2 0 2 0
ANNUAL REPORT
ACN 617 789 732
CORPORATE INFORMATION
Directors
Leonard Dean
NON-EXECUTIVE CHAIR
Duncan Chessell
MANAGING DIRECTOR
Andrew Shearer
NON-EXECUTIVE DIRECTOR
Craig Farrow
NON-EXECUTIVE DIRECTOR
CFO/Company Secretary
Jaroslaw (Jarek) Kopias
Registered & Principal Office
Level 4
29-31 King William Street
ADELAIDE SA 5000
Telephone +61 (0) 414 804 055
Postal Address
Level 4
29-31 King William Street
ADELAIDE SA 5000
Auditors
Grant Thornton Audit Pty Ltd
Level 3
170 Frome Road
ADELAIDE SA 5000
Solicitors
Piper Alderman Lawyers
Level 16
70 Franklin Street
ADELAIDE SA 5000
Home Stock Exchange
Australian Securities Exchange
20 Bridge Street,
SYDNEY NSW 2000
ASX Codes
RML – fully paid ordinary shares
RMLOA – quoted options exercise price
$0.10 and expiry 30 June 2022
Share Registry
Automic
GPO Box 5193
STDNEY NSW 2001
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R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
CONTENTS
Corporate Information
Chair’s Letter
Review of Operations
Mineral Resource Statement
Tenement Schedule
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
ASX Additional Information
2
4
5
18
20
21
34
35
36
37
38
39
57
58
61
Resolution Minerals Ltd ACN 617 789 732
This Annual Report covers Resolution Minerals Ltd (“Resolution Minerals”,
“Resolution” “RML” or the “Company”) – formerly Northern Cobalt Ltd.
The financial report is presented in the Australian currency.
The Company is a company limited by shares, incorporated and domiciled
in Australia. Its registered office and principal place of business is:
Resolution Minerals Ltd
Level 4
29-31 King William Street
ADELAIDE SA 5000
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
3
CHAIR’S LETTER
I am pleased that I can report to shareholders that despite a
advance the Wollogorang Project in 2021 during the May to
one in a hundred year pandemic and the difficult operating
November dry season and allow funding to focus on the 64North
conditions in Alaska, the Company has been able to significantly
Project in the immediate term.
advance shareholders’ interests on your Company’s flagship
64North Project. This project holds 30 known gold prospects with
multiple high priority drill ready targets. During 2020, we have
been methodically testing the primary West Pogo Block and at
the time of writing we are highly encouraged by the geology with
assays pending on multiple drill holes. The current all-time highs
in the gold price have seen well supported capital raises and the
company is well positioned to continue drilling and news flow.
The Company underwent a name change in late 2019 from
Northern Cobalt to Resolution Minerals to reflect the broader
view of economic mineral exploration the Company is
undertaking. In response to a subdued vanadium price, during
2019, the Company switched focus from the vanadium-magnetite
Snettisham Project to acquire the highly prospective 64North
Project which surrounds the high grade operating Pogo Gold
Mine (owned by Northern Star) with an endowment of 10.7 Moz
Au. We have a US$20m earn-in agreement with project partner
Millrock Resources to acquire potentially 80% of the project. This
is an audacious move for a junior Australian mineral explorer
and has required our absolute focus. I acknowledge that our
executive staff have given this exciting project the required focus
and the Company is and will benefit from it.
Resolution currently holds three projects, all in top tier mining
jurisdictions of Australia and USA, prospective for gold,
copper, cobalt, vanadium, magnetite and uranium. This puts
the Company in an excellent position with rising gold prices at
all-time highs and a steadily rising copper price and increasing
demand for battery metals.
This year will also mark the end of my tenure as the Chairman
of Resolution Minerals at this year’s AGM, as I will be retiring
after a 50-year career in the steel and mining industry. I thank
shareholders for the support over the last 3.5 years. I leave
the Company well positioned under the leadership of the
Managing Director, Duncan Chessell and incoming new Chair
Craig Farrow and the dynamic Resolution geology team, with
prospective projects in multiple in-demand commodities in top
tier mining jurisdictions.
Thank you to the shareholders for your support of Resolution
over the last 12 months and I firmly believe the company is well
positioned for the future.
While we are very positive for the copper, cobalt and uranium
potential of the Wollogorang Project, we have not had the
resources or access, due to the COVID-19 pandemic, to explore
Len Dean
Chair
in 2019-20. We are actively seeking alternative funding to
Resolution Minerals Ltd
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R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
REVIEW OF OPERATIONS
Overview
Resolution’s flagship 64North Project in the Tintina Gold
identified drill targets focussed on defining a vanadium bearing
Province, Alaska has been the focus of exploration efforts since
higher grade magnetite prospect. As the price of vanadium
17 October 2019 when the company entered into a binding
dropped significantly in early 2019 and given the early stage
agreement to earn-in to the highly prospective project. The
nature and location of the project, a decision was made to put
64North Project surrounds the world-class high-grade operating
the project under review and seek a more advanced project. A
Pogo Gold Mine, owned by Northern Star Resources Ltd (ASX:
desktop review in 2020 of the historic gold mines has identified
NST) and the western zone or “West Pogo Block” has been the
prospective areas for follow up via a program of early stage
focus of diamond core drilling activities. This is a result of the
work (soils and mapping), however, the Company’s focus is
price of gold reaching all-time highs of over US$2,000/oz and the
the compelling brown-field 64North Project for allocation of
camp scale potential of the brown-fields project.
resources and we are seeking a funding partner to advance the
Resolution’s second project is the Wollogorang project in the
Ti-V-Fe and/or gold potential at this time.
Northern Territory Australia (the asset the company listed on in
The Company is fortunate to have multiple highly prospective
late 2017), which is prospective for copper, cobalt and uranium
projects across a range of commodities all in top tier
and hosts the Stanton Cobalt Deposit. The fall in cobalt price in
jurisdictions, which de-risks commodity fluctuations and reduces
late 2018 and subdued copper price forced the Company to put
sovereign risk considerably (Table 1).
the project under review. With the steady rise in copper price
from April 2020, the Company will be seeking alternative funding
Table 1 RML project summary.
to advance the project to unlock shareholder value.
