PNX METALS LIMITED ABN 67 127 446 271
ANNUAL REPORT 2023
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
Rowan Johnston – Non-executive Director
James Fox – Managing Director & CEO
Company Secretary
Angelo Gaudio
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
Principal Administrative Office
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/
Level 1, 135 Fullarton Road
Rose Park SA 5067
Telephone: +61 (8) 8364 3188
Facsimile: +61 (8) 8364 4288
Registered 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 and page 3 photos: Aircore drilling at Glencoe.
2
PNX METALS LIMITED | ANNUAL REPORT 2023 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
14
16
20
27
33
34
38
57
INDEPENDENT AUDITOR’S REPORT TO MEMBERS 58
ADDITIONAL SHAREHOLDER INFORMATION
61
3
PNX METALS LIMITED | ANNUAL REPORT 2023 CHAIRMAN’S LETTER
Dear Fellow Shareholders,
On behalf of the Board of Directors, it is my pleasure to present the 2023 Annual Report for PNX Metals Limited (‘PNX’
or ‘Company’).
During the year PNX continued to increase its mineral resource base, progress development studies and advance the
permitting of its wholly owned Fountain Head gold and Hayes Creek zinc-gold-silver projects (‘Projects’).
The Projects are underpinned by a significant Mineral Resource estimate (MRE), which, after the addition of the Mt Porter
gold deposit and the update of the Glencoe MRE during the year increased to 520,900 oz gold, 16.2 million-oz silver,
177,000 t zinc, 37,000 t lead and 10,000 t copper (refer ASX release 28 September 2022).
As I noted in my letter to Shareholders last year, inflationary conditions globally have resulted in significant increases and
uncertainty relating to costs, timeframes, and delivery schedules for many mining projects and this includes Hayes Creek
and Fountain Head. However, the Board and management remain confident that continued work to complete the sequential
permitting and approvals while exploring for new resources will provide a clear pathway for continued growth of the project
to deliver strong returns for PNX shareholders.
Significant progress on permitting was made during the year under review, the highlight being the receipt of environmental
approvals for Fountain Head in February ‘23, that de-risks the development process and is a key component typically
required by financiers. The Fountain Head Environmental Impact Statement was submitted in mid-2022, represents a
comprehensive body of work that contains multiple risk assessments, including studies on groundwater and surface water,
biodiversity, Aboriginal and cultural heritage, socioeconomic impacts, transport, air quality, noise, and closure/rehabilitation.
Exploration continues to deliver strong results from our extensive holdings in the highly prospective Pine Creek region that
cover more than 1,500 km2. Drilling in the vicinity of the Glencoe gold deposit during the year intersected several new gold
targets and was successful in demonstrating continuity of the Central Zone to the east.
On the Burnside Northern Leases, multiple new targets have been identified within kilometre-scale gold corridors, with
the potential to host economically significant gold mineralisation, including the high grade C6 gold prospect. Assays from
surface rock chip samples at C6 returned very high gold grades of up to 189 g/t gold. This new high-grade zone is located on
100% owned tenure and as no historic drilling has been undertaken in the immediate vicinity of C6, the prospect is open in
all directions.
Recently PNX completed trenching in the vicinity of C6 to expose and better sample the high-grade gold zones at surface.
Early results are very encouraging and include intervals of 1.5 m @ 21.5 g/t gold and 1.0 m @ 30.7 g/t gold from sampling of
weathered bedrock.
An initial program of near-surface Aircore drilling was completed in early September with assays pending, and RC drilling
is planned for the September 2023 quarter. These early, strong results mean the field teams will be very active assessing
several targets for new discoveries in the area for the next few months.
Before closing, 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 2024.
Yours sincerely,
Graham Ascough
Chairman
6 October 2023
4
PNX METALS LIMITED | ANNUAL REPORT 2023 OVERVIEW
During the year, the Company continued to advance a program for the sequential development of its
100%-owned Fountain Head gold and Hayes Creek zinc-gold-silver Projects, so that an investment
decision can be made once Government and Environmental approvals and Project financing have been
achieved. The Projects host considerable mineral resources and are all located on 100%-owned Mineral
Leases (MLs), in the Pine Creek region of the Northern Territory, approximately 170 km from Darwin.
The Company has developed an integrated strategy to mine
and process Mineral Resources (MRE) via a staged approach
from the five discrete deposits that make up the Project, and
a Pre-Feasibility Study (PFS) (excluding the recently acquired
Mt Porter gold deposit) was completed detailing this strategy
(refer ASX release 17 June 2021).
During February 2023, the Company was granted environmental
approval under the NT Environment Protection Act 2019
(EP Act). The grant of the environmental approval, completes
the EIS process for Fountain Head and enabled the Company to
submit a Mining Management Plan (MMP) to the Department of
Industry, Tourism & Trade (DITT) for assessment.
During the year, evaluation of and testing of gold exploration
prospects advanced and the Company believes there is
potential to augment its overall Project scale and scope through
successful exploration and/ or acquisition. The newly discovered
high-grade C6 gold prospect highlights the undeveloped
potential of the region.
The Company also entered an agreement to acquire the Mount
Porter gold deposit (refer ASX release 28 September 2022),
with completion due in late 2023. Mount Porter is a ‘bolt-on’
asset with a MRE of 0.68 Mt @ 2.2 g/t Au for 48,200 (Indicated
and Inferred; reported in accordance with the JORC Code,
2012) and strong exploration potential. This acquisition is
consistent with the Company’s strategy to consolidate nearby
projects which host existing gold, silver or base metals MRE to
support its proposed Project development and have significant
exploration upside.
An updated MRE was also completed for the 100% owned
Glencoe gold deposit (refer ASX release 30 August 2022), that
returned 2.1 Mt @ 1.2 g/t Au for 79,000 oz Au and significantly
improved geological classification with 77.4% of the Glencoe
MRE now reporting to the higher-confidence Measured and
Indicated categories.
The Company’s global Mineral Resources now contain 520,900
oz Au, 16.2 million oz Ag, 177,000 t Zn, 37,000 t Pb and 10,000t
Cu (estimated in accordance with the 2012 JORC Code1), (refer
ASX release 28 September 2022 for a summary of the MRE by
the Competent Persons and JORC Table 1)2.
All tenements remain in good standing with statutory reporting
up to date.
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 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint Ore
2
Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).
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 2023 OVERVIEW
HEALTH AND SAFETY
There were no reportable safety or environmental incidents during the year.
The safety and welfare of the Group’s employees and contractors is paramount and
a comprehensive risk register and safe operating procedures are maintained and
regularly reviewed.
KEY FINANCIAL RESULTS
($000’S, EXCEPT AS INDICATED)
30 JUNE 2023
30 JUNE 2022
Interest/other income
Gain on sale of tenements
Corporate/administrative costs
Impairment –exploration assets
(Income)/loss on Sunstone investment
74
-
1,547
-
114
109
535
1,407
-
(759)
Comprehensive loss after tax
1,587
5
Comprehensive loss per share
0.03 cents
0.02 cents
Net operating cashflows
Exploration expenditure
Funds raised – equity (net of costs)
Cash on hand
Net working – capital1
Investment in Sunstone – at fair value
Capitalised exploration expenditure
Debt
Lease liabilities
Contract liabilities – silver streaming
Net assets
(1,243)
(2,398)
2,718
2,725
4,283
156
23,566
-
124
2,400
26,423
(948)
(3,499)
3,914
3,702
3,062
270
21,520
-
206
2,400
25,136
Number of shares on issue
5,380,624,719
4,444,057,807
Number of performance rights on issue
141,800,000
49,300,000
Number of unlisted options on issue
-
-
Share price (ASX: PNX)2
0.2 cents
0.4 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 $1.47 million
(2022: $0.76 million).
The comparable pre-tax loss is not
unexpected given PNX’s corporate cost
structure has not significantly changed
and exploration costs in the Northern
Territory (the primary area of expenditure)
are capitalized, together with the gain
of $535k which was recorded on the
sale of the Moline tenements during
the previous annual period. Corporate
and administration costs include head
office wages, directors’ fees, audit fees,
insurance, professional fees, regulatory,
occupancy and communications,
and collectively have increased by
approximately 9% over the period.
Net cash outflow of $977k for the
year primarily reflects payments for
investing activities, including exploration
($2.4 million) and to suppliers and
employees ($1.2 million), financed
through new shares issued ($2.7 million
after costs). Exploration and Evaluation
cash outflows of $2.4 million consisted
of $0.7 million at the Fountain Head
gold project, $0.6 million at Glencoe
(including an updated MRE being
completed and reported in accordance
with the JORC Code 2012, released to
the ASX 30 August 2022), $0.6 million
at the Northern Burnside exploration
Leases, $0.2 million at Hayes Creek
and $0.3 million at other NT regional
exploration for the year.
The Company raised $2.8 million (before
costs) during February 2023 under a
non-renounceable rights issue of one (1)
for every three (3) shares held at a price of
0.3 cents per share.
At 30 June 2023, the Group had no
debt, and:
•
•
cash holdings of $2.7 million, and
investment in Sunstone Metals Ltd
valued at $0.16 million.
6
PNX METALS LIMITED | ANNUAL REPORT 2023 EXPLORATION REPORT
BURNSIDE EXPLORATION
PNX’s main exploration tenure is the
Burnside Project which covers more
than 1,000 km2 of contiguous, highly
prospective (for gold/silver, base metals
and uranium) granted Exploration
Licences between Adelaide River and
Pine Creek. The area has a substantial
gold endowment with a long history of
prospecting and mining dating back to
the late 1800’s. The Fountain Head and
Hayes Creek developments are in the
south-east portion of the Burnside tenure
(Figure 2).
The Company has applied new
exploration concepts and modern
exploration methodologies, including
detailed drone magnetics surveys, to
assess their tenure in view of a stronger
gold price. Historic gold exploration relied
heavily on surface prospecting, and, as
such, large areas with limited outcrop
near existing mineralisation remain
essentially untested.
Of the 36,000 holes drilled by previous
explorers at Burnside, 70% have a depth
extent of 10 m or less. The Company
believes there is still considerable
potential for discovery of significant
gold resources. Systematic review,
incorporating both empirical data and
fresh conceptual modelling of historic
drilling and >30,000 soils samples,
has identified areas with the potential
to host ‘standalone’ gold deposits,
and supplement and extend the
proposed gold processing operations at
Fountain Head.
This systematic exploration methodology
has led to the identification of high-priority
regional gold targets and reinforces
the Company’s belief that the Burnside
Project has potential to support a long-life
gold mining operation starting at Fountain
Head and supported by new regional
discoveries in the longer term.
Figure 2 Burnside Exploration Project, PNX’s and other parties’ ML on regional
TMI magnetics.
7
PNX METALS LIMITED | ANNUAL REPORT 2023 EXPLORATION REPORT
The Northern Leases are located in
the north-west of the Burnside project
and host multiple kilometre-scale gold
targets with the potential for economically
significant gold mineralisation along the
same structural corridor as the Cosmo
Howley gold mine (owned by Agnico
Eagle Mines Limited) (refer ASX release
13 February 2023) and the historic
Goodall gold mine3.
