PolarX Limited
ABN 76 161 615 783
Annual Report
30 June 2023
CONTENTS
Corporate Directory
Review of Operations
Directors’ Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Audit Report
Additional ASX Information
Page No
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POLARX LIMITED
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ANNUAL REPORT 2023
CORPORATE DIRECTORY
Directors
Mr. Mark Bojanjac
Executive Chairman
Dr. Jason Berton
Managing Director (appointed 15 July 2022 – previously Executive Director)
Dr. Frazer Tabeart
Non-Executive Director (appointed 15 July 2022 – previously Managing Director)
Mr. Robert Boaz
Non-Executive Director
Company Secretary
Mr. Ian Cunningham
Registered Office and Principal Place of Business
Unit 25, Level 3, 22 Railway Road
Subiaco WA 6008
Australia
Telephone:
(+61 8) 9226 1356
Facsimile:
(+61 8) 9226 2027
Share Register
Computershare Investor Services Pty Ltd
Level 17
221 St Georges Terrace
Perth WA 6000 Australia
Telephone: 1300 850 505 (within Australia)
International: (61 8) 9415 4000
Stock Exchange Listing
Australian Securities Exchange
ASX Code: PXX
Auditor
Stantons
40 Kings Park Road
West Perth WA 6005
Australia
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ANNUAL REPORT 2023
REVIEW OF OPERATIONS
During the financial year ended 30 June 2023 (FY2023) the Group continued to focus on the exploration and development of
its mineral projects, with key activities being:
•
•
Completion of two independent scoping studies for the Alaska Range Copper Gold Project (Alaska Range Project)
in Alaska, USA, which comprises both the Stellar Gold Copper Property (Stellar Project – 100% owned), and
Caribou Dome Copper Property (Caribou Dome Project – earning 80-90%).
RC drilling programs and follow up IP surveys at the Humboldt Range Gold-Silver Project in Nevada, USA
(Humboldt Range Project), which comprises the Black Canyon and Fourth of July mineral claim groups.
Project Overview
Figure 1: PolarX’s US projects are situated in Nevada and Alaska
Alaska Range: Stellar Property (100% interest)
•
•
Updated Mineral Resource Estimate (MRE) in October 2022 of 4.0Mt @ 1.1% Cu + 1.6g/t Au + 12.6g/t Ag at Zackly
Copper-Gold-Silver skarn deposit, open in all directions.
Highly prospective for large, bulk tonnage porphyry copper-gold deposits with maiden discovery (102m @ 0.22% Cu
+ 0.1g/t Au) at the Mars prospect.
Alaska Range: Caribou Dome Property (Earning up to 90% interest)
•
•
Updated MRE in June 2023 of 7.2Mt @ 3.1% Cu + 6.5g/t Ag (JORC estimate) at Caribou Dome VMS Copper
deposit, starting at surface and down to only 300m depth.
Potential to improve copper recoveries with further metallurgical test-work
• Mineralisation remains open in all directions with numerous untested IP/geochemical targets, which provides
potential to increase the mineral resource base.
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ANNUAL REPORT 2023
Figure 2. Location Map showing location of the Alaska Range Project
Humboldt Range, Nevada (100% interest)
• Lies between the 5 Moz Florida Canyon Gold mine, Spring Valley project (4.12Moz), and the 400Moz Rochester Silver
mine (which also contains 3.5Moz gold).
• Maiden Reverse Circulation (RC) drilling program undertaken in the first half of 2022 at the gold-silver Star Canyon
prospect, which lies within the Black Canyon claim group, which returned exceptional results including 9m @ 124g/t Au
and 49g/t Ag. This highlighted the potential for the Humboldt Range Project to host high-grade gold and silver veins
within a potentially broader modest grade, sulphide hosted, bulk mineable system.
• Subsequent RC drilling program in December 2022 identified Induced Polarization (IP) as the most appropriate
geophysical technique to detect unexposed high-grade veins and bulk scale modestly mineralised rocks.
•
IP surveys undertaken in May and June 2023 at Black Canyon and Fourth of July (FoJ), with a view to identifying targets
for a drilling program scheduled to commence in Q4 2023.
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ANNUAL REPORT 2023
Figure 3. PolarX’s Humboldt Range Project is located adjacent to large scale operating mines and important road,
energy and workforce infrastructure. The Rochester Mine, Spring Valley project, Black Canyon and Fourth of July
projects all host gold & silver mineralisation within north-south striking Rochester Rhyolite rock units.
Humboldt Range Project
The Humboldt Range Project comprises 364 lode mining claims in Nevada in two claim groups: Black Canyon and Fourth of
July and is situated between two large-scale active mines: the Florida Canyon gold mine and the Rochester silver-gold mine
(see Figure 3). Access to the project is straightforward via roads off the I-80 Interstate Highway, which lies less than 15km
to the west of the claims.
Humboldt Range contains geology consistent with bonanza-style epithermal gold-silver mineralisation and bulk mineable
epithermal gold-silver mineralisation, both of which are well known in Nevada. Widespread narrow vein mineralisation with
visible gold occurs within the claims and was historically mined via numerous adits and underground workings between 1865
and the 1927. Mineralisation occurs in swarms of high-grade epithermal quartz veins of varying thickness (reported from
1cm to 3m), either as isolated veins or as broad zones of sheeted/anastomosing veins within zones of intensely altered and
mineralised host rocks.
Mineralised Rochester Rhyolite Formation outcrops at surface throughout the Humboldt Range Projects and is in places
concealed beneath relatively thin overlying unmineralized Prida Limestone. Regionally the Rochester Rhyolite Formation
hosts multi-million-ounce gold and silver deposits at the nearby Rochester Mine and the Spring Valley projects.
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ANNUAL REPORT 2023
FY2023 Exploration Activities
Drilling
In December 2022, the Company completed an 11-hole (1,500 metres) RC percussion drilling program at its gold-silver Star
Canyon prospect, which forms part of the Black Canyon claim group (see Figure 3). Star Canyon was previously drilled in
May 2022, intersecting bonanza gold grades in hole BC22-005 (see Figure 4).
Highlights of the program were:
• Extensive low-grade gold mineralisation was identified in association with sulphides within the Rochester Rhyolite
Formation throughout the Star Canyon drill program. The modest-grade gold mineralisation is hosted in similar
geology to the nearby Rochester Mine (400Moz Ag, 3Moz Au) and neighbouring Spring Valley project (4.1Moz Au)
which already demonstrate commercial potential for large scale bulk tonnage mining and are both hosted within the
Rochester Rhyolite Formation (Figure 3).
• Detailed geological logging has identified a concealed fault structure (see Figure 5) which offsets depth continuity of
the targeted bonanza gold vein, which is also concealed beneath the surface. The surrounding Rochester Rhyolite
continues to host wide, low-grade, sulphide metal related mineralised intercepts.
•
•
Targeted bonanza-grade veins lie above the fault hanging wall. All holes in this program were drilled below the fault
into its footwall.
Follow up RC drill program planned to test extensions of high-grade gold vein sets in hanging wall and footwall and
higher grade zones of potentially bulk mineable Rochester Rhyolite after IP survey program.
• Bonanza gold and silver veins remain a high priority target within the extensive lower grade regional host. The two
mineralised settings are not mutually exclusive, they have been observed to be geologically coincident in the
Rochester Rhyolite at Star Canyon and potentially occur elsewhere in the Black Canyon and Fourth of July claim
groups.
Figure 4. Plan view of drill hole collars, Au soil anomaly, May 2022 drill results for Star Canyon. Note the Normal Fault identified from the
December 2022 RC drill campaign, strikes N-S and dips about 60oE. The hanging wall (HW) side has moved vertically downwards, and the
footwall side (FW) has moved vertically upwards, thus displacing the earlier mineralised veins and rock units. The concealed fault has
hampered the drill programs’ ability to test previously intersected high-grade veins. The follow-up program will take that offset into account.
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ANNUAL REPORT 2023
Figure 5. RC holes drilled in December 2022 (BC22-011, BC22-011A & BC22-011B) drilled into the footwall of a concealed normal fault that
has displaced the bonanza vein. High priority drill holes have been planned to intersect the bonanza vein in both the hanging wall and
footwall of the fault.
Together with the previous program in May 2022, the December 2022 RC drill program identified wide mineralised intercepts
that frequently range in Au grade from 0.1 to 0.4 g/t Au which is associated with relatively weak sulphide metal
concentration. Accordingly, it was determined that Induced Polarisation (IP) geophysical surveys could be used to identify
higher sulphide metal concentrations than drilling has encountered to date at Star Canyon and Fourth of July.
IP Survey
Induced Polarisation (IP) surveys were undertaken over select areas of the Black Canyon and Fourth of July projects in May
and June 2023. PolarX considers IP surveys to be the best technique to assist in generating drill targets for higher grade
bulk-tonnage and high grade sulphide related vein mineralisation.
The IP surveys have identified several strong chargeability and resistivity anomalies. Each anomaly coincides with PolarX’s
surface geochemical gold anomalies and known faults, providing further confidence to drill target areas.
Black Canyon
Seven east-west IP traverse lines were surveyed across known mineralisation trends at variable lengths, ranging from 1.3 to
1.7km and totalling 10.2km.
A prominent 1.7km long chargeability anomaly extends from surface south of the Ridgeline fault zone, a prospect previously
identified by PolarX’s mapping and surface geochemistry programs. The Ridgeline target consists of multiple gold-
mineralised north-northeast trending veins extending in outcrop for 1.0km immediately north of the IP survey area.
Combined, this anomalous zone now extends for 1.0km across the Ridgeline and 1.7km south for a total target of 2.7km.
The entire length of the IP chargeability anomaly lies beneath the existing access road, which will assist drill rig access and
minimize ground disturbance.
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ANNUAL REPORT 2023
Ridgeline
Star Canyon
Traverse 5
Veins
Faults
Tenement
boundary
Figure 6. Plan view over Black Canyon showing inset 3D chargeability inversion model, gold soil samples and mapped gold hosting vein
structures (red vectors). The light grey line denotes the approximate location of traverse 5. Note, inversion models are not topographically
matched to terrain, for terrain corrected results see the IP traverse section in Figure 8.
A section view of traverse line 5 shows the chargeability and resistivity anomalies extend to depths beyond 250m.
Extrapolating anomaly extensions beneath 250m exceeds the penetration reliability of this IP survey which was configured to
target responses to a 250m depth.
The coincidence of strong chargeability and resistivity anomalies fits the expected IP response for mineralisation observed in
the region, which is typically finely disseminated metal sulphides (conductive) and strong siliceous alteration (resistive).
Mineralisation has been previously described as hosted within finely disseminated arsenopyrite and pyrite crystals in drilling
results at Star Canyon (see ASX releases 5 July 2022 and 20 February 2023). The extensive Rochester Rhyolite unit
outcrops at surface where both the chargeability anomalies occur in traverse line 5.
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ANNUAL REPORT 2023
Florida Canyon Mine
Road
access
Golden
Staircase
Ridgeline
Star Canyon
Veins
Faults
Tenement
Figure 7. Regional perspective of the IP chargeability anomaly in relation to the gold soils anomaly and road access for future drilling. View
west-northwest to Florida Canyon Mine.
Figure 8 Chargeability and Resistivity profiles for line 5 shows strong anomalies commencing at surface and penetrating to +250 m depth
(looking northwards).
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ANNUAL REPORT 2023
Fourth of July
Four east-west IP traverse lines between 3,000 and 3,500 metres in length were conducted at Fourth of July (“FoJ”), totalling
13.6 km. Figure 9 shows the chargeability zones in the inversion model profiles across the entire survey. There are some
very strong chargeability anomalies throughout each traverse.
Figure 9. IP chargeability profiles and mapped fault traces (red lines) at FoJ. The northern most traverse shows a large strong chargeability
anomaly commencing from surface.
The chargeability anomalies at Fourth of July are strongest near surface and coincide well with the soil anomalies and
known NW trending fault structures. The chargeability anomalies however do not exhibit the same compelling depth
penetration as the Black Canyon results and are considered a lower priority drill target.
