PNX METALS LIMITED ABN 67 127 446 271
ANNUAL REPORT 2021
ANNUAL REPORT
Share Registry
Computershare
Level 5, 115 Grenfell Street
Adelaide
SA 5000
Telephone (within Australia): 1300 305 232
Telephone (outside Australia): +61 (3) 9415 4657
Auditors
Grant Thornton
Level 3, 170 Frome St
Adelaide
SA 5000
Lawyers
Piper Alderman
Level 16
70 Franklin Street
Adelaide SA 5000
ASX
The Company’s fully paid ordinary shares are quoted on the ASX
under the code PNX.
Corporate Governance Statement
The Corporate Governance Statement for PNX Metals Limited
is available on the Company’s website and can be accessed by
clicking on the following URL Link:
https://pnxmetals.com.au/corporate-governance/
CORPORATE DIRECTORY
Australian Business Number
67 127 446 271
Country of Incorporation
Australia
Board of Directors
Graham Ascough – Non-executive Chairman
Hans-Jörg Schmidt – Non-executive Director
Hansjoerg Plaggemars – Non-executive Director
Frank Bierlein – Non-executive Director
Richard Willson – Non-executive Director
James Fox – Managing Director & CEO
Company Secretary
Angelo Gaudio
Principal Administrative Office
Level 1, 135 Fullarton Rd
Rose Park
SA 5067
Telephone: +61 (8) 8364 3188
Facsimile: +61 (8) 8364 4288
Registered Office
Level 1
135 Fullarton Rd
Rose Park
SA 5067
Telephone: +61 (8) 8364 3188
Facsimile: +61 (8) 8364 4288
Contact
info@pnxmetals.com.au
Website
www.pnxmetals.com.au
Cover photo: Drilling at Glencoe.
Photo page 3: Weed control area at Moline.
2
PNX METALS LIMITED | ANNUAL REPORT 2021 CONTENTS
CHAIRMAN’S LETTER
OVERVIEW
EXPLORATION REPORT
TENEMENTS
MINERAL RESOURCES AND ORE RESERVES
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
4
5
8
17
19
22
28
33
34
38
57
INDEPENDENT AUDITOR’S REPORT TO MEMBERS 58
ADDITIONAL SHAREHOLDER INFORMATION
61
PNX METALS LIMITED | AN N UAL RE PORT 2021
3
CHAIRMAN’S LETTER
Dear Fellow Shareholders,
On behalf of the Board of Directors, it is my pleasure to present the 2021 Annual Report for PNX Metals Limited (‘PNX’
or ‘Company’).
During the year the Company made significant progress in advancing the 100% owned Fountain Head gold and Hayes
Creek zinc-silver-gold projects towards development and in June 2021 the Company released a prefeasibility study
confirming the technical and financial viability of our strategy to sequentially develop these projects. The study envisages
initial gold mining and processing at Fountain Head (Years 1 to 5) to be followed by gold-silver-zinc development at Hayes
Creek (from Year 4), resulting in a long-life, multi-commodity operation (~10 years) that would produce approximately
250,500 ounces of gold, 11.4 million ounces of silver, and 116,300 tonnes of zinc.
Under the proposed staged development approach, Stage 1 would see the construction of a low capital and operating
cost carbon-in-leach gold plant at Fountain Head to treat the near-surface oxide and free-milling gold and silver ore from
three open-pit mines at Fountain Head, Mt Bonnie and Glencoe over an initial 5-year period. Subsequent to the treatment
of the currently defined oxide gold and silver resources, Stage 2 envisages upgrading the Plant infrastructure to incorporate
a sulphide flotation circuit capable of processing the Hayes Creek high-grade gold-silver-zinc massive sulphide ores to
produce two valuable product streams, a zinc concentrate, and a precious metals concentrate.
In May 2021, the Environmental Impact Statement (EIS) to develop Fountain Head was submitted to the Northern Territory
Environmental Protection Authority (NTEPA) and the public consultation period has now concluded. PNX is now considering
the feedback from the public consultation and the NTEPA and will provide an updated EIS to address the issues raised as
part of the normal consultation process. We anticipate approval of the EIS by early 2022. Significantly, approval has already
been received from the Northern Territory Department of Industry, Tourism and Trade (DITT) for a variation to the Company’s
Mine Management Plan (MMP) to allow dewatering of the Fountain Head pit as a precursor to development.
In addition to Fountain Head and Hayes Creek, the Company holds a 90% interest in a large and very prospective land
holding (in excess of 1,500km2) in the vicinity of these projects. In parallel with the studies and permitting activities currently
completed during the year, PNX has implemented an exploration strategy that identified a number of promising exploration
targets with the potential to deliver a pipeline of gold mineral resources for processing at Fountain Head, with the aim of
adding to mine life and enhancing project economics.
Testing these exploration targets has since been deferred as drilling progresses at the newly acquired Glencoe gold deposit
(part of the Fountain Head project) where we are excited to see new extensional zones of gold mineralisation being intersected.
The Board and management are confident that continued technical studies and exploration work will be successful in growing
our resource base and that the completion of development studies, permitting and financing at Fountain Head will provide a
clear pathway for this exciting production opportunity, that has the potential to deliver strong returns for PNX shareholders.
I would like to take this opportunity to express my thanks to my fellow directors, management and staff for their dedication
and work during the past 12 months. We are committed to progressing the Company and growing our flagship Fountain
Head and Hayes Creek projects towards development for the benefit of all shareholders.
I also take this opportunity to thank all shareholders for your continued support of PNX and I look forward to providing
further updates as our activities move forward in 2021.
Yours sincerely,
Graham Ascough
Chairman
24 September 2021
4
PNX METALS LIMITED | ANNUAL REPORT 2021 OVERVIEW
GENERAL
PNX Metals Limited (PNX or the Company) is an ASX listed minerals exploration company
with the objective of being a successful explorer and a sustainable and profitable gold and
base metals producer for the benefit of its shareholders, employees and the communities in
which it operates.
PNX holds a large exploration and
development portfolio which is highly
prospective for gold, silver and base
metals located in the Pine Creek region of
the Northern Territory (NT), approximately
170km from Darwin (Figure 1).
During the year a Preliminary Feasibility
Study (PFS) was released by the
Company that supports the robust multi-
commodity development of Fountain
Head and Hayes Creek over an initial
10-year mine-life.
The Company’s 100% owned Mineral
Leases host considerable Mineral
Resources including the Fountain Head
Gold Project (“Fountain Head”) and
the recently acquired Glencoe deposit
which host 156,000oz of gold and
79,000oz of gold respectively, and at the
Mt Bonnie and Iron Blow polymetallic
deposits (“Hayes Creek”) which contain
237,700oz of gold, 16.2Moz silver and
177,200 tonnes of zinc.
Collectively the projects host 472,700oz
of gold, 16.2Moz of silver, 177,200 tonnes
of zinc, 37,000 tonnes of lead and
10,050 tonnes of copper (details of the
Mineral Resource Estimates (MRE) are
provided in the MRE section on Page 21 of
this report.
Included in the proposed development is
the construction of a purpose build gold
plant where Como Engineers have been
engaged to assist with this process.
Production estimates (refer PNX ASX
release 17 June 2021) of metals
recovered to doré and concentrates is
250,500oz gold, 11.4Moz silver and
116,300t of zinc commencing from
mid-late 2022 subject to Government,
Environmental and Board approvals and
financing, which the Company is currently
working through.
During the year, drilling at Fountain
Head was completed with the aim
of identifying areas of near-surface
mineralisation with the potential to
augment the existing mine plan, and to
provide information around sterilisation
of areas that may be used for the waste
stockpile and other infrastructure. (Refer
to PNX ASX release on 11 August 2021
for results).
The Company also identified and
acquired the Glencoe tenement located
on a granted Mining Lease approximately
3 kilometres north of Fountain Head.
The acquisition represents a ‘bolt
on’ asset that expands the proposed
Fountain Head development and is a key
component of the Company’s NT gold
development strategy.
DARWIN
N O R T H E R N
T E R R I T O R Y
Burnside Project
Darwin
Moline Project
Hayes Creek,
Fountain Head and
Glencoe Projects
Chessman Project
Burnside Project
Glencoe Project
Hayes Creek
Fountain Head Project
Hayes Creek Project
Moline Project
Pine Creek
0
50
100
Katherine
kilometres
Chessman Project
NT 06
Figure 1 NT Project locations.
NORTHERN
TERRITORY
QUEENSLAND
WESTERN AUSTRALIA
SOUTH AUSTRALIA
NEW SOUTH WALES
Adelaide
VICTORIA
TASMANIA
Aust 04
5
PNX METALS LIMITED | ANNUAL REPORT 2021 OVERVIEW
GENERAL
KEY FINANCIAL RESULTS
Approximately 2,000m of RC drilling was
completed at Glencoe during August
2021 to increase geological confidence
in the updated Mineral Resource, and
to identify mineralised extensions with
the potential to host additional gold
resources. This drilling was extremely
successful with multiple zones of new
high-grade gold mineralisation intersected
and a second RC drill program is to
commence in October 2021.
The Burnside exploration project has been
systematically reviewed and evaluated to
identify targets with the potential to host
significant “standalone” gold deposits,
and to supplement and extend proposed
gold processing operations at Fountain
Head. Numerous high-value target areas
were identified and are being progressed
to drill-ready status.
IMPACTS OF COVID-19
The Company continually reviews
updates regarding the COVID-19
pandemic and the implications for the
health and wellbeing of our employees,
contractors and stakeholders. The safety
of PNX employees and contractors is
paramount and appropriate measures
regarding COVID-19 are taken in-line
with government advice, particularly in
relation to interstate travel. NT field-
based activities are safely continuing with
personnel movements limited to the NT
in line with any border restrictions and
closures with other states, in particular
South Australia.
($000’S, EXCEPT AS INDICATED)
30 JUNE 2021
30 JUNE 2020
Interest/other income
Research & Development tax offset refund
Corporate/administrative costs
Impairment – exploration assets
(Income)/loss on Sunstone investment
117
-
1,373
-
(103)
113
150
1,269
500
438
Comprehensive Loss after tax
1,153
1,944
Comprehensive Loss per share
0.04 cents
0.06 cents
Net operating cashflows
Exploration expenditure
Funds raised – equity (net of costs)
Cash on hand
Net working – capital1
Investment in Sunstone - at fair value
Capitalised exploration expenditure
Debt
Lease liabilities
Contract liabilities – silver streaming
Net assets
(1,184)
(3,582)
6,470
3,632
3,632
193
19,573
-
50
2,400
21,085
(692)
(4,282)
1,602
1,973
1,973
90
16,365
-
-
2,400
15,661
Number of shares on issue
3,652,193,511
2,542,621,476
Number of performance rights on issue
54,300,000
10,800,000
Number of unlisted options on issue
359,125,000
379,125,000
Share price (ASX: PNX)2
0.8 cents
1.0 cents
1
Excluding investment in Sunstone Metals Ltd.
2 Closing share price as at 30 June.
6
PNX METALS LIMITED | ANNUAL REPORT 2021 At 30 June 2021, the Group had no
debt, and:
• cash holdings of $3.63 million,
•
investment in Sunstone Metals Ltd
valued at $0.2 million.
OVERVIEW
KEY FINANCIAL RESULTS
The Company and its wholly owned
subsidiary (the Group) reported a loss
after tax for the year of $1.3 million (2020:
$1.5 million). As a comparison to last
year’s results the lower loss figure (down
$0.2 million) was primarily due to no
impairment of Exploration and Evaluation
expenditure during the year, and no
Research and Development (R&D) tax
offset recorded during the year.
The loss for the year was net of a $Nil
million (2020: $0.15 million) income
tax benefit from the Company’s R&D
tax offset claims. Pre-tax loss for the
year was $1.26 million compared to
$1.66 million in 2020.
The comparable pre-tax loss is not
unexpected given PNX’s corporate
cost structure has not significantly
changed, and exploration costs in the
Northern Territory (the primary area of
expenditure) are capitalised. Corporate
and administration costs include head
office wages, directors’ fees, audit fees,
insurance, professional fees, regulatory,
occupancy and communications, and
these have not changed significantly.
Net cash inflow of $1.7 million for the
year primarily reflects payments for
exploration activities ($3.6 million) and to
suppliers and employees ($1.3 million)
financed through new shares issued
($6.5 million after of costs) and various
government grants and R&D tax offset
($0.1 million). Exploration and Evaluation
cash outflows of $3.6 million consisted
of $1.5 million on the Fountain Head gold
project (including drilling that resulted
in an updated MRE being completed
and reported in accordance with the
JORC Code 2012, released to the ASX
16 June 2020), $1.2 million towards the
acquisition of Glencoe, $0.1 million at
Hayes Creek and $0.8 million on other NT
regional exploration for the year.
The Company raised a total of $6.7
million (before costs) during December
2020 and January 2021 comprising of a
share placement at 0.6 cents per share to
sophisticated and professional investors
for $2.3 million, and $4.4 million under a
non-renounceable rights issue of one (1)
for every four (4) shares held at a price of
0.6 cents per share.
Fountain Head pit ramp.
7
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
During the year the Company made significant progress with the development of its Northern
Territory projects through the release of a Preliminary Feasibility Study (PFS) that supports the
sequential development of its 100% owned Fountain Head gold and Hayes Creek gold-silver-
zinc projects (Project) (see PNX ASX release dated 17 June 2021).
The Project is located within the
boundaries of the Ban Ban Springs and
Douglas pastoral stations approximately
13km east of the Stuart Highway and
170km south of Darwin in the Northern
Territory and comprises 19 Mineral
Leases (MLs) covering an area of
1246.6 hectares providing continuous
coverage of, and unrestricted access
over, the Fountain Head, Glencoe,
Mt Bonnie and Iron Blow deposits. The
Project areas are 100% owned by PNX
and located on granted MLs where the
original MLs pre-date Native Title.
The Project is ideally located within an
existing infrastructure services corridor
in an historic and mining region. PNX
is a 100% holder of 366km², and 90%
holder of a further 1,113km² of highly
prospective exploration tenure (in Joint
venture with Kirkland Lake Gold (ASX:
KLA, TSX: KL)) surrounding the Project
with numerous high-priority gold and
base metals exploration targets.
Development and exploration activities
were ongoing for much of the year with
only minor delays related to COVID-19
travel restrictions between the Northern
Territory and South Australia. The
Company is fortunate to have secured
the services of skilled staff as continued
domestic and international border
restrictions have meant that shortages of
personnel and equipment are becoming
more commonplace.
Table 1 Project pre and post tax NPV and IRR metrics
(all $ are AUD, unless otherwise noted) .
NPV6%
NPV8%
NPV10%
IRR
The PFS was published in mid-June
2021 and contains a comprehensive
assessment of the technical and
economic parameters relating to the
sequential development of the Project
which the Company believes holds the
best potential to maximise shareholder
returns. The proposed development will
make optimum use of the Company’s
Mineral Resource inventory which
collectively contain 472,700 ounces of
gold, 16.2 million ounces of silver and
177,200 tonnes of zinc. 37,000 tonnes of
lead and 10,050 tonnes of copper from
ore located at Fountain Head, Glencoe
and the Hayes Creek VMS deposits
(Mt Bonnie and Iron Blow) (details of the
Mineral Resource Estimates (MRE) are
provided on Page 21 of this report)
The Project is forecast to return a
strong Earnings Before Interest Tax
Depreciation and Amortisation (EBITDA)
of A$413 million from total revenues of
A$972 million (net of treatment refining
and transport charges) representing an
EBITDA margin of 42% over its 10-year
mine-life from a total combined mining
inventory which exceeds 7 million tonnes.
Gold will be the largest contributor to life-
of-mine revenue (48%) followed by silver
(27%) and zinc (25%) (Tables 1-3).
PRE-TAX
$ MILLION
$197
$171
$149
63%
POST-TAX
$ MILLION
$147
$127
$111
55%
Commodity prices (US$) and FX rates
used in the PFS: gold US$1,733/oz, silver
US$25/oz, zinc US$1.31lb, US$0.77/
A$1.00.
A healthy pre-tax unleveraged Internal
Rate of Return (IRR) of 63% (post-tax
IRR 55%) is calculated based on an
upfront A$46 million pre-production
capital investment, inclusive of a working
capital component of A$4 million
to manage the cost of the Project
through the commissioning phase.
The Project is forecast to generate net
revenues of A$352 million over the life
of mine, returning a net cash position of
A$276 million after tax.
The Company’s aim is to construct
a low capital and operating cost
carbon-in-leach (CIL) gold plant (Plant)
and infrastructure capable of treating
750ktpa with a capacity potential of
900ktpa (Figure 2). Near-surface oxide
and free-milling gold and silver ore from
three open-pit mines at Fountain Head,
Mt Bonnie and the newly acquired
Glencoe gold deposit (see PNX ASX
release 10 December 2020) is planned to
be processed over an initial 5-year period
(Stage 1) to produce a gold doré and
commencing, subject to approvals, later
in 2022.
8
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
FOUNTAIN HEAD GOLD AND HAYES CREEK GOLD-SILVER-ZINC PROJECT – KEY METRICS
Note: All financial values are in Australian dollars unless otherwise noted.
Table 2 Project key production metrics summary.
