Limited
And Controlled Entities
ABN: 49 623 130 987
ANNUAL REPORT
For the Year Ended 30 June 2020
CONTENTS
CORPORATE DIRECTORY
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
1
2
23
24
25
26
27
28
29
51
52
56
Rafaella Resources Limited and Controlled Entities
CORPORATE DIRECTORY
DIRECTORS
Peter Hatfull
Non-Executive Chairman
Steven Turner
Managing Director
Robert Wrixon
Executive Director
Non-Executive Director
Ashley Hood
Royston Denysschen Non-Executive Director
SECRETARY
Amanda Wilton-Heald
REGISTERED OFFICE
Level 8
175 Eagle Street
Brisbane QLD 4000
BUSINESS OFFICE
Level 11, London House
216 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9481 0389
Facsimile: +61 8 9463 6103
WEBSITE & EMAIL
www.rafaellaresources.com.au
info@rafaellaresources.com.au
SHARE REGISTRY
Automic Registry Services Pty Ltd
Level 2
267 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9324 2099
AUDITORS
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
STOCK EXCHANGE LISTING
Australian Securities Exchange
ASX Code: RFR; RFRO
Rafaella Resources Limited and Controlled Entities
1
DIRECTORS’ REPORT
Your Directors submit the financial report of the Group for the year ended 30 June 2019.
DIRECTORS
The names of Directors who held office during or since the end of the year:
Name
Peter Hatfull
Graham Durtanovich
Steven Turner
Robert Wrixon
Ashley Hood
Royston Denysschen
PRINCIPAL ACTIVITIES
Title
Independent Non-Executive Chairman (changed from Independent
Non-Executive Director on 27 August 2019)
Independent Non-Executive Chairman (resigned on 27 August 2019)
Managing Director (appointed 27 August 2019)
Executive Director (appointed 27 August 2019)
Independent Non-Executive Director (changed from Executive
Technical Director on 27 August 2019)
Non-Independent Non-Executive Director (appointed 19 May 2020)
The principal activity of the Group is exploration for tungsten and tin in Spain and gold, cobalt and
copper in Canada.
REVIEW OF RESULTS
The loss after tax for the year ended 30 June 2020 was $2,382,017 (2019: $1,080,737).
The earnings of the Group for the years since incorporation (incorporation date being 29
November 2017) are summarised below:
Revenue
EBITDA
EBIT
Loss after income tax
30 June 2020
$
66,305
(2,358,842)
(2,379,493)
(2,382,017)
30 June 2019
$
57,811
(1,080,737)
(1,080,737)
(1,080,737)
30 June 2018
$
-
(271,353)
(271,353)
(271,353)
The factors that are considered to affect total shareholders return are summarised below:
Share price at financial year end
30 June 2020
$
0.074
30 June 2019
$
0.165
30 June 2018
$
N/A
Company Focus and Mission
Rafaella was established to explore and develop high-quality assets worldwide. In FY20 the
Company’s key focus was on fast-tracking its wholly-owned Santa Comba Project in Spain,
targeting cash flows in 2021. Post FY20, the Company looked to expand its portfolio, entering
into a conditional agreement to acquire a package of high-grade nickel-copper-PGM sulphide
projects in Quebec, Canada.
Rafaella Resources Limited and Controlled Entities
2
DIRECTORS’ REPORT continued
PROJECTS
Santa Comba Project [Spain]
In July 2019, Rafaella announced the proposed acquisition of the Santa Comba Project, subject to
due diligence and shareholder approval. The following month, the acquisition was approved and
the Company conducted a placement to support the development of the project.
Located in a historically productive tungsten and tin province and close to deep-water ports, the
Santa Comba Project is permitted for underground mining and partially permitted for open pit
mining, with a pre-existing JORC (2012) Mineral Resource Estimate in both areas. The recently
discovered large, near-surface resource on the property, amenable to open pit mining, remained
mostly undrilled. The Project benefits from a 5-year offer of offtake from a leading global
German-based consumer, H.C Stark Tungsten GmbH (‘HC Stark’). Furthermore, the Company
secured the strategic investment of Transamine Trading (‘Transamine’), the world’s oldest
privately held commodity trader based out of Geneva. Transamine also agreed to provide
logistical support and offtake for 100% of the tungsten and tin concentrate over a 3-year period,
greatly assisting the Company in its early commissioning period. The tungsten offtake is to be
structured as a back to back trade through to an end user, such as H.C. Stark. In May the
relationship between Rafaella and Transmine was further strengthen when Transamine
representative Royston Denysschen joined the Board.
Identified by the UK, Japan, the US and Europe as a critical raw material, tungsten is a specialty
metal seeing renewed investment amongst investors. It has significant commercial, industrial and
military applications and is seen as having significant demand and pricing upside.
Following the successful capital raising and formal completion of the acquisition, Rafaella moved
swiftly to commence a feasibility study, appointing a Feasibility Study Manager and engaging
Tomra Sorting GmbH to conduct ore sorting test-work and Grinding Solutions of the UK to
undertake metallurgical test work.
In September 2019, Rafaella appointed Geonor Sondeos y Peforaciones, S.L. (‘Geonor’), a local
drilling contractor to conduct its diamond drilling programme. The Company then also engaged
Sondeos y Peforaciones Industriales del Bierzo, S.A (‘SPI’), another local contractor to complete a
reverse circulation drilling programme. The purpose of the drilling campaign was to better define
and upgrade the existing Inferred Resource, such that an updated resource model could be fed in
to a mine plan as part of a feasibility study.
The drilling campaign concluded on 5 March, 2020 with 65 holes and 8,825m drilled. An updated
Mineral Resource Estimate was released on 30 June, 2020 showing a 103% increase in near
surface mineralisation to 10.4m tonnes of ore with 58% of the near surface resource classified as
either Measured or Indicated. The underground Inferred Resource remains unchanged at 234kt.
Total tungsten trioxide (WO3) contained within the Resource now stands at 18,530t as well as
1,630t of tin (Sn).
Rafaella Resources Limited and Controlled Entities
3
DIRECTORS’ REPORT continued
The other key activity underway through FY20 has been the feasibility study for an open pit
development at Santa Comba. The open pit will support the partial recommissioning of the
underground operation that previously operated in the period 1980 to 1985 producing clean
concentrate with 66% contained WO3. Initial ore-sorting and metallurgical test work has been
positive, and the Company is now in the final stages of completing the process flow sheet. Once
the feasibility study in completed, the Company intends to release the findings to the market and
raise development capital to fast track the Project construction and commissioning through to
first sales in 2021.
McCleery Project [Canada]
The McCleery Project is located within the Yukon Territory, Canada. The Project is approximately
170km southeast of Whitehorse, the territorial capital of the Yukon. Teslin, the nearest town,
with a population of 2,000 is approximately 40km southwest of the Project.
Rafaella undertook a number of activities in FY19 that culminated in the obtaining of final
modelling results from a Versatile Time Domain Electromagnetic (VTEM) survey of the Project.
In May 2020, Rafaella announced that it was selected to receive government funding from the
Yukon Mineral Exploration Program (YMEP) for exploration of McCleery of up to 60% of eligible
expenses up to a maximum of $40,000. This funding will be used to support a geochemical
mapping programme scheduled for early FY21.
Sandstone Project [Australia]
Following a review of its portfolio, Rafaella announced in May 2020 that it had completed the sale
of the Sandstone Project to private gold exploration company Westar Resources. The disposal
has allowed the Company to focus its cash resources on fast-tracking the development of the
Santa Comba Project and progressing its highly-prospective McCleery Project. The full
consideration of Westar’s acquisition of Sandstone was met through the issuance of 3,000,000
shares in Westar at the recent fundraising price of $0.05 per share, giving the Company a 5%
interest in Westar.
Environmental Regulation
The Company’s projects are not subject to direct physical risk arising from climate factors. The
Sandstone Project is still at an early exploration stage and was sold during the financial year. The
McCleery Project is located in the north of Canada and hence is only accessible during a limited
season. Global warming may make the site more accessible over time. The Santa Comba Project
is not subject to any direct physical risk from climate factors such as flooding or excessive drought.
The Group is subject to and is compliant with all aspects of environmental regulation of its
exploration and mining activities. The Directors are not aware of any environmental law that is
not being complied with. The Santa Comba Project currently has a compliant environmental
rehabilitation bond in place with the local authorities.
Rafaella Resources Limited and Controlled Entities
4
DIRECTORS’ REPORT continued
CORPORATE
A notice of a meeting was issued to shareholders on 10 July 2019 to approve the acquisition of
Galicia Tin and Tungsten, S.L., the 100% owner of the Santa Comba tungsten and tin mine located
in Galicia, northwest Spain as well as the proposed capital raise and Board changes. The
shareholder meeting occurred on 9 August 2019, with all resolutions being passed. In August
2019, Rafaella successfully completed a capital raising of $2.6m in connection with the acquisition
of the Santa Comba project.
Following the completion of the acquisition, there were several changes to the Rafaella Board.
Steven Turner joined the Board as Managing Director and Robert Wrixon as Executive Director.
Graham Durtanovich resigned from the Board and Peter Hatfull, existing Non-Executive Director
took the role of Non-Executive Chairman.
As part of the acquisition, the Company announced the following:
The issue of 250,000 fully paid ordinary shares to Graham Durtanovich for his anniversary
shares;
The issue of 500,000 fully paid ordinary shares to Ashley Hood for his anniversary shares;
The issue of 10,950,000 fully paid ordinary shares as part of the placement (announced
on 27 May 2019);
The issue of 13,125,000 fully paid ordinary shares as part consideration shares for the
acquisition of Galicia Tin & Tungsten SL;
The issue of 2,850,000 fully paid ordinary shares as a success fee;
The grant of 2,925,000 unlisted $0.20 options expiring 27 August 2022 as a success fee
and in connection with the remuneration of Robert Wrixon and a contractor;
The grant of 10,000,000 listed $0.30 options expiring 31 October 2021 as advisory
options;
The issue of 2,900,000 milestone 1 performance rights to Steven Turner, Robert Wrixon
and a contractor; and
The issue of 2,900,000 milestone 2 performance rights to Steven Turner, Robert Wrixon
and a contractor.
Rafaella held its Annual General Meeting on 29 November 2019. At the AGM all resolutions put
to the meeting were passed unanimously by a show of hands. Details regarding the resolutions
are provided in the ASX Announcement dated 29 November 2019.
In April 2020, Rafaella released an investor presentation outlining its progress at the Santa Comba
Project. The new presentation was presented by Mr Turner at the 121 Mining Investment APAC
Forum through a series of virtual meetings with prospective investors and again in May 2020 at
the 121 Mining Investment EMEA Forum.
In May 2020, Rafaella further bolstered its leadership team via two new appointments. The first
appointment was of Royston Denysschen, Director of Transamine’s Australian operations. The
second appointment was of Oscar Amigo García as Project Manager for the Santa Comba Project.
Rafaella Resources Limited and Controlled Entities
5
DIRECTORS’ REPORT continued
COVID-19 Impacts
Indirect financial risk has impacted the price of tungsten as the COVID-19 pandemic has led to the
temporary closure of various automobile factories in Europe and has also seen a significant
decline in the number of onshore oil rigs deployed in North America – both industries that are
material end-users of tungsten. Tungsten has been identified as a critical element and a material
that will see increased usage in the changing technically driven environment.
COVID-19 has had limited impact on the operations of the Company. Activities at the Santa
Comba site were largely concluded by the time of the national lockdown in Spain. For the
feasibility study the vast majority of work has been conducted as desk top studies and therefore
has seen no adverse impact. Limited metallurgical test work being undertaken in the UK has seen
limited disruption. Some personnel movements have been restricted delaying business
development initiatives and the relocation of the Managing Director to Spain to oversee the
ongoing development of the flagship Santa Comba project has also been delayed by 6 months.
No other activities in the Company have been negatively impacted by the coronavirus pandemic.