Alaska Range Project
The Alaska Range Project (Figure 2) is located approximately 250km northeast of Anchorage in Alaska, USA. It is readily
accessible by road – the Denali Highway passes within 20km of the Project and from there a purpose-built road provides
direct access to the historic underground exploration development at the Project.
The Alaska Range Project comprises a contiguous package covering 262km2 with ~35km strike length hosting extensive
copper- and gold-in-soil anomalism consistent with several mineralised districts.
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ANNUAL REPORT 2023
2023 Scoping Study
On 28 August 2023, the Company announced the results of an updated scoping study for the Alaska Range Project (2023
Scoping Study), which was undertaken following the June 2023 mineral resource estimate upgrade for the Caribou Dome
deposit. The 2023 Scoping Study evaluates sequential mining and processing options for the Caribou Dome deposit and
the nearby Zackly skarn deposit, and updated the study previously published in October 2022.
The 2023 Scoping Study revealed several key aspects:
• Mining and processing is now scheduled to commence at Caribou Dome with a high-grade open pit followed by
underground mining at Zackly which will be trucked to the proposed plant at Caribou Dome.
• 83% of the material proposed to be mined falls in the Measured and Indicated resource categories.
• Relatively fast capital recoupment is possible.
• Further metallurgical test-work is intended to improve copper recovery and concentrate grades at Caribou Dome
and gold recovery at Zackly.
• Even modest increases in copper and gold recoveries and/or concentrate grades could deliver a dramatic
economic uplift to potential economics.
• Modest resource extensions at either deposit could also significantly further enhance projected economic returns.
• Mineralisation is known to continue 150m below the current resource at Caribou Dome and a future anticipated
underground mine could again extend the modelled mine-life.
• Revenue from copper contributes more than gold or silver at the assumed commodity prices.
Key assumptions and outcomes of the 2023 Scoping Study were:
• Processing rate of ~750ktpa at Caribou Dome followed by 600ktpa at Zackly, over a 9.5 year
operating life
• Metallurgical recoveries of 90% copper and 79% gold from flotation at Zackly, and 78%
copper recovery from flotation at Caribou Dome and 80% silver at each deposit
• Pre-production capital expenditure of US$145m (including pre-strip and royalty buy-back)
• Revenue of approximately US$1.375bn# (A$2.115bn) over the forecast initial operating life
• Average annual free cash flow of US$53m# (A$460m) over the initial operating life
(undiscounted, pre-tax)
• NPV7 (pre-tax) of approximately US$201m# (A$309m).
•
IRR# of 38.4% (pre-tax)
• Payback of 2.75 years
#Assuming commodity prices of copper – US$8,500/tonne; gold – US$1,900/oz; silver – US$25/oz and AUD: USD Exchange
Rate of 0.65.
The 2023 Scoping Study findings are presented on a 100% project basis and without finance leverage.
Over the life of the Project, Measured and Indicated Resources account for 83% of the total tonnes mined. Inferred Mineral
Resources comprise only 17% of the production schedule. In particular, during the first 3 years of the production plan,
approximately 99% of the material to be mined is classified as Measured and Indicated which comfortably recovers
projected capital start-up costs. There is a lower level of geological confidence associated with Inferred Mineral Resources
and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that
the production target itself will be realised.
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ANNUAL REPORT 2023
Updated Mineral Resource
The 2023 Scoping Study was based on the updated mineral resource estimate for the Caribou Dome deposit, announced in
June 2023 of 7.2Mt @ 3.1% Cu and 6.5g/t Ag. This followed the announcement of an updated mineral resource estimate for
the Zackly deposit in October 2022 of 4.0Mt @ 1.1% Cu and 1.6g/t Au (refer Table 1 below):
Table 1: Alaska Range Project Resource Estimates (JORC 2012), 0.5% Cu cut-off
Contained Cu
(M lb)
Contained Cu
(t)
Resource
Category
Ag
g/t
Au
g/t
Cu
%
Mt
Contained Au
(oz)
Contained Ag
(oz)
ZACKLY
Inferred
CARIBOU
DOME
Indicated
TOTAL
Inferred
Indicated
Measured
TOTAL
1.5
2.5
4.0
3.0
3.2
1.0
7.2
0.9
1.2
1.1
2.6
3.3
3.9
3.1
1.2
1.9
1.6
-
-
-
10.4
13.9
12.6
5.7
6.5
8.6
6.5
COMBINED
TOTAL
11.2
14,300
30,700
45,000
79,400
105,175
39,800
224,375
269,375
32
68
100
175
232
88
495
595
58,000
155,000
213,000
-
-
-
513,000
1,120,000
1,633,000
552,000
662,800
284,000
1,498,000
213,000
3,131,000
Notes:
1. Refer to the ASX announcement of 14 June 2023 for full details on the Caribou Dome Project Mineral Resource estimate,
including applicable technical information and reporting criteria.
2. Refer ASX announcement of 17 October 2022 for full details on the Zackly Deposit Mineral Resource estimate, including
applicable technical information and reporting criteria.
Key changes from the previous Mineral Resource Estimate (MRE) for the Caribou Dome deposit in 2017 (refer ASX
announcement of 5 April 2017) were:
•
•
•
the 2023 MRE has a copper metal content of 224,375 tonnes, which is 2.6 times greater than the 2017 MRE of
2.8Mt at 3.1% Cu with contained copper metal of 86,000 tonnes;
58% of the 2023 MRE is now classified as Measured or Indicated compared to 43% in the 2017 MRE; and
the 2023 MRE includes a silver estimate for the first time, with a contained silver metal content of 1.5 Moz within
the 0.5% copper cut-off envelope.
Key changes from the previous MRE for the Zackly deposit in 2018 (refer ASX announcement of 20 March 2018) were:
•
•
the 2023 MRE represents a 20% increase in overall size to 4.0Mt @ 1.1% Cu and 1.6g/t Au (2018 – 3.4Mt @1.2%
Cu and 2.0g/t Au); and
70% of the 2023 MRE is now in the Indicated category compared to the 2018 MRE which was 100% Inferred.
Sensitivity Analysis
The 2023 Scoping Study determined that the NPV and IRR of the Alaska Range Project are most sensitive to the commodity
prices, concentrate grades and realisation costs of copper as well as project operating costs.
Sensitivity analysis also determined that the Project is less sensitive to capital costs than it is to life-of-mine operating costs
and copper realisation costs.
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ANNUAL REPORT 2023
Figure 10. NPV sensitivity (pre-tax basis) for copper and gold price, copper recovery and tonnes processed.
Figure 11. NPV sensitivity (pre-tax basis) to capital costs and operating costs
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ANNUAL REPORT 2023
The 2023 Scoping study revealed that key areas for potential cashflow and NPV enhancement, other than copper and gold
prices, are found in improving concentrate grades, copper and gold recovery and resource extension. In particular:
•
•
•
advancing successful metallurgical test work has the most immediate potential to deliver the greatest uplift in the
Caribou Dome deposit NPV. It reveals that substantially better economic returns could be achieved with even
modest improvements in both copper recovery and concentrate grades at Caribou Dome. Concentrate grades at
20% or greater deliver the best returns as they reduce freight-to-refinery costs and avoid punitive realisation costs for
lower grade concentrates.
for example, sensitivity analysis indicates that lifting copper recovery by 7% to 85% whilst floating a 20% copper
concentrate from material mined at Caribou Dome could potentially yield a further $174M (+87%) increase in
projected pre-tax NPV; and
similarly, advancing test-work to deliver better gold recovery at Zackly could also yield immediate benefit.
Forward Plans
• Metallurgical test work to date is at an interim level and is not yet optimised. Hence further testing including the
examination and trial of alternative recovery options at both Caribou Dome and Zackly are planned this year.
• Mineral resource expansion potential is evident and may be achieved with further successful resource extension
drilling at both Caribou Dome and Zackly:
- Caribou Dome drilling to date has mineralised intercepts a further 150m below the current mineral resource
estimate. If further drilling extended the mineral resource to that depth and an estimated 2Mt was mined from
underground, the 2023 Scoping Study indicated this has the potential to yield a US$50M increase in projected
pre-tax NPV (+25%).
- Analysis of drilling and the current Indicated mineral resource at Zackly also highlights several mineralised shoots
which plunge at depth and along-strike and have yet to be fully evaluated by drilling. The 2023 Scoping Study
indicated that adding an extra year’s material mined from Zackly could yield a US$22M increase in projected
pre-tax NPV (+11%).
Corporate
During November and December 2022, the Company raised a total of approximately $3.63 million via:
(i)
the issue of 112,983,117 fully paid ordinary shares (Shares) at an issue price of 0.8 cents per Share to raise ~$904k,
pursuant to a renounceable rights issue (2022 Entitlement Offer). Under the terms of the 2022 Entitlement Offer,
eligible shareholders were able to subscribe for two (2) new Shares for every five (5) existing Shares held on the
applicable record date;
(ii)
the issue of 246,658,650 Shares at an issue price of 0.8 cents per Share, raising an additional ~$1.97 million,
pursuant to the allocation of shortfall from the 2022 Entitlement Offer (December Shortfall Placements);
(iii) a placement to Northern Star Resources Limited (Northern Star) of 94,200,000 Shares at an issue price of 0.8 cents
per Share to raise ~$754k (December Placement).
Northern Star subscribed for a total of 135,333,702 Shares under the December Placement and Shortfall Placements,
representing approximately 10% of the Company’s issued capital post raise.
Subsequent to year-end the Company has raised a further $2.26 million via:
(i)
(ii)
the issue on 2 August 2023 of 140,605,262 Shares at an issue price of 1.1 cents per Share to raise ~$1.55 million,
pursuant to a placement, and
the issue on 15 September 2023 of 65,101,367 Shares at an issue price of 1.1 cents per Share to raise ~$716k,
pursuant to a non-renounceable rights issue (2023 Entitlement Offer). Under the terms of the 2023 Entitlement
Offer, eligible shareholders were able to subscribe for one (1) new Share for every six (6) existing Shares held on the
applicable record date.
In July 2023, the Company announced a Board restructure pursuant to which Dr Jason Berton was appointed as the
Company’s new Managing Director. The former Managing Director, Dr Frazer Tabeart, has continued in the capacity of
Non-Executive Director.
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ANNUAL REPORT 2023
As of the date of this report, the Company has on issue 1,559,616,775 Shares,91,552,685 listed options ($0.03; 6 Nov 2023)
and 50,868,907 unlisted options.
Material Business Risks
The Group’s principal activity is mineral exploration and development and companies in this industry are subject to many
and varied kinds of risks. While risk management cannot eliminate the impact of all potential risks, the Company strives to
manage such risks to the extent possible and practical. Following are the material business risks which the Company
believes are most important in the context of the Company’s business.
General Risks
Contractual Risk
Some of the Company's mineral properties are subject to option or lease agreements between the Company (or its
respective subsidiaries), as the case may be, and the owners of such mineral properties or an interest in such mineral
properties. The Company will be reliant on the owners of such mineral properties or interests therein complying with their
contractual obligations under the option agreements to maintain the Company's interest in such mineral properties in full
force and effect.
Access to Financing
The Company is at the exploration stage with no revenue being generated from the exploration activities on its respective
mineral properties. The Company may therefore have to raise the capital necessary to undertake or complete future
exploration work, including drilling programs. There can be no assurance that debt or equity financing will be available or
sufficient to meet these requirements or for other corporate purposes or, if debt or equity financing is available, that it will be
on terms acceptable to the Company. Moreover, future activities may require the Company to alter its capitalization
significantly. An inability to access sufficient capital for operations could have a material adverse effect on the Company's
financial condition, results of operations or prospects. In particular, failure to obtain such financing on a timely basis could
cause the Company to forfeit its interest in its mineral properties, miss certain acquisition opportunities, or reduce or
terminate its operations.
Industry risks
Exploration and Development Risks
Few mineral properties which are explored are ultimately developed into producing mines. There can be no guarantee that
the estimates of quantities and qualities of minerals disclosed will be economically recoverable. Mineral exploration is
speculative in nature and there can be no assurance that any minerals discovered will result in the definition of a mineral
resource.