Project
Commodity
Location
Stage
The Company’s Snettisham Project, which is prospective for
vanadium, titanium and magnetite and contains three historic
gold mines from the early 1900s is part of the Juneau Gold Belt
in southern Alaska. Resolution acquired the project in late 2018
as the price of vanadium was rising dramatically. The Company
undertook an air-borne magnetic geophysics survey and
64North
Au
120 km east of
Fairbanks, Alaska, USA
Brownfields
exploration
Wollogorang
Co-Cu, U 850 km south-east of
Darwin, NT, Australia
Snettisham
Ti-V-Fe, Au 50 km south of
Juneau, Alaska, USA
Resource and
greenfields
exploration
Greenfields
exploration
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5
REVIEW OF OPERATIONS, continued
64 NORTH GOLD PROJECT, ALASKA USA
On 17 October 2019, Resolution
announced that the Company entered
Resolution holds a dominant 660 km2 land package surrounding the Pogo Gold Mine
(Figure 3) and is on track to earn-in to a 30% interest in year 1 in line with the earn-in
into a binding term sheet with Millrock
agreement. Field activities at the time of writing are ongoing and summarised below.
Resources Inc (Millrock TSXV: MRO)
to acquire, via joint venture earn-in,
Table 2 Terms of the sole funding earn-in agreement summary.
up to 80% in the 64North Project in
Stage
Alaska (Table 2). The Project completely
surrounds Northern Star’s Pogo Gold
Commence
Mine (Figure 1), which has a total
Drilling target
endowment of over 10 million ounces
of gold and has produced over 4 million
ounces of gold since commencing
production in 2006 at an average
rate of ~300,000 ounces per annum.
The 64North Project lies in the highly
prospective Tintina Gold Province, which
hosts over 100 Moz of gold across a
2,000 km east-west arc from the Yukon to
the west coast of Alaska.
Year 1
Year 2
Year 3
Year 4
Total
RML Expenditure
US$ (million)
% Earn in RML
Cash to MRO
US$ (‘000)
RML Shares to MRO
(million)
-
5
5
5
5
20
-
7,500m drilling (diamond core)
30%
42%
51%
60%
60%
-
50
50
50
50
200
5
5
10
10
4
4
38
Resolution can elect to earn up to 80% on one block of the Company’s choosing, by
fully funding the BFS and loan-carrying MRO to first production. The remainder of the
property would be subject to a co-funded JV.
Regional geology
The 64North Project coincides with
Devonian-Mississippian Fairbanks-
Chena assemblages (amphibolite facies)
basement, intruded by the mid-Cretaceous
Goodpaster batholith. The project falls
within the Goodpaster Gold District,
which includes the 10 Moz Pogo Au Mine.
The Goodpaster District is bound by the
Shaw Creek Fault to the north-west and
the Black Mountain Tectonic Zone to the
south-east (both left lateral conjugate faults
trending south-west to north-east). The
tectonic setting of the 64North Project
is within the Yukon-Tanana Upland, a
Devonian-Mississippian continental margin
assemblage bounded to the north by the
Tintina Fault and to the south by the Denali
Fault (Figure 1). The main mineralising event
for the 2,000 km wide Tintina Gold Province
is the mid-Cretaceous granite intrusions
(age 90–105 Ma) and these are present in
abundance across the 64North Project.
Figure 1 Deposit sizes stated as Endowment (Resources & Reserves plus historic
production) *sourced from company websites.
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R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Pogo Gold Mine history
Exploration began relatively recently in
the 1980s with prospectors collecting
steam sediment samples for assay.
During the early 1990s, the first modern
exploration commenced as a JV between
Sumitomo Metal Mining & Teck, involving
follow up of historic pan concentrate
anomalies from the early 1980s. In 1994
the first drill holes at Liese Creek missed
the main mineralisation on what is now
the key gold bearing Liese Zone (L1) at
the Pogo Gold Mine. The Liese Zone (L1)
was discovered in 1995 when geologists
realised there had been a near miss and
drilled vertically and intersected the gently
dipping thick and high-grade gold bearing
quartz veins. By 2000, over 77000 m of
drilling was completed on the Pogo Gold
Mine claims and first production began
in 2006. In 2009 Sumitomo purchased
Teck’s 40% stake for US$245m and in
the same year the 1st million Au ounces
were produced. In 2015 three million
Au ounces total production milestone
was reached. In 2018 Northern Star
purchased the Pogo Gold Mine for
US$260m with the total production history
to date of 3.9 Moz Au @ 13.1 g/t Au at rate
of ~ 300,000 oz/year. In 2019 Northern
Star aggressively added ounces near
mine. Presently, Northern Star continues
to explore on the Goodpaster Discovery,
which is located only 450 m from RML’s
claim boundary, which has increased the
Resource and Reserve to ~6 Moz Au. In
2020 Northern Star announced a $21m
resource drill out plan for the Goodpaster
Prospect and updated the total Resource
and Reserves to ~6.7 Moz Au.
Figure 2 The 64North Project prospects map; RML claims in blue, others in tan (See ASX
announcement “Investor Presentation” on 13 July 2020).
Figure 3 The 64North Project is split into 9 blocks.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
7
REVIEW OF OPERATIONS, continued
Exploration history 64North Project
The 64North Project area covers 660 km2
and has been the subject of only a
decade of modern exploration focussed
between 2001 and 2012, not surprisingly
this coincides with the Pogo Mine
commencing operation and constrained
to fluctuations in the gold price. Multiple
parties have explored a patch-work of
prospects and in total collected over
40,000 surface samples (rock, soil and
stream sediment), 8 geophysics surveys
and 46 diamond core holes totalling
11,434 m. The previous explorers
included: Zeus, Aurora, Hansen, Hyder,
Western Keltic, Rimfire, Avalon, Stoneboy,
Anglo, Corvus and Alix.
In 2015 Millrock Resources (our project
partner) started negotiations to package
up key historic prospects and peg open
ground surrounding the Pogo Gold Mine.
As the sale of Pogo progressed between
Sumitomo and Northern Star in late 2018,
Millrock stepped in and consolidated
the current project area of 660 km2 in
early 2019, securing a dominant ground
position. Millrock undertook a CSAMT
survey in the Summer of 2019 using
the same technique that lead to the
Goodpaster discovery in 2017 under
Sumitomo’s watch. Millrock Resources
is a project generator and their business
model is to bring in a JV partner to
fund the exploration and retain a long
tail interest. The first time the entire
potential camp scale system was packed
into one project area was in 2019, as
the 64North Project, with 30 identified
prospects (Figures 2 and 4). This presents
Resolution Minerals with an opportunity
to explore a brownfields project next to
Exploration activities
undertaken by Resolution
An extensive desktop data review was
undertaken in parallel to construction
of a road, in order to provide access
the compelling Aurora Prospect for
winter drilling in early 2020. The project
vendor had secured some of the historic
data from previous explorers, which is
critical in Alaska, as companies are not
required to report exploration data to
the government. Historic data review of
all available exploration data from 1998 to
2012 included:
•
•
40,000 surface samples: rock chips,
soils and pan concentrates.