Asset values, going concern and future funding of the business is not expected to be materially
adversely affected by COVID 19. This has been evidenced by the successful private placement
conducted by the Company post year-end.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 9 August 2019 shareholders approved the acquisition of Galicia Tin and Tungsten, S.L., the
100% owner of the Santa Comba tungsten and tin mine located in Galicia, northwest Spain, which
was completed on 27 August 2019. The acquisition is transformational for Rafaella, moving the
Company from an explorer of gold and copper to a developer of the permitted brownfield
tungsten and tin Santa Comba mine.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Post year end the Company provisionally agreed the acquisition of the Canadian high grade Ni-Cu
exploration assets from Meteoric Resources. The acquisition is subject to due diligence and all
necessary shareholder and regulatory approvals.
The Feasibility Study for Santa Comba is well advanced with many of the technical studies
complete. It is expected that the findings of the Feasibility Study will be released in early Q2
FY2021. Subject to the results of the Feasibility Study the Company intends to immediately seek
development funding for the construction and commissioning the Santa Comba Project.
Rafaella Resources Limited and Controlled Entities
6
DIRECTORS’ REPORT continued
DIRECTORS’ QUALIFICATIONS AND EXPERIENCE
The Directors’ qualifications and experience are set out below.
Current Directors
Director
Peter Hatfull
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Committee
Memberships
Current ASX Listed
Directorships
Former ASX Listed
Directorships
Steven Turner
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Details
MAICD
Independent Non-Executive Chairman (changed from Independent
Non-Executive Director on 27 August 2019)
16 May 2018
N/A
2 years, 4 months
Peter Hatfull has over 30 years’ experience in a range of senior
executive positions with Australian and international companies. He
has an extensive skill-set in the areas of business optimisation,
capital raising and group restructuring. Peter Hatfull has particular
experience in revitalising business plans, attracting investor funding,
and implementing profitable strategies. He graduated as a
Chartered Accountant in the United Kingdom, where he worked for
Coopers and Lybrand (now PriceWaterhouseCoopers), and
subsequently moved to Africa, where he spent 8 years in Malawi,
where he was CFO of the Malawi operation of international trading
group, Guthrie Limited. Peter Hatfull moved to Perth in 1988.
Member of Board in its capacity as Audit and Risk Committee
Member of Board in its capacity as Nomination Committee
Member of Board in its capacity as Remuneration Committee
Esense-Lab Limited
Roots Sustainable Agricultural Technologies Limited
Affinity Energy & Health Limited
Aus Asia Minerals Limited
BA (Hons) Banking Insurance and Finance, ACA, MAICD
Managing Director
27 August 2019
N/A
10 months
Steven Turner brings over 25 years of experience in the resource
sector, having held senior roles in both industry and investment
banking. During his career Steven has been based in London,
Aberdeen, Singapore, Brisbane and Madrid. Steven has raised
significant capital for the development of resource projects, including
equity, public bonds and project finance. Most recently Steven was
head of business development at a private mining group, having been
instrumental in the successful growth of the company from a junior
to mid-tier Australian base metal operator. Mr Turner holds
Rafaella Resources Limited and Controlled Entities
7
DIRECTORS’ REPORT continued
Committee
Memberships
Current ASX Listed
Directorships
Former ASX Listed
Directorships
Robert Wrixon
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Committee
Memberships
Current ASX Listed
Directorships
Former ASX Listed
Directorships
Ashley Hood
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Committee
Memberships
Australian, Canadian and UK citizenships and is a Fellow of The
Chartered Accountants of England and Wales and a Member of the
Australian Institute of Company Directors.
N/A
N/A
None
BEng (Chem Eng), PhD (Mats Sci & Mineral Eng), GAICD
Executive Director
27 August 2019
N/A
10 months
Robert Wrixon is the currently a Director of the mining venture capital
group Starboard Global Limited and has 20 years of experience in
corporate strategy, commodities marketing, mining M&A and mineral
exploration management. He has previously run two listed resources
companies in Australia, and prior to that spent five years in corporate
strategy for Xstrata plc based in Sydney and London.
N/A
N/A
N/A
Independent Non-Executive Director (changed from Non-
Independent Executive Technical Director on 27 August 2019)
12 December 2017
N/A
2 years, 7 months
Ashley Hood has more than 15 years’ experience in the mining
industry working in mine and exploration operations for junior and
large mining companies based in Australia and throughout the Pacific
including New Zealand. He has broad senior management experience
having held a number of ASX appointed board positions while working
on some of Australia’s major JORC resources.
Mr Hood
predominantly specialises in project/people management, native title
negotiations,
logistics, project diligence/acquisitions and has
personally held and managed a number of his own exploration
projects.
Member of Board in its capacity as Audit and Risk Committee
Member of Board in its capacity as Nomination Committee
Member of Board in its capacity as Remuneration Committee
Rafaella Resources Limited and Controlled Entities
8
DIRECTORS’ REPORT continued
Current ASX Listed
Directorships
Former ASX Listed
Directorships
Royston Denysschen
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Committee
Memberships
Current ASX Listed
Directorships
Former ASX Listed
Directorships
Former Directors
Graham Durtanovich
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Committee
Memberships
Non-Executive Director of Celsius Resources Limited
Non-Executive Director of Mount Ridley Mines Limited
Non-Independent Non-Executive Director
19 May 2020
N/A
1 month
Royston Denysschen has been active in business development,
commerce and logistics globally for over 20 years. He has held Board
positions in South African, Botswana, Australian and Canadian
businesses. He is currently employed by Transamine Trading where
he was Director for Africa for 10 years. He has recently been
appointed as Director for Australia where he will oversee their
Australian operations and business development.
Member of Board in its capacity as Audit and Risk Committee
Member of Board in its capacity as Nomination Committee
Member of Board in its capacity as Remuneration Committee
N/A
N/A
BEcon, MBA, GradDip Applied Finance & Investment
Independent Non-Executive Chairman
15 March 2018
27 August 2019
1 year, 5 months
financial management
Graham Durtanovich brings extensive
experience from a large private enterprise within the construction
industry, where he previously held the role of Chief Financial Officer
and was responsible for the financial administration, strategic
planning, risk analysis and Corporate Governance of the company. In
recent times Mr Durtanovich has worked in Corporate Finance with a
small boutique company and served as the Chief Financial Officer at
WHL Energy Limited and was responsible for the financial
administration, strategic planning, risk analysis and Corporate
Governance of WHL Energy.
Member of Board in its capacity as Audit and Risk Committee
Member of Board in its capacity as Nomination Committee
Member of Board in its capacity as Remuneration Committee
Rafaella Resources Limited and Controlled Entities
9
DIRECTORS’ REPORT continued
Current ASX Listed
Directorships
Former ASX Listed
Directorships
COMPANY SECRETARY
Company Secretary
Amanda Wilton-Heald
Qualifications
Position
Appointment Date
Resignation Date
Biography
Non-Executive Director of Bronson Group Limited
Non-Executive Director of TV2U Limited
Non-Executive Director of JV Global Limited
Details
BCom, CA
Company Secretary
3 July 2018
N/A
Amanda Wilton-Heald is a Chartered Accountant with over 20 years
of accounting, auditing (of both listed and non-listed companies) and
company secretarial experience in both Australia and the UK.
Amanda has been involved in the listing of junior explorer
companies on the ASX and has experience in corporate advisory and
company secretarial services.
MEETINGS OF DIRECTORS
The number of meetings held during the year and the number of meetings attended by each
Director was as follows:
Number of Meetings Held
Number of Meetings Attended:
Peter Hatfull
Graham Durtanovich1
Steven Turner
Robert Wrixon
Ashley Hood
Royston Denysschen2
Board
7
7
2
5
5
6
1
Board in
Capacity of
Audit & Risk
Committee
2
Board in
Capacity of
Nomination
Committee
1
Board in
Capacity of
Remuneration
Committee
1
2
-
2
2
2
-
1
-
1
1
1
-
1
-
1
1
-
1
The Group does not have an Audit, Remuneration or Nomination Committee with the full Board
carrying out the functions that would otherwise be dealt with by such Committees. All Directors
were eligible to attend all Board Meetings held when they were in office.
1 Resigned 27 August 2019.
2 Appointed 19 May 2020.
Rafaella Resources Limited and Controlled Entities
10
DIRECTORS’ REPORT continued
SHARE OPTIONS
As at the date of this report:
No. Options
27,098,036
2,500,000
2,925,000
Exercise Price
$0.30
$0.20
$0.20
Expiry Date
31-Oct-21
19-Jul-22
27-Aug-22
Listed / Unlisted
Listed
Unlisted
Unlisted
SHARES ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS
No shares as a result of the exercise of the options were issued as at the date of this report.
Waiver Securities
As required by the waiver from ASX Listing Rule 7.3.2 granted on 7 August 2019, the Company
advises that 15,000,000 fully paid ordinary shares (Milestone 1 shares) and 15,000,000 fully paid
ordinary shares (Milestone 2 shares) remain to be issued. The details of these Milestone 1 and
Milestone 2 shares were announced to the ASX on 27 May 2019 and 9 August 2019.
Rafaella Resources Limited and Controlled Entities
11
DIRECTORS’ REPORT continued
DIRECTORS’ INTERESTS AND BENEFITS
The movement during the reporting period in the number of options over ordinary shares of the
Company held directly, indirectly or beneficially, by each Director or key management personnel,
including their personally-related entities is as follows:
Director
Peter Hatfull
Directly
Indirectly
Graham
Durtanovich3
Directly
Indirectly
Steven
Turner4
Directly
Indirectly
Robert
Wrixon5
Directly
Indirectly
Ashley Hood
Directly
Indirectly
Royston
Denysschen6
Directly
Indirectly
Total
No.
Options
Held at 30
June 2019
Share
Based
Payments
Exercise
of
Options
Other
Changes
No.
Options
Held at 30
June 2020
No. Options
Held at Date
of this Report
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
-
-
-
-
-
750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
-
750,000
-
-
-
-
-
-
-
750,000
-
-
750,000
3 Resigned 27 August 2019.
4 Appointed 27 August 2019.
5 Appointed 27 August 2019.
6 Appointed 19 May 2020.
Rafaella Resources Limited and Controlled Entities
12
DIRECTORS’ REPORT continued
The movement during the reporting period in the number of performance rights of the Company
held directly, indirectly or beneficially, by each Director or key management personnel, including
their personally-related entities is as follows:
Director
Peter Hatfull
Directly
Indirectly
Graham
Durtanovich7
Directly
Indirectly
Steven
Turner8
Directly
Indirectly
Robert
Wrixon9
Directly
Indirectly
Ashley Hood
Directly
Indirectly
Royston
Denysschen10
Directly
Indirectly
Total
No.
Performance
Rights Held
at 30 June
2019
Security
Based
Payments
Conversion
of
Performance
Rights
No.
Performance
Rights Held
at 30 June
2020
No.
Performance
Rights Held at
Date of this
Report
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,800,000
500,000
-
-
-
-
-
5,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,800,000
-
4,800,000
500,000
-
500,000
-
-
-
-
-
-
-
5,300,000
-
-
5,300,000
Transactions with related parties
During the reporting year, there were the following related party transactions:
On 27 August 2019 the Company issued the following:
o 250,000 fully paid ordinary shares to a related party of Graham Durtanovich for
his anniversary shares;
o 500,000 fully paid ordinary shares to a related party of Ashley Hood for his
anniversary shares;
7 Resigned 27 August 2019.
8 Appointed 27 August 2019.
9 Appointed 27 August 2019.
10 Appointed 19 May 2020.
Rafaella Resources Limited and Controlled Entities
13
DIRECTORS’ REPORT continued
o 1,144,237 fully paid ordinary shares to a related party of Steven Turner as part of
the consideration shares for the acquisition of Galicia Tin & Tungsten SL;
o 100,000 fully paid ordinary shares to Robert Wirxon and 1,527,277 fully paid
ordinary shares to a related party of Robert Wrixon as part of the consideration
shares for the acquisition of Galicia Tin & Tungsten SL;
o 2,850,000 fully paid ordinary shares to EverBlu Capital Pty Ltd and their associates
(deemed related to the Company by ASX) as a success fee;
o 750,000 unlisted $0.20 options expiring 27 August 2022 to Robert Wrixon as part
of his remuneration;
o 1,425,000 unlisted $0.20 options expiring 27 August 2022 to EverBlu Capital Pty
Ltd and their associates (deemed related to the Company by ASX) as a success
fee;
o 10,000,000 listed $0.30 options expiring 31 October 2021 to EverBlu Capital Pty
Ltd and their associates (deemed related to the Company by ASX) as advisory
options;
o 2,400,000 milestone 1 performance rights and 2,400,000 milestone 2
performance rights to a related party of Steven Turner as part of his
remuneration; and
o 250,000 milestone 1 performance rights and 250,000 milestone 2 performance
rights to a related party of Robert Wrixon as part of his remuneration.