PRODUCTION SUMMARY
METALS
UNITS
FOUNTAIN HEAD
HAYES CREEK
TOTALS
tonnes per annum 750,000-900,000
450,000
Plant throughput rate
Mine life
Ore mined open-pit
Strip-ratio open-pit
Ore mined underground
Average mined grades
Metals recovered
Metals paid
years
tonnes
waste: ore
-
g/t
g/t
%
ounces
ounces
tonnes
ounces
ounces
tonnes
Gold
Silver
Zinc
Gold
Silver
Zinc
Gold
Silver
Zinc
-
10*
4.8
6.6
4,032,828
1,015,400
5,048,228
5.96
-
1.23
7.42
-
147,678
688,491
-
147,678
688,491
-
-
8.02
-
1,957,565
1,957,565
1.76
131
4.45%
102,844
-
-
-
250,522
10,684,910
11,373,401
116,333
82,638
116,333
230,316
9,176,852
9,865,343
83,851
322,309
83,851
-
Concentrates produced
dry metric tonnes
*
Fountain Head (Stage 1) and Hayes Creek (Stage 2) processing to overlap from Year 4.
Table 3 Project key economic metrics summary.
PROJECT ECONOMICS A$’000
FOUNTAIN HEAD
HAYES CREEK
TOTALS
CONTRIBUTION
Total revenue (ex-mine gate)
Gold
Silver
Zinc
Royalties payable (NT & 3rd party)
C1 Cash Costs
EBITDA
Pre-production capital (Stage 1)
Sustaining and life of mine capital (Stage 2)
AIC (Opex + Capex)
AISC*
354,623
332,276
22,347
-
15,320
245,385
93,919
42,018
-
287,403
302,722
682,287
161,583
259,426
261,278
49,287
314,227
318,772
-
65,000
379,227
428,515
1,036,910
493,859
281,773
261,278
64,607
559,612
412,691
42,018
65,000
666,630
731,237
47.6%
27.2%
25.2%
*
All-in sustaining costs (AISC) is defined as the all-in costs (which includes all site-based capital and operating costs; mining, processing, haulage and admin),
plus royalties.
9
PNX METALS LIMITED | ANNUAL REPORT 2021
EXPLORATION REPORT
Figure 2 Fountain Head draft process plant and infrastructure.
To assist with fast-tracking the Project
development the Company appointed
Como Engineers Pty Ltd earlier in the
year to design a ‘fit for purpose’ solution
and utilising modular and transportable
equipment for the Project. The parties
are operating under an Early Contractor
Involvement structure which aims to
deliver a design and construct proposal
for the Plant for a fixed-duration, lump-
sum price, thereby removing a large
portion of the project risk from PNX.
An initial capital outlay of A$40.3 million,
per the PFS, is required for the Stage
1 pre-production mine-development,
Plant and associated infrastructure,
inclusive of Engineering Procurement
Construction and Management costs.
Plant first fill and critical path spares are
expected to be a further A$1.69 million.
These projected capital costs are being
refined and this process, which was
expected to be completed in September
2021, is ongoing due to challenges
such as extended lead times and well
publicised materials price increases
being offset with proposed utilisation of
secondhand equipment.
Subsequent to the treatment of the
currently defined oxide gold and silver
resources in Stage 1, the Plant will be
upgraded to incorporate a sulphide
flotation circuit capable of processing the
Hayes Creek high-grade gold-silver-zinc
massive sulphide ores into two valuable
product streams, a zinc concentrate, and
a precious metals concentrate (Stage 2)
which will be trucked to the Port of Darwin
and then shipped to international markets
for sale and smelting and refining.
Capital required for the Stage 2
development is estimated to be an
additional A$58 million (PNX ASX release
12 July 2017 ‘Hayes Creek confirmed to
be a leading Zinc and Precious Metals
Project in Australia’).
The timing and quantum of Stage 2
capital is being assessed as there
are a number of items that will be
utilised across both process streams
such as maintenance, administration,
telecommunications, power, crushing
and tailings. Considerable capital cost
savings are expected to be realised upon
completion of this work. The intent is
that Stage 2 capital will be funded from
operating cash-flows after the pay-back
of the initial Stage 1 capital.
10
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
The resultant void space generated from
mining at Fountain Head will be used
for sub-aqueous storage of tailings from
Stage 2, and generate flexibility in water
management which eliminates the need
for an above ground tailings dam. This
will result in significant time and cost
savings, and a considerable reduction in
the Project’s environmental footprint and
potential Project risks.
A key component of the Government
and environmental approvals process for
Fountain Head, the Environmental Impact
Study (EIS), was lodged in June 2021
with the Northern Territory Environmental
Protection Authority (EPA). An 8-week
Public Consultation period ended on
8 August 2021, and the Company is
currently working through the feedback
received with a view to submit the
updated EIS next quarter. Based on
published statutory timelines full EIS
approval is anticipated towards the end of
March 2022.
Approval was received from the Northern
Territory Department of Industry,
Tourism and Trade (DITT) for a variation
to the Company’s Mine Management
Plan (MMP) to allow dewatering of the
Fountain Head pit (see PNX ASX release
24 March 2021).
Numerous opportunities exist within PNXs
approximate 1,500km² exploration tenure
to delineate additional gold resources
which, if successful, could extend gold
processing in parallel with concentrates
production, generating a significant
increase in the production profile from
Year 7, or earlier.
REGIONAL EXPLORATION
GLENCOE
During the year, PNX finalised the Sale
and Purchase Agreement (SPA) with
private company, Ausgold Trading Pty
Ltd, to acquire the Glencoe gold deposit
(see PNX ASX release 10 December
2020). Glencoe represents a ‘bolt-on’
asset that has significantly expanded the
proposed Fountain Head development.
An updated MRE was published and
multiple new zones of high-grade gold
mineralisation intersected during PNX’s
first RC drill program (refer PNX ASX
release 14 September 2021).
In April 2021 the Company reported
a Mineral Resource Estimate1 for the
Glencoe gold deposit in accordance with
the JORC Code2, 2012 (refer PNX ASX
release 28 April 2021), comprising:
• 2.1Mt @ 1.2g/t Au for 79,000oz Au
(Inferred Category)
The Glencoe MRE, remains open in all
directions and extends from surface
to 120m vertical depth and comprises
discrete lodes over a strike length of
approximately 1.5km (Figure 3).
The Company’s first drill program at
Glencoe, which is located 3km to the north
of Fountain Head, was highly successful
and intersected multiple new zones of
high-grade gold mineralisation (see PNX
ASX release 14 September 2021.
The first phase of drilling comprising
27 RC holes for 2,352m confirmed
historic drilling results with equivalent
gold grades and widths, and identified
significant gold mineralisation more than
200 metres southeast of the current
MRE. Mineralisation also appears
to be thickening to the southeast
where broader zones of mineralisation
containing multiple gold intercepts were
encountered, including:
• 8m at 1.69g/t Au from 65m in
GLRC012
• 9m at 2.23g/t Au from 21m in
GLRC019
• 3m at 5.37g/t Au from 31m in
GLRC027
A detailed topographic survey, surveying
of historic drill collars, geological mapping
of pits walls and surfaces (Figure 3), and
reprocessing of regional aeromagnetic
data have provided greater confidence
in the validity of the historic drill data,
contributed robust geological data to
inform the future MRE, and identified new
target areas. Integration and interpretation
of these datasets are ongoing.
A second phase of RC drilling comprising
20 RC holes for approximately 2,000m is
proposed to start in October 2021. These
holes will build on the results of recently
completed drilling. In addition, three
diamond holes for 360 m will be drilled to
provide rock density data (predominantly
in the Oxide and Transitional zones),
structural information, geotechnical and
metallurgical data.
1 Refer PNX ASX release 28 April 2021 ‘New Glencoe Mineral Resource expands Fountain Head
Development’ including a summary report prepared by H&S Consultants Pty Ltd and JORC Table 1
2 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The
JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of The Australasian
Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of
Australia (JORC).
Example of ferruginous stockwork veins.
11
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
REGIONAL EXPLORATION
Figure 3 Glencoe drilling for 2021 (red traces), in relation to MRE outline (yellow), historic drilling (RAB,
Arircore and RC) (white traces), and geochemical anomaly (hashed orange line).
An example of sheeted ‘Tally Ho’ quartz veins in Glencoe South pit.
Termite mounds at Glencoe.
12
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
REGIONAL EXPLORATION
FOUNTAIN HEAD
Commencing June 2021, 20 RC holes
were drilled at Fountain Head for a total of
1,992m. The aim of drilling was to identify
areas of near-surface mineralisation with
the potential to augment the existing
mine plan, and test that there were
no significant mineralised zones in the
vicinity of proposed waste stockpiles or
other infrastructure (Figures 2 and 3).
Numerous zones of potentially economic
gold mineralisation were intersected,
and further work has been planned,
including a detailed structural study to
assist in vectoring extensions of the more
significant gold lodes or offset high-grade
gold shoots (Figure 4).
Integration of recent mapping with
existing geological data suggests that
gold mineralisation at Fountain Head
exists over a strike extent of at least
5km along the Fountain Head anticline
fold hinge. Two sets of gold lodes have
been identified to date – the NW-trending
Fountain Head lodes and the crosscutting
NNW-trending Tally Ho lodes. These lode
sets remain open along strike and down
dip and host the current MRE. Limited
exploration has taken place outside of the
known mineralised zones and geological
controls of gold mineralisation are not well
understood in these peripheral areas.
Four main exploration targets were tested
at Fountain Head (Figure 4) during the
year. Significant results include several
narrow zones of gold mineralisation from
three of the targets that remain open:
North West Zone
• 3m at 8.54g/t Au from 34m in
FHRC145, including 1m at 23.72g/t
from 34m
• 2m at 3.56g/t Au from surface,
3m at 4.13g/t Au from 16m, and 3m
at 1.83g/t Au from 116m in FHRC192
• 1m at 1.83g/t Au from 73m in
FHRC196
South East Zone
• 1m at 4.38g/t Au from surface in
transported gravel in hole FHRC190
Far East Zone
• 1m at 2.87g/t Au from 5m, and 1m at
1.30g/t Au from 65m in FHRC182
• 1m at 1.44g/t Au from 26m, and 2m
at 1.36g/t Au from 56m in FHRC187
• 1m at 3.98g/t Au from 24m in
FHRC189
Figure 4 Fountain Head drilling areas for 2021.
Field setup for RC logging at Fountain Head.
13
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
REGIONAL EXPLORATION
BURNSIDE EXPLORATION PROJECT
The Burnside area, part of the broader
Pine Creek Orogen, has a substantial
gold endowment of approximately
3.5Moz (see PNX ASX release
10 October 2020). The majority of the
gold mineralisation typically occurs in
zones of quartz veining, brecciation and
shearing along fold hinges, shear zones
and thrust faults. Each of the target
areas defined by PNX contains one or
more of these zones.
In October 2020, the Company
completed a regional review of its
Burnside Exploration Project and
identified multiple high priority gold
targets, separate from Fountain Head,
each with the potential to host economic
quantities of gold mineralisation. Four
areas were prioritised for additional
follow-up work (Figure 5).
Concurrent with development activities
relating to Fountain Head, PNX has been
systematically reviewing the broader
Burnside area to identify targets with the
potential to host significant “standalone”
gold deposits, and to supplement and
extend future proposed gold processing
operations at Fountain Head.
An Aboriginal Areas Protection Authority
(AAPA) Certificate was applied for in
February 2021 in relation to the Western
Arm North area and is expected to be
issued in October 2021.
Historic exploration has largely involved
surface prospecting throughout areas
of outcrop to identify prospective zones
followed by trenching (costeaning) and
drilling. PNX’s recent assessment has
highlighted that while exploration in the
vicinity of some of the known deposits is
extensive, areas along strike from existing
mineralisation and non-outcropping areas
have not been effectively explored in the
past and remain essentially untested
despite being highly prospective for
gold mineralisation.
The majority of regional exploration
at Burnside took place in the period
between the late 1980s and early
2000s when low gold prices prevailed.
Consequently, various gold anomalies
and targets originally identified during
that period were not followed up and
now present as opportunities for PNX in
the current environment of substantially
higher gold prices.
Priority Gold Targets
Structural interpretation of regional
aeromagnetic data, compilation and
verification of historic exploration data
(approximately 36,000 drill holes,
424 costeans, and 30,000 surface
geochemical samples), and target
generation incorporating both empirical
and conceptual criteria has been
completed. The following priority gold
targets are typically characterised by
strong surface geochemical anomalism
and drilled bedrock mineralisation.
Medusa
The Medusa gold target lies within
the central portion of the project and
is characterised by a large surface
(700m x 600m area) gold and arsenic
in soil anomaly, and rock chip values
up to 2.56g/t gold and 6.70% arsenic
(arsenic being a good pathfinder for gold
mineralisation in the Pine Creek and
Burnside region). Initial reconnaissance
drill testing of the structure undertaken
in 1996 returned encouraging near-
surface intercepts which have never been
followed up.
The mineralisation, which occurs within
a zone of quartz veining and shearing,
has been intersected over a 600m
strike length and remains open in all
directions. Significantly the original
surface geochemical anomaly extends
well beyond the limits of drilling and
interpretation of magnetic data suggests
that there are multiple parallel NE trending
fault zones running through the area
which have never been drill tested.
Cookies Corner
Cookies Corner is located on a NE
trending fault approximately 3km to the
NNE of the historic Goodall deposit where
Western Mining Corporation mined 4.1Mt
@ 1.99g/t gold (228koz contained gold)
from 1988 to 1992. Gold mineralisation
at Goodall occurs within a 25m to 50m
wide x 600m long zone of shearing and
quartz veining on the western limb of an
anticlinal fold hinge closure adjacent to
the same NE trending fault that hosts
Cookies Corner.
At Cookies Corner an 800m long x
300m wide gold in soil anomaly has
been defined that overlies an area of
outcropping gossanous quartz veins.
Drilling by PNX in late 2018 intersected
gold mineralised quartz veining over a
400m strike, which remains open in all
directions. Numerous high-grade gold
intercepts reported at the time (see
ASX release 29 January 2019).
Western Arm North
Western Arm North is characterised by
a linear north-south trending 900m long
x 400m wide surface gold in soil anomaly
overlying the soil-covered northern
continuation of the same faulted anticlinal
fold hinge that hosts Kirkland Lake’s
Western Arm Gold Deposit (Inferred
Resource 1.79Mt @ 1.4g/t gold for 86,000
contained ounces) 1km to the south.
Three drill traverses (spaced 300m
to 500m apart) of 20m deep vertical
reconnaissance holes were drilled across
the anomaly in 1993 with several holes
intersecting anomalous gold within
weathered ferruginous quartz veining
and sediments
Chimera
Lying east of Medusa within the same
dolerite and sediment rock sequence,
Chimera is an east-west trending
700m long x 200m wide surface gold in
soil anomaly.
Four 60m deep angled RC holes
drilled in 1996 did not identify the
source of the anomaly and as such it
remains unexplained.
14
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
REGIONAL EXPLORATION
N O R T H E R N
T E R R I T O R Y
Cookies Corner
Goodall
PNX Exploration Licence
Ringwood Range
n
PNX Mining Licence
Other parties production
licence
Other parties production
licence application
Highway
Gold occurrence
Fault
Granite
Target
Medusa
Bons Rush
Santorini
Kazi
Chimera
Western Arm North
Western Arm
Woolwonga
Howley
Rising Tide
Glencoe
Brocks Creek
Zapopan
Fountain Head
Big Howley
Chinese Howley
Cosmo Howley (Cosmo Deeps)
Long Airfield
Hayes Creek
0
5
10
Fenton Airfield
kilometres
Princess Louise
Iron Blow
Mount Bonnie
Davies
Golden Dyke
Langleys
Burnside 03
Figure 5 Burnside Exploration Project – TMI magnetics.
Emerald Springs Roadhouse
15
PNX METALS LIMITED | ANNUAL REPORT 2021 EXPLORATION REPORT
REGIONAL EXPLORATION
MOLINE
The 100% owned Moline Project
is located approximately 65km to
the east of Hayes Creek. Moline
comprises three main “lines of lode”
hosting numerous gold and gold-zinc
prospects, including Moline, School,
Tumbling Dice, Swan, and Hercules.
The majority of historical mining
only extended to shallow depths
in the oxide zone and studies
have indicated that the primary
mineralisation at depth could
potentially be recovered and
upgraded to a high-value concentrate
to supplement future proposed
processing at Fountain Head or at
Hayes Creek.
No on-ground exploration work
took place at Moline with all of the
Company’s focus on the Fountain
Head and Hayes Creek projects.
OCCUPATIONAL HEALTH AND
SAFETY
PNX is committed to the health and safety
of all its stakeholders, including employees,
contractors and visitors. No reportable
incidents occurred during the year.
Access to site and existing infrastructure
is well maintained, and relevant OHS and
ESG policies and procedures are regularly
updated and reviewed. The Company
utilises camp facilities operated by Kirkland
Lake Gold at their Cosmo mine and has
developed and maintained an excellent
relation with staff and management.
Regarding the COVID-19 pandemic the
Company continually reviews updates and
assesses the implications for the health and
wellbeing of our employees, contractors and
stakeholders. The safety of PNX employees
and contractors is paramount and
appropriate measures regarding COVID-19
are taken in-line with government advice,
particularly in relation to interstate travel.
The Company reviews its Health and
Safety policies and procedures on a
regular basis to ensure it maintains a high
standard. All field staff take part in ongoing
training to develop skills for supervising
and conducting exploration activities in
remote environments.
ENVIRONMENT
The Company has approved exploration,
and care and maintenance Mine
Management Plans (MMP) for all
project areas in the NT. Environmental
rehabilitation bonds are held by the
NT Government and are required prior
to any ground disturbing activities
taking place. Progressive rehabilitation
of disturbed areas has occurred in
accordance with licence conditions and
will continue to occur in the future. Regular
water monitoring and weed mapping
was completed in accordance with
approved MMPs.
SOCIAL & COMMUNITY
PNX recognises and responds to the
growing expectation from community,
regulators and industry leaders for more
open community engagement and
stakeholder consultation. The Company
engages with local stakeholders, including
government, pastoral leaseholders,
Aboriginal groups, and local community
as an integral part of its social license
to operate.