11,434 m of diamond core drilling
across 46 holes.
• Airborne geophysics surveys:
magnetics, radio-metrics and EM.
• Ground geophysics: magnetics,
NSAMT and VLF-EM.
The results of the desktop review is
summarised (below) via a prospect
ranking pyramid and a program of
works designed for year 1 of the earn-
in agreement. As part of the earn-in
agreement US$1 million must be spent
on regional exploration, which is defined
as the area outside the West Pogo Block
(Figure 3). The project’s logistical overlay
is unique in an Alaskan exploration project
with an all-weather, all-year access
road servicing the Pogo Gold Mine and
prospects immediately adjacent to the
road, such as the Aurora Prospect.
Regional prospects requiring helicopter
support can be worked during the
five-month summer field season from
May to September and in certain cases
shoulder seasons of Spring and Autumn
by use of “winter-over” trails but at an
increased cost.
Figure 4 The 64North Project prospect ranking pyramid (See ASX announcement “Investor
Presentation” on 13 July 2020).
Table 3 The 2020 field season 1 January 2020 to 10 September 2020 summary, with field
operations ongoing.
a world-class high-grade operating gold
Surface samples
Drilling
Geophysics
mine in a top tier mining jurisdiction
(Alaska was ranked #4 in the world by the
Fraser Institute in 2019).
Soils
164
Rock chips
Stream sediments
Diamond core drilling
Heli-magnetics
ZTEM
CSAMT
142
39
3724m (7 holes)
1961 km
570 km
18 km
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R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Exploration drilling 2020
Drilling has been focussed on the West
Pogo block adjacent to the known gold
mineralisation at the Pogo Gold Mine.
The Echo and Reflection Prospects
(West Pogo Block) required helicopter
support and have been drill tested
with HQ diamond core drilling, with
Road access constructed in late 2019 and
assays pending.
extended during 2020 allows for track
Drilling to date has intersected paragneiss
mounted rigs to work throughout most of
rock type, which is the target host rock
the 2 km x 5 km Aurora Prospect, which is
with significant alteration, sulphides and
a north-west trending valley close to the
minor gold mineralisation and associated
Pogo Mine road.
pathfinder elements of arsenic (As),
bismuth (Bi) and elevated tellurium (Te)
suggesting the presence of a Pogo-style
mineral system on Resolution’s 64North
Project claims.
Figure 5 West Pogo Block – Aurora, Reflection and Echo Prospects – strongly de-magnetised Aurora Prospect.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
9
REVIEW OF OPERATIONS, continued
Assays have been received for four (4)
3 Large structures – potential
out of the seven (7) holes and while
fluid pathways.
Assay results
At the time of writing the assays for drill
holes 20EC05, 20RE06 and 20AU07 were
to date only minor gold mineralisation
has been identified, the right
3 Highly anomalous surface
geochemistry – soils, streams and
pending.
ingredients are all there for a discovery
rock chips.
(Figures 5 and 6).
3 Right geology – granitic Intrusions,
age 80-102 Ma, main mineralising
3 Evidence of vertical feeder systems
typical of Pogo-style mineralisation in
historic drilling (western end of valley),
engine room present throughout
mapping and surface samples.
Tintina Gold Province
3 Brown fields – next to Pogo
Gold Mine.
3 Geophysics – strongly de-magnetised
zone mirror of Goodpaster and Pogo.
3 Geophysics – CSAMT and ZTEM
3 Same paragneiss host rocks as Pogo
surveys, indicate same conductors on
Mine.
RML ground.
Figure 6 Drill collar locations West Pogo Block 2020 drilling.
10
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Hole IDs 20AU01 and 20AU02
Assays (ASX announcement “RML
Exploration Update – 64North Project
– Alaska” on 14 May 2020) and visual
logging of drill core confirms a Pogo-
style mineral system is present at
Resolution’s Aurora Prospect area
(Figure 7). Strong sericite and dolomite
alteration are present in the biotite-quartz-
feldspar paragneiss and are associated
with narrow sulphide-bearing quartz
veins including arsenopyrite, pyrite,
bismuthinite and pyrrhotite. Assays
with high levels of arsenic (As), bismuth
(Bi) and elevated tellurium (Te) support
the geological logging. The correlation
between Au-As-Bi-Te is typical of a Pogo-
style mineral system. The paragneiss is
interpreted to be the same host rock as
Northern Star’s Pogo Gold Mine.
Best intervals Hole 1: 20AU001
•
•
•
•
•
•
•
0.55 m @ 0.52 g/t Au from 94.31 m
0.12 m @ 0.94 g/t Au from 276.88 m
0.12 m @ 0.63 g/t Au from 326.88 m
1.01 m @ 1.59 g/t Au from 389.80 m
0.77 m @ 1.23 g/t Au from 430.65 m
2.59 m @ 0.37 g/t Au from 432.36 m
0.39 m @ 0.51 g/t Au from 458.21 m
Best intervals Hole 2: 20AU002
(*note hole 2 is incomplete due to COVID-19
shutdown)
•
•
0.65 m @ 0.53 g/t Au from 72.83 m
1.33 m @ 0.40 g/t Au from 98.25 m
Hole IDs 20AU03 and 20AU04
Assays from Aurora drill holes #3 and
hole #4 (ASX announcement “Assays
and Operations Update 64North Project
Alaska” on 10 September 2020), indicate
minor gold mineralisation as detailed
below (Figures 7 and 8). The alteration
observed in the drill core matched the
CSAMT and ZTEM geophysics anomalies.