On 5 March 2020 the Company issued 250,000 fully paid ordinary shares to a related party
of Ashley Hood for his anniversary shares.
On 13 March 2020 the Company issued the following:
o 780,000 fully paid ordinary shares to EverBlu Capital Pty Ltd and their associates
(deemed related to the Company by ASX) as a capital raising fee.
o 600,000 fully paid ordinary shares to EverBlu Capital Pty Ltd and their associates
(deemed related to the Company by ASX) as an advisory mandate fee.
During the year a total of $103,500 plus GST was paid to EverBlu Capital Pty Ltd (deemed
related to the Company by ASX) in relation to corporate advisory fees and research report
fees.
REMUNERATION REPORT
Introduction
The Directors present the Remuneration Report for the Group for the year ended 30 June 2020.
This Remuneration Report forms part of the Directors’ Report in accordance with the
requirements of the Corporations Act 2001 and its regulations. For the purposes of this report,
Key Management Personnel (“KMP”) of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Group, directly
or indirectly, including any Director (whether executive or otherwise) of the Group.
Remuneration Policy
The remuneration policy of the Group has been designed to align KMP objectives with
Shareholders’ interests and business objectives by providing a fixed remuneration component
and offering specific long-term incentives based on key performance areas affecting the Group’s
financial results. The Board believes that the remuneration policy is appropriate and effective in
its ability to attract and retain the best KMP to run and manage the Group, as well as create goal
congruence between Directors, Executives and Shareholders.
Rafaella Resources Limited and Controlled Entities
14
DIRECTORS’ REPORT continued
Executive Directors and Key Management Personnel
The Board’s policy for determining the nature and amount of remuneration for Executive
Directors and Key Management Personnel of the Group was in place for the year ended 30 June
2020.
There was no performance evaluation performed during the year due to the Group’s infancy. The
Board has agreed to conduct its first performance review in the next financial year, now that the
GTT Acquisition has been in operation.
Non-Executive Directors
The Board’s policy is to remunerate Non-Executive Directors based on market practices, duties
and accountability. Independent external advice is sought when required. The fees paid to Non-
Executive Directors will be reviewed annually. The maximum aggregate amount of fees that can
be paid to Non-Executive Directors is subject to approval by Shareholders at the Annual General
Meeting (“AGM”). The maximum aggregate amount of fees payable has been set at $250,000pa.
Use of Remuneration Consultants
To ensure the Remuneration Committee (of which the function is performed by the Board as a
whole at this stage) is fully informed when making remuneration decisions, it may seek external
remuneration advice. The Board did not engage external remuneration advice in 2020.
Remuneration Report Approval at FY2020 AGM
The remuneration report for the year ended 30 June 2020 will be put to shareholders for approval
at the Group’s AGM which will be held during November 2020.
Rafaella Resources Limited and Controlled Entities
15
DIRECTORS’ REPORT continued
Details of Remuneration
Details of remuneration of the Directors and KMP of the Group (as defined by AASB 124 Related
Party Disclosures) and specified executives are set out below:
Fixed
STI
LTI
Total
Proportion of
Remuneration
Other
Fees
$
Super-
annuation
$
Security
Based
Payments
$
Incentive
Payments
$
Fair value
of Share
Options
(equity
settled)
$
Fixed
%
STI
%
$
LTI
%
Salary
fees
and
leave
$
67,000
39,177
7,000
39,177
24,000
91,667
99,723
-
22,500
165,667
-
-
-
-
-
-
7,803
6,365
3,722
665
3,722
-
8,708
7,022
-
-
-
-
-
15,738
44,00011
-
28,750
18,75013
-
117,000
35,00016
-
-
189,750
224,577
7,803
14,466
53,750
266,631
-
60,968
-
327,599
36,300
13,500
-
-
36,300
21,554
-
-
-
21,554
139,333
-
40,764
-
180,097
-
13,500
-
-
Year
Non-Executive Directors
Peter Hatfull
Graham
Durtanovich12
James
Ellingford14
2020
2019
2020
2019
2019
2020
2019
2019
Ashley Hood15
Royston
Denysschen17
2020
Terence Clee18 2019
2020
Total Non-
Executive
Directors
Executive Directors
Steven
Turner19
Robert
Wrixon20
Total
Executive
Directors
2020
2019
2020
2019
2020
2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
117,365
42,899
36,415
61,649
24,000
217,375
149,548
-
22,500
371,155
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
300,596
100%
463,818
13,500
101,732
-
565,550
100%
100%
100%
-
100%
13,500
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11 Accrual of 500,000 anniversary shares at $0.088 each, for approval by shareholders at the 2020 Annual General
Meeting.
12 Resigned 27 August 2019.
13 Accrual of 250,000 anniversary shares at $0.075 each, for approval by shareholders at 9 August 2019 General
Meeting.
14 Resigned 16 May 2018. Director’s salaries pertains to services rendered for the financial year ended 30 June 2018,
but was recognised during the financial year ended 30 June 2019.
15 changed from Non-Independent Executive Technical Director on 27 August 2019
16 Issue of 250,000 anniversary share.s at $0.14 each, as approved by shareholders at the 15 November 2018 Annual
General Meeting.
17 Appointed 19 May 2020.
18 Resigned 15 March 2018. Director’s salaries pertains to services rendered for the financial year ended 30 June 2018,
but was recognised during the financial year ended 30 June 2019.
19 Appointed 27 August 2019.
20 Appointed 27 August 2019.
Rafaella Resources Limited and Controlled Entities
16
DIRECTORS’ REPORT continued
Service Agreements
The Group has entered into an executive services agreement with Ashley Hood on the following
material terms:
Position: Executive Technical Director (Held position until 27 August 2019).
Commencement Date: 12 December 2017.
Term: Until agreement is validly terminated.
Notice period: The Group must give 24 months’ notice to terminate the agreement other
than for cause. The executive must give 6 months’ notice to terminate the agreement.
Salary: $75,000 per annum (plus superannuation), base salary. Effective 21 May 2019,
the base salary was increased to $110,000 per annum (plus superannuation). Effective 1
March 2020, the base salary was decreased to $55,000 per annum (plus superannuation).
Consulting Fees: Ashley Hood is entitled to receive consulting fees of $650 (ex GST) per
day for technical services provided to the Group and for which an invoice has been given
to the Group for work performed.
Share Issue: Subject to compliance with the ASX Listing Rules and the Corporations Act,
the Group will issue 250,000 fully paid ordinary shares in the Group to Ashley Hood (or
his nominee) on each anniversary of the Commencement Date during which Ashley Hood
remains employed under the Executive Services Agreement. Subject to compliance with
the ASX Listing Rules and the Corporations Act, the Group will also issue a performance
based bonus payment of 500,000 fully paid ordinary shares in the Group to Ashley Hood
(or his nominee) in the event that the Company completes the GTT Acquisition.
Expenses: The Group will reimburse Ashley Hood for all reasonable expenses incurred by
him in the performance of his duties in connection with the Group.
Leave: The agreement otherwise contains
leave entitlements, termination and
confidentiality provisions and general provisions considered standard for an agreement
of this nature.
The Group has entered into an executive employment contract with Steven Turner, upon his
appointment on 27 August 2019 on the following material terms:
Commencement Date: 27 August 2019
Role: Managing Director and Executive Director
Term: Until terminated in accordance with the terms of the employment agreements
Base salary: fixed annual salary of €162,000pa (approximately AUD$265,000) increasing
to €200,000pa (approximately AUD$327,000pa) upon execution of the development
financing
Performance incentives: a total of 4,800,000 Performance Rights, comprising 2,400,000
Milestone 1 Performance Rights and 2,400,000 Milestone 2 Performance Rights, vesting
upon the satisfaction of certain key performance criteria, as detailed in the notice of
general meeting dated 9 July 2019 (issued 27 August 2019)
Bonus: subject to the Board’s discretion, the Executive may be paid a bonus up to 50% of
the base salary
Other benefits: the costs of the Executive’s relocation to Spain, in connection with his role
as Managing Director and Executive Director, shall be met by the Company for the
duration of the Term
Rafaella Resources Limited and Controlled Entities
17
DIRECTORS’ REPORT continued
Termination:
o by the Company: three months’ notice (or payment in lieu) plus three months’ salary
and any relocation costs of the Executive; and
o by the Executive: three months’ notice, which the Company may elect to pay out by
paying the Executive three months’ salary and any relocation costs of the Executive.
The Group has entered into an executive director agreement and a consulting contract with
Robert Wrixon, upon his appointment on 27 August 2019 on the following material terms:
Commencement Date: 27 August 2019
Role: Executive Director and Consultant
Term: Until terminated in accordance with the terms of the employment agreements
Base salary: $24,000pa for directorship role and $48,000pa for consulting services
Options: 750,000 unlisted $0.20 options expiring 3 years from date of grant, as detailed
in the notice of general meeting dated 9 July 2019 (granted 27 August 2019)
Performance incentives: a total of 500,000 Performance Rights, comprising 250,000
Milestone 1 Performance Rights and 250,000 Milestone 2 Performance Rights, vesting
upon the satisfaction of certain key performance criteria, as detailed in the notice of
general meeting dated 9 July 2019 (issued 27 August 2019)
Termination:
o by the Company: three months’ notice (or payment in lieu) plus three months’ salary
and any relocation costs of the Executive; and
o by the Executive: three months’ notice, which the Company may elect to pay out by
paying the Executive three months’ salary and any relocation costs of the Executive.
The Group has entered into agreements with its Non-Executive Directors.
Key management personnel have no entitlement to termination payments in the event of removal
from misconduct.
Share Based Compensation
Performance based compensation during the year ended 30 June 2020 has been detailed for the
Directors within the Remuneration and Service Agreements sections of the Remuneration Report.
There were anniversary shares issued to Ashley Hood and Graham Durtanovich and accrued for
issue to Peter Hatfull, subject to shareholder approval, duing the year ended 30 June 2020. Refer
to the Details of Remuneration above.
Rafaella Resources Limited and Controlled Entities
18
DIRECTORS’ REPORT continued
The movement during the reporting period in the number of ordinary shares of the Company held
directly, indirectly or beneficially, by each Director or key management personnel, including their
personally-related entities is as follows:
Director
Peter Hatfull
Directly
Indirectly
Graham
Durtanovich
21
Directly
Indirectly
Steven
Turner23
Directly
Indirectly
Robert
Wrixon24
Directly
Indirectly
Ashley Hood
Directly
Indirectly
Royston
Denysschen
26
Directly
Indirectly
Total
No. Shares
Held at 30
June 2019
Share
Based
Payments
Exercise
of
Options
Other
Changes
No. Shares
Held at 30
June 2020
No. Shares
Held at Date
of this Report
-
-
-
-
-
-
-
-
-
-
-
250,00022
-
-
-
-
-
250,000
-
750,00025
-
-
250,000
-
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
345,000
-
345,000
-
345,000
-
(250,000)
-
-
-
N/A
1,100,000
1,144,237
1,100,000
1,144,237
1,100,000
1,144,237
390,812
1,527,277
390,812
1,527,277
390,812
1,527,277
-
-
-
1,000,000
-
1,000,000
-
-
5,000,000
5,000,000
9,257,326 10,507,326
-
5,000,000
10,507,326
21 Resigned 27 August 2019.
22 Issued on 27 August 2019 as per remuneration terms.
23 Appointed 27 August 2019.
24 Appointed 27 August 2019.
25 Issued on 27 August 2019 and 5 March as per remuneration terms.
26 Appointed 19 May 2020.
Rafaella Resources Limited and Controlled Entities
19
DIRECTORS’ REPORT continued
The following table sets out the details of unlisted share option movements during the year ended
30 June 2020:
Exercise
Price
Expiry
Date
Balance at
30 June
2019
Grant
Date
Granted as
Remuneration
Fair Value
per Option
at Grant
Date
Exercised
Expired
Balance at
30 June
2020
Non-
Executive
Directors
Peter Hatfull
Graham
Durtanovich
27
Ashley
Hood28
Royston
Denysschen
29
Total Non-
Executive
Directors
Executive
Directors
Steven
Turner30
Robert
Wrixon31
Total
Executive
Directors
Total
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
$0.20
N/A
27-Aug-
22
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
27-
Aug-19
-
-
-
-
-
-
-
-
-
-
-
-
750,000
$94,50032
N/A
N/A
750,000
750,000
$94,500
$94,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
750,000
750,000
There were no other Director and KMP transactions.
