PolarX Limited
ABN 76 161 615 783
Annual Report
30 June 2019
PolarX Limited
Corporate Directory
Review of Operations
Directors’ Report
CONTENTS
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Audit Report
Additional ASX Information
Page No
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70
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PolarX Limited
2019 Annual Report
Directors’ Report
CORPORATE DIRECTORY
Directors
Mr. Mark Bojanjac
Dr. Frazer Tabeart
Dr. Jason Berton
Mr. Robert Boaz
Company Secretary
Mr. Ian Cunningham
Executive Chairman
Managing Director
Executive Director
Non-Executive Director
Registered Office
1/100 Railway Road
Subiaco WA 6008
Australia
Telephone:
Facsimile:
(+61 8) 9226 1356
(+61 8) 9226 2027
Principal Place of Business
Suite 1, 245 Churchill Avenue
Subiaco WA 6008
Australia
Telephone:
Facsimile:
(+61 8) 6465 5500
(+61 8) 6465 5599
Share Register
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth WA 6000 Australia
Telephone: 1300 787 272
International: (61 8) 9323 2000
(61 8) 9323 2033
Facsimile:
Stock Exchange Listing
Australian Securities Exchange
ASX Code: PXX
Auditors
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
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REVIEW OF OPERATIONS
During the financial year ended 30 June 2019 (FY2019), the Company’s continued focus has been on the exploration and
development of its Alaska Range Project (Alaska, USA), which contains both the Stellar Gold Copper Project (Stellar
Project) and the Caribou Dome Copper Project (Caribou Dome Project) (refer Figure 1). The combined Alaska Range
Project now comprises 447 State mineral claims covering a total area of ~261km2. Collectively these claims form a
contiguous package with ~35km strike length containing extensive copper and gold-in-soil anomalism, with significant upside
potential for resource extensions and larger porphyry copper-gold discoveries.
Figure 1. Location map showing main deposits and prospects at the Stellar and Caribou Dome projects in central Alaska and showing
regional copper geochemistry in soil sampling draped on digital elevation.
Alaska Range Project Overview
The Stellar Property contains six main prospects: the Zackly Cu-Au skarn (Zackly Deposit); the Saturn Porphyry Target
(formerly Zackly SE), the Mars Porphyry Target, the Jupiter and Gemini porphyry Cu-Au targets, and the Au-only Moonwalk
Prospect (Figure 1). A maiden JORC Inferred Resource estimate for the Zackly Deposit was announced in March 2018
(Zackly Resource, refer Table 1). The Zackly Resource extends from surface and remains open for extension along strike
and at depth.
The Caribou Dome deposit is located approximately 20km south-west of the Zackly Deposit (Figure 1) and includes the
Senator copper prospect. A maiden mineral resource estimate for the Caribou Dome deposit was announced in April 2017
(Table 1).
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Table 1. Alaska Range Project Resource Estimates (JORC 2012), 0.5% Cu cut-off grade
Category
Inferred
Inferred
Indicated
Measured
ZACKLY1
CARIBOU
DOME2
Notes:
Million
Tonnes
Cu %
Au g/t
Ag g/t
Contained Cu
(t)
Contained
Cu (M lb)
Contained Au
(oz)
Contained
Ag (oz)
3.4
1.6
0.6
0.6
1.2
2.0
14.0
41,200
91
213,000
1,500,000
3.2
2.2
3.6
-
-
-
52,300
13,000
20,500
TOTAL
127,000
115
29
45
280
-
-
-
-
-
-
213,000
1,500,000
1. Refer to the ASX announcement of 20 March 2018 for full details on the Stellar Project Resource Estimate, including applicable
technical information and reporting criteria. During FY2019 there was no change to the Zackly Resources Estimate reported at 30 June
2018 for comparison.
2. Refer to the ASX announcement of 5 April 2017 for full details on the Caribou Dome Project Resource Estimate, including applicable
technical information and reporting criteria. During FY2019 there was no change to the Caribou Dome mineral resources estimate
reported at 30 June 2018 for comparison.
Strategic Partnership – Lundin Mining Corporation
On 3 June 2019, the Company and Lundin Mining Corporation (Lundin Mining) agreed terms for a strategic earn-in joint
venture over select porphyry Cu-Au targets within the Stellar Project (Strategic Partnership). The following summary sets
out the key terms and conditions of the Strategic Partnership:
The Strategic Partnership contemplates an earn-in joint venture over select porphyry Cu-Au targets in PolarX’s 100%
owned Stellar Project within its Alaska Range Project. The Zackly Cu-Au skarn claims and the Caribou Dome Project
are excluded from the earn-in area (Figure 1).
Lundin Mining subscribed for 53.4M ordinary shares in PolarX at A$0.08 per share for A$4.3M (Lundin Mining
Placement) following which Lundin Mining become PolarX’s largest shareholder. This share subscription secures an
exclusive option for Lundin Mining to enter an earn-in joint venture on porphyry Cu-Au targets within PolarX’s Stellar
Claims.
PolarX agreed to use the proceeds of this share subscription to fund an exploration program on porphyry Cu-Au targets
in the Stellar Claims. The exploration program is to be completed by the end of 2019, subject to extension in certain
limited circumstances, and will be determined by a five-person exploration committee (3 Lundin Mining members, 2
PolarX).
Lundin Mining will make its decision as to whether to exercise the option to commence the earn-in on or before the later
of a thirty-day period to review results of the exploration program and 31 December 2019 (the “Option Exercise Date”).
Lundin Mining can exercise the option to enter into a 3-year Earn-in Period for a joint venture at any time prior to Option
Exercise Date, with the following earn-in terms:
‐ Year 1 - upfront cash payment to PolarX of US$2M within 30 days of the Option Exercise Date (anticipated to be 30
January 2020) plus a minimum of US$8M exploration expenditure by the end of Year 1 to earn the right to continue.
‐ Year 2 - upfront cash payment to PolarX of US$3M within 30 days of the first anniversary of the Option Exercise
Date (anticipated to be 30 January 2021) plus a minimum of US$8M exploration expenditure by the end of Year 2 to
earn the right to continue.
‐ Year 3 - upfront cash payment to PolarX of US$5M within 30 days of the second anniversary of the Option Exercise
Date (anticipated to be 30 January 2022) plus a minimum of US$8M exploration expenditure by the end of Year 3 to
earn the right to then enter into a joint venture.
‐ Final cash payment of US$10M to PolarX to exercise the right to form a joint venture initially owned 51% Lundin
Mining and 49% PolarX.
Lundin Mining can withdraw at any time prior to formation of the JV as long as the required upfront cash payments for
said year to PolarX have been made to that point.
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Lundin Mining may accelerate the earn-in phase by spending the total of $24M and making the $20M cash payments in
a shorter timeframe at its sole election.
Once formed, the JV will be managed by a five-person board (3 Lundin Mining appointees, 2 PolarX appointees). Both
parties will be responsible for funding their share of future expenditure, with standard dilution provisions for non-
contributing parties.
Pursuant to the Lundin Mining Placement, the Company also granted Lundin Mining the right to maintain its equity interest in
the Company in the event that the Company commits to issue equity securities other than in specified circumstances (Anti-
Dilution Right). The Company obtained an ASX waiver from ASX Listing Rule 6.18 to allow the Company to grant the Anti-
Dilution Right.
Exploration Programs
Geological Setting and Porphyry Cu-Au Potential
The Alaska Range Project occurs immediately south of a series of thrust faults which mark the local boundary between the
Tintina Gold Belt to the north and the well-endowed Cretaceous porphyry copper belt to the south (this belt hosts the
supergiant Pebble Deposit which contains 37Mt of copper and 107Moz gold).
A corridor of NW to WNW trending faults intersects the thrusts in the NE part of the Alaska Range Project (refer to Figure 2).
A series of magnetic anomalies consistent with porphyry-style intrusions occur within this fault corridor. Interpreted porphyry-
style intrusions occur below Mars, Gemini and Saturn.
Figure 2. Geological interpretation for the Alaska Range Project, showing the Zackly prospect occurring in limestones next to a cluster of
intrusive centres, bounded by a major fault corridor which is perpendicular to terrane bounding thrust faults.
Based on geological and geophysical interpretations published to date:
a very pronounced, 12km long structural corridor extends from Mars in the WNW to Saturn in the ESE. This structural
corridor is up to 1km wide and hosts the Zackly Skarn along its northern edge (Figure 3);
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the Saturn complex can be resolved with an interpretation of multiple intrusive bodies surrounded by a significant
halo of magnetite destruction; and
inversion modelling of the magnetic data has highlighted that the anomaly at Saturn represents a steeply south
plunging, upward flaring cylinder. The magnetic body is approximately 2km x 1km in areal extent and extends to
depths in excess of 3km which the lower extent of the inversion model (Figure 4). It is covered by glacial till and is
blind to surface geochemistry.
Figure 3. District scale overview showing the 12km long WNW trending corridor which hosts Mars porphyry Cu-Au target, the high-grade
Zackly Cu-Au skarn and the Saturn porphyry target.
Saturn Porphyry Target
The Saturn copper-gold porphyry target was identified in early 2018 from PolarX’s evaluation of regional aeromagnetic data
and confirmed through a higher-resolution survey in October 2018. Saturn is approximately 3km to the east of the 100%
owned high-grade Zackly skarn deposit, a style of mineralisation often associated with large mineralised porphyry systems.
The Saturn anomaly is interpreted to be the potential fluid source for the east-west trend of skarn mineralization and
alteration discovered at Zackly (Figures 4 and 5).
The Saturn magnetic body is approximately 2km x 1km in areal extent and is covered by post-mineral glacial gravels and is
therefore blind to surface geochemistry.
The geometry of the Saturn magnetic body, its geological setting, and the bulls-eye magnetic high/low pattern are consistent
with an interpretation of a hydrothermal system related to a porphyry intrusive body, including an interpreted halo of
magnetite destruction and propylitic alteration surrounding the body. These factors, plus the proximity of high-grade Cu-Au
mineralisation at the Zackly Skarn deposit, support the interpretation that Saturn may host a porphyry Cu-Au system.
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Figure 4. Oblique view of 3D inversion modelling showing the strongly magnetic, upward flaring cylinder of the Saturn anomaly and its
spatial relationship to the mineralisation at Zackly. The image shows three cylindrical iso-surfaces of magnetic susceptibility, with red
representing the most magnetic and yellow the least. Non-magnetic areas are blank.
Figure 5. The Saturn target showing proximity to the high-grade Zackly Cu-Au deposit.
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IP Survey
A program of induced polarisation ground geophysics (IP survey) commenced in July 2019 over the Saturn target to collect
data along several profiles (Figure 6). Areas of anomalous chargeability have been identified on all five sections.
In Section 9175 the highest chargeability occurs on the outer flanks of the magnetic high, surrounding a zone of elevated
chargeability associated with the magnetic high (Figures 6, 7 and 8). This pattern is entirely consistent with the classic
porphyry copper exploration model; a pyritic shell in propylitic alteration surrounding the interpreted core of the porphyry
intrusions and is also consistent with the potential for disseminated sulphides and stockwork quartz veins within the porphyry
intrusions. This again confirms the interpreted porphyry intrusion as a high priority for drill testing.
The IP data also show zones of decreased resistivity above the chargeability highs, possibly indicating the presence of clay-
minerals associated with argillic alteration or weathering.
Two core drilling rigs commenced drilling in August 2019, to down-hole depths of 600m, to test the IP chargeability response
and magnetic bodies (Figure 8). Further drilling will be planned after an assessment of the geology encountered in the initial
holes is combined with the IP survey results and the previously announced detailed magnetic data.
Figure 6. Plan view of IP survey lines and projections of chargeability highs delineated at the Saturn target. The collar positions of the first
two diamond drill holes on line 9175N are also shown
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Figure 7. IP Line 9175N Inversion model showing chargeability response
Figure 8. IP Line 9175N Geological interpretation showing IP chargeability and magnetic responses and highlighting the potential potassic
core of the intrusive centres as a high priority drilling target
Zackly Deposit (100% owned by PolarX and excluded from the Lundin Mining earn-in area)
The skarn alteration and associated Cu-Au-Ag mineralisation at Zackly occurs in silty limestones (exoskarn) and also locally
in andesitic-basalt volcanic rocks and dioritic intrusive rocks (endokarn).
A drill program comprising 18 core holes for approximately 3,560m was completed in the first half of FY2019 (Zackly Drilling
Program) and determined that the mineralisation extends below the current resource and for at least 850m outside the
resource along-strike to the east (Figure 9). Assay results from that field program are detailed below (refer Figure 9 and
Table 2):
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Figure 9. Drill hole plan for Zackly showing the 2018 surface trace of PolarX’s inferred resource outline (red) and the 2018 drill hole collars
and key assay results. Further drilling has been planned in 2019 around the high-grade intersections in holes ZX-18020 and ZX-18024.
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Table 2: Assay Results Received from 2018 Zackly Drilling Program
Hole_ID
ZX-18016
ZX-18017
ZX-18018
ZX-18019
ZX-18020
ZX-18021
ZX-18022*
ZX-18023
ZX-18024
ZX-18025
ZX-18026
ZX-18027
ZX-18028
ZX-18029
ZX-18030
ZX-18032
ZX-18033
Including
and
and
AND
Including
AND
Including
Including
and
Depth
from (m)
Down hole
Interval
(m)
Au g/t Cu% Ag g/t
no significant assays - hole off trend
no significant assays - hole off trend
261.6
261.6
273.5
285.8
300.8
312
326.1
326.1
25.5
5.3
3.8
1.4
13.9
2.7
4.7
2.5
1.1
1.7
1.2
9.3
1.1
2.1
2.1
3.5
0.6
1.1
0.8
3.2
0.6
1.3
1.3
2.3
5.5
11.3
6.3
38.2
4.7
10.5
10.6
18.5
2.8
1.1
2.3
3.6
2.4
1.0
0.6
1.0
No significant assays – fault zone offsets trend
9.5
2.5
5.3
8.2
23.6
8.5
7.1
16.0
3.9
45.1
7.4
57.1
1.6
76.6
1.9
83.7
0.6
55
0.3
20.2
1.3
2.4
0.4
2.9
0.2
3.8
0.5
2.1
0.1
2.6
0.3
7.3
hole failed to reach target - rods jammed
3.3
9.3
0.6
47
2.3
15.0
0.8
0.24
0.7
5.4
20.8
36.1
84.8
148.6
149.9
2.3
3.1
2.2
0.7
0.7
no significant assays
and
Including
and
And
248.2
285.5
128.3
264.1
264.1
276.6
288.1
366.4
406.1
4.3
6.2
5.8
16.7
2.1
2.4
2.1
0.9
2.0
0.5
0.6
0.9
0.5
1.5
1.1
0.8
0.6
0.7
0.4
0.3
0.5
1.2
1.1
2.7
3.1
0.4
0.3
19.7
3.3
11.9
8.9
7.6
5.0
5.2
4.9
6.9
1.1
12.0
13.2
5.8
4.7
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Highlights and key conclusions from the 2018 assays were:
ZX-18020 and ZX-18024: Thick, High-Grade Gold with Copper Oxides from Surface
Strong, visible copper oxide mineralisation associated with quartz and sericite alteration was seen in hole ZX-18020
commencing near the surface immediately below 2.5m of transported over-burden, and also in hole ZX-18024 down dip to
the north (Figure 10). This mineralisation is hosted within sub-horizontal garnet bearing skarn alteration.
