PNX METALS LIMITED ABN 67 127 446 271
ANNUAL REPORT 2022
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
Registered and Principal Administrative Office
Level 1, 135 Fullarton Road
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: Wet season drilling at Glencoe.
Photo page 3: Drone magnetic survey at Mt Bonnie.
2
PNX METALS LIMITED | ANNUAL REPORT 2022 CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S LETTER
OVERVIEW
EXPLORATION REPORT
TENEMENTS
MINERAL RESOURCES AND ORE RESERVES
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
2
4
5
7
15
17
20
25
31
32
36
54
INDEPENDENT AUDITOR’S REPORT TO MEMBERS 55
ADDITIONAL SHAREHOLDER INFORMATION
58
PNX METALS LIMITED | AN N UAL REP ORT 2022
3
CHAIR’S LETTER
Dear Fellow Shareholders,
On behalf of the Board of Directors, it is my pleasure to present the 2022 Annual Report for PNX Metals Limited (‘PNX’
or ‘Company’).
During the year PNX made significant progress in advancing the integrated development of its wholly owned Fountain Head
gold and Hayes Creek zinc-gold-silver projects towards a production decision. The positive feasibility study completed in
June 2021, confirmed the technical and financial viability of our strategy to sequentially develop these projects. Since its
completion, construction projects globally, including those in the mining industry, have been impacted by an unprecedented
series of supply chain issues and inflationary conditions which have resulted in significant increases and uncertainty relating
to costs, timeframes and delivery schedules.
The Company has been working closely with its preferred contractors and consultants to manage the impact and mitigate
these factors and remains confident that the development of Fountain Head and Hayes Creek has the potential to create
strong returns for shareholders.
Mineral Resource Estimates (MRE) have been established for each of the four discrete deposits that have been the focus of
our development studies to date, namely Fountain Head, Glencoe, Mt Bonnie and Iron Blow.
Recently the Company acquired the Mt Porter Project which lies within trucking distance of the proposed infrastructure
at Fountain Head and with the inclusion of this strategic acquisition the Company’s total Mineral Resources now exceed
500,000oz of gold. As presented in detail later in this report the combined MREs across the deposits now total: 520,900oz
of gold, 16.2million oz of silver, and 177,000t of zinc.
The permitting of the Fountain Head project is well advanced and the supplement to the Environmental Impact Statement
(EIS) was recently submitted to the Northern Territory Environmental Protection Authority for consideration with an
expectation that the EIS will be approved towards the end of CY2022. The Project Mine Management Plan, required in
addition to the EIS for works to commence at site is also well advanced and will be submitted upon approval of the EIS.
Drilling during the year returned solid results from both Fountain Head and Glencoe, indicating the potential for resource
extensions and new mineralised positions. The Company also holds 90-100% interests in granted exploration licences
covering 1,528 km2 of the Pine Creek Orogen. A review of this extensive land package continues to identify new target
areas and while the focus is on gold, silver and zinc to supplement the current Project resource base, the Company is also
assessing this tenure for other commodities such as lithium, nickel, tin, tantalum and copper, and will continue to increase
on-ground activities in the year ahead.
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 hard work during the past 12 months. We are committed to growing the Company and safely and expeditiously
progressing the development of our flagship Fountain Head and Hayes Creek projects 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 2023.
Yours sincerely,
Graham Ascough
Chairman
7 October 2022
4
PNX METALS LIMITED | ANNUAL REPORT 2022 OVERVIEW
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.
HEALTH AND SAFETY
The Company continually reviews its health, safety and
environmental obligations and the the health and wellbeing of
its employees, contractors and stakeholders. The safety of PNX
employees and contractors is paramount and the Company
maintains a comprehensive risk register and regularly reviews its
safe operating proceduces.
There were no reportable safety or environmental incidents
during the year.
During the year ended 30 June 2022, the Company continued
to advance the sequential development of its 100% owned
Fountain Head gold and Hayes Creek zinc-gold-silver Projects
(Project) in order for an investment decision to be made once
Government and Environmental approvals and Project financing
have been achieved.
PNX also added to its large exploration and development portfolio
through acquisition of Mineral Leases and Exploration Licenses,
which are highly prospective for gold, silver and base metals
located in the Pine Creek region of the Northern Territory (NT),
approximately 170 km from Darwin.
Collectively the Projects host considerable zinc-gold-silver
mineral resources (details of which are provided in the MRE
section on Page 19 of this report):
• 520,900 ounces of gold, 16.2 million ounces of silver,
177,000 ounces of zinc, 37,000 tonnes of lead and
10,000 tonnes of copper1
DARWIN
N O R T H E R N
T E R R I T O R Y
Burnside Project
Darwin
Hayes Creek,
Fountain Head and
Glencoe Projects
Chessman Project
Burnside Project
Glencoe Project
Hayes Creek
Rockland Tenure
Fountain Head Project
Mount Porter Project
Pine Creek
Hayes Creek Project
0
50
100
Katherine
kilometres
Chessman Project
NT 07
Figure 1 NT Project locations.
NORTHERN
TERRITORY
QUEENSLAND
WESTERN AUSTRALIA
SOUTH AUSTRALIA
NEW SOUTH WALES
Adelaide
VICTORIA
TASMANIA
Aust 05
1
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement
and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements referenced in this
announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcements.
5
PNX METALS LIMITED | ANNUAL REPORT 2022 OVERVIEW
KEY FINANCIAL RESULTS
($000’S, EXCEPT AS INDICATED)
30 JUNE 2022
30 JUNE 2021
Interest/other income
Gain on sale of tenements
Corporate/administrative costs
Impairment – exploration assets
(Income)/loss on Sunstone investment
109
535
1,407
-
(759)
117
-
1,373
-
(103)
Loss after tax – continuing operations
764
1,256
Loss per share – continuing operations
0.02 cents
0.04 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
(948)
(3,499)
3,914
3,702
3,702
270
21,520
-
206
2,400
25,136
(1,184)
(3,582)
6,470
3,632
3,632
193
19,573
-
50
2,400
21,085
Number of shares on issue
4,444,057,807
3,652,193,511
Number of performance rights on issue
49,300,000
54,300,000
Number of unlisted options on issue
-
359,125,000
Share price (ASX: PNX)2
0.4 cents
0.8 cents
1
Excluding investment in Sunstone Metals Ltd
2 Closing Share price as at 30 June
The Company and its wholly owned
subsidiary (the Group) reported a loss
after tax for the year of $0.76 million
(2021: $1.3 million).
The comparable pre-tax loss is not
unexpected given PNX’s corporate
cost structure has not significantly
changed, and exploration costs in the
NT (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 $70k for the year
primarily reflects payments for investing
activities, including exploration
($2.8 million) and to suppliers and
employees ($0.9 million) financed through
new shares issued ($3.9 million after
costs). Exploration and Evaluation cash
outflows of $3.6 million consisted of
$1.4 million on the Fountain Head gold
project, $1.3 million at Glencoe (including
drilling that resulted in an updated
MRE being completed and reported in
accordance with the JORC Code 2012,
released to the ASX 30 August 2022),
$0.1 million at Hayes Creek and
$0.8 million on other NT regional
exploration for the year.
The Company raised $4.0 million (before
costs) during January and February 2022
under a non-renounceable rights issue of
one (1) for every four (4) shares held at a
price of 0.5 cents per share.
At 30 June 2022, the Group had no
debt, and
• cash holdings of $3.7 million, and
•
investment in Sunstone Metals Ltd
valued at $0.27 million.
6
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
PNX’s PFS envisaged initial mining
and processing of gold ore (Stage 1)
for a minimum of 5 years from existing
resources at a newly constructed carbon-
in-leach (CIL) processing plant to be
located at Fountain Head. Hayes Creek
zinc-gold-silver development is to operate
in parallel (Stage 2), and utilise the mined-
out Fountain Head pit for tailings storage.
The basis of a staged approach is
to make best use of the Company’s
resource inventory, and to enable a
lower cost, lower risk entry to generate
shareholder value from its MREs.
PNXs intent, which is strongly supported
by the NT Government and NT
Environmental Protection Authority
(NT EPA), is to minimise additional
disturbance, limit the Project footprint
to granted MLs, and to store any future
tailings sub-aqueously with existing voids,
or in voids that are to be created during
the mining process.
During the year, the Company
continued to advance its development
and exploration program, specifically
relating to Government and
Environmental approvals, resource
upgrades, and acquisition of nearby
prospective tenements.
GOVERNMENT AND
ENVIRONMENTAL APPROVALS
The Fountain Head Environmental
Impact Statement (EIS) is an important
component of the Project approval
process and contains a comprehensive
risk assessment, including studies
on groundwater and surface water,
biodiversity, Aboriginal and cultural
heritage, socioeconomic impacts,
transport, air quality, noise, and
closure/rehabilitation.
A detailed body of work was completed
by the Company and its Environmental
Consultants, ERIAS Group, to identify
potential Project environmental impacts
and risks and mitigate these through
careful and considered management.
In late July 22, subsequent to the year-
end, PNX lodged a second Supplement
to the Fountain Head gold Project draft
EIS with the NT EPA (refer ASX release 28
July 2022). An Assessment Report will be
prepared by the NT EPA and provided to
the Minister for Environment to consider
towards the end of CY2022.
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 (refer
ASX release 24 March 2021).
PROJECT OVERVIEW
PNX’s integrated gold, silver and zinc
development strategy is proposing to
mine and process ore, via a staged
approach, from five 100%-owned
discrete deposits (Fountain Head,
Glencoe and the newly acquired Mt
Porter (gold), Mt Bonnie and Iron Blow
(zinc-gold-silver)), all located on granted
Mineral Leases (MLs) in the Pine Creek
region of the Northern Territory (NT).
Mineral Resource Estimates (MREs)
have been established for each of these
deposits and a Pre-Feasibility Study (PFS)
(excluding Mt Porter) was released in
June 2021.
Near surface oxide and free milling gold
mineral resources hosted at Fountain
Head, Glencoe and Mt Porter, now
total 283,200 ounces gold (refer PNX
ASX announcements 16 June 2020,
30 August 2022, 28 September 2022
for full details of the MREs including
JORC tables), and are capable of
being processed through the proposed
Fountain Head processing plant.
The Mt Bonnie and Iron Blow zinc-gold-
silver-rich massive sulphide deposits
host polymetallic mineral resources
and contain 237,700 ounces of
gold, 16.2 million ounces of silver,
177,000 tonnes zinc, 37,000 tonnes
lead, and 10,000 tonnes copper (refer
PNX ASX announcement 3 May 2017 for
full details including JORC tables).
PNX’s Global Mineral Resources now
contain a total metal inventory of:
• 520,900 ounces of gold, 16.2 million
ounces of silver, 177,000 ounces
of zinc, 37,000 tonnes of lead and
10,000 tonnes of copper2
2
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement
and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements referenced in this
announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcements.
7
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
ENGINEERING
During the year PNXs engineering partner, Como Engineers,
completed a site visit to assess and report on the suitability and
cost of dismantling and relocating second-hand tailings and filtration
equipment from Queensland to the Fountain Head site.