The Company also took part in a number of
online investor interviews, and presented at
the Annual Geoscience Exploration Seminar
(AGES) 2021 in Alice Springs (Figure 6).
Figure 6 Presenting at the 2021 AGES seminar.
16
PNX METALS LIMITED | ANNUAL REPORT 2021 TENEMENTS
NORTHERN TERRITORY
TENEMENT
ML30512
ML30589
MLN1033
MLN1039
MLN214
MLN341
MLN342
MLN343
MLN346
MLN349
MLN405
MLN459
MLN811
MLN816
MLN794
MLN795
ML30936
ML31124
MLN1020
MLN4
MLN1034
NAME
Mt Bonnie
Mt Bonnie
Mt Bonnie
Mt Bonnie
Iron Blow
Iron Blow
Mt Bonnie
Iron Blow
Mt Bonnie
Iron Blow
Mt Bonnie
Mt Bonnie
Mt Bonnie
Mt Bonnie
Fishers-1
Fishers-2
HOLDER
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
Good Shepherd
PNX Metals Ltd 100%
Fountain Head
Fountain Head
Fountain Head
Fountain Head
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
Total Hayes Creek
Total Other
ML29679+
Glencoe
PNX Metals Ltd 100%
Total Fountain Head
Total Glencoe
ML24173
MLN1059
MLN41
EL28616
EL31099
EL31893
EL32489+
Moline
Moline
Mt Evelyn
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
Total Moline
Total Mineral Leases
Moline
Bridge Creek
PNX Metals Ltd 100%
PNX Metals Ltd 100%
Ringwood Station
PNX Metals Ltd 100%
J25 Anomaly
PNX Metals Ltd 100%
+ ML29679 was acquired by PNX Metals Limited on 27 April 2021.
Total Exploration Licences
AREA HECTARE
6.4
31.6
4.8
1.2
6.3
14.9
13.7
14.9
16.0
15.0
12.0
15.0
8.1
8.1
168.0
8.1
8.1
106.0
122.2
33.5
12.0
529.9
304.2
879.6
199.0
199.0
3126.0
418.7
8.9
3,553.6
4,922.4
262.5km2
60.2km2
23.4km2
19.9km2
366.0km2
17
PNX METALS LIMITED | ANNUAL REPORT 2021 TENEMENTS
NORTHERN TERRITORY – FARM-IN TENEMENTS
TENEMENT
NAME
HOLDER
(AREA SQ KM)
Burnside Project*
EL10012
EL10347
EL23431
EL23536
EL23540
EL23541
EL24018
EL24051
EL24058
EL24351
EL24405
EL24409
EL24715
EL25295
EL25748V
EL9608
Chessman Project*
EL25054
EL28902
ML30293
Rocklands Project#
EL10120#
EL25120#
EL27363#
EL25379#
EL23509#
ML29933^
Mt Ringwood
Golden Dyke
Thunderball
Brocks Creek
Jenkins
Cosmo North
Hayes Creek
Margaret River
Yam Creek
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
McCallum Creek
PNX Metals Limited 90%, NTMO 10%
Yam Creek
PNX Metals Limited 90%, NTMO 10%
Brocks Creek South
PNX Metals Limited 90%, NTMO 10%
Mt Masson
PNX Metals Limited 90%, NTMO 10%
Margaret Diggings
PNX Metals Limited 90%, NTMO 10%
Burnside
Mt Bonnie
Maud
Maud
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
PNX Metals Limited 90%, NTMO 10%
Chessman
PNX Metals Limited 90%, NTMO 10%
Rocklands 1
Rocklands 2
Rocklands 4
Rocklands 7
Rocklands 8
Rocklands 3
PNX Metals Ltd – earning-in 100%
PNX Metals Ltd – earning-in 100%
PNX Metals Ltd – earning-in 100%
PNX Metals Ltd – earning-in 100%
PNX Metals Ltd – earning-in 100%
PNX Metals Ltd – earning-in 80%, Trojan
Enterprises Pty Ltd and David Trow 20%
PNX Metals Ltd – earning-in 80%, Trojan
Enterprises Pty Ltd and David Trow 20%
ML29937^
Rocklands 5
Total Exploration Licences
14.9
10.0
13.4
70.4
16.7
3.3
23.4
86.9
3.3
13.4
4.1
22.1
56.8
10.0
584.5
10.0
64.0
104.5
1.1
6.94
9.96
6.64
6.64
19.92
0.86
3.54
1,167.30
V
*
Subject to exclusion of two non-material discrete blocks totalling 38km2 which are excluded due to third party interests.
PNX Metals Ltd has earned a 90% interest under a farm-in agreement with NT Mining Operations Pty Ltd (NTMO) a wholly owned subsidiary of Kirkland Lake
Gold Australia Pty Ltd.
# PNX Metals Ltd earning-in 100% interest in the Hardrock Rights under a farm-in agreement with Rockland Resources Pty Ltd (Rockland) and Oz Uranium Pty
Ltd Holdings Pty Ltd (Oz).
^ PNX Metals Ltd earning-in 80% interest in the Hardrock Rights under a farm-in agreement with Rockland Resources Pty Ltd (Rockland) and Oz Uranium Pty
Ltd Holdings Pty Ltd (Oz). A 20% interest is held by Trojan Enterprises Pty Ltd and David Trow.
18
PNX METALS LIMITED | ANNUAL REPORT 2021 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2021
NORTHERN TERRITORY
HAYES CREEK MINERAL RESOURCES
Table 1: Iron Blow Mineral Resources by JORC Classification as at 3 May 2017.
JORC
CLASSIFICATION
LODE
AuEq CUT-OFF
(g/t)
TONNAGE
(kt)
Zn
(%)
Indicated
East Lode
Total Indicated
Inferred
West Lode
East Lode
West Lode
FW Gold
HW Gold
Interlode Gold
Interlode Base Metal
Total Inferred
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
800
7.64
1,280
4.14
2,080
5.49
20
20
0.48
0.76
210
0.25
40
40
120
450
0.06
0.21
3.52
1.11
Total Indicated + Inferred Mineral Resource
2,530
4.71
Pb
(%)
1.83
0.33
0.91
0.34
0.96
0.07
0.09
0.03
0.32
0.18
0.78
Cu
(%)
0.30
0.31
0.30
0.16
0.13
0.03
0.01
0.07
0.14
0.07
0.26
Ag
(g/t)
275
60
143
132
109
16
6
8
35
27
122
Au
(g/t)
2.90
1.73
2.19
6.01
1.02
2.03
1.68
1.66
0.69
1.71
2.10
ZnEq
(%)
AuEq
(g/t)
20.64
15.53
8.84
6.66
13.39
10.08
13.65
5.90
3.48
2.57
2.79
5.87
4.38
11.79
9.43
4.44
2.62
1.94
2.10
4.42
3.30
8.87
Total Contained Metal (t)
119,200
19,700
6,650
9.9Moz 170.9koz 298,000t 721.5koz
Table 2: Mt Bonnie Mineral Resources by JORC Classification as at 8 February 2017.
JORC
CLASSIFICATION
Indicated
Indicated
Total Indicated
Inferred
Inferred
Inferred
Total Inferred
DOMAIN
CUT-OFF GRADE
TONNAGE
(kt)
Zn
(%)
Oxide/Transitional
0.5g/t Au
195
0.94
Fresh
1% Zn
1,180
4.46
Oxide/Transitional
0.5g/t Au
32
0.43
1,375
3.96
Fresh
Ag Zone
1% Zn
50g/t Ag
118
2.91
21
0.17
171
2.11
Total Indicated + Inferred Mineral Resource
1,545
3.76
Pb
(%)
2.43
0.94
1.15
1.33
0.90
0.03
0.87
1.12
Cu
(%)
0.18
0.23
0.23
0.29
0.15
0.04
0.16
0.22
Ag
(g/t)
171
121
128
74
135
87
118
127
Au
(g/t)
3.80
1.02
1.41
2.28
0.54
0.04
0.80
1.34
ZnEq
(%)
11.50
9.60
9.87
6.37
7.61
2.36
6.73
9.53
AuEq
(g/t)
9.44
7.88
8.11
5.23
6.25
1.94
5.53
7.82
Total Contained Metal (t)
58,000
17,300
3,400
6.3Moz
66.8koz 147,000t 388.5koz
Table 3: Total Hayes Creek Mineral Resources (Iron Blow + Mt Bonnie) by JORC Classification at 3 May 2017.
JORC
CLASSIFICATION
Total Indicated (84.7%)
Total Inferred (15.3%)
Total Indicated + Inferred Mineral Resource
TONNAGE
(kt)
Zn
(%)
3,455
4.88
622
1.39
4,077
4.35
Pb
(%)
1.01
0.37
0.91
Cu
(%)
0.27
0.10
0.25
Ag
(g/t)
137
52
124
Au
(g/t)
1.88
1.46
1.81
ZnEq
(%)
11.99
5.03
10.93
AuEq
(g/t)
9.29
3.91
8.47
Total Contained Metal (t)
177,200
37,000
10,050 16.2Moz 237.7koz 445,000t 1,110koz
19
PNX METALS LIMITED | ANNUAL REPORT 2021
MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2021
NORTHERN TERRITORY
Notes relating to Hayes Creek Project Resource Tables
• Due to effects of rounding, the total may not represent the sum of all components. No material changes in the estimates of the
mineral resources at Mt Bonnie and Iron Blow have occurred since they were originally reported.
• Metallurgical recoveries and metal prices (Table 4) have been applied in calculating zinc equivalent (ZnEq) and gold equivalent
(AuEq) grades.
•
Iron Blow – A mineralisation envelope was interpreted for each of the two main lodes, the eastern lode (Zn-Au-Ag-Pb) and
western lode (Zn-Au), and four subsidiary lodes with a 1g/t AuEq cut-off used to interpret and report these lodes.
• Mt Bonnie – Zinc domains are reported above a cut-of grade of 1% zinc, gold domains are reported above a cut-off grade of
0.5g/t gold and silver domains are reported above a cut-off grade of 50g/t silver.
Table 4: Commodity price and metal recovery assumptions for the estimation of gold and zinc equivalents.
METALS
Zinc
Lead
Copper
Silver
Gold
UNIT
USD / t
USD / t
USD / t
USD / troy ounce
USD / troy ounce
PRICE*
2,450
2,100
6,200
20.50
1,350
80%
60%
60%
70%
55%
RECOVERY
MT BONNIE
RECOVERY
IRON BLOW
*
consensus prices at the time of the resources estimates.
FOUNTAIN HEAD MINERAL RESOURCES
Table 5: Fountain Head and Tally Ho Mineral Resources by JORC Classification as at 16 June 2020.
JORC
CLASSIFICATION
TALLY HO
Indicated
Inferred
Total
FOUNTAIN HEAD
Indicated
Inferred
Total
GLOBAL
Indicated
Inferred
Total
TONNAGE
(Mt)
0.94
–
0.94
0.89
1.11
2.00
1.83
1.11
2.94
Au
(g/t)
2.0
–
2.0
1.4
1.6
1.5
1.7
1.6
1.7
80%
60%
60%
80%
60%
OUNCES
(koz)
59
–
59
41
56
96
100
56
156
Notes relating to Fountain Head Mineral Resources
• Due to effects of rounding, the total may not represent the sum of all components. The updated estimate of the Mineral
Resources at Fountain Head and Tally Ho deposits was reported during June 2020. (Please refer to PNX ASX release dated
16 June 2020). The estimate of the initial Mineral Resources was reported on 11 July 2019.
• Fountain Head and Tally Ho mineralisation reported utilising a cut-off grade of above 0.7g/t Au/t gold, which is consistent with the
assumed open cut mining method.
20
PNX METALS LIMITED | ANNUAL REPORT 2021 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2021
NORTHERN TERRITORY
GLENCOE MINERAL RESOURCES
Table 6: Glencoe Mineral Resources by JORC Classification as at 28 April 2021.
JORC
CLASSIFICATION
Inferred
Total
OXIDATION
Oxide
Transitional
Fresh
TONNAGE
(Mt)
0.5
0.3
1.3
2.1
Au
(g/t)
1.3
1.2
1.1
1.2
OUNCES
(koz)
20
11
48
79
Notes relating to Glencoe Mineral Resources
• Due to effects of rounding, the total may not represent the sum of all components. Glencoe Mineral Resources by oxidation zone
as at 26 April 2021 estimated using a cut-off grade of 0.7g/t Au which is consistent with the assumed open-cut mining method.
(Please refer to PNX ASX release dated 28 April 2021).
• The cut-off grade is also consistent with the Mineral Resource Estimate for Fountain Head.
PNX TOTAL MINERAL RESOURCES
Table 7: Total JORC Mineral Resources (Iron Blow + Mt Bonnie + Fountain Head + Glencoe).
TONNAGE
(kt)
Zn
(t)
Pb
(t)
Cu
(t)
Total Contained Metal (t)
9,117
177,200
37,000
10,050
Ag
(Moz)
16.2
Au
(koz)
472.7
The reported mineral resources for Iron Blow and Mt Bonnie were updated in February 2017 and May 2017 and there have been no
material changes in the estimated resources, underlying assumptions or technical parameters since then.
The reported mineral resources for Fountain Head and Tally Ho were updated on 16 June 2020 (Refer to PNX ASX release dated
16 June 2020) and there have been no material changes in the estimated resources, underlying assumptions or technical parameters
since then.
The reported mineral resources for Glencoe were reported on 28 April 2021 (Refer to PNX ASX release dated 28 April 2021) and there
have been no material changes in the estimated resources, underlying assumptions or technical parameters since then.
PNX utilises suitably qualified independent consultants to compile all new mineral resources estimates. These resource estimates and
the underlying assumptions and interpretations, are reviewed by PNX management, and in particular full-time employee and Resources
Geologist with PNX Metals Limited, Mr Marco Scardigno (a Competent Person), for reasonableness prior to being finalised.
COMPETENT PERSON’S STATEMENT
The information in this report that relates to Exploration Results is based on information compiled by Mr Marco Scardigno, a
Competent Person who is a Member of the Australian Institute of Mining and Metallurgy (AusIMM). Mr Scardigno has sufficient
experience relevant to the style of mineralisation and the type of deposits under consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Scardigno is a full-time employee and Resource Geologist with PNX Metals Ltd and consents to
the inclusion in this report of the matters based on his information in the form and context in which it appears.
21
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
The Directors of PNX Metals Limited (‘PNX’ or ‘Company’) present their report for the
financial year ended 30 June 2021.
DIRECTORS
The names and details of directors in office during and since the end of the financial year, unless otherwise stated, are as follows:
HANSJOERG PLAGGEMARS
Non-executive Director
Appointed 28 November 2020
Mr Hansjoerg Plaggemars was
appointed to the board as Non-Executive
Director with effect from 28 November
2020. He is an experienced company
director with a strong background in
corporate finance, corporate strategy,
and governance. He has qualifications
in Business Administration and has
served on the Board of Directors of
many listed and unlisted companies in
a variety of industries including mining,
agriculture, shipping, construction,
and investments. Mr. Plaggemars has
previously served on the Board of
Delphi Unternehmensberatung AG, the
Company’s major shareholder.
In the three years immediately prior to
30 June 2021, Hansjoerg Plaggemars
held the following directorships of
other ASX listed companies for the
following periods:
• Non-executive Director, Kin Mining NL
– since July 2019
• Non-executive Director, South Harz
Potash Limited – since October 2019
• Non-executive Director, Azure Minerals
Limited – since November 2019
• Non-executive Director, Altech
Chemicals Limited – since
August 2020
• Non-executive Director, Gascoyne
Resources Limited – since July 2021
• Non-executive Director, Wiluna Mining
Corporation Limited – since July 2021
GRAHAM ASCOUGH
Non-executive Chairman
Appointed 7 December 2012
HANS-JÖRG SCHMIDT
Non-executive Director
Appointed 11 November 2019
Based in Monaco, Mr Schmidt has a
Master of Business & Administration from
the University of Mannheim (Germany)
and has a strong track record of business
start-up and investment management.
He is an experienced Private Equity
Investor, working and investing across a
broad range of industries and has held
senior positions in investment banking
and investment research firms along
with director roles for publicly listed
Companies in Europe. He has advised
boards and management teams on
investment decisions, financings and
transactions across a broad range
of industries.
In the three years immediately prior
to 30 June 2021, Hans-Jörg Schmidt
held no directorships of other ASX
listed companies.
Graham Ascough (BSc, PGeo, MAusIMM)
is a senior resources executive with more
than 30 years of industry experience
evaluating mineral projects and resources
in Australia and overseas.
Mr Ascough, a geophysicist by training,
has had broad industry involvement
playing a leading role in setting the
strategic direction for companies,
completing financing and in implementing
successful exploration programmes.
Mr Ascough was the Managing Director
of Mithril Resources Ltd from October
2006 until June 2012. Prior to joining
Mithril in 2006, he was the Australian
Manager of Nickel and PGM Exploration
at a major Canadian resources house,
Falconbridge Limited, which was acquired
by Xstrata Plc in 2006. He is a member
of the Australian Institute of Mining
and Metallurgy and is a Professional
Geoscientist of Ontario, Canada.