The economics of developing gold and other mineral properties is affected by many factors, including the cost of operations,
variations in the grade of minerals mined, fluctuations in metal markets, costs of processing equipment and such other
factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting
of minerals and environmental protection. The long-term success of the Company depends on its ability to explore, develop
and commercially produce minerals from its mineral properties and to locate and acquire additional properties worthy of
exploration and development for minerals.
Changes to legislation and permits governing operations and activities of mining companies, or more stringent
implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures
or production costs or reduction in levels of production at any future producing properties or require abandonment or delays
in the development of new mining properties.
Permits and licenses
The activities of the Company will be subject to government approvals, various laws governing prospecting, development,
land resumptions, production taxes, labour standards and occupational health, mine safety, toxic substances and other
matters, including issues affecting local native populations. Amendments to current laws and regulations governing
operations and activities of exploration and mining, or more stringent implementation thereof, could have a material adverse
impact on the business, operations and financial performance of the Company. Further, the mining licenses and permits
issued in respect of the Company's mineral properties may be subject to conditions which, if not satisfied, may lead to the
revocation of such licenses. In the event of revocation, the value of the Company's investments in its mineral properties may
decline.
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ANNUAL REPORT 2023
Title risks
The acquisition of title to resource properties or interests therein is a very detailed and time-consuming process. The
Company's mineral properties may be subject to prior unregistered agreements or transfers and title may be affected by
undetected defects.
Volatility of metal prices
The market price of any precious or base metal is volatile and is affected by numerous factors that will be beyond the
Group's control. Sustained downward movements in metal market prices could render less economic, or uneconomic, some
or all of the precious or base metal extraction and/or exploration activities to be undertaken by the Company.
Environmental risks
All phases of the mining business present environmental risks and hazards and are subject to environmental regulation
pursuant to a variety of international conventions and state and municipal laws and regulations. Environmental legislation
provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances
produced in association with mining operations. The legislation also requires that wells and facility sites be operated,
maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with environmental
legislation can require significant expenditures and a breach may result in the imposition of fines and penalties.
Mineral Resource estimates
Mineral resources that are not mineral reserves do not have demonstrated economic viability and there is no assurance that
they will ever be mined or processed profitably. Due to the uncertainty which may attach to mineral resources, there is no
assurance that inferred mineral resources will be upgraded to proven and probable mineral reserves as a result of continued
exploration.
General investment risks
Economic
General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse
effect on the Company’s development and production activities, as well as on its ability to fund those activities.
Additional requirements for capital
The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income
from its operations, the Company may require further financing. Any additional equity financing may dilute shareholdings,
and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to
obtain additional financing as needed, it may be required to reduce the scope of its operations.
Climate risk
There are a number of climate-related factors that may affect the Company’s operations and proposed activities. In
particular:
(i)
(ii)
the emergence of new or expanded regulations associated with the transitioning to a lower-carbon economy and
market changes related to climate change mitigation. The Company may be impacted by changes to local or
international compliance regulations related to climate change mitigation efforts, or by specific taxation or penalties
for carbon emissions or environmental damage. These examples sit amongst an array of possible restraints on
industry that may further impact the Company and its profitability; and
climate change may cause certain physical and environmental risks that cannot be predicted by the Company,
including events such as increased severity of weather patterns and incidences of extreme weather events and
longer-term physical risks such as shifting climate patterns.
ADDITIONAL DISCLOSURE
There is information in this report relating to:
(i)
(ii)
the Mineral Resource Estimate for the Caribou Dome Deposit, which was previously announced on 14 June 2023;
the Mineral Resource Estimate for the Zackly Deposit, which was previously announced on 17 October 2022; and
(iii) exploration results which were previously announced on 11 January 2021, 5 July 2022, 8 August 2022, 5 October 2022, 20
February 2023 and 15 August 2023.
POLARX LIMITED
17
ANNUAL REPORT 2023
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.
All references to the 2023 Scoping Study and its outcomes in this presentation relate to the announcement of 28 August 2023 titled
“2023 Scoping Study Alaska Range Project”. Please refer to that announcement for full details and supporting information.
Forward Looking Statements:
Information included in this report constitutes forward-looking statements. When used in this announcement, forward-looking
statements can be identified by words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “future”, “intend”, “may”,
“opportunity”, “plan”, “potential”, “project”, “seek”, “will” and other similar words that involve risks and uncertainties.
Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the
Company’s actual results, performance and achievements to differ materially from any future results, performance or
achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations
and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and
project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of
resources and reserves, political and social risks, changes to the regulatory framework within which the Company operates or may
in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel,
industrial relations issues and litigation as well as other uncertainties and risks set out in the announcements made by the Company
from time to time with the Australian Securities Exchange.
Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties,
assumptions and other important factors, many of which are beyond the control of the Company, its directors and management of
the Company that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these
statements.
The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the
forward-looking statements contained in this report will actually occur and investors are cautioned not to place undue reliance on
these forward-looking statements. The Company does not undertake to update or revise forward-looking statements, or to publish
prospective financial information in the future, regardless of whether new information, future events or any other factors affect the
information contained in this report, except where required by applicable law and stock exchange listing requirements.
POLARX LIMITED
18
ANNUAL REPORT 2023
DIRECTORS
The names, qualifications and experience of the Directors in office during or since the end of the financial year are as
follows:
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.
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
3,979,999 ordinary shares
Options
5,000,000 unlisted options exercisable at $0.058 on or before 27 October 2025
Other Current Directorships
Kula Gold Limited
Metallica Minerals Limited
Former Directorships in last
3 years
Nil
Jason Berton
Managing Director (prior to 15 July 2022 - Executive Director)
Qualifications
Ph.D, B.Sc (Hons), MAusIMM
Experience
Dr. Berton is a geologist with over 18 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
19,255,795 ordinary shares.
Options
5,000,000 unlisted options exercisable at $0.058 on or before 27 October 2025
Other Current Directorships
Lithium Plus Minerals Limited
Eastern Metals Limited
Former Directorships in last
3 years
Nil
Frazer Tabeart
Non-Executive Director (prior to 15 July 2022 - 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 where he is currently a Director and Principal.
Dr. Tabeart has served on ASX-listed Company Boards at Executive level over last 15 years.
Interest in shares
6,937,431 ordinary shares
Options
5,000,000 unlisted options exercisable at $0.058 on or before 27 October 2025
128,453 listed options exercisable at $0.03 on or before 6 November 2023
Other Current Directorships African Energy Resources Limited
Arrow Minerals Limited
Alma Metals Limited
Former Directorships in last
3 years
Nil
POLARX LIMITED
19
ANNUAL REPORT 2023
Robert Boaz
Qualifications
Experience
Independent Non-Executive Director
Honors B.A., M.A. Economics
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.
Interest in shares
Options
None
None
Other Current Directorships Nil
Former Directorships in last
3 years
Nil
RESULTS OF OPERATIONS
The Group’s total comprehensive loss for the financial year attributable to the members was $467,422 (2022: income of
$539,237).
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, gold and silver exploration projects in Nevada and Alaska USA. During the 2023 financial year, there were no
changes in the principal activities from the prior financial year.
EMPLOYEES
The Group had one employee at 30 June 2023 (2022: one employee).
REVIEW OF OPERATIONS
A detailed summary of the Group’s operations during the financial year, including significant changes in the state of
affairs, are detailed in the Review of Operations.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 2 August 2023, the Company completed a share placement, pursuant to which the Company issued 140,605,262
Shares at an issue price of $0.011 per Shares to raise gross proceeds of $1.55 million.
On 25 July 2023, the Company announced a non-renounceable entitlement offer of one (1) new fully paid ordinary share
(New Share) for every six (6) existing fully paid ordinary shares (Entitlement Offer). The Entitlement Offer was
completed on 15 September 2023, pursuant to which 65,101,367 Shares were issued at an issue price of 1.1 cents per
Share to raise ~$716k.
On 28 August 2023 the Company announced the results of an updated scoping study conducted for the Alaska Range
Project, which evaluated sequential mining and processing options for the Caribou Dome and Zackly deposits.
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
20
ANNUAL REPORT 2023
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue to carry out its business plan, by:
•
•
•
continuing to explore the Alaska Range and Humboldt Range projects and advance the projects 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 142,421,592 options over unissued Shares at 30 June 2023, comprising 50,868,907 unlisted options and
91,552,685 listed options. During the 2023 financial year:
•
•
the Company issued 19,127,436 unlisted options to consultants on 24 October 2022, each exercisable at $0.03 on
or before 1 April 2025;
the Company issued 8,741,471 unlisted options to consultants on 9 February 2023, each exercisable at $0.016 on
or before 8 February 2026;
• no options lapsed; and
• 4,049 listed options, each exercisable at $0.03 on or before 6 November 2023 were exercised.
Since the end of the financial year no options have been exercised or expired.
The details of the options on issue at the date of this report are as follows:
Number
Exercise Price
Expiry Date
Unlisted Options
3,000,000
5,000,000
15,000,000
1912 36
19,127,436
8,741,471
Listed Options
$0.05
$0.05
$0.058
$0.03
$0.016
01 November 2023
26 July 2024
27 October 2025
1 April 2025
8 February 2026
91,552,685
$0.03
06 November 2023
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 1,559,616,775 Shares on issue at the date of this report.
POLARX LIMITED
21
ANNUAL REPORT 2023
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.
DIRECTORS’ MEETINGS
During the financial year, the number of Directors’ meetings (including meetings held via circulating resolution) and Audit
Committee meetings that were held and attendance records, were as follows:
Name
Mark Bojanjac
Frazer Tabeart
Jason Berton
Robert Boaz
Directors Meetings
Audit Committee Meetings
Number Eligible to
Attend
Number Attended
Number Eligible
to Attend
Number Attended
21
21
21
22
21
21
21
22
2
2
-
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 Recommendations (4th Edition) ('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 73 of this report. There were no non-audit services provided by the Group’s auditor.
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.
POLARX LIMITED
22
ANNUAL REPORT 2023
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
Dr. Frazer Tabeart
Non-Executive Director (appointed 15 July 2022, previously Managing Director)
Executive Officers (KMP)
Mr. Mark Bojanjac
Executive Chairman
Dr. Jason Berton
Managing Director (appointed 15 July 2022 – previously Executive Director)
Mr. Ian Cunningham
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 2023.
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 equity-based incentives (e.g. share options), 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 equity-based incentives is to link the variable remuneration to
the achievement of key operational targets and shareholder value creation.
The table below shows the performance of the Group as measured by loss per share for the current and previous four
years:
As at 30 June
Loss per share (cents)
Share price at reporting date (cents)
2023
$0.14
1.1
POLARX LIMITED
2022
$0.22
1.6
23
2021
$0.22
3.1
2020
$2.13
3.4
2019
$0.55
9.0
ANNUAL REPORT 2023
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
Base Salary
$
Director Fees
$
Consulting
Fees
$
Super-
annuation
$
Short Term Benefits
Equity
Share Based
Payments –
Options****
$
Total
$
Equity based
remuneration
%
2023
Non-Executive Directors
Robert Boaz
Frazer Tabeart*
Executive Officers (KMP)
Mark Bojanjac
Jason Berton**
Ian Cunningham***
2022
Non-Executive Directors
Robert Boaz
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart*
Jason Berton
Ian Cunningham**
-
-
-
-
-
-
-
-
-
-
-
-
22,500
45,000
-
15,000
-
-
-
67,500
326,375
300,000
151,000
792,375
22,500
-
-
-
-
-
22,500
270,000
254,500
215,250
143,333
883,083
-
-
-
-
-
-
-
-
-
-
-
-
-
42,736
22,500
102,736
42,736
42,736
-
128,208
369,111
342,736
151,000
988,083
-
41.6
11.6
12.5
-
13.0
-
22,500
-
31,298
31,298
31,298
-
93,894
301,298
285,798
246,548
143,333
999,477
10.4
11.0
12.7
-
9.4
*Frazer Tabeart was the Managing Director up until his transition to Non-Executive Director on 15 July 2022.
** Jason Berton was appointed as Managing Director on 15 July 2022, prior to which he held the position of Technical Director.