End of Audited Remuneration Report.
DIVIDENDS
No dividends were paid during the year and no recommendation is made as to payment of
dividends.
27 Resigned 27 August 2019.
28 changed from Non-Independent Executive Technical Director on 27 August 2019
29 Appointed 19 May 2020.
30 Appointed 27 August 2019.
31 Appointed 27 August 2019.
32 Recognised over 3 years from the grant date, being the vesting period.
Rafaella Resources Limited and Controlled Entities
20
DIRECTORS’ REPORT continued
EVENTS SUBSEQUENT TO REPORTING DATE
There are no matters or circumstances have arisen since the end of the year which will
significantly affect, or may significantly affect, the state of affairs or operations of the reporting
entity in future financial years other than the following:
On July 1 2020, the Company announced a substantial increase in total mineral resources
and the estimation of maiden measured and indicated resources at the Santa Comba
Project. The resource update significantly increases the Company’s confidence in the
Project and underpins the development of the mine plan and feasibility study. The
increase in tonnes also allows Rafaella to evaluate enhanced production scenarios.
The following month, the Company announced that it has entered into a conditional
agreement to acquire 100% of the Midrim and Laforce nickel-copper sulphide projects
from Meteoric Resources NL (ASX: MEI). The projects are in the highly prospective
Belleterre-Angliers Greenstone Belt located in the Province of Quebec, Canada. They are
located close to Chase Mining Corporation’s (ASX: CML) Alotta Project, which announced
massive sulphides and high-grade nickel and copper intersections from its recently
completed drilling programme on 29 June 2020. The acquisition is subject to due
diligence as well as regulatory and shareholder approvals. It supports the Company’s
strategic focus on developing near term, low cost base metal operations.
The Company also completed a placement to raise approximately $1.2m to provide funds
to progress further feasibility work at the flagship Santa Comba Project which it is
continuing to advance in FY21.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the Directors and officers of the Company for costs incurred, in
their capacity as a Director or officer, for which they may be held personally liabie, except where
there is a lack of good faith. During the financial year, the Company paid a premium in respect of
a contract to insure the Directors and officers of the Company against a liability to the extent
permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the
nature of the liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Group has not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the Group or any related entity against a liability incurred by the auditor.
During the financial year, the Group has not paid a premium in respect of a contract to insure the
auditor of the Group or any related entity.
PROCEEDINGS 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
Group is a party for the purpose of taking responsibility on behalf of the Company for all or part
of those proceedings.
Rafaella Resources Limited and Controlled Entities
21
DIRECTORS’ REPORT continued
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the
financial year by the auditor are outlined in Note 5 to the financial statements. The Directors are
satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor’s behalf), is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are of the
opinion that the services as disclosed in Note 5 to the financial statements do not compromise
the external auditor’s independence requirements of the Corporations Act 2001 for the following
reasons:
All non-audit services have been reviewed and approved to ensure that they do not
impact the integrity and objectivity of the auditor; and
None of the services undermine the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional Accountants issued by the
Accounting Professional and Ethical Standards Board, including reviewing or auditing the
auditor’s own work, acting in a management or decision-making capacity for the Group,
acting as advocates for the Group or jointly sharing economic risks and rewards.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA PARTNERS
There are no officers of the company who are former partners of RSM Australia Partners.
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration for the year ended 30 June 2020 has been received and
is included within the financial statements.
AUDITOR
RSM continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of
the Corporation Act 2001. Signed in accordance on behalf of the Directors.
____________________
Peter Hatfull
Non-Executive Chairman
24 September 2020
Rafaella Resources Limited and Controlled Entities
22
CORPORATE GOVERNANCE
The Board of Directors is responsible for the corporate governance of Rafaella Resources Limited
(the Group). The Board of Directors have established a corporate governance framework which
follows the recommendations as set out in the ASX Corporate Governance Council’s Principles and
Recommendations 3rd edition (“Principles and Recommendations”). The Group has followed each
recommendation where the Board has considered the recommendation to be appropriate
benchmark for the Group's corporate governance practices. Where the Group's corporate
governance practices follow a recommendation, the Board has made appropriate statements
reporting on the adoption of the recommendation. In compliance with the "if not, why not"
reporting regime, where the Group's corporate governance practices do not follow a
recommendation, the Board explained its reasons for not following the recommendation and
disclosed what, if any, alternative practices the Group has adopted instead of those in the
recommendation. The Group’s corporate governance framework can be viewed on the Group’s
website: www.rafaellaresources.com.au
Recommendation 1.5
The respective proportions of men and women on the Board, in senior executive positions
(including key management personnel) and across the whole organisation:
Details: 2020
Board
Men
Women
Senior Executive Positions
Men
Women
Entire Organisation
Men
Women
Percentage
Number
100%
-%
67%
33%
77%
23%
5
-
2
1
10
3
The Group recognises and respects the value of diversity at all levels of the organisation. The
Group recognises that the mining and exploration industry is intrinsically male dominated in many
of the operational sectors and the pool of women with appropriate skills will be limited in some
instances. The Group recognises that diversity extends to matters of age, disability, ethnicity,
marital/family status, religious/cultural background and sexual orientation. Where possible, the
Group will seek to identify suitable candidates for positions from a diverse pool.
Recommendation 2.2
The Group has reviewed the skill set of its Board to determine where the skills lie and any relevant
gaps in skills shortages. The Group is working towards filling these gaps through engagement of
professional advisors where it is deemed necessary.
Recommendation 7.4
The Group has assessed its exposure to economic, environmental and social sustainability risks
and has addressed them in the second replacement prospectus dated 1 June 2018 and these
remain the same for the current financial year.
Rafaella Resources Limited and Controlled Entities
23
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Rafaella Resources Limited for the year ended 30 June 2020,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 24 September 2020
TUTU PHONG
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Note
Group
30 June 2020
$
Group
30 June 2019
$
Revenue
3
66,305
57,811
Accounting fees
Compliance fees
Consultancy fees
Depreciation
Directors’ remuneration
Exploration expenditure impairment
Foreign exchange loss
Insurance expense
Interest expense
IT expenses
Legal fees
Marketing
Other expenses
Share based payments expense
Travel expenses
Loss before tax
Income tax benefit/(expense)
(91,506)
(163,061)
(821,875)
(20,651)
(389,034)
(215,454)
(7,631)
(40,998)
(2,524)
(7,899)
(88,183)
(156,485)
(83,656)
(232,250)
(127,115)
(2,382,017)
-
(72,448)
(97,221)
(215,000)
-
(239,043)
-
(2,465)
(34,940)
-
(90)
(70,439)
(268,636)
(25,682)
(63,750)
(48,834)
(1,080,737)
-
10
11
14
4
Net loss for the year from operations
(2,382,017)
(1,080,737)
Other comprehensive income
-
-
Total comprehensive loss for the year
(2,382,017)
(1,080,737)
Basic and diluted loss per share (cents)
6
(3.64)c
(3.06)c
The accompanying notes form part of these financial statements.
Rafaella Resources Limited and Controlled Entities
25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Note
Group
30 June 2020
$
Group
30 June 2019
$
7
8
9
1,179,723
249,781
122,843
3,279,816
43,494
42,449
Total Current Assets
1,552,347
3,365,759
Non-Current Assets
Investments held at fair value through other
comprehensive income
Plant and equipment
Exploration and evaluation assets
10
11
150,000
101,874
10,863,511
-
-
915,030
Total Non-Current Assets
11,115,385
915,030
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
12,667,732
4,280,789
12
296,886
31,931
230,220
5,811
328,817
236,031
328,817
236,031
12,338,915
4,044,758
13
14
15,110,433
962,589
(3,734,107)
4,617,297
779,551
(1,352,090)
12,338,915
4,044,758
The accompanying notes form part of these financial statements.
Rafaella Resources Limited and Controlled Entities
26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Group
Balance at 1 July 2019
Equity issues
Equity issue expenses
Foreign exchange on
translation of operations
Share based payments
Loss for the year
Other comprehensive
income
Total comprehensive
loss for the year
Contributed
Equity
$
4,617,297
10,685,864
(192,728)
-
-
-
-
Foreign
Currency
Translation
Reserve
$
9,875
-
-
(48,579)
-
-
-
-
Options
Reserve
Share Based
Payments
Reserve
Accumulated
Losses
Total
$
$
$
$
125,980
-
-
-
-
-
-
643,696
-
-
-
231,617
-
-
-
(1,352,090)
-
-
4,044,758
10,685,864
(192,728)
-
-
(2,382,017)
(48,579)
231,617
(2,382,017)
-
-
(2,382,017)
(2,382,017)
Balance at 30 June 2020
15,110,433
(38,704)
125,980
875,313
(3,734,107)
12,338,915
Balance at 1 July 2018
Equity issues
Equity issue expenses
Foreign exchange on
translation of operations
Share based payments
Loss for the year
Other comprehensive
income
Total comprehensive
loss for the year
534,268
5,195,000
(1,111,971)
-
-
-
-
125,980
-
-
-
-
(271,353)
-
-
262,915
5,320,980
(1,111,971)
-
-
-
-
9,875
-
-
-
-
-
-
-
-
-
-
643,696
-
-
-
(1,080,737)
9,875
643,696
(1,080,737)
-
-
-
-
(1,080,737)
(1,080,737)
Balance at 30 June 2019
4,617,297
9,875
125,980
643,696
(1,352,090)
4,044,758
The accompanying notes form part of these financial statements.
Rafaella Resources Limited and Controlled Entities
27
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Interest paid
ATO cashflow boost received
Payment for exploration and evaluation
Note
Group
30 June 2020
$
Group
30 June 2019
$
(1,244,321)
21,395
(2,524)
50,000
(3,351,568)
(975,724)
55,632
-
-
(652,101)
Net cash used in operating activities
16
(4,527,018)
(1,572,193)
Cash flows from investing activities
Net cash inflow on acquisition of subsidiary
Payment for plant and equipment
21
Net cash from investing activities
Cash flows from financing activities
Proceeds from shares pending allotment
Proceeds from equity issues
Payment for costs of equity issues
Repayment of borrowings
Net cash provided/(used in) from financing
activities
221,493
(25,233)
196,260
-
2,324,000
(12,129)
(80,880)
-
-
-
74,013
125,980
(484,279)
-
2,230,991
(284,286)
Net decrease in cash held
(2,099,767)
(1,856,479)
Cash and cash equivalents at beginning of the year
3,279,816
5,135,839
Foreign exchange effect on cash and cash
equivalents
(326)
456
Cash and cash equivalents at year end
7
1,179,723
3,279,816
The accompanying notes form part of these financial statements.
Rafaella Resources Limited and Controlled Entities
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1.
Corporate information
This annual report covers Rafaella Resources Limited (parent entity) and subsidiaries (the
“Group”), a company incorporated in Australia for the year ended 30 June 2020. The presentation
currency of the Group is Australian Dollars (“$”). A description of the Group’s operations is
included in the review and results of operations in the Directors’ Report. The Directors’ Report is
not part of the financial statements. The Group is a for-profit entity and limited by shares
incorporated in Australia whose shares are traded under the ASX code “RFR”. The financial
statements were authorised for issue on 24 September 2020 by the Directors. The Directors have
the power to amend and reissue the financial statements. The principal accounting policies
adopted in the preparation of the financial statements are set out below.
2.
