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Seabridge Gold2020
ANNUAL REPORT
Prodigy Gold NL
CORPORATE DIRECTORY
ABN 58 009 127 020 ACN 009 127 020
Directors
Secretary
Auditors
Bankers
Share Registry
Solicitors
Stock Exchange
Registered Office
Principal Place of
Business
Mr Thomas McKeith (Chairman)
Mr Matthew Briggs (Managing Director)
Mr Brett Smith
Mr Michael Stirzaker
Ms Jutta Zimmermann
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
Australia and New Zealand Banking Group Limited
Level 10, 77 St Georges Terrace
PERTH WA 6000
Automic Group
Level 2, 267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664
Ward Keller
Northern Territory House
Level 7, 22 Mitchell Street
DARWIN NT 0800
Piper Alderman
Level 16, 70 Franklin Street
ADELAIDE SA 5000
Australian Securities Exchange Limited
ASX Code: PRX
Level 1, 141 Broadway
NEDLANDS WA 6009
Level 1, 141 Broadway
NEDLANDS WA 6009
Telephone: +61 8 9423 9777
Fax: + 61 8 9423 9733
Postal Address
Level 1, 141 Broadway
NEDLANDS WA 6009
Website
Email
www.prodigygold.com.au
admin@prodigygold.com.au
2
Prodigy Gold Annual Report 2020
CONTENTS
Chairman’s Report
Managing Director’s Report – Review of Operations
Summary of Mining Tenements and Areas of Interest
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
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
Independent Auditor’s Report to the Members
Additional Information for Listed Public Companies
Page
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72
3
Prodigy Gold Annual Report 2020
MESSAGE FROM THE CHAIRMAN
Dear Shareholder,
I would like start by
acknowledging the
widespread impacts of the
COVID-19 pandemic currently
being felt across the globe – in
particular the associated
economic and travel
restrictions has been challenging for us all. I do hope
that you have been able to manage through this crisis
and remain healthy and safe.
For Prodigy Gold, the 2020 financial year has been a
tale of two halves. The first half saw the Company raise
$12 million and undertake a record level of exploration
activity across its 100% owned and joint venture
projects. Unfortunately, this actvity was stopped
suddenly in the second half by restrictions imposed by
the Northern Territory Government and the Central
Land Council to limit the spread of the COVID-19 virus.
While access to our projects was restricted, our team
used the time to re-examine our exploration strategy
and to generate and refine our exploration targets.
Entering the new financial year, your Company is well
funded, has a clear exploration strategy in place with
activity back underway on our 100% owned projects
and is re-energised to deliver value to you our
shareholders.
Through perserverance and our robust relationships
with key local stakeholders Prodigy Gold has become a
leading exploration company in the Tanami.
However, operating a gold exploration company in the
Tanami district is challenged by:
•
the remoteness of the project areas and the
lack of infrastructure;
• more than 95% of the prospective areas under
cover;
•
•
a shortened field season; and,
a slow, cumbersome and costly approvals
processes.
Notwithstanding, the Company has assembled and
controls a large and prospective exploration tenement
portfolio. Together with its quality joint venture
partners IGO Limited, Newcrest Mining Limited and
Newmont Corporation it now operates one of the
largest greenfields exploration drilling programs in the
country. This was achieved in the challenging, costly and
time consuming environment described – an exceptional
feat. Re-examination of our strategy has made it clear
that Prodigy Gold needs to make some changes to
realise the potential of its landholding and its top class
exploration team.
4
We will expand our strategy of securing and supporting
joint venture partners for our Tanami tenements. This
way we will maintain and possibly increase exploration
activity while retaining significant exposure to discovery
success on our prospective holdings. We will accelerate
exploration at our 100% owned North Arunta Project
which is less remote and located on pastoral leases
making it easier and cheaper to explore.
Lastly we will seek drill-ready opportunities in Western
Australia where we can leverage our exploration team’s
top class abilities to deliver shareholder value.
The Board would like to thank Managing Director Matt
Briggs and the team for their hard work and
achievements in very difficult circumtances.
Highlights for the year include:
•
•
•
•
•
•
•
keeping our team safe and supporting our
local communities during the COVID-19
restrictions;
identification and development of high quality
targets in our portfolio while access to the
field was prohibited;
developing COVID-19 management plans to
regain access to our project areas;
completing a $12 million fully underwritten
placement that has left the Company well
funded to pursue its strategy;
signing an Operator Agreement on the Old
Pirate Project that will see the redevelopment
of the project;
completing an innovative prospectivity
analysis of the Tanami using machine learning;
and
encouraging initial metallurgical recoveries
received for Co and Mn from samples taken at
the Grimlock Prospect in the Lake Mackay
joint venture with IGO.
In addition to increasing work on our 100% owned
targets, we also have a lot to look forward to across our
joint venture portfolio.
Our partner at the Lake Mackay Project, IGO Limited, is
encouraged by the Co and Mn recoveries from Grimlock
and further drilling is planned at Grimlock as well as
other Cu-Au targets during the next year.
Our partner at the Euro Project, Newcrest, has received
encouraging results from drilling at the Dune Propsect
within our Euro JV Project.
Prodigy Gold Annual Report 2020
MESSAGE FROM THE CHAIRMAN
At the Tobruk Project, our partner Newmont, has
completed deep probing geochemical sampling and
geophysical surveys to identify targets for drilling in the
next year.
Prodigy Gold and our partners are committed to
environmentally responsible exploration and
rehabilitates disturbances on an ongoing basis. Our
team has worked to increase the transparency of our
environmental, social and governance reporting and
remains committed to our values.
On behalf of the Board I would like to thank the team for
their energy and focus in delivering our strategy and
developing a clear path for identifying new strategic
opportunities and delivering shareholder value. I look
forward to supporting their renewed energy and effort.
I would also like to thank my fellow directors for their
support and strategic guidance over the last year.
And lastly, as always, I would like to thank you our
valued shareholders for your support and look forward
to rewarding you through discovery.
Again, on behalf of the Board I am pleased to present
you with the Company’s 2020 Annual Report. I expect
2021 to be a very exciting year unlocking the discovery
potential of our extensive exploration tenure and
renewing the Company’s focus on delivering shareholder
value.
T H O M A S M C K E I T H
5
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
EXPLORATION
Strategy & Target Generation
Prodigy Gold is focussed on exploration in the Tanami region in the Northern Territory. The Tanami is one of Australia’s
most prospective gold regions. This prospective terrain has had limited previous work completed with the majority of
discoveries to date in areas of outcrop. The Company is systematically working through its tenement holding and
advancing the high priority opportunities in the portfolio.
Prodigy Gold has built a deep knowledge and understanding of its Tanami portfolio through drilling and the acquisition of
geochemical and geophysical data. In particular, the recent acquisition of the detailed airborne survey from the Northern
Territory Geological Survey (NTGS), covering the majority of the Tanami Gold Province, has been a step change in the
mapping of stratigraphy, fold hinges and structural offsets, which are key predictors of large scale deposits in this region.
These culminated in the completion of an updated prospectivity analysis in the second half of the financial year, leading
to a refining of target areas for 2020 exploration.
As a result of this improved understanding, the Company plans to test 19 high priority targets during the FY2021 field
season. The work comprises up to 27,000m of aircore drilling across three project areas and follow-up RC drilling.
Campaigns of field mapping and geochemical sampling of drill spoils and rock chips will be run concurrent to the drilling
programs.
The exploration programs planned for the 2020/2021 field season continue to systematically screen the Tanami for large
scale gold deposits. Aircore drilling is planned at Bluebush, West Bonanza, Tregony, Hyperion and the North Arunta
Projects. Several targets can be rapidly progressed to RC drilling following results of the aircore drilling programs. Further
information on individual targets and exploration plans has been outlined in the below report.
COVID-19 Impacts on Exploration
In March, the Company received a request from the Central Land Council (CLC) to delay the commencement of field
activities to assist the CLC to mitigate coronavirus transmission to Traditional Owners and ensure the health services for
the remote communities are in place. In spite of the remoteness of our exploration programs all exploration companies
with Exploration Licences in Central Australia were requested to delay non-essential travel. As a result no on-ground
exploration work was undertaken during the second half of the FY2020.
Prodigy Gold values its positive relationship with, and support of the Traditional Owners, and has continued to work with
the Central Land Council to mitigate transmission risk.
During 2020, Joint Venture activities were suspended due to the implementation of a biosecurity zone over the majority
of the Northern Territory.
Following detailed consultation with the CLC and Federal Government, Prodigy Gold has implemented a robust COVID-19
management plan, which has allowed the Company post FY-end to re-start exploration work across several priority gold
targets. The Company continues to monitor the COVID-19 situation and will advise shareholders of any further impacts or
delays caused by the virus.
6
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 1 - Prodigy Gold project areas, gold deposits, and major infrastructure
100% PRODIGY GOLD PROJECTS
Refined Near-Term Priority Targets – Future work for FY2021
West Bonanza –Beluga Target
Previous historic surface sampling campaigns across the West Bonanza Area included gold grades of 63ppb Au in soils. In
1995 – 1996 vacuum drilling generated significant surficial gold and arsenic anomalies that remain ineffectively tested.
180 holes are planned to test 3 targets in the area. Figure 2 illustrates the West Beluga Target which warrants immediate
aircore drilling. Several fences of aircore drilling are planned to identify bedrock mineralisation along the 3.5km strike of
the structure.
Tregony Project – PHD Prospect
The Tregony Project falls within the same structural trend that includes the Groundrush (1.7Moz Au), Hyperion (310koz
Au), and Crusade (119koz) deposits. Ord River completed prefeasibility studies on a JORC 2004 gold resource following
diamond drilling in 2012.
The PHD and Boco Prospects were last systematically explored by AngloGold Ashanti/Acacia Resources from 1998 – 2004.
Shallow RC drilling by Ord River Resources in 2005 defined gold in RC drilling within two zones over 3.5km of strike at the
PHD Prospect. The soil anomalism associated with this structure is now interpreted to extend for over 9 km. Airborne
magnetic surveying completed in 2019 highlights the extensions of the structure along strike and the potential for parallel
structures (Figure 3).
Fences of aircore drilling are planned to confirm the position of the structure and prioritise areas along the gold trend to
be RC drilled. The Suplejack Downs pastoral lease covers the Tregony Area and an access agreement is in place.
Additional aircore reconnaissance programs, including at the Bluebush Project, are planned to screen for large scale gold
deposits in areas of transported cover.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 2 - West Bonanza Project Beluga Target with coincident rock chip and soil gold anomalism in historic sampling.
Figure 3 -PHD soil samples (left) and drilling (right). 2019 airborne magnetics highlights strike extensions planned to be drilled in FY2021.
8
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
North Arunta Project
The North Arunta Project consists of a 200km long gravity trend with associated metamorphosed sedimentary rocks,
dolerite intrusions and large granite intrusions. The region has several known mineral occurrences including gold, copper,
nickel, zinc, tin and tantalum. Many targets identified by Newmont remain undrilled.
Prodigy Gold has planned aircore drilling to systematically screen these prospects for large scale gold mineralisation. As
there is less transported cover, soil sampling has successfully identified gold, arsenic and multi-element anomalism as
commonly occurs associated with gold deposits. Aircore programs totaling 300 holes have been planned for 6 priority
prospects (Figure 4).
As reported on 5 August 2020, drilling has commenced at the Tulsa Target. Previous ionic leach analysis of soil samples
collected on this target produced coherent anomalies in the projected extension of gold mineralisation from the Kroda
Prospect. Soil anomalism extends for more than 5km of strike.