Follow-up fieldwork in this area led to the
discovery of very high-grade surface gold
at the C6 prospect in a parallel structural
corridor ~3.5 km to the WNW of the
historic Goodall gold mine (Figure 3). Of
the initial 22 surface samples taken (refer
ASX release 31 May 2023), all returned
elevated gold and 15 returned assays
greater than 1 g/t gold including five
samples over 100 g/t gold with a peak
value of 186.6 g/t gold. The new high-
grade zone at C6 is located on PNX’s
100% owned EL31893.
The C6 corridor is characterised by an
intense gold-in-soil anomaly with multiple
>1 g/t gold-in-soil values (maximum
of 3.46 g/t) over a 1.2 km extent.
Significantly, no drilling to basement has
been undertaken in the immediate vicinity
of these new high-grade surface samples.
Due to a lack of surface outcrop and to
improve geological understanding at
the C6 gold prospect, six (6) costeans
approximately 100 m long were excavated
(Figure 4) and a sub-vertical 2.5 m wide
zone of quartz vein, gossan and siltstone
was exposed. The gossan is interpreted
to be weathered primary sulphide, with
remnant pyrite and arsenopyrite found
within adjacent massive quartz likely to
be the main sulphides weathered to form
the gossan.
Initial costean samples (refer ASX release
29 August 2023) returned significant gold
intersections, including:
•
•
•
21.5 g/t Au over 1.5 m in upper south
section in costean 3,
30.7 g/t Au over 1.0 m in upper north
section in costean 3, and
28.5 g/t Au over 0.5 m in the upper
and lower south section in costean 4.
Aircore drilling (fifty-two (52) drill holes
for a total of 1,030 m) was subsequently
Figure 3 PNX rock chips and costeans (green lines), historic drilling and limited historic soil
anomalies. Yellow dashed lines represent interpreted gold trends.
used to target the down-dip and down-
plunge extensions of the new high-grade
gold zone and explore for other zones
in the immediate area where there is no
outcrop. At the time of this report, assays
were pending.
The Company also completed two
costeans at their Brumby/Bartons gold
prospect, which is ~3.4 km further west,
where there are also excellent historic
results confirmed by recent PNX surface
samples (refer ASX release 13 February
2023). Aircore drilling is also planned at
Brumby/Bartons in October 2023.
High-grade surface gold samples have
been collected along the greater C6
north-south corridor with +10 g/t gold
samples extending over >2.8 km strike
extent (Figure 3), (refer ASX release
29 August 2023):
3
The Goodall gold deposit had a pre-mining resource of 4.25 Mt @ 2.35 g/t Au. It was mined between 1988 and 1993, producing 7.1 t of gold from 4.095 Mt @
1.99 g/t Au (Quick 1994).
8
PNX METALS LIMITED | ANNUAL REPORT 2023 Figure 4 Location of costeans,
aircore drill holes and rock
chip samples at C6.
EXPLORATION REPORT
DRONE-BASED MAGNETIC
LIDAR SURVEYS
Detailed, drone-based magnetic-LiDAR
surveys were flown over Fountain Head-
Glencoe and the Hayes Creek areas.
The surveys were co-funded by Grants
NT in Round 15 of the Northern Territory
Geophysics and Drilling Collaborations
program (refer ASX release 2 June 2022).
The images generated by the surveys
show much greater detail than previous
surveys (Figure 5) and permit confident
delineation of the folded and faulted
magnetic stratigraphy, particularly where
it is covered by transported sediments
(refer ASX release 17 November 2022).
The results of these surveys, (Figure 5),
demonstrate the usefulness of drone
magnetics and so a new survey is
currently being flown over the Northern
Leases area. This survey will cover
more than 50 km2 at 40 m line-spacing,
including over the C6 and Brumby/
Bartons gold corridors and the historic
Goodall gold mine.
Figure 5 New magnetic imagery from recent drone survey over the Glencoe and Fountain Head gold, and Mt Bonnie and Iron Blow zinc-
gold-silver deposits. Background image: regional Total Magnetic Intensity.
9
PNX METALS LIMITED | ANNUAL REPORT 2023 EXPLORATION REPORT
FOUNTAIN HEAD – GLENCOE FLIGHT AREA
GLENCOE EXTENSIONAL DRILLING
Detailed images were generated of an ~1.2 km wide package of highly magnetic rocks
buried beneath transported sediments between Glencoe and Fountain Head (Figure
6). Based on the known regional geology, the magnetic units are interpreted to be iron-
rich horizons within the Koolpin Formation which hosts several nearby gold deposits,
including Cosmo-Howley, Mount Porter and Golden Dyke. Folds sub-parallel to the
known Fountain Head and Glencoe anticlines are also highlighted which is a common
structural control to gold mineralisation in the Pine Creek area.
Additionally, north-south trending faults can be traced in the images and are most
intense in a ~1.5 km wide corridor between Glencoe and Fountain Head. These
interpreted faults are subparallel to the Tally Ho gold lodes at Fountain Head and gold-
bearing quartz veins at Glencoe.
The combination of prospective folded stratigraphy and oblique cross-cutting structures
with the same orientation as known high-grade gold mineralisation at Tally Ho and
Glencoe support this location as highly prospective for new gold mineralisation. Most of
this area is covered by transported sediments of unknown thickness.
Following recommendations made
in the Glencoe MRE, and to test for
extensions to gold-rich quartz veins
oblique to the main resource lodes
(refer ASX release 16 December 2022),
eighteen (18) RC drill holes for a total of
1,740 metres were completed (Figure 7).
The drilling was successful and extended
the Glencoe Central Gold Zone to the east
by approximately 200 m and demonstrated
that the gold-bearing quartz veins oblique
to the main gold mineralisation, and
interpreted to be those imaged by drone
magnetics, extend to depth and the south.
No update was made to the MRE at
that time.
Figure 6 Location of aircore drilling between Glencoe and Fountain Head over drone magnetic Total Magnetic Intensity.
10
PNX METALS LIMITED | ANNUAL REPORT 2023 EXPLORATION REPORT
GLENCOE-FOUNTAIN HEAD
CORRIDOR AIRCORE DRILLING
Based on interpretation of new data from
the drone-magnetic survey, and to follow
the RC drilling, sixty-four (64) near-surface
(depths between 10-32 m) aircore holes
for 1,409 m were completed further
south of Glencoe (Figure 6). The drill
holes penetrated bedrock through soil-
colluvium-alluvium cover varying between
2 and 9 m deep with an average less than
5 m. All drill holes intersected weathered
bedrock with 31 drill holes intersecting
quartz veins. No significant gold values
were intersected and further sampling
and interpretation is ongoing.
Figure 7 Glencoe November 2022 RC drilling, with interpreted faults shown as dashed lines.
11
PNX METALS LIMITED | ANNUAL REPORT 2023 EXPLORATION REPORT
HAYES CREEK FLIGHT AREA
The Hayes Creek drone-magnetic survey
(Figures 5 & 8) also gives great detail
and allows delineation of the folded and
faulted magnetic stratigraphy where it is
covered by transported sediments. New
discrete magnetic highs with similar
responses to the Mt Bonnie and Iron
Blow VMS deposits are discernible in
the images. The additional detail in the
western part of the survey area shows
that the Priscilla gold trend is displaced
along a northwest-trending fault. Similar
faults can also be seen elsewhere. This
interpretation identified numerous new
target areas which will be assessed
during the NT wet season and prioritised
accordingly for exploration during the
2024 season.
12
Figure 8 Coloured Total Magnetic Intensity draped over first vertical derivative for Hayes
Creek drone survey. Areas highlighted (white rings) refer to discrete magnetic-highs
of interest.
PNX METALS LIMITED | ANNUAL REPORT 2023 EXPLORATION REPORT
PROJECT GOVERNMENT AND
ENVIRONMENTAL APPROVALS
In February 2023, the Northern Territory
Minister for Environment, Climate Change
and Water Security granted environmental
approval for the Fountain Head gold
Project. The grant of environmental
approval is the culmination of a
significant body of work and a milestone
event in PNX’s Pine Creek integrated
development strategy.
The Fountain Head Environmental Impact
Statement (EIS), which was submitted in
mid-2022, 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.
The last step in the approvals process
for the Fountain Head gold Project is
the Mine Management Plan (‘MMP’)
which was submitted to the Department
of Industry, Tourism & Trade (‘DITT’)
for assessment in late May 2023. A
successful review of the MMP by DITT
could result in a Mining Authorisation
being provided in late 2023. The
Company is still waiting for feedback on
its submission.
PROJECT FINANCING
The Group has received and assessed
several term sheet proposals for
project debt finance with the minimum
requirements being an updated Project
feasibility assessment and Project
approvals. No decision has been made of
project financing at this stage.
PLANT AND INFRASTRUCTURE
ENGINEERING AND DESIGN, AND
PROJECT PFS
PNX’s PFS envisaged initial mining
and processing of gold ore (Stage 1)
for a minimum of 5 years at a newly
constructed carbon-in-leach (CIL)
processing plant to be located at
Fountain Head (refer ASX release 17 June
2021). Near-surface oxide and free-
milling gold mineral resources hosted
at Fountain Head, Glencoe and Mt
Porter total 283,200 ounces gold (refer
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 Hayes Creek zinc-gold-silver
development is to operate in parallel
(Stage 2 of PFS) and comprises the
Mt Bonnie and Iron Blow zinc-gold-silver-
rich massive sulphide deposits which
contain 237,700 ounces gold, 16.2 million
ounces silver, 177,000 tonnes zinc,
37,000 tonnes lead and 10,000 tonnes
copper (refer ASX announcement
3 May 2017 for full details including
JORC tables). The PFS considers the use
of the mined-out Fountain Head pit to
store tailings.
The basis of a staged approach is to best
use the Company’s resource inventory
and to enable a lower cost, lower risk
entry to generate shareholder value from
the Mineral Resources.
PNX’s intent is to minimise additional
disturbance, limit the Project’s footprint
to granted MLs, and to store any future
tailings sub-aqueously within existing
voids, or in voids that are created during
the mining process.
A parallel development-synergies study
is ongoing for the Project. The aim of
this study is to assess opportunities
identified through the integrated
flowsheet to improve capital efficiency;
overall resource utilisation; recoveries
and payment terms for metals produced;
tailings quality; and margins. Test-work
to recover additional gold lost through
the float tails, improve distribution and
recovery of payable metals, and assess
alternative processing of precious metals
is ongoing and expected to be complete
by the end of 2023.
BUSINESS DEVELOPMENT
Due diligence continues on 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.