Accounting policies
a. Basis of preparation
The general purpose financial statements of the Group have been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. Compliance with
Australian Accounting Standards results in full compliance with the International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The
financial report has also been prepared on a historical cost base. It is recommended that the
annual financial report be considered together with any public announcements made by the
Group up to the issue date of this report, which the Group has made in accordance with its
continuous disclosure obligations arising under the Corporations Act 2001. The financial
statements have been prepared on an accruals basis and is based on historical costs, modified
where applicable, by the measurement at fair value of financial assets and financial liabilities.
b. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Rafaella Resources Limited (Company or parent entity) as at 30 June 2020 and the results of all
subsidiaries for the year then ended. Rafaella Resources Limited and its subsidiaries together are
referred to in these financial statements as the Group. Subsidiaries are all those entities over
which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are de-consolidated from the
date that control ceases. Intercompany transactions, balances and unrealised gains on
transactions between entities in the Group are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group. The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership interest, without the loss of control, is
accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Rafaella Resources Limited and Controlled Entities
29
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
2.
Accounting policies (continued)
Non-controlling interest in the results and equity of subsidiaries are shown separately in the
statement of profit or loss and other comprehensive income, statement of financial position and
statement of changes in equity of the Group. Losses incurred by the Group are attributed to the
non-controlling interest in full, even if that results in a deficit balance. Where the Group loses
control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Group recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
c. Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and
non-current classification. An asset is classified as current when: it is either expected to be
realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the
purpose of trading; it is expected to be realised within 12 months after the reporting period; or
the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period. All other assets are classified as non-
current. A liability is classified as current when: it is either expected to be settled in normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no unconditional right to defer the settlement of
the liability for at least 12 months after the reporting period. All other liabilities are classified as
non-current. Deferred tax assets and liabilities are always classified as non-current.
d. Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
e. Provisions
Provision is made for the Group's liability for employee benefits arising from services rendered by
employees to the end of the reporting period. Employee benefits that are expected to be wholly
settled within one year have been measured at the amounts expected to be paid when the
liability is settled. Employee benefits expected to be settled more than one year after the end of
the reporting period have been measured at the present value of the estimated future cash
outflows to be made for those benefits.
f. Significant management judgement in applying accounting policies and estimate uncertainty
When preparing the financial statements, management undertakes a number of judgements,
estimates and assumptions about recognition and measurement of assets, liabilities, income and
expenses. The actual results may differ from the judgements, estimates and assumptions made
by management, and will seldom equal the estimated results. Information about significant
judgements, estimates and assumptions that have the most significant effect on recognition and
measurement of assets, liabilities, income and expense is provided below.
Rafaella Resources Limited and Controlled Entities
30
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
2.
Accounting policies (continued)
i. Exploration and evaluation expenditure
Exploration and evaluation costs have been capitalised and are only carried forward to the extent
that they are expected to be recouped through the successful development of the area or where
activities in the area have not yet reached a stage that permits reasonable assessment of the
existence of economically recoverable reserves. Key judgements are applied in considering the
costs to be capitalised which includes determining expenditures directly related to these activities
and allocating overheads between those that are expensed and capitalised.
ii. Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to
the fair value of the equity instruments at the date at which they are granted. The fair value of
the options issued are determined by using the Black-Scholes model taking into account the terms
and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact
profit or loss and equity.
f. New or amended Accounting Standards and Interpretations adopted
In the year ended 30 June 2020, the Group has reviewed all of the new and revised Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board that are
relevant to its operations and effective for the current annual reporting year. It has been
determined by the Group that there is no impact, material or otherwise, of the new and revised
Standards and Interpretations on its business and, therefore, no change is necessary to the Group
accounting policies.
Rafaella Resources Limited and Controlled Entities
31
Application
date of
standard
1 January
2019
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
g. New accounting standards and interpretations
Reference Title
AASB 16
Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019.
The standard replaces AASB 117 ‘Leases’ and for lessees will eliminate the classifications of
operating leases and finance leases. Subject to exceptions, a ‘right-of-use’ asset will be
capitalised in the statement of financial position, measured as the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to
short-term leases of 12 months or less and leases of low-value assets (such as personal
computers and small office furniture) where an accounting policy choice exists whereby
either a ‘right-of-use’ asset is recognised or lease payments are expensed to profit or loss as
incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted
for lease prepayments, lease incentives received, initial direct costs incurred and an estimate
of any future restoration, removal or dismantling costs. Straight-line operating lease expense
recognition will be replaced with a depreciation charge for the leased asset (included in
operating costs) and an interest expense on the recognised lease liability (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB
16 will be higher when compared to lease expenses under AASB 117. However EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the
operating expense is replaced by interest expense and depreciation in profit or loss under
AASB 16. For classification within the statement of cash flows, the lease payments will be
separated into both a principal (financing activities) and interest (either operating or
financing activities) component. For lessor accounting, the standard does not substantially
change how a lessor accounts for leases. The Group has adopted this standard from 1 July
2019 or whenever it enters into a lease. There has been no impact on the adoption of the
standard as the Group does not have any leases.
h. New accounting standards and interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the Group for the annual reporting
period ended 30 June 2020. The Group's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the Group, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after
1 January 2020 and early adoption is permitted. The Conceptual Framework contains new
definition and recognition criteria as well as new guidance on measurement that affects several
Accounting Standards. Where the Group has relied on the existing framework in determining its
accounting policies for transactions, events or conditions that are not otherwise dealt with under
the Australian Accounting Standards, the Group may need to review such policies under the
revised framework. At this time, the application of the Conceptual Framework is not expected to
have a material impact on the Group's financial statements.
Rafaella Resources Limited and Controlled Entities
32
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
3.
Revenue
ATO cashflow boost
Interest revenue
Loss on sale of Sandstone project
Group
30 June 2020
$
Group
30 June 2019
$
50,000
19,236
(2,931)
-
57,811
-
66,305
57,811
Accounting policy
Interest revenue
Interest revenue is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income
over the relevant period using the effective interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Government grants
Government grants are recognised as and when they accrue.
4.
Income tax benefit/(expense)
A reconciliation between the income tax expense and the product of accounting profit before
income tax multiplied by the Group’s applicable income tax rate is as follows:
Loss before tax
Statutory income tax rate for the Group at 30% (2019: 30%)
(2,382,017)
(714,605)
(1,080,737)
(324,221)
Tax effect of amounts which are not deductible /(taxable)
in calculating taxable income:
Accrued expenses
Other deductible expenses
Other non-deductible expenses
Other non-assessable amounts
Share issue costs
Capital acquisition costs
Immediate deduction for exploration costs
Disposal of exploration project
Unrecognised tax losses
6,486
(10,861)
354,918
(15,000)
(40,559)
-
(9,606)
80,403
348,824
5,043
(5,852)
30,817
(653)
(8,895)
1,631
(69,174)
371,304
Income tax expense
-
-
Rafaella Resources Limited and Controlled Entities
33
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
4.
Income tax benefit/(expense) (continued)
Unrecognised deferred tax assets and liabilities
Deductible temporary differences
Tax loses
Exploration and evaluation expenditure
Group
30 June 2020
$
Group
30 June 2019
$
104,647
753,468
-
131,602
422,108
(69,496)
858,115
484,214
Accounting policy
Income tax
Current income tax assets and liabilities for the current and prior years are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted by the
reporting date. Deferred income tax is provided on all temporary differences at the reporting
date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred income tax assets and liabilities are recognised for all taxable
temporary differences:
Except for the deferred income tax liability arises from the initial recognition of an asset
or liability in a transaction that is not a business combination and at the time of the
transaction affects neither the accounting profit nor taxable profit or loss; and
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures except where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax
assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred income tax to be recovered. Deferred
income tax assets and liabilities are measured at the tax rates that are expected to apply to the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date. Income taxes relating to items
recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets
and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
Rafaella Resources Limited and Controlled Entities
34
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
4.
Income tax benefit/(expense) (continued)
Goods and services and sales tax
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST)
except:
Where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of the asset or as part of an item of expense; or
For receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables.
Group
30 June 2020
$
Group
30 June 2019
$
5.
Auditor’s remuneration
Audit of the financial statements: RSM Australia Partners
Tax compliance services: RSM Australia Partners
28,000
9,500
19,500
5,500
37,500
25,000
Group
30 June 2020
Group
30 June 2019
6.
Loss per share
The following reflects the loss and number of shares used in the calculation of the basic and
diluted loss per share.
Basic and diluted loss per share (cents per share)
Net loss attributable to ordinary shareholders ($)
(3.64)c
$(2,382,017)
(3.06)c
$(1,080,737)
Weighted average number of ordinary shares used in the
calculation of basic loss per share
Weighted average number of ordinary shares used in the
calculation of diluted loss per share
Shares
Shares
65,426,825
35,297,012
102,876,022
44,709,829
Rafaella Resources Limited and Controlled Entities
35
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
6.
Loss per share (continued)
Accounting policy
Basic earnings per share is calculated as net profit attributable to members of the parent,
adjusted to exclude any costs of servicing equity (other than dividends), dividend by the
weighted average number of ordinary shares, adjusted for any bonus element. The diluted
earnings per share is calculated as net profit or loss attributable to members of the parent
dividend by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element. The weighted average number of shares was based on
the consolidated weighted average number of shares in the reporting year. The net profit or
loss attributable to members of the parent is adjusted for:
Costs of servicing equity (other than dividends) and preference share dividends;
The after-tax effect if dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
Other non-discretionary changes in revenue or expenses during the year that would
result from the dilution of potential ordinary shares.
7.
Cash and cash equivalents
Cash at bank
Term deposits
Group
30 June 2020
$
Group
30 June 2019
$
1,003,867
175,856
1,272,254
2,007,562
1,179,723
3,279,816
Accounting policy
Cash and cash equivalents include cash on hand and in the bank, and other short-term deposits.
Bank overdrafts are shown separately in current liabilities on the Statement of Financial Position.
For the purposes of the Statement of Cash Flows, cash and cash equivalents as defined above, net
of outstanding bank overdrafts.
Rafaella Resources Limited and Controlled Entities
36
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
8.
Trade and other receivables (current)
Accrued interest revenue
Tax refunds
Group
30 June 2020
$
Group
30 June 2019
$
20
249,761
249,781
2,178
41,316
43,494
Accounting policy
Receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. After initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest rate method, less any impairment losses.
This category generally applies to trade and other receivables. Trade and other receivables are
generally due for settlement within no more than 30 days from the date of recognition. Due to
their current nature, the carrying amount of trade and other receivables approximates fair value.
There is no allowance for expected credit losses regognised for the year ended 30 June 2020
(2019: Nil).
9.
Other assets
Prepaid expenses
10.
Plant and equipment
Opening written down value at beginning of year
Acquired upon acquisition of Galicia Tin & Tungsten SL
Additions
Foreign exchange transalation
Depreciation
Closing written down value at beginning of year
122,843
122,843
42,449
42,449
-
93,156
25,233
4,136
(20,651)
101,874
-
-
-
-
-
-
Accounting policy
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property,
plant and equipment (excluding land) over their expected useful lives, being 2.5 years. The
residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate,
at each reporting date. An item of plant and equipment is derecognised upon disposal or when
there is no future economic benefit to the consolidated entity. Gains and losses between the
carrying amount and the disposal proceeds are taken to profit or loss.
Rafaella Resources Limited and Controlled Entities
37
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
11.
Exploration and evaluation assets
Balance at beginning of year
Exploration expenditure acquired – fair value of
exploration expenditure acquired from the acquisition of
Overland Resources (BC) Ltd
Exploration expenditure acquired – fair value of
exploration expenditure acquired from the acquisition of
the Sandstone project from Topdrill Pty Ltd
Exploration expenditure acquired – fair value of
exploration expenditure acquired from the acquisition of
Galicia Tin & Tungsten SL (refer to Note 21)
Exploration and evaluation expenditure incurred during
the year
Impairment of Sandstone project
Group
30 June 2020
$
Group
30 June 2019
$
915,030
77,005
-
-
7,140,699
3,023,236
(215,454)
108,294
60,000
-
669,731
Balance at end of year
10,863,511
915,030
Accounting policy
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be
recouped through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves. Directly attributed exploration and evaluation costs are capitalised to
exploration and evaluation assets. A regular review for impairment is undertaken of each area of
interest to determine the appropriateness of continuing to carry forward costs in relation to that
area of interest.
12.
Trade and other payables
Accrued expenses
Director payables
Trade creditors
88,083
24,669
184,134
63,654
4,559
162,007
296,886
230,220
Accounting policy
Trade and other payables amounts represent liabilities for goods and services provided to the
entity prior to the end of the year and which are unpaid. The amounts are unsecured and are
usually paid within 30 days of invoice.