***Ian Cunningham was paid additional consulting fees of $5,000 during the year.
**** Represents the value of the Director options, determined using the Black-Scholes option pricing model (refer Note 23), which were issued on
21 December 2021 following shareholder approval. The options are each exercisable at $0.058 on or before 27 October 2025. The options vest
evenly over three years, subject to the continual service to the Company and remaining as a director.
There were no other key management personnel of the Group during the financial years ended 30 June 2023 and 30
June 2022.
The share options issued as part of the remuneration to the Executive Directors in FY2022, were subject to service
based vesting conditions, designed to secure their ongoing commitment to the Group.
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)
Mark Bojanjac
21/12/21
5,000,000
Frazer Tabeart
21/12/21
5,000,000
Jason Berton
21/12/21
5,000,000
1
1
1
Expiry
Date /
Last
Exercise
Date
Average
Fair
Value per
Option at
Grant
Date
Exercise
Price per
Option
Total
Value
Granted
$
27/10/25
$0.0196
$0.058
$97,889
27/10/25
$0.0196
$0.058
$97,889
27/10/25
$0.0196
$0.058
$97,889
Vested
%
Vested
-
-
-
-
-
-
Notes: Options were granted for no consideration and shall vest upon evenly over three years upon completion of continual service to the
Company and remaining as a director for 1 year, 2 years, and 3 years.
Options were granted as part of the recipient’s remuneration package.
POLARX LIMITED
24
ANNUAL REPORT 2023
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 2023 (2022: Nil). There
were no remuneration options that expired during the year ended 30 June 2023 (2022: 16.5 million).
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 2023
Non-Executive Directors
Robert Boaz
-
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart1
Jason Berton2
Ian Cunningham
30 June 2022
1,342,857
6,012,564
14,664,938
4,387,596
Non-Executive Directors
Robert Boaz
-
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart
Jason Berton
Ian Cunningham
Notes:
1,342,857
5,755,657
14,664,938
4,387,596
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,637,1423
924,8673
4,590,8574
-
-
-
256,9075
-
-
-
-
-
-
-
-
-
-
-
-
-
3,979,999
6,937,431
19,255,795
4,387,596
-
1,342,857
6,012,564
14,664,938
4,387,596
1.
2.
3.
4.
Frazer Tabeart was the Managing Director up until his transition to Non-Executive Director on 15 July 2022.
Jason Berton was the Technical Director up until his transition to Managing Director on 15 July 2022.
Acquired on 30 November 2022 pursuant to a rights issue, at an issue price of $0.008 per Share.
3,269,725 Shares acquired on-market on 26 October 2022 at an acquisition price of $0.008 per Share. A further 1,321,132 Shares were
acquired on 30 November 2022 pursuant to a rights issue, at an issue price of $0.008 per Share
5.
Acquired on 4 May 2022 pursuant to a rights issue, at an issue price of $0.021 per Share.
POLARX LIMITED
25
ANNUAL REPORT 2023
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 /
lapsed/expired
Balance at
the end of the
year
30 June 2023
Non-Executive Directors
Robert Boaz
Frazer Tabeart1
Executive Officers (KMP)
Mark Bojanjac
Jason Berton2
Ian Cunningham
30 June 2022
Non-Executive Directors
Robert Boaz
Executive Officers (KMP)
Mark Bojanjac
Frazer Tabeart1
Jason Berton
Ian Cunningham
Notes:
-
5,128,453
5,000,000
5,000,000
-
-
-
-
-
-
-
-
5,000,000
5,000,000
5,000,000
1,500,000
5,000,0003
5,000,0003
5,000,0003
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,128,453
5,000,000
5,000,000
-
-
(5,000,000)4
(4,871,547)5
(5,000,000)4
(1,500,000)5
5,000,000
5,128,453
5,000,000
-
1.
2.
3.
4.
5.
Frazer Tabeart was the Managing Director up until his transition to Non-Executive Director on 15 July 2022.
Jason Berton was the Technical Director up until his transition to Managing Director on 15 July 2022.
Options exercisable at $0.058 each on or before 27 October 2025, were issued on 21 December 2021 following shareholder approval.
Options exercisable at $0.125 each, expired on 20 December 2021.
5,000,000 options, each exercisable at $0.125, expired on 20 December 2021. However, 128,453 Listed Options were acquired on 4 May
2022 pursuant to participation in a rights issue.
Service Agreements
Executive Officers
The Executive Chairman, Mr. Mark Bojanjac consults to the Company and was remunerated during FY2023 at an
average rate of $27,198 per month (excluding GST) (2022: $22,500). Mr. Bojanjac is not entitled to any termination
benefits.
The Managing Director, Dr. Jason Berton consults to the Company and was remunerated during FY2023 at an average
rate of $25,000 per month (excluding GST) (2022: $17,938). Dr. Berton is not entitled to any termination benefits.
The Company Secretary / Chief Financial Officer, Mr. Ian Cunningham consults to the Company and was remunerated
during FY2023 at an average rate of $12,583 per month (excluding GST) (2022: $11,944). Mr. Cunningham is not
entitled to any termination benefits.
Non-Executive Directors
Following his transition to a Non-Executive Director in July 2023, Dr. Frazer Tabeart now receives fixed remuneration of
$60,000 per annum in the form of Director’s Fees and consulting fees at a collective average rate of $5,000 per month
(excluding GST). Dr. Tabeart held the position of Managing Director in the 2022 financial year and was remunerated at
an average rate of $21,208 per month (excluding GST).
POLARX LIMITED
26
ANNUAL REPORT 2023
Mr. Robert Boaz receives fixed remuneration of $22,500 per annum in the form of Director’s fees. No notice period is
required should a non-executive director elect to resign.
END OF REMUNERATION REPORT (AUDITED)
Signed on behalf of the board in accordance with a resolution of the Directors.
Mark Bojanjac
Executive Chairman
26 September 2023
POLARX LIMITED
27
ANNUAL REPORT 2023
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2023
Notes
Consolidated
June 30
2023
$
2022
$
Interest Revenue & Other Income
$ 71
$ 4
Public company costs
Consulting and directors fees
Share-based compensation
Legal fees
Staff costs
Serviced office and outgoings
Foreign exchange gain
Loss on sale of asset
Other expenses
(Loss) from operations
Income tax expense
(Loss) after Income Tax
54,517 44,970
495,453
494,048
128,209
123,289
4,380 10,340
62,692 58,441
24,000 24,000
(9,879) (27,893)
9,172 -
876,291
790,249
1,557,388
1,604,891
5
$ (1,557,317) $(1,604,887)
6
- -
$ (1,557,317) $(1,604,887)
Other comprehensive income/(loss)
Items that may be reclassified to profit and loss in subsequent
years
Foreign currency translation
Other comprehensive income for the year
14 (ii)
1,089,895
1,089,895
2,144,124
2,144,124
Total comprehensive (loss)/income for the year
$ (467,422)
$ 539,237
(Loss) per share:
Basic and diluted (loss) per share (cents per share)
18
$ (0.14)
$ (0.22)
Weighted Average Number of Shares:
Basic and diluted number of shares
18
1,147,897,471 729,629,895
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes.
POLARX LIMITED
28
ANNUAL REPORT 2023
Consolidated Statement of Financial Position
as at 30 June 2023
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
June 30
June 30
2023
$
2022
$
15
7
8
10
$ 732,033 $ 1,945,756
631,493
433,222
1,165,255
2,577,249
$ 61,517
$ 87,345
39,206,132 34,973,692
39,267,649 35,061,037
$ 40,432,904
$ 37,638,286
11
$ 141,675
308,024
141,675
308,024
$ 141,675 $ 308,024
$ 40,291,229
$ 37,330,262
$107,364,607
$104,134,832
9,851,680 8,563,171
(76,925,058) (75,367,741)
$ 40,291,229
$ 37,330,262
12
14
13
16
24
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
POLARX LIMITED
29
ANNUAL REPORT 2023
Consolidated Statement of Cash Flows
for the year ended 30 June 2023
Notes
Consolidated
June 30
2023
$
2022
$
Cash flows from Operating activities
Payments to suppliers and employees
Interest received and other income
$ (1,435,692) $ (1,477,550)
71 4
Net cash flows (used in) operating activities
15 (b)
(1,435,621)
(1,477,546)
Cash flows from investing activities
Purchase of property, plant and equipment
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
Proceeds from exercise of options
Net cash flows generated from financing activities
- (30,026)
(4,890,542)
(3,017,914)
(3,017,914)
(4,920,568)
3,630,735 5,221,810
(377,142) (366,379)
121
-
3,253,714 4,855,431
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Foreign exchange variances on cash
Cash and cash equivalents at end of the year
(1,199,821)
(1,542,683)
1,945,756 3,485,056
3,383
(13,902)
15 (a)
$ 732,033 $ 1,945,756
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
POLARX LIMITED
30
ANNUAL REPORT 2023
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Consolidated
Notes Number of Shares
Issued Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserves
Warrant
Reserves
Share Based
Payment
Reserves
Option Premium
Reserve
Total
At 1 July 2022
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
Shares issued to consultants
Options issued to consultants
Exercise of stock options
Share-based compensation
12
12
12
12,14, 23
14
12,14, 23
899,101,093 $ 104,134,832 $ (75,367,741)
- - (1,557,317)
- - - 1,089,895
$ 2,183,708 $ 1,190,098 $ 5,186,365 $ 3,000 $ 37,330,262
- - - - (1,557,317)
- - - 1,089,895
- $ - $ (1,557,317)
$ 1,089,895
$ - $ - $ - $ (467,422)
453,841,767 3,630,735
(414,567)
963,237 13,486
- - - - 70,405
- - - - - 3,630,735
- - - - - (414,567)
13,486
- 70,405
- - - - - 121
- 128,209
- - - - 128,209
4,049 121
Balance at 30 Junel 2023
1,353,910,146 $ 107,364,607 $ (76,925,058) $ 3,273,603
$ 1,190,098 $ 5,384,979 $ 3,000 $ 40,291,229
Consolidated
Notes Number of Shares
Issued Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserves
Warrant
Reserves
Share Based
Payment
Reserves
Option Premium
Reserve
Total
At 1 July 2021
Loss for the year
Other comprehensive income
Total comprehensive (loss)/income
for the year
Transactions with owners in their
Shares issued
Share issue costs
Shares issued to consultants
Options issued to consultants
Share-based compensation
$ 39,584 $ 1,190,098 $ 4,836,646 $ 3,000 $ 31,731,596
672,216,731 $ 99,425,122 $ (73,762,854)
- - (1,604,887) - - - - (1,604,887)
- - - 2,144,124 - - - 2,144,124
- $ - $ (1,604,887)
$ 2,144,124
$ - $ - $ - $ 539,237
12
12
12
12,14, 23
12,14, 23
757,576 11,364
226,126,786 5,221,810 - - - - - 5,221,810
(523,464) - - - - - (523,464)
11,364
- - - - 217,953 - 217,953
- - - - 131,766 - 131,766
Balance at 30 June 2022
899,101,093 $ 104,134,832 $ (75,367,741) $ 2,183,708
$ 1,190,098 $ 5,186,365 $ 3,000 $ 37,330,262
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
POLARX LIMITED
31
ANNUAL REPORT 2022
Notes to the consolidated financial statements for the financial year ended 30 June 2023
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 2023 was authorised for issue in accordance with a resolution of the Directors on 26 September
2023.
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.
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 2023, the Group incurred a loss from operations of $1,557,317 (2022: $1,604,887) and
recorded net cash outflows of ($1,199,821) (2022: outflows of ($1,542,683)). At 30 June 2023, the Group had net
current assets of $1,023,580 (2022: $2,269,225).
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; and
the fact that 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 consolidated 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
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
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 considered the implications of new and amended Accounting Standards which have become
applicable for the current financial reporting period.
AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements 2018–2020 and
Other Amendments
The Entity adopted AASB 2020-3 which makes some small amendments to a number of standards including the
following: AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 and AASB 141.
The adoption of the amendment did not have a material impact on the financial statements.
AASB 2021-7a: Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB
10 and AASB 128 and Editorial Corrections
AASB 2020-7a makes various editorial corrections to a number of standards effective for reporting periods beginning
on or after 1 January 2022.