Table 1 - Summary of 100% owned North Arunta Project Targets
Prospect
Target Anomaly
Best Historic Results
Target
Harrison
4.2km by 1km
Au-in-soil
Eleanor
Lennon
Waldron’s
6km by 4km
Au-As-in-soil
7km by 3km
Au-Cu-Mo-in-soil
4km by 1.5km
Au-As-Sb-Mo-Ag-Cu
12m @ 1.03g/t Au from 36m
incl 4m @ 2.27g/t Au from 36m
20m @ 0.7g/t Au from 28m
incl 4m @ 2.67g/t Au from 40m
untested by drilling
untested by drilling
historical workings with rock chips up to 15g/t Au,
and historical drilling results of
1m @ 29.5g/t Au, 7m @ 1.5g/t Au, 2m @ 4.4g/t
Au
Mineralisation untested for 1,200m
west of 4m @ 2.27g/t Au result
untested by drilling
untested by drilling
Previous drilling too shallow to
effectively test potential
Tulsa
Kroda
5km x 3km Au-in-soil untested by drilling
untested by drilling
400m strike >1g/t Au
including a shoot of
50m+ at >5g/t Au
57m @ 3.8g/t Au and 6m @ 26g/t Au
Depth extensions and additional shoots
on strike
(ASX: GLA 7 March 2018, 18 June 2018, PRX 19 March 2013)
Figure 4 - North Arunta Prospects on 1vd magnetic image.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
The Company has been successful in being awarded co-funding for the Lennon Prospect as part of the Northern
Territory’s “Resourcing the Territory” initiative. This will contribute up to 50% of the cost of RC drilling. The fieldwork is
dependent on COVID-19 access restrictions and sacred site clearance surveys being completed at Lennon.
Assessment of Western-Australian Projects
With ongoing delays and extended timeframes for permitting in the Northern Territory combined with the risk of further
COVID-19 related restrictions, the Company is continuing due diligence on projects in Western Australia.
Exploration Work undertaken during FY2020
Bluebush Project
Bluebush is considered prime exploration ground with potential for the discovery of another Callie deposit (14.2Moz). It is
a large-scale project area falling within the Trans-Tanami Fault Zone located 50km (Figure 5) to the northwest of the
world-class Callie Gold Mine owned by Newmont Mining. The prospective Dead Bullock Formation, host rock of the Callie
deposit, extends into the project area with structural similarities of folding and faulting complexity and geochemical
anomalism associated with Callie.
Figure 5 - Prodigy Gold Bluebush Projects and work programs
Exploration
Aircore drilling was completed during the year at the Bluebush Project targeting deposits analogous to the 14.2Moz Callie
Gold Mine. Drilling included 12 RC holes and 192 aircore holes.
A summary of the targets and exploration activity completed at Bluebush is provided below.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Capstan
Capstan is a 22km x 8km sub-area of the Bluebush Project, falling within the Trans-Tanami Fault Zone and located 50km
northwest of the world-class Callie Gold Mine. The interpreted folding and faulting complexity and geochemical
anomalism within the Dead Bullock Formation (host rocks of Callie) highlight the prospectivity of the area. Approximately
95% of Capstan is undercover and surface sampling has only been effective in very limited areas in the north and south of
the Prospect.
Capstan North RC Drilling
A total of 11 RC holes for 1,959m of drilling were completed testing 1,000m of strike (Figure 6). These holes were
designed to confirm the interpreted orientation of mineralisation and infill between previous results including 4m @
6.1g/t Au (RC), 9m @ 1.3g/t Au (RC) (ASX: 18 December 2018). Results of this drilling continued to define the mineralised
structures. Sampling at Capstan returned results including 2m @ 1.2g/t Au from 122m (BLRC028) and 1m @ 1.1g/t Au
from 102m (BLRC027) (ASX: 22 November 2019). While the target structure was intersected, the RC drilling limited the
scale of gold mineralisation in this part of the prospect.
Figure 6 - RC drilling gold results at the Capstan Prospect
Hat RC and Aircore Drilling
Hat is a 3km long gold anomaly. The first wide spaced RC program completed in 2018, produced a result of 4m @ 1.2g/t
Au from 111m (ASX: 18 December 2018).
A single RC hole was drilled at the Hat target designed to confirm the westerly dip to the north south striking structure.
Sampling of the single RC hole drilled at Hat returned 2m @ 0.7g/t Au from 152m (BLRC038) (ASX: 22 November 2019).
This hole has confirmed the interpreted steep westerly dip to mineralisation.
An aircore program of 44 drill holes was completed at the Hat Prospect in October 2019.
11
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Results outlined a 0.3g/t Au anomaly within the larger system with best results (ASX: 9 December 2019) including:
-
-
-
-
6m @ 0.52g/t Au from 36m (BL0888)
3m @ 0.58g/t Au from 57m & 3m @ 0.51g/t Au from 69m (BL0880)
6m @ 0.45g/t Au from 75m (BL0844)
6m @ 0.47g/t Au from 45m (BL0854)
The gold anomalism has been defined along 3km of strike and is over 500m wide on the southern two sections most
recently drilled. The best results and widest part of the gold anomaly coincide with the favourable Dead Bullock
Formation and a northwest trending antiformal fold hinge. Gold deposits in the Tanami are typically associated with
folded iron rich sediments as occurs at Hat.
This data will be combined with geophysical data to determine potential scale of targets and optimise future drilling.
Figure 7 - Hat Prospect Geology Map and Recent Result Highlights
Capstan North Aircore Drilling
Capstan North was first drilled with aircore in 2018. Initial results included 1m @ 4.0g/t Au (ASX: 2 August 2018) at end of
hole within a 900m zone of gold and arsenic anomalism hosted in folded Dead Bullock Formation.
A total of 18 aircore holes were drilled at Capstan North in late 2019, targeting an area of structural complexity
coincident with gold anomalism. The best result (ASX: 9 December 2019) was in an area where results of up to 4g/t Au
had previously been intersected (Figure 8).
-
3m @ 0.25g/t Au from 36m (BL0896)
No further drilling is planned on this target as the recent program has reduced the size of the potential target.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 8 - Capstan North Target Geology Map and Recent Result Highlights
Capstan East Aircore Drilling
The Capstan East gold trend has a strike length of 7km identified as a priority target for 2019. Drilling in 2018 included a
result of 6m @ 0.5g/t Au at the north end of the 7km trend (ASX: 2 August 2018). Gold anomalism is coincident with
arsenic anomalism and a northsouth fault. Results from 39 reconnaissance aircore holes failed to identify gold
anomalism of interest. Arsenic anomalism previously intersected is now interpreted to be sourced from graphitic shales.
Capstan South Aircore Drilling
Results were returned for 61 stratigraphic aircore holes completed at Capstan South (Figure 9). The broad drilling has
confirmed stratigraphy and will form the foundation of a detailed aeromagnetic structural interpretation to target Callie-
style deposits. No significant gold anomalism was identified in this drilling.
Apertawonga Target
The Apertawonga Prospect is located 50km northwest of the Callie Gold Mine. The target is a >7km long northwest
trending magnetic anomaly. Apertawonga lies on a steep gravity gradient and is bisected by the Trans-Tanami Fault Zone,
a long-lived regional structure that is interpreted to be a focus for gold bearing fluids during deformation.
A program of 54 aircore holes completed in June 2019 defined gold and pathfinder anomalism over 4.5km including
highlights of 1m @ 0.7g/t Au from 36m and 3m @ 0.14g/t Au from 36m (ASX: 16 July 2019).
An additional 49 aircore holes were completed during the year to further define the gold anomaly at Apertawonga
(Figure 9). Results of this drilling reduced the potential for gold mineralisation.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
3m @ 0.14g/t Au (AC)
1m @ 0.7g/t Au (AC)
Figure 9 - Recent aircore drilling and results reported at the Apertawonga Prospect
Gravity surveys co-funded by the Northern Territory Government as part of the Resourcing the Territory Initiative were
completed at Capstan East and Hyperion during the year.
Hyperion Gold Project
The Hyperion Project is located 19km to the north of the 1.6Moz Groundrush Pit (Figure 10) and 58km to the northeast
of the Central Tanami Processing Plant site. The area has historically received sporadic shallow drilling. Drilling often
ended in the depleted oxide zone testing the area ineffectively.
The Hyperion gold camp contains an indicated and inferred resource of 4.93Mt at 1.95g/t Au for 310koz (ASX: 31 July
2018). As part of its broader exploration strategy, Prodigy Gold is focused on growing the existing resource base at
Hyperion and progressing the discovery of new standalone projects.
A summary of the targets and exploration work completed at Hyperion is provided below.
14
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 10 - Hyperion Project location on 100% owned Tenements.
Seuss Aircore Drilling
The Seuss Structure was first recognised in late 2016. Geochemical analysis of drilling in 2017 confirmed that a mafic
sediment was the control of shallow high-grade shoots. Subsequent drilling has focused on the intersection of the
sediment and mineralised structures.
A total of 32 aircore holes were completed in October 2019. This program was drilled to identify extensions of the east-
west Hyperion structures to the east of the resource and extension of the Seuss and Hyperion Faults to the south and
east of the resource. Two lines of drilling were completed 100m and 500m to the east of the resource, and a single line
15
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
600m to the south. The best results (ASX: 17 December 2019) from the program include:
-
-
-
-
6m @ 0.20g/t Au from 84m (SJ0187)
3m @ 0.13g/t Au from 102m (SJ0186)
3m @ 0.10g/t Au from 84m (SJ0185)
3m @ 0.10g/t Au from 54m (SJ0181)
Gold and arsenic results seen in SJ0186 and SJ087 indicate the mineralisation continues to the south of the resource. The
drilling to the east appears to close off the potential for extensions in that direction.
Seuss Diamond Drilling
Previous drilling by Prodigy Gold identified breccia hosted gold mineralisation associated with the Seuss Fault. This is a
new style of mineralisation for the district and the prospective structure has potential to host significant mineralisation
where it obliquely intercepts the mafic sediments at Seuss.
A 369.8m NTGS co-funded diamond drill hole HYDD100054 was completed in November 2019. This hole was designed to
provide structural information to assist in the targeting of gold mineralisation. The drill hole has successfully intersected
the target structure with similar veining and alteration (Figure 11) seen in the previous RC holes. Drilling intersected
approximately 78m of veining from within the interval 141-261m (ASX: 22 November 2019).
Figure 11 - Veining, sulphides, and alteration in diamond hole HYDD100054 similar to that seen in the 2018 RC drilling
HYDD100054 defined a broad interval of low-grade gold mineralisation along the targeted fault. This hole is consistent
with the previous RC drill holes completed to the north and SJRD0058 to the south. Intervals of arsenopyrite and veining
correlated with elevated gold anomalism.
Results from drill hole HYDD100054 include (ASX: 10 February 2020):
-
-
-
-
-
-
4m @ 0.6g/t Au from 106m
2m @ 0.5g/t Au from 144m
15m @ 0.4g/t Au from 167m
3m @ 0.3g/t Au from 236m
18.76m @ 0.6g/t Au from 243m
1m @ 2.4g/t Au from 255m
A diamond tail was also completed on RC hole SJRC0058. This tail extended the hole from 156m to 249.2m. The hole
previously ended with a 0.7g/t Au sample from within an interval of 89m @ 0.3g/t Au (Figure 13) (ASX: 20 December
2018). The diamond tail intersection of this hole intersected additional quartz veining and sulphide.
Final results from extended drill hole SJRD0058 include:
-
-
89m @ 0.3g/t Au from 67m (ASX: 20 December 2018)
5m @ 0.3g/t Au from 166m (ASX: 10 February 2020)
Drilling has continued to define gold mineralisation to the south of the existing resource area. Broad intervals of
mineralisation are unusual in the district. A favourable lithology or structural intersection may yield higher grade gold
mineralisation to the south (Figure 12) and the Company is assessing potential follow-up drilling options in this area.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 12 - Hyperion Project geology map with recent drill results, to the south of the Hyperion Resource, highlighted in black.
Figure 13 - Hyperion Project east-west cross section illustrating the broad zone of mineralisation to the south of the Hyperion Resource.