13
PNX METALS LIMITED | ANNUAL REPORT 2023 TENEMENTS
NORTHERN TERRITORY
TENEMENT
NAME
HOLDER
AREA (hectare)
HAYES CREEK
Total Hayes Creek
GOLDEN DYKE
Total Golden Dyke
FOUNTAIN HEAD
Total Fountain Head
GLENCOE
Total Glencoe
MT PORTER
Total Mt Porter
MOLINE
Total Moline
Total mineral leases
EXPLORATION
LICENCES
Total exploration licences
ML30512
ML30589
MLN1033
MLN1039
MLN214
MLN341
MLN342
MLN343
MLN346
MLN349
MLN405
MLN459
MLN811
MLN816
MLN794
MLN795
ML30936
ML31124
MLN1020
MLN4
MLN1034
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
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
PNX Metals Ltd 100%
Fountain Head
PNX Metals Ltd 100%
Fountain Head
PNX Metals Ltd 100%
Fountain Head
PNX Metals Ltd 100%
ML29679
Glencoe
PNX Metals Ltd 100%
ML23839##
Mt Porter##
Ausgold 100%
ML24173+
MLN1059+
MLN41+
Moline+
Moline+
Mt Evelyn+
PNX Metals Ltd 100%
PNX Metals Ltd 100%
PNX Metals Ltd 100%
EL28616+
EL31099
EL31893
EL32489
EL33217
Moline+
PNX Metals Ltd 100%
Bridge Creek
PNX Metals Ltd 100%
Ringwood Station
PNX Metals Ltd 100%
J25 Anomaly
Stray Creek
PNX Metals Ltd 100%
PNX Metals Ltd 100%
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
364.7
364.7
3126.0
418.7
8.9
3,553.6
4,922.4
262.5 km2
60.2 km2
23.4 km2
20.0 km2
46.0 km2
412.1 km2
+ On 28 February 2022, PNX Metals Limited agreed to divest the Moline project (tenements ML24173, MLN1059, MLN41 & EL28616) in the Northern Territory
to Sovereign Metallurgical Pty Ltd, with completion to occur by 28 August 2023. (Refer ASX 1 March 2022 & 14 April 2023).
## On 27 September 2022, PNX agreed to acquire ML23839 (Mt Porter) from Ausgold Trading Pty Ltd (Ausgold). (Refer ASX 28 September 2022). Completion to
occur by 30 September 2023.
14
PNX METALS LIMITED | ANNUAL REPORT 2023 TENEMENTS
NORTHERN TERRITORY – FARM-IN TENEMENTS
PROJECT
TENEMENT
NAME
HOLDER
AREA (sq km)
BURNSIDE*
CHESSMAN*
ROCKLANDS#
EL10012
EL10347
EL23431
EL23536
EL23540
EL23541
EL24018
EL24051
EL24058
EL24351
EL24405
EL24409
EL24715
EL25295
EL25748
EL9608
EL25054
EL28902
ML30293
EL10120#
EL25120#
EL27363#
EL25379#
EL23509#
ML29933^
ML29937^
Mt Ringwood
PNX Metals Ltd 90%, NTMO 10%
Golden Dyke
Thunderball
PNX Metals Ltd 90%, NTMO 10%
PNX Metals Ltd 90%, NTMO 10%
Brocks Creek
PNX Metals Ltd 90%, NTMO 10%
Jenkins
PNX Metals Ltd 90%, NTMO 10%
Cosmo North
PNX Metals Ltd 90%, NTMO 10%
Hayes Creek
PNX Metals Ltd 90%, NTMO 10%
Margaret River
PNX Metals Ltd 90%, NTMO 10%
Yam Creek
PNX Metals Ltd 90%, NTMO 10%
McCallum Creek
PNX Metals Ltd 90%, NTMO 10%
Yam Creek
PNX Metals Ltd 90%, NTMO 10%
Brocks Creek South
PNX Metals Ltd 90%, NTMO 10%
Mt Masson
PNX Metals Ltd 90%, NTMO 10%
Margaret Diggings
PNX Metals Ltd 90%, NTMO 10%
Burnside
Mt Bonnie
Maud
Maud
Chessman
Rocklands 1
Rocklands 2
Rocklands 4
Rocklands 7
Rocklands 8
Rocklands 3
Rocklands 5
PNX Metals Ltd 90%, NTMO 10%
PNX Metals Ltd 90%, NTMO 10%
PNX Metals Ltd 90%, NTMO 10%
PNX Metals Ltd – earned-in 100%
PNX Metals Ltd – earned-in 80%, 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
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
Mines Limited.
# 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.
NORTHERN TERRITORY – LICENCE APPLICATIONS
TENEMENT
NAME
HOLDER
EXPLORATION LICENCE
APPLICATIONS
EL33476
EL33477
EL33478
EL33479
EL33480
EL33502
EL33503
EL33536
Total exploration licence applications
Salt Trough Creek
PNX Metals Ltd – 100%
Harriet Creek
PNX Metals Ltd – 100%
Copperfield Creek
PNX Metals Ltd – 100%
Burnside Granite
PNX Metals Ltd – 100%
Horners Creek
PNX Metals Ltd – 100%
AREA
10 Blocks; 32.38 km2
146 Blocks; 487.03 km2
35 Blocks; 116.64 km2
10 Blocks; 33.41 km2
5 Blocks; 16.70 km2
Golden Grove Gap
PNX Metals Ltd 90%, NTMO 10%
11-part Blocks = 3.00 km2
Burnside Gap
PNX Metals Ltd 90%, NTMO 10%
19-part Blocks = 4.37 km2
Mt Ringwood Gap
PNX Metals Ltd 90%, NTMO 10%
5-part Blocks = 1.81 km2
695.18 km2
15
PNX METALS LIMITED | ANNUAL REPORT 2023 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2023
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
Total Indicated + Inferred Mineral Resource
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
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
Indicated
Indicated
Total Indicated
Inferred
Inferred
Inferred
Total Inferred
Oxide/Transitional
0.5g/t Au
Fresh
1% Zn
Oxide/Transitional
0.5g/t Au
Fresh
Ag Zone
1% Zn
50g/t Ag
TONNAGE
(kt)
195
1,180
1,375
32
118
21
171
Total Indicated + Inferred Mineral Resource
1,545
Zn
(%)
0.94
4.46
3.96
0.43
2.91
0.17
2.11
3.76
Pb
(%)
2.43
0.94
1.15
1.33
0.90
0.03
0.87
1.12
Cu
(%)
Ag
(g/t)
0.18
0.23
0.23
0.29
0.15
0.04
0.16
0.22
171
121
128
74
135
87
118
127
Au
(g/t)
3.80
1.02
1.41
2.28
0.54
0.04
0.80
1.34
ZnEq
(%)
11.50
9.60
9.87
6.37
7.61
2.36
6.73
9.53
AuEq
(g/t)
9.44
7.88
8.11
5.23
6.25
1.94
5.53
7.82
Total Contained Metal (t)
58,000
17,300
3,400
6.3Moz
66.8koz 147,000t 388.5koz
Table 3 Total Hayes Creek Mineral Resources (Iron Blow + Mt Bonnie) by JORC Classification at 3 May 2017
JORC CLASSIFICATION
Total Indicated (84.7%)
Total Inferred (15.3%)
Total Indicated + Inferred Mineral Resource
TONNAGE
(kt)
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
16
PNX METALS LIMITED | ANNUAL REPORT 2023 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2023
Table 4 Commodity price and metal recovery assumptions.
Zn
Pb
Cu
Ag
Au
METALS
UNIT
USD / t
USD / t
USD / t
USD / troy ounce
USD / troy ounce
*
Consensus prices as at the time of the resources estimates.
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%
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.
17
PNX METALS LIMITED | ANNUAL REPORT 2023 MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2023
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
14,000
Transitional
144,000
Fresh
Total
269,000
427,000
1.18
1.25
1.36
1.32
86,000
449,000
649,000
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.
MT PORTER MINERAL RESOURCES
Table 7 Mt Porter Mineral Resources by JORC Classification as at 28 June 2022.
TYPE
INDICATED
INFERRED
TOTAL
TONNES (t)
AU (g/t)
TONNES (t)
AU (g/t)
TONNES (t)
AU (g/t)
Oxide / Transitional
Fresh
Total
70,000
478,000
548,000
1.9
2.3
2.3
7,300
125,000
133,000
2.4
1.8
1.9
77,200
603,000
681,000
2.0
2.2
2.2
AU (oz)
4,900
43,200
48,200
Notes relating to Mt Porter Mineral Resources
• Due to the effects of rounding, totals may not represent the sum of all components.
• Classification of Mineral Resources incorporates the terms and definitions from the JORC Code.
• Mt Porter gold mineralisation estimated using a cut-off grade of >1.0 g/t Au, which is consistent with the assumed open-cut
mining method.
• Mt Porter Mineral Resources by oxidation zone and JORC classification as at 28 June 2022 (refer to ASX Release dated 28 September
2022).
18
PNX METALS LIMITED | ANNUAL REPORT 2023
MINERAL RESOURCES AND ORE RESERVES
As at 30 June 2023
PNX TOTAL MINERAL RESOURCES
Total Mineral Resources (Iron Blow + Mt Bonnie + Fountain Head + Glencoe + Mt Porter) by JORC Classification
JORC CLASSIFICATION
TONNAGE (kt)
ZN (t)
Total Contained Metal (t)
9,780
177,200
PB (t)
37,000
Cu (t)
10,050
AG (Moz)
16.2
AU (koz)
520.9
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.
The reported mineral resources for Mt Porter were reported on 28 September 2022 (refer to ASX Release dated 28 September 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 2023 DIRECTORS’ REPORT
The Directors of PNX Metals Limited (‘PNX’ or ‘Company’) present their report for the
financial year ended 30 June 2023.
DIRECTORS
The names and details of directors in office during and since the end of the financial year, unless otherwise stated, are as follows:
GRAHAM ASCOUGH
HANS-JÖRG SCHMIDT
HANSJOERG PLAGGEMARS
Non-executive Chairman
Appointed 7 December 2012
Non-executive Director
Appointed 11 November 2019
Non-executive Director
Appointed 28 November 2020
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
2023, Mr. Schmidt held no directorships
of other ASX listed companies.
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 2023, 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 – from October 2019
to 31 December 2022
• Non-executive Director, Azure
Minerals Limited – since
November 2019
• Non-executive Director, Altech
Chemicals Limited – since
August 2020
• Non-executive Director, Spartan
Resources Limited – since July 2021
• Non-executive Director, Wiluna
Mining Corporation Limited – since
July 2021
• Non-executive Director, Geopacific
Resources Limited – since July 2022
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 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
2023, 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 2023 DIRECTORS’ REPORT
ROWAN JOHNSTON
FRANK BIERLEIN
RICHARD WILLSON
Non-executive Director
Appointed 11 April 2023
Mr Johnston is a mining engineer
with over 40 years’ resources industry
experience, including significant
experience as a company director through
executive and non-executive directorship
roles. Mr Johnston has held various senior
executive and leadership roles in Australia
and internationally, primarily in the gold
sector, and has considerable experience
in feasibility studies, company formations,
construction, expansions and mergers.
He is currently Non-executive Chairman
of ASX-listed Spartan Resources Ltd and
Chairman of Kin Mining NL. Earlier in his
career, he was a Director and Executive
Director of a range of companies
including Bardoc Gold, Excelsior Gold,
Mutiny Gold, and Integra Mining.
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
2023, James Fox held the following
directorships of other listed companies for
the following periods:
• Non-executive Director, Thomson
Resources Ltd – since May 2023
Non-executive Director
Appointed 18 June 2021
and resigned on 6 April 2023
Non-executive Director
Appointed 18 June 2021
and resigned on 6 April 2023
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 MineralDeposits.