The adoption of the amendment did not have a material impact on the financial statements.
New accounting standards and interpretations issued but not yet effective
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet
mandatorily applicable to the Group have not been applied in preparing these financial statements.
AASB 2022-6: Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants
AASB 2022-6 amends AASB 101 to improve the information an entity provides in its financial statements about
liabilities arising from loan arrangements for which the entity’s right to defer settlement of those liabilities for at least
12 months after the reporting period is subject to the entity complying with conditions specified in the loan
arrangement. It also amends an example in Practice Statement 2 regarding assessing whether information about
covenants is material for disclosure.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The amendment is not
expected to have a material impact on the financial statements once adopted.
POLARX LIMITED
33
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(b) New accounting standards and interpretations issued but not yet effective (continued)
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current or
Non-current
The amendment amends AASB 101 to clarify whether a liability should be presented as current or non-current.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024 along with the adoption of
AASB 2022-6. The amendment is not expected to have a material impact on the financial statements once adopted.
AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates
The amendment amends AASB 7, AASB 101, AASB 108, AASB 134 and AASB Practice Statement 2. These
amendments arise from the issuance by the IASB of the following International Financial Reporting Standards:
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) and Definition of
Accounting Estimates (Amendments to IAS 8).
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact of the initial
application is not yet known.
AASB 2021-5: Amendments to Australian Accounting Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
The amendment amends the initial recognition exemption in AASB 112: Income Taxes such that it is not applicable to
leases and decommissioning obligations – transactions for which companies recognise both an asset and liability and
that give rise to equal taxable and deductible temporary differences.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact of the initial
application is not yet known.
AASB 2021-7b & c: Amendments to Australian Accounting Standards – Effective Date of Amendments to
AASB 10 and AASB 128 and Editorial Corrections
AASB 2021-7b makes various editorial corrections to AASB 17 Insurance Contracts which applies to annual reporting
periods beginning on or after 1 January 2023, with earlier application permitted.
AASB 2021-7c defers the mandatory effective date (application date) of amendments to AASB 10 and AASB 128 that
were originally made in AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture so that the amendments are required to be applied for
annual reporting periods beginning on or after 1 January 2025 instead of 1 January 2018.
The Group plans on adopting the amendments for the reporting periods ending 30 June 2024 and 30 June 2026. The
impact of initial application is not yet known.
AASB 2022-7: Editorial Corrections to Australian Accounting Standards and Repeal of Superseded and
Redundant Standards
AASB 2022-7 makes editorial corrections to the following standards: AASB 7, AASB 116, AASB 124, AASB 128,
AASB 134 and AASB as well as to AASB Practice Statement 2. It also formally repeals superseded and redundant
Australian Account Standards as set out in Schedules 1 and 2 to the Standard.
The Group plans on adopting the amendments for the reporting period ending 30 June 2024. The amendment is not
expected to have a material impact on the financial statements once adopted.
POLARX LIMITED
34
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(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 9.
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 consolidated
statement of financial position and consolidated statement of profit and loss and other 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.
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.
POLARX LIMITED
35
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(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 marketplace (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 cash and cash equivalents and other receivables.
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.
POLARX LIMITED
36
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
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.
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.
POLARX LIMITED
37
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
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.
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.
POLARX LIMITED
38
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
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.
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.
POLARX LIMITED
39
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(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%
Motor Vehicles
Computer Equipment
Office Furniture and Fixtures
30%
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.
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.
POLARX LIMITED
40
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(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.
(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.
POLARX LIMITED
41
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
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.
(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.
POLARX LIMITED
42
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
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 a Long-Term Incentive Plan (Plan) in place, which provides benefits to Directors, employees 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 Plan 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 23.
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.
The dilutive effect, if any, of outstanding options is reflected in the computation of loss per share (see Note 18).
POLARX LIMITED
43
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(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 consolidated
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 consolidated Statement of Financial Position.
Cash flows are presented in the Consolidated 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
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
3. Summary of Significant Accounting Policies (continued)
(s) Leases
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-
of-use asset and a corresponding liability are recognised by the Group where the Group is a lessee. However, all
contracts that are classified as short-term leases (i.e. leases with a remaining lease term of 12 months or less) and
leases of low-value assets are recognised as an operating expense on a straight-line basis over the term of the
lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot
be readily determined, the Group uses incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
•
•
•
•
•
•
fixed lease payments less any lease incentives;
variable lease payments that depend on index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if the lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of options to terminate
the lease.
The right-of-use asses comprise the initial measurement of the corresponding lease liability, any lease payments
made at or before the commencement date and any initial direct costs. The subsequent measurement of the right-of-
use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the
shortest.
Where a lease transfers ownership of the underlying asset or the costs of the right-of-use asset reflects that the
Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the
underlying asset.
(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.
POLARX LIMITED
45
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
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.
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 23.
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.
Deferred Tax Assets and Liabilities
The Group recognises deferred tax assets in respect of tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Judgment is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and level of future taxable profits, together with future
tax planning strategies. Deferred tax liabilities are recognised when it is considered probable that there will be a
future outflow of funds to a taxing authority. A change in estimate of the likelihood of a future outflow and/or in the
expected amount to be settled would be recognised in profit or loss in the period in which the change occurs. This
requires the application of judgement as to the ultimate outcome, which can change over time depending on facts
and circumstances.
POLARX LIMITED
46
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
5. Other expenses
Accounting and audit fees
Bank fees
Business expenses
Computer expenses
Conferences
Corporate finance
Insurance
Investor relations
Media coverage
Printing and stationery
Postage
Subscriptions
Telephone
Travel expenses
Depreciation
Others
Consolidated
2023
$
95,957
6,979
59,429
5,677
86,361
2022
$
92,315
7,590
24,109
5,302
64,373
127,500
180,508
56,319
63,300
71,927
449
1,533
9,008
3,821
35,261
1,580
65,823
103,000
135,591
1,955
182
5,951
2,022
43,956
2,356
165,148
141,258
790,249
876,291
POLARX LIMITED
47
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
6.
Income Tax expense
(a) Income tax expense
Current tax
Deferred tax
(b) Numerical reconciliation between aggregate
in the consolidated
tax expense recognised
and other
statement of profit or
expense
income
comprehensive
calculated per the statutory income tax rate
loss
and
tax
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
Tax at the company rate of 25.0% (2022: 25.0%)
Expense of remuneration options
Other non-deductible expenses
Impact of reduction in future corporate income tax
rate
Income tax benefit not brought to account
Income tax expense
(c) Deferred tax
Consolidated Statement of financial position
The following deferred tax balances have not been
brought to account:
Deferred Tax Liabilities
Unrealised forex gain
Prepayments
Exploration (foreign @ 30%)
Deferred tax liability
Deferred Tax Assets
Foreign carry forward revenue losses (@ 30%)
Australian carry forward revenue losses (@ 25%)
Accrued expenses
Other
Deferred tax asset not recognised
Consolidated
2023
$
2022
$
-
-
-
-
-
-
-
-
(1,557,317)
(1,604,887)
(389,329)
(401,222)
32,052
82,364
-
30,822
86,042
-
274,913
284,358
-
-
453
12,220
9,172
13,831
7,908,856
6,527,955
7,921,529
6,550,958
8,723,456
7,296,968
2,177,578
1,899,116
8,500
52,841
7,500
43,920
10,962,375
9,247,504
POLARX LIMITED
48
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
6. Income Tax expense (continued)
The benefit for tax losses will only be obtained if:
(i)
the Group 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 Group 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.
(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.
7. Other Receivables and Prepayments
Current
GST / VAT receivable
Prepayments
Consolidated
2023
$
31,125
402,097
433,222
2022
$
44,297
587,196
631,493
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.
Prepayments predominantly comprises deposits paid to contractors and refundable bonds deposited with
Government authorities in relation to the Group’s exploration and development operations.
POLARX LIMITED
49
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
8. Property, Plant and Equipment
Plant and Equipment
Cost
Accumulated depreciation
Net carrying amount
Motor Vehicles
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
2023
$
2022
$
27,856
41,951
(17,376)
(25,351)
10,480
16,600
134,168
121,232
(86,280)
(55,312)
47,888
65,920
-
-
-
9,039
(5,890)
3,149
519
(436)
83
10,876
(6,134)
4,742
171,063
(109,546)
174,578
(87,233)
61,517
87,345
POLARX LIMITED
50
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
8. Property, Plant and Equipment (continued)
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current
financial year:
Plant and Equipment
Carrying amount at beginning of year
Additions
Disposals
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Motor Vehicles
Carrying amount at beginning of year
Additions
Disposals
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Office Furniture and Fixtures
Carrying amount at beginning of year
Additions
Disposals
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Computer Equipment
Carrying amount at beginning of year
Additions
Dispositions
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Total property, plant and equipment
Consolidated
2023
$
16,600
-
(1,579)
(5,100)
559
10,480
65,920
-
-
2022
$
17,606
3,757
-
(6,281)
1,518
16,600
57,988
25,673
-
(20,255)
(23,571)
2,223
47,888
5,830
65,920
83
-
(66)
(17)
-
-
4,742
-
(30)
104
-
-
(21)
-
83
7,077
-
-
(1,563)
(2,335)
-
3,149
61,517
-
4,742
87,345
POLARX LIMITED
51
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
9.
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
Coventry Minerals Pty Ltd
Crescent Resources (USA) Inc.
Vista Minerals Pty Ltd
Vista Minerals (Alaska) Inc.
Aldevco Pty Ltd
Aldevco Inc.
Humboldt Range Inc
Australia
USA
Australia
USA
Australia
USA
USA
10. Exploration and Evaluation Assets
Exploration and evaluation expenditure
At cost
Accumulated provision for impairment
Write-off
Total exploration and evaluation
Carrying amount at beginning of the year
Exploration and evaluation expenditure during the
year
Disposals
Net exchange differences on translation
Carrying amount at end of year
Impairment of exploration and evaluation assets
Write-off of exploration and evaluation assets
Carrying amount at end of year
2023
100%
100%
100%
100%
100%
100%
100%
2022
100%
100%
100%
100%
100%
100%
100%
Consolidated
2023
$
2022
$
47,606,245
43,373,805
(8,400,113)
(8,400,113)
-
-
39,206,132
34,973,692
Consolidated
2023
$
2022
$
34,973,692
27,946,204
3,142,588
4,931,268
(7,743)
-
1,097,595
2,096,220
39,206,132
34,973,692
-
-
-
-
39,206,132
34,973,692
The Directors’ assessment of the carrying amount for the Group’s exploration and development assets was made
after consideration of (i) prevailing market conditions, (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, Stellar and Humboldt Range projects. The recoverability of the carrying amount of the
exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively the sale, of the respective areas of interest.
POLARX LIMITED
52
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
11. Current Liabilities
Trade and other payables
Trade payables
Accruals
Consolidated
2023
$
27,558
114,117
141,675
2022
$
179,940
128,084
308,024
Trade payables are not past due and are non-interest bearing. They are normally on average settled between 30-45
days term.
12. Contributed Equity
(a) Issued and paid up capital
2023
2022
No. of shares
No. of shares
Ordinary shares fully paid
1,353,910,146
899,101,093
2023
2022
No. of shares
$
No. of shares
$
(b) Movements in ordinary shares on issue
Balance at beginning of year
899,101,093
104,134,832
672,216,731
99,425,122
Shares issued for exercise of options
4,049
121
-
-
Shares issued to consultants
963,237
13,486
757,576
11,364
Shares issued (net of costs)
453,841,767
3,216,168
226,126,786
4,698,346
Balance at end of year
1,353,910,146
107,364,607
899,101,093
104,134,832
(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.
2023
On 1 November 2022, the Company the Company issued 4,049 ordinary shares (Shares) pursuant to an
exercise of listed options at an exercise price of $0.03 per Share for proceeds of $121.
On 30 November 2022, the Company completed a rights and shortfall issue, pursuant to which the Company
issued 157,261,117 Shares at an issue price of $0.008 per Share to raise gross proceeds of $1,258,089.
On 14 December 2022, the Company completed a shortfall issue, pursuant to which the Company issued
111,717,428 Shares at an issue price of $0.008 per Share to raise gross proceeds of $893,740.