This wide, new drill intersection is approximately 850m to the east of the current inferred resource at Zackly and is open in
all directions (Figures 9 and 10). This mineralisation occurs very close to surface and is relatively flat lying, and if extended
by further drilling, may be amenable to open pit mining methods (refer Figures 11).
The Company also believes that the geological nature, width and grade of the mineralisation in hole ZX18020 supports its
view of the potential for a porphyry copper-gold target at Saturn (Figures 4 and 5).
Figure 10. Drill hole cross section for holes ZX-18020, ZX-18021 and ZX-18024.
Holes ZX-18023 and ZX-18025: High Grade Zones of Bornite-Chalcopyrite-Magnetite Skarn
Strong, visible copper sulphide mineralisation was seen in hole ZX-18023 and ZX-18025 in a magnetite-rich skarn horizon.
This drill section is approximately 350m east of the current Inferred Resource at Zackly (refer Figures 9 and 11). The copper
mineralisation is hosted within magnetite-rich skarn alteration and occurs as the high-tenor sulphide bornite, with lesser
amounts of chalcopyrite and covellite, with traces of native copper and copper oxides.
Lower grade mineralisation occurs in hole ZX-18027 where there is noticeably less magnetite. However, the
aeromagnetic data highlights a very strong magnetic anomaly to the immediate east of this section which has yet to be drill
tested by PolarX, offering potential for further shallow high-grade intersections such as those seen in holes ZX-18023 and
ZX-18025.
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Figure 11. Drill hole cross section for holes ZX-18023, ZX-18025 and ZX-18027
Holes ZX-18018 and hole ZX-18032: Zackly Main Skarn Extends Below Existing Resource
Assays from drill hole ZX-18032 confirm a 16.7m wide down-hole interval from 264.1m containing 1.2% copper, 0.5g/t gold
and 6.9g/t silver (refer Figure 12 and Table 2), extending the depth of the Main Skarn. This includes 2.4m with 2.7% copper,
1.1 g/t gold and 12 g/t silver from 264.1m and 2.1m with 3.1% copper, 0.8 g/t gold and 13.2 g/t silver from 288.1m.
This wide interval lies adjacent to a historical interval (Z-23-82) of 13.3m @ 2.2 g/t gold, 0.41% copper and 4.29 g/t silver
from 271.67m that included 5.7m at 4.43 g/t gold, 0.8% copper and 9.06 g/t silver.
Diamond hole ZX-18030, on the same cross-section as ZX-18032, intersected 5.8m at 0.8 g/t gold, 0.5% copper and 4.9 g/t
silver from 128.3 metres, beneath a historical intercept (Z-07-81) of 7.9m at 2.05% copper, 2.55 g/t gold and 22 g/t silver.
These intersections, along with those reported last year from hole ZX-18018, clearly demonstrate the potential for the Zackly
mineral resource to extend further at depth, where it has yet to be closed off by drilling.
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Figure 12. Hole ZX-18032 has intersected multiple copper & gold mineralised zones in skarn commencing near historical drill intercepts.
This confirms that mineralisation remains open at depth.
Mars Porphyry Cu-AU Target
The Mars prospect lies 6km to the WNW of the Zackly Skarn (see Figures 1 and 3) and is included in the JV Claims which
are subject to the Strategic Partnership with Lundin Mining. Mars is characterised by co-incident copper, gold, molybdenum
and arsenic anomalism in detailed soil sampling over a large area of approximately 2,000m x 1,500m, spatially co-incident
with a strong magnetic anomaly and an IP anomaly.
Key results to date include:
1. Copper (>250ppm) and molybdenum (>5ppm) anomalism in soils occurs in the central 1400m x 800m part of the multi-
element anomaly, within larger haloes of gold and arsenic anomalism. Peak values for copper were 1,775ppm and for
molybdenum were 24.2ppm.
2. Gold (>50ppb) and arsenic (>50ppm) anomalism in soils covers a larger 2000m x 1500m area, with peak values of
556ppb gold and 1,230ppm arsenic.
3. The copper and molybdenum anomalies coincide with a previously identified IP anomaly (Figure 13), which has been
modelled at depths of 100-150m below surface.
4. Rock-chip sampling shows numerous anomalous samples for copper and gold, with 18 of the 87 samples assaying
over 1% copper and 10 assaying over 0.5g/t gold.
5. Peak assays in rock-chips of 7.44%, 4.49%, 4.45% and 1.65% copper and 6.93g/t, 2.94g/t, 2.41g/t and 1.78g/t gold all
occur on the northern edge of the soil anomaly closets to the intersection of the terrane bounding fault, WNW structure
and intrusive cluster.
The Mars prospect is drill-ready and will be evaluated after completion of the 2019 the drilling program at Saturn.
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Figure 13. IP anomaly outlines plotted on gridded soil sampling copper assays for Mars. Also shown in black outlines are the magnetic
anomalies.
Figure 14. Copper oxides on steep outcrop at Mars, looking back towards Zackly
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Environmental Baseline Surveys
Environmental baseline studies to monitor surface and ground water at the Caribou Dome Project and Zackly deposits for
future mine permitting purposes continued during FY2019.
Uncle Sam Gold Project, Alaska USA
The Uncle Sam Project is located 75 kilometres southeast of the City of Fairbanks in Alaska. Intrusion-related gold has
been targeted in previous exploration programs.
The Company acquired the Uncle Sam Project in April 2013 from Millrock. Subsequently in July 2015, the Company entered
into a mineral lease and purchase agreement with Great American Minerals Exploration Inc. (GAME), pursuant to which
GAME agreed to lease the Uncle Sam Project for 10 years with an option to purchase the property at any time during the
lease period (refer Note 29 to the 2019 Annual Financial Report for key terms).
During the 2018 reporting period the Company received noticed from the Department of Natural Resources (State of Alaska)
that the mineral claims which comprise the Uncle Sam Gold Project had been declared abandoned (DNR Notice). The
basis for the decision was an error on the affidavit of labor filed by the previous tenement owner in 2011. As a result, GAME
has sought to terminate the Option Agreement.
The Company is currently reviewing its options in relation to this matter, including whether GAME has complied with its
obligations under the Option Agreement, but notes that the Uncle Sam Gold Project:
is considered a non-core asset and had a $nil carrying value in the Company’s financial statements at the time of
receipt of the DNR Notice; and
is independent of the Company’s Alaska Range Project.
Corporate
As detailed further above, in June 2019 the Company secured the Strategic Partnership with Lundin Mining in June 2019, the
terms of which included Lundin Mining subscribing for 53,442,000 Shares at an issue price of $0.08 per Share for gross
proceeds of $4.275 million.
A summary of the other significant corporate activities that have taken place during the reporting period is as follows:
on 2 August 2018, the Company completed a placement consisting of 35,299,128 Shares at an issue price of $0.11 per
share for gross proceeds of $3.883 million to institutional and sophisticated investors;
on 14 December 2018, the Company completed a placement consisting of 21,100,000 Shares at an issue price of
$0.06 per share for gross proceeds of $1.266 million to institutional and sophisticated investors; and
on 7 June 2019, the Company announced that it would be undertaking a non-underwritten 1-for-7 non-renounceable
rights issue (Entitlement Offer). The Entitlement Offer subsequently completed on 4 July 2019 and raised gross
proceeds of $3,456,314 pursuant to the issue of 43,203,922 Shares at an issue price of $0.08 per share.
As at the date of this report, the Company had on issue 416,222,115 Shares and 33,800,000 unlisted options.
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Additional Disclosure
The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’) sets out
minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources
and Ore Reserves. The information contained in this report has been presented in accordance with the JORC Code.
Information in this report relating to Exploration results is based on information compiled by Dr Frazer Tabeart (a director and
shareholder of PolarX Limited), who is a member of The Australian Institute of Geoscientists. Dr Tabeart has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person under the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral
Resources and Ore Reserves. Dr Tabeart consents to the inclusion of the data in the form and context in which it appears.
Previously Reported Results
There is information in this report relating to
(1)
(2)
the Mineral Resource Estimate for the Caribou Dome Deposit (Alaska Range Project), which was previously announced on 5
April 2017;
the Mineral Resource Estimate for the Zackly Deposit (Alaska Range Project), which was previously announced on 20 March
2018; and
(3) exploration results which were previously announced on 13 July 2018, 17 July 2018, 24 July 2018, 7 August 2018, 15 August
2018, 21 August 2018, 27 August 2018, 20 September 2018, 25 September 2018, 31 October 2018, 5 November 2018, 29
January 2019, 25 March 2019 and 6 August 2019.
Other than as disclosed in those announcements, the Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcements, and that all material assumptions and technical
parameters have not materially changed. The Company also 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.
Strategic Partnership - Anti Dilution Right
As detailed in the report above, the Company obtained an ASX waiver from ASX Listing Rule 6.18 to allow the Company to grant
the Anti-Dilution Right to Lundin Mining. A condition of the ASX waiver was that the Company disclose a summary of the Anti-
Dilution Right in each annual report. That summary is as follows:
(1)
the Anti-Dilution Right lapses on the earlier of:
(i)
the date on which Lundin Mining ceases to hold in aggregate at least 10% voting power in the Company;
(ii)
the date on which Lundin Mining’s voting power in the Company exceeds 25%; or
(iii) the strategic relationship between the Company and Lundin Mining ceasing or changing in such a way that it effectively
ceases;
(2)
the Anti-Dilution Right may only be transferred to a wholly owned subsidiary of Lundin Mining;
(3) any securities issued under the Anti-Dilution Right must be issued to Lundin Mining for cash consideration that is:
(i) no more favourable to the Company than any cash consideration paid by third parties (in the case of issues of equity
securities to third parties for cash consideration); or
(ii) equivalent in value to non-cash consideration offered by third parties (in the case of issues of equity securities to third
parties for non-cash consideration); and
(4)
the number of securities that may be issued to Lundin Mining under the Anti-Dilution Right in the case of any diluting event
must not be greater than the number required in order for Lundin Mining to maintain its percentage holding in the issued share
capital of the Company immediately before that diluting event.
Forward Looking Statements:
Any forward-looking information contained in this report is made as of the date of this news release. Except as required under
applicable securities legislation, PolarX does not intend, and does not assume any obligation, to update this forward-looking
information. Any forward-looking information contained in this report is based on numerous assumptions and is subject to all of the
risks and uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a
result, actual results may vary materially from those described in the forward-looking information. Readers are cautioned not to
place undue reliance on forward-looking information due to the inherent uncertainty thereof.
PolarX Limited
17
2019 Annual Report
Directors’ Report
The Directors present the annual report of PolarX Limited (PolarX or the Company) and its controlled entities (the Group)
for the financial year ended 30 June 2019.
DIRECTORS
The names, qualifications and experience of the Directors in office during or since the end of the financial year are as follows
(Directors were in office for the entire period unless otherwise stated).
Mark Bojanjac
Executive Chairman
Qualifications
BCom, ICAA
Experience
Mr Bojanjac is a Chartered Accountant with over 25 years’ experience in developing resource
companies. Mr Bojanjac was a founding director of Gilt-Edged Mining Limited which discovered
one of Australia’s highest-grade gold mines and was managing director of a public company
which successfully developed and financed a 2.4m oz gold resource in Mongolia. He also co-
founded a 3 million oz gold project in China.
Mr Bojanjac was most recently Chief Executive Officer of Adamus Resources Limited and
oversaw its advancement from an early stage exploration project through its definitive feasibility
studies and managed the debt and equity financing of its successful Ghanaian gold mine.
Interest in shares
and options
2,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020
5,000,000 unlisted options exercisable at $0.125 on or before 20 December 2021
Other Directorships
Non-Executive Director of Kula Gold Limited (since 21 August 2017) and Geopacific Resources
Limited (March 2013 to May 2019)
Frazer Tabeart
Managing Director
Qualifications
Ph.D, B.Sc (Hons), ARSM, MAIG
Experience
Dr. Tabeart is a geologist with over 30-years’ international experience in exploration and project
development, with strong technical background in porphyry copper-gold systems in SE Asia, SW
Pacific, the American Cordillera and central and northern Asia. After spending 16 years with WMC
Resources and managing exploration portfolios in the Philippines, Mongolia and Africa, he left to
join the Mitchell River Group.
Dr. Tabeart has served on ASX-listed Company Boards at Executive level over last 10 years.
Interest in shares
and options
4,450,000 ordinary shares
5,000,000 unlisted options exercisable at $0.125 on or before 20 December 2021
Other Directorships
Dr. Tabeart is a Director and Principal at Mitchell River Group, and current Managing Director at
African Energy Resources Limited (since 1 November 2007) and Non-Executive Director at
Arrow Minerals Limited (since 1 September 2014).
Jason Berton
Executive Director
Qualifications
Ph.D, B.Sc (Hons), MAusIMM
Experience
Dr. Berton is a geologist with over 17 years’ mining and exploration experience including working
for Homestake, Barrick and BHP Billiton and SRK Consulting. Dr Berton has also previously
spent two years in private equity investment and four years as Managing Director of ASX- listed
Estrella Resources.
Dr Berton holds two Degrees, a Bachelor of Economics and a Bachelor of Science (Hons) plus a
PhD in Structural Geology, all from Macquarie University.
Interest in shares
and options
13,664,938 ordinary shares
5,000,000 unlisted options exercisable at $0.125 on or before 20 December 2021
Other Directorships
None
PolarX Limited
18
2019 Annual Report
Directors’ Report
Robert Boaz
Independent Non-Executive Director
Qualifications
Honors B.A., M.A. Economics
Experience
Interest in shares
and options
Other Directorships
Mr Boaz graduated with honours from McMaster University of Hamilton, Ontario with a Bachelor
of Arts in Economics and has a Masters Degree in Economics from York University in Toronto.
He is a highly respected financial and economic strategist in Canadian bond and equity markets
with experience related to equity research, portfolio management, institutional sales and
investment banking.
Mr Boaz has over 20 years’ experience in the finance industry, most recently as Managing
Director, Investment Banking with Raymond James Ltd and Vice-President, Head of Research
and in-house portfolio strategist for Dundee Securities Corporation.