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Prospectivity analysis
Prodigy Gold utilized an integrated prospectivity analysis approach in collaboration with the Corporate Geoscience Group
(CGSG) to assist targeting large-scale gold systems. Prospectivity analysis integrating empirical and conceptual data, and
mineral systems mapping are commonly employed to assist targeting for exploration projects. The prospectivity analysis
approach improves Prodigy Gold’s confidence to target these areas more effectively. Seven models were run with the
following three methods deemed the best for predicting the known deposits in the Tanami Region using Prodigy Gold and
public data:
-
-
-
Continuous Fuzzy Gamma Prospectivity
Geometric Average Prospectivity Model
Data Driven Index Overlay Prospectivity Model
This analysis was incorporated into the Company’s prioritising of targets for the FY2021 field season. Figure 14 highlights
the higher relative prospectivity of the Boco, Tregony, Hyperion, and West Bonanza areas.
Figure 14 - Example of the output of the 2019 CGSG prospectivity analysis. Note that the Bonanza, Hyperion and Tregony-Boco areas are
identified as the most prospective (hot colours).
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Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
JOINT VENTURE PROJECTS
Joint Venture Portfolio Overview
Project
Lake Mackay (Cu-Au,
Ni-Co and Orogenic Au
potential)
JV Partner
IGO (IGO. AX)
JV Terms
IGO 70% / PRX
30%
Euro Gold Project
Newcrest (NCM. AX)
Tobruk Gold Project
Newmont
Exploration Pty Ltd,
a wholly owned
subsidiary of
Newmont
Corporation (NEM.
NYSE)
Old Pirate Gold Project
TRL Tanami (Private)
NCM to spend
$12M on the
Euro Project to
ultimately earn a
75% interest
$12M in-ground
earn-in to 70% /
$2.5M cash +
financing option
Operator
agreement
$2.3M + 2.5%
NSR
Lake Mackay JV Project
Current Status
RC drilling completed by IGO in late
2019 returned 12m @ 3.5g/t Au
from 112m from the Arcee Gold
Prospect. Soil sampling completed
during the December quarter
extended the gold in-soil anomaly
at Arcee to 2.3km long. A number
of conductors and Co-Ni-Mn
projects remain to be tested.
Further follow-up work is planned.
RC drilling at Dune Prospect
identified significant gold in oxide
and further extends the 1.4km gold
and arsenic anomaly which remains
open to the north.
The Tobruk Project is interpreted to
have occurrences of similar
prospective lithologies that host
Newmont’s Callie Gold deposit and
several smaller deposits including
Groundrush and Oberon.
Laboratory analysis of 675 soil
samples completed across the
Tobruk Project area has been
completed.
Agreement signed with TRL Tanami
to develop and mine the Old Pirate
Project under a strategic 10-year
Operator Agreement.
IGO Limited (”IGO”) commenced activity on the current Lake Mackay JV area in 2014. Systematic exploration lead to the
discovery of gold and base metal mineralisation at Bumblebee in 2015 and Grapple in 2016. Diamond drilling of Grapple
in 2017 defined gold and copper mineralisation over 800m of plunge including a result of 11m @ 7.9g/t Au, 20.7g/t Ag,
0.8% Cu, 0.5% Pb, 1.1% Zn & 0.1% Co in 17GRDD001 (ASX: 18 September 2017). In 2018 further work identified Ni, Co
and Mn-bearing laterites. During 2018, IGO completed the $6M earn-in and the JV Project is now funded 70/30.
Subsequent work at the Grimlock Prospect has identified cobalt of up to 2% and test work has demonstrated leach
extraction rates for Co of up to 98%.
Project Background
The Lake Mackay Project is 400km northwest of Alice Springs, adjacent to the Western Australian border, and comprises
approximately 15,630km2 of exploration licences and applications (14,730km2 IGO/Prodigy Gold JV, 900km2 IGO/Prodigy
Gold/Castile JV). The emerging mineralised belt at Lake Mackay is at a very early stage of exploration. The Project has
consolidated tenure over the favourable Proterozoic margin between the Aileron and Warumpi Provinces and is
characterised by a continent-scale geophysical gravity ridge and the Central Australian Suture.
19
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 15 - Lake Mackay JV Project Location
Phreaker Cu-Au-Ag Prospect
Six holes for 1,596m of RC drilling were completed at the Phreaker Prospect. Results for RC holes drilled at Phreaker
include (ASX: 17 July 2019):
-
-
-
19LMRC028 14m @ 0.84% Cu, 0.15g/t Au, 4.1g/t Ag from 353m
19LMRC031 10m @ 0.98% Cu, 0.06g/t Au, 13.9g/t Ag from 146m
19LMRC032 11m @ 1.15% Cu, 0.07g/t Au, 7.9g/t Ag from 189m
The RC holes confirmed anomalous Cu, Au and Ag over a strike length of 750m, although DHEM results suggest that the
more conductive parts of the target have not been adequately tested with the recently completed RC holes likely drilled
up dip of the main mineralisation (Figure 15).
Additional RC drilling completed at the Phreaker Prospect in August 2019 confirmed that the mineralised system extends
for over 750m of strike (ASX: 16 October 2019). Downhole EM completed in these drill holes demonstrated that the
strongest parts of the ~1,000m long EM conductor have not been effectively tested. Two diamond drill holes are planned
to test positions down dip of the existing RC drilling.
Grimlock Ni-Co-Mn Prospect
Stage 1 metallurgical test work was undertaken during the December quarter on approximately 100kg of lateritic
duricrust (containing strong Mn, Ni and Co enrichment) from the Grimlock Co-Ni-Mn Prospect (Figure 15). The first
bench-scale leach extraction results were released on 12 December 2020, on a bulk sample grade of 1.94% Co, 0.47% Ni
and 51.91% Mn.
The preliminary leaching tests conducted at the Perth laboratories of Bureau Veritas used SO2 (Sulphur Dioxide) to
reduce the manganese dioxide present and with the addition of some H2SO4 (sulphuric acid) at 40°C and 70°C. These
tests were performed at atmospheric pressure with a 3-hour residence time.
The best conditions from testing yielded extractions of 97.6% cobalt, 85% nickel, and 99% manganese into solution. The
test work showed encouraging extraction results at a bench scale and further leach tests are planned as part of a series of
future metallurgical studies.
Following on from successful leach test work, two PQ diamond holes are planned to acquire additional samples for
metallurgical test work. A ground penetrating radar (GPR) survey is also planned to map the depth, thickness and
continuity of the Ni-Co-Mn enriched duricrust from surface to approximately 25m depth. This will be used to target a 10-
12 hole RC drill program to assess the size potential of the prospect.
20
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Arcee Gold Prospect
The Arcee Prospect is a 2.3km long coherent gold-in-soil anomaly open to the west (Figure 17). Initial drilling intersected
disseminated sulphide in amphibolite yielding a 12m interval of low-level gold. A hole completed 350m to the southeast,
19LMRC072, returned 12m @ 3.5g/t Au from 112m, including 8m @ 4.9g/t Au from 116m (ASX: 16 October 2019). This
intersection included disseminated pyrite and minor quartz veining.
Results were returned for an additional six RC holes completed at the Arcee Prospect in December, following the
completion of drilling on five sections testing ~600m of strike. The drilling confirmed the interpreted orientation of
mineralisation.
The best results were returned from the original section drilled, 19LMRC073 4m @ 1.6g/t Au from 72m (Figure 16), and
the section 120m to the west (19LMRC076); 4m @ 1.5g/t Au from 128m (ASX: 12 December 2019). On the most western
line of drilling, 19LMRC078 intersected 4m @ 0.9g/t Au from 104m, demonstrating the mineralisation likely extends to
the west as suggested by recent soil sampling (Figure 17).
Assays were also received from infill soil sampling around Arcee and to the west into E80/5001. 200 x 400m soil sampling
close to the WA/NT border has extended the Arcee gold anomaly into E80/5001 bringing the Arcee gold-in-soil anomaly
to 2.3km long.
Soil sampling is proposed to follow up soil anomalies identified at the end of 2019, including the Arcee Au anomaly.
Positive results would allow for step out drilling from the RC result of 12m @ 3.5g/t Au (ASX: 16 October 2019)
Figure 16 - Arcee Prospect Cross-section
21
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Figure 17 - Arcee Prospect Collar and Soil Sample Map
Raw Prospect
Results of soil sampling at the Raw Prospect defined a 1.1km long polymetallic soil anomaly. Moving loop EM of an AEM
anomaly has defined a conductor modelled at >400m from surface adjacent to the soil anomalism.
A single 540m diamond drill hole is planned to intersect the EM conductor which was too deep to drill with conventional
RC at the end of 2019. Additionally, ~400m of RC drilling is planned to test beneath the 1.1km long gold and multi-
element soil anomaly adjacent to the conductor at Raw (ASX: 16 October 2019).
Blaze Prospect
Anomalous gold was detected from drilling of the Blaze Prospect soil anomaly, however drilling completed to date within
the Blaze Prospect has failed to identify an economic accumulation of copper or gold.
Customisable Target
A 350m diamond drill hole is planned to test a modelled EM conductor.
Future Work
Planning was well underway for the 2020 field season, however the drilling program was postponed due to COVID-19
pandemic-related regional travel access restrictions, which were introduced to protect remote outback communities. IGO
is in consultation with the Central Land Council and the Department of Primary Industry and Resources; and will
recommence field activities at the earliest appropriate time. At this juncture, this timing remains uncertain.
Notwithstanding, drilling remains planned for at least 6 targets at Lake Mackay. Systematic fieldwork is planned across
numerous targets at Lake Mackay in FY2021. Diamond drilling is to be undertaken at the Grimlock, Phreaker, Raw and
Customisable targets. RC drilling is planned at Grimlock and Raw.
22
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Euro Farm-in Agreement
In July 2018 a subsidiary of Newcrest Mining Ltd (“Newcrest”) and Prodigy Gold signed an earn-in agreement. Under the
agreement Newcrest will sole fund up to $12M over seven years to ultimately earn up to a 75% interest in the Project.
Project Background
The Project includes ~3,478km2 of exploration licenses and applications in the Tanami Region of the Northern Territory
along strike of, or contains structures parallel to, the Trans-Tanami Trend. This is the regional control of major gold
deposits in the area, including Newmont Mining’s 14.2Moz Callie Gold Mine. Previous exploration has primarily been soil
sampling and patchy reconnaissance drilling with 10 of the 17 tenements in the Euro JV Project having no drilling in the
last 20 years.
Exploration
During the year 616.9m of diamond drilling and 512m of RC drilling were completed at Anomaly 16 and Dune
respectively.
Dune Prospect
The Dune Prospect is located 1.5km to the south of the Newmont Exploration Oberon Deposit. Drilling has focused on
gold anomalism defined by historic aircore in folded sediments.
Results of 2,730m of drilling completed at the Dune Prospect included broad intersection of 36m @ 0.65g/t Au including
20m @ 0.95g/t Au (ASX: 19 August 2019) along the same trend as the previously reported results of 2m @ 12g/t Au and
3m @ 1.5g/t Au (ASX: 22 January 2019).
Figure 18 - Dune Prospect 2019 drilling program. FY2020 results highlighted in black
23
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Results were returned for three RC drill holes drilled (Figure 18) for a total of 512m. The holes completed tested northern
extensions of the Dune Target 2 anomaly and for an antiformal closure to the east of Target 1. Holes EUR0019 and
EUR0021 infill and extend gold anomalism in oxide to the north to a strike length of 1.4km. The area, thickness and grade
of gold in oxide is significant when compared to gold deposits in the district.
Best intercepts included (ASX: 28 November 2019):
-
-
18m at 0.4g/t Au from 126m, including 2m at 1.24g/t Au from 126m (EUR0019)
10m at 0.3g/t Au from 146m (EUR0021)
There is no previous drilling between the northern line of drilling and the Newmont tenement boundary. The ongoing
intersection of water in RC drilling has made the drilling into fresh rock challenging. Future work, and success on this
target requires an effective method of defining the bedrock source of the anomalism through transported cover.
Anomaly 16
The Anomaly 16 Prospect is located 50km north of the Granites Gold Mine and 40km northwest along strike of the main
controlling structure to the Minotaur (Windy Hill) gold deposit. Anomaly 16 was initially generated through first pass
reconnaissance vacuum drilling during 1990 by North Flinders Mines which identified a 2.5km NW-trending gold bulk
cyanide leach anomaly. This target is interpreted to be folded Dead Bullock Formation with coincident gold and arsenic
anomalism in lag sampling and RAB drilling. Previous drilling appears to have been ineffective in testing the denser
magnetic rocks.