A mill optimisation study was also completed to identify potential
bottlenecks and impacts on process recoveries relating to the
processing of the various ore types at Fountain Head, Glencoe
and Mt Bonnie oxide/stockpile up to a 900,000 tonnes per annum
feed rate.
A detailed options analysis was completed on various aspects of
the Project’s plant and infrastructure design criteria, including a
review of the second-hand filtration equipment, tailings storage, and
mill optimisation. This work provided inputs to update the process
flowsheet, equipment lists, production schedules and more accurate
cost estimates.
Subsequent to year end, the Project capital and operating costs
were updated using a simplified flowsheet. This is expected to
partly offset cost inflation pressures being experienced for resource
projects globally, and will be used to update the Project’s financial
model and for ongoing discussions with prospective financiers.
The Project construction schedule is yet to be finalised, but
expected to be up to 12 months from the decision to proceed.
Site establishment works are planned to commence upon grant of
Project approvals.
Above and below: Fountain Head CIL plant.
Figure 2 Typical carbon-in-leach tanks.
8
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
GLENCOE GOLD DEPOSIT
PNX finalised acquisition of the Glencoe
gold deposit in April 2021, and has
since completed 4,470 metres of
Reverse Circulation (RC) drilling, and
220 metres of diamond drilling to test for
near-surface extensions of known gold
mineralisation and increase confidence in
the mineral resource.
Results continued to increase the extent
of gold mineralisation to the east of the
historic pits with many holes returning
multiple intervals with significant gold
intercepts consistent with a revised
geological model. Some of the better
results from the final phase of RC
drilling were:
Multiple new zones of high-grade gold
mineralisation were intersected during
the first phase of PNX’s RC drill program
(refer ASX release 14 September 2021).
Mineralisation displayed excellent
continuity and was extended by more
than 280 metres to the southeast, and
450 metres from the historic North-
Central pit (Figure 3). Importantly,
several thicker near-surface zones of
gold mineralisation were identified (refer
ASX releases 25 November 2021, and
14 January 2022).
• 6 metres at 3.84 grams per tonne
of gold from 36 metres in GLRC044
• 2 metres at 8.58 grams per tonne
of gold from 10 metres in GLRC045
• 5 metres at 1.61 grams per tonne
of gold from 11 metres in GLRC053
During geological mapping, thirty-five
rock chip samples were taken from
selected sites at Glencoe to assist with
determining the distribution of gold and
understanding its geological context (refer
ASX release 17 March 2022). Numerous
samples were taken from quartz veins
with a strike direction approximately
30° oblique to that of the main MRE
gold lodes, and so will have not have
been adequately tested by the typical
drilling geometry.
The orientation of these oblique gold-
bearing quartz veins and their structural
relationship with the main anticlinal
fold zone, which hosts the majority of
the currently delineated mineralisation
at Glencoe, is similar to that of the
high-grade Tally Ho gold lode which
cross-cuts the main anticlinal zone at
Fountain Head. These observations are
potentially significant and highlight a
new geometry of gold-hosting structures
to target.
These oblique quartz veins have been
identified in all four historic starter pits at
Glencoe, but are best developed in the
South Central and West pits. Samples of
these quartz veins returned the highest
gold assays of the current rock chip
sampling program, including:
• 33.1 grams per tonne of gold in
GLFS035c (South Central pit),
• 15.5 grams per tonne of gold in
GLFS043 (West pit),
• 35.8 grams per tonne of gold in
GLFS046a (South Central pit), and
• 15.9 grams per tonne of gold in
GLFS046c (South Central pit).
Figure 3 Glencoe resource outline, all drill holes to date (extensional areas highlighted by the
word ‘Section’).
9
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
Using geological information derived from
443 drill holes (including PNX’s recent
drilling) that intersected the deposit, and
data obtained from field mapping, a
revised geological model was developed.
The Glencoe resource is divided into six
zones based on geological characteristics
and drilling density (Figure 4).
The Glencoe gold mineralisation is hosted
by greywacke, sandstone, siltstone and
mudstone of the Paleoproterozoic Mount
Bonnie Formation, and is contained
within complex quartz veins and shears
spatially associated with the axial zone
of a shallowly east-west (local grid)
plunging anticline.
Drilling to test potential extensions to the
Glencoe gold mineralisation is scheduled
to commence during the 2022 NT dry
season. Five main target areas have been
identified and are shown in Figure 6. An
updated MMP has been submitted for
Government approval.
Resource wireframes were generated and
used by independent mining consultants,
Measured Group Pty Ltd, to estimate a
new MRE in accordance with the 2012
JORC Code3, and reported subsequent
to year end on 29 August 2022. The
updated MRE contained 2.1 million
tonnes at 1.2 grams per tonne of gold
for 79,000 ounces of gold with 77.4% of
the gold resources in the Indicated and
Measured Resource categories.
The majority of the gold-bearing quartz
veins occur within sub-vertical to steeply
dipping fracture and shear zones. Other
gold-bearing quartz veins are interpreted
to have conformable or ‘saddle reef’
geometries sub-parallel to the folded
beds extending outwards from the
discordant sub-vertical fracture-filled
zones. These two geometries were
delineated by wireframes and then
reflected in the block model (Figure 5).
Figure 4 Glencoe gold mineral zones and lodes separated by domain including outlines of trial pits (PNX drill traces are shown in red).
3 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).
10
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
Figure 5 Cross-section with wireframes, block grades and composite data in the West Zone (see Figure 4 for section location).
Figure 6 Glencoe Exploration target zones for next phase of drilling (existing mineral
lodes outlined in yellow with new targets in white).
11
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
BURNSIDE EXPLORATION PROJECT
PNX’s Burnside exploration project
covers more than 1,000 km2 of
contiguous, highly prospective granted
tenure between Adelaide River and Pine
Creek. The Fountain Head and Hayes
Creek development is located within the
Burnside tenure (Figure 7).
Regional exploration continued during
the year, with geological mapping and
surface geochemical sampling focussed
on prospective target areas at Fountain
Head South, Bartons and the Golden
Dyke Dome prospects. MMPs were
approved to drill validated gold targets
at Cookies Corner, Western Arm North,
Chimera and Medusa. The timing to
complete this drilling is being finalised.
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 was completed by
PNX previously. The priority gold targets
to be tested are typically characterised by
strong surface geochemical anomalism
and drilled bedrock mineralisation.
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
Howley
Rising Tide
Brocks Creek
Zapopan
Big Howley
Chinese Howley
Cosmo Howley (Cosmo Deeps)
Long Airfield
Hayes Creek
0
5
10
Fenton Airfield
kilometres
Woolwonga
Glencoe
Fountain Head
Princess Louise
Iron Blow
Hayes Creek
Mount Bonnie
Davies
Golden Dyke
Langleys
Burnside 03
Emerald Springs Roadhouse
Figure 7 Burnside exploration project with TMI magnetic image in the background.
12
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
GEOPHYSICS COLLABORATION
WITH NT GOVERNMENT
Grants NT approved PNX’s application
for co-funding in Round 15 of the
Northern Territory Geophysics and Drilling
Collaborations program (refer ASX release
2 June 2022).
PNX’s application for a 1,099 line-km
drone magnetic survey and LiDAR to
cover the Hayes Creek, Fountain Head
and Glencoe areas was successful under
the new Brownfields Targeting component.
The grant amounted to $34,404 (inclusive
of GST) and covers 50% of the direct cost
of the survey, which was flown in August
2022 (Figure 8) with results and analysis
pending as at the date of this report.
Figure 8 Drone magnetic survey at Fountain Head.
13
PNX METALS LIMITED | ANNUAL REPORT 2022 EXPLORATION REPORT
CORPORATE TRANSACTIONS
Acquisition of tenure
adjacent to Iron Blow
In March 2021, PNX entered into a
Farm-In Agreement with private operators
Oz Uranium Pty Ltd and Rockland
Resources Pty Ltd, to acquire two
granted MLs (29933 and 29937), one
MLA and five ELs. The Company satisfied
the terms of the agreement in early 2022
(refer ASX release 28 June 2022).
The MLs are contiguous with PNX’s
existing tenure at Iron Blow and cover
additional parts of the Golden Dyke
– North Point gold-trend. ML29933
hosts the Priscilla gold prospect located
along strike and within 100 metres of
the southern boundary of the historic
Princess Louise open-cut gold mine
which was mined by Crocodile Gold
Australia Pty Ltd between 2011
and 2013.
RC drilling at the Priscilla gold prospect
in 2011 by Thundelarra Exploration Ltd
intersected a high-grade intercept of
4 metres at 118 grams per tonne of
gold from 40 metres in TPCRC159,
(follow-up assays included 1 metre
at 908 grams per tonne of gold (refer
THX ASX releases 21 December 2011,
30 January 2012 and 30 April 2012)).
The Red Hill prospect is off-set
approximately 200 metres east of the
Princess Louise “line-of-lode” where
TPCRC167 returned 4 metres at
4.6 grams per tonne of gold from
64 metres. Three follow-up RC drill holes
at Red Hill in 2013 returned a best result
of 4 metres at 0.81 grams per tonne
of gold from 24 metres in TPCRC178
(refer THX ASX release 31 July 2013)
and were unable repeat the previously
drilled ‘bonanza’ gold grades highlighting
coarse nuggety gold typical of the Pine
Creek area.
Since the acquisition, PNX has completed
field mapping and sampling at high
priority areas within the Golden Dyke
Dome and around Priscilla.
14
Mt Porter gold deposit
Subsequent to year end PNX executed
a sale and purchase agreement with
private Company Ausgold Trading Pty Ltd
(“Ausgold”) to acquire the Mt Porter gold
deposit (ML23839) (refer ASX release
28 September 2022).
The acquisition is consistent with PNX’s
strategy to consolidate nearby projects
which host existing gold, silver or base
metals mineral resources to support the
proposed Fountain Head and Hayes
Creek development and have significant
exploration upside.
Mt Porter is situated approximately 50 km
southeast of the proposed Plant and
Infrastructure at Fountain Head via the
existing Mt Wells Road.
A JORC 2012 compliant MRE of
681,000 tonnes at 2.2 grams per
tonne of gold for 48,200 ounces of
gold, with 84% reporting to the higher-
confidence Indicated category, was
completed by independent mining
consultants Measured Group Pty Ltd
Figure 9 Locating historic drill holes during
fieldwork at Mt Porter.
on 28 June 2022 (refer ASX release
28 September 2022 for full details
including JORC tables).
Gold mineralisation at Mt Porter is hosted
by folded and faulted silicate-sulphide-
rich iron formations in the middle to upper
levels of the Koolpin Formation. Mt Porter
is analogous to the Cosmo Howley
and Golden Dyke gold deposits, where
370,000 and 25,000 ounces of gold were
produced, respectively.
The majority of gold mineralisation at
Mt Porter occurs in consistent 2-25 metre
thick zones within a complex multiply
hinged fold zone extending west from the
main axis of the Mt Porter Anticline. The
main mineralised zone is bounded by at
least three major faults.
The Mt Porter Mineral Resource extends
over a strike length of approximately
230 metres and from surface to a depth
of approximately 95 metres. The deposit
remains open along strike and to the
west where MPRC248, intersected
a previously unknown zone of gold
mineralisation of 13 metres at 3.53 grams
per tonne of gold from 71 metres located
20 metres west of and 30 metres deeper
than the current MRE. This zone was not
intersected in any holes previously drilled
into the western side of the Mt Porter
deposit and remains an area of significant
exploration potential.