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), AusTin 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
21
PNX METALS LIMITED | ANNUAL REPORT 2023 OTHER KEY MANAGEMENT
PERSONNEL
Craig Wilson
BEng (Mining)
Mining, Infrastructure and Studies Manager
Craig Wilson, BEng (Mining), is a Mining
Engineer with over 30 years of mining
industry experience. He has worked in
western and central Australia in copper,
uranium, coal, iron ore and numerous
open cut and underground gold mines.
He also worked as an expat for over 11
years in numerous African gold mines.
He has project managed many mine site
developments from pre-feasibility through
to approvals, construction and then into
operations. He brings to PNX operational,
mine planning and management
experience to develop exploration sites
into operating mines.
Michael Green
PhD, (MAIG)
Exploration Manager
Dr Green is a geologist with more than
25 years experience exploring for gold,
base metals, and rare earths around
the world. He has been involved in
various discoveries, including some now
producing gold mines. Michael has a
strong field geology background with
board and project finance experience.
Michael has managed many regional
exploration projects and has worked for
many years in the Northern Territory,
including with the Northern Territory
Geological Survey, Arafura Resources
and Tanami Gold. Dr Green joined PNX in
April 2021.
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 21,498,192 Shares.
•
James Fox
Managing Director & CEO
James Fox holds 55,800,000
Performance Rights, and a related
party of Mr Fox holds 12,000,000
Shares.
• Angelo Gaudio
Company Secretary
Angelo Gaudio holds 15,000,000
Performance Rights.
• Craig Wilson
Mining, Infrastructure and
Studies Manager
Craig Wilson has a direct interest
in 3,562,519 Shares, and holds
40,000,000 Performance Rights.
• Michael Green
Exploration Manager
Michael Green has a direct interest
in 3,000,000 Shares, and holds
20,000,000 Performance Rights.
DIVIDENDS AND DISTRIBUTIONS
No dividends or distributions were paid
to members during the financial year and
none were recommended or declared
for payment.
DIRECTORS’ REPORT
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.
22
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal activities of the Company
and its wholly owned subsidiary
(‘Group,‘Company’, or ‘PNX’) during
the financial year was advancement of
development activities and approvals for
its 100% owned Fountain Head gold and
Hayes Creek zinc-gold-silver Projects
(Projects), and near-mine and regional
minerals exploration in the Pine Creek
region of the Northern Territory (‘NT’).
REVIEW OF OPERATIONS
There were no reportable safety or
environmental incidents during the
year, and all tenements remain in good
standing with statutory reporting up
to date.
The safety and welfare of the Group’s
employees and contractors is paramount
and a comprehensive risk register and
safe operating procedures are maintained
and regularly reviewed.
During the year, the Group continued to
advance its program for the sequential
development of its Projects, which host
considerable zinc, gold and silver mineral
resources, so that an investment decision
can be made once Government and
Environmental approvals and Project
financing have been achieved.
Evaluation and testing of gold exploration
prospects was progressed and the
Company believes the potential exists to
augment overall project scale and scope
through successful exploration and/
or acquisition.
The Company entered an agreement to
acquire The Mt Porter gold deposit (refer
ASX release 28 September 2022), with
completion due in late 2023. Mt Porter is
a ‘bolt-on’ asset with strong exploration
potential that hosts a Mineral Resource
Estimate (MRE), reported in accordance
with the JORC Code, 2012, of 0.68 Mt
@ 2.2 g/t Au for 48,200 (Indicated
and Inferred).
The acquisition is consistent with the
Company’s strategy to consolidate nearby
projects which host existing gold, silver or
base metals mineral resources to support
the proposed Project development and
have significant exploration upside.
An updated MRE was also completed for
the 100% owned Glencoe gold deposit
(refer ASX release 30 August 2022),
which returned 2.1 Mt @ 1.2 g/t Au for
79,000 oz Au and significantly improved
geological classification with 77.4%
of the Glencoe MRE now reporting to
the higher-confidence Measured and
Indicated categories.
The Group’s total Mineral Resources now
contain 520,900 oz Au, 16.2 million oz Ag,
177,000 t Zn, 37,000 t Pb and 10,000t Cu
(refer ASX release 28 September 2022).
During February 2023, the Northern
Territory Minister for Environment, Climate
Change and Water Security granted
environmental approval for Fountain
Head. The Company subsequently
completed and submitted (during
May 2023) its Mining Management Plan
to the Department of Industry, Tourism &
Trade (DITT) for assessment which could
result in approval being granted towards
the end of 2023. The Mine Management
Plan (MMP) is the last step in the
approvals process for Fountain Head.
On 28 February 2022 (refer ASX release
1 March 2022), the Group agreed to
divest the Moline project (tenements
ML24173, MLN1059, MLN41 and
EL28616) to Sovereign Metallurgical
Pty Ltd (‘Sovereign’), a subsidiary of
Ausgold Trading Pty Ltd (‘Ausgold’). The
completion of this transaction is pending
and expected to be completed by the end
of 2023.
Geology and exploration
During February 2023, the Company
announced that multiple targets, with the
potential to host economically significant
gold mineralisation, including at the C6
gold prospect, had been identified within
prospective kilometre-scale gold corridors
across its Northern Burnside exploration
Leases (refer ASX release 13 February
2023). The Northern Burnside Leases are
located approximately 100 km south of
Darwin and 35 km NNW of the Projects.
The C6 prospect exists along the same
structural corridor as the Cosmo Howley
gold mine (owned by Agnico Eagle
Mines Limited) and other gold deposits
(refer ASX release 13 February 2023).
The historic Goodall gold mine (4.25 Mt
at 2.35 g/t for 321,000 oz Au) is located
3.5 km to the ESE of C6 in a parallel
structural zone with the gold hosted in
numerous sub-vertical lenses 100–200 m
in length and up to 10 m true width.
Subsequent fieldwork and mapping
at C6 returned very high-grade gold
assay results from surface rock chip
samples collected from quartz-gossan
that sporadically outcropped along the
northern extension of the C6 anomaly.
The new high-grade zone located on
the 100% owned EL31893. Significantly,
no drilling has been undertaken in the
immediate vicinity of the new C6 high-
grade surface samples, and the prospect
remains open in all directions.
In July 2023, the Company completed
eight trenches (costeans) up to 100m
in length to better evaluate the extent
and geometry of gold mineralisation
and to assist with targeting subsequent
drill-testing. The first phase of aircore
drilling, comprising approximately
50 holes was completed in August, with
assay results pending as at the date of
this report. RC drilling is planned for the
September 2023 quarter.
23
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
Exploration is also planned to continue
at the Company’s Bartons gold prospect,
which is ~2.5 km further west, where
there are excellent historic results
confirmed by recent surface samples.
In late 2022 the Company drilled 18 RC
holes for a total of 1,740 m at the
Glencoe gold deposit (refer ASX release
16 December 2022). The program
generated positive gold assay results
and was successful in demonstrating
continuity to the east of the Central Zone
by approximately 200 m, and that gold-
bearing quartz veins previously reported
at surface (refer ASX release 20 March
2022) extend at depth and to the south,
oblique to the main gold mineralisation.
Glencoe is located on a granted Mineral
Lease approximately 3 km north of
Fountain Head and represents a ‘bolt-
on’ asset that supports the proposed
Project development.
During June 2023, 64 angled aircore
drill holes were drilled covering a 1 km
x 500 m area immediately to the south
of Glencoe. The aim of this drilling was
to test gold targets identified through
a NT Government co-funded drone-
based magnetic survey (refer ASX
release 17 November 2022). The drill
holes penetrated bedrock through
soil-colluvium-alluvium cover varying
between 2 and 9 m deep. All drill holes
intersected weathered bedrock with 31
drill holes intersecting quartz veins. Initial
composite assay samples did not show
any material gold grades in this area,
further interpretation and assessment
is underway.
24
Government and
environmental approvals
Plant and infrastructure
engineering and design
In February 2023, the Northern Territory
Minister for Environment, Climate Change
and Water Security granted environmental
approval for the Fountain Head gold
Project. The grant of environmental
approval is the culmination of a
significant body of work, and a milestone
event in PNX’s Pine Creek integrated
development strategy.
The Fountain Head Environmental Impact
Statement (EIS), which was submitted in
mid-2022, 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.
The last step in the approvals process
for the Fountain Head gold Project is
the Mine Management Plan (‘MMP’)
which was submitted to the Department
of Industry, Tourism & Trade (‘DITT’)
for assessment in late May 2023. A
successful review of the MMP by DITT
could result in a Mining Authorisation
being provided in late 2023.
Project financing
The Group has received and assessed
several term sheet proposals for
project debt finance with the minimum
requirements being an updated Project
feasibility assessment and Project
approvals. No decision has been made of
project financing at this stage.
The Group has commenced a parallel
development synergies study for the
Project integration. The aim of this
study work is to assess opportunities
identified through the integrated
flowsheet to improve capital efficiency;
overall resource utilisation; recoveries
and payment terms for metals produced;
tailings quality; and margins. Test-work
to recover additional gold lost through
the float tails, improve distribution and
recovery of payable metals, and assess
alternative processing of precious metals
is ongoing and expected to be complete
by the end of 2023.
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
Due diligence continues on 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 $1,472,967 (2022: $764,024).
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 outflow of $1.0 million for the
year, primarily reflect net payments for
investing activities, including exploration of
$2.4 million and net payments for operating
activities of $1.2 million, and financing
activities, including the issue of new shares
under a non-renounceable Rights Issue,
raising $2.6 million (net of costs).
PNX METALS LIMITED | ANNUAL REPORT 2023 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
A two-year lease for the Rose Park office
tenancy expired on 31 August 2023. The
Company has been in negotiation to
extend the tenancy lease. As at the date
of this report negotiations are continuing
in relation to a further extension the
tenancy lease.
On 21 July 2023, $250,000 was received
from Sovereign for the payment of
tranche 2, 2nd instalment pursuant to the
Purchase and Sale Agreement relating to
the Moline tenements.
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
and as at the date of this report, there
were no options on issue.
During the year, 95,000,000 new
Performance Rights were issued. No
Performance Rights vested during the
year and therefore no shares were issued
under the Company’s Performance
Rights Plan. 2,500,000 Performance
Rights lapsed during the year as a result
of an employee resignation. At the date
of this report, 141,800,000 unvested
Performance Rights remain on issue.
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, Rowan Johnston on 11 April 2023,
Frank Bierlein and Richard Willson on
18 June 2021. Under the terms of these
Deeds, the Company has undertaken,
subject to restrictions in the Corporations
Act 2001, to:
•
•
indemnify each Director in certain
circumstances;
advance money to a Director for
the payment of legal costs incurred
by a Director in defending legal
proceedings before the outcome of
those proceedings is known (subject
to an obligation by the Director to
repay money advanced if the costs
become costs in respect of which
the Director is not entitled to be
indemnified under the Deed);
• maintain Directors’ and Officers’
insurance cover (if available) in favour
of each Director whilst they remain a
Director of the Company and for a run
out period after ceasing to be such a
director; and
•
provide each Director with access to
Board papers and other documents
provided or available to the Director
as an Officer of the Company.
Throughout the year and since the end
of the financial year, the Group has had in
place and paid premiums for insurance
policies, with a limit of liability of $10
million, indemnifying Directors and
Officers of the Group against certain
liabilities incurred in the conduct of
business or in the discharge of their
duties as Directors or Officers of the
Group. The contracts of insurance contain
confidentiality provisions that preclude
disclosure of the premium paid.