Mr Boaz is the former President & CEO of Aura Silver Resources Inc.
1,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020
Aura Silver Resources Inc. (2008 - 2018)
Caracara Silver Inc. (2011 - 2019)
Renaissance Gold Inc. (since 2010)
RESULTS OF OPERATIONS
The Group’s total comprehensive loss for the year attributable to the members was $795,651 (2018: $869,476).
DIVIDENDS
No dividend was paid or declared by the Group in the year and up to the date of this report.
CORPORATE STRUCTURE
PolarX Limited is an Australian registered public company limited by shares.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
During the financial year, the Group’s principal activity was mineral exploration. The Group currently holds interests in
copper and gold exploration projects in Alaska USA. During the 2019 financial year, there were no changes in the principal
activities from the prior financial year.
EMPLOYEES
The Group had one employee at 30 June 2019 (2018: one employee).
REVIEW OF OPERATIONS
A detailed summary of the Group’s operations during the year, including significant changes in the state of affairs, are
detailed in the Review of Operations.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 4 July 2019, the Company completed a non-renounceable rights issue (Entitlement Offer), which raised gross proceeds
of $3,456,314 pursuant to the issue of 43,203,922 Shares at an issue price of $0.08 per Share. Net proceeds from the
Entitlement Offer will be used for exploration and development activities on the Alaska Range Project and for general
working capital purposes.
On 31 July 2019, the Company issued 10,750,000 options to consultants and advisers, each exercisable at $0.125 on or
before 20 December 2021, as part consideration for past and ongoing services to the Company.
PolarX Limited
19
2019 Annual Report
Directors’ Report
On 30 August 2019, the Company issued 305,555 shares at a deemed issue price of $0.108 per share as part consideration
for consulting services.
No other significant events have occurred subsequent to the balance sheet date but prior to the date of this report that would
have a material impact on the consolidated financial statements.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue to carry out its business plan, by:
continuing to explore the Alaska Range Project and advance the project towards development;
continuing to meet its commitments relating to exploration tenements and carrying out further exploration, permitting
and development activities; and
prudently managing the Group’s cash to be able to take advantage of any future opportunities that may arise to add
value to the business.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group carries out operations that are subject to environmental regulations under Federal and State legislation in the
USA. The Group has procedures in place to ensure regulations are adhered to. The Group is not aware of any breaches in
relation to environmental matters.
SHARE OPTIONS
There were 23,450,000 options over unissued ordinary shares at 30 June 2019. During the 2019 financial year:
the Company issued 18,250,000 options, exercisable at $0.125 on or before 20 December 2021, to directors,
employees, and consultants; and
no options were exercised.
Since the end of the financial year, (i) a further 10,750,000 options, each exercisable at $0.125 on or before 20 December
2021, have been issued; (ii) no options have been exercised; and (iii) 400,000 options have expired. The details of the
options on issue at the date of this report are as follows:
Number
Exercise Price
Expiry Date
4,000,000
$0.0715
19 February 2020
400,000
400,000
29,000,000
$0.175
$0.12
$0.125
17 June 2020
18 September 2020
20 December 2021
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
There were 416,222,115 Shares on issue at the reporting date.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has made agreements indemnifying all the Directors and Officers of the Company against all losses or
liabilities incurred by each Director or Officer in their capacity as Directors or Officers of the Company to the extent permitted
by the Corporations Act 2001. The indemnification specifically excludes wilful acts of negligence. The Company paid
insurance premiums in respect of Directors’ and Officers’ Liability Insurance contracts for current Officers of the Company,
including Officers of the Company’s controlled entities. The liabilities insured are damages and legal costs that may be
incurred in defending civil or criminal proceedings that may be brought against the Officers in their capacity as officers of
entities in the Group. The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons.
PolarX Limited
20
2019 Annual Report
Directors’ Report
DIRECTORS’ MEETINGS
During the financial year, in addition to regular informal Board discussions and decisions made via circulating resolutions,
the number of Directors’ meetings (including meetings of Committees) held during the year, and the number of meetings
attended by each Director were as follows:
Directors Meetings
Audit Committee Meetings
Name
Number Eligible to
Attend
Number Attended
Number Eligible
to Attend
Number Attended
Mark Bojanjac
Frazer Tabeart
Jason Berton
Robert Boaz
1
1
1
1
1
1
1
1
2
-
-
2
2
-
-
2
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
The Board of Directors is responsible for the overall strategy, governance and performance of the Company. The Board has
adopted a corporate governance framework which it considers to be suitable given the size, nature of operations and
strategy of the Company. To the extent that they are applicable, and given its circumstances, the Company adopts the eight
essential Corporate Governance Principles and Best Practice Recommendations ('Recommendations') published by the
Corporate Governance Council of the ASX. The Company’s Corporate Governance Statement and Appendix 4G, both of
which have been lodged with ASX, are available on the Company’s website: www.polarx.com.au.
AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Group’s auditors to provide the Directors of PolarX with an
Independence Declaration in relation to the audit of the full-year financial report. A copy of that declaration is included at
page 71 of this report. There were no non-audit services provided by the Company’s auditor.
PolarX Limited
21
2019 Annual Report
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and other key management personnel of the
Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purpose of this report,
Key Management Personnel (KMP) are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether
executive or otherwise) of the Parent entity.
Details of Directors and Key Management Personnel
The directors and other KMP of the Group during or since the end of the financial year were:
Non-Executive Directors
Mr. Robert Boaz
Non-Executive Director
Executive Officers (KMP)
Mr. Mark Bojanjac
Dr. Frazer Tabeart
Dr. Jason Berton
Mr. Ian Cunningham
Executive Chairman
Managing Director
Executive Director
Chief Financial Officer and Company Secretary
Remuneration Policy
In the absence of a remuneration committee, the Board is responsible for determining and reviewing compensation
arrangements for the Directors and executives. The key principles which apply in determining remuneration structure and
levels are:
set competitive fixed remuneration packages to attract and retain high calibre directors and executives;
structure variable remuneration rewards to reflect the stage of development of the Company’s operations; and
establish appropriate performance hurdles for variable executive remuneration.
The Board undertakes an annual review of remuneration arrangements and may seek Independent external advice if
required, but did not employ a remuneration consultant during the year ended 30 June 2019.
The structure of Non-Executive Director and Executive remuneration is separate and distinct.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
Directors of high calibre, whilst incurring costs that are acceptable to shareholders.
In accordance with the Company’s Constitution and the ASX Listing Rule, the maximum aggregate remuneration that may
be paid to Non-Executive Directors is currently set at $200,000 per annum. The amount of aggregate remuneration and the
manner is which is apportioned is reviewed annually. The Board considers the fees paid to non-executive directors of
comparable companies and external advice (if required), when undertaking the annual review process.
Executive Director and Senior Manager Remuneration
Remuneration consists of fixed and variable components (currently comprising a long-term incentive scheme).
Fixed remuneration currently consists of cash remuneration. Fixed remuneration levels are reviewed annually by the Board,
taking into consideration past performance, time commitments, relevant market comparatives and the Company’s stage of
development. The Board has access to external advice if required.
The Board determines the appropriate form and levels of variable remuneration as and when they consider rewards are
warranted. Variable remuneration currently consists of share option grants (long term incentives), which are currently
considered to be the most effective and appropriate form of long-term incentives given the Company’s financial resources
and stage of development. The objective of the option grants is to link the variable remuneration to the achievement of key
operational targets and shareholder value creation.
PolarX Limited
22
2019 Annual Report
Directors’ Report
The table below shows the performance of the Group as measured by loss per share for the previous five years:
As at 30 June
2019
2018
2017*
2016*
2015*
Loss per share (cents)
Share price at reporting date (cents)
*adjusted on a post-Consolidation basis
$0.55
9.0
$0.64
8.0
$1.05
8.0
$1.95
31.0
$2.4
17.5
Details of the nature and amount of each element of the emolument of Directors and KMP of the Company for the financial
year are as follows:
Director
2019
Non-Executive Directors
Robert Boaz
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart
Jason Berton
Ian Cunningham
2018
Non-Executive Directors
Michael Fowler2
Robert Boaz
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart1
Jason Berton1
Ian Cunningham
Short Term Benefits
Base Salary
$
Director Fees
$
Consulting
Fees
$
Super-
annuation
$
-
-
-
-
-
-
-
-
-
-
-
-
-
21,250
-
-
-
-
-
21,250
7,610
20,000
-
-
-
-
27,610
187,000
147,000
152,500
147,000
633,500
-
-
180,000
128,333
136,250
140,000
584,583
-
-
-
-
-
-
723
-
-
-
-
-
723
Share
Based
Payments –
Options
$
Total
$
-
21,250
20,577
20,577
20,577
7,687
69,418
-
-
-
-
-
-
-
207,577
167,577
173,077
154,687
724,168
8,333
20,000
180,000
128,333
136,250
140,000
612,916
Notes:
1.
2. Michael Fowler resigned as Non-Executive Director on 1 December 2017.
Frazer Tabeart and Jason Berton were appointed as directors on 25 July 2017.
There were no other key management personnel of the Company during the financial years ended 30 June 2019 and 30
June 2018.
The share options issued as part of the remuneration to the Non-Executive Director were subject to vesting conditions,
designed to secure his ongoing commitment to the Company.
PolarX Limited
23
2019 Annual Report
Directors’ Report
The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are
as follows:
Name
Grant
Date
Grant
Number
Second
Vesting
Date)
Expiry
Date /
Last
Exercise
Date
Mark Bojanjac1
20/02/15
2,000,000
20/02/17
19/02/20
Average
Fair
Value per
Option at
Grant
Date
$0.0460
Exercise
Price per
Option
Total
Value
Granted
$
Vested
%
Vested
$0.0715
$92,393
2,000,000
100
100
100
-
-
-
-
-
-
-
-
-
-
-
Michael Fowler1, 2
20/02/15
1,000,000
20/02/17
19/02/20
$0.0460
$0.0715
$46,197
1,000,000
Robert Boaz1
20/02/15
1,000,000
20/02/17
19/02/20
$0.0460
$0.0715
$46,197
1,000,000
Mark Bojanjac
21/12/18
2,000,000
21/12/18
2,000,000
21/12/18
1,000,000
Frazer Tabeart
21/12/18
2,000,000
21/12/18
2,000,000
21/12/18
1,000,000
Jason Berton
21/12/18
2,000,000
21/12/18
2,000,000
21/12/18
1,000,000
Ian Cunningham
21/12/18
750,000
21/12/18
750,000
3
4
5
3
4
5
3
4
5
3
6
20/12/21
$0.0235
$0.125
$47,000
20/12/21
$0.0120
$0.125
$23,970
20/12/21
$0.0235
$0.125
$23,500
20/12/21
$0.0235
$0.125
$47,000
20/12/21
$0.0120
$0.125
$23,970
20/12/21
$0.0235
$0.125
$23,500
20/12/21
$0.0235
$0.125
$47,000
20/12/21
$0.0120
$0.125
$23,970
20/12/21
$0.0235
$0.125
$23,500
20/12/21
$0.0235
$0.125
$17,625
20/12/21
$0.0235
$0.125
$17,625
-
-
-
-
-
-
-
-
-
-
-
Notes:
1.
Options were granted for no consideration with 50% vesting on 20 February 2016 (fair value per option $0.0455) and the remaining
50% vested on 20 February 2017 (fair value per option $0.0465).
2. Michael Fowler resigned as Non-Executive Director on 1 December 2017.
3.
Options were granted for no consideration and shall vest upon announcement of a JORC Inferred mineral resource estimate for the
Alaska Range Project, comprising both the Stellar Copper Gold and the Caribou Dome Copper properties, of 10 million tonnes of
mineralisation at a minimum cut-off grade of 0.5% copper or copper equivalent, signed off by a competent person other than a director
or employee of the Company.
Options were granted for no consideration and shall vest upon the Shares trading on ASX at a volume weighted average price of
$0.20 or more for 10 consecutive trading days.
Options were granted for no consideration and shall vest upon completion of feasibility study for the Alaska Range Project.
Options were granted for no consideration and shall vest upon the announcement of the completion of the acquisition of an 80%
interest in the Caribou Dome Copper Project.
4.
5.
6.
Options were granted as part of the recipient’s remuneration package.
There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were
no forfeitures and no remuneration options were exercised during the year ended 30 June 2019 (2018: Nil).
PolarX Limited
24
2019 Annual Report
Directors’ Report
Shareholdings of Directors and Key Management Personnel
The number of shares in the Company held during the financial year by Directors and Key Management Personnel of the
Group, including their personally related parties, is set out below.
Balance at
the start of
the year
Granted as
compensation
Received on
exercise of
options
Acquired on
Market
Balance on
resignation
date / Other
Balance at
the end of the
year
30 June 2019
Non-Executive Directors
Robert Boaz
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart
Jason Berton
Ian Cunningham
30 June 2018
Non-Executive Directors
Michael Fowler1
Robert Boaz
Executive Officers (KMP)
Frazer Tabeart 2
Jason Berton 2
Ian Cunningham
-
-
4,103,273
13,664,938
3,720,930
-
-
4,103,273
13,631,832
3,720,930
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,106
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,103,273
13,664,938
3,720,930
-
-
4,103,273
13,664,938
3,720,930
Notes:
1. Michael Fowler resigned as Non-Executive Director on 1 December 2017.
2.
Frazer Tabeart and Jason Berton were appointed as directors on 25 July 2017 and hence their opening balances represent shares
held on the appointment date.
PolarX Limited
25
2019 Annual Report
Directors’ Report
Option holdings of Directors and Key Management Personnel
The numbers of options over ordinary shares in the Company held during the financial year by Directors and Key
Management Personnel of the Group, including their personally related parties, are set out below:
Balance at the
start of the year
Granted as
compensation
Exercised
during the year
Balance on
resignation
date / Other
Balance at
the end of the
year
30 June 2019
Non-Executive Directors
Robert Boaz
1,000,000
-
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart
Jason Berton
Ian Cunningham
30 June 2018
Non-Executive Directors
Robert Boaz
Michael Fowler2
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart1
Jason Berton1
Ian Cunningham
2,000,000
-
-
-
1,000,000
1,000,000
2,000,000
-
-
-
5,000.000
5,000.000
5,000.000
1,500,000
-
-
-
-
-
-
Notes:
1.
2. Michael Fowler resigned as Non-Executive Director on 1 December 2017.
Frazer Tabeart and Jason Berton were appointed as directors on 25 July 2017.
Service Agreements
Executive Officers
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
7,000,000
5,000,000
5,000,000
1,500,000
1,000,000
(1,000,000)
-
-
-
-
-
2,000,000
-
-
-
The Executive Chairman, Mr. Mark Bojanjac consults to the Company and was remunerated on an average monthly basis at
a rate of $15,583 per month (excluding GST). Mr. Bojanjac is not entitled to any termination benefits.