Moline Divestment
In March 2022, PNX agreed to divest
the Moline exploration project to
Sovereign Metallurgical Pty Ltd for a
total consideration of up to $3.0 million,
plus refund the existing tenement
bond of approximately $300,000 (refer
ASX release 1 March 2022). Moline is
located approximately 65 km east of the
Company’s Fountain Head and Hayes
Creek development. The divestment
comprises ML24173, MLN1059, MLN41
and EL28616.
PNX METALS LIMITED | ANNUAL REPORT 2022 TENEMENTS
NORTHERN TERRITORY
TENEMENT
ML30512
ML30589
MLN1033
MLN1039
MLN214
MLN341
MLN342
MLN343
MLN346
MLN349
MLN405
MLN459
MLN811
MLN816
Total Hayes Creek
MLN794
MLN795
ML30936
Total Other
ML31124
MLN1020
MLN4
MLN1034
Total Fountain Head
Glencoe
ML29679
Total Glencoe
ML24173 +
MLN1059 +
MLN41 +
Total Moline
Total Mineral Leases
EL28616 +
EL31099
EL31893
EL32489
Total Exploration Licences
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%
Glencoe
PNX Metals Ltd 100%
Moline
Moline
Mt Evelyn
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
Moline
Bridge Creek
PNX Metals Ltd 100%
PNX Metals Ltd 100%
Ringwood Station
PNX Metals Ltd 100%
J25 Anomaly
PNX Metals Ltd 100%
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
262.5 km2
60.2 km2
23.4 km2
19.9 km2
366.1 km2
+ On 28 February 2022, PNX Metals Limited agreed to divest the Moline project (tenements ML24173, MLN1059, MLN41 and EL28616) in the
Northern Territory to Sovereign Metallurgical Pty Ltd, with completion to occur within 18 months of the Agreement. (Refer ASX 1 March 2022).
15
PNX METALS LIMITED | ANNUAL REPORT 2022 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
EL25748
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 – earned 100%
PNX Metals Ltd – earned 100%
PNX Metals Ltd – earned 100%
PNX Metals Ltd – earned 100%
PNX Metals Ltd – earned 100%
PNX Metals Ltd – earned 80%, Trojan
Enterprises Pty Ltd and David Trow 20%
PNX Metals Ltd – earned 80%, Trojan
Enterprises Pty Ltd and David Trow 20%
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
6.68
10.02
6.68
6.68
20.00
3.54
0.85
ML29937 ^
Rocklands 5
Total Exploration Licences
1,167.25
*
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 Agnico Eagle.
# PNX Metals Ltd has earned a 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 earned 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.
16
PNX METALS LIMITED | ANNUAL REPORT 2022 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2022
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
(%)
PB
(%)
CU
(%)
AG
(g/t)
AU
(g/t)
ZnEq
(%)
AuEq
(g/t)
Indicated
East Lode
West Lode
Total Indicated
Inferred
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
1,280
2,080
20
20
210
40
40
120
450
Total Indicated + Inferred Mineral Resource
2,530
7.64
4.14
5.49
0.48
0.76
0.25
0.06
0.21
3.52
1.11
4.71
1.83
0.33
0.91
0.34
0.96
0.07
0.09
0.03
0.32
0.18
0.78
0.30
0.31
0.30
0.16
0.13
0.03
0.01
0.07
0.14
0.07
0.26
275
60
143
132
109
16
6
8
35
27
122
2.90
1.73
2.19
6.01
1.02
2.03
1.68
1.66
0.69
1.71
2.10
20.64
15.53
8.84
13.39
13.65
5.90
3.48
2.57
2.79
5.87
4.38
11.79
6.66
10.08
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
DOMAIN
CUT-OFF
GRADE
TONNAGE
(kt)
Zn
(%)
Pb
(%)
Cu
(%)
Ag
(g/t)
Au
(g/t)
Indicated
Indicated
Oxide/Transitional
0.5g/t Au
Fresh
1% Zn
Total Indicated
Inferred
Inferred
Inferred
Total Inferred
Oxide/Transitional
0.5g/t Au
Fresh
Ag Zone
1% Zn
50g/t Ag
195
1,180
1,375
32
118
21
171
Total Indicated + Inferred Mineral Resource
1,545
0.94
4.46
3.96
0.43
2.91
0.17
2.11
3.76
2.43
0.94
1.15
1.33
0.90
0.03
0.87
1.12
0.18
0.23
0.23
0.29
0.15
0.04
0.16
0.22
171
121
128
74
135
87
118
127
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)
3,455
622
4,077
Zn
(%)
4.88
1.39
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
17
PNX METALS LIMITED | ANNUAL REPORT 2022 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2022
Table 4 Commodity price and metal recovery assumptions
METALS
Zn
Pb
Cu
Ag
Au
UNIT
USD / t
USD / t
USD / t
USD / troy ounce
USD / troy ounce
PRICE
2,450
2,100
6,200
20.50
1,350
RECOVERY MT BONNIE
RECOVERY IRON BLOW
80%
60%
60%
70%
55%
80%
60%
60%
80%
60%
* Consensus prices as at 2017, when the resource estimates were completed.
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 East Lode (Zn-Au-Ag-Pb) and West Lode
(Zn-Au), and four subsidiary lodes with a 1 g/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 0.5 g/t gold
and silver domains are reported above a cut-off grade of 50 g/t silver.
FOUNTAIN HEAD MINERAL RESOURCES
Table 5 Fountain Head and Tally Ho updated Mineral Resources by JORC Classification as at 16 June 2020
JORC CLASSIFICATION
TONNAGE (Mt)
Au (g/t)
OUNCES (koz)
Tally Ho
Indicated
Inferred
Total
Fountain Head
Indicated
Inferred
Total
Combined
Indicated
Inferred
Total
0.94
–
0.94
0.89
1.11
2.00
1.83
1.11
2.94
2.0
–
2.0
1.4
1.6
1.5
1.7
1.6
1.7
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 the Fountain Head and Tally Ho deposits was reported during June 2020 (refer
to ASX Release dated 16 June 2020). An initial Mineral Resources Estimate was reported on 11 July 2019.
• Fountain Head and Tally Ho gold mineralisation reported utilising a cut-off grade of 0.7 g/t gold, which is consistent with the
assumed open cut mining method.
18
PNX METALS LIMITED | ANNUAL REPORT 2022 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2022
GLENCOE MINERAL RESOURCES
Table 6 Glencoe Mineral Resources by JORC Classification as at 29 August 2022
ZONE
MEASURED
INDICATED
INFERRED
TOTAL
TONNES
Au (g/t)
TONNES
AU (g/t)
TONNES
AU (g/t)
TONNES
AU (g/t)
AU OUNCES
Oxide
Transitional
Fresh
Total
14,000
144,000
269,000
427,000
1.18
1.25
1.36
86,000
449,000
649,000
1.32
1,184,000
1.04
1.28
1.04
1.13
40,000
107,000
324,000
471,000
1.23
1.18
140,000
700,000
1.17
1,242,000
1.18
2,082,000
1.11
1.26
1.14
1.18
5,000
28,300
45,700
79,000
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 and JORC classification as at 29 August 2022 (refer to ASX Release dated 30
August 2022).
• Glencoe gold mineralisation estimated using a cut-off grade of 0.7 g/t gold, which is consistent with the assumed open-cut
mining method
• Classification of Mineral Resources incorporates the terms and definitions from the JORC Code.
• The cut-off grade of 0.7 g/t gold is equal with that used for the Fountain Head and Tally Ho Mineral Resource Estimates.
PNX TOTAL MINERAL RESOURCES
Total Mineral Resources (Iron Blow + Mt Bonnie + Fountain Head + Glencoe) by JORC Classification
JORC CLASSIFICATION
TONNAGE (kt)
ZN (t)
Total Contained Metal (t)
9,099
177,200
PB (t)
37,000
Cu (t)
AG (Moz)
10,050
16.2
AU (koz)
472.7
The reported mineral resources for Iron Blow and Mt Bonnie were updated in May 2017 and February 2017 (refer to ASX Releases
3 May 2017 and 8 February 2017, respectively) 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 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 update for Glencoe were reported on 30 August 2022 (refer to ASX Release dated 30 August 2022)
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
Exploration Manager with PNX Metals Limited, Dr Michael Green (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 Dr. Michael Green, a
Competent Person who is a Member of the Australasian Institute of Geoscientists (AIG). Dr. Green 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” (JORC Code). Dr. Green is a full-time employee and Exploration Manager with PNX
Metals Ltd and consents to the inclusion of this information in the form and context in which it appears.
19
PNX METALS LIMITED | ANNUAL REPORT 2022
DIRECTORS’ REPORT
The Directors of PNX Metals Limited (‘PNX’ or ‘Company’) present their report for the
financial year ended 30 June 2022.
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
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 3 years immediately prior to
30 June 2022, Mr. 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 3 years immediately prior
to 30 June 2022, Mr. Schmidt
held no directorships of other ASX
listed companies.
Graham Ascough is a senior resources
executive with more than 30 years of
industry experience evaluating mineral
projects and resources in Australia and
overseas. He has had broad industry
involvement ranging from playing a
leading role in setting the strategic
direction for significant country-wide
exploration programs to working directly
with mining and exploration companies.
Mr. Ascough is a geophysicist by training
and was the Managing Director of
ASX listed Mithril Resources Ltd from
October 2006 until June 2012. Prior to
joining Mithril in 2006, Mr. Ascough was
the Australian Manager of Nickel and
PGM Exploration at the major Canadian
resources house, Falconbridge Ltd
(acquired by Xstrata Plc in 2006).
He is a Member of the Australasian
Institute of Mining and Metallurgy
(“AusIMM”) and is a Professional
Geoscientist of Ontario, Canada.
In the 3 years immediately prior to
30 June 2022, Mr. 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).
20
PNX METALS LIMITED | ANNUAL REPORT 2022 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 3 years immediately prior to
30 June 2022, Dr. Bierlein held the
following directorships of other ASX
listed companies:
• Non-executive Director, Impact
Minerals Limited – since
October 2021
• Non-executive Director, Firetail
Resources Limited – since
November 2021 (IPO 12 April 2022)
• Non-executive Director, Blackstone
Minerals Limited – since
November 2021.
Richard Willson is an experienced, Non-
executive Director, Company Secretary and
CFO with more than 20 years’ experience
predominantly within the mining, technology
and agricultural sectors for both publicly
listed and private companies.
Mr. Willson has a Bachelor of Accounting
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), Aus Tin Mining Limited
(ASX:ANW), Thomson Resources Limited
(ASX:TMZ), MedTEC Holdings Limited, and
Unity Housing Company Ltd; 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, and Unity Housing
Company, and is the Chairman of the
Remuneration & Nomination Committee of
Titomic Limited.
In the 3 years immediately prior to 30 June
2022, 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, Lanyon
Investment Company Ltd – from April
2021 to May 2022
• 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 25 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 3 years immediately prior
to 30 June 2022, Mr. Fox 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 Pty Ltd.
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.