25
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
DIRECTORS’ ATTENDANCE AT MEETINGS
There were nine Board meetings and three Audit Committee meetings held during the financial year. The following table summarises
director attendance:
YEAR ENDED 30 JUNE 2022
TOTAL
MEETINGS
HELD DURING
THE YEAR
GRAHAM
ASCOUGH1
(Board
Chairman)
HANS-JÖRG
SCHMIDT1
FRANK
BIERLEIN2,4
RICHARD
WILLSON2,3,5
JAMES
FOX2
HANSJOERG
PLAGGEMARS1
(Audit
Committee
Chairman)
ROWAN
JOHNSTON1,6,7
(Audit
Committee
Chairman)
Meetings attended
Board meetings
Audit committee meetings
1 Audit Committee member.
9
3
9
3
8
2
9
3
1
1
5
2
6
2
9
3
2
Invited to attended Audit Committee meetings.
3 Richard Willson appointed as Chairman of the Audit Committee from 8 March 2023.
4
Frank Bierlein resigned as Non-executive Director on 6 April 2023.
5 Richard Willson resigned as Non-executive Director on 6 April 2023.
6 Rowan Johnston appointed on 11 April 2023.
7 Rowan Johnston appointed as Chairman of the Audit Committee from 7 June 2023.
none of the services undermine the
general principles relating to auditor
independence as set out in APES
110 Code of Ethics for Professional
Accountants (including independence
standards) issued by the Accounting
Professional and Ethical Standards
Board, including reviewing or auditing
the auditor’s own work, acting in a
management or decision-making
capacity for the Group, acting as
advocate for the Group or jointly
sharing economic risks and rewards.
AUDITOR’S INDEPENDENCE
DECLARATION
•
The auditor’s independence declaration is
included on page 33.
NON-AUDIT SERVICES
Details of the amounts paid or payable
to the auditor for non-audit services
provided during the financial year by
the auditor are outlined in note 23 to the
financial statements.
The directors are of the opinion that the
services as disclosed in note 23 to the
financial statements do not compromise
the external auditor’s independence
requirements of the Corporations Act
2001 for the following reasons:
•
all non-audit services have been
reviewed and approved to ensure that
they do not impact the integrity and
objectivity of the auditor; and
26
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
This Report outlines the remuneration arrangements in place for the Directors, key management
personnel 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
• Rowan Johnston
appointed 11 April 2023
Non-executive Director
•
James Fox
Managing Director & CEO
The following persons acted as Directors
of the Company and resigned from their
position during the year as noted below:
•
Frank Bierlein
resigned 6 April 2023
Non-executive Director
• Richard Willson
resigned 6 April 2023
Non-executive Director
The following persons were key
management personnel of the Company
and Group during and since the end of
the financial year:
• Angelo Gaudio
Chief Financial Officer &
Company Secretary)
• Craig Wilson
REMUNERATION POLICY
Mining, Infrastructure and Studies
Manager)
• Michael Green
Exploration 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
Senior 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 may
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.
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. During
the financial year ended 30 June 2023
the Group did not engage external
remuneration consultants.
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.
27
PNX METALS LIMITED | ANNUAL REPORT 2023 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.
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 Director, Rowan Johnston,
also receives $7,000 per annum whilst
holding the role of the Audit Committee
Chairman. 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 other additional amounts were paid
to a Director during the financial year
(2022: $ 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 30 and 31. Remuneration
is not dependent on the satisfaction of
performance conditions. The maximum
aggregate remuneration of Non-executive
Directors, other than for extra services or
special exertions, is $500,000 per annum.
28
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
and CEO on 26 November 2014 with his
appointment to the Board. During the year,
Mr. Fox was entitled to an annual salary
of $302,500 up to 30 September 2022
and from 1 October 2022 he is entitled
to an annual salary of $317,625, 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 2023 and as of the date of
this report, Mr. Fox held no Shares in the
Company directly. At 30 June 2023 and the
date of this report, a related party of Mr. Fox
held 12,000,000 Shares in the Company.
During the year, no Performance Rights
held by Mr. Fox lapsed. At the 2022 AGM
shareholders approved the grant of
30,000,000 additional Performance Rights
to Mr. Fox. The Performance Rights are
held, whilst Mr. Fox remains employed by
the Company, and subject to a 12-month
vesting period together with 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
substantially increases its resources
by more than 200,000 oz gold in
a Mineral Resource Estimate(s)
reported in accordance with the JORC
Code 2012 with a cut-off grade above
0.7 g/t gold, either through discovery,
acquisition or increase of existing
Mineral Resource Estimates.
3) 25% will vest upon the securing of a
project financing package to fund the
development of the Fountain Head
and/or Hayes Creek Projects.
4) 25% will vest if the Company secures
all key requirements including
financing package, permits and
contracts to enable a development
decision to proceed with construction
of the Fountain Head and/or Hayes
Creek Project.
At 30 June 2023, a total of 55,800,000
Performance Rights subject to
performance conditions were held by
Mr Fox.
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 2
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.
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
CHIEF FINANCIAL OFFICER
& COMPANY SECRETARY
REMUNERATION
MINING, INFRASTRUCTURE
AND STUDIES MANAGER
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 $12,500 per month and from
October 2022 at a rate of $13,125 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 2023
financial year, Mr. Gaudio was paid fees of
$155,625 (excluding GST).
During the financial year, Mr. Gaudio
was granted additional 10,000,000
Performance Rights subject to a twelve-
month vesting period together with
performance conditions related to key
Company objectives. At the date of this
report Mr. Gaudio continues to hold a total
of 15,000,000 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
substantially increases its resources
by (at least 200,000 koz AuEq) in
resources either through discovery,
acquisition or increase of existing
Mineral Resource Estimates.
3) 25% will vest will vest upon the
securing of a project financing
package to fund the development
of the Fountain Head and/or Hayes
Creek Projects.
Craig Wilson has been an employee of the
Company since 1 March 2021. Mr. Wilson
is employed as Mining, Infrastructure and
Studies Manager and was entitled to an
annual salary of $260,000. From October
2023, Mr Wilson is entitled to a salary of
$275,600, plus mandated superannuation
contributions, 20 days annual leave,
10 days sick leave each year and
reimbursement of out-of-pocket expenses.
At 30 June 2023 and as of the date of this
report, Mr. Wilson held 3,562,519 Shares
in the Company.
During the financial year, Mr. Wilson
was granted additional 25,000,000
Performance Rights subject to a twelve-
month vesting period together with
performance conditions related to key
Company objectives. At the date of this
report Mr. Wilson continues to hold a total
of 40,000,000 Performance Rights, whilst
he 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.
substantially increases its resources
by (at least 200,000koz AuEq) in
resources either through discovery,
acquisition or increase of existing
Mineral Resource Estimates.
3) 25% will vest will vest upon the
securing of a project financing
package to fund the development
of the Fountain Head and/or Hayes
Creek Projects.
4) 25% will vest if the Company secures
4) 25% will vest if the Company secures
all key requirements including
financing package, permits and
contracts to enable a development
decision to proceed with construction
of the Fountain Head and/or Hayes
Creek Project.
all key requirements including
financing package, permits and
contracts to enable a development
decision to proceed with construction
of the Fountain Head and/or Hayes
Creek Project.
EXPLORATION MANAGER
REMUNERATION
Michael Green has been an employee
of the Company since 1 July 2022. Dr.
Green is employed as the Exploration
Manager and is entitled to an annual
salary of $225,000, plus mandated
superannuation contributions, 20 days
annual leave, 10 days sick leave each
year and reimbursement of out-of-
pocket expenses.
At 30 June 2023 and as of the date of this
report, Dr. Green held 3,000,000 Shares in
the Company.
During the financial year, Dr. Green was
granted 20,000,000 Performance Rights
subject to a twelve-month vesting period
together with performance conditions
related to key Company objectives. At the
date of this report Dr. Green continues to
hold a total of 20,000,000 Performance
Rights, whilst he 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.
substantially increases its resources
by (at least 200,000 koz AuEq) in
resources either through discovery,
acquisition or increase of existing
Mineral Resource Estimates.
3) 25% will vest will vest upon the
securing of a project financing
package to fund the development
of the Fountain Head and/or Hayes
Creek Projects.
4) 25% will vest if the Company secures
all key requirements including
financing package, permits and
contracts to enable a development
decision to proceed with construction
of the Fountain Head and/or Hayes
Creek Project.
29
2) 25% will vest if the Company
2) 25% will vest if the Company
PNX METALS LIMITED | ANNUAL REPORT 2023 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 2023:
FINANCIAL YEAR ENDED
30 JUNE 2023
SHORT TERM EMPLOYMENT BENEFITS
POST-EMPLOYMENT
EQUITY
SALARY & FEES
NON–CASH
BENEFITS1
SUPERANNUATION
PERFORMANCE
RIGHTS
TOTAL
% OF TOTAL
REMUNERATION
CONSISTING OF EQUITY
Directors
Graham Ascough
Hans-Jörg Schmidt
Hansjoerg Plaggemars
Rowan Johnston6
Frank Bierlein4
Richard Willson5
James Fox
$75,000
$36,158
$40,000
$8,412
$27,706
$27,706
-
-
-
-
-
-
-
$3,842
-
$925
$2,909
$2,909
-
-
-
-
-
-
$75,000
$40,000
$40,000
$9,337
$30,615
$30,615
0%
0%
0%
0%
0%
0%
$319,297
$13,4891
$27,500
$83,9452
$444,231
18.9%
Chief Financial Officer & Company Secretary
Angelo Gaudio
$155,625
Other key management personnel
Craig Wilson
Michael Green3
$271,700
$225,000
-
-
-
Totals
$1,186,604
$13,489
-
$14,2852
$169,910
$28,529
$23,625
$90,239
$40,2552
$10,3852
$340,484
$259,010
$148,870
$1,439,202
8.4%
11.8%
4.0%
10.3%
1 Use of a Company provided motor vehicle.
2
Value of Performance Rights held attributable to the 2023 financial year that have not yet vested.
3 Michael Green included as Key Management Personnel from 1 July 2022 in his role as Exploration Manager.
4
Frank Bierlein resigned as director on 6 April 2023.
5 Richard Willson resigned as director on 6 April 2023.
6 Rowan Johnston was appointed as a director on 11 April 2023.
30
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
Directors’ and key management personnel remuneration for the year ended 30 June 2022:
FINANCIAL YEAR ENDED
30 JUNE 2022
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
0%
0%
0%
0%
0%
$87,8482
$424,731
20.7%
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
7.6%
10.9%
11.8%
1 Use of a Company provided motor vehicle.
2
Value of Performance Rights held 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.