The Managing Director, Mr. Frazer Tabeart consults to the Company and was remunerated on an average monthly basis at
a rate of $12,250 per month (excluding GST). Mr. Tabeart is not entitled to any termination benefits.
The Executive Director, Mr. Jason Berton consults to the Company and was remunerated on an average monthly basis at a
rate of $12,708 per month (excluding GST). Mr. Berton is not entitled to any termination benefits.
The Company Secretary / Chief Financial Officer, Mr. Ian Cunningham consults to the Company and was remunerated on
an average monthly basis at a rate of $12,250 per month (excluding GST). Mr. Cunningham is not entitled to any
termination benefits.
Non-Executive Directors
Mr. Robert Boaz is paid Director’s fees on a monthly basis. No notice period is required should a non-executive director
elect to resign.
Mr. Michael Fowler was paid Director’s fees on a monthly basis prior to his resignation on 1 December 2017.
PolarX Limited
26
2019 Annual Report
Directors’ Report
END OF REMUNERATION REPORT
Signed on behalf of the board in accordance with a resolution of the Directors.
Mark Bojanjac
Executive Chairman
23 September 2019
PolarX Limited
27
2019 Annual Report
PolarX Limited
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2019
Notes
Consolidated
2019
$
2018
$
Interest Revenue & Other Income
$ 736 $ 4,247
Public company costs
Consulting and directors fees
Share-based compensation
Legal fees
Staff costs
Serviced office and outgoings
Interest and penalties
Foreign exchange loss
Write off of exploration assets
Other expenses
Loss from operations
Income tax expense
Loss after Income Tax
11
6
54,092 43,558
431,243
402,630
34,945 29,738
17,576 40,373
50,586 50,471
36,000 28,000
-
570
41,815 (40,931)
- 3,094
1,034,784
938,526
1,701,041
1,496,029
$ (1,700,305) $ (1,491,782)
- -
$ (1,700,305) $ (1,491,782)
Other comprehensive income
Items that may be reclassified to profit and loss in subsequent
periods
Foreign currency translation
Other comprehensive income for the year
15
904,654
622,306
904,654
622,306
Total comprehensive loss for the year
$ (795,651) $ (869,476)
Loss per share:
Basic and diluted loss per share (cents per share)
19
$ (0.55) $ (0.64)
Weighted Average Number of Shares:
Basic and diluted number of shares
310,085,648 231,387,714
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
PolarX Limited
28
2019 Annual Report
PolarX Limited
Statement of Financial Position
as at 30 June 2019
Current Assets
Cash and cash equivalents
Other receivables and prepayments
Total current assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation assets
Total Non-Current Assets
Total Assets
Current liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
NET ASSETS
Equity
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Commitments
Contingent Liability
Notes
Consolidated
As at
June 30
June 30
2019
$
2018
$
16
8
9
11
$ 4,254,493 $ 528,997
152,650 1,096,095
4,407,143
1,625,092
$ 6,518
$ 8,834
25,961,956 20,308,946
25,968,474 20,317,780
$ 30,375,617
$ 21,942,872
12
279,193
199,309
279,193
199,309
$ 279,193 $ 199,309
$ 30,096,424
$ 21,743,563
$ 86,874,320
$ 77,805,986
6,790,756 5,805,924
(63,568,652) (61,868,347)
$ 30,096,424
$ 21,743,563
13
15
14
17
25
The above statement of financial position should be read in conjunction with the accompanying notes.
PolarX Limited
29
2019 Annual Report
PolarX Limited
Statement of Cash Flows for the year ended 30 June 2019
Notes
Consolidated
2019
$
2018
$
Cash flows from Operating activities
Payments to suppliers and employees
Interest received and other income
$ (1,654,788) $ (1,627,717)
736 4,247
Net cash flows used in operating activities
16 (b)
(1,654,052) (1,623,470)
Cash flows from investing activities
Cash acquired on acquisition
Payments for expenditure on exploration
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Net cash flows generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange variances on cash
Cash and cash equivalents at end of year
- 35,142
(3,751,237) (5,404,515)
(3,751,237) (5,369,373)
9,424,274 8,012,313
(316,783) (521,941)
9,107,491 7,490,372
3,702,202
497,529
528,997
54,856
23,294 (23,388)
$ 4,254,493 $ 528,997
The above statement of cash flows should be read in conjunction with the accompanying notes.
PolarX Limited
30
2019 Annual Report
PolarX Limited
Statement of Changes in Equity for the year ended 30 June 2019
Consolidated
At 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive
(loss)/income for the year
Transactions with owners in
their capacity as owners
Shares issued
Share issue costs
Options issued to consultants
Share-based compensation
Notes
Number of
Shares
Issued
Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserves
Warrant
Reserves
Share Based
Payment
Reserves
Option
Premium
Reserve
Total
262,871,510 $ 77,805,986 $(61,868,347)
- - (1,700,305)
- - - 904,654
$ 406,328 $ 1,190,098 $ 4,206,498 $ 3,000 $ 21,743,563
- - - - (1,700,305)
- - - 904,654
- $ - $ (1,700,305)
$ 904,654
$ - $ - $ - $ (795,651)
13
13
13, 24
13, 24
109,841,128 9,424,274
- (355,940)
- - - - - 9,223
- - - - - 70,955
- - - - - 9,424,274
- - - - - (355,940)
- 9,223
- 70,955
Balance at 30 June 2019
372,712,638 $ 86,874,320 $(63,568,652) $ 1,310,982
$ 1,190,098 $ 4,286,676 $ 3,000 $ 30,096,424
Consolidated
At 1 July 2017
Loss for the year
Other comprehensive income
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued
Share issue costs
Shares issued for acquisition of
Vista Minerals
Options issued to consultants
Notes
Number of
Shares
Issued
Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserves
Warrant
Reserves
Share Based
Payment
Reserves
Option
Premium
Reserve
Total
91,982,673 61,123,936 (60,376,565) (215,978)
- - (1,491,782)
- - - 622,306 - - -
5,901,251
1,190,098 4,176,760 3,000
- - - - (1,491,782)
622,306
- - (1,491,782)
622,306 - - - (869,476)
13
13
78,924,407 8,012,313 - - - - -
8,012,313
- - - - - (526,689)
- (526,689)
5, 13
13, 24
91,964,430 9,196,426 - - - - -
- - - - - 29,738 -
9,196,426
29,738
Balance at 30 June 2018
262,871,510 77,805,986 (61,868,347) 406,328
1,190,098 4,206,498 3,000
21,743,563
The above statement of changes in equity should be read in conjunction with the accompanying notes.
PolarX Limited
31
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
1. Corporate Information
The financial report of PolarX Limited (PolarX or the Company) and its controlled entities (the Group) for the year
ended 30 June 2019 was authorised for issue in accordance with a resolution of the Directors on 23 September
2019.
PolarX Limited is a public company limited by shares and domiciled in Australia, whose shares are publicly traded on
the Australian Securities Exchange. It is a “for profit” entity.
On 7 August 2017, the Company completed a 1 for 5 security consolidation (Consolidation). Accordingly, the
comparatives for the year ended 30 June 2018 have been presented on a post-Consolidation basis in this report,
including all references throughout the financial statements and the notes to the financial statements to shares and
options.
The nature of the operations and principal activities of the Group are described in the Directors’ report.
2. Going Concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal
business activities and realisation of assets and settlement of liabilities in the ordinary course of business.
For the year ended 30 June 2019, the Group incurred a loss from operations of $1,700,305 (2018: $1,491,782) and
recorded net cash inflows of $3,702,202 (2018: $497,529). At 30 June 2019, the Group had net current assets of
$4,127,950 (2018: $1,425,783).
The Group’s ability to continue as a going concern is dependent upon it maintaining sufficient funds for its operations
and commitments. The Directors continue to be focused on meeting the Group’s business objectives and is mindful of
the funding requirements to meet these objectives. The Directors consider the basis of going concern to be
appropriate for the following reasons:
the current cash balance of the Group relative to its fixed and discretionary commitments;
given the Company’s market capitalisation and the underlying prospects for the Group to raise further
funds from the capital markets;
potential for additional funding from the strategic earn-in joint venture with Lundin Mining Corporation
(Strategic Partnership), subject to exercise of the earn-in option; and
the fact that future exploration and evaluation expenditure is generally discretionary in nature (i.e. at the
discretion of the Directors having regard to an assessment of the Group’s eligible expenditure to date
and the timing and quantum of its remaining earn-in expenditure requirements). Subject to meeting
certain minimum expenditure commitments, further exploration activities may be slowed or suspended as
part of the management of the Group’s working capital.
The Directors are confident that the Group can continue as a going concern and as such are of the opinion that the
financial report has been appropriately prepared on a going concern basis. However, should the Group be unable to
raise further required financing, there is uncertainty which may cast doubt as to whether or not the Group will be able
to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course
of business and at the amounts stated in the financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not
continue as a going concern.
PolarX Limited
32
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
3. Summary of Significant Accounting Policies
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements
of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis.
The financial report is presented in Australian dollars.
(a) Compliance Statement
The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board.
(b) New accounting standards and interpretations
New and revised accounting requirement applicable to the current reporting period
The Group has adopted the following new standards and amendments to standards, including any consequential
amendments to other standards, with a date of initial application of 1 July 2018 and that are applicable to the Group.
(i) AASB 9: Financial Instruments and associated Amending Standards - AASB 139 Financial Instruments:
Recognition and Measurement
This Standard brings together all three aspects of the accounting for financial instruments: classification and
measurement; impairment; and hedge accounting.
As a result of adopting AASB 9 Financial Instruments, the Company has amended its financial instruments
accounting policies to align with AASB 9. AASB 9 makes major changes to the previous guidance on the
classification and measurement of financial assets and introduces an ‘expected credit loss’ model for
impairment of financial assets.
AASB 9 is applicable to annual reporting periods beginning on or after 1 January 2018.
There were no financial instruments which the Company designated at fair value through profit or loss under
AASB 139 that were subject to reclassification. The Board assessed the Company’s financial assets and
determined the application of AASB 9 does not result in a change in the classification of the Company’s
financial instruments.
The adoption of AASB 9 does not have a significant impact on the financial report.
(ii) AASB 15 Revenue from Contracts with Customers - AASB 118: Revenue, AASB 111 Construction Contracts
The Standard replaces AASB 118 Revenue, AASB 111 Construction Contracts and several revenue-related
Interpretations. AASB 15 establishes a five-step model to account for revenue arising from contracts with
customers and requires that revenue be recognised at an amount that reflects the consideration to which an
entity expects to be entitled in exchange for transferring goods or services to a customer.
AASB 15 is applicable to annual reporting periods beginning on or after 1 January 2018.
The adoption of AASB 15 does not have a significant impact on the Company as the Company does not
currently have any revenue from customers.
PolarX Limited
33
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(iii) AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-
based Payment Transactions
This standard issued amendments to AASB 2 Share-based Payment that address three main areas:
the effects of vesting conditions on the measurement of a cash-settled share-based payment
transaction;
the classification of a share-based payment transaction with net settlement features for withholding
tax obligations; and
accounting where a modification to the terms and conditions of a share-based payment transaction
changes its classification from cash settled to equity settled.
AASB 2016-5 is applicable to annual reporting periods beginning on or after 1 January 2018.
The adoption of these amendments does not have a material impact on the Group.
New accounting standards and interpretations issued but not yet effective
The following applicable accounting standards and interpretations have been issued or amended but are not yet
effective. The Company has not elected to early adopt any new Standards or Interpretations. The adoption of the
Standards or Interpretations are not expected to have material impact on the financial statements of the Group.
Application
Application
date
of
date
for
Standard
Group
1 January 2019
1 July 2020
Reference
Title
Summary
AASB 16
Leases
AASB 117
Leases
Int. 4
Determining
whether an
Arrangement
contains a
Lease
Int. 115
Operating
Leases—
Lease
Incentives
Int. 127
Evaluating the
Substance of
Transactions
Involving the
Legal Form of
a Lease
for
the principles
AASB 16 sets out
the
recognition, measurement, presentation and
disclosure of leases and requires lessees to
account for all leases under a single on-balance
sheet model similar to the accounting for finance
leases under AASB 117.
The key features of AASB 16 are as follows:
‐ Leases are required to recognise assets
and liabilities for all leases with a term of
the
more
underlying asset is of low value.
than 12 months, unless
‐ A
lessee measures
right-of-use assets
to other non-financial assets
to other
liabilities similarly
similarly
lease
and
financial liabilities.
‐ Assets and Liabilities arising from the lease
are initially measured on a present value
includes non-
basis. The measurement
(including
cancellable
also
inflation-linked
in
includes payments
optional
is
if
reasonably certain to exercise an option to
extend to lease, or not to exercise an
option to terminate the lease.
lease payments
payments),
to be made
lessee
periods
and
the
‐ AASB 16 contains disclosure requirements
for leases.
PolarX Limited
34
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Lessor accounting
‐ AASB 16 substantially carries forward the
in AASB
lessor accounting requirements
117. Accordingly, a lessor continues to
classify its leases as operating leases or
finance leases, and to account for those
two types of leases differently.
‐ AASB
requires
16 also
enhanced
disclosures to be provided by lessors that
will improve information disclosed about a
to
lessor’s
residual value risk.
risk exposure, particularly
The directors anticipate that the adoption of
AASB 16 will not have a material impact on the
Group's financial statements.
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
(c) Basis of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the Company and all of its
controlled entities. Controlled entities are entities the Company controls. The Company controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. A list of the controlled entities is provided in Note 10.
The assets, liabilities and results of all controlled entities are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a controlled entity is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses
on transactions between Group entities are fully eliminated on consolidation. Accounting policies of controlled entities
have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted
by the Group.
Equity interests in a controlled entity not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests". The Group initially recognises non-controlling interests that are present ownership interests in
controlled entities and are entitled to a proportionate share of the controlled entity's net assets on liquidation at either
fair value or at the non-controlling interests' proportionate share of the controlled entity's net assets. Subsequent to
initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other
comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of
financial position and statement of comprehensive income.
(d)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the balance date.
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and
liabilities and their carrying amounts for financial reporting purposes.
No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
PolarX Limited
35
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
No deferred income tax will be recognised in respect of temporary differences associated with investments in
subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary differences will not reverse in the near future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited to Profit or Loss except where it relates to items that may be credited
directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax
assets and unused tax losses to the extent that it is probable that future tax profits will be available against which
deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax laws)
that have been enacted or substantially enacted at the balance date and the anticipation that the Group will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law. The carrying amount of deferred tax assets is reviewed at each balance date and only
recognised to the extent that sufficient future assessable income is expected to be obtained.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of profit
or loss.