21
PNX METALS LIMITED | ANNUAL REPORT 2022 DIRECTORS’ REPORT
INTERESTS IN SHARES AND
PERFORMANCE RIGHTS OF THE
COMPANY
As at the date of this report, the
interests of the Directors in the shares
and Performance Rights of PNX are
as follows:
• Graham Ascough,
Non-executive Chairman
Graham Ascough has an indirect
interest in 17,291,459 Shares.
• James Fox,
Managing Director & CEO
James Fox holds 25,800,000
Performance Rights, and a
related party of Mr. Fox holds
12,000,000 Shares.
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 and Hayes Creek zinc-gold-silver
Projects 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.
22
REVIEW OF OPERATIONS
During the year, the Group continued to
advance its program for the sequential
development of the Group’s 100%
owned Fountain Head gold and Hayes
Creek zinc-gold-silver Projects (Project),
which host considerable zinc-gold-silver
resources, in order for an investment
decision to be made once Government
and Environmental approvals and Project
financing have been achieved.
The Group’s Global Mineral Resources
(MREs) (reported in accordance with
the JORC Code 2012) now contain a
total metal inventory of 472,700 ounces
gold, 16.2 million ounces silver,
177,000 tonnes zinc, 37,000 tonnes lead
and 10,000 tonnes copper. (refer ASX
release 30 August 2022).
On 28 February 2022, the Group agreed
to divest the Moline project (tenements
ML24173, MLN1059, MLN41 and
EL28616) in the Northern Territory
to Sovereign Metallurgical Pty Ltd, a
subsidiary of Ausgold Trading Pty Ltd.
The completion of this transaction to
occur within 18 months of the date
of the Agreement. (refer ASX release
1 March 2022 for further information).
There were no reportable safety or
environmental incidents during the year.
The safety of the Group’s employees
and contractors is paramount and the
Group maintains a comprehensive risk
register and regularly reviews its safe
operating procedures.
Geology and Exploration
All tenements remain in good standing
with statutory reporting up to date.
The Glencoe gold deposit is located on
a granted Mineral Lease approximately
170 km south of Darwin and 3 km north
of Fountain Head in the Pine Creek
region of the Northern Territory. Glencoe
represents a ‘bolt-on’ asset that supports
the proposed Project development (refer
ASX release 20 December 2021).
The Group completed 4,470 metres
of reverse circulation drilling, and
220 metres of diamond drilling to test for
near-surface extensions of known gold
mineralisation and increase confidence
in geological model. An updated MRE
was then completed (refer ASX release
30 August 2022) where the geological
classification was significantly improved
with 77.4% of the MRE now reporting
to the higher-confidence Measured and
Indicated categories. Further drilling to
test potential extensions to the Glencoe
gold mineralisation is scheduled to
commence during the 2022 Northern
Territory dry season upon receipt of
Government approvals.
The Group’s Burnside exploration
project covers more than 1,000 km2 of
contiguous, highly prospective granted
tenure between Adelaide River and Pine
Creek. The Group’s Project development
is located within the Burnside tenure.
Regional exploration continued during
the year, with geological mapping
and surface geochemical sampling
focussed on prospective target areas at
Fountain Head South, Bartons and the
Golden Dyke Dome prospects. Mine
Management Plans have been approved
to drill validated gold targets at Cookies
Corner, Western Arm North, Chimera
and Medusa. The timing to complete this
drilling is finalised.
Grants NT approved the Group’s
application for co-funding in Round 15
of the Northern Territory Geophysics and
Drilling Collaborations program (refer ASX
release 2 June 2022). The Geophysics
and Drilling Collaborations program is
part of the NT Government’s ‘Resourcing
the Territory’ initiative, https://
resourcingtheterritory.nt.gov.au/. This is a
competitive grants program administered
by the Northern Territory Geological
Survey (NTGS) to address geoscientific
knowledge gaps, advance exploration
activity and support the discovery and
development of resources in the NT.
PNX METALS LIMITED | ANNUAL REPORT 2022
DIRECTORS’ REPORT
The Group’s application for a
1,099 line-km drone magnetic survey and
LiDAR to over the Hayes Creek, Fountain
Head and Glencoe areas was successful
under the new Brownfields Targeting
component. The grant amounted to
$34,404 (inclusive of GST) and covers
50% of the direct cost of the survey,
which was flown in August 2022. The
results and analysis are pending as at the
date of this report.
Government and
Environmental Approvals
The Fountain Head Environmental
Impact Statement (EIS) is an important
component of the project approval
process and contains a comprehensive
risk assessment, including studies
on groundwater and surface water,
biodiversity, Aboriginal and cultural
heritage, socioeconomic impacts,
transport, air quality, noise, and closure/
rehabilitation. A detailed body of work
was completed by the Group and its
Environmental Consultants, ERIAS
Group, to identify potential Project
environmental impacts and risks and
mitigate these through careful and
considered management.
A considerable amount of additional
work was completed over the first half
of the 2022 calendar year, including
engagement of an independent expert
to review and provide advice regarding
the surface and groundwater modelling
approach, parameters used and
interpretation. The independent experts
report was included as part of the suite
of documents submitted in late July
2022 in response to feedback from the
NT Environmental Protection Authority
(NT EPA).
Feedback from the NT EPA has been
positive to date with EIS approval
expected late in 2022 based on
statutory timeframes.
The Fountain Head Mining Management
Plan (MMP) will be submitted once the
EIS has been approved, and will include
any recommended actions from NT EPA.
Project Financing
The Group has received several term
sheet proposals for project debt finance.
The Group has commenced a period of
discussion and negotiation with various
parties as to the key terms, with the
requirement for an updated Project
feasibility assessment.
The board will then consider each
proposal to ensure appropriate
management of cost and risk to the
Company in funding the Project.
Plant and Infrastructure
Engineering and Design
Construction projects globally, including
those in the mining industry, are being
impacted by an unprecedented series
of supply chain issues and inflationary
conditions which have resulted in
significant increases and uncertainty
relating to costs, timeframes and
delivery schedules.
There is also continued pressure
on availability of qualified personnel
to undertake planned work within
satisfactory timeframes.
The Group has been working closely with
its preferred contractors and consultants
to manage the impact to its Project
development schedule, and overall
capital and operating cost estimates to
an appropriate level of accuracy and
confidence to report on.
Detailed options analysis on various
aspects of the Project’s plant and
infrastructure design criteria has been
completed and included a review of
filtration equipment, tailings storage,
and mill optimisation. The result of this
work and simplification of the flowsheet
will provide inputs to equipment lists,
production schedules and more accurate
cost estimates.
This is expected to partly offset cost
inflation pressures being experienced
for resource projects globally, and will
be used to update the Project’s financial
model and for ongoing discussions with
prospective financiers
The Project construction schedule is
yet to be finalised, but expected to be
up to 12 months from the decision to
proceed. Site establishment works are
planned to commence upon grant of
Project approvals.
Business Development
The Group satisfied the terms of a Farm-In
Agreement with private companies Oz
Uranium Pty Ltd and Rockland Resources
Pty Ltd covering two granted Mineral
Leases, one Mineral Lease Application,
and five Exploration Licences (refer ASX
release 28 June 2022). Foreign Investment
Review Board approval has been received
with Ministerial Approval pending prior to
title transfers.
This acquisition continues to strengthen
the Group’s footprint in the Pine Creek
region as the new licenses are contiguous
with the Group’s existing tenements at
Iron Blow, part of the Project, and along
strike from the historic Princess Louise
gold mine.
Due diligence has been completed on a
number of other ‘bolt-on’ gold projects
which have the potential to extend and
improve Project economics. Discussions
with vendors are ongoing and PNX
will provide updates if and when the
outcome of these discussions becomes
more definite.
Corporate
The Group reported a loss after tax for the
year of $764,024 (2021: $1,256,079). 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 cash inflows of $0.1 million for the
year, primarily reflect net payments for
investing activities, including exploration
of $2.8 million and net payments for
operating activities of $0.95 million, and
financing activities, including the issue of
new shares under a non-renounceable
Rights Issue, raising $3.85 million (net
of costs).
23
PNX METALS LIMITED | ANNUAL REPORT 2022 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.
SIGNIFICANT EVENTS
SUBSEQUENT TO THE END OF
THE FINANCIAL YEAR
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 its Projects through
development and into production, and
by making new mineral discoveries in the
Pine Creek region of the Northern Territory
to either supplement its Projects or to be
developed as stand-alone operations.
ENVIRONMENT REGULATION
AND PERFORMANCE
The Group continues to meet all
environmental obligations across
its tenements.
OPTIONS AND
PERFORMANCE RIGHTS
No options were issued during the year,
however, a total of 359,125,000 unquoted
options at a price of $0.01464 per share,
expired on 30 September 2021. As at the
date of this report, there were no options
on issue.
No new Performance Rights were issued
during the year. No Performance Rights
vested during the year and therefore no
shares were issued under the Company’s
Performance Rights Plan. 5,000,000
Performance Rights lapsed during the
year as the vesting conditions were not
met. At the date of this report, 49,300,000
unvested Performance Rights remain
on issue.
24
• 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.
AUDITOR’S INDEPENDENCE
DECLARATION
The auditor’s independence declaration is
included on page 31.
NON-AUDIT SERVICES
There were no non-audit services
provided during the financial year by
the auditor as outlined in note 23 to the
financial statements.
INDEMNIFICATION AND
INSURANCE OF DIRECTORS
AND OFFICERS
The Company entered into a Deed of
Access, Insurance and Indemnity with
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
DIRECTORS’ ATTENDANCE AT MEETINGS
There were ten 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
ASCOUGH1
(Board
Chairman)
HANS-JÖRG
SCHMIDT1
HANSJOERG
PLAGGEMARS1
(Audit
Committee
Chairman)
FRANK
BIERLEIN2
RICHARD
WILLSON2,3
JAMES
FOX2
YEAR ENDED
30 JUNE 2022
Board meetings
Audit committee
meetings
10
3
Meetings attended
10
3
9
2
9
2
10
3
9
3
10
3
1 Audit Committee member.
2
Invited to attended Audit Committee meetings.
3 Mr. Willson acted as Chairman of the Audit Committee in the absence of Mr. Plaggemars on
9 March 2022.
PNX METALS LIMITED | ANNUAL REPORT 2022 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 when
approval is obtained, the date on which
key terms of the Shares or Performance
Rights (e.g. 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
• Hansjoerg Plaggemars
Non-executive Director
• Frank Bierlein
Non-executive Director
• Richard Willson
Non-executive Director
• James Fox
Managing Director & CEO
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
• Craig Wilson
Mining, Infrastructure and
Studies Manager
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:
• provide competitive rewards to attract
and retain high calibre executives,
directors and employees;
•
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.
25
PNX METALS LIMITED | ANNUAL REPORT 2022 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 (2021: $ Nil). There
have been no changes to these fees or
entitlements since the inception of the
Company in 2007.
Summary details of remuneration for
Non-executive Directors are given
in the tables on pages 28 and 29.
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. During the
year, Mr. Fox was entitled to an annual
salary of $275,000 up to 30 September
2021 and from 1 October 2021 he is
entitled to an annual salary of $302,500,
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 2022 and as of the date of
this report, Mr. Fox held no Shares in the
Company directly. At 30 June 2022 and
the date of this report, a related party
of Mr. Fox held 12,000,000 Shares in
the Company.