The Company is encouraged by the
strong alteration, presence of minor gold
mineralisation, para-gneiss host rocks
and presence of sulphides indicating the
strong fertility of the system. We interpret
that correct structural “dilation” event, or
opening of “space”, to allow thick high-
grade gold mineralisation did not occur
at these locations. We conclude these
holes intersected thick zones that were
Cross Section Aurora Prospect drill holes 20AU01 & 20AU03 on CSAMT Line 6, West Pogo Block, 64North Project
800
700
600
500
400
300
200
100
0
-100
-200
S
N
3
0
0
U
A
0
2
0.86m @ 0.35 g/t
Au
1
0
0
U
A
0
2
1.48m @ 0.31 g/t Au
0.37m @ 0.30 g/t Au
0.55m @ 0.52 g/t Au
1.28m @ 0.35 g/t Au
0.12m @ 0.94 g/t Au
4.30m @ 0.47 g/t Au
462.4m
0.96m @ 0.42 g/t Au
0.12m @ 0.63 g/t Au
1.01m @ 1.59 g/t Au
0.39m @ 0.51 g/t Au
0.86m @ 0.44 g/t Au
615m
7147000
7147200
7147400
7147600
7147800
7148000
7148200
7148400
7148600
7148800
0
100
200
300
400
500m
NAD83/NUTM06
Vertical Exaggeration = 1:1
Width of Section = 80m
Assays
>0.3 g/t Au
ohm.m
Target conductivity <700 ohm.m
Figure 7 20AU004 cross section, West Pogo Block 2020 drilling (See ASX announcement
“Assays and Operations Update 64North Project Alaska” on 10 September 2020).
Cross Section Aurora Prospect drill holes 20AU04 on CSAMT Line 3, West Pogo Block, 64North Project
clearly the fluid pathways for a large
1200
S
mineralising system and further drilling will
target potential high-grade zones of gold
mineralisation nearby.
Intervals Hole 20AU003
•
0.86 m @ 0.35 g/t Au
from 19 m depth
•
0.86 m @ 0.44 g/t Au
from 423 m depth
Intervals Hole 20AU004
•
0.78 m @ 0.41 g/t Au
from 522 m depth
•
1.19 m @ 0.76 g/t Au
from 762 m depth
1000
800
600
400
200
0
-200
-400
historic results
1.53m @ 0.56 g/t Au
3.11m @ 0.51 g/t Au
4
0
0
U
A
0
2
R-12-01
2
0
-
2
1
-
R
M
M
1.22m @ 1.71 g/t Au
1.53m @ 1.67 g/t Au
4
0
0
m
463m
1.52m @ 0.53 g/t Au
N
RML results
0.78m @ 0.41 g/t Au
1.19m @ 0.76 g/t Au
7147500N
7148000N
7148500 N
7149000N
7149500N
7150000N
1093m
0
100
200
300
400
500m
NAD83/NUTM06
Vertical Exaggeration = 1:1
Width of Section = 400m
Assays
>0.3 g/t Au
ohm.m
125
435
1290
Target conductivity <700 ohm.m
810
1960
3070
6940
Figure 8 20AU004 cross section, West Pogo Block 2020 drilling (See ASX announcement
“Assays and Operations Update 64North Project Alaska” on 10 September 2020).
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REVIEW OF OPERATIONS, continued
WOLLOGORANG PROJECT, NORTHERN TERRITORY
Location
The Wollogorang Project covers
3,825 km2 (Figure 10) located on pastoral
land, along the Northern Territory –
Queensland border, on the Gulf of
Carpenteria and sits wholly on the NT
side of the border (Figure 9). The Project
area is most readily accessible from the
-1555 °°°NNN
Wollogorang and Pungalina Stations. The
nearest substantial population centre
is Borroloola 180 km to the north-west
which supports the world class lead-
zinc McArthur River Mine owned by
Glencore and speaks to the prospectivity
for base metals of the McArthur Basin
in which the project lies. The capital city
of Darwin is 850 km to the north-west.
Access to the area is possible in the dry
season between May to November via
gravel roads and station tracks, airports in
QLD at Borroloolla and Burketown have
regular scheduled flights, allowing for
-2555 °N
-10 °N
E
°
0
3
1
E
°
5
3
1
E
°
0
4
1
E
°
5
4
1
DARWIN
Ranger
Ranger
U
U
Wollogorang
Cobalt Project
Cobalt Project
BORROLOOLA
BORROLOOLA
Mcarthur River
Mcarthur River
Ag-Pb-Zn
Walford Creek
Zn-Pb-Cu-Ag
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
WOLLOGORANG
BURKETOWN
KARUMBA
KARUMBA
KARUMBA
Bluebush
Zn
-2000 °N
Tennant Creek
Tennant Creek
Au-Cu
Au-Cu
Century
Century
Century
Ag-Pb-Zn
Ag-Pb-Zn
Ag-Pb-Zn
Lady Loretta
Zn-Pb-Ag
Karnarga
Zn-Cu
Mount Oxide
Cu
Capricorn Copper
Cu
CuCuCuCuCuCu
Rosebury
Cu-Au
Dugald River
Pb-Zn-Ag
George Fisher
Pb-Zn-Ag
Mt IsaMt Isa
Mt Isa
Mt Isa
Ag-Pb-Zn
Ag-Pb-Zn
Ernest Henry
Cu-Au
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Rocklands
Cu-Au
0
250
ALICE SPRINGS
KILOMETRES
CAIRNS
TOWNSVILLE
Mine
Resource
Slurry Pipeline
Powerline
Export Port
Population Centre
crew changes only a few hours’ drive from
Figure 9 Location map.
the project.
Regional geology
The Wollogorang Cobalt Project occurs
on the “Wearyan Shelf” of the Proterozoic
to Mesoproterozoic McArthur Basin,
a 5–12 km thick unmetamorphosed
dolostone) and Gold Creek Volcanics
(interlayered basalt lavas and sediments).
In the west, these formations are overlain
by the flat-lying 250m-thick Pungalina
Member-Echo Sandstone couplet and, in
turn, by the Karns Dolomite.
sedimentary succession containing
In 2020 a Geoscience Australia research
dolostone, sandstone and shale units
team identified a 170 km deep continent
with minor felsic and mafic volcanics. The
scale feature on which empirical data
McArthur Basin unconformably overlies
suggests >90% of the world’s large
various Palaeoproterozoic terrains, such
scale (often blind) sediment hosted
as the Pine Creek Orogen, and is host to
base metal deposits occur on this line
mineral deposits such as the McArthur
(Figures 11 and 12). This feature is known
River zinc-silver-lead mine. The main
as the “170 km LAB” or Lithosphere-
geological units of interest in the Project
Asthenosphere Boundary and it runs
area are the Wollogorang Formation
underneath Resolution’s Wollogorang
(carbonaceous shales, sandstone and
Project (Figure 12). It is possible that
12
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Figure 10 Tenement map showing
3,825 km2 of granted exploration tenements.