Rafaella Resources Limited and Controlled Entities
38
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
13.
Contributed equity
Balance at beginning of year
Share issue: 19 July 2018
Share issue: 19 July 2018
Share issue: 19 July 2018
Share issue: 12 December 2018
Share issue: 27 August 2019
Share issue: 3 October 2019
Share issue: 14 October 2019
Contingent consideration for
acquisition of GTT
Share issue: 5 March 2020
Share issue: 13 March 2020
Share issue costs
Group
30 June 2020
No.
$
Group
30 June 2019
No.
$
38,043,751
-
-
-
-
27,675,000
331,820
4,375,000
250,000
1,900,000
-
4,617,297
-
-
-
-
5,527,500
66,364
875,000
3,815,000
22,000
380,000
(192,728)
11,993,751
500,000
300,000
25,000,000
250,000
-
-
-
534,268
100,000
60,000
5,000,000
35,000
-
-
-
-
-
-
-
-
-
-
(1,111,971)
Balance at end of year
72,575,571 15,110,433
38,043,751
4,617,297
Ordinary shares
Ordinary shares have no par value and have the right to receive dividends as declared and, in the
event of the winding up of the Group, to participate in proceeds from the sale of all surplus assets
in proportion to the number of and amounts paid up on the shares held. Ordinary shares entitle
their holder to one vote, either in person or by proxy, at a meeting of the Group. Share capital
represents the nominal value of shares that have been issued. Any transaction costs associated
with the issuing of shares are deducted from share capital, net of any related income tax benefits.
Capital management
Management controlled the capital of the Group in order to maintain a capital structure that
ensured the lowest cost of capital available to the Group. Management’s objective is to safeguard
its ability to continue as a going concern, so that it can provide returns for shareholders and
benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital. Capital is regarded as total equity, as recognised in the statement of financial position,
plus net debt. The Group would look to raise capital when an opportunity to invest in a business
or company was seen as value adding relative to the current Company's share price at the time of
the investment.
Rafaella Resources Limited and Controlled Entities
39
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
14.
Reserves
Foreign currency translation reserve
Balance at beginning of year
Foreign exchange on translation of operations
Balance at end of year
Options reserve
Balance at beginning of year
Options issued (entitlements)
Balance at end of year
Share based payments reserve
Balance at beginning of year
Options granted33
Grant of performance rights
Balance at end of year
Group
30 June 2020
$
Group
30 June 2019
$
9,875
(48,579)
(38,704)
-
9,875
9,875
125,980
-
-
125,980
125,980
125,980
643,696
52,500
179,117
-
643,696
-
875,313
643,696
33Variables used to calculate the option valuations are are as follows:
Inputs
Broker Options
Broker Options
Number of options
Exercise price
Expiry date
Grant date
Share price at grant date
Risk free interest rate
Volatility
Option value
10,000,000
$0.3000
31 October 2021
27 August 2019
$0.1900
2.20%
100%
$0.0010
1,425,000
$0.2000
27 August 2022
27 August 2019
$0.1900
2.13%
100%
$0.0825
Director &
Employee Options
1,500,000
$0.2000
27 August 2022
27 August 2019
$0.1900
0.66%
112%
$0.1260
Rafaella Resources Limited and Controlled Entities
40
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
14.
Reserves (continued)
Unlisted options
Balance at beginning of year
Options granted
Options expired
Balance at end of year
Listed options
Balance at beginning of period
Options granted
Options issued (entitlements)
Balance at end of period
Group
30 June 2020
No.
Group
30 June 2019
No.
4,825,000
2,925,000
(2,325,000)
2,325,000
2,500,000
-
5,425,000
4,825,000
17,098,036
10,000,000
-
-
4,500,000
12,598,036
27,098,036
17,098,036
Accounting policy
Each entity within the Group determines the appropriate functional currency as it reflects the
primary economic environment in which the relevant reporting entity operates, being Australian
dollars. In translating the financial statements of such an entity for incorporation in the combined
financial statements in the presentation currency the assets and liabilities denominated in other
currencies are translated at end of the reporting year rates of exchange and income and expense
items for each statement presenting profit or loss and other comprehensive income are translated
at average rates of exchange for the reporting year. The resulting translation adjustments (if any)
are recognised in other comprehensive income and accumulated in a separate component of
equity until the disposal of that relevant reporting entity.
Rafaella Resources Limited and Controlled Entities
41
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
15.
Operating segments
The Group has determined operating segments based on the information provided to the Board
of Directors. The Group operates predominantly in one business segment being the exploration
for minerals in three geographic segments, being Australia, Canada and Spain.
Australia
Canada
Spain
Corporate
Total
2020
Segment revenue
Segment loss
Segment assets
Segment liabilities
2019
Segment revenue
Segment loss
Segment assets
Segment liabilities
(2,931)
(219,683)
29
-
-
(2,107)
340,291
(352)
-
(22,892)
472,054
-
-
(14,234)
478,722
(1,086)
-
(2,672,531)
11,052,893
(107,040)
69,236
533,089
1,142,756
(221,777)
66,305
(2,382,017)
12,667,732
(328,817)
-
-
-
-
57,811
(1,064,396)
3,461,776
(234,593)
57,811
(1,080,737)
4,280,789
(236,031)
Accounting policy
Operating segments are identified based on the internal reports that are regularly reviewed by
the Board of Director’s, the Chief Operation Decision Maker, for the purpose of allocating
resources and assessing performance. The adoption of this “management approach” has resulted
in the identification of reportable segments.
16.
Reconciliation of cashflows from operating activities
Loss before tax
Consultancy fees
Depreciation
Exploration impairment
Share based payments
Forex reserve
Change in trade & other receivables
Change in other assets
Change in exploration expenditure
Change in trade & other payables
Change in provisions
Group
30 June 2020
$
Group
30 June 2019
$
(2,382,017)
580,688
20,651
215,454
232,250
(38,704)
(206,287)
(80,394)
(2,961,445)
66,666
26,120
(1,080,737)
-
-
-
35,000
9,875
(38,356)
(24,668)
(651,394)
183,898
(5,811)
Net cash used in operating activities
(4,527,018)
(1,572,193)
Rafaella Resources Limited and Controlled Entities
42
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
17.
Events after the end of the reporting year
There are no matters or circumstances have arisen since the end of the year which will
significantly affect, or may significantly affect, the state of affairs or operations of the reporting
entity in future financial years other than the following:
On July 1 2020, the Company announced a substantial increase in total mineral resources
and the estimation of maiden measured and indicated resources at the Santa Comba
Project. The resource update significantly increases the Company’s confidence in the
Project and underpins the development of the mine plan and feasibility study. The
increase in tonnes also allows Rafaella to evaluate enhanced production scenarios.
The following month, the Company announced that it has entered into a conditional
agreement to acquire 100% of the Midrim and Laforce nickel-copper sulphide projects
from Meteoric Resources NL (ASX: MEI). The projects are in the highly prospective
Belleterre-Angliers Greenstone Belt located in the Province of Quebec, Canada. They are
located close to Chase Mining Corporation’s (ASX: CML) Alotta Project, which announced
massive sulphides and high-grade nickel and copper intersections from its recently
completed drilling programme on 29 June 2020. The acquisition is subject to due
diligence as well as regulatory and shareholder approvals. It supports the Company’s
strategic focus on developing near term, low cost base metal operations.
The Company also completed a placement to raise approximately $1.2m to provide funds
to progress further feasibility work at the flagship Santa Comba Project which it is
continuing to advance in FY21.
18.
Related party transactions
a. KMP compensation
Short-term employee benefits
Post-employment benefits
Total
Group
30 June 2020
$
Company
30 June 2019
$
899,413
37,292
299,630
14,466
936,705
314,096
Detailed remuneration disclosures are provided in the remuneration report included in the
Directors’ Report.
Rafaella Resources Limited and Controlled Entities
43
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
18.
Related party transactions (continued)
b. Transactions with related parties
During the reporting year, there were the following related party transactions:
On 27 August 2019 the Company issued the following:
o 250,000 fully paid ordinary shares to a related party of Graham Durtanovich for
his anniversary shares;
o 500,000 fully paid ordinary shares to a related party of Ashley Hood for his
anniversary shares;
o 1,144,237 fully paid ordinary shares to a related party of Steven Turner as part of
the consideration shares for the acquisition of Galicia Tin & Tungsten SL;
o 100,000 fully paid ordinary shares to Robert Wirxon and 1,527,277 fully paid
ordinary shares to a related party of Robert Wrixon as part of the consideration
shares for the acquisition of Galicia Tin & Tungsten SL;
o 2,850,000 fully paid ordinary shares to EverBlu Capital Pty Ltd and their associates
(deemed related to the Company by ASX) as a success fee;
o 750,000 unlisted $0.20 options expiring 27 August 2022 to Robert Wrixon as part
of his remuneration;
o 1,425,000 unlisted $0.20 options expiring 27 August 2022 to EverBlu Capital Pty
Ltd and their associates (deemed related to the Company by ASX) as a success
fee;
o 10,000,000 listed $0.30 options expiring 31 October 2021 to EverBlu Capital Pty
Ltd and their associates (deemed related to the Company by ASX) as advisory
options;
o 2,400,000 milestone 1 performance rights and 2,400,000 milestone 2
performance rights to a related party of Steven Turner as part of his
remuneration; and
o 250,000 milestone 1 performance rights and 250,000 milestone 2 performance
rights to a related party of Robert Wrixon as part of his remuneration.
On 5 March 2020 the Company issued 250,000 fully paid ordinary shares to a related party
of Ashley Hood for his anniversary shares.
On 13 March 2020 the Company issued the following:
o 780,000 fully paid ordinary shares to EverBlu Capital Pty Ltd and their associates
(deemed related to the Company by ASX) as a capital raising fee.
o 600,000 fully paid ordinary shares to EverBlu Capital Pty Ltd and their associates
(deemed related to the Company by ASX) as an advisory mandate fee.
During the year a total of $103,500 plus GST was paid to EverBlu Capital Pty Ltd (deemed
related to the Company by ASX) in relation to corporate advisory fees and research report
fees.
c. Outstanding balances arising from sales/purchases of goods and services
There are no outstanding balances arising from sales/purchases of goods and services at the end
of the reporting year.
Rafaella Resources Limited and Controlled Entities
44
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
18.
Related party transactions (continued)
d. Loan to Directors and their related parties
No loans have been made to any Director or any of their related parties, during the reporting
year.
19.
Financial risk management
The Group’s overall financial risk management strategy is to ensure that the Group is able to fund
its business operations and expansion plans. Exposure to credit risk, liquidity risk, foreign
currency risk, interest rate risk and commodity price risk arises in the normal course of the Group’s
business. The Group’s risk management strategy is set by and performed in the close co-operation
with the Board and focuses on actively securing the Group’s short to medium-term cash flows by
regular review of its working capital and minimising the exposure to financial markets. The Group
does not actively engage in the trading of financial assets for speculative purposes nor does it
write options. The most significant financial risks to which the Group is exposed are described
below.
Financial assets and liabilities
The financial assets and liabilities as at 30 June 2020 are reflected at cost, fair valued through the
statement of comprehensive income. The Directors consider that the carrying amounts of the
financial assets and liabilities approximate their fair values.
Specific financial risk exposures and management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity
risk and market risk, including in interest rates, foreign currency, commodity and equity prices.
a) Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents.
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contractual obligations that could lead to a financial loss to the Group. Credit
risk is managed through the maintenance of credit assessment and monitoring procedures.
b) Liquidity risk
Liquidity risk is the risk that there will be inadequate funds available to meet financial
commitments as they fall due. The Group recognises the on-going requirements to have
committed funds in place to cover both existing business cash flows and provide reasonable
headroom for capital expenditure programs.
The key funding objective is to ensure the availability of flexible and competitively priced funding
from alternative sources to meet the Group’s current and future requirements. The Group utilises
a detailed cash flow model to manage its liquidity risk. This analysis shows that available sources
of funds are expected to be sufficient over the lookout period. The Group attempts to accurately
project the sources and uses of funds which provide an effective framework for decision making
and budgeting. The table below summarises the maturity profile of the Group’s contractual cash
flow financial liabilities based on contractual undiscounted repayment obligations. Repayments,
which are subject to notice, are treated as if notice were to be given immediately.