During the year, 5,000,000 of
30,800,000 Performance Rights held
by Mr. Fox lapsed, as the performance
conditions were not met. During the year
no additional Performance Rights were
issued to Mr. Fox. The Performance
Rights are held, whilst Mr. Fox remains
employed by the Company, and subject
to performance conditions related to key
Company objectives, including:
• 25% will vest if the Company’s share
price increases by at least 100%
based on a 12-month VWAP for a
financial year under review during
the term of the performance rights
when compared to the previous
financial year.
• 25% will vest if the Company receives
of all required government approvals
for the construction of an operating
mine at Fountain Head.
• 25% will vest upon the receipt
of payment for the first sale of
product from the commencement
of production on the Fountain Head
mining lease.
• 25% will vest if the Company
delineates through exploration, or
secures through acquisition, new
resources and reserves to extend
mine life by at least 2 years (or at least
double the Fountain Head resource
inventory either at Fountain Head or
elsewhere within trucking distance of
Fountain Head)
At 30 June 2022, a total of
25,800,000 Performance Rights subject
to performance conditions were held
by Mr. Fox.
26
PNX METALS LIMITED | ANNUAL REPORT 2022 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
James Fox’s employment with the
Company may be terminated on
3 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
provided his services on a part-time basis
at a rate of $10,000 per month and from
October 2021 at a rate of $12,500 per
month plus GST and reimbursement of
out-of-pocket expenses. The services
may be terminated by either party on
one months’ notice. During the 2022
financial year, Mr. Gaudio was paid fees
of $142,500 (excluding GST).
During the previous financial year,
Mr. Gaudio was granted 5,000,000
Performance Rights subject to
performance conditions and at the date
of this report Mr. Gaudio continues to
hold a total of 5,000,000 Performance
Rights, whilst he remains engaged by the
Company, and subject to performance
conditions related to key Company
objectives, including:
1) 25% will vest if the Company’s share
price increases by at least 100%
based on a 12-month VWAP for a
financial year under review during
the term of the performance rights
when compared to the previous
financial year.
2) 25% will vest if the Company receives
of all required government approvals
for the construction of an operating
mine at Fountain Head.
3) 25% will vest upon the receipt
of payment for the first sale of
product from the commencement
of production on the Fountain Head
mining lease.
4) 25% will vest if the Company
delineates through exploration, or
secures through acquisition, new
resources and reserves to extend
mine life by at least 2 years (or at least
double the Fountain Head resource
inventory either at Fountain Head or
elsewhere within trucking distance of
Fountain Head).
MINING, INFRASTRUCTURE
AND STUDIES MANAGER
REMUNERATION
Craig Wilson has been an employee
of the Company since 1 March 2021.
Mr. Wilson is employed as Mining,
Infrastructure and Studies Manager
and is entitled to an annual salary of
out-of-pocket $260,000 plus mandated
superannuation contributions, 20 days
annual leave and 10 days sick leave
each year.
At 30 June 2022 and as of the date of
this report, Mr. Wilson held 3,562,519
Shares in the Company.
During the previous financial year,
Mr. Wilson was granted 15,000,000
Performance Rights subject to
performance conditions and at the date
of this report. Mr. Wilson continues to
hold a total of 15,000,000 Performance
Rights whilst Mr. Wilson remains
employed by the Company, and subject
to performance conditions related to key
Company objectives, including:
1) 25% will vest if the Company’s share
price increases by at least 100%
based on a 12-month VWAP for a
financial year under review during
the term of the performance rights
when compared to the previous
financial year.
2) 25% will vest if the Company receives
of all required government approvals
for the construction of an operating
mine at Fountain Head.
3) 25% will vest upon the receipt
of payment for the first sale of
product from the commencement
of production on the Fountain Head
mining lease.
4) 25% will vest if the Company
delineates through exploration, or
secures through acquisition, new
resources and reserves to extend
mine life by at least 2 years (or at least
double the Fountain Head resource
inventory either at Fountain Head or
elsewhere within trucking distance of
Fountain Head)
27
PNX METALS LIMITED | ANNUAL REPORT 2022 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 2022:
FINANCIAL YEAR ENDED
30 June 2022
SHORT TERM
EMPLOYMENT
BENEFITS
SHORT TERM
EMPLOYMENT
BENEFITS
POST-
EMPLOYMENT
EQUITY
SALARY & FEES
NON–CASH
BENEFITS1
SUPERANNUATION
SHARES AND
PERFORMANCE
RIGHTS
TOTAL
% OF TOTAL
REMUNERATION
CONSISTING OF EQUITY
Directors
Graham Ascough
Hans-Jörg Schmidt
Hansjoerg Plaggemars
Frank Bierlein
Richard Willson
James Fox
$75,000
$36,364
$40,000
$36,364
$36,364
-
-
-
-
-
$297,687
$11,6961
-
$3,636
-
$3,636
$3,636
$27,500
-
-
-
-
-
$75,000
$40,000
$40,000
$40,000
$40,000
$87,8482
$424,731
Chief Financial Officer & Company Secretary
Angelo Gaudio
$142,500
Other key management personnel
Craig Wilson3
TOTALS
$260,000
$924,279
$11,696
-
-
-
$11,6402
$154,140
$26,000
$64,408
$34,9122
$320,912
$134,400
$1,134,783
0%
0%
0%
0%
0%
20.7%
7.6%
10.9%
11.8%
1 Use of a Company provided motor vehicle.
2
Value of Performance Rights issued in prior periods attributable to the 2022 financial year that have not yet vested.
3 Craig Wilson included as Key Management Personnel from 1 July 2021 in his role as Mining, Infrastructure and Studies Manager.
Directors’ and key management personnel remuneration for the year ended 30 June 2021:
FINANCIAL YEAR ENDED
30 June 2021
SHORT TERM
EMPLOYMENT
BENEFITS
SHORT TERM
EMPLOYMENT
BENEFITS
POST-
EMPLOYMENT
EQUITY
SALARY & FEES
NON–CASH
BENEFITS1
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
$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
James Fox
$276,125
$10,3345
$25,000
$80,6176
$392,076
Chief Financial Officer & Company Secretary
Angelo Gaudio
$120,000
-
-
TOTALS
$602,564
$10,334
$33,422
$4,8486
$85,465
$124,848
$731,785
0%
0%
0%
0%
0%
0%
0%
0%
20.6%
3.9%
11.7%
28
PNX METALS LIMITED | ANNUAL REPORT 2022 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
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 issued in prior periods that have not yet vested that is attributable to the 2021 financial year.
EQUITY HOLDINGS OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
i) Fully paid ordinary shares of PNX Metals Limited:
Directors
Graham Ascough
Hans-Jörg Schmidt
Hansjoerg Plaggemars
Frank Bierlein
Richard Willson
James Fox1
Key management personnel
Angelo Gaudio
Craig Wilson2
BALANCE
1 JULY 2021
NET CHANGES3
BALANCE
30 JUNE 2022
13,833,166
3,458,293
17,291,459
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,850,015
712,504
3,562,519
1 Shares held by related party at 30 June 2022: 12,000,000 (2021: 11,000,000).
2 Craig Wilson included as a Key Management Personnel from 1 July 2021 in his role as Mining, Infrastructure and Studies Manager.
3 Shares acquired on 16 February 2022 under a non-renounceable rights issue.
ii) Unquoted options exercisable at 1.464 cents, expired on 30 September 2021 of PNX Metals Limited:
BALANCE
1 JULY 2021
NET CHANGES3
BALANCE
30 JUNE 2022
Directors
Graham Ascough
Hans-Jörg Schmidt
Hansjoerg Plaggemars
Frank Bierlein
Richard Willson
James Fox1
Key management personnel
Angelo Gaudio
Craig Wilson2
3,125,000
(3,125,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Options held by related party at 30 June 2022: Nil (2021: 1,875,000).
2 Craig Wilson included as Key Management Personnel from 1 July 2021 in his role as Mining, Infrastructure and Studies Manager.
3 Unquoted options exercisable at 1.464 cents, expired on 30 September 2021
-
-
-
-
-
-
-
-
29
PNX METALS LIMITED | ANNUAL REPORT 2022
DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
iii) Performance rights of PNX Metals Limited and outstanding:
BALANCE 1 JULY 2021
BALANCE 30 JUNE 2022
VESTED
UNVESTED
GRANTED
VESTED
LAPSED1
VESTED
UNVESTED
Directors
James Fox
Key management personnel
Angelo Gaudio
Craig Wilson2
-
-
-
30,800,000
5,000,000
15,000,000
-
-
-
-
-
-
(5,000,000)
-
-
-
-
-
25,800,000
5,000,000
15,000,000
1
5,000,000 Unvested Performance Rights, originally issued on 3 December 2018, lapsed on 3 December 2021.
2 Craig Wilson included as Key Management Personnel from 1 July 2021 in his role as Mining, Infrastructure and Studies Manager, the performance rights
disclosed above relate to performance rights issues to Craig Wilson in prior periods.
OTHER RELATED PARTY TRANSACTIONS
Mr. Fox had incurred out of pocket expenses throughout the year on behalf of the Group. At 30 June 2022 a reimbursement to
Mr. Fox of $464 was outstanding (2021: $585).
END OF REMUNERATION REPORT
Signed on 21 September 2022 in accordance with a resolution of the Board
made pursuant to section 298(2) of the Corporations Act 2001.
