 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
102 PANORAMIC RESOURCES LIMITED
Additional Shareholder Information
As at 5 September 2022
Stock Exchange Listing
ASX code is PAN.
Listing of Top 20 Shareholders
As at 5 September 2022
Name of Registered Shareholder
WESTERN AREAS LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
ZETA RESOURCES LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
10.
ZERO NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
SACAVIC PTY LTD
13.
KHEIR GROUP PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
COLENEW PTY LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900
ACCOUNT>
CRANPORT PTY LTD
MR KWOK LEUNG FUNG + MS YUEN MAN MOK
HISHENK PTY LTD
NETWEALTH INVESTMENTS LIMITED
TOTAL
(ASX:PAN).
As at 5 September 2022, there were 9,944 holders of 2,050,914,004 fully paid ordinary shares of the Company
At 5 September 2022, the number of parcels of shares with a value of less than $500 was 1,045.
1,427,603,346
69.57
10.
ADDITIONAL SHAREHOLDER
INFORMATION
Additional Shareholder Information
As at 5 September 2022
AS AT 5 SEPTEMBER 2022
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 5 September 2022
Name of Registered Shareholder
WESTERN AREAS LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
ZETA RESOURCES LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
ZERO NOMINEES PTY LTD
11.
12.
BNP PARIBAS NOMINEES PTY LTD
SACAVIC PTY LTD
13.
KHEIR GROUP PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
COLENEW PTY LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900
ACCOUNT>
CRANPORT PTY LTD
MR KWOK LEUNG FUNG + MS YUEN MAN MOK
HISHENK PTY LTD
NETWEALTH INVESTMENTS LIMITED
14.
15.
16.
17.
18.
19.
20.
TOTAL
Number of Shares
Held
Percentage of
Shares Held %
408,131,660
315,210,317
173,157,333
95,361,276
83,327,333
77,982,292
71,470,000
67,469,157
35,106,695
23,067,522
14,653,098
12,431,625
9,090,555
8,821,865
7,256,407
5,770,637
5,432,150
5,000,000
4,590,000
4,273,424
19.90
15.37
8.44
4.65
4.06
3.80
3.48
3.29
1.71
1.12
0.71
0.61
0.44
0.43
0.35
0.28
0.26
0.24
0.22
0.21
1,427,603,346
69.57
As at 5 September 2022, there were 9,944 holders of 2,050,914,004 fully paid ordinary shares of the Company
(ASX:PAN).
At 5 September 2022, the number of parcels of shares with a value of less than $500 was 1,045.
2022 ANNUAL REPORT 103
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
which the Substantial Shareholder
Number of Voting
Shareholder
and its Associates Hold a Relevant
Shares (%)
Total Number of Voting Shares in
Percentage of Total
Date of Notice
IGO Limited and related
entities
Ausbil Investment
Management Limited
Interest
431,045,545
111,091,173
21.02%
5.417%
16 June 2022
1 June 2022
Zeta Resources Limited
313,845,362
15.27%
13 May 2022
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/.
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 5 SEPTEMBER 2022
Unquoted Securities
The number of unquoted securities on issue as at 5 September 2022 is as follows:
Unquoted Security
Number on Issue
Options exercisable at $0.16 on or before 30 June 2023
Performance Rights - 2020
Performance Rights - 2021
28,520,525
10,270,269
7,563,219
In the period from the end of the financial year, the Company has granted new Performance Rights totalling
5,377,969 to KMP and senior managers under the 2021 Equity Incentive Plan. Mr Rajasooriar, Managing
Director, was awarded (subject to shareholder approval at the Company’s upcoming 2022 annual general
meeting of shareholders) 2,837,838 performance rights.
Distribution schedule and number of holders of equity securities
As at 5 September 2022
Issued Securities
1 –
1,000
1,001 –
5,000
5,001 –
10,000
10,001 –
100,000
Total
100,001
– and
over
Fully Paid Ordinary Shares
(ASX:PAN)
Options exercisable at $0.16
on or before 30 June 2023
Performance Rights - 2020
Performance Rights - 2021
283
(0.00%)
2,423
(0.37%)
1,619
(0.64%)
4,428
(8.52%)
1,191
(90.47%)
9,944
(100%)
-
-
-
-
-
-
-
-
-
-
-
-
1
(100%)
3
(100%)
5
(100%)
1
(100%)
3
(100%)
5
(100%)
Holder Details of Unquoted Securities
Unquoted security holders that hold more than 20% of a given class of unquoted securities as at 5 September 2022
other than the performance rights which were issued under an employee incentive scheme are as follows:
Unquoted Security
Options exercisable at $0.16 on or before 30 June 2023
Holder
Zeta Resources
Limited
Number Held
28,520,525
104 PANORAMIC RESOURCES LIMITED
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 5 SEPTEMBER 2022
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
IGO Limited and related
entities
Ausbil Investment
Management Limited
Total Number of Voting Shares in
which the Substantial Shareholder
and its Associates Hold a Relevant
Interest
Percentage of Total
Number of Voting
Shares (%)
431,045,545
111,091,173
21.02%
5.417%
Date of Notice
16 June 2022
1 June 2022
Zeta Resources Limited
313,845,362
15.27%
13 May 2022
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/.