Rafaella Resources Limited and Controlled Entities
45
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
19.
Financial risk management (continued)
c) Foreign currency risk
The following table illustrates the estimated sensitivity to a 1% increase and decrease to exchange
rate movements:
Impact on pre-tax profit/(loss)
30 June 2020
AUD to EUR rate + 10%
AUD to EUR rate – 10%
AUD to CAD rate + 10%
AUD to CAD rate – 10%
30 June 2019
AUD to CAD rate + 10%
AUD to CAD rate – 10%
$
8,547
(8,547)
12
(12)
921
(921)
d) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market interest rate. The Group is not exposed to interest rate
movement through borrowings as there are no borrowings. The following table sets out the
variable interest bearing and fixed interest bearing financial instruments of the Group:
30 June 2020
Financial assets
Cash and cash equivalents
Total
30 June 2019
Financial assets
Cash and cash equivalents
Total
Variable interest
$
Fixed interest
$
5,000
5,000
-
-
2,007,562
2,007,562
1,272,254
1,272,254
The following table illustrates the estimated sensitivity to a 1% increase and decrease to interest
rate movements.
Impact on pre-tax profit/(loss)
30 June 2020
Interest rates + 1%
Interest rates – 1%
30 June 2019
Interest rates + 1%
Interest rates – 1%
$
(31,546)
31,546
(201)
201
Rafaella Resources Limited and Controlled Entities
46
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
19.
Financial risk management (continued)
Accounting policy
Recognition and derecognition of financial instruments:
A financial asset or a financial liability is recognised in the statement of financial position when,
and only when, the entity becomes party to the contractual provisions of the instrument. All
other financial instruments (including regular-way purchases and sales of financial assets) are
recognised and derecognised, as applicable, using trade date accounting or settlement date
accounting. A financial asset is derecognised when the contractual rights to the cash flows from
the financial asset expire or it transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of ownership of the financial asset
are transferred or in which the entity neither transfers nor retains substantially all of the risks and
rewards of ownership and it does not retain control of the financial asset. A financial liability is
removed from the statement of financial position when, and only when, it is extinguished, that is,
when the obligation specified in the contract is discharged or cancelled or expires.
At initial recognition the financial asset or financial liability is measured at its fair value plus or
minus, in the case of a financial asset or financial liability not at fair value through profit or loss,
transaction costs that are directly attributable to the acquisition or issue of the financial asset or
financial liability.
Classification and measurement of financial assets:
Financial asset classified as measured at amortised cost: A financial asset is measured at
amortised cost if it meets both of the following conditions and is not designated as at fair value
through profit or loss (FVTPL), that is (a) the asset is held within a business model whose objective
is to hold assets to collect contractual cash flows; and (b) the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding. Typically trade and other receivables, bank and cash
balances are classified in this category. Financial asset that is a debt asset instrument classified
as measured at fair value through other comprehensive income (FVTOCI): There were no financial
assets classified in this category at reporting year end date. Financial asset that is an equity
investment classified as measured at fair value through other comprehensive income (FVTOCI):
There was one financial assets classified in this category at reporting year end date. Financial
asset classified as measured at fair value through profit or loss (FVTPL): There were no financial
assets classified in this category at reporting year end date.
Classification and measurement of financial liabilities:
Financial liabilities are classified as at fair value through profit or loss (FVTPL) in either of the
following circumstances: (1) the liabilities are managed, evaluated and reported internally on a
fair value basis; or (2) the designation eliminates or significantly reduces an accounting mismatch
that would otherwise arise. All other financial liabilities are carried at amortised cost using the
effective interest method. Reclassification of any financial liability is not permitted.
Rafaella Resources Limited and Controlled Entities
47
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
Commitments and contingencies
20.
a. Commitments relating to operating and
exploration expenditures
Not longer than 1 year
More than 1 year but not longer than 5 years
More than 5 years
Group
30 June 2020
$
Group
30 June 2019
$
155,032
379,238
2,489,770
299,161
195,801
-
3,024,040
494,962
There are no other material commitments as at 30 June 2020.
b. Contingent assets
There are no contingent assets as at 30 June 2020.
c. Contingent liabilities
Contingent liabilities as at 30 June 2020 consist of the issue of 250,000 fully paid ordinary shares
each in the Company to the Directors, Peter Hatfull and Ashley Hood, on each anniversary of the
director’s commencement date during which the Director remains employed under their
Executive Services Agreement.
Rafaella Resources Limited and Controlled Entities
48
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
21.
Acquisition of controlled entities – business combination
On 27 August 2019, Rafaella Resources Limited acquired the rights to operate the underlying
business of Galicia Tin & Tungsten SL (“GTT”) for a consideration of 17,500,000 in shares with a
contingent consideration of 30,000,000 in share payable upon achieving certain milestones.
Details of the acquisition are as follows:
Cash and cash equivalents
Other assets
Plant and equipment
Exploration and evaluation asset
Trade and other payables
Loans
Acquisition-date fair value of the total consideration transferred
Representing:
Shares paid or payable to vendor
Total consideration transferred
Fair value
$
221,493
8,020
93,156
7,140,699
(65,619)
(82,749)
7,315,000
7,315,000
7,315,000
The fair value of GTT’s assets and liabilities have been measured provisionally. If new information
obtained within one year of the date of acquisition about facts and circumstances that existed at
the date of acquisition identifies adjustments to the amounts above, the accounting for the
acquisition will be revised. The contingent consideration relating to the acquisition is as follows:
15,000,000 ordinary shares on the Company announcing a JORC compliant resource at
any of the tenements in relation to the GTT Project (Milestone 1); and
15,000,000 ordinary shares on the completion of a pre-feasibility study for the
development of the GTT Project, and the grant of a loan or any other project financing
package that allows the Project to progress to construction (Milestone 2).
Rafaella Resources Limited and Controlled Entities
49
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2020
21.
Acquisition of controlled entities – business combination (continued)
Accounting policy
The acquisition method of accounting is used to account for business combinations regardless of
whether equity instruments or other assets are acquired. The consideration transferred is the
sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-
controlling interest in the acquiree. For each business combination, the non-controlling interest
in the acquiree is measured at either fair value or at the proportionate share of the acquiree's
identifiable net assets. All acquisition costs are expensed as incurred to profit or loss. On the
acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms, economic
conditions, the Group's operating or accounting policies and other pertinent conditions in
existence at the acquisition-date. Where the business combination is achieved in stages, the
Group remeasures its previously held equity interest in the acquiree at the acquisition-date fair
value and the difference between the fair value and the previous carrying amount is recognised
in profit or loss. Contingent consideration to be transferred by the acquirer is recognised at the
acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration
classified as an asset or liability is recognised in profit or loss. Contingent consideration classified
as equity is not remeasured and its subsequent settlement is accounted for within equity. The
difference between the acquisition-date fair value of assets acquired, liabilities assumed and any
non-controlling interest in the acquiree and the fair value of the consideration transferred and
the fair value of any pre-existing investment in the acquiree is recognised as goodwill.
If the consideration transferred and the pre-existing fair value is less than the fair value of the
identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is
recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after
a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer. Business combinations are initially accounted for
on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised
and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The
measurement period ends on either the earlier of (i) 12 months from the date of the acquisition
or (ii) when the acquirer receives all the information possible to determine fair value.
22.
Interests in controlled entities
Company Name
Sandstone Metals PtyLtd
Yukon Metals Pty Ltd
Biscay Minerals Pty Ltd
Overland Resources (BC) Limited
Galicia Tin & Tungsten SL
Place of
Incorporation
Australia
Australia
Australia
Canada
Spain
30 June 2020
% Ownership
100%
100%
100%
100%
100%
30 June 2019
% Ownership
100%
100%
-%
100%
-%
Rafaella Resources Limited and Controlled Entities
50
DIRECTORS’ DECLARATION
The Directors of the Group declare that:
The financial statements and notes are in accordance with the Corporations Act 2001 and:
comply with Australian Accounting Standards;
are in accordance with International Financial Reporting Standards issued by the
International Accounting Standards Board, as stated in Note 2 to the financial
statements; and
give a true and fair view of the Group’s financial position as at 30 June 2020 and of the
performance for the year ended 30 June 2020;
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to
pay its debts as and when they become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act
2001.
This declaration is signed in accordance with a resolution of the Directors made pursuant to
section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
____________________
Peter Hatfull
Non-Executive Chairman
24 September 2020
Rafaella Resources Limited and Controlled Entities
51
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
RAFAELLA RESOURCES LIMITED
Opinion
We have audited the financial report of Rafaella Resources Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Exploration and evaluation assets - Refer to Note 11
The Group has capitalised exploration and
evaluation expenditure with a carrying value of
$10,863,511 as at the reporting date.
We considered this to be a key audit matter due to
the significant management judgments involved in
assessing the carrying value of the assets including:
finding
the basis on which
Determining whether the expenditure can be
specific mineral
that
associated with
resources, and
expenditure is allocated to an area of interest;
Assessing whether any indicators of impairment
are present and if so, judgement applied to
determine and quantity any impairment loss; and
Determining whether exploration activities have
reached a stage at which the existence of an
economically recoverable reserves may be
determined.
Our audit procedures included:
Ensuring that the right to tenure of each area of
interest is current;
Agreeing a sample of additions to supporting
documentation and ensuring the amounts are
capital in nature and relate to the area of interest;
Assessing and evaluating management’s
assessment of the impairment loss recognised in
relation to the disposal of the Sandstone Project;
Assessing and evaluating management’s
assessment that no indicators of impairment
existed as at 30 June 2020;
Enquiring with management and reviewing
budgets and other supporting documentation as
evidence that active and significant operations
in, or relation to, the area of interest will be
continued in the future; and
Through discussions with the management and
reviewing relevant supporting documentation,
that
assessing management’s determination
exploration and evaluation activities have not yet
reached a stage where
the existence or
otherwise of economically recoverable reserves
may be reasonably determined.
Acquisition of Galicia Tin & Tungsten SL – refer to Note 21
During the year ended 30 June 2020, the Group
acquired Galicia Tin & Tungsten SL (GTT).
Our audit procedures included:
The accounting for this acquisition is a key audit
matter because it involves management judgement
in determining the acquisition date, appropriate
acquisition accounting treatment, fair value of assets
acquired,
liabilities assumed and purchase
consideration.