A single 616.9m diamond hole, co-funded by the Northern Territory Government as part of the Resourcing the Territory
Initiative, was completed. Despite the encouraging veining and sulphides, no significant gold intercepts were returned.
No additional work is currently planned for this target.
Tobruk Farm-in Agreement
In May 2019 Prodigy Gold signed a A$14.5M Exploration Farm-in and Joint Venture Agreement (“Agreement”) with
Newmont Exploration Pty Ltd (“Newmont Exploration”) (ASX: 16 May 2019). Under the Agreement, Newmont Exploration
can earn up to a 70% interest in the Tobruk Project by sole funding A$12M in exploration expenditure. The Agreement
includes a total of A$2.5M cash payments to Prodigy Gold (with A$1M being contingent on Newmont Exploration electing
to proceed to phase 2 of the earn-in).
The Agreement covers nine of the Company’s tenements and tenement applications, within the vicnity of Newmont’s
>14Moz Callie Gold Mine.
Project Background
The Tobruk Project is interpreted to have occurrences of the similar prospective lithologies that host Newmont’s Callie
Gold deposit and several smaller deposits including Groundrush and Oberon. The Tobruk Project’s potential is further
enhanced by having analogous structural settings to known Tanami deposits, including tightly folded stratigraphy, Trans
Tanami parallel faults and drill defined anomalous geochemistry positioned on the margins of magnetic features.
Most of the historical exploration work in the Tobruk area was undertaken by North Flinders Mines Limited /Normandy
Mining Limited in the late 1980s and 1990s and subsequently by Newmont and AngloGold Australia in the early 2000s.
Previous exploration has comprised field mapping, aeromagnetic/detailed ground magnetic surveys and targeted soil,
rock chip and lag sampling. Drilling (RAB and aircore) was primarily directed at testing magnetic features supported by
anomalous surface geochemistry at targets identified in Dead Bullock Formation sediments, considered the most
prospective sequence in the Tanami group. Key logistical advantages include the 450km gas pipeline to the Newmont
Granites Plant recently constructed and the Federal Government’s commitment to upgrade the Tanami Track, which will
improve the economics of any future discoveries.
24
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Exploration
675 soil samples were collected across the northern half of the Tobruk Project during 2019. Results of the extensive
geochemical survey (utilising Newmont’s proprietary deep sensing geochemistry) and the passive seismic survey carried
out during the December quarter of 2019 were received. Three target areas of interest were recognised in the results of
this survey.
Future Work
On-ground work has been suspended pending the re-issue of entry and transit permits.
Operator Agreement – Old Pirate
In October 2019, the Company signed a strategic 10-year operator agreement with private company TRL Tanami over the
Company’s Old Pirate Project located in the Tanami Region of the Northern Territory (ASX: 3 October 2019). The Old
Pirate agreement includes staged cash payments totaling approximately $600,000, replacement of bonds totaling
approximately $1.7M and a 2.5% NSR.
The Old Pirate agreement also includes an option for TRL Tanami to acquire the Old Pirate plant and equipment for a cash
consideration of $500k, or both the Old Pirate Project and Old Pirate plant and equipment for $3M.
The agreement is in line with Prodigy Gold’s strategy to monetise Twin Bonanza and significantly reduce portfolio holding
costs.
Some payments due under the agreement are delayed. The Buccaneer option included in the original agreement has now
lapsed. Study work is advancing on Old Pirate.
North Arunta JV Project
Gladiator Resources returned all tenements that formed of the North Arunta JV project to Prodigy Gold. The termination
of the Joint Venture Agreement is pending the lodgement of an environmental report by Gladiator Resources with the
DPIR.
The North Arunta Project is now 100% owned by Prodigy Gold and exploration work has commenced post year-end on
the Tulsa Target.
25
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
MINERAL RESOURCES
Prodigy Gold’s Mineral Resources for 30 June 2020 are summarised below. See the 2020 Annual Mineral Resource
Statement (ASX: 25 August 2020) and the individual announcements referenced below for additional information.
Prodigy Gold's Mineral Resource governance includes systems and procedures that ensure:
• All persons responsible for preparing and reporting Prodigy Gold estimates qualify as a Competent Person as
•
•
defined by the JORC Code (2012 Edition), and the Competent Persons have provided written sign-off on publicly
reported estimates
Estimates are prepared using accepted industry methods
Competent Persons prepare and provide Prodigy Gold with the supporting documentation for each estimate,
and before being reported to the Board, estimates are either reviewed by Prodigy Gold senior technical staff or
by a suitably qualified external reviewer
• Any material changes or updates to estimates are reviewed and approved by the Prodigy Gold's Board before
being promptly announced to the market
Consolidated Resource Summary
Table 2 – Prodigy Gold Mineral Resource Summary as at 30 June 2020
Indicated
Inferred
Total
Tonnes
(Mt)
Grade
(g/t Gold)
Metal
(Koz)
Tonnes
(Mt)
Grade
(g/t Gold)
Metal
(Koz)
Tonnes
(Mt)
Grade (g/t
Gold)
Metal
(Koz)
Resource
Author
0.04
1.2
0.92
2.2
4.6
1.7
2.35
2.0
7
65
69
141
0.72
8.8
4.02
13.5
4.7
1.8
1.86
2.0
109
520
240
869
0.76
10.0
4.93
15.7
4.7
1.8
1.95
115
585
310
2.0
1,010
1
2
2
Project
Date
Old Pirate
Aug-16
Buccaneer Aug-17
Hyperion
July-18
Cut-Off
Grade
(g/t)
1.0
1.0
0.8
Total
Note: Totals may vary due to rounding.
various
•
•
1 CSA Global
2 Optiro Pty Ltd
Old Pirate Mineral Resource
Table 3 – Old Pirate August 2020 Mineral Resource Estimate
Old Pirate-Project – Mineral Resource Estimate – August 2016
Domain
Classification
Tonnes (Mt)
Grade (Au g/t)
Metal (koz)
Western Limb
Central
East
Golden Hind
Sub-Total
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Total
Indicated + Inferred
0.010
0.280
0.020
0.420
0.005
0.010
0.005
0.005
0.040
0.720
0.760
7.5
5.5
3.1
4.2
7.6
4.9
3.5
4.1
4.6
4.7
4.7
3.0
49.7
2.4
56.3
0.5
1.6
0.5
0.9
6.5
108.5
114.9
Note: Totals may vary due to rounding. The above Mineral Resource Estimate was first reported in 2016 (ASX: 19 August 2016).
26
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
Buccaneer Mineral Resource
Table 4 – Buccaneer August 2020 Mineral Resource Estimate
Buccaneer Project - Mineral Resource Estimate – August 2017
Oxide
Oxidised
Transitional
Fresh
Total
Indicated
Grade
(Au g/t)
1.69
1.69
1.59
1.67
Tonnes
(Mt)
0.2
0.7
0.3
1.2
Metal
(koz)
12
40
13
65
Tonnes
(Mt)
0.1
0.5
8.3
8.8
Inferred
Grade
(Au g/t)
1.82
1.52
1.86
1.84
Metal
(koz)
4
22
494
521
Tonnes
(Mt)
0.3
1.2
8.5
10.0
Total
Grade
(Au g/t)
1.73
1.63
1.85
1.82
Metal
(koz)
16
62
507
585
Note: Totals may vary due to rounding. The above Mineral Resource Estimate was first reported in 2017 (ASX: 1 September 2017).
Hyperion Mineral Resource
Table 5 – Hyperion August 2020 Mineral Resource Estimate
Hyperion Project - Mineral Resource Estimate July 2018
Oxide
Oxide
Transitional
Fresh
Total
Indicated
Grade
Au (g/t)
1.48
1.79
2.62
2.35
Tonnes
(Mt)
0.03
0.26
0.63
0.92
Metal
(koz)
1.3
14.8
53.1
69.3
Tonnes
(Mt)
0.29
1.16
2.57
4.02
Inferred
Grade
Au (g/t)
2.28
2.08
1.72
1.86
Metal
(koz)
21.2
77.3
141.8
240.3
Tonnes
(Mt)
0.32
1.41
3.20
4.93
Total
Grade
Au (g/t)
2.21
2.03
1.89
1.95
Metal
(koz)
22.6
92.1
194.9
309.5
Note: Reported above 0.8g/t cut-off and above the 230mRL. Totals may vary due to rounding. The above Mineral Resource Estimate was first reported in
2018 (ASX: 31 July 2018).
The Hyperion Project was formerly known as the Suplejack Project however it was renamed at the request of the local
community.
Competent Persons Statements
The information in this announcement relating to exploration targets and exploration results is based on information reviewed and checked by
Mr Matt Briggs who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Briggs is a full time employee and shareholder of
Prodigy Gold NL and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting
Exploration Results, Mineral Resources and Ore Reserves”. Mr Briggs consents to the inclusion in the documents of the matters based on this
information in the form and context in which it appears.
The information in this report relating to the Mineral Resources is based on information reviewed and compiled by Mr Matt Briggs who is a
Member of The Australasian Institute of Mining and Metallurgy. Mr Briggs is a full time employee and shareholder of Prodigy Gold NL and has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting Exploration Results, Mineral Resources and
Ore Reserves”. Mr Briggs consents to the inclusion in the documents of the matters based on this information in the form and context in which it
appears.
All information compiled in this statement has been previously announced and this annual statement fairly represents a summary of the
supporting information and documentation. Prodigy Gold NL confirms that it is not aware of any new information or data that materially affects
the information included in the market announcement and that all material assumptions and technical parameters underpinning the estimates
included in referenced previous market announcements continue to apply and have not materially changed.
27
Prodigy Gold Annual Report 2020
MANAGING DIRECTOR’S REPORT – REVIEW OF OPERATIONS
TENEMENT MANAGEMENT
The total area of 38,848km2 (2019: 42,577km2) held under tenure by Prodigy Gold and its joint venture partners has
decreased during the financial year. The area held under granted mineral tenements is 16,554km2 with 22,294km2 held
under exploration licence application. To address the costs associated with maintaining such a large land holding and to
better focus exploration activities, the Company continues to actively seek to reduce its tenure costs through joint
venture and divestment.
The Company relinquished two granted tenements during the year, withdrew five tenement applications and no
additional tenements were applied for during the year. Joint venture interests in the Lake Mackay JV with IGO remained
at 70% IGO and 30% Prodigy Gold during the year and in the Lake Mackay JV with IGO and Castile, Prodigy Gold increased
its interest to 25.4%, with IGO increasing to 59.3% andCastile diluting to 15.3%.
A map showing the location of the Company’s current tenement holding is presented in Figure 1 of the review of
operations report and a complete list of tenements follows this report.
CORPORATE
Shares on Issue and Unlisted Options
Prodigy Gold placed 100,000,000 shares at an issue price of $0.12 per share for total gross proceeds of $12,000,000
during August 2019. The shares were issued following the completion of a fully underwritten institutional placement
announced on 21 August 2019.
The Company issued 16,500,000 options to employees under the terms and conditions of the Company’s Employee Share
Option Plan during the financial year and 3,675,000 options expired.
As at 30 June 2020, Prodigy Gold has a total of 580,627,606 shares and 39,150,000 million unlisted options on issue.
Share Registry
The Company’s share registry changed to Automic Pty Ltd during January 2020.