31
PNX METALS LIMITED | ANNUAL REPORT 2023 DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
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
Rowan Johnston6
Frank Bierlein5
Richard Willson5
James Fox1
Key management personnel
Angelo Gaudio
Craig Wilson
Michael Green2
BALANCE 1 JULY 2022
NET CHANGES
BALANCE 30 JUNE 2023
17,291,459
4,206,7333
21,498,192
-
-
-
-
-
-
-
3,562,519
-
-
-
-
-
-
-
-
-
3,000,0004
-
-
-
-
-
-
-
3,562,519
3,000,000
1 Shares held by related party at 30 June 2023: 12,000,000 (2022: 12,000,000).
2 Michael Green included as a Key Management Personnel from 1 July 2022 in his role as Exploration Manager.
3 Shares acquired on 27 February 2023 under a non-renounceable rights issue.
4 Shares acquired by market trade during the year.
5 Frank Bierlein and Richard Willson resigned as directors on 6 April 2023.
6 Rowan Johnston was appointed as a director on 11 April 2023
ii) There were no PNX Metals Limited options on issue during the year ended 30 June 2023.
Performance Rights of PNX Metals Limited and outstanding:
DIRECTORS
James Fox
Key management personnel
Angelo Gaudio
Craig Wilson
Michael Green1
BALANCE 1 JULY 2022
BALANCE 30 JUNE 2023
VESTED
UNVESTED
GRANTED
VESTED
LAPSED
VESTED
UNVESTED
-
-
-
-
25,800,000
30,000,000
5,000,000
10,000,000
15,000,000
25,000,000
-
20,000,000
-
-
-
-
-
-
-
-
-
-
-
-
55,800,000
15,000,000
40,000,000
20,000,000
1 Michael Green included as Key Management Personnel from
1 July 2022 in his role as Exploration Manager.
OTHER RELATED PARTY TRANSACTIONS
Mr. Fox incurred out of pocket expenses throughout the
year on behalf of the Group. At 30 June 2022 there was
no outstanding out of pocket expenses
reimbursement to Mr. Fox (2022: $464).
END OF REMUNERATION REPORT
32
Signed on 20 September 2023 in accordance with a
resolution of the Board made pursuant to section 298(2)
of the Corporations Act 2001.
Graham Ascough
Chairman
PNX METALS LIMITED | ANNUAL REPORT 2023
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 2023, 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, 20 September 2023
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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33
PNX METALS LIMITED | ANNUAL REPORT 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2023
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)
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
30/06/23
$
74,088
-
-
(328,375)
(445,052)
(225,568)
(72,031)
-
(38,382)
(74,826)
(16,074)
(57,967)
(155,880)
(34,101)
(90,385)
(8,414)
(1,472,967)
-
(1,472,967)
(114,000)
(1,586,967)
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)
(764,024)
-
(764,024)
759,321
(4,703)
Basic and diluted (cents per share)
28
(0.03)
(0.02)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
34
PNX METALS LIMITED | ANNUAL REPORT 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2023
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments and deposits
Other receivables – Sale of Moline Project
Other assets
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
6
7
8
10
25(d)
9
10
11
12
13
14
15
16
15
16
17
18
19
20
30/06/23
$
2,724,552
103,277
223,801
1,560,624
250,000
156,000
5,018,254
-
23,565,704
118,412
784,055
24,468,171
29,486,425
322,763
215,778
40,273
578,814
-
84,175
2,400,000
2,484,175
3,062,989
30/06/22
$
3,701,939
37,589
184,004
-
-
270,000
4,193,532
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
26,423,436
25,136,381
60,176,998
446,956
(34,200,518)
26,423,436
57,458,856
413,316
(32,735,791)
25,136,381
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
35
PNX METALS LIMITED | ANNUAL REPORT 2023 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2023
ISSUED CAPITAL
$
EQUITY-BASED
PAYMENT RESERVES
$
FAIR VALUE OCI
RESERVES
$
ACCUMULATED
LOSSES
$
TOTAL
$
Balance at 1 July 2021
53,545,287
127,143
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
-
-
-
-
(32,587,459)
21,084,971
(764,024)
(764,024)
-
(764,024)
-
-
-
36,371
759,321
(4,703)
3,959,322
(45,753)
142,544
-
-
(579,321)
579,321
Balance at 30 June 2022
57,458,856
233,316
180,000
(32,735,791)
25,136,381
Balance at 1 July 2022
57,458,856
233,316
180,000
(32,735,791)
25,136,381
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
-
-
-
2,809,701
(91,559)
-
-
-
-
-
-
-
155,880
(8,240)
-
(1,472,967)
(1,472,967)
(114,000)
-
(114,000)
(114,000)
(1,472,967)
(1,586,967)
-
-
-
-
-
-
-
2,809,701
(91,559)
155,880
8,240
-
Balance at 30 June 2023
60,176,998
380,956
66,000
(34,200,518)
26,423,436
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
36
PNX METALS LIMITED | ANNUAL REPORT 2023 CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2023
Cash flows relating to operating activities
Other income
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
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
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
INFLOWS/(OUTFLOWS)
YEAR ENDED
30/06/23
$
-
(1,243,064)
(1,243,064)
73,597
-
-
YEAR ENDED
30/06/22
$
100,000
(1,048,364)
(948,364)
4,349
682,701
5,000
(2,398,098)
(3,549,229)
(2,272)
-
(40,633)
(2,367,406)
2,809,701
(91,559)
(85,058)
2,633,084
(977,387)
3,701,939
2,724,552
(1,472,967)
(73,597)
-
155,880
1,096
89,289
8,414
72,031
-
8,382
836
(45,045)
12,617
(1,243,064)
(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)
37
PNX METALS LIMITED | ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
1 GENERAL INFORMATION AND
BASIS OF PREPARATION
PNX Metals Limited (‘Company’, or ‘PNX’) 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 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 2023.
2 NEW AND REVISED ACCOUNTING STANDARDS
In the current year, there are no new and/or revised Standards
and Interpretations adopted in these Financial Statements
affecting presentation or disclosure and the reported result or
financial position.
3. SIGNIFICANT ACCOUNTING POLICIES
In the application of the Group’s accounting policies, which are
described below, management is required to make judgements,
estimates and assumptions. Key areas of judgement and
estimation uncertainty are discussed in Note 3(s).
The following significant accounting policies have been
adopted in the preparation of the financial report:
a) Going concern basis
The financial report has been prepared on the going
concern basis which contemplates the continuity of normal
business activities and the realisation of assets and the
settlement of liabilities in the ordinary course of business.
For the year ended 30 June 2023, the Group made a loss of
$1,472,967 (2022: loss of $764,024) and recorded a net cash
outflow from operating and investing activities of $3,610,470
(2022: $3,767,279). At 30 June 2023, the Group had cash of
$2,724,552 (2022: $3,701,939), net current assets, excluding
the investment in Sunstone Metals Ltd, of $4,283,440
(2022: $3,062,068) and net assets of $26,423,436 (2022:
$25,136,381).
The Directors believe that it is appropriate to prepare the
financial statements on the going concern basis. The Group
raised sufficient capital during the year to allow activities
to progress towards the development of its Project and
exploration activities in the Northern Territory. The Group’s
ability to continue as a going concern is contingent on
raising additional capital and/or the successful exploration
and subsequent exploitation of its areas of interest through
sale or development.
If additional capital is not obtained or successful exploration
performed, the going concern basis may not be appropriate,
with the result that 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 interim 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.
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.
38
PNX METALS LIMITED | ANNUAL REPORT 2023 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.
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:
i)
the rights to tenure of the area of interest are current;
and
ii) at least one of the following conditions is also met:
–
or
–
the exploration and evaluation expenditure is
expected to be recouped through successful
development of the mineral exploration project, or
alternatively, by its sale;
exploration and evaluation activities in the area of
interest have not, at the reporting date, reached a
stage which permits a reasonable assessment of the
existence of economically recoverable reserves, and
active and significant operations in, or in relation to,
the area of interest are continuing.
Exploration and evaluation assets are initially measured at
cost and include the acquisition cost of rights to explore,
studies, exploration drilling, trenching and sampling and
associated activities. General and administrative costs
are only included in the measurement of exploration and
evaluation assets where they relate directly to operational
activities in a particular area of interest.
39
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023
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.
40
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 m) Site restoration and environmental rehabilitation
Provision for the costs of environmental restoration and
rehabilitation are recognised when the Group has a present
obligation (legal or constructive) to perform restoration
activities, it is probable that the Group will be required to
settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
Restoration and rehabilitation provisions are measured as
the present value of estimated future cash flows to perform
the rehabilitation activities, discounted at pre-tax rate that
reflects market assessments of the time value of money and
risks specific to the rehabilitation obligation.
There are cash backed deposits recorded under Other
financial assets in support of these rehabilitation obligations.
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
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.
41
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023
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.
42
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 (2022:
$Nil) in relation to Exploration and Evaluation Assets - refer to
Note 11 for detail.
Equity-based payments
The Group measures the cost of equity-settled transactions
with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value
is determined by using a financial pricing model taking into
account the terms and conditions upon which the instruments
were granted. Refer to Note 21 for more information regarding
equity-based payments made during the year.
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023
4 LOSS FROM CONTINUING OPERATIONS
a)
Interest income
Interest on bank deposits
b) Other income
Exclusivity fee received
Gain on sale of equipment
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 & taxation expenses
Legal fees
Contractor services
Company promotion
Corporate financing
Secretarial services
Total professional fees
YEAR ENDED
30/06/23
$
YEAR ENDED
30/06/22
$
74,088
4,329
-
-
-
1,096
89,289
90,385
-
52,675
34,965
154
115,750
85,883
155,625
445,052
100,000
5,000
105,000
3,398
75,057
78,455
10,100
48,317
75,658
71,537
146,015
141,773
142,500
625,800
43
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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 30.0%
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 30.0%.
b) Recognised tax assets and liabilities
Deferred tax assets and (liabilities) are attributable to the following:
Exploration and evaluation expenditure
Plant and equipment
Trade and other payables
Employee benefits
Share issue costs
Net deferred tax liabilities
Tax losses recognised
Net deferred tax assets / (liabilities)
YEAR ENDED
30/06/23
$
YEAR ENDED
30/06/22
$
-
-
-
1,472,967
(441,890)
38,970
402,920
-
-
30/06/23
$
(7,069,711)
(35,524)
9,905
64,733
90,576
(6,940,021)
6,940,021
-
-
-
-
764,024
(229,207)
35,636
193,571
-
-
30/06/22
$
(6,455,953)
(61,650)
9,905
60,948
126,071
(6,320,679)
6,320,679
-
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 30.0% tax rate. The potential benefit of unrecognised tax
losses (shown below) has similarly been calculated utilising a 30.0% 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)
30/06/23
$
9,716,269
160,307
30/06/22
$
9,328,327
160,307
Of the total operating tax losses of approximately $55.5 million in the Group at 30 June 2023, $32.4 million are unrecognised as shown
above as a $9.7 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.
44
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 6 CASH AND CASH EQUIVALENTS AND TERM DEPOSITS
Cash and cash equivalents
30/06/23
$
2,724,552
30/06/22
$
3,701,939
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 2023, the Group did not hold any term deposits with maturity terms of greater than 3 months (2022: $Nil).
7 TRADE AND OTHER RECEIVABLES
Interest
Trade debtors
Goods and services tax
8 PREPAYMENTS AND DEPOSITS
Prepayments
Environmental deposits – Northern Territory
Deposit – office bond
30/06/23
$
525
85,460
17,292
103,277
30/06/23
$
19,624
171,417
32,760
223,801
30/06/22
$
33
-
37,556
37,589
30/06/22
$
20,460
130,784
32,760
184,004
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 2023, $19,624 prepaid insurance was held under Prepayments (2022 $20,460).