(e) Financial Instruments
Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do
not contain a significant financing component or for which the Group has applied the practical expedient, the Group
initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under AASB 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date (i.e., the date that the Group
commits to purchase or sell the asset).
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
Financial assets at fair value through profit or loss
The Group’s financial assets at amortised cost includes trade receivables.
PolarX Limited
36
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
The financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through OCI (debt instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
The financial asset is held within a business model with the objective of both holding to collect contractual
cash flows and selling; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses
or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets
measured at amortised cost.
The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change
recognised in OCI is recycled to profit or loss.
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.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be
measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as
held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are
not solely payments of principal and interest are classified and measured at fair value through profit or loss,
irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost
or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or
loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with
net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had not irrevocably
elected to classify at fair value through OCI. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been established.
PolarX Limited
37
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host
and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the
host; a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is
either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required
or a reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The
financial asset host together with the embedded derivative is required to be classified in its entirety as a financial
asset at fair value through profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
The rights to receive cash flows from the asset have expired; or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group
has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the
asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case,
the Group also recognises an associated liability. The transferred asset and the associated liability are measured on
a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required to
repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within
the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in
credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore,
the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. The Group has established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
For debt instruments at fair value through OCI, the Group applies the low credit risk simplification. At every reporting
date, the Group evaluates whether the debt instrument is considered to have low credit risk using all reasonable and
supportable information that is available without undue cost or effort. In making that evaluation, the Group
reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there has been a
significant increase in credit risk when contractual payments are more than 30 days past due.
PolarX Limited
38
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account
any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation
of recovering the contractual cash flows.
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial instruments entered into by the Group that are not designated
as hedging instruments in hedge relationships as defined by AASB 9. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial
date of recognition, and only if the criteria in AASB 9 are satisfied. The Group has not designated any financial
liability as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the
statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
PolarX Limited
39
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
(f) Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position include cash on hand, deposits held at call with
banks and other short term highly liquid investments with original maturities of three months or less. Bank overdrafts
are shown as current liabilities in the Statement of Financial Position. For the purpose of the Statement of Cash
Flows, cash and cash equivalents consist of cash and cash equivalents as described above, net of outstanding bank
overdrafts.
(g) Trade and other receivables
Trade receivables generally have 30-90 day terms. Trade and other receivables are initially recognized at fair value
and subsequently measured at amortised cost using the effective interest method, less provision for impairment.
(h) Property, plant and equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation
and impairment losses.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the
item can be measured reliably. Repairs and maintenance expenditure is charged to Profit or Loss during the financial
period in which it is incurred.
Depreciation
The depreciable amount of most of the fixed assets are depreciated on a diminishing balance method and some of
the fixed assets are depreciated on a straight-line basis over their useful lives to the Group commencing from the
time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment 10 % to 30%
Computer Equipment
Furniture and Fittings
33%
20%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Derecognition
Additions of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are recognised in the Profit or Loss.
Impairment
Carrying values of plant and equipment are reviewed at each balance date to determine whether there are any
objective indicators of impairment that may indicate the carrying values may be impaired.
PolarX Limited
40
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Where an asset does not generate cash flows that are largely independent it is assigned to a cash generating unit
and the recoverable amount test applied to the cash generating unit as a whole.
Recoverable amount is determined as the greater of fair value less costs to sell and value in use. The assessment of
value in use considers the present value of future cash flows discounted using an appropriate pre-tax discount rate
reflecting the current market assessments of the time value of money and risks specific to the asset. If the carrying
value of the asset is determined to be in excess of its recoverable amount, the asset or cash generating unit is written
down to its recoverable amount.
(i) Exploration expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area
of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure,
but does not include general overheads or administrative expenditure not having a specific nexus with a particular
area of interest.
Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a
mining operation.
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of
the following conditions is met:
such costs are expected to be recouped through successful development and exploitation of the area of
interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and
significant operations in relation to the area are continuing.
Expenditure which fails to meet the conditions outlined above is written off, furthermore, the directors regularly review
the carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to
be recoverable.
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the
requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired are
reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions
referred to in AASB 6 is met.
Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset
acquired, is accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on
behalf of the entity.
Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not
expected to be recovered.
When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off.
Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group’s rights of
tenure to that area of interest are current.
PolarX Limited
41
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(j)
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its
value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or categories of assets and the asset's value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating
unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable
amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is
treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in
which case the reversal is treated as a revaluation increase.
After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life.
(k)
Trade and other payables
Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the
consideration to be paid in the future for goods and services received that are unpaid, whether or not billed to the
Group.
(l)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue
of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the
purchase consideration.
(m) Revenue
Revenue is recognised when a performance obligation in the contract with a customer is satisfied or when the control
of the goods or services underlying the particular performance obligation is transferred to the customer.
Interest income
Income is recognised as the interest accrues (using the effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying
amount of the financial asset.
PolarX Limited
42
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(n) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any
costs of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any
bonus elements.
Diluted earnings per share
Diluted earnings per share is calculated as net profit attributable to members of the Group, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus elements.
(o) Share based payment transactions
The Group provides benefits to individuals and entities, in the form of share based payment transactions, whereby
the recipients render services in exchange for shares or options (Equity Settled Transactions).
There is currently an Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and other
eligible persons, including consultants who provide services similar to those provided by an employee. The Company
may also issue options or shares outside of the ESOP to consultants and other service providers.
The cost of these equity settled transactions is measured by reference to the fair value at the date at which they are
granted. The fair value of options is determined by using the Black Scholes formula taking into account the terms and
conditions upon which the instruments were granted, as discussed in Note 25.
In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the Company’s shares (‘market conditions’).
The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects (i)
the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of
the group, will ultimately vest. This opinion is formed based on the best available information at balance date. No
adjustment is made for the likelihood of the market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for a period
represents the movement in cumulative expense recognised at the beginning and end of the period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon
a market condition.
Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of
the modification, as measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award
are treated as if they were a modification of the original award, as described in the previous paragraph.
PolarX Limited
43
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
The dilutive effect, if any, of outstanding options is reflected in the computation of loss per share (see note 20).
(p) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement
of Financial Position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of receivables
or payables in the Statement of Financial Position.
Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of
investing and financing activities, which is receivable from or payable to the ATO, are disclosed as operating cash
flows.
(q) Investments in controlled entities
All investments are initially recognised at cost, being the fair value of the consideration given and including
acquisition charges associated with the investment. Subsequent to the initial measurement, investments in controlled
entities are carried at cost less accumulated impairment losses.
(r)
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each entity within the Group are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The functional and
presentation currency of PolarX Limited is Australian dollars.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the profit or loss.
Group entities
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
assets and liabilities are translated at the closing rate at the date of that Statement of Financial Position;
income and expenses are translated at average exchange rates (unless this is not a reasonable
approximation of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions);
retained earnings are translated at the exchange rates prevailing at date of transaction; and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are taken to shareholders’
equity. When a foreign operation is sold the exchange differences relating to that entity are recognised in the profit or
loss, as part of the gain or loss on sale where applicable.
PolarX Limited
44
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(s) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not
the legal ownership, that are transferred to entities in the economic entity are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value
of the leased property or the present value of the minimum lease payments, including any guaranteed residual
values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for
the period.
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the
Group will obtain ownership of the asset or over the term of the lease. Leases are classified as operating leases
where substantially all the risks and benefits remain with the lessor.
Payments in relation to operating leases are charged as expenses in the periods in which they are incurred. Lease
incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of
the lease term.
(t) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of PolarX Limited.
(u) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate,
the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
4. Critical accounting estimates and judgments
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the
related exploration and evaluation asset through sale.
PolarX Limited
45
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Factors which could impact the future recoverability include the size and composition of any future mineral resource
and ore reserve estimates, future technological changes which could impact the cost of mining, future legal changes
(including changes to environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, this will reduce profits and net assets in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet
reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this
will reduce profits and net assets in the period in which this determination is made.
Share based payment transactions
The Group measures the cost of equity settled transactions by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value of options is determined by using the Black Scholes formula taking
into account the terms and conditions upon which the instruments were granted, as discussed in Note 25.
Functional currency translation reserve
Under the Accounting Standards, each entity within the Group is required to determine its functional currency, which
is the currency of the primary economic environment in which the entity operates. Management considers the United
States subsidiary to be a foreign operation with United States dollars as the functional currency. In arriving at this
determination, management has given priority to the currency that influences the labour, materials and other costs of
exploration activities as they consider this to be a primary indicator of the functional currency.
5. Acquisition
On 23 May 2017, the Company announced it had entered into agreements that provided it the right to acquire an
100% interest in the Stellar Copper Gold Project (Stellar Property) via the acquisition of Vista Minerals Pty Ltd
(Vista) (the Vista Transaction), subject to shareholder approval and certain closing conditions. On 30 June 2017,
the Company’s shareholders approved the Vista Transaction and it was completed on 26 July 2017.
Pursuant to the Vista Transaction, PolarX issued 91,964,430 fully paid ordinary shares (Shares) to Vista’s
shareholders, being the consideration for the acquisition of 100% of the issued capital of Vista. Concurrently, the
Company completed a private placement pursuant to which 54,950,000 Shares were issued at $0.10 per Share for
gross proceeds of $5.495 million.
The Company accounted for the Vista Transaction as a business combination and identified and recognized the
individual identifiable assets acquired and liabilities assumed. The purchase price was allocated to the individual
identifiable assets and liabilities on the basis of their fair values at the date of purchase. Consideration consisted
entirely of Shares, which were measured at the fair value of the PolarX Shares issued using quoted price per Share.
The fair value of the 91,964,430 Shares issued to Vista’s shareholders to complete the Vista Transaction was
$9,196,426.
PolarX Limited
46
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
The fair value of net assets at the Vista Transaction date is as follows:
ASSETS
Cash
Convertible note
Other receivables
Exploration and evaluation assets
Total Assets
LIABILITIES
Accounts payables
Accrued liabilities
Total Liabilities
Net assets
July 26,
2017
$ 35,142
100,921
44,191
9,240,287
9,420,541
140,787
83,328
224,115
$ 9,196,426
The acquired subsidiary contributed no revenue and a loss of $48,318 (July 2017 to 30 June 2018: $15,332).
6. Other expenses
Accounting and audit fees
Analysts
Bank fees
Business expenses
Computer expenses
Conferences
Corporate finance
Insurance
Investor relations
Media coverage
Printing and stationery
Postage
Rent & accommodation
Subscriptions
Telephone
Travel expenses
Depreciation
Others
Consolidated
2019
$
65,730
1,192
4,503
65,298
3,018
123,087
245,060
48,262
49,510
124,305
4,809
5,408
75,627
9,965
3,050
177,845
210
27,905
1,034,784
2018
$
67,397
46,845
3,981
107,545
4,282
57,446
183,643
35,933
42,117
60,357
3,206
5,247
99,747
-
1,905
155,400
246
63,229
938,526
PolarX Limited
47
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
7.
Income Tax
(a) Income tax expense
Current tax
Deferred tax
Consolidated
2019
$
-
-
-
2018
$
-
-
-
(b) Numerical reconciliation between aggregate tax expense
recognised in the statement of profit or loss and other
comprehensive income and tax expense calculated per the
statutory income tax rate
A reconciliation between tax expense and the product of accounting
loss before income tax multiplied by the Company’s applicable tax
rate is as follows:
Loss from operations before income tax expense
(1,700,305)
(1,491,782)
Tax at the company rate of 27.5% (2018: 27.5%)
Expense of remuneration options
Other non-deductible expenses
Income tax benefit not brought to account
Income tax expense
(c) Deferred tax
Statement of financial position
The following deferred tax balances have not been brought to
account:
Deferred Tax Liabilities
Unrealised forex gain
Exploration (foreign @ 30%)
Deferred tax liability not recognised
Deferred Tax Assets
Foreign carry forward revenue losses (@ 30%)
Australian carry forward revenue losses (@ 27.5%)
Accrued expenses
Other
The benefit for tax losses will only be obtained if:
(467,584)
9,610
75,853
382,121
-
-
1,916,010
1,916,010
2,808,740
1,289,000
6,875
46,050
(410,240)
8,178
(149,558)
551,620
-
11,747
733,132
744,879
1,244,918
932,453
8,250
-
4,150,665
2,185,621
(i) the Company derives future assessable income in Australia or the US (as applicable) of a nature and of an
amount sufficient to enable the benefit from the deductions for the losses to be realised;
(ii) the Company continues to comply with the conditions for deductibility imposed by tax legislation in Australia or the
US (as applicable); and
(iii) no changes in tax legislation in Australia or the US, adversely affect the Company in realising the benefit from the
deductions for the losses.
PolarX Limited
48
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(d) Tax consolidation
PolarX and its wholly owned Australian subsidiaries (Controlled Entities) implemented the tax consolidation
legislation effective as of 1 July 2017. The Controlled Entities have also entered into tax sharing and tax funding
agreements. Under the terms of these agreements, the Controlled Entities will reimburse PolarX for any current
income tax payable by PolarX arising in respect of their activities. The reimbursements are payable at the same time
as the associated income tax liability falls due and will therefore be recognised as a current tax-related receivable by
PolarX when they arise. In the opinion of the Directors, the tax sharing agreement is also a valid agreement under the
tax consolidation legislation and limits the joint and several liability of the Controlled Entities in the case of a default
by PolarX.
8. Other Receivables and Prepayments
Current
GST / VAT receivable
Prepayments
Consolidated
2019
$
2018
$
22,273
130,377
152,650
22,927
1,073,168
1,096,095
Other debtors and goods and services tax are non-interest bearing and generally receivable on 30 day terms. They
are neither past due nor impaired. The amount is fully collectible. Due to the short term nature of these receivables,
their carrying value is assumed to approximate their fair value.
9. Property, Plant and Equipment
Plant and Equipment
Cost
Accumulated depreciation
Net carrying amount
Office Furniture and Fixtures
Cost
Accumulated depreciation
Net carrying amount
Computer Equipment
Cost
Accumulated depreciation
Net carrying amount
Total property, plant and equipment
Cost
Accumulated depreciation
Net carrying amount
Consolidated
2019
$
2018
$
17,628
(11,413)
6,215
519
(357)
162
1,946
(1,805)
141
20,093
(13,575)
6,518
17,628
(9,206)
8,422
519
(317)
202
1,946
(1,736)
210
20,093
(11,259)
8,834
PolarX Limited
49
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current
financial year:
Consolidated
Plant and Equipment
Carrying amount at beginning of year
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Office Furniture and Fixtures
Carrying amount at beginning of year
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Computer Equipment
Carrying amount at beginning of year
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
2019
$
8,422
(2,618)
411
6,215
202
(40)
-
162
210
(69)
-
141
2018
$
11,599
(3,451)
274
8,422
253
(51)
-
202
313
(103)
-
210
Total property, plant and equipment
6,518
8,834
10.