In the three years immediately prior to
30 June 2021, Graham Ascough held
the following directorships of other listed
companies for the following periods:
• Non-executive Chairman, Musgrave
Minerals Limited – since 26 May 2010
• Non-executive Chairman,
Sunstone Metals Limited – since
30 November 2013
• Non-executive Chairman, Black
Canyon Limited – since 25 August
2013 (listed on 5 May 2021)
• Non-executive Chairman, Mithril
Resources Limited – from 9 October
2006 to 15 May 2019
22
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
FRANK BIERLEIN
Non-executive Director
Appointed 18 June 2021
RICHARD WILLSON
Non-executive Director
Appointed 18 June 2021
Dr Bierlein is a geologist with 30
years of experience as a consultant,
researcher, lecturer and industry
professional. Dr Bierlein has held
exploration and generative geology
management positions with QMSD
Mining Co Ltd, Qatar Mining, Afmeco
Australia and Areva NC, and consulted
for, among others, Newmont Gold,
Resolute Mining, Goldfields International,
Freeport-McMoRan, and the International
Atomic Energy Agency. He was a non-
executive director of Gold Australia Pty
Ltd from 2015 to 2019, and chaired
the Advisory Board of a Luxemburg-
based private equity fund between
2014 and 2021. Dr Bierlein has worked
on six continents spanning multiple
commodities, and over the course of his
career has published and co-authored
more than 130 articles in peer-reviewed
scientific journals. Dr Bierlein obtained
a PhD (Geology) from the University of
Melbourne, is a Fellow of the Australian
Institute of Geoscientists (AIG), and a
member of both the Society of Economic
Geologists (SEG) and the Society of
Geology Applied to Mineral Deposits.
In the three years immediately prior
to 30 June 2021, Frank Bierlein
held no directorships of other ASX
listed companies.
Mr Willson is an experienced, Non-
Executive Director, Company Secretary
and CFO with more than 20 years’
experience with both publicly listed and
private companies. Mr Willson holds a
Bachelor of Accounting Degree from
the University of South Australia, is a
Fellow of CPA Australia, and a Fellow
of the Australian Institute of Company
Directors. He is a Non-Executive Director
of Titomic Limited (ASX:TTT), AusTin
Mining Limited (ASX:ANW), Thomson
Resources Limited (ASX:TMZ), 8IP
Emerging Companies Limited (ASX:8EC),
Unity Housing Company Ltd and Variety
SA; and Company Secretary of a number
of ASX listed Companies. Mr Willson is
the Chairman of the Audit Committee of
Titomic Limited, AusTin Mining Limited,
8IP Emerging Companies Limited,
and Unity Housing Company, and is
the Chairman of the Remuneration &
Nomination Committee of Titomic Limited.
In the three years immediately prior to
30 June 2021, Richard Willson held the
following directorships of other listed
companies for the following periods:
• Non-executive Director, Aus Tin
Mining Limited – since February 2011
• Non-executive Director, Titomic
Limited – since May 2017
• Non-executive Director, Thomson
Resources Limited – since July 2019
• Non-executive Director,
8IP Emerging Companies Limited –
since April 2021
• Non-executive Director,
1414 Degrees Limited – from
July 2020 to May 2021
• Non-executive Director, Graphene
Technology Solutions Limited (now
Sparc Technologies Limited) – from
March 2019 to December 2020
JAMES FOX
Managing Director & Chief Executive
Officer (MD & CEO)
Appointed 26 November 2014
James Fox has been CEO of the Company
since May 2012. He has over 20 years’
experience in the mining industry. Prior to
joining PNX, he was responsible for the
development and operation of the Nickel
Laterite Heap Leach project at the Murrin
Murrin operations in Western Australia.
Mr Fox has held various senior processing
positions including Process Manager at
the Nifty Copper Operation in Western
Australia. He has worked in the UK, Cyprus,
Uganda and Australia in gold, lead, zinc,
copper, nickel and cobalt mining and
processing operations.
In the three years immediately prior to 30
June 2021, James Fox held no directorships
of other listed companies.
The names and details of directors who
resigned during the year are as follows:
PAUL J DOWD
Non-executive Director
Appointed 27 September 2007 and resigned
on 5 March 2021
Paul Dowd has over 50 years’ experience
in the mining industry in Australia and
many overseas countries. In April 2012
he retired as Managing Director of PNX, a
position he assumed in September 2008.
Mr Dowd’s experience includes executive
management roles including Vice President
of Newmont Mining Corporation’s Australian
and New Zealand Operations and Managing
Director of Newmont Australia Limited, and
as a senior public servant – head of the
resources and petroleum department in the
Kennett Government of Victoria. In 2015,
he retired as Chairman of the SA Mineral
Resources & Heavy Engineering Skills
Centre but remains on the Board. In 2017,
Mr Dowd retired as a non-executive director
of Oz Minerals Limited after eight years of
23
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
service. He is a non-executive director
of Energy Resources of Australia
Limited (ERA), a board member of the
Sustainable Minerals Institute (University
of Queensland) and retired as Chairman,
but remains a Councillor of the Mineral
Resources Sector Advisory Council of
the CSIRO.
In the three years immediately prior
to 30 June 2021, Paul Dowd held the
following directorship of other listed
companies for the following period:
• Non-executive director, Energy
Resources of Australia Limited – since
26 October 2015
PETER WATSON
Non-executive Director
Appointed 7 September 2007 and resigned
on 5 March 2021
Peter Watson, a founder of PNX, studied
Law at Melbourne University and
graduated with honours. He has practiced
law since 1970, specialising in commercial,
corporate, resources and trade practices
law. He is admitted to practice in South
Australia, New South Wales, Victoria and
Western Australia as well as the High
Court of Australia. For over 20 years,
Mr Watson was a partner in the national
law firm now known as Norton Rose
Fulbright. During that time he established,
and for 4 years managed, its Perth office.
He also managed its Melbourne office
for 2 years. In 1996 Mr Watson joined
Andersen Legal as its first Melbourne
partner and in 1999 was recruited by
Normandy Mining Limited as its group
legal counsel and a group executive.
Following the takeover of Normandy
by Newmont Mining Corporation, he
returned to private legal practice and
founded the boutique law firm Watsons
Lawyers in Adelaide which on 1 July
2016 merged with Piper Alderman (an
Adelaide headquartered firm with Sydney,
Melbourne and Brisbane offices). Mr
Watson is a director of BGRF Company
Ltd, the trustee of the Bethlehem Griffiths
Research Foundation (a medical research
charitable foundation), non-executive
director of Felton Grimwade & Bosisto’s
24
Pty Ltd (a manufacturer and supplier of
essential oil products and over-the-counter
therapeutic products) and a trustee of a
perpetual charitable trust.
In the three years immediately prior to
30 June 2021, Peter Watson held no
directorships of other listed companies.
INTERESTS IN SHARES AND
PERFORMANCE RIGHTS OF
THE COMPANY
As at the date of this report, the interests
of the Directors in the shares, unlisted
options and Performance Rights of PNX
are as follows:
DAVID HILLIER
Non-executive Director
Appointed 17 September 2010 and
resigned on 26 November 2020
David Hillier is a Chartered Accountant
and has more than 40 years’ experience
in commercial aspects of the resources
industry. He has served as Chairman
and as a director of a number of public
companies in the mining and exploration
fields, including Lawson Gold Limited and
Buka Gold Limited. He was Chief Financial
Officer and an executive director of AIM
listed Minerals Securities Limited, based in
London. Over a period of 14 years Mr Hillier
held a range of senior executive positions
in the Normandy Mining Limited Group of
companies and was Chief Financial Officer
of Normandy for six of these years.
In the three years immediately prior
to 30 June 2020, David Hillier held no
directorships of other listed companies.
COMPANY SECRETARY
Angelo Gaudio
Appointed 10 January 2019
Angelo Gaudio has significant experience
in senior financial positions within the
resource sector. Previous roles include;
the Chief Financial Officer and Company
Secretary for Investigator Resources
Limited, Renascor Resources Limited,
as well as Vice President, Finance and
Administration with Heathgate Resources.
Angelo is a qualified accountant with
over forty years of finance, management
and accounting experience. His
expertise includes corporate finance,
risk management, financial reporting and
corporate development. Angelo is a Fellow
of the Institute of Public Accountants and
a certificated member of the Governance
Institute of Australia.
Graham Ascough
Non-executive Chairman
Graham Ascough has an indirect interest
in 13,833,166 Shares and 3,125,000
unquoted options with an exercise
price of 1.464 cents each, expiring on
30 September 2021.
Paul Dowd
Non-executive Director
Resigned on 5 March 2021
Paul Dowd has a direct interest in
500,000 Shares, an indirect interest
in 26,693,298 Shares and 6,250,000
unquoted options with an exercise
price of 1.464 cents each, expiring on
30 September 2021.
Peter Watson
Non-executive Director
Resigned on 5 March 2021
Peter Watson has a direct interest in
3,534,464 Shares, an indirect interest in
16,857,143 Shares and related parties of
Mr Watson hold 1,962,707 Shares.
David Hillier
Non-executive Director
(Resigned on 26 November 2020).
David Hillier has an indirect interest
in 12,000,001 Shares and 3,125,000
unquoted options with an exercise
price of 1.464 cents each, expiring on
30 September 2021.
James Fox
Managing Director & CEO
James Fox holds 30,800,000
Performance Rights, and a related party
of Mr Fox holds 11,000,000 Shares
and 1,875,000 unquoted options with
an exercise price of 1.464 cents each,
expiring on 30 September 2021.
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
DIVIDENDS AND DISTRIBUTIONS
No dividends or distributions were paid
to members during the financial year and
none were recommended or declared
for payment.
PRINCIPAL ACTIVITIES
The principal activity of the Company
and its wholly owned subsidiary
(‘Group’) during the financial year was
advancement of the Fountain Head Gold
Project and progression of Feasibility
Studies over its Fountain Head Gold
Project, situated in the Pine Creek region
of the Northern Territory (‘NT’). The
Group continued to conduct near-mine
and regional mineral exploration at its
Fountain Head and other projects in the
Pine Creek region of the NT.
REVIEW OF OPERATIONS
PNX continued to make significant
progress during the year and released
a PFS that supports the sequential
development of Fountain Head and
Hayes Creek Projects (Project), both of
which are located approximately 170km
south of Darwin in the Pine Creek region
of the Northern Territory.
The PFS confirmed the technical and
economic viability of a staged development
approach, to construct a low capital
and operating cost carbon-in-leach gold
plant (Plant) and infrastructure capable of
treating 750ktpa with a capacity potential
of 900ktpa. Near-surface oxide and free-
milling gold & silver ore from three open-pit
mines at Fountain Head, Mt Bonnie and
Glencoe and would be processed over an
initial 5-year period (Stage 1).
Subsequent to the treatment of the
currently defined oxide gold and silver
resources in Stage 1, the Plant will be
upgraded to incorporate a sulphide
flotation circuit capable of processing the
Hayes Creek high-grade gold-silver-zinc
massive sulphide ores into two valuable
product streams, a zinc concentrate and
a precious metals concentrate (Stage 2).
In June 2021, the Company lodged an
EIS for the Fountain Head Gold Project
with the Northern Territory EPA. An
8-week Public Consultation period ended
on 8 August 2021 and the Company is
expecting feedback from this process
during September 2021.
The broader Burnside area has, along
with other exploration areas, been
systematically reviewed to identify targets
with the potential to host significant
“standalone” gold deposits, and to
supplement and extend proposed gold
processing operations at Fountain Head.
The Group’s Exploration and Mineral
Leases remain in good standing.
During the year, drilling at Fountain Head
was completed with the aim of identifying
areas of near-surface mineralisation with
the potential to augment the existing
mine plan, and to provide information
around sterilisation of areas that may be
used for the waste stockpile and other
infrastructure. (Refer to PNX ASX release
on 11 August 2020 for results).
During the year, the Company acquired
the Glencoe project located on a
granted Mining Lease approximately
3 kilometres north of Fountain Head.
The acquisition represents a ‘bolt
on’ asset that expands the proposed
Fountain Head development and is a
key component of the Group’s NT gold
development strategy.
Drilling at Glencoe was undertaken during
August 2021 to increase geological
confidence in the updated Mineral
Resource, and to identify mineralised
extensions with the potential to host
additional gold resources.
The Company is also progressing
evaluation of additional gold prospects
that may have the potential to augment
overall project returns. PNX holds a
large exploration tenement portfolio with
potential for zinc, gold and silver, also
inthe Pine Creek region.
The Group continually reviews updates
regarding the COVID-19 pandemic
and the implications for the health and
wellbeing of its employees, contractors
and stakeholders. The safety of
PNX employees and contractors is
paramount and appropriate measures
regarding COVID-19 are taken in-line
with government advice, particularly in
relation to interstate travel. NT field-
based activities are safely continuing with
personnel movements limited to the NT
in line with any border restrictions and
closures with other states, in particular
South Australia.
The Group reported a loss after tax
for the year of $1.3 million (2020:
$1.5 million). No impairments were
recorded during the year.
The Group’s corporate costs, which
include head office wages, directors’ fees,
professional fees, insurance, regulatory,
occupancy and communication costs
have not changed significantly.
Net operating cash inflows of $1.7 million
for the year primarily reflect payments for
exploration activities ($3.6 million) and to
suppliers and employees ($1.3 million)
financed through new shares issued
($6.5 million) and various government
grants received ($0.1 million).
The Company raised a total $6.5 million
during December 2020 and January
2021 through a share placement at
0.6 cents per share to sophisticated
and professional investors and a non-
renounceable Rights Issue at 0.6 cents
per share.
25
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
SIGNIFICANT CHANGES IN
STATE OF AFFAIRS
There were no significant changes in the
state of affairs of the Group during or
since the end of the year.
ENVIRONMENT REGULATION
AND PERFORMANCE
The Group continues to meet all
environmental obligations across its
tenements.
SIGNIFICANT EVENTS
SUBSEQUENT TO THE END OF
THE FINANCIAL YEAR
The Group’s office lease in Rose Park,
South Australia, extended to August 2021
as at year end. Subsequent to 30 June
2021, the Group secured the extension of
the office lease for a further 12 months.
There has been no other matter or
circumstance that has occurred
subsequent to the end of the financial
year that has significantly affected, or may
significantly affect, the operations of the
Group, the results of those operations, or
the state of affairs of the Group in future
financial years.
LIKELY DEVELOPMENTS
The Group’s aim is to be a sustainable,
profitable gold and base metals producer
and successful minerals explorer by
advancing the Fountain Head and Hayes
Creek Projects to development and
production, and by making new mineral
discoveries in the Pine Creek region of the
Northern Territory to either supplement
the Fountain Head and Hayes Creek
Projects or to be developed as stand-
alone operations.
An EIS for the Fountain Head Gold
Project was lodged on 1 June 2021
with the NT EPA. An 8-week Public
Consultation period ended on 8 August
2021 and the Group is finalising a
Supplement with approvals expected,
based on statutory timelines, by end
March 2022.
The EIS is an important milestone
in the Fountain Head Gold Project
approval process and the culmination
of a significant detailed body of work
by the Group and its Environmental
Consultants, ERIAS Group, to identify
potential environmental impacts and risks
and mitigate these through careful and
considered management.
OPTIONS AND PERFORMANCE
RIGHTS
53,500,000 Performance Rights were
issued to personnel during the financial
year. There were no shares issued in
satisfaction of Performance Rights
that vested under the Company’s
Performance Rights Plan. 10,000,000
Performance Rights lapsed during the
year as the vesting conditions were
not met. At the date of this report,
54,300,000 unvested Performance Rights
are on issue.
There were no options issued during
the financial year, however, 20,000,000
unquoted options exercisable at a
price of $0.0147 per share, expired
on 30 October 2020. As at the date
of this report, a total of 359,125,000
unquoted options are on issue at a
price of $0.01464 per share, expiring on
30 September 2021.
26
INDEMNIFICATION AND
INSURANCE OF DIRECTORS
AND OFFICERS
The Company entered into a Deed
of Access, Insurance and Indemnity
with Peter Watson and Paul Dowd on
12 November 2007, David Hillier on
22 September 2010, Graham Ascough
on 11 December 2012, James Fox on
26 November 2014, Hans-Jörg Schmidt
on 11 November 2019, Hansjoerg
Plaggemars on 28 November 2020,
Frank Bierlein and Richard Willson on
18 June 2021. Under the terms of these
Deeds, the Company has undertaken,
subject to restrictions in the Corporations
Act 2001, to:
•
indemnify each Director in certain
circumstances;
• advance money to a Director for
the payment of legal costs incurred
by a Director in defending legal
proceedings before the outcome of
those proceedings is known (subject
to an obligation by the Director to
repay money advanced if the costs
become costs in respect of which
the Director is not entitled to be
indemnified under the Deed);
• maintain Directors’ and Officers’
insurance cover (if available) in favour
of each Director whilst they remain a
Director of the Company and for a run
out period after ceasing to be such a
director; and
• provide each Director with access to
Board papers and other documents
provided or available to the Director
as an Officer of the Company.
Throughout the year and since the end
of the financial year, the Group has had
in place and paid premiums for insurance
policies, with a limit of liability of $10 million,
indemnifying Directors and Officers of the
Group against certain liabilities incurred in
the conduct of business or in the discharge
of their duties as Directors or Officers of the
Group. The contracts of insurance contain
confidentiality provisions that preclude
disclosure of the premium paid.
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
DIRECTORS’ ATTENDANCE AT MEETINGS
There were twelve Board meetings and three Audit Committee meetings held during the financial year. The following table
summarises director attendance:
TOTAL
MEETINGS
HELD DURING
THE YEAR
GRAHAM
ASCOUGH
(Board
Chairman)
HANS-JÖRG
SCHMIDT5,6
HANSJOERG
PLAGGEMARS
(Audit Committee
Chairman)1
FRANK
BIERLEIN4
RICHARD
WILLSON4
JAMES
FOX6
PETER
WATSON3
PAUL
DOWD3,6
DAVID
HILLIER
Audit Committee
Chairman)2
Meetings
attended
Meetings
attended
Meetings
attended
Meetings
attended
Meetings
attended
Meetings
attended
Meetings
attended
Meetings
attended
Meetings
attended
12
3
12
3
10
2
6
2
0
0
0
0
12
3
9
2
8
1
6
1
YEAR ENDED
30 JUNE 2021
Board
meetings
Audit
committee
meetings
1 Hansjoerg Plaggemars was appointed as a director on 28 November 2020 and appointed Chairman of the Audit Committee on 27 January 2021. He was a
director for six of the Board meetings and two of the Audit Committee meetings
2 Mr. Hillier resigned on 26 November 2020 and was a director for six of the board meetings and one of the Audit Committee meetings.