Graham Ascough
Chairman
30
PNX METALS LIMITED | ANNUAL REPORT 2022 AUDITORS INDEPENDENCE DECLARATION
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of PNX Metals Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of PNX Metals Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief,
there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
I S Kemp
Partner – Audit & Assurance
Adelaide, 21 September 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
#8036770v2w
31
PNX METALS LIMITED | ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2022
Interest income
Other income
Gain on sale of exploration assets
Employee benefits
Professional fees
Directors’ fees
Exploration – tenement maintenance
Occupancy
Insurance
Share registry and regulatory
Communication
Audit fees
Equity-based remuneration
Other expenses
Depreciation
Interest charges
Loss before income tax
Income tax benefit
Loss for the year
NOTE
4(a)
4(b)
10
4(e)
4(d)
23
19
4(c)
5(a)
Other comprehensive income/loss:
Items that will not be subsequently reclassified to profit or loss:
Financial assets - Fair value through OCI
9, 19
Total comprehensive loss for the year, attributable
to equity holders of the parent
Loss per share – continuing operations and Total
YEAR ENDED
30/06/22
$
4,329
105,000
534,545
(131,373)
(625,800)
(235,000)
-
(10,100)
(34,414)
(65,550)
(12,267)
(46,174)
(142,544)
(16,552)
(78,455)
(9,669)
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)
(764,024)
(1,255,883)
-
(196)
(764,024)
(1,256,079)
759,321
(4,703)
103,136
(1,152,943)
Basic and diluted (cents per share)
28
(0.02)
(0.04)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
32
PNX METALS LIMITED | ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments and deposits
Other financial assets
Total current assets
NON-CURRENT ASSETS
Trade and other receivables
Exploration and evaluation expenditure
Plant and equipment
Other financial assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Lease liabilities
Financial liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
NOTE
30/06/22
$
30/06/21
$
6
7
8
9
10
11
12
13
14
15
16
15
16
17
18
19
20
3,701,939
3,632,252
37,589
184,004
270,000
52,314
180,119
193,380
4,193,532
4,058,065
1,810,624
21,519,844
205,499
784,055
24,320,022
28,513,554
568,151
203,161
90,152
861,464
-
115,709
2,400,000
2,515,709
3,377,173
-
19,573,034
56,424
1,090,585
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
25,136,381
21,084,971
57,458,856
413,316
(32,735,791)
25,136,381
53,545,287
127,143
(32,587,459)
21,084,971
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
33
PNX METALS LIMITED | ANNUAL REPORT 2022 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2022
ISSUED CAPITAL
$
EQUITY-BASED
PAYMENT RESERVES
$
FAIR VALUE OCI
RESERVES
$
ACCUMULATED
LOSSES
$
TOTAL
$
Balance at 1 July 2020
47,072,054
83,839
(103,136)
(31,391,477)
15,661,280
Total loss for the year
Other comprehensive Income
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
Balance at 1 July 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
(32,587,459)
21,084,971
(764,024)
(764,024)
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
Valuation adjustment to retained
earnings for investment shares sold
-
-
-
3,959,322
(45,753)
-
-
-
-
-
-
-
-
142,544
(36,371)
759,321
759,321
-
(764,024)
-
-
-
-
-
-
-
36,371
-
(579,321)
579,321
759,321
(4,703)
3,959,322
(45,753)
142,544
-
-
Balance at 30 June 2022
57,458,856
233,316
180,000
(32,735,791)
25,136,381
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
34
PNX METALS LIMITED | ANNUAL REPORT 2022 CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2022
INFLOWS/(OUTFLOWS)
YEAR ENDED
30/06/22
$
INFLOWS/(OUTFLOWS)
YEAR ENDED
30/06/21
$
Cash flows relating to operating activities
Other Income
Receipt of research and development tax offsets
COVID-19 stimulus support received
Payments to suppliers and employees
Net operating cash flows
Cash flows relating to investing activities
Interest received
Proceeds from disposal of investments
Proceeds from disposal of plant and equipment
Payments for exploration activities
Payments for plant and equipment
Deposits paid for acquisition of Glencoe tenement
Deposit received for sale of Moline project
Payments for tenement security bonds
Net investing cash flows
Cash flows relating to financing activities
Proceeds from share issues
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
Gain on sale of plant and equipment
Equity-based remuneration
Depreciation and amortisation
Depreciation on right of use assets
Unwinding discount on lease liability
Exploration not capitalised – investing
Gain on sale of exploration 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
100,000
-
-
(1,048,364)
(948,364)
4,349
682,701
5,000
(3,549,229)
(8,980)
-
50,000
(2,756)
(2,818,915)
3,959,321
(45,753)
(76,602)
3,836,966
69,687
3,362,252
3,701,939
(764,024)
(4,349)
(5,000)
142,544
3,399
75,057
9,669
-
(534,545)
(50,748)
(5,224)
149,055
35,802
(948,364)
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
-
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
(1,256,079)
(7,934)
-
103,401
7,384
3,693
371
(2,710)
-
35,228
(1,044)
(84,014)
17,516
(1,184,188)
35
PNX METALS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2022
1 GENERAL INFORMATION AND
a) Going concern basis
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 20th September 2022.
2 NEW AND REVISED ACCOUNTING STANDARDS
New or amended accounting standards
and interpretations adopted
The Group has adopted all of the new or amended Accounting
Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are mandatory for
the current reporting period. Any new or amended Accounting
Standards or Interpretations that are not yet mandatory have not
been early adopted.
New accounting standards and interpretations
not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual
reporting period ended 30 June 2022. The consolidated entity
has not yet assessed the impact of these new or amended
Accounting Standards and Interpretations.
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.
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:
36
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 2022, the Group made a loss
of $764,024 (2021: loss of $1,256,079) and recorded a
net cash outflow from operating and investing activities
of $3,767,279 (2021: $4,810,740). At 30 June 2022, the
Group had cash of $3,701,939 (2021: $3,632,252), net
current assets, excluding the investment in Sunstone Metals
Ltd of $3,062,068 (2021: $2,627,665) and net assets of
$25,136,381 (2021: $21,084,971).
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.
A material uncertainty exists as to whether the Group will be
able to raise sufficient capital and if the 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.
b) Principles of consolidation
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.
PNX METALS LIMITED | ANNUAL REPORT 2022
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 AASB 120 “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).
e) Cash and cash equivalents
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.
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:
¬ the rights to tenure of the area of interest are current;
and
¬ 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
37
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022
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.
k) Debt and equity instruments
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.
38
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 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.
n) Share-based payments
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 when approval is obtained, 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 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. During the year the Group was committed to a
short-term tenancy lease which expired on 31 August 2021,
and the total commitment was $11,336.
The office tenancy lease was subsequently extended for a
period of 24 Months from 1 September 2021. This 2-year
tenancy lease has been recorded under AASB 16.
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.
p) Income tax
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.
39
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022
Tax consolidation
s) Right-of-use assets
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 29. 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.
q) Goods and service tax
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.
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 were
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.
t) Critical accounting judgements and key sources of
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 (2021:
$Nil) in relation to Exploration and Evaluation Assets - refer to
Note 11 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 21 for more information regarding
equity-based payments made during the year.
40
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022
4 LOSS FROM CONTINUING OPERATIONS
a)
Interest income
Interest on bank deposits
b) Other income
Exclusivity fee received
Gain on sale of equipment
Miscellaneous income
Other income
c) Depreciation
Depreciation of plant and equipment
Depreciation of right of use (ROU) Assets
Total depreciation
d) Occupancy
Short-term lease expenses #
e) Professional fees
Accounting and taxation expenses
Legal fees
Contractor services
Company promotion
Corporate financing
Secretarial services
Total professional fees
YEAR ENDED
30/06/22
$
YEAR ENDED
30/06/21
$
4,329
4,836
100,000
5,000
-
105,000
3,398
75,057
78,455
-
-
112,681
112,681
7,383
3,694
11,077
10,100
56,931
48,317
75,658
71,537
146,015
141,773
142,500
625,800
44,085
139,563
6,313
247,974
-
120,000
557,935
# A short-term lease for the Rose Park office tenancy expired on 31 August 2021 and the payments, in relation to the short-term lease, were recognised
as an expense in profit or loss. Following subsequent negotiation, it was agreed to extend the tenancy lease for a period of 24 Months. This 2-year lease
was recorded under AASB 16 - Leases.
41
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 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 25.0% (2021: 26.0%)
Equity-based remuneration – performance rights
Current year tax losses and movements in
temporary differences not recognised
Recognition of actual research and development tax
offset refund related to the previous tax year
Tax expense (benefit)
The tax rate used in the above reconciliation is the corporate tax
rate of 25.0% 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:
YEAR ENDED
30/06/22
$
YEAR ENDED
30/06/21
$
-
-
-
764,024
(191,006)
35,636
155,370
-
-
196
-
196
1,255,883
(326,530)
26,884
299,646
196
196
Exploration and evaluation expenditure
(5,358,633)
(4,884,098)
Plant and equipment
Trade and other payables
Employee benefits
Share issue costs
Net deferred tax liabilities
Tax losses recognised
Net deferred tax assets / (liabilities)
(51,375)
8,254
50,790
105,059
(5,245,905)
5,245,905
-
(15,079)
7,454
43,514
116,186
(4,732,023)
4,732,023
-
A net deferred tax liability will only arise if the Company generates taxable income in the future (for example via a profitable mining
operation). Deferred tax balances shown above have been calculated utilising a 25.0% tax rate. The potential benefit of unrecognised
tax losses (shown below) has similarly been calculated utilising a 25.0% 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)
30/06/22
$
7,773,606
133,589
30/06/21
$
8,098,833
138,932
Of the total operating tax losses of approximately $52.1 million in the Group at 30 June 2022, $31.6 million are unrecognised as
shown above as a $7.77 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.
42
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 6 CASH AND CASH EQUIVALENTS AND TERM DEPOSITS
Cash and cash equivalents
30/06/22
$
30/06/21
$
3,701,939
3,632,252
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 2022, the Group did not hold any term deposits with maturity terms of greater than 3 months (2021: $Nil).
7 TRADE AND OTHER RECEIVABLES
Interest
Goods and services tax
Other
8 PREPAYMENTS AND DEPOSITS
Prepayments
Environmental deposits – Northern Territory
Deposit – office bond
30/06/22
$
33
37,556
-
37,589
30/06/22
$
20,460
130,784
32,760
184,004
30/06/21
$
52
49,951
2,311
52,314
30/06/21
$
15,237
132,122
32,760
180,119
On renewal of insurance policies, insurance premiums paid are recognised as Prepayments and allocated to insurance expenses on a
monthly basis. As at 30 June 2022, $20,460 prepaid insurance was held under Prepayments.
Environmental bonds 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. The environmental bonds are held until rehabilitation of worksites are carried out.
Rehabilitation and monitoring is typically completed within 12 months. Environmental bonds totalling $130,784 are held by the DITT as
security in relation to current exploration activities in the Northern Territory and excludes $4,094 of the bonds that relate to the Moline
project, which have been recorded with the sale of the Moline assets (refer to note 10).
The office bond of $32,760 is invested in a 365-day term deposit maturing February 2023 and earning 0.25% interest.
9 OTHER FINANCIAL ASSETS
Investment in Sunstone Metals Ltd
30/06/22
$
270,000
30/06/21
$
193,380
During the financial year, the Group sold 6,892,013 of shares held in ASX listed Sunstone Metals Limited (‘Sunstone’ or ‘STM’, previously
Avalon Minerals Ltd) to net $677,434 after costs.
The Group continues to hold a balance of 6,000,000 shares in Sunstone. 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 2022, the investment was reflected at fair value of $270,000, with the incremental movement of $180,000 recorded at fair
value through other comprehensive income (FVOCI) - refer to Note 19.
43
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 10 SALE OF EXPLORATION ASSETS
Consideration:
Non-refundable deposit
Tranche 1 – forgiveness of the final payment on Glencoe acquisition
Tranche 2 – $1,500,000 cash receivable on completion
Total consideration
Carrying amount of the assets sold
Gain on sale of assets
$
50,000
700,000
1,500,000
2,250,000
1,715,455
534,545
On 28 February 2022, PNX Metals Limited agreed to divest the Moline project (tenements ML24173, MLN1059, MLN41 and EL28616) in
the Northern Territory to Sovereign Metallurgical Pty Ltd. The balance of capitalised Exploration and Evaluation expenditure of $1,715,455
for the Moline project as at 30 June 2022 was sold for total proceeds of $2,250,000. Completion of this transaction can occur within
18 months of the Agreement (Refer ASX release 1 March 2022), however the risks and rewards of these assets have transferred to the
purchaser at the time of the agreement.
Environmental bonds totalling $4,094 that relate to the Moline project are held by the DITT as security in relation to exploration activities in
the Northern Territory are to be refunded by Sovereign Metallurgical Pty Ltd on completion of the transaction.