Investments in Controlled Entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities
in accordance with the accounting policy described in Note 3. Details of controlled entities are as follows:
Name
Country of
incorporation
% Equity Interest
2019
2018
Coventry Minerals Pty Ltd
Crescent Resources (USA) Inc.
Vista Minerals Pty Ltd
Vista Minerals (Alaska) Inc.
Aldevco Pty Ltd
Aldevco Inc.
Australia
USA
Australia
USA
Australia
USA
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
PolarX Limited
50
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
11. Deferred Exploration and Evaluation Expenditure
Consolidated
2019
$
2018
$
Exploration and evaluation
expenditure
At cost
Accumulated provision for
impairment
Total exploration and evaluation
Carrying amount at beginning of the year
Acquisition cost
Exploration and evaluation expenditure during the year
Net exchange differences on translation
Carrying amount at end of year
Write-off of exploration and evaluation expenditures
Carrying amount at end of year
27,255,500
(1,293,544)
21,602,490
(1,293,544)
25,961,956
20,308,946
Consolidated
2019
$
20,308,946
-
4,765,350
887,660
2018
$
6,031,415
9,240,287
4,466,504
573,834
25,961,956
20,312,040
-
(3,094)
25,961,956
20,308,946
The Directors’ assessment of the carrying amount for the Group’s exploration and development expenditure was
made after consideration of (i) prevailing market conditions, including the Company’s market capitalisation and metal
prices; (ii) the level of previous expenditure undertaken and the results from those programs; and (iii) the potential for
future development, noting the current mineral resource estimates for both the Caribou Dome and Stellar projects.
The recoverability of the carrying amount of the deferred exploration and evaluation expenditure is dependent on
successful development and commercial exploitation, or alternatively the sale, of the respective areas of interest. It
was determined the carrying amount of the Uncle Sam Project was not recoverable and therefore was written down
to nil in the prior year.
12. Current Liabilities
Trade and other payables
Trade payables
Accruals
Consolidated
2019
$
2018
$
146,966
132,227
279,193
111,507
87,802
199,309
Trade payables are not past due and are non-interest bearing. They are normally on average settled between 30-45 days
term.
PolarX Limited
51
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
13. Contributed Equity
(a) Issued and paid up capital
2019
2018
No. of shares
No. of shares
Ordinary shares fully paid
372,712,637
262,871,510
2019
No. of
shares
$
2018
No. of
shares
$
(b) Movements in ordinary shares on
issue
Balance at beginning of year
1:5 Share Consolidation
262,871,510
77,805,986
459,913,365
61,123,936
-
-
(367,930,692)
-
Number of shares post- Consolidation
262,871,510
77,805,986
91,982,673
61,123,936
Shares issued for acquisition of Vista
Minerals
-
-
91,964,430
9,196,426
Share issues (net of costs)
109,841,128
9,068,334
78,924,407
7,485,624
Balance at end of year
372,712,638
86,874,320
262,871,510
77,805,986
(c) Ordinary shares
The Group does not have authorised capital nor par value in respect of its issued capital. Shares have the right to
receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from
sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Shares entitle the
holder to one vote, either in person or proxy, at a meeting of the Company.
2019
On 2 August 2018, the Company completed a placement consisting of 35,299,128 Shares at an issue price of $0.11
per share for gross proceeds of $3.883 million to institutional and sophisticated investors.
On 14 December 2018, the Company completed a placement consisting of 21,100,000 Shares at an issue price of
$0.06 per share for gross proceeds of $1.266 million to institutional and sophisticated investors.
On 5 June 2019, the Company completed a placement of 53,442,000 Shares to Lundin Mining Corporation, at an
issue price of $0.08 per share. The placement was undertaken pursuant to the terms of the Strategic Partnership
(refer Note 28).
2018
On 26 July 2017, concurrent with the Vista Acquisition, the Company completed a private placement of 54,950,000
Shares at an issue price of $0.10 per share for gross proceeds of $5.495 million to institutional and sophisticated
investors.
On 26 May 2018, the Company completed a placement consisting of 23,974,407 Shares at an issue price of $0.105
per share for gross proceeds of $2.337 million to institutional and sophisticated investors.
(d) Capital Risk Management
The Group’s capital comprises share capital, reserves and accumulated losses which amounted to $30,096,424 at 30
June 2019 (2018: $21,743,563). The Group manages its capital to ensure its ability to continue as a going concern
and to optimise returns to its shareholders. The Group was ungeared at year end and not subject to any externally
imposed capital requirements. Refer to Note 23 for further information on the Group’s financial risk management
policies.
PolarX Limited
52
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(e) Share options
At 30 June 2019, there were 23,450,000 options over unissued Shares (2018: 5,200,000 options). During the
financial year no options expired and no options were exercised. Since the end of the financial year (i) a further
10,750,000 options, each exercisable at $0.125 on or before 20 December 2021, have been issued; (ii) no options
have been exercised; and (iii) 400,000 options have expired.
On 21 December 2018, the Company issued 18,250,000 options, each exercisable at $0.125 on or before 20
December 2021 to directors, employees, and consultants which vest upon meeting certain performance or market
conditions.
In the prior year, on 19 September 2017, the Company issued 400,000 options, each exercisable at $0.12 on or
before 18 September 2020, in lieu of cash consideration for consulting services.
No option holder has any right under the options to participate in any other share issue of the Company or any other
entity.
Information relating to the Options granted by the Company, including details of options issued under the Plan, is set
out in Note 24.
14. Accumulated losses
Movements in accumulated losses were as follows:
At 1 July
Loss for the year
At 30 June
Consolidated
2019
$
2018
$
61,868,347
1,700,305
63,568,652
60,376,565
1,491,782
61,868,347
PolarX Limited
53
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
15. Reserves
Foreign currency translation reserve
Warrant reserves
Share based payments reserves
Option premium reserve
Movement in reserves:
Share based payments and option premium
reserve
Balance at beginning of year
Options issued to agents
Options exercised
Equity benefits expense
Balance at end of year
Consolidated
2019
$
2018
$
1,310,982
1,190,098
4,286,676
3,000
406,328
1,190,098
4,206,498
3,000
6,790,756
5,805,924
Consolidated
2019
$
2018
$
4,206,498
4,176,760
9,223
-
70,955
29,738
-
-
4,286,676
4,206,498
The Share based payments and option premium reserve is used to record the value of equity benefits provided to
individuals acting as employees, directors as part of their remuneration, and consultants and for their services. Refer
to Note 25 for details of share based payments during the financial year and prior year.
Foreign currency translation reserve
At 1 July
Foreign currency translation
Balance at end of year
2019
$
406,328
904,654
1,310,982
2018
$
(215,978)
622,306
406,328
The foreign currency reserve is used to record the currency difference arising from the translation of the financial
statements of the foreign operation.
.
Warrant reserve
At 1 July
Warrants exercised
Balance at end of year
2019
$
2018
$
1,190,098
1,190,098
-
-
1,190,098
1,190,098
The warrant reserve is used to record the value of warrants provided to shareholders as part of capital raising
activities.
PolarX Limited
54
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
16. Cash and Cash Equivalents
(a) Reconciliation of cash
Cash balance comprises:
Cash and cash equivalents
(b) Reconciliation of the net loss after tax to the
net cash flows from operations
Loss after income tax
Adjustments for:
Depreciation
Gain on convertible note
Share-based compensation
Changes in operating assets and liabilities:
(Decrease)/increase in other
receivables/prepayments
Increase/(decrease) in trade and other payables
Net cash flow used in operating activities
Consolidated
2019
$
2018
$
4,254,493
528,997
(1,700,305)
(1,491,782)
210
-
34,945
246
(8,512)
29,738
(5,082)
16,180
61,974
(215,134)
(1,654,052)
(1,623,470)
PolarX Limited
55
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
17. Expenditure commitments
(a) Tenement expenditure commitments – Caribou Dome Property
Remaining commitments related to the Caribou Dome Project at reporting date but not recognised as liabilities,
include the following:
(i)
(ii)
(iii)
maintaining the claims (licenses) at the Project in good standing, including making annual claim rental
payments and ensuring minimum expenditure commitments are met;
expending a minimum of US$2,000,000 in each of the periods (i) 2 September 2017 to 1 September
2020; and (ii) 2 September 2020 to 6 June 2023 (unless the Earn-in deadline of 6 June 2023 is
extended);
expending a total of US$9,000,000 on the Project (inclusive of the expenditure in (i) and (ii) above and
expenditure prior to 2 September 2017) or completing a feasibility study on the Project by 6 June 2023
(unless the Earn-in deadline of 6 June 2023 is extended); and
(iv) making annual payments to the underlying vendors of the Project in the amounts of:
Due Date
6 June 2020
6 June 2021
6 June 2022
Earn-in deadline
(currently 6 June 2023)
Payment
US$100,000
US$100,000
US$100,000
US$1,360,000
Subject to Aldevco exercising its right to acquire an 80% interest in the Caribou Dome Project, Hatcher will retain a
10% interest in the Project with the remaining 10% held by SV Metals LP. The current owner of the Caribou Dome
Project, C-D Development Corporation, would retain a 5.0% Net Smelter Returns royalty, with PolarX retaining the
right to purchase this royalty for US$1million for each 1.0%.
(b) Tenement expenditure commitments – Stellar Property
Remaining commitments related to the Stellar Property at reporting date but not recognized as liabilities below
include the following:
(i)
(ii)
payment of US$1,000,000 cash to Millrock Resources Inc (Millrock) if a JORC Indicated Resource of
1Moz contained Au or more is delineated;
payment of US$2,000,000 cash to Millrock if a JORC Indicated Resource of 1Moz contained copper (or
copper equivalent) metal is delineated;
(iii)
45 claim blocks covering the Zackly, Moonwalk, Mars and Gemini prospects, are subject to a royalty
payable to Altius Minerals, being:
a. 2% gross value royalty on all uranium produced
b. 2% net smelter return royalty on gold, silver, platinum, palladium and rhodium
c. 1% net smelter return royalty on all other metals;
(iv)
All Stellar claim blocks are subject to a royalty payable to Millrock, being:
a. 1% gross value royalty on all uranium produced; and
b. 1% net smelter royalty on all other metals;
and
PolarX Limited
56
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(v) making advance royalty payments (payments are deductible from future royalty payments) to Millrock in the
amounts of:
Due Date
31 March 2020
31 March 2021
31 March 2022
31 March 2023*
31 March 2024*
31 March 2025*
31 March 2026*
31 March 2027,* and 31 March of
each year thereafter occurring
prior to the fifth anniversary of the
commencement of Commercial
Production
Payment
US$25,000
US$30,000
US$35,000
US$40,000
US$45,000
US$50,000
US$55,000
US$60,000
* Such payments will not be payable if the fifth anniversary of the commencement of Commercial Production has
occurred before such date.
(c) Services agreement
Within one year
18. Subsequent events
Consolidated
2019
2018
$
-
-
$
-
-
On 4 July 2019, the Company completed a non-renounceable rights issue (Entitlement Offer), which raised gross
proceeds of $3,456,314 pursuant to the issue of 43,203,922 Shares at an issue price of $0.08 per Share. Net
proceeds from the Entitlement Offer will be used for exploration and development activities on the Alaska Range
Project and for general working capital purposes.
On 31 July 2019, the Company issued 10,750,000 options to consultants and advisers, each exercisable at $0.125
on or before 20 December 2021, as part consideration for past and ongoing services to the Company.
On 30 August 2019, the Company issued 305,555 shares at a deemed price of $0.108 per share as part
consideration for consulting services.
No other significant events have occurred subsequent to the balance sheet date but prior to the date of this report
that would have a material impact on the consolidated financial statements.
PolarX Limited
57
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
19. Loss per share
Loss used in calculating basic and dilutive EPS
(1,700,305)
(1,491,782)
Consolidated
2019
$
2018
$
Weighted average number of ordinary shares
used in calculating basic earnings / (loss) per
share:
Effect of dilution:
Share options
Adjusted weighted average number of
ordinary shares used in calculating diluted
loss per share:
Basic and Diluted loss per share (cents
per share)
Number of Shares
2019
2018
310,085,648
231,387,714*
-
-
310,085,648
231,387,714*
(0.55)
(0.64)
*All share numbers are shown on a post-Consolidation basis
There is no impact from the 5,200,000 options vested and outstanding at 30 June 2019 (2018: 5,200,000 options) on
the loss per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the
future.
20. Auditor’s remuneration
During the financial year, the following audit fees were paid or payable:
Stantons International Audit and Consulting Pty Ltd.
Consolidated
2019
$
33,550
33,550
2018
$
46,765
46,765
PolarX Limited
58
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
21. Key Management Personnel Disclosures
(a) Details of Key Management Personnel
Mr. Mark Bojanjac
Executive Chairman
Mr. Frazer Tabeart
Managing Director (appointed 26 July 2017)
Mr. Jason Berton
Executive Director (appointed 26 July 2017)
Mr. Ian Cunningham
Company Secretary/Chief Financial Officer
Mr. Robert Boaz
Non-Executive Director
Mr. Michael Fowler
Non-Executive Director (resigned on 1 December 2017)
(b) Remuneration of Key Management Personnel
Details of the nature and amount of each element of the emolument of each Director and Executive of the Group for
the financial year are as follows:
Consolidated
2019
$
2018
$
Consulting and director fees
Share-based compensation
654,750
612,916
69,418
-
Total remuneration
724,168
612,916
22. Related Party Disclosures
The ultimate parent entity is PolarX Limited. Refer to Note 10 - Investments in Controlled entities, for a list of all
controlled entities.
Mitchell River Group Pty Ltd., a Company of which Mr. Frazer Tabeart is a Director, provided the Company with
consulting services related to exploration activities for a fee totalling $18,999 (2018: $33,579) and serviced office fees
of $12,000 (2018: $nil).
There were no other related party disclosures for the year ended 30 June 2019 (2018: Nil).
23. Financial Instruments and Financial Risk Management
Exposure to interest rate, liquidity and credit risk arises in the normal course of the Group’s business. The Group
does not hold or issue derivative financial instruments.
The Company uses different methods as discussed below to manage risks that arise from financial instruments. The
objective is to support the delivery of the financial targets while protecting future financial security.
PolarX Limited
59
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(a) Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial
liabilities.
The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of the
business and investing excess funds in highly liquid short term investments. The responsibility for liquidity risk
management rests with the Board of Directors.
Alternatives for sourcing our future capital needs include our cash position and the issue of equity instruments. These
alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. We expect that,
absent a material adverse change in a combination of our sources of liquidity, present levels of liquidity will be
adequate to meet our expected capital needs.