28
Prodigy Gold Annual Report 2020
SUMMARY OF MINING TENEMENTS AND AREAS OF INTEREST
Summary of Mining Tenements as at 30 June 2020
Area of Interest
Tenement
Group’s
Interest
Tenement
Status
Status Changes
During the Year
NORTHERN TERRITORY
TANAMI
Birrindudu
Bluebush
Bonanza
Hyperion
Abroholos
Tobruk (1)
EL5889
EL23523
EL28326
EL31332
EL23659
EL24436
EL26610
EL26634
EL27119
EL27127
EL27589
EL28327
EL29860
EL31288
EL31290
EL31291
EL30944
EL25194
EL26608
EL27378
EL28322
EL28324
EL28325
EL28328
EL28394
EL29790
EL31289
ML29822
EL30814
EL9250
EL26619
EL27125
EL27126
EL27979
EL31330
EL31331
EL31530
EL32055
EL26623
EL32056
EL29833
EL29834
EL25156
EL25191
EL25192
EL28785
EL29832
EL29859
EL30270
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
application
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
application
granted
granted
granted
granted
granted
granted
granted
granted
granted
application
application
application
application
granted
granted
granted
granted
granted
granted
application
Relinquished during the year
Granted during the year
29
Prodigy Gold Annual Report 2020
SUMMARY OF MINING TENEMENTS AND AREAS OF INTEREST
Area of Interest
Tenement
Tobruk (1)
Euro (2)
Tanami Altura JV (3)
LAKE MACKAY
Tarawera
Lake Mackay North
Tekapo
Warumpi (4)
EL30274
EL32057
EL25845
EL26590
EL26591
EL26592
EL26593
EL26613
EL26615
EL26618
EL26620
EL26621
EL26622
EL26673
EL27604
EL30271
EL30272
EL30273
EL30283
EL26626
EL26628
EL29828
EL26627
EL23898
EL24473
EL27894
EL30552
EL30553
EL30554
EL30555
EL30556
EL28682
EL24915
EL25146
EL30729
EL30730
EL30731
EL30732
EL30733
EL30739
EL30740
EL31234
EL31723
E80/5001
EL27947 (5)
EL31974 (5)
EL25147
EL31718
EL31719
EL31720
EL31721
EL31722
Group’s
Interest
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
90
90
90
100
100
100
100
100
100
100
100
100
30
30
30
30
30
30
30
30
30
30
0
30
15.3
15.3
30
30
30
30
30
30
Tenement
Status
Status Changes
During the Year
application
application
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
application
application
application
application
granted
granted
granted
application
application
application
application
application
application
application
application
application
application
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
application
application
application
application
application
application
Relinquished during the year
IGO Limited
IGO Limited
Castile Resources Pty Ltd
Castile Resources Pty Ltd
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
30
Prodigy Gold Annual Report 2020
SUMMARY OF MINING TENEMENTS AND AREAS OF INTEREST
Area of Interest
Tenement
Warumpi (4)
NORTH ARUNTA
Barrow Creek
Reynolds Range
Walkeley
EL31723
EL31913
EL32095
EL32096
EL32097
EL32098
EL32099
EL32100
EL32101
EL32102
EL32103
EL8766
EL23880
EL23883
EL23884
EL23885
EL23886
EL25031
EL25033
EL25034
EL25035
EL25041
EL25042
EL25044
EL26825
EL28515
EL28727
EL29723
EL29724
EL29725
EL29896
EL30470
EL30507
EL30637
EL25030
EL25036
EL29819
EL29820
EL23655
EL23888
EL28083
EL26903
Group’s
Interest
30
30
30
30
30
30
30
30
30
30
30
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
100
100
100
100
100
100
100
0
0
0
0
80 (6)
100
100
0
Tenement
Status
Status Changes
During the Year
application
application
application
application
application
application
application
application
application
application
application
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
granted
application
application
application
application
granted
granted
granted
application
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
IGO Limited
Relinquished during the year
Withdrawn during the year
Withdrawn during the year
Withdrawn during the year
Withdrawn during the year
Withdrawn during the year
1)
2)
3)
4)
5)
6)
31
Farm-in and Joint Venture Agreement with Newmont Exploration Pty Ltd earning up to a 70% interest in the tenements.
Farm-in and Joint Venture Agreement with Newcrest Operations Ltd earning up to a 75% interest in the tenements.
Joint Venture with Altura Lithium Operations Pty Ltd.
Joint Venture with IGO Limited 70% / Prodigy Gold NL 30%.
Tenement is subject to a Joint Venture between with Castile Resources Pty Ltd (49%), IGO Limited (35.7%) and Prodigy Gold NL (15.3%).
Tenement is subject to a Joint Venture with Select Resources Pty Ltd. Prodigy Gold holds an 80% beneficial interest with a 60% interest
currently registered on title.
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
The Directors of Prodigy Gold NL present their report on the consolidated entity (Group), consisting of Prodigy Gold NL
and the entities it controlled at the end of, and during, the financial year ended 30 June 2020.
Mr Thomas McKeith
Non-Executive Chairman
Mr Matthew Briggs
Managing Director
Mr Brett Smith
Non-Executive Director
Mr Michael Stirzaker
Non-Executive Director
Directors have been in office since the start of the financial year to the date of this report.
Principal Activities
The principal activities of the Company during the year consisted of exploration and evaluation of mineral resources.
There was no significant change in the nature of the Company’s activities during the year.
Dividends
There were no dividends paid or declared during the year.
Operating Results
The consolidated loss for the Group after providing for income tax amounted to $5,620,204 (2019: loss of $5,004,727).
Financial Position
The net assets of the Group have increased by $5,883,159 from 30 June 2019 to $20,955,691 in 2020. The increase is
largely due to a capital raising undertaken during the year.
Significant Changes in the State of Affairs
In October 2019, the Company signed a strategic 10-year operator agreement with private company TRL Tanami over the
Company’s Old Pirate Project located in the Tanami Region of the Northern Territory. Other than as disclosed in this
Report, no additional significant changes in the state of affairs of the Company occurred during the financial year.
Matters Subsequent to the End of the Financial Year
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential impact
after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the State,
Territory and Commonwealth Governments as well as the Central Land Council. Such measures include, but are not
limited to, social distancing and quarantine requirements, travel restriction, land access restrictions, ability to undertake
land clearances and any economic stimulus that may be provided.
Subsequent to year-end 2,000,000 unlisted options vested and the Company issued 1,050,000 and cancelled 12,500,000
unlisted options. Additionally the Company agreed to issue 400,000 unlisted options to the Company’s Managing
Director, subject to shareholder approval at the next AGM (for details refer to Note 17).
Likely Developments
•
•
•
Continued regional exploration;
Further rationalisation of tenement holdings in the Northern Territory through divestment or joint venture; and
Systematic evaluation of high potential early stage targets in Western Australia.
Environmental Regulation
The Group’s operations are subject to standard environmental regulation under the laws of the Commonwealth of
Australia and the Northern Territory. The Group monitors its compliance with environmental regulations on an ongoing
basis. The Directors are not aware of any significant breaches during the period covered by this report.
32
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
Mr Thomas McKeith
BSc Hons (Geol), GDE (Mining), MBA, Fellow AusIMM
Status: Independent
Position: Non-Executive Chairman
Qualifications and Experience:
Mr McKeith is a resource company executive with over 30 years’ experience in various exploration, business
development, mine geology and executive leadership roles. He has led exploration teams to several significant
discoveries and concluded several significant business development transactions. Mr McKeith was formerly executive
vice president: Growth and International Projects for Gold Fields Ltd, where he was responsible for global exploration and
project development. He has also served as CEO of Troy Resources Ltd and held non-executive director roles at Sino Gold
Ltd and Avoca Resources. He is currently a non-executive director of Evolution Mining Ltd (since February 2014), non-
executive chairman of Genesis Minerals Limited (since November 2018), non-executive director of Arrow Minerals
Limited (since August 2019) and principal in various private resource investment companies.
Mr Matthew Briggs
BSc Hons (Geol), Member AusIMM, Member AICD
Status: Not independent
Position: Executive Director
Qualifications and Experience:
Mr Briggs has more than 20 years’ experience in Australia and internationally in various aspects of mine geology,
exploration, project management and strategic leadership in the gold industry. Matt graduated as a geologist from the
University of Queensland and worked at a number of mine sites in Western Australia. Since then he has worked
internationally on projects in Africa and headed Group Strategic Planning for Gold Fields Limited. Matt has been directly
involved or managed teams that have discovered several multi-million ounce gold deposits.
Mr Brett Smith
BEng Hons (Chem), MBA, MA
Status: Not independent
Position: Non-Executive Director
Qualifications and Experience:
Mr Smith has participated in the development and delivery of a number of mining and mineral processing projects
including coal, iron ore, base and precious metals. He has also managed engineering and construction companies in
Australia and internationally. Mr Smith has served on boards of both private and public mining and exploration
companies. He is currently executive director of Hong Kong listed Dragon Mining Limited (since February 2014), deputy
executive Chairman of Hong Kong listed APAC Resources Limited (since May 2016), executive director of Metals X Limited
(board member since December 2019), non-executive director of Tanami Gold NL (since November 2018) and non-
executive director of Elementos Limited (since January 2020). Overall, Mr Smith has over 30 years’ international
experience in the engineering, project development and organisational change management.
Mr Michael Stirzaker
BCom, CA
Status: Not independent
Position: Non-Executive Director
Qualifications and Experience:
Mr Stirzaker has over 30 years’ commercial experience, mainly in mining finance and mining investment with KPMG,
HSBC Group, Kleinwort Benson Limited, RFC Group Limited, Tennant Metals and Finders Resources. From 2010 to 2019,
Mr Stirzaker was a partner at the private equity mining fund manager, Pacific Road Capital. Mr Stirzaker is currently non-
executive director of Base Resources Limited and Firestone Diamonds PLC.
33
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
Ms Jutta Zimmermann
Dip AQF, Dip IT, GradDipACG, FGIA, FCIS
Position: Company Secretary
Qualifications and Experience:
Ms Zimmermann is an accountant (Australian AQF diploma level) with over 30 years’ of Australian and international
industry experience encompassing accounting, company secretarial, government and community liaison, business
development and corporate administration management. She holds a diploma in information technology (Australian
bachelor degree level) and a graduate diploma in applied corporate governance. Ms Zimmermann holds the position of
Chief Financial Officer and Company Secretary with the Company. She is a fellow of the Governance Institute of Australia
and is a Director of two of Prodigy Gold’s subsidiaries.
Directors’ Meetings
The Company had no Board committees during the financial year. The number of meetings of the Group’s Board of
Directors held during the year ended 30 June 2020, and the number of meetings attended by each Director were:
Directors
Mr T McKeith
Mr M Briggs
Mr B Smith
Mr M Stirzaker
Board Meetings
Eligible to Attend
Attended
7
7
7
7
7
7
7
7
Interests in Shares and Share Rights of the Company
At the date of this report, the interests of the Directors in the shares and share rights of the Group were as follows:
Directors
Mr T McKeith
Mr M Briggs
Mr B Smith
Mr M Stirzaker
Fully Paid Ordinary Shares
Unlisted Options
2,158,586
500,000
175,000
-
7,000,000
14,500,000
1,500,000
-
34
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
This Remuneration Report outlines the Director’s and the Group’s key management personnel remuneration
arrangements in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of
this report, key management personnel of the Group 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 Group.
Remuneration Principles
Remuneration levels are set with the objective of attracting and retaining appropriately qualified and experienced staff.
Remuneration packages are structured to recognise, encourage and reward improved performance and business growth,
balanced between short-term and long-term goals. Benchmarking is undertaken where considered appropriate to ensure
remuneration packages are competitively positioned in the market.
Non-Executive Director Remuneration
Non-Executive Directors’ fees are set by the Board within the maximum aggregate amount of fees approved by
shareholders at a general meeting. Non-Executive Directors are not entitled to retirement benefits other than statutory
superannuation or other statutory required benefits. The remuneration of Non-Executive Directors is fixed for each
individual Director taking into account market rates for comparable companies for time, commitment, responsibilities
and accountability.
The available Non-Executive Directors’ fees pool is currently $400,000. As at 30 June 2020 the Company utilised $94,310
(2019: $60,000) of the pool.
Performance evaluations of the Board are usually undertaken annually with a view to comparing the performance of the
Board and Directors against their relevant Charters and their interactions with and performance of management. A
review of the Board’s performance for the year was finalized during July 2020.