Environmental bonds totalling $306,530 relating to the care and maintenance conditions for the Moline mineral leases are expected to be
returned to the Company pursuant to the Sale Agreement for the sale of the Moline tenements.
The total amount receivable at 30 June 2022 of $1,810,624 consists of the $1,500,000 Tranche 2 payment due on completion, and the
environmental bonds noted above for $310,624.
The Tranche 1 - forgiveness of the final payment on Glencoe acquisition has been treated as a non-cash transaction for cash flow
statement purposes (refer note 14).
11 EXPLORATION AND EVALUATION EXPENDITURE
Costs brought forward
Expenditure incurred during the year
South Australian expenditure not capitalised
Sale of Moline assets#
Security bonds offset against the carrying costs+
30/06/22
$
19,573,034
3,662,265
-
(1,715,455)
-
21,519,844
30/06/21
$
16,364,563
4,479,015
2,710
-
(1,273,254)
19,573,034
# Balance of capitalised Exploration and Evaluation expenditure of $1,715,455 for the Moline project as at 30 June 2022 was sold. Refer to Note 10.
+ During the year ended 30 June 2021, 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.
Project economics have remained positive for the Fountain Head Gold and Hayes Creek Projects during the financial year ended
30 June 2022, 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 (MRE) as announced on
28 April 2021 and updated MRE as announced on 30 August 2022.
The PFS for the Fountain Head gold and Hayes Creek zinc-gold-silver- 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 following the lodgement of a suite of documents in late July 2022 in response to the
second Direction from the NTEPA. Feedback from the NT EPA has been positive to date with EIS approval expected late in 2022 based
on statutory timeframes.
The Group continues with its review of the Burnside and other 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 and Evaluation Expenditure during the year ended 30 June 2022.
44
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 12 MOTOR VEHICLES, PLANT, EQUIPMENT AND RIGHT OF USE ASSETS
COST
Balance at 30 June 2020
Additions
Disposals
Balance at 30 June 2021
Additions
Disposals
Balance at 30 June 2022
Accumulated depreciation
Balance at 30 June 2020
Depreciation expense
Depreciation capitalised to exploration assets
Disposals
Balance at 30 June 2021
Depreciation Expense
Depreciation capitalised to exploration assets
Disposals
Balance at 30 June 2022
Net book value – motor vehicles, plant,
equipment and right of use
Balance at 30 June 2021
Balance at 30 June 2022
MOTOR VEHICLES,
PLANT AND EQUIP
$
RIGHT OF
USE ASSETS
$
545,676
5,486
-
551,162
8,980
(140,000)
420,142
530,907
7,384
3,526
-
541,817
3,398
2,872
(140,000)
408,087
9,345
12,055
-
50,772
-
50,772
221,422
-
272,194
-
3,693
-
-
3,693
75,057
-
-
78,750
47,079
193,444
TOTAL
$
545,676
56,258
-
601,934
230,402
(140,000)
692,336
530,907
11,077
3,526
-
545,510
78,455
2,872
(140,000)
486,837
56,424
205,499
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
2022 balance of $205,499 for the net book value, an amount of $193,444 relates to right of use Assets.
13 OTHER FINANCIAL ASSETS – NON CURRENT
Environmental bonds (care and maintenance)
30/06/22
$
784,055
30/06/21
$
1,090,585
Environmental bonds are required to be lodged with the Department of Industry, Tourism and Trade (DITT) in the Northern Territory in
relation to the Care and Maintenance conditions mineral leases, in the Northern Territory. Accordingly, environmental bonds totalling
$784,055 are held by the DITT as security in relation to the conditions of the Fountain Head mineral leases. Environmental bonds totalling
$306,530 relating to the Moline mineral leases are expected to be returned to the Company as part of the sale of the Moline project as at
30 June 2022. Refer to Note 10.
45
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 14 TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Accrued completion payment for the acquisition of Glencoe#
Other payables
30/06/22
$
469,076
77,449
-
21,626
568,151
30/06/21
$
313,425
36,670
700,000
25,770
1,075,865
# On 28 February 2022, PNX Metals Limited agreed to divest the Moline project (tenements ML24173, MLN1059, MLN41 and EL28616) in the Northern
Territory to Sovereign Metallurgical Pty Ltd, a subsidiary of Ausgold Trading Pty Ltd (Ausgold). The completion of this transaction to occur within
18 months of the Agreement. (Refer ASX release 1 March 2022). As The Glencoe title was transferred to PNX contemporaneous with execution of the
Moline Agreement, the tranche #1 payment of $700,000 pursuant to the Moline agreement was waived and offset against the $700,000 payment for the
completion payment of the acquisition of the Glencoe tenement (refer to note 10).
Average credit period on trade payables is 30 days.
15 PROVISIONS
Current
Employee benefits – annual leave
Employee benefits – long service leave
Non-current
Employee benefits – long service leave
16 LEASE LIABILITIES
Lease liabilities – current
Lease liabilities – non-current
17 FINANCIAL LIABILITIES
Silver streaming receipts
30/06/22
$
86,166
116,995
203,161
30/06/21
$
70,933
81,336
152,269
-
15,091
30/06/22
$
90,152
115,709
30/06/21
$
8,886
41,026
30/06/22
$
30/06/21
$
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 336,000 oz of
silver, to be delivered over a 3 year period once commissioning and ramp up of the Fountain Head 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 Fountain Head Project, and will be paid for a 5-year period. PNX can buy back the NSR royalty from an investor prior to the
commencement of production for $0.4 million.
These original 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 financial 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 may be converted to shares in the Company.
46
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 18 ISSUED CAPITAL
4,444,057,807 fully paid ordinary shares (2021: 3,652,193,511)
57,458,856
Movement in ordinary shares for the year:
30/06/22
$
30/06/21
$
53,545,287
NO.
30/06/22
$
NO.
30/06/21
$
Ref
Balance at beginning of year
3,652,193,511
53,545,287
2,542,621,476
47,072,054
a)
b)
c)
d)
e)
Shares issued at 0.5 cents under a non-
renounceable rights issue (NRRI)
Placement shares issued at 0.6 cents
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.
Shares issued at 0.6 cents for the placement
of the shortfall under the NRRI.
Share issue costs
791,864,296
3,959,321
-
-
-
-
-
-
-
-
-
-
-
378,333,333
2,270,000
527,950,076
3,167,700
1,000,000
6,000
202,288,626
1,213,732
(45,752)
-
(184,199)
Balance at end of year
4,444,057,807
57,458,856
3,652,193,511
53,545,287
Fully paid shares carry one vote per share and a right to dividends.
a) 791,864,296 shares were issued to shareholders who subscribed for shares under a non-renounceable rights issue at 0.5 cents per
share (NRRI) on 16 February 2022
b) 378,333,333 shares were issued at 0.6 cents under a placement to sophisticated and professional investors on 2 December 2020.
c) 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.
d) 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.
e) 202,288,626 shares were issued at 0.6 cents per share under the placement of the NRRI shortfall on 29 January 2021.
19 RESERVES
FVOCI investment
Equity-settled benefits
30/06/22
$
180,000
233,316
413,316
30/06/21
$
-
127,143
127,143
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 ASX listed Sunstone Metals Ltd (STM) of $270,000 as at 30 June 2022.
During the financial year, the Group sold 6,892,013 shares held in STM (refer to Note 9 for further information). The Group continues to
hold a balance of 6,000,000 shares in Sunstone as at 30 June 2022. An adjustment of $579,321 was transferred to Retained Earnings to
move excess FVOCI reserve relating to the Non-Renounceable STM shares that were sold during the year.
At 30 June 2022, the investment was reflected at fair value of $270,000, with the incremental movement of $180,000 recorded at fair
value through other comprehensive income (FVOCI).
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 2022, includes an adjustment for lapsed rights
during the financial year. 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.
47
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 During the year, no new 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. For the Rights to vest, participants of the Group’s Performance
Rights Plan are subject to remain employed by the Company, and also subject to performance conditions related to key Company
objectives, including:
1) 25% will vest if the Company’s share price increases by at least 100% based on a 12-month VWAP for a financial year under review
during the term of the performance rights when compared to the previous financial year.
2) 25% will vest if the Company receives of all required government approvals for the construction of an operating mine at Fountain
Head.
3) 25% will vest upon the receipt of payment for the first sale of product from the commencement of production on the Fountain Head
mining lease.
4) 25% will vest if the Company delineates through exploration, or secures through acquisition, new resources and reserves to extend
mine life by at least 2 years (or at least double the Fountain Head resource inventory either at Fountain Head or elsewhere within
trucking distance of Fountain Head)
5,000,000 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 $142,544. 5,000,000 Performance Rights lapsed during
the year and an amount of $36,371 was transferred to retained earnings. A total of $233,316 held in the equity-settled benefits reserve
represents the value relating to the Performance Rights on issue as at 30 June 2022.
Further information on share-based payments is disclosed in Note 21.
20 ACCUMULATED LOSSES
Balance at beginning of year
Lapsed performance rights transferred to accumulated losses (Note 19)
Fair value OCI adjustment to retained earnings (Note 19)
Loss for the year
Balance at end of year
21 PERFORMANCE RIGHTS AND SHARE OPTIONS
Performance rights
30/06/22
$
32,587,459
(36,371)
(579,321)
764,024
32,735,791
30/06/21
$
31,391,477
(60,097)
-
1,256,079
32,587,459
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.
During the financial year ended 30 June 2022 no performance rights were granted under the plan. As at 1 July 2021, there were
54,300,000 unvested Performance Rights on issue under the Plan as follows:
»
»
»
»
800,000 Performance Rights were held by the Company’s Managing Director & CEO and were originally issued on 8 February 2017;
5,000,000 Performance Rights were held by the Company’s Managing Director & CEO were originally issued on 3 December 2018;
25,000,000 Performance Rights were held by the Company’s Managing Director & CEO were originally issued on 27 January 2021;
and
23,500,000 Performance Rights were held by Company executives and employees were originally issued on 1 February 2021.
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.
The total remaining 49,300,000 unvested Performance Rights at 30 June 2022 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.
48
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 For the Rights to vest, participants of the Group’s Performance Rights Plan are subject to remain employed by the Company, and also
subject to performance conditions related to key Company objectives, including:
1) 25% will vest if the Company’s share price increases by at least 100% based on a 12-month VWAP for a financial year under review
during the term of the performance rights when compared to the previous financial year.
2) 25% will vest if the Company receives of all required government approvals for the construction of an operating mine at Fountain
Head.
3) 25% will vest upon the receipt of payment for the first sale of product from the commencement of production on the Fountain Head
mining lease.
4) 25% will vest if the Company delineates through exploration, or secures through acquisition, new resources and reserves to extend
mine life by at least 2 years (or at least double the Fountain Head resource inventory either at Fountain Head or elsewhere within
trucking distance of Fountain Head)
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.
During the year, the balance of 359,125,000 unquoted options exercisable at 1.464 cents each, expired on 30 September 2021.
At 30 June 2022, there were no options on issue, as per the table below.