Maturity analysis for financial liabilities
Financial liabilities of the Group comprise trade and other payables. As at 30 June 2019 and 30 June 2018, all
financial liabilities contractually matured within 60 days.
(b)
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value
of financial instruments.
The Group’s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and
term deposits. The Group manages the risk by investing in short term deposits.
Cash and cash equivalents
Interest rate sensitivity
Consolidated
2019
$
2018
$
4,254,493
528,997
The following table demonstrates the sensitivity of the Group’s statement of profit or loss and other comprehensive
income to a reasonably possible change in interest rates, with all other variables constant.
Consolidated
Change in Basis Points
Judgements of reasonably possible
movements
Increase 100 basis points
Decrease 100 basis points
Effect on Post Tax Loss
Effect on Equity
Increase/(Decrease)
including accumulated
losses
Increase/(Decrease)
2019
$
42,545
(42,545)
2018
$
5,290
(5,290)
2019
$
42,545
(42,545)
2018
$
5,290
(5,290)
A sensitivity of 100 basis points has been used as this is considered reasonable given the current level of both short
term and long term interest rates. The change in basis points is derived from a review of historical movements and
management’s judgement of future trends. The analysis was performed on the same basis in 2018.
PolarX Limited
60
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(c) Credit Risk Exposures
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and
cause the Group to incur a financial loss. The Group’s maximum credit exposure is the carrying amounts on the
statement of financial position. The Group holds financial instruments with credit worthy third parties.
At 30 June 2019, the Group held cash deposits. Cash deposits were held with financial institutions with a rating from
Standard & Poors of A or above (long term). The Group has no past due or impaired debtors as at 30 June 2019
(2018: Nil).
(d) Foreign Currency Risk Exposure
As a result of operations in the USA and expenditure in US dollars, the Group’s statement of financial position can be
affected by movements in the USD$/AUD$ exchange rates. The Group seeks to mitigate the effect of its foreign
currency exposure by holding cash in US dollars to match expenditure commitments.
Sensitivity analysis:
The table below summarises the foreign exchange exposure on the net monetary position of parent and the
subsidiary against its respective functional currency, expressed in group’s presentation currency. If the AUD/ USD
rates moved by +10%, the effect on comprehensive loss would be as follows:
Loan to subsidiary – Aldevco Pty Ltd and Aldevco Inc. (in AUD)
Loan to subsidiary – Vista Minerals Pty Ltd and Vista Minerals
(Alaska) Inc. (in AUD)
Total effect on comprehensive loss of positive movements
Total effect on comprehensive loss of negative movements
Company
2019
$
6,799,132
11,932,791
2018
$
6,130,967
7,881,418
10%
A$
10%
A$
1,873,192
1,401,239
(1,873,192)
(1,401,239)
The table below summarises the foreign exchange exposure on the net monetary position of parent and the
subsidiary against its respective functional currency, expressed in group’s presentation currency. If the AUD/ CAD
rates moved by +10%, the effect on comprehensive loss would be as follows:
Loan from subsidiary – Coventry Minerals. (in AUD)
Percentage shift of the AUD / CAD exchange rate
Total effect on comprehensive loss of positive movements
Total effect on comprehensive loss of negative movements
Company
2019
$
750,861
10%
A$
75,086
(75,086)
2018
$
709,298
10%
A$
70,930
(70,930)
PolarX Limited
61
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(e) Fair Value
The aggregate net fair values of the Group’s financial assets and financial liabilities both recognised and
unrecognised are as follows:
Carrying
Carrying
Amount in
Aggregate
Amount in
Aggregate
the Financial
Net Fair
the Financial
Net Fair
Statements
Value
Statements
2019
$
2019
$
2018
$
Value
2018
$
4,254,493 4,254,493
528,997
528,997
22,273
22,273
22,927
22,927
279,193
279,193
199,309
199,309
Financial Assets
Cash and cash equivalents
Other receivables
Financial Liabilities
Trade and other payables
The following methods and assumptions are used to determine the net fair value of financial assets and liabilities.
Cash assets and financial assets are carried at amounts approximating fair value because of their short term
nature to maturity. Receivables and payables are carried at amounts approximating fair value.
24. Share Based Payment Plans
(a) Recognised share based payment expenses
Total expenses arising from share based payment transactions recognised during the year as part of share based
payment expense, the income statement, or capitalised to exploration costs were as follows:
Consolidated
Operating expenditure
Options issued to employees, key management
personnel and directors
Options issued to consultants
(b) Share based payments
2019
$
70,955
9,223
80,178
2018
$
-
29,736
29,736
The Company makes share based payments in the form of Shares and options, to directors, executives and
employees as part of their remuneration and to consultants and advisers for their services.
The Company has an Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and other
eligible persons, including consultants who provide services similar to those provided by an employee. The Company
may also issue options or shares outside of the ESOP to consultants and other service providers (collectively the
Options). The objective of the Options is to assist in the recruitment, reward, retention and motivation of the
recipients and/or reduce the level of remuneration or consideration that would otherwise be paid to the recipient.
PolarX Limited
62
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
Details of Options granted are as follows:
2019
Grant date
Expiry date Exercise
Balance at
Granted
Exercised
Expired
Balance at
Exercisable
price
start of the
during the
during the
during the
end of the
at end of the
year
year
year
year
year
year
Number
Number
Number
Number
Number
Number
Feb 20, 2015 Feb 19, 2020 A$0.0715
4,000,000
Jun 18, 2015
Jun 17, 2020 A$0.175
400,000
Aug 31, 2016 Aug 30, 2019 A$0.195
400,000
Sep 19, 2017 Sep 18, 2020
A$0.12
400,000
-
-
-
-
Dec 21, 2019 Dec 20, 2021 A$0.125
- 18,250,000
5,200,000 18,250,000
-
-
-
-
-
-
-
-
-
-
4,000,000
4,000,000
400,000
400,000
400,000
400,000
400,000
400,000
- 18,250,000
- 23,450,000
5,200,000
Weighted remaining contractual
1.67
2.08
0.67
life (years)
Weighted average exercise price
$ 0.09
$ 0.12
$ 0.09
On 21 December 2019, the Company issued 18,250,000 options, each exercisable at $0.125 on or before 20
December 2021, in lieu of cash consideration for consulting services. The 18,250,000 options shall vest as follows:
(i)
8,500,000 options shall vest upon announcement of a JORC Inferred mineral resource estimate for the Alaska
Range Project, comprising both the Stellar Copper Gold and the Caribou Dome Copper properties, of 10
million tonnes of mineralisation at a minimum cut-off grade of 0.5% copper or copper equivalent, signed off by
a competent person other than a director or employee of the Company;
(ii)
6,000,000 options shall vest upon the Shares trading on ASX at a volume weighted average price of $0.20 or
more for 10 consecutive trading days;
(iii)
3,000,000 options shall vest upon completion of feasibility study for the Alaska Range Project; and
(iv)
750,000 options shall vest upon the announcement of the completion of the acquisition of an 80% interest in
the Caribou Dome Copper Project from Hatcher Resources Inc.
The fair value at grant date of options was determined using the Black Scholes option pricing model that takes into
account (i) the exercise price ($0.125); (ii) the term of the option (2-3 years); (iii) the share price at grant date
($0.052); (iv) expected price volatility (101%) of the underlying share; and (v) the risk free interest rate (2.04%) for the
term of the Option. The fair value of the stock options was $359,785.
PolarX Limited
63
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
2018
Grant date
Expiry date Exercise
Balance at
Granted
Exercised
Expired
Balance at
Exercisable
price
start of the
during the
during the
during the
end of the
at end of the
year
year
year
year
year
year
Number
Number
Number
Number
Number
Number
Jan 8, 2013 Aug 17, 2017
C$0.25
226,170
Feb 20, 2015 Feb 19, 2020 A$0.0715
4,000,000
Jun 18, 2015
Jun 17, 2020 A$0.175
400,000
Jun 18, 2015
Jun 30, 2018
A$0.13
146,200
Aug 31, 2016 Aug 30, 2019 A$0.195
400,000
-
-
-
-
-
Sep 19, 2017 Sep 18, 2020
A$0.12
-
400,000
5,172,370
400,000
-
-
-
-
-
-
-
(226,170)
-
-
-
-
4,000,000
4,000,000
400,000
400,000
(146,200)
-
-
-
-
400,000
400,000
400,000
400,000
(372,370)
5,200,000
5,200,000
Weighted remaining contractual
2.47
1.67
1.67
life (years)
Weighted average exercise price
$ 0.10
$ 0.09
$ 0.09
On 19 September 2017, the Company issued 400,000 options exercisable at $0.12 on or before 18 September 2020,
in lieu of cash consideration for consulting services. The fair value at grant date of options was determined using the
Black Scholes option pricing model that takes into account (i) the exercise price ($0.12); (ii) the term of the option (3
years); (iii) the share price at grant date ($0.10); (iv) expected price volatility (135%) of the underlying share; and (v)
the risk free interest rate (2.1%) for the term of the Option. The fair value of the stock options was $29,738.
25. Contingent Liabilities
The Company has a contingent liability arising from the termination of a drilling contract in Paraguay in 2008,
subsequent to which Arbitration proceedings were commenced by the drilling contractor.
In August 2016, the Company received notice of the Arbitration Tribunal’s determination. Based on its review of the
Tribunal’s judgement and advice from its Paraguayan legal counsel, the Company assessed the quantum of
damages that may be payable by it to be approximately US$40,000 plus interest. Subsequently on 7 March 2018,
the Company received notice that the plaintiff was seeking a Paraguayan judicial order for the enforcement of an
arbitration award against the Company in the amount of US$123,853.
Subject to receiving a Paraguayan court order for execution of the Tribunal’s judgement, the Company intends to
defend any attempt to enforce the order in Australia. As at the date of this report the Company has not received
notice of a court order having been issued for the execution of the Tribunal’s judgement. No provision for a
contingent liability was recognised as at 30 June 2019.
Refer also to Notes 17 and 29 for the contingent payments and royalties applicable to the Caribou Dome, Stellar and
Uncle Sam properties.
PolarX Limited
64
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
26. Operating Segment
For management purposes, the Group is organised into one main operating segment, which involves mineral
exploration, predominantly for gold and copper. All of the Group’s activities are interrelated, and discrete financial
information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all
significant operating decisions are based upon analysis of the Group as one segment. The financial results from this
segment are equivalent to the financial statements of the Group as a whole. The Group currently operates in
Australia and the USA. The following table shows the assets and liabilities of the Group by geographic region:
Assets
Australia
United States
Total Assets
Liabilities
Australia
United States
Total Liabilities
Operating Result
Australia
United States
Total loss from operations
27. Dividends
Consolidated
30 June
30 June
2019
$
2018
$
4,809,156
25,566,461
30,375,617
1,054,140
20,888,732
21,942,872
207,108
72,085
279,193
154,840
44,469
199,309
30 June
30 June
2019
$
2018
$
(1,626,583)
(1,463,701)
(73,722)
(28,081)
(1,700,305)
(1,491,782)
No dividend was paid or declared by the Company in the period since the end of the financial year and up to the date
of this report. The Directors do not recommend that any amount be paid by way of dividend for the financial year
ended 30 June 2019 (2018: Nil). The balance of the franking account as at 30 June 2019 is Nil (2018: Nil).
PolarX Limited
65
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
28. Lundin Mining Strategic Partnership
On 3 June 2019, the Company and Lundin Mining Corporation (Lundin Mining) agreed terms for a strategic earn-in
joint venture over select porphyry Cu-Au targets within PolarX’s 100% owned Stellar Project (Strategic Partnership).
The following summary sets out the key terms and conditions of the Strategic Partnership:
(1)
(2)
(3)
in June 2019, Lundin Mining subscribed for 53,442,000 Shares at an issue price of $0.08 per share, to raise
gross proceeds of $4,275,360 (Share Placement);
the proceeds from the Share Placement are to be used to fund exploration activities on certain claims
contained within the Stellar Project (JV Claims). This exploration program (Exploration Program) is to be
completed by the end of 2019, subject to extension in certain limited circumstances;
upon completion of the Share Placement, Lundin Mining was granted an exclusive option (Option) to earn in
to a 51% participating interest in the JV Claims, expiring on the later of (i) 31 December 2019 and (ii) 30 days
after Lundin Mining has been provided all information and data from the Exploration Program (Option
Period), during which:
(i)
(ii)
the parties will form a joint exploration committee (Exploration Committee), which committee will
comprise three representatives appointed by Lundin Mining and two representatives appointed by the
Company, for the purposes of directing and reviewing the Exploration Program; and
the Company will remain the operator of the drilling program on the other Alaska Range Project claims
which are located outside the JV Claims (Excluded Claims). The Excluded Claims include the areas
covered by the Caribou Dome and Zackly deposits which contain the Company’s existing mineral
resource estimates.
(4)
if Lundin Mining exercises the Option (Option Exercise Date), during the next three-year period (Earn-in
Period):
(i)
Lundin Mining’s earn-in obligations will be as follows:
(A) Year One – a cash payment of US$2 million to the Company within 30 days of the Option Exercise
Date (anticipated to be 30 January 2020) plus a US$8 million minimum expenditure commitment in
relation to the JV Claims;
(B) Year Two – an additional cash payment of US$3 million to the Company within 30 days of the first
anniversary of the Option Exercise Date (anticipated to be 30 January 2021) plus a further US$8
million minimum expenditure commitment in relation to the JV Claims; and
(C) Year Three – an additional cash payment of US$5 million to the Company within 30 days of the
second anniversary of the Option Exercise Date (anticipated to be 30 January 2022) plus a further
US$8 million minimum expenditure commitment in relation to the JV Claims,
(together, the Earn-in Requirements);
(ii) Lundin Mining will have the option to assume the role of operator in relation to the JV Claims;
(iii) all exploration work will be decided on by the Exploration Committee (which composition will remain the
same as described in paragraph (3)(i) above);
(iv) Lundin Mining shall be entitled to nominate one candidate for appointment to the Board of the Company
as a non-executive director of the Company, subject to Lundin Mining holding in aggregate no less than
12.5% of the shares on issue and assuming the role of operator in relation to the JV Claims and provided
that if Lundin Mining’s interest in the Company falls below 10% for more than 10 consecutive trading
days, such nomination right will be terminated; and
PolarX Limited
66
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
(v) Lundin Mining shall have a first right of refusal in relation any purported sale of (i) the Company’s interest
in the JV Claims; and/or (ii) the Excluded Claims, subject to any requirements (including the requirement
to obtain shareholder approval) that ASX may impose on the Company at the time of exercise by Lundin
of such rights (provided that the Company shall use its best efforts to satisfy such requirements or obtain
an exemption therefrom).