Key Management Personnel Remuneration including the Managing Director
The key management personnel remuneration framework has three components and the combination of these comprise
the key management personnel’s total remuneration:
•
•
•
Base salary and benefits
Short-term incentives at the Boards discretion
Long-term incentives at the Boards discretion
Base Salary and Benefits
Executive Directors, key management personnel and employees are offered a fixed base salary and benefits. Base salary
and benefits are usually reviewed every year to ensure the employee’s remuneration is competitive with the market.
Employment contracts do not guarantee increases in base salary and benefits. The Executive Directors, key management
personnel and employees receive the superannuation guarantee contribution required by the government, which was
9.5% during the reporting period, and do not receive any other retirement benefits. Other benefits include personal
accident (working directors) insurance and other fringe benefits. No remuneration consultants were engaged.
Short-Term Incentives
The objective of short-term incentives is to align the interests of Executive Directors, key management personnel and
employees with those of the shareholders through the payment of short-term incentives linked to pre-agreed targets.
The targets include, where appropriate meeting budget forecasts, occupational health and safety measures, relationship
management, exploration success, staff retention, compliance and formulating company strategies. Short-term
incentives are designed to incentivise and reward individual contribution to achieving overall performance. No
discretionary short-term incentive cash bonuses have been granted during the year.
35
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
Long-Term Incentives
All long-term and equity incentives must be linked to predetermined performance and/or continuity criteria. Long-term
incentives are designed to align Executive Directors, key management personnel and employee’s interest with the
Company’s longer term objectives of growth in market capitalisation, earnings per share, share performance compared to
peer companies, exploration and strategic success. The Board may exercise its discretion in relation to approving
incentives, including equity participation. The policy is designed to attract high calibre key management personnel and
reward them for performance. Key management personnel are also entitled to participate in employee share or option
arrangements. No discretionary long-term incentive cash bonuses have been granted during the year. Executive
management received options during the financial year with details provided in Note 15 and prior year options continued
to vest.
Performance Evaluation
There was no performance based cash remuneration paid during the year but the Company may in future grant, as part
of each Executive Director and key management personnel’s remuneration package, a performance-based component,
consisting of cash bonuses and/or incentives, including equity participation (refer to Note 15), linked to the achievement
of key performance indicators (KPIs) and taking into account experience, qualifications and length of service.
Company Performance
The following table shows the gross revenue and interest, losses and dividends for the last five years for the listed entity,
as well as the share price at the end of the respective financial years.
Revenue and interest
Net loss
Share price at year-end
Dividend paid
Key Management Personnel
2016
36,149,624
21,616,759
0.065
-
2017
180,138
2018
141,739
2019
168,037
2020
205,300
7,012,190
5,693,350
5,004,727
5,620,204
0.095
-
0.087
-
0.089
-
0.045
-
The following persons were key management personnel of the Group during the financial year:
Key Management Personnel
Position
Commencement of Position
Mr T McKeith
Mr M Briggs
Mr B Smith
Mr M Stirzaker
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
27 June 2016
3 October 2016
9 May 2016
3 December 2018
Ms J Zimmermann
CFO / Company Secretary
1 June 2005
36
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
Details of Remuneration
Details of compensation for key management personnel (“KMP”) and Directors of the Group are set out below:
Short-Term Employee Benefits
Cash Salary
and Fees
$
Cash Bonus
$
Annual
Leave 1)
$
Post-
Employ-
ment
Super-
annuation
$
Long-Term
Benefits
Long
Service
Leave 2)
$
Share-
based
Payments
Options 3)
$
Termina-
tion
Benefits
$
2020
Directors
Mr T McKeith
Mr M Briggs
Mr B Smith4)
Mr M Stirzaker4)
54,795
315,000
15,849
15,849
Total Directors
401,493
Other KMP
Jutta Zimmermann
220,000
Total Other
Total
220,000
621,493
-
-
-
-
-
-
-
-
-
5,205
-
53,660
9,903
25,000
5,073
151,517
-
-
1,306
1,306
-
-
16,921
16,921
9,903
32,817
5,073
239,019
6,705
6,705
20,900
20,900
3,543
3,543
-
-
16,608
53,717
8,616
239,019
1)
2)
3)
4)
Annual leave relates to movements in annual leave provisions during the year.
Long service leave relates to movements in long service leave provisions during the year.
These amounts are accounting accruals required under accounting standards and have not actually been paid during the year, nor do they
reflect the benefit (if any) that KMP may ultimately receive. The share-based payments are options expensed based on vesting conditions
(refer to Note 15 in the consolidated financial statements).
Cash Salary and Fees includes JobKeeper top-up payments.
Short-Term Employee Benefits
Cash Salary
and Fees
$
Cash Bonus
$
Annual
Leave 1)
$
Post-
Employ-
ment
Super-
annuation
$
Long-Term
Benefits
Long
Service
Leave 2)
$
Share-
based
Payments
Options 3)
$
Termina-
tion
Benefits
$
2019
Directors
Mr T McKeith
Mr M Briggs 4)
Mr B Smith
Mr M Stirzaker5)
Mr M Faul5)
54,795
315,000
-
-
-
Total Directors
369,795
Other KMP
J Zimmermann 4)
Total Other
Total
220,000
220,000
589,795
-
-
-
-
-
-
-
-
-
-
5,205
-
-
3,445
25,000
4,975
13,077
-
-
-
-
-
-
-
-
-
-
-
-
3,445
30,205
4,975
13,077
(1,675)
20,900
(1,675)
20,900
1,770
51,105
3,520
3,520
8,495
159
159
13,236
1)
2)
3)
4)
5)
37
Annual leave relates to movements in annual leave provisions during the year.
Long service leave relates to movements in long service leave provisions during the year.
These amounts are accounting accruals and have not actually been paid during the year.
Share-based payments are options expensed based on the vesting conditions (refer to Note 15 in the consolidated financial statements).
Mark Faul resigned on 30 November 2018 and Mike Stirzaker was appointed director on 3 December 2018.
Prodigy Gold Annual Report 2020
Proportion
of
Remune-
ration that
is at Risk
47.2%
29.9%
49.7%
49.7%
0%
Total
$
113,660
506,493
34,076
34,076
688,305
251,148
251,148
939,453
-
-
-
-
-
-
-
-
Proportion
of
Remune-
ration that
is at Risk
0%
3.6%
0%
0%
0%
0.1%
Total
$
60,000
361,497
-
-
-
421,497
242,904
242,904
664,401
-
-
-
-
-
-
-
-
-
DIRECTORS’ REPORT
Options and Shares Issued as Part of Remuneration
Options valued at $239,019 (2019: $13,236) were issued to KMP and prior year options continued to vest during the
financial year. These amounts are accounting accruals required under accounting standards and have not actually been
paid during the year, nor do they reflect the benefit (if any) that KMP may ultimately receive. For further detail refer to
Note 15.
Employment Contracts of Directors and Other Key Management Personnel
Remuneration and other terms of engagement for Non-Executive Directors are formalised in service agreements. The
agreement summarises the Board policies and terms, including compensation relevant to the office of Director.
The employment contracts of Executive Directors and Other KMP stipulate a range of one to four month resignation
notification periods. The Company may terminate an employment contract without cause by providing a range of one to
three-month written notice or making payment in lieu of notice based on the individual’s annual salary component. In
the instance of serious misconduct the Company can terminate employment at any time. Other material provisions of the
agreements relating to remuneration are set out below.
Non-Executive Directors
The base fees for the Non-Executive Chairman is $60,000 per year. The base fee for shareholder nominee Directors was
resolved to be $30,000 per year commencing on 1 January 2020, with a zero base fee for the period to 31 December
2019. The Commonwealth Government introduced the JobKeeper payment of $1,500 per employee per fortnight which
led to an increased payment to the shareholder nominee Directors as required by JobKeeper legislation.
Mr M Briggs, Managing Director
•
•
•
Term of agreement – 3 year contract commencing 3 October 2019;
Base salary, inclusive of superannuation, $340,000 per year;
Payment of a termination benefit on early termination by the Company, other than for gross misconduct, equals
3 month salary and, in the event of a takeover, equals 9 month salary;
• Notice period varies between no notice if mutually agreed and three month notice by the Company or the
executive without reason.
Ms J Zimmermann, CFO and Company Secretary
•
•
•
Term of agreement – 2 year contract commencing 1 July 2012, contract extended automatically;
Base salary, exclusive of superannuation, $220,000 per year;
Payment of a termination benefit on early termination by the Company, other than for gross misconduct, equals
6 month salary and, in the event of a takeover, equals 9 month salary;
• Notice period varies between no notice if mutually agreed and three month notice by the Company and 4
month notice by the executive without reason.
Additional Disclosure Relating to Key Management Personnel
Share-Based Payments
Fair values at grant date are independently determined using a Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the
option.
These amounts are accounting accruals required under accounting standards and have not actually been paid during the
year, nor do they reflect the benefit (if any) that KMP may ultimately receive.
Refer to Note 15 of the financial statements for more information on options provided as part of remuneration to the
Directors and key management personnel.
38
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
Shareholding
No shares were issued by the Company to KMP as remuneration during the financial year. Details of shares held directly,
indirectly or beneficially by Directors and KMP and their related parties are as follows:
Name
Mr T McKeith
Mr M Briggs
Mr B Smith 1)
Mr M Stirzaker 2)
Ms J Zimmermann
Balance at the
Start of the Year
Received as Part
of Remuneration
Additions
Disposals/Other
Balance at the
End of the Year
2,158,586
500,000
175,000
-
2,001,145
4,834,731
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,158,586
500,000
175,000
-
2,001,145
4,834,731
1)
2)
Mr Smith is a nominee of APAC Resources Limited who are a substantial shareholder of Prodigy Gold.
Mr Stirzaker is a nominee of Pacific Road Capital Management who are a substantial shareholder of Prodigy Gold.
Option Holding
Directors and other KMP of the Group, including their personally related parties, hold options over ordinary shares in the
Company.
Name
Mr T McKeith1)
Mr M Briggs
Mr B Smith1)
Mr M Stirzaker1)
Ms J Zimmermann
Balance at the
Start of the Year
Received as Part
of Remuneration
Additions
Disposals/Other
Balance at the
End of the Year
7,000,000
11,000,000
1,500,000
-
1,550,000
21,050,000
-
15,000,000
-
-
-
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
7,000,000
26,000,000
1,500,000
-
1,550,000
36,050,000
1)
Non-Executive Director options (10 Million) were agreed during the financial year, however were not issued and are pending shareholder
approval.
Loans to Directors and Other Key Management Personnel
No loans to Directors and other key management personnel of the Group were provided in 2020 (2019: NIL).
Other Transactions with Directors and Other Key Management Personnel
The terms and conditions of transactions with Directors, other key management personnel and their related parties and
entities were no more favourable than those available, or which might reasonably be expected to be available, on similar
transactions with non-Director related parties and entities on an arm’s length basis.
This concludes the Remuneration Report, which has been audited.
39
Prodigy Gold Annual Report 2020
DIRECTORS’ REPORT
Insurance of Officers and Indemnities
During the financial year, the Company paid an insurance premium in respect of a contract insuring the Directors and
executive officers of the Company and its related entities against a liability incurred as such a Director or executive officer
to the extent permitted by the Corporations Law. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
The Company has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify an
officer of the Company or any of its related entities against a liability incurred by such an officer.
Proceeding on Behalf of the Company
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to 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 part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237
of the Corporations Act 2001.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor's expertise and experience with the Company and/or the Group are important.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person
or firm on behalf of the auditor), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. Payments for non-audit services were $19,593 (2019: $28,181) and are detailed in Note 13.
The Directors are satisfied that the provision of non-audit services by the auditor, as set out above, did not compromise
the auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
Auditor’s Independence Declaration
A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out
on page 42.
Auditor
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 and the Corporation Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the Directors
MATTHEW BRIGGS
Managing Director
Dated this 25th day of August 2020
Perth, Western Australia
40
Prodigy Gold Annual Report 2020
CORPORATE GOVERNANCE STATEMENT
In February 2019, the ASX Corporate Governance Council released a fourth edition of the ASX Corporate Governance
Council’s Principles and Recommendations (ASX Principles) which takes effect for an entity’s first full financial year
commencing on or after 1 January 2020. The Company has undergone a full review of its corporate governance
policies during the financial year ending 30 June 2020 and amended its disclosures effective 1 July 2020.