Figure 11 Mineralisation system for genesis of large scale sediment-hosted base metal
deposits (Hoggard et al 2020).
the LAB is linked to anomalous copper
found on Resolution’s tenements and
that modern-day explorers have only
scratched the surface of a potential
larger scale copper system. Further
understanding of this new concept will be
undertaken and incorporated into future
exploration planning.
Historic exploration
The Wollogorang Cobalt Project consists
of the Stanton-Running Creek Co-Cu-Ni
prospects and Stanton Cobalt Deposit,
which occur within EL31272. From the
period 1987 to 1996, W.J. Fisher and
CRAE identified about 10 individual
breccia pipes, up to 100m diameter, in
a “cluster”.
The first mineralisation was discovered
in the area by Mt Isa Mines Limited
who mined secondary copper from
a small open pit in the 1930s. Other
companies explored in the region for
various commodities, including uranium
and diamonds, but it was not until the
late 1980s that W.J. Fisher, a consultant
geologist, identified breccia pipes in the
region. CRA Exploration Pty Ltd (CRA)
joint ventured into the Project between
1990 and 1996 undertaking an extensive
amount of exploration including 21,468m
in 257 drill holes, various geophysical
surveys, soil geochemistry and
metallurgical testing. When CRA merged
with Rio Tinto, in 1997, the Project was
no longer a focus for the company, and
it was divested to Chemmet Pty Ltd. The
company commissioned a resource
calculation between 1999 and 2000 along
with a scoping study for development
options. In 2000 Mineral Estates Pty Ltd,
a wholly subsidiary of Hydromet Ltd,
acquired the Project and undertook an
Figure 12 The 170 km “LAB” line empirical data collected by Geoscience Australia suggest
90% of the worlds large scale sediment hosted base metal deposits sit on the 170 km LAB
line – which includes Resolution’s Wollogorang Project.deposits (Hoggard et al 2020).
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
13
REVIEW OF OPERATIONS, continued
independent Mineral Resource estimate.
The company also commissioned a
scoping study of mining and processing
options by Resource Engineers Pty Ltd.
The tenements were then acquired by
Toro Energy Ltd who were exploring for
uranium and then dropped as uranium
prices fell. Coolabah Group acquired the
ground in 2013 and this became the basis
for Resolution’s IPO on the ASX in late
2017 (as Northern Cobalt Limited).
Exploration and drilling programs
During 2017 and 2018 the Company
undertook significant exploration
activities aiming to define additional
cobalt resources in the vicinity of the
RUNNING CREEK PROSPECT,
NORTHERN TERRITORY
The Running Creek Prospect is 2 km
from the Stanton Cobalt Deposit and was
discovered and drill tested by CRA in
the 1990s and although a Resource was
not defined, the system appears to be
copper dominant rather than cobalt. The
best mineralisation (ASX announcement
“Copper Intersection Confirms New
Model at Running Creek” on 9 October
2018) was identified in 2018 with drill
hole 18RAB102 which contained a
thick intersection of high-grade copper
mineralisation with associated cobalt
mineralisation from surface to the end of
hole at 55 m, highlights:
Stanton Cobalt Deposit. The two best
•
55 m @ 0.78% Cu from 0m to TD
prospects Gregjo and Running Creek are
(hole 18RAB102)
described below.
¬ including 33 m @ 1.08% Cu
In 2019 a subdued cobalt and copper
from 11 m,
price instigated a change in focus to other
¬ including 13 m @ 2.01% Cu
projects and no substantial field work
from 11 m
¬ and 12 m @ 380 ppm Co
from 22 m
GREGJO PROSPECT,
NORTHERN TERRITORY
The Gregjo Prospect is located
approximately 3.4 km south of the
Stanton Cobalt Deposit, is associated
with a north-west trending structure.
The Gregjo Prospect was originally
identified by CRA in the 1990s, as a
surface geochemical anomaly with
minor copper mineralisation, with
limited extent. Reinterpretation of the
main controls of mineralisation by the
Company along north-west trending
structures and subsequent drill testing
in 2018, has identified the source of the
copper mineralisation causing the surface
geochemical anomaly. In late 2018 an
IP survey was undertaken across the
Gregjo Prospect to define possible depth
extensions to copper mineralisation.
The results of the IP survey identified
a large chargeable feature beneath
the currently identified mineralisation.
Resolution Minerals interprets this feature
to represent an extension of high-grade
was undertaken.
The 2020 pandemic closed access to
remote areas of the NT and despite rising
copper prices from May 2020 no field
work was able to be undertaken.
Deposits
The Stanton Cobalt Deposit contains
an Indicated and Inferred Resource
of 942,000 t @ 0.13% Co, 0.06% Ni
and 0.12% Cu (JORC 2012) (ASX
announcement “Stanton Resource
Upgrade Increases Contained Cobalt”
on 9 April 2018). This deposit occurs
within one of many breccia pipes known
to occur within EL31272. The Stanton
Cobalt Deposit was originally discovered
by CRA exploration in 1995-96 and was
of similar size as a pre-JORC deposit to
what the Company defined in the 2018
Resource statement (9 April 2018).
Figure 13 2018 RAB hole locations and copper results (See ASX announcement “Copper
Discovery Grows at GregJo Prospect” on 19 September 2019.) with background RTP
magnetic image.
14
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SNETTISHAM IRON ORE / VANADIUM PROJECT, ALASKA USA
oxide copper mineralisation identified
Resolution Minerals Ltd has staked
The Snettisham Project contains several
at surface as primary mineralisation at
48 mineral claims over the Snettisham
critical infrastructure requirements for
depth. Assay results (ASX announcement
Vanadium Project in south-western
processing a vanadium-rich magnetite
“Copper Discovery Grows At Gregjo
Alaska in late 2018 (Figure 14). The
concentrate and exporting it to market.
Prospect” on 19 September 2018) from
Company identified the potential
These include:
• Close proximity to cheap electricity to
undertake magnetic separation and
operation of grinding facilities, a high
voltage transmission line and several
existing and proposed hydropower
projects nearby.