On 21 December 2022, the Company completed a shortfall issue, pursuant to which the Company issued
184,863,222 Shares at an issue price of $0.008 per Share to raise gross proceeds of $1,478,906.
POLARX LIMITED
53
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
12. Contributed Equity (continued)
(c) Ordinary shares (continued)
On 18 May 2023, the Company issued 963,237 Shares with an issue price of $0.014 per Share as part
consideration for the amendments to the Company’s option to acquire an interest in the Caribou Dome Project in
Alaska USA (refer Note 16(b) for a summary of the amended option terms).
2022
On 22 December 2021, the Company completed a share placement, pursuant to which the Company issued
43,013,125 ordinary shares at an issue price of $0.032 per Share to raise gross proceeds of $1,376,420.
On 6 April 2022, the Company completed a share placement, pursuant to which the Company issued
119,599,906 Shares at an issue price of $0.021 per Share, together with 59,799,892 free attaching listed
options to raise gross proceeds of $2,511,600. The listed options are exercisable at $0.03 each on or before 6
November 2023 (Listed Options).
On 4 May 2022, the Company completed a rights issue, pursuant to which the Company issued 36,419,451
Shares at an issue price of $0.021 per Share, together with 18,209,695 free attaching Listed Options to raise
gross proceeds of $764,810.
On 1 June 2022, the Company issued 757,576 Shares with an issue price of $0.016 per Share as part
consideration for the amendments to the Company’s option to acquire an interest in the Caribou Dome Project in
Alaska USA (refer Note 16(b) for a summary of the amended option terms).
On 2 June 2022, the Company completed a secondary share placement, pursuant to which the Company
issued 27,094,304 Shares at an issue price of $0.021 per Share, together with 13,547,147 free attaching Listed
Options to raise gross proceeds of $568,980.
(d) Capital Risk Management
The Group’s capital comprises share capital, reserves and accumulated losses which amounted to $40,291,229
at 30 June 2023 (2022: $37,330,262). 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 22 for further information on the Group’s financial
risk management policies.
(e) Share options
2023
At 30 June 2023, there were 142,421,592 (2022: 114,556,734) options over unissued Shares, comprising
50,868,907 (2022: 23,000,000) unlisted options and 91,552,685 (2022: 91,556,734) Listed Options.
On 27 July 2022, shareholders approved the issue of Options to Peak of 19,127,436 unlisted options (Broker
Options) to Peak Asset Management as part consideration for acting as corporate adviser and lead manager
the capital raisings undertaken in April, May and June 2022. The Broker Options were issued on 24 October
2022 and each Broker Option is exercisable at $0.03 on or before 1 April 2025.
On 9 February 2023, the Company issued 8,741,471 unlisted options to various consultants as part
consideration for acting as corporate advisers and lead manager of the capital raisings undertaken in November
and December 2022. Each Option is exercisable at $0.016 each on or before 8 February 2026.
On 1 November 2022, the Company the Company issued 4,049 ordinary shares pursuant to an exercise of
4,049 listed options at an exercise price of $0.03 per Share for proceeds of $121.
During the year, no options lapsed.
POLARX LIMITED
54
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
12. Contributed Equity (continued)
(e) Share options (continued)
2022
On 28 July 2021, the Company issued 5,000,000 options to consultants, each exercisable at $0.05 on or before
26 July 2024. The options vested at the time of issue. Since year end, no options have been issued, exercised
or expired.
On 21 December 2021, the Company issued 15,000,000 incentive options, each exercisable at $0.058 on or
before 27 October 2025, to directors.
There were 91,556,734 free attaching Listed Options issued together with Shares issued on 8 April 2022, 4 May
2022, and 2 June 2022 (refer Note 12(c)).
On 5 May 2022, shareholders approved 30,000,000 unlisted options to be issued to the lead manager Peak
Asset Management (Peak) to raise capital of minimum of $4,000,000. On 12 May 2022, the agreement with
Peak was amended to issue a prorated number of options based on the amount of capital raised capped at
$4,000,000 and 30,000,0000 unlisted options. Accordingly, 19,127,436 unlisted options were issuable but not
yet issued to Peak based on the capital raised by the lead manager subject to shareholder approval at 30 June
2023.
During the prior year, 29,000,000 options lapsed.
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 23.
13. Accumulated losses
Movements in accumulated losses were as follows:
At 1 July
Loss for the year
At 30 June
Consolidated
2023
$
2022
$
2021
$
75,367,741
73,762,854
1,557,317
1,604,887
76,925,058
75,367,741
POLARX LIMITED
55
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
14. Reserves
Foreign currency translation reserve (ii)
Warrant reserves(iii)
Share based payments reserves(i)
Option premium reserve
Movement in reserves:
(i) Share based payments and option premium reserve
Balance at beginning of year
Options issued to corporate advisers
Options exercised
Equity benefits expense
Balance at end of year
Consolidated
2023
$
2022
$
3,273,603
2,183,708
1,190,098
1,190,098
5,384,979
5,186,365
3,000
3,000
9,851,680
8,563,171
Consolidated
2023
$
2022
$
5,186,365
4,836,646
70,405
217,953
-
-
128,209
131,766
5,384,979
5,186,365
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 23 for details of share based payments during the financial year and prior year.
(ii) Foreign currency translation reserve
Balance at beginning of year
Foreign currency translation
Balance at end of year
2023
$
2,183,708
1,089,895
3,273,603
2022
$
39,584
2,144,124
2,183,708
The foreign currency reserve is used to record the currency difference arising from the translation of the financial
statements of the foreign operation.
(iii) Warrant reserve
Balance at beginning of year
Warrants exercised
Balance at end of year
2023
$
2022
$
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
56
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
15. 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
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
2023
$
2022
$
732,033
1,945,756
(1,557,317)
(1,604,887)
1,581
128,209
19,861
(27,955)
2,356
123,289
(20,245)
21,941
(1,435,621)
(1,477,546)
Share-based compensation and depreciation capitalised to exploration and evaluation assets were $nil (2022:
$8,477) and $25,355 (2022: $29,852), respectively. In addition, the value of shares and options issued to consultants
of $13,486 (2022: $105,212) were capitalised to exploration and evaluation assets. Included in the total share issue
costs was a share-based payment expense of $70,405 (2022: $124,105).
16. Expenditure commitments
(a) Tenement expenditure commitments – Caribou Dome Property
On 17 November 2020, the Company announced it secured more favourable amendments to the terms of its
option to acquire (i) 80% interest in the Caribou Dome copper deposit in Alaska, USA and (ii) a 90% interest in the
adjacent Senator property (collectively “the Caribou Dome Project”). Upon execution of the amendments to the
option agreement, the Company made a one-off cash payment to underlying vendors of US$75,000.
POLARX LIMITED
57
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
16. Expenditure commitments (continued)
(b) Tenement expenditure commitments – Caribou Dome Property
Remaining commitments related to the Caribou Dome Property at reporting date but not recognised as liabilities
are as follows:
(i)
(ii)
maintaining the claims (licenses) at the property in good standing, including making annual claim rental
payments and ensuring minimum expenditure commitments are met;
Either meeting the following substantially reduced qualifying expenditure requirements or completing a
feasibility study to mine the Caribou Dome Project:
Due Date
Expenditure
Commitment
12 months ending 1 September 2023 (complete)
US$400,000
2 September to Earn-in deadline*
US$400,000
*Note: Earn-in deadline has been extended to 6 June 2024
For any period during which the Company does not complete U$400,000 of qualifying expenditure until it
has completed a feasibility study, it shall pay to the underlying vendors a penalty in the amount of 25% of
the expenditure shortfall. This payment will be in lieu of the expenditure shortfall. Excess qualifying
expenditure in any period may be carried forward to future periods.
(iii)
making annual payments to the underlying vendors of the property in the amount of:
Due Date
Payment
Earn-in deadline (currently 6 June 2024)
US$1,260,000
(iv)
the issue to certain underlying vendors of $12,500 worth of Shares on or before 1 June 2021 and on or
before 1 June of each subsequent year as long as the option remains in effect. For each Share payment
instalment, the number of Shares to be issued will be based on the 10-day volume weighted average
price of the Company’s shares immediately prior to the date of each Share issue; and
(v)
a 5% net smelter return royalty is payable in relation to the sale of ore from the property and the
Company has the right to purchase the royalty for US$1,000,000 for each 1.0%.
POLARX LIMITED
58
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
16.
Expenditure commitments (continued)
(c) Tenement expenditure commitments – Stellar Property
Remaining commitments related to the Stellar Property at reporting date but not recognised 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 1Mt 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; and
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
(v) making advance royalty payments (payments are deductible from future royalty payments) to Millrock in the
amounts of:
Due Date
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$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.
POLARX LIMITED
59
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
16.
Expenditure commitments (continued)
(d) Tenement expenditure commitments – Humboldt Range Property
Remaining commitments related to the Humboldt Range mining lease agreement (MLA) at reporting date but not
recognized as liabilities include the following:
(i)
(ii)
payment of annual claim maintenance fees (by 1 September of each year), such payments to be credited
against any future production royalties that accrue;
commencing 1 September 2022, making monthly payments of US$10,000, such payments to be credited
against any future production royalties that accrue; and
(iii) a royalty on gold production of 2.5% NSR (3.75% NSR if grade> 15.6g/t Au).
17.
Subsequent events
On 2 August 2023, the Company completed a share placement, pursuant to which the Company issued
140,605,262 Shares at an issue price of $0.011 per Shares to raise gross proceeds of $1.55 million.
On 25 July 2023, the Company announced the Entitlement Offer. The Entitlement Offer was completed on 15
September 2023, pursuant to which 65,101,367 Shares were issued at an issue price of 1.1 cents per Share to
raise ~$716k.
On 28 August 2023 the Company announced the results of an updated scoping study conducted for the Alaska
Range Project, which evaluated sequential mining and processing options for the Caribou Dome and Zackly
deposits.
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.
18.
Loss per share
Loss used in calculating basic and dilutive loss per share
(1,557,317)
(1,604,887)
Consolidated
2023
$
2022
$
Weighted average number of ordinary shares used in
calculating basic 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
2023
2022
1,147,897,471
729,629,895
-
-
1,147,897,471
729,629,895
(0.14)
(0.22)
There is no impact from the 132,421,592 options vested and outstanding at 30 June 2023 (2022: 99,556,734 options)
on the loss per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in
the future.
POLARX LIMITED
60
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
19. Auditor’s remuneration
During the financial year, the following audit fees were paid or payable:
Consolidated
2023
$
58,539
58,539
2022
$
51,972
51,972
Stantons
20. Key Management Personnel Disclosures
(a) Details of Key Management Personnel
Mr. Mark Bojanjac
Executive Chairman
Dr. Jason Berton
Managing Director (appointed 15 July 2022 – previously Executive Director)
Dr. Frazer Tabeart
Non-Executive Director (appointed 15 July 2022 – previously Managing Director)
Mr. Robert Boaz
Non-Executive Director
Mr. Ian Cunningham
Company Secretary/Chief Financial Officer
(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:
Consulting and director fees
Share-based compensation
Total remuneration
Consolidated
2023
$
2022
$
859,875
128,208
988,083
905,583
93,894
999,477
Out of the total consulting and directors fees of key management employees, $340,000 (2022: $421,833) was
capitalised as exploration and evaluation assets.
POLARX LIMITED
61
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
21. Related Party Disclosures
The ultimate parent entity is PolarX Limited. Refer to Note 9 - Investments in Controlled entities, for a list of all
controlled entities.
Mitchell River Group Pty Ltd., a company of which Dr. Frazer Tabeart is a Director, provided the Group with
consulting services related to exploration activities for a fee totalling $4,770 (2022: $12,815) and serviced office fees
of $nil (2022: $12,000).
There were no other related party disclosures for the year ended 30 June 2023 (2022: Nil).
22. 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 Group 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.
(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 2023 and 30 June 2022, 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
2023
$
2022
$
732,033
1,945,756
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.