3 Mr. Watson and Mr. Dowd resigned on 5 March 2021 and were directors for nine of the board meetings and two of the Audit Committee meetings.
4 Mr. Bierlein and Mr. Willson appointed on 18 June 2021 and there was no board meeting prior to the financial year end.
5 Mr Schmidt was nominated as Audit Committee member on 21 Apr 2021.
6
Invited to attended Audit Committee meetings.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 33.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are
outlined in note 22 to the financial statements.
The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise the external
auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing
the auditor’s own work, acting in a management or decision-making capacity for the Group, acting as advocate for the Group or
jointly sharing economic risks and rewards.
27
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
This Report outlines the
remuneration arrangements
in place for the Directors and
the Company Secretary.
Where this Report refers to the ‘Grant
Date’ of Shares or Performance Rights,
the date mentioned is the date on which
those Shares or Performance Rights
were agreed to be issued (whether
conditionally or otherwise) or, if later, the
date on which key terms of the Shares
or Performance Rights (eg performance
conditions) were determined.
DIRECTORS AND KEY
MANAGEMENT PERSONNEL
DETAILS
The following persons acted as Directors
of the Company during and since the end
of the financial year:
• Graham Ascough
Non-executive Chairman
• Hans-Jörg Schmidt
Non-executive Director
The following persons were Key
Management Personnel of the Company
and Group during and since the end of
the financial year:
• Angelo Gaudio
Chief Financial Officer &
Company Secretary
RELATIONSHIP BETWEEN
REMUNERATION POLICY AND
GROUP PERFORMANCE
There is no direct link between the
Group’s financial and operating
performance and the setting of
remuneration except as discussed below
in relation to certain Performance Rights.
REMUNERATION PHILOSOPHY
The performance of the Group depends
on the quality of its Directors and
management and therefore the Group
must attract, motivate and retain
appropriately qualified industry personnel.
The Group embodies the following
principles in its remuneration framework:
• Hansjoerg Plaggemars
Non-executive Director
(appointed on 28 November 2020)
• provide competitive rewards to attract
and retain high calibre executives,
directors and employees;
• Frank Bierlein
Non-executive Director
(appointed on 18 June 2021)
• Richard Willson
Non-executive Director
(appointed on 18 June 2021)
• James Fox
Managing Director & CEO
The following persons acted as Directors
and resigned from their position during
the year as noted below:
• David Hillier
Non-executive Director
(resigned on 26 November 2020)
• Paul Dowd
Non-executive Director
(resigned on 5 March 2021)
• Peter Watson
Non-executive Director
(resigned on 5 March 2021)
•
link executive rewards to Group
operating performance and
shareholder value by the granting
of Performance Rights with
performance-based vesting
conditions; and
• ensure total remuneration is
competitive by market standards.
The Group does not currently have
a policy on trading in derivatives that
would limit exposure to losses resulting
from share price decreases applicable
to Directors and employees who receive
part of their remuneration in securities of
the Company. The Board is not aware of
any of the Company’s Directors or key
management personnel ever conducting
such activity.
REMUNERATION POLICY
The Group does not have a separately
established remuneration committee.
The full Board acts as the Group’s
remuneration committee. The Board
is responsible for determining and
reviewing remuneration arrangements for
Non-executive Directors, the Managing
Director & CEO, the Company Secretary
and other senior management. The
Board assesses the appropriateness of
the nature and amount of remuneration
of such persons on a periodic basis with
reference to relevant employment market
conditions with the overall objective of
ensuring maximum stakeholder benefit
from the retention of a high quality Board
and executive team. External advice on
remuneration matters is sought when the
Board deems it necessary.
The remuneration of Non-executive
Directors and senior management
is not dependent on the satisfaction
of performance conditions, except
in relation to Performance Rights as
described below.
The Company has established an
Employee Performance Rights Plan
(‘Plan’), where the Directors can, at their
discretion, grant Performance Rights
to eligible participants. Upon a grant of
Performance Rights, the Board may set
vesting conditions, determined at the
Board’s discretion, which if not satisfied
will result in the lapse of the Performance
Rights granted to the particular employee.
Each Performance Right granted converts
into one ordinary share in PNX on vesting.
No amounts are paid or payable by the
recipient on receipt of the Performance
Right, nor at vesting. Performance Rights
have no entitlement to dividends or
voting rights.
28
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
NON-EXECUTIVE DIRECTOR
REMUNERATION
The Board seeks to set remuneration of
Non-executive Directors at a level which
provides the Company with the ability
to attract and retain Directors of the
highest calibre, whilst incurring a cost
which is appropriate at this stage of the
Company’s development.
As Non-executive Chairman, Graham
Ascough is entitled to receive $75,000
per annum inclusive of superannuation
and Non-executive Directors are each
entitled to receive $40,000 per annum
inclusive of superannuation. Non-
executive Directors are entitled to be paid
reasonable travelling, accommodation
and other expenses incurred as a
consequence of their attendance at
meetings of Directors and otherwise
in the execution of their duties as
Directors. Non-executive Directors are
also entitled to additional remuneration
for extra services or special exertions,
in accordance with the Company’s
Constitution. There are no schemes for
retirement benefits other than government
mandated superannuation. No additional
amounts were paid to any Director during
the financial year (2020: $Nil). There
has been no changes to these fees or
entitlemets since the inception of the
Company in 2007.
Summary details of remuneration for
Non-executive Directors are given
in the tables on pages 30 and 31.
Remuneration is not dependent on the
satisfaction of performance conditions.
The maximum aggregate remuneration
of Non-executive Directors, other than
for extra services or special exertions, is
$500,000 per annum.
MANAGING DIRECTOR &
CHIEF EXECUTIVE OFFICER
REMUNERATION
The Group aims to reward the Managing
Director & Chief Executive Officer (MD &
CEO) with a level and mix of remuneration
commensurate with his position and
responsibilities within the Group to:
• align the interests of the MD & CEO
with those of shareholders;
•
through Performance Rights, link
reward with the strategic goals and
performance of the Group; and
• ensure total remuneration is
competitive by market standards.
James Fox has been Chief Executive
Officer of PNX since 1 May 2012
and assumed the title Managing
Director & CEO on 26 November 2014
with his appointment to the Board. Mr Fox
is entitled to an annual salary of $275,000,
vehicle and telephone benefits to an
estimated remuneration value of $20,000,
as well as mandated superannuation
contributions, 20 days annual leave and
10 days sick leave per annum.
At 30 June 2021 and as of the date of
this report, Mr Fox held no Shares in the
Company directly. At 30 June 2020 and
the date of this report, a related party
of Mr Fox held 11,000,000 Shares in
the Company.
During the year, 5,000,000 of 10,800,000
Performance Rights held by Mr Fox
lapsed as the performance conditions
were not met. On 27 January 2021,
25,000,000 additional Performance
Rights were issued to Mr Fox. The
Performance Rights have performance
conditions related to key Company
objectives, including development of
the Fountain Head and Hayes Creek
projects and the Company’s share price
performance. Performance conditions are
required to be achieved within specified
time periods (extending to 27 January
2024) in order for the Rights to vest.
At 30 June 2021, a total of 30,800,000
Performance Rights subject to performance
conditions were held by Mr Fox.
James Fox’s employment with the
Company may be terminated on three
months written notice or on summary
notice if he:
•
•
•
is charged with any criminal offence
or is guilty of any other conduct
which, in the reasonable opinion
of the Board, is prejudicial to the
interests of the Group;
is negligent in the performance of
his duties;
is incapacitated from performing his
duties as Chief Executive Officer by
illness or injury for a period of two
consecutive months;
• materially breaches any term of his
contract of employment and this is
not remedied within 14 days of notice
of the breach to him by the Company;
• materially contravenes any share
dealing code relating to shares;
•
•
is the subject of, or causes the
Company or Group to be the subject
of, a material penalty or serious
reprimand imposed by any regulatory
authority; or
independently acts in a manner
contravening the directives and
expressed wishes of the Board.
CHIEF FINANCIAL OFFICER
& COMPANY SECRETARY
REMUNERATION
Angelo Gaudio has been the Chief
Financial Officer and Company Secretary
of the Company since 10 January 2019.
Through his company, Angelo Gaudio
provides his services on a part-time
basis and at a rate of $10,000 per
month plus GST plus reimbursement of
out of pocket expenses. The services
may be terminated by either party on
one months’ notice. During the 2021
financial year, Mr Gaudio was paid fees of
$120,000 (excluding GST).
On 1 February 2021, 5,000,000
Performance Rights were issued to
Mr Gaudio and at 30 June 2021, a total
of 5,000,000 Performance Rights subject
to performance conditions were held by
Mr Gaudio.
29
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
Directors’ and Key Management Personnel remuneration (all amounts are paid or payable) for the year ended 30 June 2021:
FINANCIAL YEAR ENDED
30 JUNE 2021
SHORT TERM EMPLOYMENT
BENEFITS
POST-
EMPLOYMENT
EQUITY
SALARY
& FEES
NON–CASH
BENEFITS5
SUPERANNUATION
SHARES AND
PERFORMANCE
RIGHTS
TOTAL
% OF TOTAL
REMUNERATION
CONSISTING OF EQUITY
Directors
Graham Ascough
Paul Dowd3
Peter Watson3
David Hillier1
Hans-Jörg Schmidt
Hansjoerg Plaggemars2
Frank Bierlein4
Richard Willson4
James Fox
$75,000
$26,127
$26,127
$16,329
$36,530
$23,716
$1,305
$1,305
-
-
-
-
-
-
-
-
-
$2,352
$2,352
-
$3,470
-
$124
$124
-
-
-
-
-
$75,000
$28,479
$28,479
$16,329
$40,000
$23,716
$1,429
$1,429
$276,125
$10,3345
$25,000
$80,6176
$392,076
Chief Financial Officer & Company Secretary
Angelo Gaudio
TOTALS
$120,000
$602,564
-
-
$10,334
$33,422
$4,8486
$85,465
$124,848
$731,785
1 David Hillier resigned as a director on 26 November 2020.
2 Hansjoerg Plaggemars was appointed as a director on 28 November 2020.
3 Paul Dowd and Peter Watson resigned as a director on 5 March 2021.
4
Frank Bierlein and Richard Willson were appointed as directors on 18 June 2021.
5 Use of a company provided motor vehicle.
6
Value of Performance Rights that have not yet vested that is attributable to the 2021 financial year.
0%
0%
0%
0%
0%
0%
0%
0%
20.6%
3.9%
11.7%
30
PNX METALS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
Directors’ and Key Management Personnel remuneration for the year ended 30 June 2020:
FINANCIAL YEAR ENDED
30 JUNE 2020
SHORT TERM EMPLOYMENT
BENEFITS
POST-
EMPLOYMENT
EQUITY
SALARY
& FEES
NON–CASH
BENEFITS5
SUPERANNUATION
SHARES AND
PERFORMANCE
RIGHTS
TOTAL
% OF TOTAL
REMUNERATION
CONSISTING OF EQUITY
Directors
Graham Ascough3
Paul Dowd3
Peter Watson3
David Hillier3
Hans-Jörg Schmidt1,3
$71,250
$34,704
$34,704
$38,000
$21,501
-
-
-
-
James Fox4
$276,125
$17,0235
Chief Financial Officer & Company Secretary
-
$3,296
$3,296
-
$2,043
$25,000
-
-
-
-
-
$71,250
$38,000
$38,000
$38,000
$23,543
$33,8252
$351,973
Angelo Gaudio
TOTALS
$120,000
$596,284
-
-
-
$17,023
$33,635
$33,825
$120,000
$680,766
0%
0%
0%
0%
0%
9.6%
0%
5.0%
1 Hans-Jörg Schmidt was appointed as a director on 11 November 2019.
2
3
4
Value of Performance Rights that have not yet vested that is attributable to the 2020 financial year.
20% reduction in Directors fees Directors was applied for Qtr 4 (Apr-Jun 2020) in response to the COVID-19 Pandemic.
20% reduction in James Fox CEO salary was applied for Qtr 4 (Apr-Jun 2020) in response to the COVID-19 Pandemic and annual leave entitlement was
taken in lieu of the reduction.
5 Use of a company provided motor vehicle.
EQUITY HOLDINGS OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
i) Fully paid ordinary shares of PNX Metals Limited:
BALANCE 1 JULY 2020
NET CHANGES
BALANCE 30 JUNE 2021
Directors
Graham Ascough
Paul Dowd3
Peter Watson3
David Hillier1
Hans-Jörg Schmidt
Hansjoerg Plaggemars2
Frank Bierlein4
Richard Willson4
James Fox5
Key management personnel
Angelo Gaudio
11,066,532
21,854,638
16,313,285
10,500,001
-
-
-
-
-
-
2,766,634
5,338,660
4,078,322
1,500,000
-
-
-
-
-
-
1 David Hillier resigned as a director on 26 November 2020.
2 Hansjoerg Plaggemars was appointed as a director on 28 November 2020.
3 Paul Dowd and Peter Watson resigned as a director on 5 March 2021.
4
Frank Bierlein and Richard Willson were appointed as directors on 18 June 2021.
5 Shares held by related party at 30 June 2021: 11,000,000 (2020: 9,999,999).
13,833,166
27,193,298
20,391,607
12,000,001
-
-
-
-
-
-
31
PNX METALS LIMITED | ANNUAL REPORT 2021
DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
ii) Unquoted options exercisable at 1.464 cents, expiring on 30 September 2021 of PNX Metals Limited:
Directors
Graham Ascough
Paul Dowd3
Peter Watson3
David Hillier1
Hans-Jörg Schmidt
Hansjoerg Plaggemars2
Frank Bierlein4
Richard Willson4
James Fox5
Key management personnel
Angelo Gaudio
BALANCE
1 JULY 2020
3,125,000
6,250,000
-
3,125,000
-
-
-
-
-
-
NET CHANGES
-
-
-
-
-
-
-
-
-
-
BALANCE
30 JUNE 2021
3,125,000
6,250,000
-
3,125,000
-
-
-
-
-
-
1 David Hillier resigned as a director on 26 November 2020.
2 Hansjoerg Plaggemars was appointed as a director on 28 November 2020.
3 Paul Dowd and Peter Watson resigned as a director on 5 March 2021.
4
Frank Bierlein and Richard Willson were appointed as directors on 18 June 2021.
5 Options held by related party at 30 June 2021: 1,875,000 (2020: 1,875,000).
iii) Performance Rights of PNX Metals Limited and outstanding:
DIRECTORS
James Fox
BALANCE 1 JULY 2020
BALANCE 30 JUNE 2021
VESTED
UNVESTED
GRANTED
VESTED
LAPSED
VESTED
UNVESTED
Key management personnel
Angelo Gaudio
-
-
10,800,000
25,000,000
-
5,000,000
-
-
5,000,000
-
-
-
30,800,000
5,000,000
OTHER RELATED PARTY TRANSACTIONS
During the financial year the Group engaged Piper Alderman, an entity in which a Director (Peter Watson) is a senior consultant, to advise
on legal matters. The cost of services paid to Piper Alderman during the financial year inclusive of GST, was $120,614 (2020: $34,438).
END OF REMUNERATION REPORT – AUDITED
Signed on 14th September 2021 in accordance with a resolution of the Board
made pursuant to section 298(2) of the Corporations Act 2001.