• Access to bulk material handling
and transport facilities to move the
concentrate to steel markets in either
the USA or China, deep water channel
adjacent to project.
• Access to an experienced mining
workforce to support year-round
operations.
shallow RAB drilling confirm copper
for large scale vanadium-magnetite
mineralisation along the Gregjo Fault with
mineralisation and its unique position
at least five (5) drill holes along the fault
regarding fundamental infrastructure
intersecting mineralisation over 1% Cu
requirements such as cheap electricity,
along a distance of >300 m (Figure 13).
transport options and proximity to the
Drilling plans and statutory approvals
mining town of Juneau in southern
are in place and the prospect is at “Drill
Alaska. The Snettisham Vanadium
Ready” status to test the compelling
Project occurs within titaniferous
magnetite, concentrated within an
Alaskan-style mafic-ultramafic intrusion,
extending over 3.2 km along the coast
of the Snettisham Peninsula and up to
1.5 km inland.
copper targets.
Highlights of 2018 RAB drilling by the
Company include:
•
•
•
•
•
18RAB013
¬ 7 m @ 1.23% Cu from 1 m
including 1 m @ 4.24% Cu
18RAB009
¬ 15 m @ 0.53% Cu from 5 m
including 4 m @ 1.08% Cu
18RAB020
¬ 20 m @ 0.72% Cu from 1 m
including 1 m @ 1.4% Cu
and 3 m @ 1.67% Cu
18RAB031
¬ 11 m @ 0.65% Cu from 16 m
including 1 m @ 1.97% Cu
18RAB051
¬ 3 m @ 1.57% Cu from 13 m
and 1 m @ 0.78% Cu
Figure 14. Location map. Kensington/Jualin Mine ~1.48M oz Au Resource & Reserves
is currently being mined by Coeur Mining Inc; producing 127k ounces of gold in 2019
@ 6.8 g/t Au -source Coeur Mining Company Website (30 June 2020)
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
15
REVIEW OF OPERATIONS, continued
Project geology
The body in Port Snettisham is an
elliptical intrusion about 3.2 kilometres
maximum outcrop that is mainly
composed of hornblende-magnetite
clinopyroxenite, biotite-magnetite
pyroxenite, and hornblende-biotite-
magnetite clinopyroxenite. There
appear to be numerous metasomatic
replacement episodes. The pyroxenite
locally grades into diorite. As in several
other such bodies in south-eastern
Alaska, the magnetite content is locally
high enough to be considered as a source
of iron, titanium, vanadium, and possibly
platinum-group elements.
Most of the claim area is composed of
an igneous rock termed pyroxenite. At
the northern end near Sentinel Point, the
vanadium bearing magnetite pyroxenite
is bordered by phyllite and the borders to
the south and southwest are composed
mostly of diorite. The main vanadium
bearing phase is in the form of magnetite
as an accessory mineral in the pyroxenite.
Pacific Rim Minerals visited the project
in November 2010 and documented the
following description of magnetite in the
pyroxenite; “Massive magnetite is easily
located with a simple pencil magnet along
the coast by the Port of Snettisham and
to the north near Sentinel Point. Moving
into the interior from Port Snettisham
and up to the 300+ metre elevation,
outcrops of massive magnetite are well
exposed along the coast and in cliffs and
ledges that are found in the steeper hill
sides along the southeast portions of the
claim block”.
Figure 15 Snettisham Project (48 claims) overlain on Google Earth with 2018 acquired air-
magnetic geophysics survey (RTP), location of three historic gold mines and 2.5 km x 0.6 km
highly magnetic body interpreted to be a magnetite up to 2 km deep (ASX announcement
“N27 Magnetic Survey Identifies Vanadium and Iron Ore Potential” on 2 February 2019).
Exploration history and
acquisition of the property:
The Snettisham Project has been a focus
of magnetite style iron ore exploration
since the early 1950s.
Based on work undertaken from 1950 to
1956, the U.S. Bureau of Mines produced
a report titled “Studies of the Snettisham
Magnetite Deposit South East Alaska,
Bureau of Mines Report of Investigations
5195”, United States Department of the
Interior, February 1956. In this report they
completed a magnetic survey, drilled 11
holes for a total depth of 1,995 metres (in
In 1969 Marcona Corporation completed
a drilling program and feasibility study for
production with Marubeni Corporation,
unfortunately no reports from this work
have been found.
In 2011, Arrowstar Resources (Arrowstar)
entered into an option agreement with
Gulfside Minerals to acquire 100% of
the property. Arrowstar undertook a
detailed ground magnetic survey, rock
chip sampling and Davis Tube Separation
studies. A sharp decline in the iron ore
price in 2013 led them to relinquish all
interest in the project.
1953), completed detailed geochemistry
In 2013 Arrowstar commissioned Burton
and petrographic studies and collected
Consulting Limited to undertake a
enough samples to beneficiate the iron
NI43-101 Technical report on the Port
ore using dry magnetic separation.
Snettisham Iron Ore Property. In this
report they detail eight rock chip samples
of magnetite bearing pyroxenite sampled
from scree and outcrop along the beach.
16
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Gold potential
The Snettisham Project is within the
Juneau Gold Belt of south-east Alaska
(Figure 14), which has produced over
7 Moz (million ounces). The historical
Crystal, Friday and Minehaha Gold mines
all occur with the boundary of the project
area. In the late 1800s to early 1900s the
Alaska Snettisham Gold Mining Company
had a 20-stamp mill in the township of
Snettisham processing ore from the local
mines. As a result of the recently flown
magnetic survey (Figures 15 and 16),
Resolution Minerals has identified
significant potential for further gold
mineralisation within the project area.
The local geology is well suited to hosting
Juneau Gold Belt style mineralisation,
which occurs as lode gold within fault
and shear structures in the host rocks. At
Snettisham a mafic-ultramafic intrusive
complex and granite intrude layered
metasediments and metavolcanics. This
geological scenario, when subjected to
deformation and metamorphism during
the gold producing event, produces an
ideal environment for the deposition of
gold mineralisation in space forming
structures. These structures are produced
as a result of the contrasting competency
of the intrusive rocks and metasediments
where deformation is focussed around
the margins of the intrusive bodies and in
discrete zones within them. The Crystal,
Friday and Minehaha Gold Mines appear
to occur on these types of structures.