Environmental Deposits (‘Exploration Bonds’) are required to be lodged with DITT prior to the commencement of any ground disturbing
exploration activities. The Exploration Bonds are held until rehabilitation of worksites are carried out, typically within 12 months. Exploration
Bonds totalling $171,417 are held by the DITT as security in relation to current exploration activities and exclude $4,094 of the Exploration
Bonds that relate to prior exploration on the Moline project, which have been recorded with the sale of the Moline assets (refer to note 10).
The Deposit - office bond of $32,760 is invested in a 365-day term deposit maturing February 2024 and earning 4.0% interest.
9 OTHER FINANCIAL ASSETS
Investment in Sunstone Metals Ltd
30/06/23
$
156,000
30/06/22
$
270,000
The Group continues to hold a balance of 6,000,000 shares in ASX listed Sunstone Metals Limited (‘Sunstone’ or ‘STM’, previously Avalon
Minerals Ltd). 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 2023, the investment was reflected at fair value of $156,000, with the incremental movement down of $114,000 recorded at fair
value through other comprehensive income (FVOCI) - refer to Note 19.
45
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 10 OTHER RECEIVABLES – SALE OF MOLINE PROJECT
Consideration for the Moline project
Care and maintenance bond
Exploration bond
Total amount receivable at 30 June 2023.
30/06/23
$
1,250,000
306,530
4,094
1,560,624
On 28 February 2022, PNX agreed to divest the Moline project (tenements ML24173, MLN1059, MLN41 & EL28616) to Sovereign. The
sale was finalised during the last financial year, however, settlement of the receivable is due to occur during the 2024 financial year, with
payment to be received in tranches, with the final settlement originally due on 28 August 2023. The amounts are guaranteed in full by
Ausgold Trading Pty Ltd, the ultimate parent of Sovereign.
During the year PNX, Ausgold, and Sovereign reached agreement to receive part payment of the receivable in the form of an offset against
the purchase price payable by PNX to Ausgold as consideration for the acquisition of Mt Porter (ML23839), resulting in a reduction in
amounts receivable of $250,000 (refer to note 25 (d)2)). This reduction has been treated as a non-cash transaction for cash flow statement
purposes.
Prior to 30 June 2023, PNX agreed to a deferral of settlement terms with Sovereign, resulting in a change in timing of settlement, with
the balance $1,250,000 to be received subsequent to balance date (excluding the Care and Maintenance Bonds and Exploration Bond).
$250,000 was received from Sovereign on 21 July 2023.
Subsequent to 30 June 2023, PNX and Sovereign entered into an agreement to receive two amounts of $500,000 on 15 September and 16
October 2023. At 30 June 2023, given management’s expectations that Ausgold and Sovereign would be capable of meeting its obligations
and in the context of the assessed fair value of the underlying security to the arrangement (being the Moline project), management have
determined the expected credit loss for the receivable to be immaterial.
The total amount receivable (relating to the divestment of the Moline project) at 30 June 2023 is $1,560,624 and consists of cash
consideration of $1,250,000 and Care and Maintenance and Exploration Bonds of $310,624 noted below.
An Exploration Bonds totalling $4,094 that relates to prior exploration activities at the Moline project is held by DITT as security and will be
returned to the Company post Completion. Further, Care and Maintenance Bonds totalling $306,530 are held by DITT as security and will
be returned to the Company at Completion to the Sale Agreement for the Moline project.
11 EXPLORATION AND EVALUATION EXPENDITURE
Costs brought forward
Expenditure incurred during the year
Sale of Moline assets
30/06/23
$
21,519,844
2,045,860
-
23,565,704
30/06/22
$
19,573,034
3,662,265
(1,715,455)
21,519,844
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective areas of interest.
The Group’s accounting policy is to capitalise exploration costs in accordance with AASB 6 and assess at each reporting date if any
impairment indicators as defined in AASB 6 paragraph 20. There was no impairment of the Group’s Exploration & Evaluation Expenditure
during the year ended 30 June 2023.
46
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 12 MOTOR VEHICLES, PLANT, EQUIPMENT AND RIGHT OF USE ASSETS
COST
Balance at 30 June 2021
Additions
Disposals
Balance at 30 June 2022
Additions
Disposals
Balance at 30 June 2023
Accumulated depreciation
Balance at 30 June 2021
Depreciation Expense
Depreciation capitalised to exploration assets
Disposals
Balance at 30 June 2022
Depreciation Expense
Depreciation capitalised to exploration assets
Disposals
Balance at 30 June 2023
Net book value – motor vehicles, plant,
equipment and right of use
Balance at 30 June 2022
Balance at 30 June 2023
MOTOR VEHICLES,
PLANT & EQUIP
$
551,162
8,980
(140,000)
420,142
2,272
-
422,414
541,817
3,398
2,872
(140,000)
408,087
1,096
2,619
-
RIGHT OF USE ASSETS
$
50,772
221,422
-
272,194
3,645
-
275,839
3,693
75,057
-
-
78,750
89,289
-
-
411,802
168,039
12,055
10,612
193,444
107,800
TOTAL
$
601,934
230,402
(140,000)
692,336
5,917
-
698,253
545,510
78,455
2,872
(140,000)
486,837
90,385
2,619
-
579,841
205,499
118,412
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
2023 balance of $118,412 for the net book value, an amount of $107,800 relates to right of use Assets.
13 OTHER FINANCIAL ASSETS – NON CURRENT
Environmental Bonds (Care & Maintenance)
30/06/23
$
784,055
30/06/22
$
784,055
Environmental bonds are required to be lodged with the DITT in relation to the Care and Maintenance conditions of the mineral leases.
Accordingly, environmental bonds totalling $784,055 are held by the DITT as security in relation to the conditions of the Fountain Head
mineral leases.
14 TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Other payables
Average credit period on trade payables is 30 days.
30/06/23
$
238,521
55,560
28,682
322,763
30/06/22
$
469,076
77,449
21,626
568,151
47
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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
30/06/23
$
80,272
135,506
215,778
30/06/22
$
86,166
116,995
203,161
-
-
30/06/23
$
40,273
84,175
30/06/23
$
2,400,000
30/06/22
$
90,152
115,709
30/06/22
$
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.
48
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 18 ISSUED CAPITAL
30/06/23
$
30/06/22
$
5,380,624,719 fully paid ordinary shares (2022: 4,444,057,807)
60,176,998
57,458,856
Movement in ordinary shares for the year:
NO.
30/06/23
$
NO.
30/06/22
$
Ref
Balance at beginning of year
4,444,057,807
57,458,856
3,652,193,511
53,545,287
a
b
Shares issued at 0.3 cents under a
non-renounceable rights issue (NRRI)
Shares issued at 0.5 cents under a
non-renounceable rights issue (NRRI)
936,566,912
2,809,701
791,864,296
3,959,321
Share issue costs
(91,559)
(45,752)
Balance at end of year
5,380,624,719
60,176,998
4,444,057,807
57,458,856
Fully paid shares carry one vote per share and a right to dividends.
936,566,912 Shares were issued to Shareholders who subscribed for shares under a Non-Renounceable Rights Issue at 0.3 cents per
share (NRRI) on 27 February 2023
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.
19 RESERVES
FVOCI investment
Equity-settled benefits
30/06/23
$
66,000
380,956
446,956
30/06/22
$
180,000
233,316
413,316
The change in Fair Value through Other Comprehensive Income (FVOCI) investment reserve reflects the current year decrease in the fair
value of the Group’s investment in ASX listed Sunstone Metals Ltd (STM) of $156,000 as at 30 June 2023.
The Group continues to hold a balance of 6,000,000 shares in Sunstone as at 30 June 2023 and the investment was reflected at fair value
of $156,000, with the incremental movement down of $114,000 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 2023, 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.
During the year, 95,000,000 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 20 December 2025) 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 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 substantially increases its resources by (at least 200,000koz AuEq) in resources either through discovery,
acquisition or increase of existing Mineral Resource Estimates.
25% will vest will vest upon the securing of a project financing package to fund the development of the Fountain Head and/or Hayes
Creek Projects.
49
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 25% will vest if the Company secures all key requirements including financing package, permits and contracts to enable a development
decision to proceed with construction of the Fountain Head and/or Hayes Creek Project.
2,500,000 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 $155,880. 2,500,000 Performance Rights lapsed during the year as a
result of an employee resignation and an amount of $8,240 was transferred to retained earnings. A total of $380,956 held in the equity-
settled benefits reserve represents the value relating to the Performance Rights on issue as at 30 June 2023.
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
30/06/23
$
30/06/22
$
32,735,791
32,587,459
(8,240)
-
1,472,967
34,200,518
(36,371)
(579,321)
764,024
32,735,791
Under PNX’s Employee Performance Rights Plan (‘Plan’), Directors may issue Performance Rights to Company executives, employees
and consultants. Performance Rights are granted for no monetary consideration and entitle the holder to be issued one fully paid ordinary
share per performance right upon vesting.
As at 1 July 2022, there were 49,300,000 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;
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, 2,500,000 Performance Rights held by an employee, originally issued on 27 January 2021, lapsed pursuant to the Plan
following the resignation of the employee.
During the financial year ended 30 June 2023, 95,000,000 new performance rights were granted under the plan as follows:
»
»
30,000,000 Performance Rights were granted to the Company’s Managing Director & CEO by shareholders at the Annual General
Meeting held on 10 November 2022 and were issued on 20 December 2022;
65,000,000 Performance Rights were granted and issued to Company executives and employees on 20 December 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.
As at 30 June 2023 there were a total of 141,800,000 unvested Performance Rights on issue under the Plan as follows:
»
»
»
»
»
800,000 Performance Rights were held by the Company’s Managing Director & CEO and were originally issued on 8 February 2017;
25,000,000 Performance Rights were held by the Company’s Managing Director & CEO and were originally issued on 27 January 2021;
30,000,000 Performance Rights were held by the Company’s Managing Director & CEO and were originally issued on 20 December
2022; and
21,000,000 Performance Rights were held by Company executives and employees and were originally issued on 27 January 2021; and
65,000,000 Performance Rights were held by Company executives and employees and were originally issued on 20 December 2022.
50
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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.
No options were on issue during the year ended 30 June 2023, as per the table below.
OPTIONS
30/06/23
30/06/22
Balance at beginning of the year
Options granted
Options exercised
Options lapsed
Balance at end of the year
NUMBER OF OPTIONS
WEIGHTED AVERAGE
EXERCISE PRICE $
NUMBER OF OPTIONS
WEIGHTED AVERAGE
EXERCISE PRICE $
-
-
-
-
-
-
-
-
-
-
359,125,000
0.01464
-
-
-
-
(359,125,000)
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)
»
»
»
»
»
James Fox (Managing Director & Chief executive Officer)
Rowan Johnston – appointed 11 April 2023 (Non-executive Director)
Frank Bierlein – resigned 6 April 2023 (Non-executive Director)
Richard Willson – resigned 6 April 2023 (Non-executive Director)
Angelo Gaudio – (Chief Financial Officer and Company Secretary)
» Craig Wilson – (Mining, Infrastructure and Studies Manager)
» Michael Green – (Exploration 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
30/06/23
$
1,200,093
90,239
148,870
1,439,202
Details of key management personnel compensation are disclosed within the Remuneration Report in the Directors’ Report.