Graham Ascough
Chairman
32
PNX METALS LIMITED | ANNUAL REPORT 2021
AUDITORS INDEPENDENCE DECLARATION
PNX Metals Limited (ASX: PNX) Financial Report for the year ended 30 June 2021
AUDITOR’S INDEPENDENCE DECLARATION
14
33
PNX METALS LIMITED | ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2021
Interest income
Other income
Employee benefits
Professional fees
Directors’ fees
Exploration – tenement maintenance
Occupancy
Insurance
Share registry and regulatory
Communication
Audit fees
Equity-based remuneration
Other expenses
Depreciation
Impairment – exploration and evaluation assets
Interest charges
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income/loss:
Items that will not be subsequently reclassified to profit or loss:
Financial assets – fair value through OCI
Total comprehensive loss for the year, attributable
to equity holders of the parent
Loss per share – continuing operations and total
NOTE
4(a)
4(e)
10
4(c)
22
20
4(b)
4(d), 10
5(a)
9, 18
YEAR ENDED
30/06/21
$
4,836
112,681
(212,955)
(557,935)
(212,124)
2,710
(56,931)
(26,265)
(65,296)
(17,233)
(39,473)
(103,401)
(73,017)
(11,077)
-
(403)
(1,255,883)
(196)
(1,256,079)
YEAR ENDED
30/06/20
$
43,417
70,000
(258,518)
(414,447)
(208,793)
(34,719)
(66,501)
(29,196)
(61,560)
(12,882)
(36,028)
(33,824)
(105,072)
(7,591)
(500,000)
-
(1,655,714)
150,189
(1,505,525)
103,136
(1,152,943)
(438,329)
(1,943,854)
Basic and diluted (cents per share)
27
(0.04)
(0.06)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
34
PNX METALS LIMITED | ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2021
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments and deposits
Other financial assets
Total current assets
NON-CURRENT ASSETS
Exploration and evaluation expenditure
Other financial assets
Plant and equipment
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Lease liabilities
Contract liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
NOTE
30/06/21
$
30/06/20
$
6
7
8
9
10
12
11
13
14
15
14
15
16
17
18
19
3,632,252
1,972,721
52,314
180,119
193,380
93,582
155,165
90,244
4,058,065
2,311,712
19,573,034
1,090,585
56,424
20,720,043
24,778,108
1,075,865
152,269
8,886
1,237,020
15,091
41,026
2,400,000
2,456,117
3,693,137
16,364,563
-
14,768
16,379,331
18,691,043
479,920
130,586
-
610,506
19,258
-
2,400,000
2,419,258
3,029,764
21,084,971
15,661,279
53,545,287
127,143
(32,587,459)
21,084,971
47,072,054
(19,297)
(31,391,478)
15,661,279
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
35
PNX METALS LIMITED | ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2021
ISSUED
CAPITAL
$
EQUITY-BASED
PAYMENT RESERVES
$
FAIR VALUE OCI
RESERVES
$
ACCUMULATED
LOSSES
$
TOTAL
$
Balance at 1 July 2019
45,469,675
50,015
335,193
(29,885,953)
15,968,930
Total loss for the year
Other comprehensive income
Total comprehensive loss for the year
Shares issued (placement)
Shares issued (unlisted
options exercised)
Share issue costs
Fair value of equity settled payments
-
-
-
500,000
1,110,000
(7,621)
-
Balance at 30 June 2020
47,072,054
-
-
-
-
-
-
33,824
83,839
-
(1,505,525)
(1,505,525)
(438,329)
-
(438,329)
(438,329)
(1,505,525)
(1,943,854)
-
-
-
-
-
-
-
-
500,000
1,110,000
(7,621)
33,824
(103,136)
(31,391,478)
15,661,279
Balance at 1 July 2020
47,072,054
83,839
(103,136)
(31,391,478)
15,661,279
Total loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Shares issued
Share issue costs
Fair value of equity settled payments
Lapsed performance rights
transferred to accumulated losses
-
-
-
6,657,432
(184,199)
-
-
-
-
-
-
-
103,401
(60,097)
Balance at 30 June 2021
53,545,287
127,143
-
(1,256,079)
(1,256,079)
103,136
-
103,136
103,136
(1,256,079)
(1,152,943)
-
-
-
-
-
-
-
-
6,657,432
(184,199)
103,401
60,097
-
(32,587,459)
21,084,971
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
36
PNX METALS LIMITED | ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2021
Cash flows relating to operating activities
Receipt of Research and Development tax offsets
COVID-19 stimulus support received
Payments for exploration activities expensed
Payments to suppliers and employees
Net operating cash flows
Cash flows relating to investing activities
Term Deposits (terms greater than 90 days) – Matured /(Purchased)
Interest received
Payments for exploration activities
Payments for plant and equipment
Deposits paid for acquisition of Glencoe tenement
Payments for tenement security bonds
Net investing cash flows
Cash flows relating to financing activities
Proceeds from share issues (Note 15)
Payments for capital raising costs
Payments for leases
Net financing cash flows
Net increase/(decrease) in cash
Cash at beginning of financial year
Cash at end of financial year
Reconciliation of loss to net operating cash flow
Loss for the year
Interest income
Miscellaneous income
Equity-based remuneration
Depreciation and amortisation
Depreciation on right of use assets
Unwinding discount on Lease liability
Exploration not capitalised – investing
Impairment charges – exploration and evaluation assets
(Increase)/decrease in receivables - operating
(Increase)/decrease in other current assets – operating
Increase/(decrease) in payables – operating
Increase/(decrease) in employee provisions
Net operating cash flows
INFLOWS/(OUTFLOWS)
YEAR ENDED
30/06/21
$
INFLOWS/(OUTFLOWS)
YEAR ENDED
30/06/20
$
54,804
102,500
-
(1,341,492)
(1,184,188)
-
7,934
(2,406,998)
(10,486)
(1,175,000)
(42,002)
(3,626,552)
6,657,432
(184,199)
(2,962)
6,470,271
1,659,531
1,972,721
3,632,252
415,025
50,000
(34,720)
(1,122,469)
(692,164)
2,500,000
41,780
(4,282,964)
-
-
-
(1,741,184)
1,610,000
(7,621)
-
1,602,379
(830,970)
2,803,691
1,972,721
(1,256,079)
(1,505,525)
(7,934)
-
103,401
7,384
3,693
371
(2,710)
-
35,228
(1,044)
(84,012)
17,516
(43,417)
(50,000)
33,824
7,591
-
-
34,720
500,000
263,092
12,954
56,737
(2,140)
(1,184,188)
(692,164)
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
37
PNX METALS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
1 GENERAL INFORMATION AND
3 SIGNIFICANT ACCOUNTING POLICIES
In the application of the Group’s accounting policies, which are
described below, management is required to make judgements,
estimates and assumptions. Key areas of judgement and
estimation uncertainty are discussed in Note 3(s).
The following significant accounting policies have been adopted
in the preparation of the financial report:
a) Going concern basis
The financial report has been prepared on the going concern
basis which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of
liabilities in the ordinary course of business.
For the year ended 30 June 2021, the Group made a loss
of $1,256,079 (2020: loss of $1,505,525) and recorded
a net cash outflow from operating and investing activities
of $4,810,740 (2020: $2,433,348). At 30 June 2021, the
Group had cash of $3,632,252 (2020: $1,972,721), net
current assets, excluding the investment in Sunstone Metals
Ltd of $2,627,664 (2020: $1,610,963) and net assets of
$21,084,971 (2020: $15,661,280).
The Directors believe that it is appropriate to prepare
the financial statements on the going concern basis,
as the Group raised sufficient capital during the year to
allow activities to progress towards the development
of the Fountain Head Gold Project. The Group’s ability
to continue as a going concern is contingent on raising
additional capital and/or the successful exploration and
subsequent exploitation of its areas of interest through sale
or development.
If sufficient additional capital is not raised, the going
concern basis of accounting may not be appropriate, and
the Group may have to realise its assets and extinguish its
liabilities other than in the ordinary course of business and
at amounts different from those stated in the financial report.
No allowance for such circumstances has been made in the
financial report.
BASIS OF PREPARATION
PNX Metals Limited (“Company”) is a for-profit Australian publicly
listed company, incorporated and operating in Australia. Its
registered office and principal place of business is Level 1, 135
Fullarton Road, Rose Park, South Australia 5067.
The consolidated financial statements of PNX Metals Limited
comprises the Company and its controlled entity (“Group”) and
is a general purpose financial report prepared in accordance
with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board and the
Corporations Act 2001.
The consolidated financial statements also comply with
International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The consolidated financial statements have been prepared on
the basis of historical cost, which is based on the fair values of
the consideration given in exchange for assets. All amounts are
presented in Australian dollars, unless otherwise noted.
The financial statements were authorised for issue by the
Directors on 13th September 2021.
2 NEW AND REVISED ACCOUNTING STANDARDS
The Group has adopted all of the new and revised Standards
and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to their operations
and effective for the year ended 30 June 2021.
The following Accounting Standards and Interpretations are
most relevant to the consolidated entity:
Conceptual framework for financial
reporting (Conceptual Framework)
The consolidated entity has adopted the revised Conceptual
Framework from 1 July 2020. The Conceptual Framework
contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting
Standards, but it has not had a material impact on the
consolidated entity’s financial statements
At the date of authorisation of these financial statements,
several new, but not yet effective, Standards and amendments
to existing Standards, and Interpretations have been published
by the IASB. None of these Standards or amendments to
existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will
be adopted for the first period beginning on or after the effective
date of the pronouncement. New Standards, amendments and
Interpretations not adopted in the current year have not been
disclosed as they are not expected to have a material impact on
the Group’s financial statements.
The accounting policies applied by the Group in the
consolidated financial statements are consistent with those
applied in the prior year. The Group has not early adopted any
other standard, interpretation or amendment that has been
issued but is not yet effective.
38
PNX METALS LIMITED | ANNUAL REPORT 2021
b) Principles of consolidation
e) Cash and cash equivalents
The consolidated financial statements comprise the financial
statements of the Company and entities controlled by
the Company (its subsidiaries). Control is achieved when
the Company:
¬ has power over the investee;
¬ is exposed, or has rights, to variable returns from its
involvement with the investee; and
¬ has the ability to use its power to affect its returns.
The Company reassesses 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
listed above.
The results of subsidiaries acquired or disposed of are
included in the Statement of Profit or Loss and Other
Comprehensive Income from the effective date of acquisition
and up to the effective date of disposal.
Profit or loss and each component of other comprehensive
income are attributed to the owners of the Company and to
the non-controlling interests. Total comprehensive income
of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses,
and cash flows are eliminated in full on consolidation.
c) Revenue
Revenue is measured at the fair value of consideration
received or receivable.
Contract liabilities
Cash received from the forward sale of metal from future
mining projects is accounted for as a long-term liability
until such time as the metal is delivered. Deferred revenue
amounts are recognised as revenue from the sale of goods
in the period that the related metal is delivered.
Interest
Interest income is accrued on a time basis, with reference
to the principal balance and at the effective interest rate
applicable, which is that rate that exactly discounts
estimated future cash receipts through the expected life of
the financial asset to the asset’s net carrying amount.
d) Government Grants
Government grants that are received or receivable as direct
compensation for mineral exploration expenditure already
incurred are recognised as a reduction in the accumulated
cost of the relevant exploration and evaluation asset.
The Group applies AASB120 “Accounting for Government
Grants and Disclosure of Government Assistance” in
accounting for such programmes as the cash flow
boost and Jobkeeper wage subsidy, whereby a credit is
recognised in other income over the period necessary to
match the benefit of the credit with the costs which they are
intended to compensate (for).
Cash and cash equivalents comprise cash on hand, cash
held at financial institutions and bank deposits with a maturity
not more than 3 months. Any Term Deposits with terms
greater than a 3 month maturity are classified as Financial
assets – Term Deposits on the statement of financial position.
f) Financial instruments
Financial assets
Financial assets are measured at amortised cost if the
assets meet the following conditions (and are not designated
as FVPL):
¬ they are held within a business model whose objective
is to hold the financial assets and collect its contractual
cash flows
¬ the contractual terms of the financial assets give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding
After initial recognition, these are measured at amortised
cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The
Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
The Group’s trade and other receivables are subject to
AASB 9 ‘s credit loss model.
Financial assets designated at fair value
through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify
irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the
definition of equity under AASB 132 Financial Instruments:
Presentation, and are not held for trading. The classification
is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of
payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the
cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value
through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity
investments under this category.
Financial liabilities
The Group’s financial liabilities include borrowings, trade and
other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives
and financial liabilities designated at FVPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss (other than any derivative financial instruments
that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
39
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021
g) Exploration and evaluation expenditure
Exploration and evaluation expenditure in relation to each
separate area of interest is recognised as an asset in the
year in which it is incurred or acquired and where the
following conditions are satisfied:
i)
the rights to tenure of the area of interest are current;
and
ii) at least one of the following conditions is also met:
–
–
the exploration and evaluation expenditure is
expected to be recouped through successful
development of the mineral exploration project, or
alternatively, by its sale;
or
exploration and evaluation activities in the area of
interest have not, at the reporting date, reached a
stage which permits a reasonable assessment of
the existence of economically recoverable reserves,
and active and significant operations in, or in relation
to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at
cost and include the acquisition cost of rights to explore,
studies, exploration drilling, trenching and sampling and
associated activities. General and administrative costs
are only included in the measurement of exploration and
evaluation assets where they relate directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for
impairment when facts and circumstances (as defined in
AASB 6 Exploration for and Evaluation of Mineral Resources)
suggest that the asset’s carrying amount may exceed its
recoverable amount. The recoverable amount of exploration
and evaluation assets is determined in accordance with
AASB 136 Impairment of Assets, being the higher of fair
value less costs to sell and value in use. If the recoverable
amount as determined is less than the carrying amount, an
impairment loss is recognised.
Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the
carrying amount had no impairment loss been recognised
for the asset in previous years.
Where a decision is made to proceed with development
in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment,
reclassified to development properties, and then amortised
over the life of the reserves associated with the area of
interest once mining operations have commenced.
h)
Impairment of assets (other than financial assets,
exploration and evaluation assets and property, plant
and equipment)
At each reporting date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the
asset belongs.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use,
estimated future cash flows are discounted to their present
value using pre-tax discount rate that reflects current
market assessments of the time value of money and the
risks specific to the asset which have not already been
incorporated into the future cash flows estimates.
If the recoverable amount of an asset or cash-generating
unit is estimated to be less than its carrying amount, the
carrying amount of the asset or cash-generating unit is
reduced to its recoverable amount. An impairment loss is
recognised in profit or loss.
Where an impairment loss subsequently reverses, the
carrying amount of the asset or cash-generating unit is
increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount
does not exceed the carrying amount had no impairment
loss been recognised in prior periods. A reversal of an
impairment loss is recognised in profit or loss.
i) Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and accumulated impairment.
Cost includes expenditure that is directly attributable to
the acquisition of the item. In the event that settlement of
all or part of the purchase consideration is deferred, cost
is determined by discounting the amounts payable in the
future to their present value as at the date of acquisition.
Depreciation is provided on plant and equipment.
Depreciation is calculated on a straight line basis so as to
write off the cost of each asset over its expected useful life
to its estimated residual value. The estimated useful lives,
residual values and depreciation method are reviewed at the
end of each annual reporting period.
Estimated useful lives of 3-5 years are used in the
calculation of depreciation for plant and equipment.
j) Trade and other payables
Liabilities for goods and services provided to the Group are
recognised initially at their fair value and subsequently at
amortised cost using the effective interest method. Trade
and other payables are unsecured.
40
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 k) Debt and equity instruments
n) Share-based payments
Debt and equity instruments are classified as either
liabilities or as equity in accordance with the substance of
the contractual arrangement. An equity instrument is any
contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities. Contracts settled
via the delivery of a fixed number of equity instruments in the
Group in exchange for cash or other assets are accounted
for as equity instruments. Equity instruments issued by the
Group are recorded at the proceeds received, net of direct
issue costs.
l) Employee benefits
A liability is recognised for benefits accruing to employees in
respect of wages and salaries, annual leave and long service
leave when it is probable that settlement will be required and
amounts are capable of being measured reliably.
Liabilities recognised in respect of employee benefits
expected to be settled within 12 months are measured at
their nominal values using the remuneration rate expected to
apply at the time of settlement.
Liabilities recognised in respect of employee benefits
which are not expected to be settled within 12 months are
measured as the present value of the estimated future cash
outflows to be made by the Group in respect of services
provided by employees up to reporting date. The present
value is calculated using a discount rate that references
market yields on high quality corporate bonds that have
maturity dates that approximate the timing of the estimated
future cash flows.
Contributions to accumulated benefit superannuation plans
are expensed when incurred.
m) Site restoration and environmental rehabilitation
Provision for the costs of environmental restoration and
rehabilitation are recognised when the Group has a present
obligation (legal or constructive) to perform restoration
activities, it is probable that the Group will be required to
settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
Restoration and rehabilitation provisions are measured as
the present value of estimated future cash flows to perform
the rehabilitation activities, discounted at pre-tax rate that
reflects market assessments of the time value of money and
risks specific to the rehabilitation obligation.
There are cash backed deposits recorded under Other
financial assets in support of these rehabilitation obligations.
Equity-settled share-based payments made to employees
and directors are measured at fair value at the grant date,
which is the date on which the equity instruments were
agreed to be issued (whether conditionally or otherwise) or,
if later, the date on which key terms (e.g. subscription or
exercise price) were determined. Fair value is determined
using the Black-Scholes model or another binomial model,
depending on the type of equity instrument issued.
The fair value of the equity instruments at grant date is
expensed on a straight-line basis over the vesting period,
based on the Group’s estimate of the number of equity
instruments that will eventually vest, with a corresponding
increase to the equity settled benefits reserve in
shareholders’ equity.
Equity-settled share-based payment transactions with
other parties are measured at the fair value of the goods
and services received, except where the fair value cannot
be estimated reliably, in which case the transactions are
measured at the fair value of the equity instruments granted,
measured at the date the Group obtains the goods or the
counterparty renders the service.
o) Lease liabilities
The Group has elected to account for short-term leases and
leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability,
the payments in relation to these are recognised as an
expense in profit or loss on a straight-line basis over the
lease term. At 30 June 2021 the Group was committed to a
short-term tenancy lease expiring on 31 August 2021, and
the total commitment at that date was $11,336.
A lease liability is recognised at the commencement date
of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the
term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined,
the consolidated entity’s incremental borrowing rate. Lease
payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend
on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase
option when the exercise of the option is reasonably certain
to occur, and any anticipated termination penalties. The
variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using
the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease
payments arising from a change in an index or a rate used;
residual guarantee; lease term; certainty of a purchase
option and termination penalties.
When a lease liability is remeasured, an adjustment is made
to the corresponding right-of use asset, or to profit or
loss if the carrying amount of the right-of-use asset is fully
written down.
41
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 p) Income tax
Tax consolidation
The Company and its wholly-owned Australian resident
entity are part of a tax-consolidated group under Australian
taxation law. The members of the tax consolidated group are
disclosed in Note 28. PNX Metals Limited is the head entity
in the tax-consolidated group. Tax expense/income, deferred
tax liabilities and deferred tax assets arising from temporary
differences of the members of the tax-consolidated group
are recognised in the separate financial statements of the
members of the tax-consolidated group using the ‘separate
taxpayer within group’ approach. Current tax liabilities and
assets and deferred tax assets arising from unused tax losses
and tax credits of the members of the tax-consolidated group
are recognised by the Company (as the head entity in the tax-
consolidated group).
Under a tax funding arrangement between the entities
in the tax-consolidated group, amounts transferred from
entities within the tax consolidated group and recognised
by the Company (‘tax contribution amounts’) are
recorded in intercompany accounts in accordance with
the arrangement.