POLARX LIMITED
62
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
22. Financial Instruments and Financial Risk Management (continued)
Consolidated
Change in Basis Points
Judgements of reasonably possible movements
Increase 100 basis points
Decrease 100 basis points
Effect on Post Tax Loss
Increase/(Decrease)
2023
$
7,320
(7,320)
2022
$
19,458
(19,458)
Effect on Equity
including accumulated
losses
Increase/(Decrease)
2023
$
7,320
(7,320)
2022
$
19,458
(19,458)
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 2022.
(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 2023, 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 2023
(2022: 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
subsidiaries 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 – Humboldt Range Inc. (in AUD)
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)
Company
2023
$
5,688,492
8,089,512
2022
$
3,524,660
8,032,028
15,972,134
17,861,722
10%
A$
10%
A$
Total effect on comprehensive loss of positive movements
2,975,014
2,941,841
Total effect on comprehensive loss of negative movements
(2,975,014)
(2,941,841)
POLARX LIMITED
63
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
22. Financial Instruments and Financial Risk Management (continued)
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
(e) Fair Value
Company
2023
$
781,717
10%
A$
78,172
(78,172)
2022
$
774,398
10%
A$
77,440
(77,440)
The aggregate net fair values of the Group’s financial assets and financial liabilities both recognised and
unrecognised are as follows:
Carrying
Amount in
the Financial
Statements
Aggregate
Net Fair
Value
Carrying
Amount in
the Financial
Statements
Aggregate
Net Fair
Value
2023
$
2023
$
2022
$
2022
$
732,033
732,033
1,945,756
1,945,756
31,125
31,125
44,297
44,297
Financial Assets
Cash and cash equivalents
Other receivables
Financial Liabilities
Trade and other payables
141,675
141,675
308,024
308,024
The following methods and assumptions are used to determine the net fair value of financial assets and liabilities.
Cash and cash equivalents, other receivables and trade and other payables are carried at amounts approximating
fair value because of their short term nature to maturity.
POLARX LIMITED
64
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
23. 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 Consolidated Statement of Profit or Loss and Other Comprehensive Income, or capitalised to
exploration costs were as follows:
Operating expenditure
Options issued to employees, key management personnel
and directors
Options issued to consultants
Consolidated
2023
$
128,209
70,405
198,614
2022
$
131,766
217,953
349,719
(b) Share based payments
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 a Long-Term Incentive Plan (Plan) in place, which provides benefits to Directors, employees 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 Plan to consultants and other service providers (collectively
“the Options”). The objective of such incentives 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.
Details of Options granted are as follows:
2023
Grant date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Expired during
the year
Balance at end
of the year
Exercisable at
end of the year
Number
Number
Number
Number
Number
Number
Nov 2, 2020
Nov 1, 2023
A$0.05
3,000,000
Jul 28, 2021
Jul 26, 2024
A$0.05
5,000,000
Dec 21, 2021
Oct 27, 2025 A$0.058
15,000,000
May 4, 2022
Nov 6, 2023
A$0.03
18,209,695
May 6, 2022
Nov 6, 2023
A$0.03
59,799,892
Jun 2, 2022
Nov 6, 2023
A$0.03
13,547,147
-
-
-
-
-
-
Oct 24, 2022
Apr 1, 2025
A$0.03
- 19,127,436
Feb 9, 2023
Feb 8, 2026 A$0.016
-
8,741,471
-
-
-
-
-
(4,049)
-
-
114,556,734 27,868,907
(4,049)
Weighted remaining contractual life
(years)
Weighted average exercise price
1.64
$ 0.035
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
5,000,000
5,000,000
15,000,000
5,000,000
18,209,695
18,209,695
59,799,892
59,799,892
13,543,098
13,543,098
19,127,436
19,127,436
8,741,471
8,741,471
142,421,592
132,421,592
0.52
0.81
$ 0.032 $ 0.030
POLARX LIMITED
65
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
23. Share Based Payment Plans (continued)
On 24 October 2022, 19,127,436 Broker options (Broker Options) with a fair value of $124,105 were issued to Peak Asset
Management as part consideration for acting as corporate adviser and lead manager the capital raisings undertaken in
April, May and June 2022.
On 9 February 2023, 8,741,471 unlisted options with a fair value of $70,405 were issued to various consultants as part
consideration for acting as corporate advisers and lead manager of the capital raisings undertaken in November and
December 2022.
On 1 November 2022, the Company the Company issued 4,049 ordinary shares pursuant to an exercise of 4,049 listed
options at an exercise price of $0.03 per Share for proceeds of $121.
24 October 2022 Options
a)
b)
c)
d)
e)
f)
options were issued with an exercise price of $0.03;
expected life of options is 2.68 years;
share price at grant date was $0.013;
expected volatility of 112%, based on the history of the Company’s share prices for the expected life of the
options;
expected dividend yield of nil; and
a risk-free interest rate of 2.87%
On 27 July 2022, shareholders approved the issue of Options to Peak of 19,127,436 unlisted options (Broker Options) to
Peak Asset Management as part consideration for acting as corporate adviser and lead manager the capital raisings
undertaken in April, May and June 2022. The total fair value of $124,105 was recognised as share issue costs at 30 June
2022.
9 February 2023 Options
a)
b)
c)
d)
e)
f)
options were issued with an exercise price of $0.016;
expected life of options is 3.0 years;
share price at grant date was $0.009;
expected volatility of 200%, based on the history of the Company’s share prices for the expected life of the
options;
expected dividend yield of nil; and
a risk-free interest rate of 3.12%
Options were fully vested at the time of issue. The total fair value of $70,405 (2022: $124,105) was recognised as share
issue costs at 30 June 2023.
POLARX LIMITED
66
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
23. Share Based Payment Plans (continued)
2022
Grant date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Expired during
the year
Balance at end
of the year
Exercisable at
end of the year
Number
Number
Number
Number
Number
Number
Dec 21, 2018
Dec 20, 2021 A$0.125
18,250,000
Jul 31, 2019
Dec 20, 2021 A$0.125
10,750,000
Nov 2, 2020
Nov 1, 2023
A$0.05
3,000,000
-
-
-
Jul 28, 2021
Jul 26, 2024
A$0.05
-
5,000,000
Dec 21, 2021
Oct 27, 2025 A$0.058
- 15,000,000
May 4, 2022
Nov 6, 2023
A$0.03
- 18,209,695
May 6, 2022
Nov 6, 2023
A$0.03
- 59,799,892
Jun 2, 2022
Nov 6, 2023
A$0.03
- 13,547,147
32,000,000 111,556,734
-
-
-
-
-
-
-
-
(18,250,000)
(10,750,000)
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
5,000,000
5,000,000
15,000,000
-
18,209,695
18,209,695
59,799,892
59,799,892
13,547,147
13,547,147
(29,000,000)
114,556,734
99,566,734
Weighted remaining contractual life
(years)
Weighted average exercise price
0.65
$ 0.12
1.64
1.39
$ 0.035 $ 0.032
On 28 July 2021, 5,000,000 Options with a fair value of $93,848 were issued to consultants as part remuneration for their
services.
On 21 December 2021, 15,000,000 Options with a fair value of $293,666 were issued to directors as part remuneration for
their services.
On 4 May 2022 and 6 May 2022, the Company issued 18,209,695 and 59,799,892 Listed Options respectively, with a fair
value of $nil, to subscribers to the April 2022 share placement and May 2022 rights issue. The Listed Options were issued
as free attaching options on the basis of one Listed Option for every two Shares subscribed for pursuant to the capital
raisings.
On 2 June 2022, the Company issued 13,547,147 Listed Options, with a fair value of $nil, to subscribers to the June 2022
share placement. The Listed Options were issued as free attaching options on the basis of one Listed Option for every two
Shares subscribed for pursuant to the placement.
The fair value at grant date of options granted during the period and in previous reporting periods, was determined using
the Black Scholes option pricing model that takes into account the exercise price, the term of the option, the share price at
grant date and expected price volatility of the underlying share and the risk free interest rate for the term of the Option.
The model inputs for the options granted during the period ended 30 June 2022 included:
28 July 2021 Options
a)
b)
c)
d)
e)
f)
options were issued with an exercise price of $0.05;
expected life of options is 3 years;
share price at grant date was $0.033;
expected volatility of 107%, based on the history of the Company’s share prices for the expected life of the
options;
expected dividend yield of nil; and
a risk-free interest rate of 0.16%
POLARX LIMITED
67
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
23. Share Based Payment Plans (continued)
Options were fully vested at the time of issue. The total fair value of $93,848 was recognised as consulting fees and
included in “consulting and directors fees” in the consolidated statement of profit or loss and other comprehensive income.
21 December 2021 Options
a) options were issued with an exercise price of $0.058;
b) expected life of options is 3.85 years;
c) share price at grant date was $0.033;
d) expected volatility of 101%, based on the history of the Company’s share prices for the expected life of the
options;
e) expected dividend yield of nil; and
f) a risk-free interest rate of 1.18%
Options vest upon evenly over three years upon completion of continual service to the Company and remaining as a
director for 1 year, 2 years, and 3 years. For the financial year ended 30 June 2022, an amount of $93,895 from these
options was recognised as "share based compensation" in the consolidated statement of profit or loss and other
comprehensive income.
27 July 2022 Options
a)
b)
c)
d)
e)
f)
options were granted with an exercise price of $0.03;
expected life of options is 2.7 years;
share price at grant date was $0.013;
expected volatility of 112%, based on the history of the Company’s share prices for the expected life of the
options;
expected dividend yield of nil; and
a risk-free interest rate of 2.87%
Options were fully vested at the time of grant to Peak as the lead manager in the capital raise. The total fair value of
$124,105 was recognised as share issue costs through the Consolidated Statement of Changes in Equity. Refer to 12. (e)
for additional information.
24. 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 liability
was recognised as at 30 June 2023.
Refer also to Notes 16 for the contingent payments and royalties applicable to the Caribou Dome, Stellar, Humboldt
Range and Uncle Sam properties.
POLARX LIMITED
68
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
25. Operating Segment
For management purposes, the Group is organised into one main operating segment, which involves mineral
exploration, predominantly for gold, copper and silver. 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
Consolidated
2023
$
2022
$
777,287
39,655,618
40,432,905
2,006,121
35,632,165
37,638,286
77,100
64,575
141,675
245,046
62,978
308,024
(1,485,286)
(1,546,744)
(72,031)
(58,143)
(1,557,317)
(1,604,887)
POLARX LIMITED
69
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
26. Dividends
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 2023 (2022: Nil). The balance of the franking account as at 30 June 2023 is Nil (2022: Nil).
27. Agreements over the Uncle Sam Gold 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.
Following a review of its options in relation to this matter, PolarX and its US subsidiary which previously held an
interest in the Uncle Sam Project, have entered into an agreement with the underlying royalty holder, International
Royalty Corporation (“IRC”), pursuant to which:
(i)
(ii)
they have assigned to IRC its rights, titles, and interests (if any) in the Uncle Sam Project (including its rights
as against GAME);
they have granted the Group a full release from any causes of action, claims, or damages that IRC could
assert against PolarX or its US subsidiary; and
(iii)
IRC has the right convey the claims back to PolarX’s US subsidiary, if it is successful in any court action to
recover the mineral claims from GAME.
IRC has commenced a court action to recover the mineral claims from GAME.
The Company also notes that the Uncle Sam Project:
-
-
is considered a non-core asset and has a $nil carrying value in the Company’s financial statements; and
is independent of the Company’s other projects in the USA.
POLARX LIMITED
70
ANNUAL REPORT 2023
Notes to the consolidated financial statements for the financial year ended 30 June 2023
28.
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
No longer than one year
Longer than one year and not longer than five years
Longer than five years
2023
$
2022
$
767,192
1,993,772
39,578,841
35,562,310
40,346,033
37,556,082
77,100
245,046
-
-
77,100
245,046
40,268,933
37,311,036
102,571,857
99,342,085
4,417,201
4,218,586
(66,720,125)
(66,249,635)
40,268,933
37,311,036
(470,490)
(5,344,604)
(470,490)
(5,344,604)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
POLARX LIMITED
71
ANNUAL REPORT 2023
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of PolarX Limited, I state that:
In the opinion of the directors:
(a) the consolidated 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 2023 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 consolidated 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 Group 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 2023.