The Group’s Corporate Governance Statement for the year ended 30 June 2020 (which reports against these ASX
Principles) may be accessed from the Company’s website at www.prodigygold.com.au/about-prodigy-
gold/corporate-governance.
The Group’s ESG (Environmental Social Governance) Statement for the year ended 30 June 2020 may also be
accessed from the Company’s website at www.prodigygold.com.au/about-prodigy-gold/corporate-governance.
41
Prodigy Gold Annual Report 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF PRODIGY GOLD NL
As lead auditor of Prodigy Gold NL for the year ended 30 June 2020, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Prodigy Gold NL and the entities it controlled during the period.
Glyn O’Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 25 August 2020
42
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
ANNUAL FINANCIAL REPORT
The financial statements of Prodigy Gold NL for the year ended 30 June 2020 were authorised for issue in accordance
with a resolution of the Directors on 25 August 2020 and cover the consolidated entity consisting of Prodigy Gold NL and
its subsidiaries as required by the Corporations Act 2001. Separate financial statements for Prodigy Gold NL as an
individual entity are no longer presented as a consequence of a change to the Corporations Act 2001. However, limited
financial information for Prodigy Gold NL as an individual entity is included in Note 20.
The financial statements are presented in Australian currency.
Prodigy Gold NL is a company limited by shares, incorporated and domiciled in Australia whose shares are publicly traded
on the Australian Securities Exchange.
The address of the registered office and principal place of business is:
Prodigy Gold NL
Level 1, 141 Broadway
NEDLANDS WA 6009
A description of the nature of the Group’s operations and its principal activities is included in the review of operations
and activities on pages 6 to 28 and in the Directors’ Report on pages 32 to 40, both of which are not part of this financial
statement.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases,
financial reports and other information are available on our website: www.prodigygold.com.au
43
Prodigy Gold Annual Report 2020
ANNUAL FINANCIAL REPORT
CONTENTS
Financial 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
Independent Auditor’s Report to the Members
Additional Information for Public Listed Companies
43
45
46
47
48
49
67
68
72
44
Prodigy Gold Annual Report 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated
Notes
2020
$
2019
$
2
3
3
3
3
7
4(a)
Interest
Other income
Administrative expenses
Employee and Directors benefits expenses
Share-based payments
Depreciation expenses
Other expenses
Exploration expenses
Impairment of property, plant and equipment
Impairment of capitalised exploration and evaluation expenditure
Loss before income tax expense
Income tax expense
Loss for the year
Loss attributable to members of Prodigy Gold NL
Other comprehensive income
Total other comprehensive income for the year
Total comprehensive loss for the year
Total comprehensive loss for the year attributable
to members of Prodigy Gold NL
205,300
550,944
168,037
1,650,410
(567,317)
(239,176)
-
(412,605)
(5,157,350)
-
-
(530,559)
(13,256)
-
(455,041)
(5,703,721)
(15,670)
(104,927)
(5,620,204)
(5,004,727)
-
(5,620,204)
(5,620,204)
-
(5,004,727)
(5,004,727)
-
-
-
-
(5,620,204)
(5,004,727)
(5,620,204)
(5,004,727)
Basic and diluted loss per share attributable to the ordinary equity holders
of the Company
Basic and diluted loss per share (cents per share)
19
(1.00)
(1.09)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
45
Prodigy Gold Annual Report 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Term deposits
Property, plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Employee benefits
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Employee benefits
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
Notes
2020
$
2019
$
5
6
6
7
8
9
10,699,944
6,356,062
248,865
45,980
166,673
907,803
143,525
110,010
11,161,462
7,517,400
2,427,490
48,722
9,943,824
12,420,036
23,581,498
683,649
197,543
881,192
58,385
1,686,230
1,744,615
2,625,807
2,427,490
84,256
9,943,824
12,455,570
19,972,970
2,921,645
234,178
3,155,823
58,385
1,686,230
1,744,615
4,900,438
20,955,691
15,072,532
10
11(a)
187,262,068
176,027,723
3,462,495
3,336,136
(169,768,872)
(164,291,327)
20,955,691
15,072,532
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
46
Prodigy Gold Annual Report 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Contribution from joint venturers
Expense re-imbursements from JV Partners
Payments to suppliers and employees (excludes payments for exploration)
Interest received
Government Grants
Payments for exploration
Payments for JV Projects
Net cash (outflow) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Net cash inflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Placement / Refund of security deposits (cash-back)
Share issue costs
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Consolidated
Notes
2020
$
2019
$
250,000
2,215,044
(1,158,060)
192,993
218,117
1,500,000
1,944,348
(810,160)
177,270
-
(4,423,800)
(4,446,423)
(4,187,939)
(6,893,645)
(1,821,044)
(3,456,009)
3,182
3,182
-
-
12,000,000
3,692,155
-
(765,655)
11,234,345
4,343,882
6,356,062
10,699,944
51,087
(67,823)
3,675,419
219,410
6,136,652
6,356,062
18
5
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
47
Prodigy Gold Annual Report 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Contributed
Equity
$
Share-based Payment
Reserve
$
Accumulated
Losses
$
Notes
Total
$
172,403,391
3,310,340
(159,286,600)
16,427,131
-
-
-
10(a)
10(a)
15
3,692,155
(67,823)
-
3,624,332
176,027,723
-
-
-
10(a)
10(a)
15
12,000,000
(765,655)
-
-
11,234,345
187,262,068
-
-
-
-
-
25,796
25,796
(5,004,727)
(5,004,727)
-
-
(5,004,727)
(5,004,727)
-
-
-
-
3,692,155
(67,823)
25,796
3,650,128
3,336,136
(164,291,327)
15,072,532
-
-
-
-
-
(142,659)
269,018
126,359
(5,620,204)
(5,620,204)
-
-
(5,620,204)
(5,620,204)
-
-
142,659
12,000,000
(765,655)
-
-
269,018
142,659
11,503,363
3,462,495
(169,768,872)
20,955,691
Balance at 1 July 2018
Comprehensive income
for the year
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transaction with owners in their
capacity as owners:
Shares Issued
Transaction costs
Share-based payments
Total transactions with owners
Balance at 30 June 2019
Comprehensive income
for the year
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transaction with owners in their
capacity as owners:
Shares issued
Transaction cost
Share-based payments reversal
Share-based payments
Total transactions with owners
Balance at 30 June 2020
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
48
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
CONTENTS OF THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Segment Information
2. Other Income
3.
4.
5.
6.
7.
8.
9.
Expenses
Income Tax Expense
Cash and Cash Equivalents
Term Deposits and Other Receivables
Exploration, Evaluation and Development Expenditure
Trade and Other Payables
Provisions
10. Contributed Equity
11. Reserves
12. Financial Risk Management
13. Auditor’s Remuneration
14. Contingencies
15. Share-Based Payments
16. Related Party Transactions
17. Subsequent Events
18. Cash Flow Information
19. Loss per Share
20. Parent Entity Information
21. Subsidiaries
22. Company Details
23. Summary of Significant Accounting Policies
Page
50
50
50
51
52
53
53
54
54
55
56
57
59
59
59
62
63
63
64
64
65
65
65
49
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
SEGMENT INFORMATION
Commencing 1 July 2018 the full Board of Directors, who are the chief operating decision makers, identified one operating segment
reportable as exploration for the Group.
NOTE 2:
OTHER INCOME
Contribution from joint ventures
Expense re-imbursements from JV Partners
Sale of Fixed Assets
Government Grants
Other Income
NOTE 3:
EXPENSES
Employee and Directors’ benefits expense
Less: Amounts included in exploration expenses
Share-based payment expense
Less: Amounts included in exploration expenses
Depreciation expense
Less: Amounts included in exploration expenses
Allowance for expected credit loss
Less: Amounts included in exploration expenses
Exploration expenses:
Employee benefit expense
Share-based payment expense
Depreciation expense
Allowance for expected credit loss
Other exploration expenses
Consolidated
2020
$
250,000
13,533
2,744
251,349
33,318
550,944
2019
$
1,500,000
64,567
-
85,843
-
1,650,410
Consolidated
2020
$
2019
$
1,913,756
2,028,851
(1,346,439)
(1,498,292)
567,317
530,559
269,018
(29,842)
239,176
35,096
(35,096)
-
404,802
(404,802)
-
25,796
(12,540)
13,256
55,250
(55,250)
-
-
-
-
1,346,439
1,498,292
29,842
35,096
404,802
3,341,171
5,157,350
12,540
55,250
-
4,137,639
5,703,721
50
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4:
INCOME TAX EXPENSE
a)
Income tax expense
Current tax
Deferred tax
b)
Reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Non-assessable income
Share-based payments
Other permanent differences
Deferred tax assets not brought to account
Income tax expense
The applicable weighted average effective tax rates
Consolidated
2020
$
2019
$
-
-
-
-
-
-
(5,620,204)
(5,004,727)
(1,545,556)
(1,376,300)
(37,596)
65,774
327
(23,607)
7,094
483
(1,517,051)
(1,392,330)
1,517,051
1,392,330
-
0%
-
0%
The Group made an election to form a tax-consolidated group from 1 July 2003. As a consequence, the transactions between the
member entities will be ignored.
c)
Deferred tax liability
Exploration and evaluation expenditure
Temporary difference
Off-set of deferred tax assets
Net deferred tax liability recognised
d)
Unrecognised deferred tax assets arising on timing
Tax losses
Temporary differences
Expenses taken into equity
Off-set of deferred tax liabilities
Net deferred tax assets not brought to account
2,444,000
2,683,542
57,817
71,096
2,501,817
2,754,638
(2,501,817)
(2,754,638)
-
-
37,151,988
40,439,731
1,970,830
164,863
2,104,479
17,844
39,287,681
42,562,054
(2,501,817)
(2,754,638)
36,785,864
39,807,416
No deferred tax assets have been recognised as it is not probable that future tax profits will be available to offset these balances.
51
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4:
INCOME TAX EXPENSE cont’d
Accounting Policy
Income taxes
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and
are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are not brought to account unless realisation of the asset is probable. Deferred tax assets in relation to tax losses are
not brought to account unless it is probable that the benefit will be utilised.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Tax consolidation legislation
Prodigy Gold NL and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. The Parent
Entity, Prodigy Gold NL, and the controlled entities in the tax consolidated group account for their own current and deferred tax
amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its
own right.
Accounting estimates and judgements
Income taxes
The Group is subject to income taxes in Australia. There are many transactions and calculations undertaken during the ordinary course
of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s
understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded,
such differences will impact the current and deferred tax provisions in the period in which such determination is made.
NOTE 5:
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term bank deposits
Consolidated
2020
$
2019
$
1,399,944
9,300,000
10,699,944
4,106,062
2,250,000
6,356,062
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of six months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
52
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6:
TERM DEPOSITS AND OTHER RECEIVABLES
CURRENT
Other receivables (Note 6(a))
Provisions for Allowance for expected credit loss (Note 6(a))
NON-CURRENT
Bond term deposit and DPIR Cash Bonds
(a)
Other receivables
Consolidated
2020
$
2019
$
653,667
(404,802)
248,865
907,803
-
907,803
2,427,490
2,427,490
2,427,490
2,427,490
These amounts generally arise from transactions outside the usual operating activities of the Group and are predominantly receivables
from joint venture partners for expense re-imbursements.
Accounting Policy
The Group measures other receivables at amortised cost, less any allowance for expected credit losses.
Accounting estimates and judgements
The Group’s other receivables and financial assets were subject an assessment under AASB 9 as at 30 June 2020. The assessment took
into account the likelihood of an impairment event occurring in the future for Prodigy Gold’s debtors and other debtor. This assumption
includes the assessment of the ability of other debtors to pay. The amounts contain some past due assets that have been provided for
and a total of $404,802 (2019: $0) of likely future credit losses have been recognised for the year ended 30 June 2020.