Where the tax contribution amount recognised by a member
of the tax-consolidated group for a particular period is
different to the aggregate of the current tax liability or asset
and any deferred tax asset arising from unused tax losses
and tax credits in respect of that period, the difference is
recognised as a contribution from (or distribution to) the
group member.
Research and development tax incentive
To the extent that research and development costs are
eligible activities under the “Research and development
tax incentive” programme, a 43.5% refundable tax offset is
available for companies with annual turnover of less than
$20 million. The Group recognises refundable tax offsets
based on management’s best estimate of the amount
receivable as an income tax benefit, in profit or loss, resulting
from the monetisation of available tax losses that otherwise
would have been carried forward.
Income tax expense represents the sum of tax currently
payable and deferred tax.
Current tax
Current tax is calculated with reference to the amount of
income tax payable or recoverable in respect of the taxable
profit or tax loss for the financial year. It is calculated
using tax rates and tax laws that have been enacted or
substantively enacted at the reporting date. Current tax for
current and prior periods is recognised as a liability (or asset)
to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for in respect of temporary
differences arising from differences between the carrying
amount of assets and liabilities for accounting purposes and
the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all
taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient
taxable amounts will be available against which deductible
temporary differences or unused tax losses and tax offsets
can be utilised.
However, deferred tax assets and liabilities are not
recognised if the temporary differences giving rise to them
arise from the initial recognition of assets and liabilities (other
than as a result of a business combination) which affects
neither taxable income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period(s) when the
assets or liabilities giving rise to them are realised or settled,
based on tax rates (and tax laws) that have been enacted or
substantively enacted by reporting date. The measurement
of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle
the carrying amount of the related assets and liabilities.
Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and
liabilities on a net basis.
Current and deferred tax recognition
Current and deferred tax is recognised as an expense
or income in the Statement of Profit or Loss and Other
Comprehensive Income, except when it relates to items
credited or debited directly to equity (in which case the
deferred tax is also recognised directly in equity), or where it
arises from the initial accounting for a business combination.
42
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021
q) Goods and service tax
t) Critical accounting judgements and key sources of
Revenues, expenses, assets and liabilities are recognised
net of the amount of goods and services tax (GST), except:
i) where the amount of GST incurred is not recoverable
from the taxation authority, in which case it is recognised
as part of the cost of acquisition of an asset or as part of
an item of expense; or
ii)
for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables.
Cash flows are included in the cash flow statement on a
gross basis. 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 operating
cash flows.
r) Earnings per share
Basic earnings per share is calculated by dividing the profit
or loss attributable to owners of the Group (excluding any
costs of servicing equity other than ordinary shares) by the
weighted average number of ordinary shares outstanding
during the financial year.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account:
¬ the after tax effect of interest and other financing costs
associated with dilutive potential ordinary shares; and
¬ the weighted average number of additional ordinary
shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
s) Right-of-use assets
A right-of-use asset is recognised at the commencement
date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability,
adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives
received, any initial direct costs incurred, and, except where
included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the
underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis
over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the
consolidated entity expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is
over its estimated useful life. Right-of use assets are subject
to impairment or adjusted for any remeasurement of lease
liabilities.
The consolidated entity has elected not to recognise a right-
of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-
value assets. Lease payments on these assets are expensed
to profit or loss as incurred.
estimation uncertainty
In the application of the Group’s accounting policies,
management is required to make judgements, estimates
and assumptions about the carrying values of assets,
liabilities and equity. These estimates and assumptions are
based on historical experience and various other factors
that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgements.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if
the revision affects only the current period, or in the period
of the revision and future periods if the revision affects both
current and future periods.
The following are the critical judgements that management
has made in the process of applying the Group’s accounting
policies and that have the most significant effect on the
amounts recognised in the financial statements.
Impairment
Determining whether assets are impaired requires an
estimation of the value in use or fair value of the assets or
cash-generating units to which assets are allocated. The fair
value of exploration assets is inherently difficult to estimate,
particularly in the absence of comparable transactions and
where a purchase offer has not been made, and relies on
management judgement.
No impairment loss was recognised during the year (2020:
$500,000) in relation to Exploration and Evaluation Assets -
refer to Note 10 for detail.
Equity-based payments
The determination of the fair value at grant date of options
and Performance Rights utilises a financial asset pricing
model with a number of assumptions, the most critical of
which is an estimate of the Company’s future share price
volatility. Refer to Note 18 for more information regarding
equity-based payments made during the year.
Research & Development (R&D) tax offset incentive
The Group is entitled to claim R&D tax offset incentives in
Australia. The R&D tax offset incentive is calculated based
on management’s assessment of eligible expenditure
multiplied by 43.5%.
43
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021
4 LOSS FROM CONTINUING OPERATIONS
a)
Interest income
Interest on bank deposits
b) Depreciation
YEAR ENDED
30/06/21
$
YEAR ENDED
30/06/20
$
4,836
43,417
Depreciation of plant and equipment
11,077
7,591
c) Occupancy
Short-term lease expenses
d) Impairment
Exploration and evaluation assets
e) Professional fees
Accounting and taxation expenses
Legal fees
Contractor services
Company promotion
Secretarial services
Total professional fees
56,931
66,501
-
500,000
44,085
139,563
6,313
247,974
120,000
557,935
32,639
38,472
20,189
203,147
120,000
414,447
44
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 5
INCOME TAX
a)
Income tax recognised in profit or loss
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Total tax expense/(benefit)
The prima facie income tax benefit on the loss before income tax reconciles
to the tax expense/(benefit) in the financial statements as follows:
Total loss for the year before tax
Income tax benefit calculated at 26.0% (2020: 27.5%)
Equity-based remuneration – Performance Rights
Current year tax losses and movements in
temporary differences not recognised
Recognition of estimated research and development
tax offset refund related to the current tax year
Recognition of actual research and development tax
offset refund related to the previous tax year
Tax expense (benefit)
YEAR ENDED
30/06/21
$
196
-
196
1,255,883
(326,530)
26,884
299,646
-
196
196
YEAR ENDED
30/06/20
$
(55,000)
(95,189)
(150,189)
1,655,714
(455,321)
9,302
446,019
(55,000)
(95,189)
(150,189)
The tax rate used in the above reconciliation is the corporate tax rate of 26.0% payable by Australian base rate entities (those
with turnover less than $50 million of revenue, and 80% or less of their assessable income is base rate entity passive income).
b) Recognised tax assets and liabilities
Deferred tax assets and (liabilities) are attributable to the following:
Exploration and evaluation expenditure
(4,884,098)
(4,471,844)
Plant and equipment
Trade and other payables
Employee benefits
Share issue costs
Net deferred tax liabilities
Tax losses recognised
Net deferred tax assets / (liabilities)
(15,079)
7,454
43,514
116,186
(4,732,023)
4,732,023
-
(4,061)
6,930
41,207
106,092
(4,321,676)
4,321,676
-
A net deferred tax liability will only arise if the Group generates taxable income in the future (for example via a profitable
mining operation). Deferred tax balances shown above have been calculated utilising a 26.0% tax rate. The potential
benefit of unrecognised tax losses (shown below) has similarly been calculated utilising a 26.0% tax rate.
c) Unrecognised tax losses:
A deferred tax asset has not been recognised in respect of the following:
Tax losses – operating (tax effected)
Tax losses – capital (tax effected)
8,098,833
138,932
8,167,833
146,948
Of the total operating tax losses of approximately $49.3 million in the Group at 30 June 2021, $31 million are unrecognised as
shown above as a $8.098 million potential tax benefit. A deferred tax asset has not been recognised in respect of these losses
because it is not considered probable at this time that future taxable profit will be available against which to utilise the losses.
45
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 6 CASH AND CASH EQUIVALENTS AND TERM DEPOSITS
Cash and cash equivalents
30/06/21
$
30/06/20
$
3,632,252
1,972,721
Cash and cash equivalents comprise cash on hand, cash held at financial institutions and bank term deposits with a maturity of not
greater than 3 months.
At 30 June 2021, the Group did not hold any term deposits with maturity terms of greater than 3 months (2020: $Nil).
7 TRADE AND OTHER RECEIVABLES
Interest
Research & development tax offset incentive
Goods & services tax
Other
8 PREPAYMENTS AND DEPOSITS
Prepayments
Environmental deposits – Northern Territory
Deposit – office bond
30/06/21
$
52
-
49,951
2,311
52,314
30/06/21
$
15,237
132,122
32,760
180,119
30/06/20
$
3,150
55,000
34,914
518
93,582
30/06/20
$
14,193
108,212
32,760
155,165
Environmental deposits are required to be lodged with the Department of Industry, Tourism and Trade (DITT) in the Northern Territory prior
to the commencement of exploration activities.
Environmental bonds totalling $132,122 have been lodged with the DITT in relation to exploration activities in the Northern Territory.
The office bond of $32,760 is invested in a 365 day term deposit maturing February 2022 and earning 0.4% interest.
9 OTHER FINANCIAL ASSETS
Investment in Sunstone Metals Ltd
30/06/21
$
193,380
30/06/20
$
90,244
The Group continues to hold 12,892,013 shares in ASX listed Sunstone Metals Limited (‘Sunstone’, previously Avalon Minerals Limited).
This investment is recognised as “Fair Value through Other Comprehensive Income (FVOCI)”, under AASB 9 Financial Instruments – refer
to Note 3 (f).
At 30 June 2021, the investment was reflected at fair value of $193,380, with the incremental movement recorded at fair value through
other comprehensive income (FVOCI) - refer to Note 18.
46
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 10 EXPLORATION AND EVALUATION EXPENDITURE
Costs brought forward
Expenditure incurred during the year
South Australian expenditure not capitalised
Impairment charges
Security bonds offset against the carrying costs#
30/06/21
$
16,364,563
4,479,015
2,710
-
(1,273,254)
19,573,034
30/06/20
$
12,505,077
4,394,205
(34,719)
(500,000)
-
16,364,563
# During the year, the formal transfer of the Fountain Head and Moline tenements to PNX was completed, pursuant to the purchase and sale agreement
between Kirkland Lake Gold Australia (“Kirkland Lake”) (formerly called Newmarket Gold) and the Company. The security bonds previously provided to
the DPIR by Kirkland Lake, totalling $1,273,254, were transferred to the Company. A total of $1,273,254 was recorded and offset against the carrying
costs for the Fountain Head and Moline projects.
The focus of the Group continues to be on the NT projects and in particular the development of the Fountain Head Gold and the Hayes
Creek Projects, in the Pine Creek region of the Northern Territory.
There has been significant improvement in the Fountain Head Gold and Hayes Creek Projects economics during the financial year ended
30 June 2021, particularly related to gold, silver and zinc prices, with forecasts for metal prices remaining relatively strong. In addition, the
acquisition of the Glencoe tenement has added 79koz gold based on the Mineral Resource Estimate as announced on 28 April 2021.
The PFS for the Fountain Head Gold and Hayes Creek Gold-Silver-Zinc Projects was announced on 17 June 2021 showing the potential
for positive economic returns. Evaluation of additional gold prospects is progressing that the Company believes may have the potential to
augment overall Project returns. The Fountain Head Environmental Impact Statement (EIS) was lodged on 1 June 2021 and the Project
development approval process is being progressed.
Concurrent with activities underway at Fountain Head, the Group continues with its review of the Burnside and Moline regional
prospectivity, with the aim of identifying new targets within those projects with the potential to host significant “stand alone” gold deposits,
and to supplement future gold production at Fountain Head.
There was no impairment of the Group’s Exploration & Evaluation Expenditure during the year ended 30 June 2021
47
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 11 MOTOR VEHICLES, PLANT, EQUIPMENT AND RIGHT OF USE
COST
Balance at 30 June 2019
Additions
Disposals
Balance at 30 June 2020
Additions
Disposals
Balance at 30 June 2021
ACCUMULATED DEPRECIATION
Balance at 30 June 2019
Depreciation expense
Depreciation capitalised to exploration assets
Disposals
Balance at 30 June 2020
Depreciation expense
Depreciation capitalised to exploration assets
Disposals
Balance at 30 June 2021
NET BOOK VALUE – MOTOR VEHICLES, PLANT, EQUIPMENT AND RIGHT OF USE
Balance at 30 June 2020
Balance at 30 June 2021
$
545,676
-
-
545,676
56,258
-
601,934
519,916
7,591
3,400
-
530,907
11,077
3,526
-
545,510
14,769
56,424
The useful lives applied in the determination of depreciation for all items of plant and equipment is 3-5 years. Of the year ended 30 June
2021 balance of $56,424 for the net book value, an amount of $47,079 relates to right of use Assets.
12 OTHER FINANCIAL ASSETS – NON-CURRENT
Environmental bonds (care & maintenance)
30/06/21
$
1,090,585
30/06/20
$
-
During the year, the formal transfer of the Fountain Head and Moline tenements to PNX was completed, pursuant to the purchase and
sale agreement between Kirkland Lake Gold Australia (“Kirkland Lake”) (formerly called Newmarket Gold) and the Company. The security
bonds previously provided to the DITT by Kirkland Lake were transferred to the Company and offset against the carrying costs for the
Fountain Head and Moline projects.
Environmental bonds totalling $1,090,585 were lodged with the DITT in relation to the Care and Maintenance conditions of the Fountain
Head and Moline mineral leases, in the Northern Territory.
48
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 13 TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Accrued completion payment for the acquisition of Glencoe
Other payables
Average credit period on trade payables is 30 days.
14 PROVISIONS
Current
Employee benefits – annual leave
Employee benefits – long service leave
Non-current
30/06/21
$
313,425
36,670
700,000
25,770
1,075,865
30/06/21
$
70,933
81,336
152,269
30/06/20
$
358,139
108,982
-
12,799
479,920
30/06/20
$
57,241
73,345
130,586
Employee benefits – long service leave
15,091
19,258
15 LEASE LIBILITIES
Lease liabilities – current
Lease liabilities – non-current
16 CONTRACT LIABILITIES
30/06/21
$
8,886
41,026
30/06/21
$
30/06/20
$
-
-
30/06/20
$
Silver streaming receipts
2,400,000
2,400,000
Two parties have entered into silver streaming and royalty agreements with the Company.
The Company has previously received a total of $2.4 million under these agreements, for the forward sale of a total of 336,000oz of
silver, to be delivered over a 3 year period once commissioning and ramp up of the Hayes Creek Project is complete. At the end of the
three year silver delivery period, each investor is to receive a 0.36% Net Smelter Return (NSR) royalty over gold and silver produced from
the Hayes Creek Project, and will be paid for a 5-year period. PNX can buy back the NSR royalty from an investor prior to production
commencing for $0.4 million.
These agreements have been amended to transfer silver delivery obligations from the Hayes Creek Project to the Fountain Head Project;
to modify the silver delivery to consist of an equivalent value of gold in the event that the silver production from Fountain Head could not
fulfill the silver delivery obligation; and to reflect that the NSR royalty at the end of the three year delivery period is calculated over gold and
silver produced from the Fountain Head Project.
Cash previously received from the forward sale of silver has been accounted for as a contract liability, classified in the Statement of
Financial Position as a long-term liability. Revenue will be recognised as the silver or gold is delivered in the future. In the event the
Fountain Head Gold Project is not developed, the forward payments will be converted to shares in the Company.
49
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 17 ISSUED CAPITAL
30/06/21
$
30/06/20
$
3,652,193,511 fully paid ordinary shares (2020: 2,542,621,476)
53,545,287
47,072,054
Movement in ordinary shares for the year:
Ref Balance at beginning of year
2,542,621,476
47,072,054
2,435,288,142
45,469,675
30/06/21
NO.
30/06/21
$
30/06/20
NO.
30/06/20
$
a
b
c
d
e
f
Placement Shares issued at 0.6 cents
378,333,333
2,270,000
Shares issued at 0.6 cents under a
Non Renounceable Rights Issue (NRRI)
Shares issued at 0.6 cents per
share to a service provider
527,950,076
3,167,700
1,000,000
6,000
Shares issued at 0.6 cents for the placement
of the shortfall under the NRRI
202,288,626
1,213,732
-
-
-
-
Shares issued at 1.5 cents
Shares issued on the exercise of
unlisted options at 1.5 cents
Share issue costs
Balance at end of year
-
-
-
-
33,333,334
500,000
74,000,000
1,110,000
(184,199)
(7,621)
3,652,193,511
53,545,287
2,542,621,476
47,072,054
Fully paid shares carry one vote per share and a right to dividends.
a) 378,333,333 Shares were issued at 0.6 cents under a placement to sophisticated and professional investors on 2 December 2020.
b) 527,950,076 Shares were issued to Shareholders who subscribed for shares under a Non Renounceable Rights Issue at 0.6 cents
per share (NRRI) on 24 December 2020.
c) 1,000,000 Shares were issued at 0.6 cents per share to a service provider on 24 December 2020, in lieu of cash payment for services
rendered to the Company.
d) 202,288,626 Shares were issued at 0.6 cents per share under the placement of the NRRI Shortfall on 29 January 2021.
e) 33,333,334 Shares were issued at 1.5 cents under a placement to sophisticated and professional investors on 23 March 2020.
f) 74,000,000 Shares were issued on the exercise of 74,000,000 unlisted options at 1.5 cents per share to major shareholder, DELPHI
UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT\C on 23 March 2020.
18 RESERVES
FVOCI investment
Equity-settled benefits
30/06/21
$
-
127,143
127,143
30/06/20
$
(103,136)
83,839
(19,297)
The change in Fair Value through Other Comprehensive Income (FVOCI) investment reserve reflects the current year increase in the fair
value of the Group’s investment in Sunstone Metals Ltd of $103,136 as at 30 June 2021.