(5)
upon completion of the Earn-in Requirements and subject to payment of an option exercise fee of US$10
million (Option Payment):
(i)
the parties will form an incorporated joint venture or other agreed structure (JV Entity) in relation to the
JV Claims, under which Lundin Mining would be entitled to an initial 51% interest;
(ii)
the board of the JV Entity will comprise five directors, with three to be initially appointed by Lundin Mining
and two initially appointed by the Company;
(iii) Lundin Mining will be manager and operator of the JV Claims;
(iv)
the detailed structure and other terms related to the management, governance, administration, funding,
and dilution of the JV Entity will be set out in a formal joint venture agreement, and will be consistent with
industry practice for joint venture exploration, development and operating companies;
(v) Lundin Mining shall have a first right of refusal in relation any purported sale of (i) the Company’s interest
in the JV Claims; and/or (ii) the Excluded Claims, subject to any requirements (including the requirement
to obtain shareholder approval) that ASX may impose on the Company at the time of exercise by Lundin
Mining of such rights (provided that the Company shall use its best efforts to satisfy such requirements or
obtain an exemption therefrom);
(vi)
if the Company identifies a deposit on any of the Excluded Claims, which deposit exceeds a threshold
size of 2Moz Au equivalent or 1Mt Cu equivalent (JORC Code – inferred resources), the JV Entity will
have the right to require that those claims be transferred to the JV Entity at fair market value, subject to
the Company first having a 90-day period to market the deposit to a third party for a higher value, subject
to a right of first refusal in favour of the JV Entity and any requirements (including the requirement to
obtain shareholder approval) that ASX may impose on the Company at the time of exercise of such
rights (provided that the Company shall use its best efforts to satisfy such requirements or obtain an
exemption therefrom); and
(vii) any and all rights now or hereafter acquired by PolarX or Lundin Mining or any of their respective
affiliates within the JV Claims or the associated area of interest (other than with respect to the Excluded
Claims) shall be subject to the joint venture.
PolarX Limited
67
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
29. Agreements over the Uncle Sam Gold Project
On December 15, 2010, Millrock Resources Inc. and Millrock Alaska LLC (collectively Millrock) entered into an
option agreement with PolarX Limited (the Millrock Option), whereby PolarX Limited was granted (and subsequently
exercised in April 2013) an option to purchase an undivided 100% interest the Uncle Sam Gold Project. Pursuant to
the Millrock Option, during such time as PolarX Limited retains an interest in the Uncle Sam Project it has the
following obligations (the Resource Share Payments) in relation to any future mineral resource estimate for the
Uncle Sam Gold Project:
(i)
(ii)
the issue of 60,000 Shares to Millrock in the event that a gold mineral resource of 1,000,000 ounces or more is
defined, in accordance with NI 43-101 on the Uncle Sam Project; and
the issue of a further 40,000 Shares to Millrock in the event that a gold mineral resource of 2,000,000 ounces or
more is defined, in accordance with NI 43-101 on the Uncle Sam Project, plus an additional 40,000 shares for
every additional 1,000,000 ounces of resources in excess of 2,000,000 ounces.
Pursuant to the Millrock Option, PolarX also remained obligated to pay a 2% net smelter return royalty to a third party
in relation to any future production from the Uncle Sam Project.
In July 2015, the Company entered into a mineral lease and purchase agreement (Option Agreement) with Great
American Minerals Exploration Inc. (GAME), pursuant to which GAME agreed to lease the Uncle Sam Project for 10
years with an option to purchase the property outright at any time during the lease period. Subject to exercise of the
purchase option, GAME would assume liability for all royalty obligations on the project.
During the 2018 financial year, the Company received noticed from the Department of Natural Resources (State of
Alaska) that the mineral claims which comprise the Uncle Sam Gold Project had been declared abandoned (DNR
Notice). The basis for the decision was an error on the affidavit of labour filed by the previous tenement owner in
2011. As a result, GAME has sought to terminate the Option Agreement.
The Company is currently reviewing its options in relation to this matter, including whether GAME has complied with
its obligations under the Option Agreement, but notes that the Uncle Sam Gold Project:
is considered a non-core asset and had a $nil carrying value in the Company’s financial statements at the time
of receipt of the DNR Notice; and
is independent of the Company’s Alaska Range Project.
‐
‐
PolarX Limited
68
2019 Annual Report
PolarX Limited
Notes to the financial statements for the financial year ended 30 June 2019
30. Information relating to PolarX Limited (“the parent entity”)
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Retained losses
(Loss) of the parent entity
Total comprehensive (loss) of the parent entity
Guarantees entered into by the parent entity in
relation to the debts of its subsidiaries
Guarantees provided
Contingent liabilities of the parent entity
Commitment for the acquisition of property, plant
and equipment by the parent entity
Not longer than one year
Longer than one year and not longer than five years
Longer than five years
2019
$
4,323,473
24,990,848
29,314,321
203,507
-
203,507
29,110,814
82,081,571
3,318,897
2018
$
564,370
20,499,838
21,064,208
152,200
-
152,200
20,912,008
73,013,238
3,238,719
(56,289,654)
(55,339,949)
29,110,814
(949,705)
(949,705)
20,912,008
(1,067,499)
(1,067,499)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
PolarX Limited
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2019 Annual Report
PolarX Limited
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of PolarX Limited, I state that:
In the opinion of the directors:
(a) the financial statements and notes are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for
the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 3(a); and
(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.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
On behalf of the Board
Mark Bojanjac
Executive Chairman
23 September 2019
PolarX Limited
70
2019 Annual Report
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
23 September 2019
Board of Directors
PolarX Limited
1/100 Railway Road
Subiaco, WA 6008
Dear Directors
RE:
POLARX LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of PolarX Limited.
As Audit Director for the audit of the financial statements of PolarX Limited for the year ended 30
June 2019, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely,
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
POLARX LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of PolarX Limited the Company and its controlled entities (“the Group”), which
comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial
performance for the year then ended; and
(ii)
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 Company 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 (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.
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.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current year and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Liability limited by a scheme approved
under Professional Standards Legislation
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Exploration and Evaluation
Assets
As at 30 June 2019, Exploration and Evaluation
Assets totalled $25,961,956 (refer to Note 11 of the
financial report).
The carrying value of exploration and evaluation
assets is a key audit matter due to:
•
•
•
The significance of the expenditure capitalised
representing 86% of total assets;
to assess management’s
The necessity
the
requirements of
the
application of
accounting standard Exploration
for and
Evaluation of Mineral Resources (“AASB 6”), in
light of any indicators of impairment that may
be present; and
The assessment of significant judgements
made by management in relation to the
capitalised
evaluation
expenditure.
exploration
and
Going Concern
In considering the going concern basis of accounting,
as referred to in Note 2 to the financial statements,
management considered whether there are any
to
material uncertainties on
continue as a going concern.
this
assessment management need to consider the period
of at least 12 months from the date our audit opinion is
signed.
the Group’s ability
In making
The assessment is largely based on the assumptions
made by the management in their cash flow forecasts.
These forecasts include management and directors’
assumptions regarding the timing of future cash flows,
operating results, and capital raising activities (if any).
This is a key audit matter due to the Group’s history of
operating losses and negative cashflows.
Inter alia, our audit procedures
following:
included
the
i. Assessing the Group’s right to tenure over
the
exploration assets by corroborating
ownership of the relevant licences for mineral
resources to government registries and relevant
third-party documentation;
ii. Reviewing the directors’ assessment of the
carrying value of the capitalised exploration and
evaluation costs, ensuring the veracity of the
data presented and assessing management’s
consideration of potential impairment indicators,
commodity prices and the stage of the Group’s
projects also against AASB 6;
iii. Evaluation of Group documents for consistency
with the intentions for continuing exploration and
evaluation activities in areas of interest and
corroborated in discussions with management.
The documents we evaluated included:
▪ Minutes of the board and management; and
▪ Announcements made by the Group to the
Australian Securities Exchange; and
iv. Consideration of the requirements of accounting
standard AASB 6 and reviewed the financial
statements to ensure appropriate disclosures
are made.
Inter alia, our audit procedures included the following:
• Obtaining and reviewing management’s cash
flow forecasts to assess whether current cash
levels and proposed capital management
initiatives can sustain operations for a period of at
least 12 months from the date of signing the
financial statements;
•
•
•
Reviewing the assumptions used by management
in the going concern forecasts for reasonableness
and challenging these where necessary;
Corroborating, where possible, management’s
assumptions in relation to its cash flow forecasts,
including enquiry, verifications of and discussions
pertaining to these assumptions; and
Assessing the adequacy of the Group’s related
disclosures within the financial report.
Other Information
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 2019, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance opinion 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. 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 ability of the Group 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 has 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.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 26 of the directors’ report for the year ended 30
June 2019.
In our opinion, the Remuneration Report of XYZ Limited for the year ended 30 June 2019 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.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
23 September 2019
PolarX Limited
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this
report. The additional information was applicable as at 2 September 2019.
Distribution of Security Holders
There are 416,221,615 fully paid ordinary shares on issue. Analysis of numbers of listed equity security holders by size of
holding:
Holding
Number of shareholders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
69
140
101
393
282
985
There are 225 shareholders holding less than a marketable parcel of ordinary shares.
Statement of Restricted Securities
There are no restricted securities on issue.
Substantial Shareholders
The Company is of the view, after taking into account publicly available information, that the substantial shareholders of the
Company are as follows:
Shareholder
Number of shares
Lundin Mining Corporation
JP Morgan Chase & Co and its affiliates
Ruffer LLP
53,442,000
34,813,892
31,315,046
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called otherwise each member present at a meeting or by proxy
has one vote on a show of hands.
Options
These securities have no voting rights.
PolarX Limited
76
2019 Annual Report
PolarX Limited
Quoted Equity Security Holders
The names of the twenty largest ordinary shareholders of the Company as at 2 September 2019 are as follows:
Shareholder
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Aetas Global Markets Limited
Orogen Investments Pty Ltd
Mr Adam Leslie Hajek + Mrs Lisa Gaye Hajek
Equity Trustees Limited
BNP Paribas Nominees Pty Ltd
Mr William Willoughby
Terra Metallica Nominees Pty Ltd
Mr Frank Violi
Mr Andrew Walsh
Dr Charles Frazer Tabeart
Mr Andrew Huat Seong Tay
MICJUD Pty Ltd
Mr Andrew John Pearson
Mr Kevin Banks-Smith & Mrs Katrina Frances Banks-Smith
Anita Cunningham
Martin Huxley
Spectral Investments Pty Ltd
Number of
Shares
75,899,522
75,432,123
34,670,836
19,646,629
13,631,832
11,453,932
8,018,041
5,247,135
5,169,427
5,004,389
4,742,857
3,885,714
3,700,395
2,867,223
2,754,840
2,743,446
2,550,000
2,460,931
2,290,908
2,195,999
% of Issued
Capital
18.24
18.12
8.33
4.72
3.28
2.75
1.93
1.26
1.24
1.20
1.14
0.93
0.89
0.69
0.66
0.66
0.61
0.59
0.55
0.53
284,366,179
68.32
Unquoted Equity Security Holders
Class
Number of
options
Number of
holders
Holders with more than 20%
Unlisted stock options each
exercisable at $0.125 on or
before 20/12/2021
Unlisted stock options each
exercisable at $0.0715 on or
before 19/2/2020
Unlisted stock options each
exercisable at $0.175 on or
before 17/6/2020
Unlisted stock options each
exercisable at $0.12 on or
before 18/9/2020
29,000,000
10
4,000,000
400,000
400,000
3
1
2
The Fiduciary Group Limited (10,000,000)
Frazer Tabeart (5,000,000)
Orogen Investments Pty Ltd (5,000,000)
Kallara Holdings Pty Ltd (5,000,000)
Denise Worthington (2,000,000) Robert Boaz
(1,000,000) Michael Fowler (1,000,000)
Julie Lai (400,000)
Jayart Funds Management Pty Ltd (200,000)
Borsa Enterprises Pty Ltd (200,000)
PolarX Limited
77
2019 Annual Report
PolarX Limited
Tenement Schedule
The tenement interest held by the Group as at the date of this report are listed below:
Project
Location
Licence(s)
Ownership Interest
Caribou Dome
Property
Alaska, USA
Claim
ADL #
Stellar Copper Gold
Project
Caribou 1 – Caribou 20
Copper 1 – Copper 6
Copper 7 – Copper 11
CD 1 – CD66
CDS 001 – 038
563243 - 563262
588461 – 588466
645375 – 645379
664859 – 664924
719949 – 7199861
CD 001 – 040
CDE-01 – 20
CDE 26
CD 41 - 51
SBX 71
SBX 74 – 75
SBX 77 - 82
719909 – 719948
722216 - 722235
722241
725113 - 725123
726910
726913 – 726914
726916 - 726921
Option to earn 80%
Option to earn 90%
Alaska, USA
SB 154 – 155
704562 – 704563
100%
SB 167 – 168
704575 – 704576
ZK 3 – 5
ZK 14
704621 – 704623
704632
ZK 19 – 21
704637 – 704639
Z 1 – 5
Z 6 - 10
SB 281 - 283
SB 297 - 299
709427 - 709431
711728 - 711732
714079 - 714081
714095 - 714097
SB 317 – 319
714115 – 714117
SB 346 – 348
714144 - 714146
SB 364 - 368
SB 376 - 379
SB 389 - 390
SB 417
714162 – 714166
714174 - 714177
714187 - 714188
715392
SBA 001 – 066
721446 - 721511
SBX 001 – 070
724789 - 724858
LYKN 1 – 2
CD 41 – 51
725111 – 725112
725113 – 725123
CDE 21 - 25
722236 – 722240
CDE 27
722242
SBX 72 – 73
726911 – 726912
SBX 76
SBX 83 – 91
SBX 92 -121
726915
726922 - 726930
728878 - 728907
PolarX Limited
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2019 Annual Report
PolarX Limited
Uncle Sam Gold
Project
Notes:
Alaska, USA
-2
-2
-2
1. Caribou Dome Claims numbered CDS 007 (ADL# 719955), CDS 008 (ADL# 719956), CDS 009 (ADL# 719957), CDS 015 (ADL#
719963), CDS 016 (ADL# 719964) and CDS 017 (ADL# 719965), overlap prior existing active claims. Hence no exploration activity
has been undertaken on these claims to date and no work will be undertaken on these claims unless they are abandoned by the
original locator. The claims are not considered material to the overall Caribou Dome Project.
2. Refer Note 29 to the financial statements for the status of the Uncle Sam Gold Project. For a detailed listing of the Uncle Sam Gold
Project mineral claims, held prior to receipt of the DNR Notice referred to in Note 29, please refer to Appendix 1 to the quarterly
activities report dated 31 October 2017.
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2019 Annual Report