NOTE 7:
EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
Carrying amount at the beginning of reporting period
Less: Impairment expense
Carrying amount at the end of reporting period
Accounting Policy
Consolidated
2020
$
2019
$
9,943,824
10,048,751
-
(104,927)
9,943,824
9,943,824
Acquired exploration and evaluation assets are carried at acquisition value less any subsequent impairment. All exploration and
evaluation expenditure, subsequent to initial acquisition, is expensed until the Directors conclude that the technical feasibility and
commercial viability of extracting a Mineral Resource are demonstrable and that future economic benefits are probable. In making this
determination, the Directors consider the extent of exploration, the proximity to existing mine or development properties as well as the
degree of confidence in the mineral resource.
No amortisation is charged during the exploration and evaluation phase. Amortisation is charged upon commencement of commercial
production. Exploration and evaluation assets are tested for impairment triggers annually and if there is an indicator of impairment
under AASB 6 Exploration for and Evaluation of Mineral Resources, the area of interest is tested for impairment under AASB 136
Impairment of Assets. Upon establishment of commercially viable mineral resources, exploration and evaluation assets are tested for
impairment.
53
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7:
EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE cont’d
Accounting estimates and judgements
The Group undertook an assessment for impairment triggers of its exploration assets. No tenements with an assigned value were
surrendered and no impairment was recognised. The balances of the exploration assets are considered to be recoverable on the basis
that the Group holds rights to tenure and has undertaken, and will continue to undertake, significant exploration on the exploration assets.
NOTE 8:
TRADE AND OTHER PAYABLES
CURRENT LIABILITIES (Unsecured)
Trade payables
Sundry payables and accrued expenses
Consolidated
2020
$
2019
$
526,661
156,988
683,649
1,846,559
1,075,086
2,921,645
Information about the Group’s exposure to liquidity risk is provided in Note 12.
Accounting Policy
These amounts represent unpaid liabilities for goods and services provided to the Group prior to the end of financial year and liabilities
to government departments offset by government grants for COVID-19 measures. Trade and other payables are recognised initially at fair
value and subsequently at amortised cost.
NOTE 9:
PROVISIONS
NON-CURRENT
Exploration and mine restoration
Movement in provisions
Consolidated
2020
$
2019
$
1,686,230
1,686,230
1,686,230
1,686,230
Movement in provisions during the current financial year, other than employee benefits, are set out below:
Opening balance
Additional provisions
Amounts reversed
Closing balance
Consolidated
2020
$
2019
$
1,686,230
1,688,251
-
-
46,900
(48,921)
1,686,230
1,686,230
54
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9:
PROVISIONS cont’d
Accounting Policy
Long-term environmental obligations are based on the Group's environmental management plans, in compliance with current
environmental and regulatory requirements. Full provision is made based on the value of the estimated cost of restoring the
environmental disturbance that has occurred up to the reporting date. The restoration provision relates to exploration, evaluation and
development expenditure and rehabilitation relating to the mining lease.
The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other
circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets.
Accounting estimates and judgements
Rehabilitation obligation
The Group estimates the future rehabilitation costs of the site and exploration locations taking into consideration facts and circumstances
available at statement of financial position date. A provision has been recognised for the cost to be incurred for the restoration of mine
and exploration sites based on the estimated cost. The estimated cost is determined to be the equivalent to the bonds provided to the
relevant government departments, reduced by restoration work completed and then increased by a correction factor. The bonds provided
are calculated by the government by allocating rehabilitation cost to activities proposed in a mine management plan submitted to the
department. Restoration work is completed on an ongoing basis.
NOTE 10:
CONTRIBUTED EQUITY
(a)
Ordinary Shares
Details
Opening balance
Share placement
Date
Number of Shares
Issue Price
$
Value
$
1 July 2018
435,601,334
172,403,391
14 December 2018
45,026,272
0.082
3,692,155
Transaction costs relating to share issues
Closing balance
30 June 2019
480,627,606
(67,823)
176,027,723
Share placement
29 August 2019
100,000,000
0.12
12,000,000
Transaction costs relating to share issues
Closing balance
30 June 2020
580,627,606
(765,655)
187,262,068
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a
limited amount of authorised capital.
(b)
Options
The number of unlisted options of the Company as at 30 June 2020 is 39,150,000 (2019: 26,325,000). For further details refer to Note 15.
55
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10:
CONTRIBUTED EQUITY cont’d
Accounting Policy
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 for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
If the entity re-acquires its own equity instruments, for example as the result of a share buy-back, those instruments are deducted from
equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including
any directly attributable incremental costs (net of income taxes) is recognised directly in equity.
NOTE 11:
RESERVES
(a)
Reserves
Share-based payment reserve
Movements in reserves
Balance at 1 July 2018
Share-based payments expense
Balance at 30 June 2019
Share-based payments expired and re-valued1)
Share-based payments expense (refer to Note 15)
Balance at 30 June 2020
Consolidated
2020
$
2019
$
3,462,495
3,462,495
3,336,136
3,336,136
Share-based
payment reserve
$
3,310,340
25,796
3,336,136
(142,659)
269,018
3,462,495
1)
On 28 June 2019, during the previous financial year, the Group had granted 2,325,000 Zepos as an equity incentive to employees of the Company, 1,675,000 of these Zepos expired during the financial year and
a previously recognised amount of $130 was recycled through retained earnings.
(b)
Nature and purpose of Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of options issued as consideration for services provided. These
amounts are accounting accruals required under accounting standards and have not actually been paid during the year, nor do they
reflect the benefit (if any) that may ultimately be received.
Refer to Note 15 to the financial statements for more information on options provided as part of remuneration to the Directors, key
management personnel and employees.
56
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12:
FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The
Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the financial performance of the Group.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk
management is addressed within an evaluative process at Board meetings.
Market Risk - Interest rate risk
Interest rate risk for the Group is considered to be minimal. The Group had no interest attracting debts at 30 June 2020 and assets are
managed with a mixture of short term and at call investments. All other receivables are non-interest bearing.
The Group’s exposure to interest rate risk relates primarily to the Group’s cash and cash equivalents as detailed in the table below. A
sensitivity analysis has been determined based on the exposure to interest rates at reporting date with the stipulated change taking
place at the beginning of the financial year and held constant throughout the reporting period. A 100 basis point increase or decrease is
used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the
possible change in interest rates.
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in
market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:
Weighted
Average
Effective
Interest
Rate %
Floating
Interest Rate
$
Fixed Interest Rate Maturing
< 1 year
$
1 - 5 year
$
> 5 years
$
Non-Interest
Bearing
$
Total
$
30 June 2020
Financial Assets:
Cash and bonds
Receivables
1.44%
1,399,944
9,300,000
-
-
Total financial assets
1,399,944
9,300,000
Financial Liabilities:
Payables
Total financial liabilities
30 June 2019
Financial Assets:
Cash and bonds
Receivables
-
-
-
-
2.10%
4,106,062
2,250,000
-
-
Total financial assets
4,106,062
2,250,000
Financial Liabilities:
Payables
Total financial liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,699,944
248,865
248,865
248,865
10,948,809
683,649
683,649
683,649
683,649
-
6,356,062
907,803
907,803
907,803
7,263,865
2,921,645
2,921,645
2,921,645
2,921,645
Based on the financial instruments held at 30 June 2020, should the interest rate weaken/strengthen by 100 basis points against the
effective interest rate with all other variables held constant, post-tax loss for the year would have been $106,999 higher/$106,999 lower
(2019: $63,561 higher/$63,561 lower).
57
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12:
FINANCIAL RISK MANAGEMENT cont’d
Credit Risk
Credit risk is managed on a Group basis. Credit risk is a risk of financial loss if the Group’s counterparties are failing to discharge their
obligation in respect to the Group’s financial instruments held in those counterparties. Credit risk mainly arises from cash, cash
equivalents, deposits with banks and receivables. The Group deposits its fund only with prudent banks with the minimum rating of “A”,
and the management believes they are fully recoverable from the banks when due. The Group has provided for a total of $404,802
(2019: $0) for past due receivables past due (see Note 6 for details).
Credit risk further arises in relation to financial guarantees given to certain parties (see Note 14 for details). The maximum exposure to
credit risk at the reporting date is the carrying amount of the financial assets as summarised in the table below.
Cash at bank
Bonds term deposit
Receivables
Bank guarantees
Liquidity Risk
Consolidated
2020
$
2019
$
10,699,944
2,427,490
248,865
2,427,490
6,356,062
2,427,490
907,803
2,427,490
The Group has prudent liquidity risk management which includes maintaining sufficient funds to meet operational and exploration
expenditure when they are due for payment, and the availability of funding through an adequate amount of a committed fund sources.
The Group and Parent Entity manage liquidity risk by continuously monitoring forecasts and actual cash flows.
The Directors of the Group place high importance on capital raising strategies and investor relations. Strategies pursued include road
shows, company presentation to fund managers and sophisticated investors and consideration of strategic partnerships.
Maturities of financial liabilities
< 6 months
$
6 - 12
months
$
1 - 2 years
$
2 - 5 years
$
> 5 years
$
Total
Contractual
Cash Flows
$
Carrying
Amount
$
30 June 2020
Non-derivatives
Non-interest bearing
683,649
Interest bearing
-
Total non-
derivatives
30 June 2019
Non-derivatives
683,649
Non-interest bearing
2,921,645
Interest bearing
-
Total non-
derivatives
2,921,645
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
683,649
683,649
-
-
683,649
683,649
2,921,645
2,921,645
-
-
2,921,645
2,921,645
58
Prodigy Gold Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12:
FINANCIAL RISK MANAGEMENT cont’d
The table above analyses the Group’s and the Parent Entity’s financial liabilities into relevant maturity periods based on the remaining
period at balance date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash
flows.
NOTE 13:
AUDITOR’S REMUNERATION
a)
Audit services
BDO
Total remuneration of audit services
b)
Non-audit services
BDO – Tax compliance services
Total remuneration of non-audit services
NOTE 14:
CONTINGENCIES
Environmental
Consolidated
2020
$
2019
$
32,490
32,490
19,593
19,593
32,362
32,362
28,181
28,181
The Group provides for all known environmental liabilities. While the Directors believe that, based upon current information, its current
provisions for the environmental rehabilitation are adequate, there can be no assurance that material new provisions will not be
required as a result of new information or regulatory requirements with respect to known sites or identification of new remedial
obligations at other sites.
Bank guarantees totaling $2,275,504 (2019: $2,275,504) have been provided. Term deposits of $2,275,504 (2019: $2,275,504) and a
cash deposit of $46,900 (2019: 46,900) with the Department of Primary Industry and Resources secure these guarantees. Per Note 9 a
restoration provision of $1,686,230 (2019: $1,686,230) has been recognised for all known required restoration costs.
NOTE 15:
SHARE-BASED PAYMENTS
Zero exercise price options (“Zepos”)
During the reporting period ended 30 June 2020, the Group granted 15,000,000 Zepos as an equity incentive to Matt Briggs, which were
issued on 29 November 2019 following approval by shareholders at the AGM.
The final number of Zepos vesting is subject to KPI’s and Company performance criteria.
The performance conditions attached to the Tranche 1 STI’s, are all subject to non-market conditions. The STI’s operate as follows:
•
•
1,250,000 Tranche 1A Zepos shall vest if Mr Briggs achieves a Board supported acquisition or project divestment between 1
July 2019 and 1 July 2020 (as assessed by the Board), as reduced by the EHS Multiplier; and
1,250,000 Tranche 1B Zepos shall vest if Mr Briggs delivers a budgeted work program between 1 July 2019 and 1 July 2020
(as assessed by the Board), as reduced by the EHS Multiplier.
The performance conditions attached to the Tranche 2 LTI’s and Tranche 3 LTI’s means the achievement of KPIs, comprising the
discovery and definition of a substantial new deposit of >1Moz JORC Resource, category inferred or better, within an optimised design
and having an average cost of production of
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