2022 ANNUAL REPORT 105
11.
MINERAL RESOURCES
AND ORE RESERVES
Mineral Resources and Ore Reserves
Nickel-Copper-Cobalt Mineral Resources as at 30 June 2022
Resource
Savannah
Above
900F
Savannah
Below
900F
Savannah
North
Total
Savannah
Project
Metal
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Resource
Date
Tonnes
Apr-20
1,010,000
Jun-15
-
Apr-20
1,885,000
Measured
Indicated
Inferred
Total
(%)
1.44
0.8
0.07
-
-
-
1.48
0.65
0.11
Tonnes
565,000
780,000
6,117,000
(%)
1.77
1.44
0.08
1.64
0.75
0.09
1.6
0.71
0.11
Tonnes
(%)
Tonnes
1,575,000
-
-
-
-
125,000
1.72
905,000
2,972,000
1.49
0.53
0.09
10,974,000
(%)
1.56
1.03
0.07
1.65
0.76
0.1
1.55
0.65
0.11
Metal
Tonnes
24,500
16,200
1,200
14,900
6,900
900
170,400
71,100
11,600
13,454,000
1.56
209,800
0.7
0.1
94,200
13,700
*Mineral Resource estimates have been rounded to the nearest 1,000t, 0.01% Metal grade and 100t of metal
Qualifying Statements and Notes:
In the period since the Mineral Resource and Ore Reserve was reported on 30 June 2021, operations at Savannah
recommenced in FY22. The mining depletion carried out during FY22 has not been depleted in either the Mineral Resource or
Ore Reserve for the Project at this time. Therefore, both the Mineral Resource and Ore Reserve estimates reported herein the
2022 Annual Report remain unchanged from that reported in 2021. A revised Mineral Resource and Ore Reserve is expected to
be released to the market in October 2022.
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 22 July 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 materiallychanged.
Ni Equivalent References
References to Ni equivalent contained metal in Mineral Resources and Ore Reserves is based on assumed metal pricesas
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.
106 PANORAMIC RESOURCES LIMITED
Mineral Resources and Ore Reserves
Nickel-Copper-Cobalt Mineral Resources as at 30 June 2022
Mineral Resources and Ore Reserces
Nickel-Copper-Cobalt Ore Reserves as at 30 June 2022
MINERAL RESOURCES AND ORE RESERVES
Resource
Date
Tonnes
Apr-20
1,010,000
Measured
Indicated
Inferred
Total
Tonnes
565,000
Tonnes
(%)
Tonnes
-
1,575,000
Ore
Reserve
Savannah
Proved
Probable
Total
Tonnes
1,233,000
Metal
Nickel
Copper
Cobalt
Savannah
North
Nickel
1,795,000
Total
Copper
Cobalt
Nickel
Copper
Cobalt
3,028,000
(%)
0.95
0.66
0.05
1.21
0.54
0.09
1.1
0.59
0.07
Tonnes
(%)
Tonnes
-
5,246,000
5,246,000
-
-
-
1.28
0.57
0.09
1.28
0.57
0.09
1,233,000
7,041,000
8,274,000
(%)
0.95
0.66
0.05
1.28
0.57
0.09
1.23
0.59
0.08
Metal
Tonnes
11,700
8,100
600
90,100
40,400
6,400
101,800
48,500
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.
In the period since the Mineral Resource and Ore Reserve was reported on 30 June 2021, operations at Savannah
recommenced in FY22. The mining depletion carried out during FY22 has not been depleted in either the Mineral Resource or
Ore Reserve for the Project at this time. Therefore, both the Mineral Resource and Ore Reserve estimates reported herein the
2022 Annual Report remain unchanged from that reported in 2021. A revised Mineral Resource and Ore Reserve is expected to
be released to the market in October 2022.
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 22 July 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.
2022 ANNUAL REPORT 107
Resource
Savannah
Above
900F
Savannah
Below
900F
Savannah
North
Total
Savannah
Project
Metal
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Jun-15
-
780,000
125,000
1.72
905,000
Apr-20
1,885,000
6,117,000
2,972,000
10,974,000
(%)
1.44
0.8
0.07
-
-
-
1.48
0.65
0.11
(%)
1.77
1.44
0.08
1.64
0.75
0.09
1.6
0.71
0.11
-
-
-
1.49
0.53
0.09
(%)
1.56
1.03
0.07
1.65
0.76
0.1
1.55
0.65
0.11
Metal
Tonnes
24,500
16,200
1,200
14,900
6,900
900
170,400
71,100
11,600
13,454,000
1.56
209,800
0.7
0.1
94,200
13,700
*Mineral Resource estimates have been rounded to the nearest 1,000t, 0.01% Metal grade and 100t of metal
Qualifying Statements and Notes:
In the period since the Mineral Resource and Ore Reserve was reported on 30 June 2021, operations at Savannah
recommenced in FY22. The mining depletion carried out during FY22 has not been depleted in either the Mineral Resource or
Ore Reserve for the Project at this time. Therefore, both the Mineral Resource and Ore Reserve estimates reported herein the
2022 Annual Report remain unchanged from that reported in 2021. A revised Mineral Resource and Ore Reserve is expected to
be released to the market in October 2022.