Obtaining the acquisition agreement and other
associated
an
understanding of the transaction and the related
accounting considerations;
documents
obtain
to
Evaluating management’s determination that the
acquisition did meet the definition of a business
in accordance with Accounting Standards;
Assessing management’s determination of the
acquisition date, fair value of consideration paid,
assets acquired and liabilities assumed; and
Reviewing the adequacy and accuracy of the
relevant disclosures in the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Rafaella Resources Limited, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 24 September 2020
TUTU PHONG
Partner
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
As at 15 September 2020
Issued Securities
Fully paid ordinary shares
$0.30 listed options expiring 31 October 2021
$0.20 unlisted options expiring 19 July 2022
$0.20 unlisted options expiring 27 August 2022
Milestone 1 performance rights expiring 27 August 2022
Milestone 2 performance rights expiring 27 August 2022
Total
Distribution of Listed Ordinary Fully Paid Shares
Unlisted
Total
Listed
on ASX
90,575,571
27,098,036
-
-
-
-
90,575,571
-
27,098,036
-
2,500,000
2,500,000
2,925,000
2,925,000
3,900,000
3,900,000
3,900,000
3,900,000
117,673,607 13,225,000 130,898,607
Spread of Holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Number of Holders Number of Units % of Total Issued Capital
0.00%
0.09%
0.53%
8.67%
90.71%
100.00%
2,240
85,196
476,179
7,848,910
82,163,046
90,575,751
11
22
52
151
147
383
Distribution of Listed Options
Spread of Holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Number of Holders Number of Units % of Total Issued Capital
0.00%
0.25%
0.50%
7.41%
91.84%
100.00%
1,120
66,622
136,675
2,008,021
24,885,598
27,098,036
2
21
19
44
25
111
Rafaella Resources Limited and Controlled Entities
56
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
Top 20 Listed Ordinary Fully Paid Shareholders
Rank
Shareholder
TRANSAMINE HOLDINGS & INVESTMENTS LTD
SUBURBAN HOLDINGS PTY LTD
ULEX RECURSOS SL
ANGLO MENDA PTY LTD
ANGLO AUSTRALASIA HOLDINGS PTY LTD
BRING ON RETIREMENT LTD
KEITH DAVIDSON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ATLANTIC CAPITAL HOLDINGS PTY LTD
EVERBLU CAPITAL PTY LTD
VBT PTY LTD
KIMBERLY WRIXON
RIMOYNE PTY LTD
HORATIO STREET PTY LIMITED
SUBURBAN HOLDINGS PTY LIMITED
DANIEL & JULIE EDDINGTON
CITICORP NOMINEES PTY LIMITED
JOSEPH PATRICK BURKE
E & E HALL PTY LTD
EXTRACTIVE CAPITAL PTE LTD
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Total
Top 20 Listed Options
Rank Option Holder
ATLANTIC CAPITAL HOLDINGS PTY LTD
CHIFLEY PORTFOLIOS PTY LTD
NATIONAL NOMINEES LIMITED
RIMOYNE PTY LTD
ANGLO AUSTRALASIA HOLDINGS PTY LTD
ANGLO MENDA PTY LTD
PITTAR NOMINEES PTY LIMITED
MR NICHOLAS DERMOTT MCDONALD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HORATIO STREET PTY LIMITED
EXERTUS CAPITAL PTY LTD
HAVENRANCH PTY LIMITED
SUBURBAN HOLDINGS PTY LIMITED
CELTIC CAPITAL PTY LTD
MR WILLIAM LESLIE KELSO
MR SHANE TIMOTHY BALL
PHEAKES PTY LTD
ANNABELLE SHAMIR
MR PETER CHARLES PITTAR
MR MARK JOHN BAHEN & MRS MARGARET PATRICIA BAHEN
MR MATTHEW BLUMBERG
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
15.
16.
17.
18.
19.
20.
Total
Shares Held
5,000,000
% Issued
Capital
5.52%
4,904,426
4,375,000
2,958,808
2,825,000
2,613,181
2,463,270
2,100,000
1,960,000
1,900,000
1,818,182
1,527,277
1,459,091
1,429,546
1,345,000
1,285,200
1,255,300
1,250,200
1,215,200
1,144,237
44,828,918
5.41%
4.83%
4.32%
3.12%
2.89%
2.72%
2.32%
2.16%
2.10%
2.01%
1.69%
1.61%
1.58%
1.48%
1.42%
1.39%
1.38%
1.34%
1.26%
49.49%
Options Held
14,717,309
1,055,966
1,039,417
1,014,299
% Issued
Capital
54.31%
3.90%
3.84%
3.74%
941,667
915,001
719,600
600,003
500,000
391,667
390,000
353,334
333,334
316,667
300,000
300,000
291,667
174,000
140,000
3.48%
3.38%
2.66%
2.21%
1.85%
1.45%
1.44%
1.30%
1.23%
1.17%
1.11%
1.11%
1.08%
0.64%
0.52%
125,000
120,000
24,738,931
0.46%
0.44%
91.29%
The number of shareholdings held in less than marketable parcels is 34.
Rafaella Resources Limited and Controlled Entities
57
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
The Company has the following substantial shareholders listed in its register as at 15
September 2020:
Rank
1.
2.
3.
Shareholder
Adam Blumenthal Entities
SUBURBAN HOLDINGS PTY LTD
TRANSAMINE HOLDINGS & INVESTMENTS LTD
Shares Held % Issued Capital
13.07%
11,836,483
6,249,426
5,000,000
6.89%
5.52%
Ordinary Shares Voting Rights - Subject to any rights or restrictions for the time being attached
to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:
each Shareholder entitled to vote may vote in person or by proxy, attorney or
representative;
on a show of hands, every person present who is a Shareholder or a proxy, attorney or
representative of a Shareholder has one vote; and
on a poll, every person present who is a Shareholder or a proxy, attorney or
representative of a Shareholder shall, in respect of each fully paid Share held by him, or
in respect of which he is appointed a proxy, attorney or representative, have one vote
for the Share, but in respect of partly paid Shares shall have such number of votes as
bears the same proportion to the total of such Shares registered in the Shareholder’s
name as the amount paid (not credited) bears to the total amounts paid and payable
(excluding amounts credited).
The Company has the following restricted securities on issue as at the date of this report:
Security Type
Fully paid ordinary shares
(voluntary escrow)
Fully paid ordinary shares
(voluntary escrow)
$0.20 unlisted options expiring 27
August 2022 (voluntary escrow)
Number of
Securities
Escrowed
13,125,000
4,375,000
1,500,000
Escrow Duration
Escrow Date
12 months from
date of issue
12 months from
date of issue
18 months from
date of issue
26 August 2020
14 October 2020
27 February 2021
Use of Funds
Between the date of listing on ASX and the date of this report the Group has used the cash and
assets in a form readily convertible to cash that it had at the time of admission in a way
consistent with its business objectives and as set out in the Second Replacement Prospectus
dated 1 June 2018.
Rafaella Resources Limited and Controlled Entities
58
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
Schedule of Exploration Tenements
Project
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Santa Comba
Tenement Name
San Antonio
Santa María
Oportuna
Carballeira
Santa Bárbara
Carmen Facción 1a
Ampliación a Oportuna
Demasía a Santa María
Primera Demasía a Oportuna
Segunda Demasía a Oportuna
Demasía a Carballeira
Demasía a Santa Bárbara
Primera Demasía a Carmen Facción 1a
Segunda Demasía a Carmen Facción 1a
Demasía a Ampliación a Oportuna
Interest Held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Project
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
Claim Name &
Number
MM 1
MM 2
MM 3
MM 4
MM 5
MM 6
MM 7
MM 8
MM 9
MM 10
MM 11
MM 12
MM 13
MM 14
MM 15
MM 16
MM 17
MM 18
MM 19
MM 20
MM 21
MM 22
MM 23
MM 24
MM 25
MM 26
MM 27
MM 28
MM 29
MM 30
Rafaella Resources Limited and Controlled Entities
Grant Number
Interest Held
YD81304
YD81305
YD81306
YD81307
YD81308
YD81309
YD81310
YD81311
YD81312
YD81313
YD81314
YD81315
YD81316
YD81317
YD81318
YD81319
YD81320
YD81321
YD81322
YD81323
YD81324
YD81325
YD81326
YD81327
YD81328
YD81329
YD81330
YD81331
YD81332
YD81333
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%
100%
100%
100%
100%
100%
59
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
MM 31
MM 32
MM 33
MM 34
MM 35
MM 36
MM 37
MM 38
MM 39
MM 40
MM 41
MM 42
MM 43
MM 44
MM 45
MM 46
MM 47
MM 48
MM 49
MM 50
MM 51
MM 52
MM 53
MM 54
MM 55
MM 56
MM 57
MM 58
MM 59
MM 60
MM 61
MM 62
MM 63
MM 64
MM 65
MM 66
MM 67
MM 68
MM 69
MM 70
MM 71
MM 72
MM 73
MM 74
MM 75
MM 76
MM 77
MM 78
MM 79
MM 80
MM 81
YD81334
YD81335
YD81336
YD81337
YD81338
YD81339
YD81340
YD81341
YD81342
YD81343
YD81344
YD81345
YD81351
YD81352
YD81353
YD81354
YD81355
YD81356
YD81357
YD81358
YD81359
YD81360
YD81361
YD81362
YD81363
YD81364
YD81365
YD81366
YD81367
YD81368
YD81369
YD81370
YD81371
YD81372
YD81373
YD81374
YD81375
YD81376
YD81377
YD81378
YD81379
YD81380
YD81381
YD81382
YD81383
YD81384
YD81385
YD81386
YD81387
YD81388
YD81389
Rafaella Resources Limited and Controlled Entities
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%
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%
100%
60
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
MM 82
MM 83
MM 84
MM 85
MM 86
MM 87
MM 88
MM 89
MM 90
MM 91
MM 92
MM 93
MM 94
MM 95
MM 96
MM 97
MM 98
MM 99
MM 100
MM 101
MM 102
MM 103
MM 104
MM 105
MM 106
MM 107
MM 108
MM 109
MM 110
MM 111
MM 112
MM 113
MM 114
MM 115
MM 116
MM 117
MM 118
MM 119
MM 120
MM 121
MM 122
MM 123
MM 124
MM 125
MM 126
MM 127
MM 128
MM 129
MM 130
MM 131
MM 132
YD81390
YD81391
YD81392
YD81393
YD81394
YD81395
YD81396
YD81397
YD81398
YD81399
YD81400
YD81449
YD81450
YD81451
YD81452
YD81453
YD81454
YD81455
YD81456
YD81457
YD81458
YD81459
YD81460
YD81461
YD81462
YD81463
YD81464
YD81465
YD81466
YD81467
YD81468
YD81469
YD81470
YD81471
YD81472
YD81473
YD81474
YD81475
YD81476
YD81477
YD81478
YD81479
YD81480
YD81481
YD81482
YD81483
YD81484
YD81485
YD81486
YD81487
YD81488
Rafaella Resources Limited and Controlled Entities
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%
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%
100%
61
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
MM 133
MM 134
MM 135
MM 136
MM 137
MM 138
MM 139
MM 140
MM 141
MM 142
MM 143
MM 144
MM 145
MM 146
MM 147
MM 148
MM 149
MM 150
MM 151
MM 152
MM 153
MM 154
MM 155
MM 156
MM 157
MM 158
MM 159
MM 160
MM 161
MM 162
MM 163
MM 164
MM 165
MM 166
MM 167
MM 168
MM 169
MM 170
MM 171
MM 172
MM 173
MM 174
MM 175
MM 176
MM 177
MM 178
MM 179
MM 180
MM 181
MM 182
MM 183
YD81489
YD81490
YD81491
YD81492
YD81493
YD81494
YD81495
YD81496
YD81497
YD81498
YD81499
YD81500
YD81501
YD81502
YD81259
YD81260
YD81261
YD81262
YD81263
YD81264
YD81265
YD81266
YD81267
YD81268
YD81269
YD81270
YD81271
YD81272
YD81273
YD81274
YD81275
YD81276
YD81277
YD81278
YD81279
YD81280
YD81281
YD81282
YD81283
YD81284
YD81285
YD81286
YD81287
YD81288
YD81289
YD81290
YD81291
YD81292
YD81293
YD81294
YD81295
Rafaella Resources Limited and Controlled Entities
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%
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%
100%
62
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
MM 184
MM 185
MM 186
MM 187
MM 188
MM 189
MM 190
MM 191
MM 192
MM 193
MM 194
MM 195
MM 196
MM 197
MM 198
MM 199
MM 200
MM 201
MM 202
MM 203
MM 204
MM 205
MM 206
MM 207
MM 208
MM 209
MM 210
MM 211
MM 212
MM 213
MM 214
MM 215
MM 216
MM 217
MM 218
MM 219
MM 220
MM 221
MM 222
MM 223
MM 224
MM 225
MM 226
MM 227
MM 228
MM 229
MM 230
MM 231
MM 232
MM 233
MM 234
YD81296
YD21019
YD21020
YD21021
YD21022
YD21023
YD21024
YD21025
YD21026
YD21027
YD21028
YD21029
YD21030
YD21031
YD21032
YD21033
YD21034
YD21035
YD21036
YD21037
YD21038
YD21039
YD21040
YD21041
YD21042
YD21043
YD21044
YD21045
YD21046
YD21047
YD21048
YD21049
YD21050
YD21051
YD21052
YD21053
YD21054
YD21055
YD21056
YD21057
YD21058
YD21059
YD21060
YD21061
YD21062
YD21063
YD21064
YD21065
YD21066
YD21067
YD21068
Rafaella Resources Limited and Controlled Entities
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%
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%
100%
63
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES continued
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
McCleery
MM 235
MM 236
MM 237
MM 238
MM 239
MM 240
MM 241
MM 242
MM 243
MM 244
YD21069
YD21070
YD21071
YD21072
YD21073
YD21074
YD21075
YD21076
YD21077
YD21078
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Rafaella Resources Limited and Controlled Entities
64