The equity-settled benefits reserve arises on the fair value of the Performance Rights granted to employees, consultants and executives
under the PNX Metals Limited Employee Performance Rights Plan. The reserve at 30 June 2021, includes an adjustment for lapsed rights
together with changes in fair value due to the passage of time to 30 June 2021. Amounts are transferred out of the reserve and into
Issued Capital when the rights are converted into shares, or to accumulated losses if rights lapse.
During the year, 53,500,000 Performance Rights were granted to employees, consultants and executives. The Performance Rights have
performance conditions related to key Group objectives, including development of the Fountain Head and Hayes Creek projects and
the Company safety and share price performance. Performance conditions are required to be achieved within specified time periods
(extending to 2 February 2024) in order for the Rights to vest.
10,000,000 Performance Rights lapsed during the year and there were no Performance Rights that vested and converted to ordinary shares.
During the year the fair value of equity-settled benefit payments was $103,401. During the year 10,000,000 Performance Rights lapsed and
together with previously lapsed Performance Rights, an amount of $60,098 was transferred to retained earnings and the total of $127,143
held in the equity-settled benefits reserve represents the value relating to the Performance Rights on issue as at 30 June 2021.
Further information on share-based payments is disclosed in Note 20.
50
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 19 ACCUMULATED LOSSES
Balance at beginning of year
Lapsed performance rights transferred to accumulated losses (Note 18)
Loss for the year
Balance at end of year
20 PERFORMANCE RIGHTS AND SHARE OPTIONS
Performance Rights
30/06/21
$
31,391,478
(60,098)
1,256,079
32,587,459
30/06/20
$
29,885,952
1,505,526
31,391,478
Under PNX’s Employee Performance Rights Plan (‘Plan’), Directors may issue Performance Rights to Company executives, employees
and consultants. Performance Rights are granted for no monetary consideration and entitle the holder to be issued one fully paid ordinary
share per performance right upon vesting.
As at 1 July 2020, there were 10,800,000 unvested Performance Rights on issue under the Plan as follows:
»
»
800,000 Performance Rights were held by the Company’s Managing Director & CEO were originally issued on 8 February 2017; and
10,00,000 Performance Rights were held by the Company’s Managing Director & CEO were originally issued on 3 December 2018.
On 27 January 2021, 25,000,000 Performance Rights (approved by shareholders at the AGM held during October 2020) were issued
under the Plan to the Company’s Managing Director & CEO, subject to performance vesting conditions related to key Company
objectives. For valuation of these Performance Rights, a 5-day VWAP was used at the grant date, being the 27 October 2020 when
shareholder approval was received at the AGM. The 5-day VWAP (calculated as 1.1 cents) was considered a better estimate of the
market value of PNX shares than the spot price and the 5-day VWAP was used to calculate the total fair value of the rights issued.
On 1 February 2021, a further 28,500,000 Performance Rights were issued under the Plan to Company executives, employees and
consultants, subject to performance vesting conditions related to key Company objectives. For valuation of these Performance Rights,
a 5-day VWAP at the grant date was used, being the date of issue on 1 February 2021. The 5-day VWAP (calculated as 0.7 cents)
was considered a better estimate of the market value of PNX shares than the spot price and accordingly the 5-day VWAP was used to
calculate the total fair value of the rights at the time of issue.
During the year, 5,000,000 Performance Rights held by the Company’s Managing Director & CEO, originally issued on 3 December 2018,
did not meet performance vesting conditions, and accordingly lapsed unvested.
During the year, 5,000,000 Performance Rights held by the Company’s Exploration Manager, originally issued on 1 February 2021, were
forefeited following his resignation.
The total remaining 54,300,000 unvested Performance Rights at 30 June 2021 are subject to various performance vesting conditions
related to key Company objectives, including development of the Hayes Creek project, development of the Fountain Head project,
exploration discoveries and Company share price performance. Performance conditions are required to be achieved within specified time
periods (extending to 1 February 2024) in order for the Performance Rights to vest.
Options
At the discretion of the Directors, and subject to ASX listing rules (including the requirement for shareholder approval in some
circumstances), options to acquire shares can be issued. Options may be used as part of corporate and asset acquisitions or as part of a
capital raising process for example. There were no new options issued during the financial year.
Of the 379,125,000 unquoted options on issue as at 1 July 2020, 20,000,000 options with an exercise price of 1.47 cents each, expired on
30 October 2020. The balance of 359,125,000 unquoted options are exercisable at 1.464 cents each and expire on 30 September 2021.
At 30 June 2021, a total of 359,125,000 unlisted options were on issue, as shown in the table below.
OPTIONS
30/06/21
NUMBER
OF OPTIONS
30/06/21
WEIGHTED AVERAGE
EXERCISE PRICE $
30/06/20
NUMBER
OF OPTIONS
30/06/20
WEIGHTED AVERAGE
EXERCISE PRICE $
Balance at beginning of the year
379,125,000
0.01498
453,125,000
0.01499
Options granted
Options exercised
Options lapsed
Balance at end of the year
-
-
20,000,000
359,125,000
-
-
0.01470
0.01464
-
(74,000,000)
-
-
0.015
-
379,125,000
0.01498
51
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 21 KEY MANAGEMENT PERSONNEL DISCLOSURE
The Key Management Personnel of the Group during the year were:
» Graham Ascough (Non-executive Chairman)
» Hans-Jörg Schmidt – (Non-executive Director)
» Hansjoerg Plaggemars – appointed 28 November 2020 (Non-executive Director)
»
»
»
Frank Bierlein – appointed 18 June 2021 (Non-executive Director)
Richard Willson – appointed 18 June 2021 (Non-executive Director)
James Fox (Managing Director & Chief executive Officer)
» David Hillier – resigned 26 November 2020 (Non-executive Director)
»
»
»
Paul Dowd – resigned 5 March 2021 (Non-executive Director)
Peter Watson – resigned 5 March 2021 (Non-executive Director)
Angelo Gaudio – (Chief Financial Officer and Company Secretary)
The aggregate compensation of Key Management Personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
30/06/21
$
612,898
33,422
85,465
731,785
Details of Key Management Personnel compensation are disclosed within the Remuneration Report in the Directors’ Report.
22 REMUNERATION OF AUDITOR
Audit and Review of the financial reports
Other services - Tax advisory services
30/06/21
$
39,473
10,500
49,973
30/06/20
$
613,307
33,635
33,825
680,767
30/06/20
$
36,028
-
36,028
During the financial year the above fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd, the auditor of the
Group, its network firms and unrelated firms.
23 RELATED PARTY DISCLOSURES
a) Subsidiaries
Detail of the percentage of ordinary shares held in the Company’s subsidiary is disclosed in Note 28.
b) Other related party transactions
During the year the Company engaged Piper Alderman, an entity in which a Director (Peter Watson) is a senior consultant, to advise
on legal matters. The cost of those services during the financial year inclusive of GST was $120,614 (2020: $34,438). $2,509 inclusive
of GST was owed to Piper Alderman at 30 June 2021 (2020: $11,922).
52
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 24 COMMITMENTS FOR EXPENDITURE AND CONTINGENT LIABILITIES
a) Expenditure commitments
The Group has certain obligations to perform exploration work and expend minimum amounts of money on mineral exploration
tenements in the Northern Territory in order to retain the full tenement. There are no minimum expenditure requirements on the
Group’s mineral leases in the Northern Territory.
These obligations vary from time to time, subject to statutory approval. The terms of current and future joint ventures, the grant or
relinquishment of licences and changes to licence areas at renewal or expiry will alter the expenditure commitments of the Group.
Total expenditure commitments at 30 June 2021 in respect of minimum expenditure requirements not provided for in the financial
statements are approximately:
Minimum exploration expenditure on exploration licences
30/06/21
$
513,130
30/06/20
$
154,250
The Group’s office tenancy is located in Rose Park, South Australia, with annual lease payments of $68,754 exclusive of GST, and
extended to August 2021 as at year end. Subsequent to 30 June 2020, the Group secured the extension of the office lease for a
further 12 months.
b) Royalty agreements
The Company has granted the following royalties (relating to Northern Territory tenements):
¬ Newmarket Gold NT Holdings Pty Ltd (Newmarket) - 2% royalty on the market value of any future production of gold and silver
from the 14 mineral leases in the Northern Territory comprising the Hayes Creek Project.
¬ Newmarket - 2% net smelter return royalty on precious metals produced from the Moline and Fountain Head tenements.
c) Other rights held by Newmarket Gold NT Holdings Pty Ltd (relating to Northern Territory tenements)
Newmarket can re-acquire 90% of any gold or silver deposits when a JORC compliant resource is defined on certain tenements
subject to PNX’s farm-in agreement by paying PNX three times the Group’s accumulated expenditure on the deposit(s).
A single payment of $500,000, either in cash or shares at the Company’s election, is due to Newmarket if a bankable feasibility study
is completed over the Hayes Creek Project or on any of the tenements that are subject to a farm-in agreement between the two
companies.
53
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021
25 FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Categories of financial instruments
Financial assets
Cash and cash equivalents
Financial assets – term deposits
Deposits
Trade and other receivables
Environmental bonds
Other financial assets – investment in Sunstone
Financial liabilities
Trade and other payables
Lease liabilities
30/06/21
$
30/06/20
$
3,632,252
1,972,721
-
164,882
2,362
1,090,585
193,380
1,050,095
49,912
-
140,972
3,668
-
90,244
467,120
-
The Group’s activities expose it to several financial risks which impact on the measurement of, and potentially could affect the ultimate
settlement amount of, its financial instruments including market risk, credit risk, and liquidity risk.
Market risk
The development prospects of the Fountain Head Gold and Hayes Creek Projects are to some extent exposed to the risk of unfavourable
movements in the US/Australian dollar exchange rate and gold, silver and zinc prices. However, the Group has no direct exposure to
foreign exchange or commodity price risk at present.
The Group has some exposure to movements in the share price of Sunstone Metals Limited, as the Group’s investment of 12,892,013
shares is carried at fair value, and price movements are reflected through profit or loss and other comprehensive income/loss. Each one
cent change in the market value of Sunstone’s shares changes the fair value of the Group’s investment by $128,920.
The Group’s exposure to interest rate movements is limited to increases or decreases in interest earned on cash, cash equivalents,
and deposits.
If interest rates had been 50 basis points higher or lower during the financial year and all other variables were held constant, the Group’s
net loss would increase or decrease by approximately $2,989 (2020: increase or decrease by approximately $7,535).
As the Group’s exposure to market risks is not significant, management of these risks is limited to monitoring movements in commodity
prices, foreign exchange rates, interest rates, and the market value of the shares of Sunstone Metals Ltd.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group
has a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating
the risk of financial loss from activities.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-
rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s
maximum exposure to credit risk without taking account of the value of any collateral obtained.
Liquidity risk
Ultimate responsibility for managing liquidity risk rests with the Board of Directors, which has built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Board and senior management manage liquidity risk by continuously monitoring forecast and actual cash flows, and
raising capital as needed, primarily through new equity issuances, in order to meet the Group’s exploration expenditure commitments and
corporate and administrative costs.
54
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 Liquidity and interest risk tables
The following table details the Company’s and the Group’s remaining contractual maturity for its non-derivative financial liabilities. The
table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can
be required to pay.
The table includes both interest and principal cash flows.
WEIGHTED AVERAGE
EFFECTIVE INTEREST RATE
%
LESS THAN
ONE MONTH
$
1-3 MONTHS
$
3-12 MONTHS
$
1-5 YEARS
$
2021
Non-interest bearing
Fixed Interest bearing
2020
Non-interest bearing
Fixed Interest bearing
-
2.9%
-
-
232,551
-
36,670
2,222
700,000
6,664
-
41,026
370,938
108,981
-
-
-
-
-
-
Fair value of financial instruments
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial
statements approximate their fair values.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns through the optimisation of
debt and equity balances. Due to the nature of the Group’s activities, the Directors believe that the most appropriate and advantageous
way to fund activities is through equity issuances, and all capital raised to date with the exception of the silver streaming transactions (see
Note 16) has been equity based.
The Group closely monitors and forecasts its cash flow and working capital to ensure that adequate funds are available in the future to
meet project development, exploration and administrative activities.
26 SEGMENT INFORMATION
There was a change in the operating segments during the financial year.
The Group has a number of exploration tenements in South Australia and Northern Territory, which it manages on a portfolio basis. The
tenements in South Australia have been fully impaired and the decision to allocate resources to individual projects in the portfolio is
predominantly based on available cash assets, technical data and the expectation of future metal prices. Accordingly, the Group now
operates as one segment being exploration for minerals in Northern Territory. This is the basis on which its internal reports are reviewed
and used by the Board of Directors (the ‘chief operating decision maker’) in monitoring, assessing performance and in determining the
allocation of resources.
The results, asset and liabilities from this segment are equivalent to the consolidated financial statements
27 EARNINGS PER SHARE
30/06/21
CENTS PER SHARE
30/06/20
CENTS PER SHARE
Basic and diluted loss per share – continuing operations
(0.04)
(0.06)
The earnings and weighted average number of ordinary shares used in
the calculation of basic and diluted earnings per share are as follows:
Loss after tax – continuing operations ($)
(1,256,079)
(1,505,525)
Weighted average number of ordinary shares
3,120,018,894
2,466,080,492
The weighted average number of ordinary shares in the calculation of diluted earnings per share is the same as for basic earnings per
share, as the inclusion of potential ordinary shares in the diluted earnings per share calculation is anti-dilutive due to the loss incurred for
the year.
55
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021 28 CONTROLLED ENTITIES
NAME OF ENTITY
Parent entity
PNX Metals Limited
Subsidiaries
Wellington Exploration Pty Ltd
i) Head entity in tax consolidated group
ii) Member of tax consolidated group
COUNTRY OF
INCORPORATION
OWNERSHIP INTEREST
2021
%
OWNERSHIP INTEREST
2020
%
i)
ii)
Australia
Australia
100%
100%
The ultimate parent entity in the wholly-owned group is PNX Metals Limited. During the financial year, PNX Metals Limited provided
accounting and administrative services at no cost to the controlled entity and advanced interest free loans to the entity. Tax losses
have been transferred to PNX Metals Limited by way of inter-company loans.
29 PARENT ENTITY DISCLOSURES
The summarised Statement of Financial Position and Statement of Profit or Loss for PNX Metals Limited as parent entity in the Group
is identical to that of the Group, as the investment in subsidiary and intercompany loan receivable (parent) and related exploration and
evaluation asset (subsidiary) are both non-current assets.
Commitments for expenditure and contingent liabilities of the parent entity
Note 24 discloses the Group’s commitments for expenditure and contingent liabilities, which are also applicable to the parent entity.
STATEMENT OF FINANCIAL POSITION
Current assets
TOTAL ASSETS
Current liabilities
TOTAL LIABILITES
Net assets
EQUITY
Issued capital
Share option reserve
Accumulated losses
Total equity
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Income
(Loss) for the year
30 SUBSEQUENT EVENTS
30/06/21
$
4,058,065
24,778,108
1,237,021
3,693,137
21,084,971
53,545,287
127,413
(32,587,459)
21,084,971
30/06/20
$
2,311,712
18,691,043
610,506
3,029,764
15,661,279
47,072,054
(19,297)
(31,391,478)
15,661,279
117,517
1,152,943
113,417
1,943,854
The Group’s office lease in Rose Park, South Australia, extended to August 2021 as at year end. Subsequent to 30 June 2021, the Group
secured the extension of the office lease for a further 12 months.
There has been no other matter or circumstance that has occurred subsequent to the end of the financial year that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
56
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2021
DIRECTORS’ DECLARATION
In the Directors’ opinion:
a)
the consolidated financial statements and notes thereto are in accordance with the
Corporations Act 2001, including
i) complying with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements, and
ii) giving a true and fair view of the Group’s financial position as at 30 June 2021
and of its performance for the financial year ended on that date;
b) the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board;
c)
there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
The Directors have been given the declarations by the Chief Executive Officer and Chief
Financial Officer required by Section 295A of the Corporation Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to Section
295(5) of the Corporations Act 2001.
Graham Ascough
Chairman
14th September 2021
57
PNX METALS LIMITED | ANNUAL REPORT 2021 INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
PNX Metals Limited (ASX: PNX) Financial Report for the year ended 30 June 2021
INDEPENDENT AUDIT REPORT TO THE MEMBERS
OF PNX METALS LIMITED
58
44
PNX METALS LIMITED | ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
PNX Metals Limited (ASX: PNX) Financial Report for the year ended 30 June 2021
45
59
PNX METALS LIMITED | ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
PNX Metals Limited (ASX: PNX) Financial Report for the year ended 30 June 2021
60
46
PNX METALS LIMITED | ANNUAL REPORT 2021
ADDITIONAL SHAREHOLDER INFORMATION
as at 31 August 2021
SHARES
The total number of shares issued as at 31 August 2021 was 3,652,193,511 held by 1,491 registered shareholders.
451 shareholders hold less than a marketable parcel, based on the market price of a share as at 31 August 2021.
Each share carries one vote.
PERFORMANCE RIGHTS/OPTIONS
As at 31 August 2021, the Company had 54,300,000 Performance Rights and 359,125,000 unquoted options on issue. All of the
359,125,000 options have a 1.464 cent exercise price expiring 30 September 2021. 49% of the unquoted options are held by
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT.
TWENTY LARGEST SHAREHOLDERS
As at 31 August 2021, the twenty largest Shareholders were as shown in the following table and held 77.39% of the Shares:
RANK
NAME
SHARES
% OF SHARES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT\C
1,620,362,034
44.37
SOCHRASTEM SA\C
MARILEI INTERNATIONAL LIMITED
1215 CAPITAL PTY LTD
ROBERT LEON
BNP PARIBAS NOMS PTY LTD
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