Figure 16 3D model of Snettisham – reduced to magnetic pole of Snettisham Vanadium
Project on Google Earth image on UBC inversion of >70% magnetite shell (ASX
announcement “3D Model Confirms Vanadium and Gold Potential at Snettisham” on
14 March 2019).
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
17
MINERAL RESOURCE STATEMENT
30 June 2019 and 30 June 2020 (unchanged)
STANTON COBALT MINERAL RESOURCE, NORTHERN TERRITORY
Weathering
Inferred
Oxide
Transition
Indicated
Oxide
Transition
Total
Tonnage
(tonnes)
8,000
242,000
406,000
286,000
942,000
Cobalt
(ppm)
500
800
1,200
1,800
1,300
Nickel
(ppm)
300
400
500
900
600
Copper
(ppm)
2,100
800
1,600
900
1,200
The information in this release that relates to the Estimation and Reporting of Mineral Resources at 30 June 2019 and 30 June 2020
is based on, and fairly represents, information and supporting documentation compiled by Dr Graeme McDonald. Dr McDonald
acts as an independent consultant to Resolution Minerals Ltd on the Stanton Deposit Mineral Resource estimation. Dr McDonald
is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience with the style of mineralisation,
deposit type under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (The JORC Code). Dr McDonald
consents to the inclusion in this report of the contained technical information relating to the Mineral Resource Estimation in the form
and context in which it appears.
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled by Mr Duncan Chessell who is a member of the Australasian Institute of Mining and Metallurgy. Mr Duncan
Chessell is a full-time employee of the company and has sufficient experience that is relevant to the style of mineralisation and type of
deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Duncan Chessell consents to the
inclusion in the report of the matters based on his information in the form in which it is appears and confirms that the data reported
as foreign estimates are an accurate representation of the available data and studies of the material mining project. The Company
is not aware of any new information or data that materially affects the information included in this announcement and all material
assumptions and technical parameters underpinning the Mineral Resource continue to apply and have not materially changed.
Additional details including JORC 2012 reporting tables, where applicable can be found in the following relevant announcements
lodged with the ASX and the Company is not aware of any new data or information that materially affects the information included
in the announcements listed in this Annual Report and that all material assumptions and technical parameters underpinning the
resource estimate continue to apply and have not materially changed.
Ownership structure 64North Project: Vendor Millrock Resources TSXV:MRO, 4 year earn-in US$5m/yr and JV agreement to earn 60%
interest, with pathway to earn up to 80%. Mandatory exploration spend $1M / year outside West Pogo Block. A one-off grace period
of 6 months allowed through the term of the earn-in (See ASX announcement “Binding Agreement earning 80% of Gold Project in
Alaska” 17 October 2019).
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R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
*Tintinta Gold Province Endowment Map & Juneau Gold Belt Map – source of data: Pebble (Northern Dynasty, www.
northerndynastyminerals.com), Pogo (Northern Star Resources, www.nsrltd.com), Fort Knox (Kinross, www.kinross.com), Donlin
Creek (NovaGold, www.novagold.com), Livengood (International Tower Hill Mines, www.ithmines.com), Eagle & Dublin Gulch (Victoria
Gold Corp, www.vgcx.com), Brewery Creek (Golden Predator, www.goldenpredator.com), White Gold (White Gold Corp, whitegoldcorp.
ca), Coffee (Newmont, www.newmont.com), Kensington (Coeur Mining, www.coeur.com
The Stanton Project Mineral Resource Estimate at 30 June 2019 has remained unchanged as at 30 June 2020. The information related
to the Stanton Project Mineral Resource Estimate at 30 June 2019 and 30 June 2020 was detailed in the market announcement
released as “Stanton Resource Upgrade Increases Contained Cobalt” on 9 April 2018. Resolution Minerals confirms that it is not
aware of any new information or data that materially affects the information included in that announcement and that all material
assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. Resolution
Minerals relies on drilling results from accredited laboratories in providing assay results used to estimate Mineral Resources.
The Company ensures that all Mineral Resource estimates are subject to appropriate levels of governance and internal controls.
Exploration results are collected and managed by an independent competent qualified geologist. All data collection activities are
conducted to industry standards based on a framework of quality assurance and quality control protocols covering all aspects of
sample collection, topographical and geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and
sample management. Mineral Resource estimates are prepared by qualified independent Competent Persons. If there is a material
change in the estimate of a Mineral Resource, the estimate and supporting documentation in question is reviewed by a suitable
qualified independent Competent Persons. The Company reports its Mineral Resources on an annual basis in accordance with JORC
Code 2012.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
19
TENEMENT SCHEDULE
At 30 June 2020
Tenement name
Tenement number
Status
Equity
Australia, Northern Territory
WOLLOGORANG
Karns
Selby
Stanton / Running Creek
Calvert
Sandy Creek
Camel Creek
Madulgina Creek
USA, Alaska
SNETTISHAM
Snettisham
64NORTH
64North
EL30496
EL30590
EL31272
EL31546
EL31548
EL31549
EL31550
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
AKAA 095408 - AKAA 095455
Granted
100%
Resolution is earning into to a 60% interest in the 64North Project which is owned by Millrock Resources
(TSXV:MRO) the details of which were announced 17 October 2019 by the Company.
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R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
DIRECTORS’ REPORT
The Directors of Resolution Minerals Ltd
Mr Dean has held a number of board
(formerly Northern Cobalt Limited) have
positions including Managing Director
pleasure in submitting their report on the
of Sesa Goa Ltd, Indian’s largest
Group for the year ended 30 June 2020.
publicly listed iron ore company
DIRECTORS
The names and details of Directors in
office at any time during the reporting
and Non-Executive Director of WPG
Resources Limited.
OTHER CURRENT DIRECTORSHIPS OF LISTED
COMPANIES
period are:
None
Leonard Dean
BSc Metallurgy, MAICD
NON-EXECUTIVE CHAIR
(appointed 6 March 2017)
EXPERIENCE AND EXPERTISE
Mr Dean has over 50 years’ experience
across various operational, marketing
and management roles in the resources
industry covering a number of
jurisdictions.
Mr Dean has previously held senior roles
with BHP including as Marketing Director
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES
IN THE LAST THREE YEARS
None
INTEREST IN SHARES
454,478 Ordinary Shares held directly
and by an entity in which Mr Dean has a
beneficial interest.
INTEREST IN OPTIONS AND RIGHTS
48,810 quoted options with exercise
price of $0.10 and expiry of 30 June 2022
(RMLOA).