OPTIONS
30/06/22
NUMBER OF
OPTIONS
30/06/22
WEIGHTED AVERAGE
EXERCISE PRICE $
30/06/21
NUMBER OF
OPTIONS
30/06/21
WEIGHTED AVERAGE
EXERCISE PRICE $
Balance at beginning of the year
359,125,000
0.01464
379,125,000
0.01498
Options granted
Options exercised
Options lapsed
-
-
-
-
-
-
(359,125,000)
0.01464
20,000,000
Balance at end of the year
-
-
359,125,000
-
-
0.01470
0.01464
22 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, Non-executive Director
»
»
»
»
Frank Bierlein, Non-executive Director
Richard Willson, Non-executive Director
James Fox, Managing Director & Chief Executive Officer
Angelo Gaudio, Chief Financial Officer and Company Secretary
» Craig Wilson, Mining, Infrastructure and Studies Manager
The aggregate compensation of Key Management Personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
30/06/22
$
935,975
64,408
134,400
1,134,783
Details of Key Management Personnel compensation are disclosed within the Remuneration Report in the Directors’ Report.
30/06/21
$
612,898
33,422
85,465
731,785
49
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 23 REMUNERATION OF AUDITOR
Audit and review of the financial reports
Other services – tax advisory services
30/06/22
$
46,174
-
46,174
30/06/21
$
39,473
10,500
49,973
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.
24 RELATED PARTY DISCLOSURES
a) Subsidiaries
Detail of the percentage of ordinary shares held in the Company’s subsidiary is disclosed in Note 29.
b) Other related party transactions
Mr. Fox incurred out of pocket expenses throughout the year on behalf of the Group. At 30 June 2022 a reimbursement to Mr. Fox of
$464 was outstanding (2021: $585).
25 COMMITMENTS FOR EXPENDITURE AND CONTINGENCIES
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 2022 in respect of minimum expenditure requirements not provided for in the financial
statements are approximately:
Minimum exploration expenditure on exploration licences
b) Royalty agreements
30/06/22
$
472,056
30/06/21
$
513,130
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.
¬ Ausgold Trading Pty Ltd – 1% gold and silver and 2% other metals net smelter return royalty for product produced from the
Glencoe tenement.
¬ Oz Uranium Pty Ltd – 1% hard rock mineral net smelter royalty for production from 2 mineral leases, 1 mineral lease application
and 5 exploration leases in the Northern Territory.
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.
d) Moline asset sale
On 28 February 2022, PNX Metals Limited agreed to divest the Moline project (tenements ML24173, LN1059, MLN41 and EL28616)
in the Northern Territory to Sovereign Metallurgical Pty Ltd. As settlement for Tranche 2 of the agreement, PNX at its election can
receive cash of $1,500,000, or shares in any listing transaction, of up to a further $2.25 million upon transfer of Moline title.
50
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022
26 FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Categories of financial instruments
Financial assets
Cash and cash equivalents
Deposits
Trade and other receivables
Environmental bonds
Other financial assets – investment in Sunstone
Financial liabilities
Trade and other payables
Lease liabilities
Financial liabilities
30/06/22
$
3,701,939
163,544
1,810,657
784,055
270,000
546,025
205,861
2,400,000
30/06/21
$
3,632,252
164,882
2,362
1,090,585
193,380
1,050,095
49,912
2,400,000
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 6,000,000
shares as at 30 June 2022 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 $60,000.
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 $1,285 (2021: increase or decrease by approximately $2,989).
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.
51
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 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.
2022
Non-interest bearing
Fixed interest bearing
2021
Non-interest bearing
Fixed interest bearing
WEIGHTED AVERAGE
EFFECTIVE INTEREST RATE
%
LESS THAN
ONE MONTH
$
-
6.6%
-
2.9%
469,576
-
232,551
-
1-3 MONTHS
3-12 MONTHS
1-5 YEARS
$
99,075
24,875
36,670
2,222
$
-
$
2,400,000
74,626
106,360
700,000
2,400,000
6,664
41,026
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 17) 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.
27 SEGMENT INFORMATION
The Group has a number of exploration tenements in the Northern Territory, which it manages on a portfolio basis. 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.
The Group operates as one segment being exploration and evaluation for minerals in the 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.
28 EARNINGS PER SHARE
Basic and diluted loss per share- continuing operations
(0.02)
(0.04)
30/06/22
CENTS PER SHARE
30/06/21
CENTS PER SHARE
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 $
(764,024)
(1,256,079)
Weighted average number of ordinary shares
3,945,074,826
3,120,018,894
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.
52
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 29 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
2022
%
OWNERSHIP INTEREST
2021
%
(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.
30 PARENT ENTITY DISCLOSURES
See below the supplementary information about the parent entity.
Commitments for expenditure and contingent liabilities of the parent entity
Note 25 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
Reserves
Accumulated losses
Total equity
Statement of profit or loss and other comprehensive income
Income
Total comprehensive loss for the year
31 SUBSEQUENT EVENTS
30/06/22
$
4,193,532
28,513,554
861,464
3,377,173
25,136,381
57,458,856
413,316
(32,735,791)
25,136,381
30/06/21
$
4,058,065
24,778,108
1,237,020
3,693,137
21,084,971
53,545,287
127,143
(32,587,459)
21,084,971
643,874
4,703
117,517
1,152,943
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.
53
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2022 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 2022
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 Corporations 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
21 September 2022
54
PNX METALS LIMITED | ANNUAL REPORT 2022 INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of PNX Metals Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of PNX Metals Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
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55
PNX METALS LIMITED | ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
Material uncertainty related to going concern
We draw attention to Note 3 (a) in the financial statements, which indicates that the Group incurred a net loss of
$764,024 during the year ended 30 June 2022, and as of that date, the Group’s net operating cash out flow from
operating and investing activities is $3,767,279. As stated in Note 3 (a), these events or conditions, along with
other matters as set forth in Note 3 (a), indicate that a material uncertainty exists that may cast doubt on the
Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets - Notes 3(g) and
11
At 30 June 2022 the carrying value of exploration and
evaluation assets was $21,519,844.
Our procedures included, amongst others:
• obtaining the management reconciliation of
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group is required
to assess at each reporting date if there are any
triggers for impairment which may suggest the carrying
value is in excess of the recoverable value.
•
capitalised exploration and evaluation expenditure
and agreeing to the general ledger;
reviewing management’s area of interest
considerations against AASB 6;
The process undertaken by management to assess
whether there are any impairment triggers in each area
of interest involves an element of management
judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
• conducting a detailed review of management’s
assessment of trigger events prepared in
accordance with AASB 6 including;
−
tracing projects to statutory registers, exploration
licenses and third party confirmations to
determine whether a right of tenure existed;
− enquiry of management regarding their intentions
to carry out exploration and evaluation activity in
the relevant exploration area, including review of
management’s budgeted expenditure;
− understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely to
be recovered through development or sale;
• evaluating the competence, capabilities and
objectivity of management’s experts in the
evaluation of potential impairment triggers;
•
reviewing the sale contract for Moline assets and
related accounting; and
• assessing the appropriateness of the related
financial statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
#8234372v8
Grant Thornton Australia Limited
2
(cid:3)
56
PNX METALS LIMITED | ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Company’s/Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Company/Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended
30 June 2022.
In our opinion, the Remuneration Report of PNX Metals Limited, for the year ended 30 June 2022 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
I S Kemp
Partner – Audit & Assurance
Adelaide, 21 September 2022
#8234372v8
Grant Thornton Australia Limited
3
(cid:3)
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PNX METALS LIMITED | ANNUAL REPORT 2022
ADDITIONAL SHAREHOLDER INFORMATION
as at 31 August 2022
SHARES
The total number of shares issued as at 31 August 2022 was 4,444,057,807 held by 1,571 registered shareholders.
700 shareholders hold less than a marketable parcel, based on the market price of a PNX share as at 31 August 2022.
Each share carries one vote.
PERFORMANCE RIGHTS/OPTIONS
As at 31 August 2022, the Company had 49,300,000 Performance Rights and Nil unquoted options on issue. During the year,
359,125,000 options exercisable at 1.464 cents, expired on 30 September 2021.
TWENTY LARGEST SHAREHOLDERS
As at 31 August 2022, the twenty largest Shareholders were as shown in the following table and held 77.39% of the Shares:
RANK
NAME
SHARES
% OF SHARES
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT\C
2,025,452,543
45.58
SOCHRASTEM SA\C
MARILEI INTERNATIONAL LIMITED
BNP PARIBAS NOMS PTY LTD
ROBERT LEON
POTEZNA GROMADKA LTD
CREATIVE DENTAL ADELAIDE
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TALIS SA\C
ESM LIMITED
CITICORP NOMINEES PTY LIMITED
KOMON NOMINEES PTY LTD
MR BRUCE JAZIE OZIMEK
LADYMAN SUPER PTY LTD
BNP PARIBAS NOMINEES PTY LTD
PJ & BA DOWD INVESTMENTS PTY LTD
WGS PTY LTD
LATSOD PTY LTD
SYNOD NOMINEES PTY LTD
MR MARK ANDREW TKOCZ
Total
264,692,564
220,957,619
193,723,930
128,331,253
112,758,817
83,100,000
81,196,526
49,149,505
45,000,000
38,657,246
30,848,793
29,257,886
27,812,500
27,184,897
26,693,298
25,888,888
25,287,202
24,000,000
23,000,000
5.96
4.97
4.36
2.89
2.54
1.87
1.83
1.11
1.01
0.87
0.69
0.66
0.63
0.61
0.60
0.58
0.57
0.54
0.52
3,482,993,467
78.37
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
58
PNX METALS LIMITED | ANNUAL REPORT 2022 ADDITIONAL SHAREHOLDER INFORMATION
as at 31 August 2022
SUBSTANTIAL SHAREHOLDERS
As at 31 August 2022, the substantial Shareholders in the Company’s Register of Substantial Shareholders are listed below:
SHAREHOLDER
Delphi Unternehmensberatung Aktiengesellschaft\C
Sochrastem SA\C
HOLDING
2,025,452,543
264,692,564
%
45.58
5.96
DISTRIBUTION SCHEDULES
A distribution schedule of the number of Shareholders, by size of holding, as at 31 August 2022 is set out below:
SIZE OF HOLDINGS
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
NUMBER OF SHAREHOLDERS
% OF SHARES
67
40
51
487
926
1,571
0.00
0.00
0.01
0.66
99.33
100.00
There is no current on-market buy-back.
There are no Unlisted Options on issue and accordingly no distribution schedule of the number of Option-holders as at
31 August 2022.
VOTING RIGHTS
Subject to the Company Constitution:
a) at meetings of shareholders, each shareholder is entitled to vote in person, by proxy, by attorney or by representative;
b) on a show of hands, each shareholder present in person, by proxy, by attorney or by representative is entitled to one vote; and
c) on a poll, each shareholder present in person, by proxy, by attorney or by representative is entitled to one vote for every share
held by the shareholder.
In the case of joint holdings, only one joint holder may vote.
ENQUIRIES FROM SHAREHOLDERS
Shareholders wishing to record a change of address or other holder details or with queries regarding their Shareholding should
contact the Company’s share registry, Computershare, as detailed in the Corporate Directory at the front of this Annual Report.
Shareholders with any other query are invited to contact the Company’s registered office as detailed in the Corporate Directory at the
front of this Annual Report.
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PNX METALS LIMITED | ANNUAL REPORT 2022