On behalf of the Board
Mark Bojanjac
Executive Chairman
26 September 2023
POLARX LIMITED
72
ANNUAL REPORT 2023
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
26 September 2023
Board of Directors
PolarX Limited
Unit 25,
Level 3,
22 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
2023, 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
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
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 subsidiaries (“the Group”)
which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2023 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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
Material Uncertainty Related to Going Concern
We draw attention to Note 2 to in the consolidated financial statements, which indicates that the Group
incurred a net loss after tax of $1,557,317 and net cash outflows of $1,199,821. As at 30 June 2023, the
Group had net current assets of $1,023,580. As stated in Note 2, these events or conditions, along with
other matters, as set forth in Note 2, indicate that a material uncertainty exists that may cast significant
doubt on the Group’s ability to continue as a going concern.
Our opinion is not modified with respect to this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matters
How the matters were addressed in the audit
Carrying Value of Exploration and Evaluation
Assets
As at 30 June 2023, exploration and evaluation
assets amounted to $39,206,132 (refer to Note
10).
The carrying value of
the exploration and
evaluation expenditure is a key audit matter due
to:
•
•
•
the significance of the total balance (97% of
total assets);
the level of judgment required in evaluating
management’s
the
requirements of AASB 6 Exploration for and
Evaluation of Mineral Resources; and
application
of
the greater level of audit effort to evaluate
the Group’s application of the requirement
of AASB 6 and assessment of impairment
indicators which
involved management
judgment.
Inter alia, our audit procedures included the
following:
i.
Assessing the management’s determination
of its areas of interest to ensure consistency
with the definition in AASB 6;
ii. Assessing the Group’s accounting policy for
compliance with AASB 6;
iii. Agreeing, on a sample basis, the capitalised
exploration and evaluation expenditure
incurred during the year to supporting
documentation and assessing that these
expenditures incurred in accordance with
the Group’s accounting policy and the
requirements of AASB 6;
iv. Obtaining evidence that the Group has valid
rights to explore the areas represented by
the capitalised exploration and evaluation
expenditure;
v. Evaluating that there had been no indicators
of impairment during the current period with
reference to the requirements of AASB 6;
and
vi. Assessing
the appropriateness of
the
disclosures in Note 10 to the consolidated
financial statements.
Key Audit Matters
How the matters were addressed in the audit
Measurement of share-based payment
transactions
Inter alia, our audit procedures included the
following:
The Company has the following share-based
payment transactions for the financial year
ended 30 June 2023:
i.
the relevant agreements
Reviewing
to
obtain an understanding of the contractual
nature and terms and conditions of the
share-based payment arrangements;
ii. Assessing the assumptions used in the
Group’s valuation of share options being the
share price of the underlying equity, interest
to
time
rate, volatility, dividend yield,
maturity (expected life) and grant date;
iii. Assessing the allocation of the share-based
payment expense over the relevant vesting
period; and
iv. Assessing
the appropriateness of
the
disclosures in Note 23 to the consolidated
financial statements.
(i) 963,237 shares with an issue price of
$0.014 per share as part consideration for
the amendments to the Company’s option
to acquire an interest in the Caribou Dome
Project in Alaska USA (refer to Note 12 (c)).
(ii) 8,741,471 listed options were issued to
various consultants as part of
the
consideration
for acting as corporate
advisers and lead manager of the capital
raisings undertaken during the year (refer
to Notes 12 (e) and 23).
(iii) 19,127,436 unlisted options were granted
lead manager as part of
to
the
consideration
for acting as corporate
adviser and lead manager on the capital
raisings undertaken during the year (refer
to Notes 12 (e) and 23).
During the financial year ended 30 June 2023,
the Company has also recognised a share-
based payment expense of $128,209 for the
vesting of options issued in the prior year.
Measurement of share-based payments was a
key audit matter due to the complex and
judgmental estimates used in determining the
fair value of the share-based payments.
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 2023 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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 the directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of PolarX Limited for the year ended 30 June 2023 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
26 September 2023
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 15 September 2023.
Distribution of Listed Equity Security Holders
There are 1,559,616,775 listed fully paid ordinary shares on issue. Analysis of numbers of listed shareholders by size of
holding:
Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of shareholders
97
97
66
650
768
1,678
There are 615 shareholders holding less than a marketable parcel of ordinary shares.
There are 91,552,685 listed options on issue, each exercisable at $0.03 on or before 6 November 2023. Analysis of
numbers of listed option holders by size of holding:
Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of option holders
12
32
23
68
108
243
There are 201 option holders holding less than a marketable parcel of listed options.
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
Ruffer LLP
Northern Star Resources Limited
Number of shares
187,496,165
174,300,394
POLARX LIMITED
79
ANNUAL REPORT 2023
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.
Quoted Equity Security Holders
The names of the twenty largest listed ordinary shareholders of the Company as at 15 September 2023 are as follows:
Shareholder
Number of Shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NORTHERN STAR RESOURCES LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD UOBKH A/C R’MIERS
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR KEVIN BANKS-SMITH
MR ROBERT KEITH BLANDEN + MS JOAN SYBIL BLANDEN
ANTANAS GUOGA
OROGEN INVESTMENTS PTY LTD
MR MARTIN HUXLEY
DONG CHEN
HAJEK FT CUSTODIANS PTY LTD
FIAGO PTY LTD
MICHAEL KOODAK NOMINEES PTY LTD
MR ALAN KENNETH MERCER
DROPMILL PTY LTD
MR RICHARD ARTHUR LOCKWOOD
MR RICHARD GEORGE MICHAEL OFFER
ZAYCHAN PTY LIMITED
257,169,381
174,300,394
124,154,653
58,448,129
44,576,420
27,770,223
19,939,000
19,555,412
13,636,363
13,631,832
13,501,912
13,190,721
13,000,000
12,342,325
11,331,683
10,269,446
10,000,000
10,000,000
10,000,000
9,800,000
% of Issued
Capital
16.49
11.18
7.96
3.75
2.86
1.78
1.28
1.25
0.87
0.87
0.87
0.85
0.83
0.79
0.73
0.66
0.64
0.64
0.64
0.63
866,617,894
55.57
POLARX LIMITED
80
ANNUAL REPORT 2023
The names of the twenty largest listed option holders of the Company as at 15 September 2023 are as follows:
Shareholder
MS NATASHA MARIE HUNT
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR WILLIAM JOHN REID
BNP PARIBAS NOMS PTY LTD UOBKH A/C R’MIERS
BNP PARIBAS NOMS PTY LTD
ALTOR CAPITAL MANAGEMENT PTY LTD
MR ADIB OLINGA SABET
M & K KORKIDAS PTY LTD
MR SHANE JOHN PEVERILL + MRS JOYCE BEVERLY PEVERILL
MR TRAVIS SHAUN BAVERSTOCK
MR CLFFORD GRAEME CHANDLER
MR ANTONY BRENDAN COSGROVE
MR ROSS DIX HARVEY
GOLD VAULT INTERNATIONAL PTY LTD
HAJEK FT CUSTODIANS PTY LTD
MR AARON JAMES SMITH
MR JAMIE MATHEW PEARCE
MS MEIXIA CHEN
SUPERHERO SECURITIES LIMITED
Number of Options
% of Issued
Options
8,500,000
6,870,540
5,069,139
5,000,000
4,050,000
3,581,446
3,333,333
3,013,875
3,000,000
2,015,625
2,000,000
1,750,000
1,600,000
1,600,000
1,500,000
1,324,578
1,230,883
1,125,000
1,100,000
1,000,152
9.28
7.50
5.54
5.46
4.42
3.91
3.64
3.29
3.28
2.20
2.18
1.91
1.75
1.75
1.64
1.45
1.34
1.23
1.20
1.09
58,664,571
64.08
Unquoted Equity Security Holders
Class
Number of
options
Number of
holders
Holders with more than 20%
Unlisted stock options each
exercisable at $0.05 on or
before 1/11/2023
Unlisted stock options each
exercisable at $0.05 on or
before 26/07/2024
Unlisted stock options each
exercisable at $0.03 on or
before 01/04/2025
Unlisted stock options each
exercisable at $0.058 on or
before 27/10/2025
Unlisted stock options each
exercisable at $0.016 on or
before 08/02/2026
3,000,000
5,000,000
19,127,436
15,000,000
8,741,471
2
4
1
3
6
Peter Nesveda (2,700,000)
C&M Co Pty Ltd (1,250,000)
Andrew Doe (1,250,000)
Justin Resta (1,250,000)
Russell Cole (1,250,000)
10 Bolivianos Pty Ltd
Charles Frazer Tabeart (5,000,000)
Kallara Holdings Pty Ltd ATF JS &DER Bojanjac
Family Super Fund (5,000,000)
Orogen Investments Pty Limited
(5,000,000)
Mahe Investments Pty Ltd 2,094,766)
Richard George Michael Offer (2,348,505)
Peter John Hyland (2,348,504)
POLARX LIMITED
81
ANNUAL REPORT 2023
Tenement Schedule
The tenement interests held by the Group as at 30 June 2023 are listed below:
Project
Location
Licence(s)
Ownership Interest
Caribou Dome Property
Alaska, USA
Caribou 1 - Caribou 20 (563243 - 563262)
Option to earn 80%
Stellar Copper Gold
Project
Copper 1 - Copper 6 (588461 - 588466)
Copper 7 - Copper 11 (645375 - 645379)
CD 1 - CD66 (664859 - 664924)
CDS 001 - 038 (719949 - 7199861)
CD 001 - 040 (719909 - 719948)
Option to earn 90%
CDE-01 - 20 (722216 - 722235)
CDE 26 (722241)
CD 41 - 51 (725113 - 725123)
SBX 71 (726910)
SBX 74 - 75 (726913 - 726914)
SBX 77 - 82 (726916 - 726921)
Alaska, USA
SB 154 - 155 (704562 - 704563),
100%
SB 167 - 168 (704575 - 704576)
ZK 3 - 5 (704621 - 704623)
ZK 14 (704632)
ZK 19 - 21 (704637 - 704639)
Z 1 - 5 (709427 - 709431)
Z 6 - 10 (711728 - 711732)
SB 281 - 283 (714079 - 714081)
SB 297 - 299 (714095 - 714097)
SB 317 - 319 (714115 – 714117)
SB 346 - 348 (714144 - 714146)
SB 364 - 368 (714162 - 714166)
SB 376 - 379 (714174 - 714177)
SB 389 - 390 (714187 - 714188)
SB 417 (715392)
SBA 001 - 066 (721446 - 721511)
SBX 001 - 070 (724789 - 724858)
CDE 21 - 25 (722236 - 722240)
CDE 27 (722242)
SBX 72 - 73 (726911 - 726912)
SBX 76 (726915)
SBX 83 - 91 (726922 - 726930)
SBX 92 -121 (728878 - 728907)
POLARX LIMITED
82
ANNUAL REPORT 2023
Project
Humboldt Range
Project
Location
Nevada, USA
Ownership Interest
100% interest in a Mineral
Lease Agreement to
explore, develop and mine
the project
Licence(s)
FOJ 40, FOJ 42, FOJ 44, FOJ 60, FOJ 62, FOJ 203,
FOJ 262, SM 27, SM 29, SM 73-75, SM 103, SM
105, SM 107, SM 109, SM 111, SM 113 -116, SM
133-152, SM 160-163, SM 170-179, SM 198-203,
FOJ-249R, FOJ-251R, INCA # 1, INCA # 4-7, SM 3-
26, SM 43-72, SM 91-102, SM 104, SM 106, SM 108,
SM 110, SM 112, SM 117-126, FOJ 65-68, FOJ 99,
FOJ 102, FOJ 104, FOJ 106, FOJ 140, FOJ 142,
FOJ 190, FOJ 192, FOJ 194, FOJ 213, FOJ 215,
FOJ 217, FOJ 219, FOJ 244, FOJ 250, FOJ 252,
FOJ 258-261, FOJ 276, FOJ 278, FOJ 300, FOJ 302,
PFJ 01-96, PFJ 97-141, BC 01-15a, BC 15b-45
POLARX LIMITED
83
ANNUAL REPORT 2023