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 22 July 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
Savannah (below 900F) – refer to ASX announcement of 30 September 2015, titled "Mineral Resources and Ore Reserves
Savannah North – refer to ASX announcement of 24 August 2016, titled “Major Resource Upgrade for Savannah North”
June 2019”
at 30 June 2015”
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 materiallychanged.
Ni Equivalent References
References to Ni equivalent contained metal in Mineral Resources and Ore Reserves is based on assumed metal pricesas
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.
12.
SCHEDULE OF
MINING TENEMENTS
PROJECT
TENEMENT STATUS CURRENT AREA
EQUITY
TENEMENT
MANGER
PANORAMIC
COMMITMENT
CURRENT RREGISTRED
HOLDERS
East
Kimberley -
100%
East
Kimberley -
100%
East
Kimberley -
100%
East
Kimberley -
Keller Creek
JV
E80/4880 Live
21
BL
100%
E80/5131
Live
5
BL
100%
E80/5238
Live
14
BL
100%
PAN
PAN
PAN
100% of Commit,
Rents & Rates
Pindan Exploration
Company Pty Ltd
100% of Commit,
Rents & Rates
Pindan Exploration
Company Pty Ltd
100% of Commit,
Rents & Rates
Pindan Exploration
Company Pty Ltd
E80/4834 Live
9
BL
80% - Ora Gold
20% free carried
interest
PAN
100% of Commit,
Rents & Rates
"Pindan Exploration
Company Pty Ltd
(80%)
Ora Gold Limited
(20%)"
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%
L80/52
Live
140.3129 HA 100%
L80/86
Live
0.04
HA 100%
M80/540
Live
128.85
HA 100%
PAN
PAN
PAN
PAN
PAN
PAN
PAN
PAN
PAN
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
M38/101
Live
583.15
HA 100% Ni-Cu-
Focus
PGM rights only
M38/159
Live
597.15
HA 100% Ni-Cu-
Focus
PGM rights only
M38/342
Live
316.25
HA 100% Ni-Cu-
Focus
PGM rights only
M38/363
Live
5.245
HA 100% Ni-Cu-
Focus
PGM rights only
M38/364
Live
18.375
HA 100% Ni-Cu-
Focus
PGM rights only
M38/37
Live
650
HA 100% Ni-Cu-
Focus
PGM rights only
M38/38
Live
280.05
HA 100% Ni-Cu-
Focus
PGM rights only
M38/49
Live
945.05
HA 100% Ni-Cu-
Focus
PGM rights only
M38/535
Live
464.55
HA 100% Ni-Cu-
Focus
PGM rights only
M38/693
Live
48.2176
HA 100% Ni-Cu-
Focus
PGM rights only
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Focus Minerals
(Laverton) Pty Limited
Savannah -
Copernicus
Savannah -
Copernicus
Savannah -
Copernicus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
Laverton -
Focus
108 PANORAMIC RESOURCES LIMITED
13.
CORPORATE
DIRECTORY
ABN 47 095 792 288
Directors
Nicholas Cernotta
Victor Rajasooriar
Independent Non-Executive Chair
Managing Director and Chief
Executive Officer
Peter Sullivan
Non-Executive Director
Rebecca Hayward
Independent Non-Executive Director
Gillian Swaby
Independent Non-Executive Director
Company Secretary
Susan Park
Company Secretary
Registered Office and Principal Place of Business
Level 9, 553 Hay Street
Perth WA 6000
Tel:
Email:
Web: www.panoramicresources.com
+61 8 6374 1700
info@panres.com
Share registry
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000
Tel - (Australia): 1300 555 159
Tel - (Overseas): +61 3 9415 4062
Auditors
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Australia
Home Exchange
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
ASX Code
Panoramic Resources Limited shares are listed
on the Australian Stock Exchange (ASX).
The Company’s ASX Code is: PAN
2022 ANNUAL REPORT 109
ABN: 47 095 792 288
PANORAMIC PERTH OFFICE:
SAVANNAH PROJECT OFFICE:
Panoramic Resources Limited
Level 9, 553 Hay Street
Perth WA 6000
+61 8 6374 1700
info@panres.com
Savannah Nickel Mines Pty Ltd
PMB 19
Kununurra WA 6743
+61 8 6103 2399
www.panoramicresources.com