23 REMUNERATION OF AUDITOR
Audit and Review of the financial reports
Other services – stamp duty advisory services
30/06/23
$
57,967
4,872
62,839
30/06/22
$
935,975
64,408
134,400
1,134,783
30/06/22
$
46,174
-
46,174
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.
51
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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 2023 there was no reimbursement to
Mr. Fox that was outstanding (2022: $464).
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 2023 in respect of minimum expenditure requirements not provided for in the financial
statements are approximately:
Minimum exploration expenditure on exploration licences
b) Royalty agreements
30/06/23
$
582,898
30/06/22
$
472,056
The Company has assumed the following royalty commitments (relating to Northern Territory tenements):
¬ NT Mining Operations Pty Ltd (a subsidiary of Agnico Eagle Mines Limited)
–
–
–
2% royalty on the market value of any future production of gold and silver from the 14 mineral leases comprising the Hayes
Creek and Fountain Head Projects.
2% net smelter return royalty on precious metals produced from the Fountain Head tenements.
1% net smelter return royalty for any metals produced from the Glencoe tenement (capped at $1,000,000).
¬ Mt Porter
–
–
Various Royalty Holders - 1% net smelter return royalty for metals produced, capped at $1,000,000).
Renison Limited – 1.25% net smelter return royalty for product produced
– Native Title parties – 3.5% Net Profit royalty for minerals produced from mining operations
The Company is entitled to the following royalties (relating to Northern Territory tenements):
¬ Sovereign Metallurgical Pty Ltd - 1% net smelter return royalty for gold or silver and 2% for any other metals produced from the
four tenements comprising the Moline Project.
c) Other rights held by NT Mining Operations Pty Ltd (a subsidiary of Agnico Eagle Mines Limited) (relating to Northern
Territory tenements)
NT Mining Operations Pty Ltd 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 NT Mining Operations Pty Ltd 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.
52
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 d) Mt Porter acquisition
As announced on 28 September 2022, the Company entered into an agreement with Ausgold to acquire Mt Porter (Agreement).
Under the Agreement, the Company will purchase Mt Porter in consideration for:
1) The issue by the Company of 200 million Shares (Consideration Shares) to Ausgold (or its nominee) within 2 business days of
completion, of the sale and purchase of Mt Porter (Completion);
2) A payment to Ausgold of $250,000 in cash was settled during May 2023, prior to Completion. During the year PNX, Ausgold
(parent company of Sovereign and in its capacity as guarantor), and Sovereign reached an agreement to reduce the receivable
owed by Sovereign by the same amount PNX was due to pay in relation to the acquisition of the Mt Porter (ML23839). Accordingly,
a reduction in the receivable of $250,000 was made and a prepayment for the acquisition was recognised. This reduction has
been treated as a non-cash transaction for cash flow statement purposes. This prepayment has been recorded as an Other Asset
on the Statement of Financial Position.
3) The following conditional post Completion payments to Ausgold (in cash or Shares, at the election of the Company):
a) $1 million, on completion of a Mineral Resource Estimate (in accordance with the JORC Code 2012)at Mt Porter within 5 years
of the date of Completion, with a minimum of 100,000 ounces of gold at a 1.0g/t cut off, of which at least 50,000 ounces of
gold reports to be in the Indicated Category, to be signed off by an appropriate independent Competent Period as agreed by
the parties; and
b) $1 million, on the production of 10,000 ounces of gold (recovered) from Mt Porter within 5 years of the date of Completion,
through the Company’s proposed Fountain Head Processing Plant, or other processing infrastructure as agreed by the
Company and Ausgold.
As part of the transaction, the Company will also take on the following royalty obligations:
–
–
the obligation to pay a 1% net smelter return royalty to existing royalty holders, up to a cap of $1million; and
the obligation to pay a 1.25% net smelter return royalty to an existing royalty holder (uncapped).
26 FINANCIAL INSTRUMENTS & 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
30/06/23
$
30/06/22
$
2,724,552
204,177
1,560,624
784,055
156,000
322,763
124,448
2,400,000
3,701,939
163,544
1,810,657
784,055
270,000
546,025
205,861
2,400,000
Categories of financial instruments (continued)
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 2023 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.
53
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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 $1,103 (2022: increase or decrease by approximately $1,285).
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.
Liquidity and interest risk tables
The following table details the Company’s and the Group’s remaining contractual maturity for its non-derivative financial liabilities. The
table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can
be required to pay.
The table includes both interest and principal cash flows.
WEIGHTED AVERAGE
EFFECTIVE
INTEREST RATE
%
LESS THAN
ONE MONTH
1-3 MONTHS
3-12 MONTHS
1-5 YEARS
$
$
2023
Non-interest bearing
Fixed Interest bearing
2022
Non-interest bearing
Fixed Interest bearing
Fair value of financial instruments
-
6.8%
-
6.6%
238,521
-
469,576
-
84,242
24,800
99,075
24,875
$
-
42,218
$
2,400,000
57,431
-
2,400,000
74,626
106,360
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.
The Group’s investment in Sunstone Metals Limited, discussed above, is recorded at the share closing price on the ASX at year end, being
its fair value (Level 1, in terms of fair value hierarchy).
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.
54
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 27 SEGMENT INFORMATION
The Group holds 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
(0.03)
(0.02)
30/06/23
CENTS PER SHARE
30/06/22
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 $
Weighted average number of ordinary shares
(1,472,967)
(764,024)
4,762,233,963
3,945,074,826
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.
29 CONTROLLED ENTITIES
NAME OF ENTITY
COUNTRY OF INCORPORATION
Parent Entity
PNX Metals Limited
Subsidiaries
Wellington Exploration Pty Ltd
i) Head entity in tax consolidated group
ii) Member of tax consolidated group
(i)
(ii)
Australia
Australia
OWNERSHIP INTEREST
2023
%
2022
%
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.
55
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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
30/06/23
$
5,018,254
29,486,425
578,814
3,062,989
26,423,436
60,176,998
446,956
(34,200,518)
26,423,436
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
Statement of profit or loss and other comprehensive income
Income
Total comprehensive loss for the year
74,088
1,586,967
643,874
4,703
31 SUBSEQUENT EVENTS
A two-year lease for the Rose Park office tenancy expired on 31 August 2023. The Company has been in negotiation to extend the tenancy
lease. As at the date of this report negotiations are continuing in relation to a further extension the tenancy lease.
On 21 July 2023, $250,000 was received from Sovereign for the payment of tranche 2, 2nd instalment pursuant to the Purchase and Sale
Agreement relating to the Moline tenements.
There has been no other matter or circumstance that has occurred subsequent to the end of the financial year that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial years.
56
NOTES TO THE FINANCIAL STATEMENTSPNX METALS LIMITED | ANNUAL REPORT 2023 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 2023
and of its performance for the financial year ended on that date;
b) the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board;
c)
there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
The Directors have been given the declarations by the Chief Executive Officer and Chief
Financial Officer required by Section 295A of the Corporation Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to Section
295(5) of the Corporations Act 2001.
Graham Ascough
Chairman
20 September 2023
57
PNX METALS LIMITED | ANNUAL REPORT 2023 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 2023, 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 2023 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
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58
PNX METALS LIMITED | ANNUAL REPORT 2023
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
$1,472,967 during the year ended 30 June 2023, and a net cash outflow from operating and investing activities of
$3,610,470. 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) &
11
At 30 June 2023 the carrying value of exploration and
evaluation assets was $23,565,704.
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.
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.
Our procedures included, amongst others:
•
reviewing management’s area of interest
considerations against AASB 6;
• 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; and
•
reviewing 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 2023, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
Grant Thornton Audit Pty Ltd 2
59
PNX METALS LIMITED | ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
to the Members of PNX Metals Limited
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
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
2023.
In our opinion, the Remuneration Report of PNX Metals Limited, for the year ended 30 June 2023 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, 20 September 2023
Grant Thornton Audit Pty Ltd 3
60
PNX METALS LIMITED | ANNUAL REPORT 2023
ADDITIONAL SHAREHOLDER INFORMATION
as at 11 September 2023
SHARES
The total number of shares issued as at 11 September 2023 was 5,380,624,719 held by 1,555 registered shareholders.
749 shareholders held less than a marketable parcel, based on the market price of a PNX share as at 11 September 2023.
Each share carries one vote.
PERFORMANCE RIGHTS/OPTIONS
As at 11 September 2023, the Company had 141,800,000 Performance Rights and no options on issue. During the year, 95,000,000
performance rights were granted under the Company’s Employee Performance Rights Plan and 2,500,000 Performance Rights lapsed
following the resignation of an employee.
TWENTY LARGEST SHAREHOLDERS
As at 11 September 2023, the twenty largest Shareholders were as shown in the following table and held 78.63% of the Shares:
RANK
NAME
SHARES
% OF SHARES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT\C (DELPHI)#
2,360,603,389
43.87
DEUTSCHE BALATON AKTIENGESELLSCHAFT (Balaton)#
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
PJ & BA DOWD INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
SYNOD NOMINEES PTY LTD
KOMON NOMINEES PTY LTD
LADYMAN SUPER PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR PETER JAMES WATSON + MS JUDITH WATSON
MR RUDOLPH FRANSCOIS NEUHOFF
MR ROGER DOUGLAS STABLES + MRS KAREN DOROTHY STABLES
340,000,000
298,025,897
220,957,619
194,224,492
171,108,339
112,758,817
85,000,000
81,196,527
59,149,505
45,000,000
35,591,064
34,833,269
32,000,000
28,723,793
27,812,500
27,060,628
26,476,193
25,983,367
24,329,879
6.32
5.54
4.11
3.61
3.18
2.10
1.58
1.51
1.10
0.84
0.66
0.65
0.59
0.53
0.52
0.50
0.49
0.48
0.45
Total
4,230,835,278
78.63
# DELPHI and Balaton are related parties.
61
PNX METALS LIMITED | ANNUAL REPORT 2023 ADDITIONAL SHAREHOLDER INFORMATION
as at 11 September 2023
SUBSTANTIAL SHAREHOLDERS
As at 11 September 2023, the substantial Shareholders in the Company’s Register of Substantial Shareholders are listed below:
SHAREHOLDER
Delphi Unternehmensberatung Aktiengesellschaft\C#
Deutsche Balaton Aktiengesellschaft#
Sochrastem SA\C
# DELPHI and Balaton are related parties.
DISTRIBUTION SCHEDULES
HOLDING
2,360,603,389
340,000,000
298,025,897
%
43.87
6.32
5.54
A distribution schedule of the number of Shareholders, by size of holding, as at 11 September 2023 is set out below:
SIZE OF HOLDINGS
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 500,000
500,001 and over
Total
NUMBER OF SHAREHOLDERS
% OF SHARES
66
38
44
431
545
431
1,555
0.00
0.00
0.01
0.46
2.50
97.03
100.00
There is no current on-market buy-back.
There are no Options on issue and accordingly no distribution schedule of the number of Option-holders as at 11 September 2023.
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.
62
PNX METALS LIMITED | ANNUAL REPORT 2023