Iron Ore and Group General Manager
1,000,000 unquoted options with
Minerals Marketing. Following his career
exercise price of $0.2493 and expiry of
at BHP Billiton, Mr Dean consulted
21 March 2021.
to a number of companies providing
marketing, commercial and technical
services to the iron ore industry.
Duncan Chessell
BSc, GAICD, MAusIMM, MAIG
MANAGING DIRECTOR
(appointed 6 March 2017)
(appointed as Managing Director on
14 October 2019)
EXPERIENCE AND EXPERTISE
Mr Chessell is a geologist with over
20 years’ experience in business and
in oil, gas and mineral exploration. He
was Managing Director of Endeavour
Group from 2010 to 2016 making new
gold discoveries in the Gawler Craton,
conducting precious and base metals
exploration in South Australia and project
generation in Papua New Guinea.
He is a Graduate of the Australian
Institute of Company Directors, Member
of the Australian Institute of Mining &
Metallurgy and Member of Australian
Institute of Geoscientists. He was co-
founder and Chair of project generator
Coolabah Group, the project vendor
of the Wollogorang Project (Northern
Territory) on which Resolution Minerals
undertook its IPO in 2017 (as Northern
500,000 unquoted vested performance
Cobalt Limited). He is currently non-
rights expiring on 31 December 2024.
executive Director of The Outdoor
Education Group Ltd, the largest outdoor
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
21
DIRECTORS’ REPORT, continued
education provider across Australia. He
was the founding Chair of the Himalayan
Development Foundation Australia Inc, a
not-for-profit entity delivering assistance
to the people of Nepal.
Mr Chessell also has a decade of
international business experience in
adventure tourism in New Zealand,
Australia, Papua New Guinea and the
Himalaya. He is also a triple Mt Everest
summiter and leader of numerous
adventures including ‘world firsts’ in
Antarctica and has guided the “Seven
Summits” – the highest peak on
each continent.
OTHER CURRENT DIRECTORSHIPS OF LISTED
COMPANIES
None
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES
IN THE LAST THREE YEARS
None
INTEREST IN SHARES
1,320,719 Ordinary Shares held directly
and by entities in which Mr Chessell has a
beneficial interest.
INTEREST IN OPTIONS, RIGHTS AND PERFORMANCE
SHARES
697,500 unquoted options with
exercise price of $0.2493 and expiry of
21 March 2021.
1,800,000 class A performance shares
subject to exploration based performance
hurdles expiring on 6 September 2022.
658,125 class B performance shares
subject to exploration based performance
Andrew Shearer
BSc (Geology), Hons (Geophysics), MBA
NON-EXECUTIVE DIRECTOR
(appointed 6 March 2017)
EXPERIENCE AND EXPERTISE
Mr Shearer has been involved in the
mining and finance industries for
INTEREST IN SHARES
940,000 Ordinary Shares held directly and
by an entity in which Mr Shearer has a
beneficial interest.
INTEREST IN OPTIONS, RIGHTS AND
PERFORMANCE SHARES
50,000 quoted options with exercise
25 years. With a geoscientific and finance
price of $0.10 and expiry of 30 June 2022
background he has experience in the
(RMLOA).
resources industry from exploration
through to development. As a Resources
Analyst, Mr Shearer has been exposed
to the global resources sector covering
450,000 unquoted options with
exercise price of $0.2493 and expiry of
21 March 2021.
small to mid-cap resource stocks across
800,000 class A performance shares
a broad suite of commodities. Prior to
subject to exploration based performance
moving into the finance sector he spent
hurdles expiring on 6 September 2022.
over a decade working in the minerals
exploration industry in technical and
senior management roles. Mr Shearer
brings to Resolution Minerals strong
professional skills and experiences
in equity research, investor relations,
valuations, supply and demand analysis
and capital markets.
Mr Shearer’s experience includes roles
with PAC Partners Pty Ltd, Phillip Capital,
Austock, South Australian Government,
Mount Isa Mines Limited and Glengarry
Resources Limited.
OTHER CURRENT DIRECTORSHIPS OF LISTED
COMPANIES
Andromeda Metals Limited (ASX:ADN)
from 27 October 2017.
Investigator Resources Limited (ASX:IVR)
from 14 July 2020.
325,000 class B performance shares
subject to exploration based performance
hurdles expiring on 6 September 2022.
500,000 unquoted vested performance
rights expiring on 31 December 2024.
Michael Schwarz
BSc (Hons) Geology, AIG
MANAGING DIRECTOR
(appointed 6 March 2017 and resigned as
Director 26 August 2019)
EXPERIENCE AND EXPERTISE
Mr Schwarz has over 20 years’ senior
experience in mineral exploration
spanning industry and government
as a geologist and director of several
exploration companies. Mr Schwarz has
extensive experience both at a senior
corporate level and in the hands-on
roles of a geologist. He has high level
Okapi Resources Limited (ASX:OKR) from
negotiation and communication skills,
hurdles expiring on 6 September 2022.
20 July 2020.
500,000 unquoted vested performance
rights expiring on 31 December 2024.
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES
IN THE LAST THREE YEARS
4,000,000 unquoted performance rights
subject to KPI based vesting conditions
and an expiry between 31 December
2024 and 31 December 2026.
None
and has managed competing stakeholder
interests successfully, specifically
balancing the needs of shareholders, land
owners, corporate financiers, joint venture
22
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
partners and government to ensure a
positive outcome for his organisations.
Mr Schwarz has significant technical
knowledge and experience in South
Australian and Northern Territory geology
and mineralisation styles and has led
research projects with State Governments,
Geoscience Australia and various
universities.
He was a founding Director and Executive
Director Exploration for Core Exploration
Limited (ASX:CXO), founding Managing
Director of Monax Mining Ltd (ASX:MOX)
and was also a founding Director of
Marmota Energy Ltd (ASX:MEU).
OTHER CURRENT DIRECTORSHIPS OF LISTED
COMPANIES
None
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES
IN THE LAST THREE YEARS
None
INTEREST IN SHARES
None
INTEREST IN OPTIONS AND RIGHTS
COMPANY SECRETARY
Jaroslaw (Jarek) Kopias
BCom, CPA, AGIA, ACIS
COMPANY SECRETARY / CHIEF
FINANCIAL OFFICER
(appointed 6 March 2017)
Mr Kopias is a Certified Practising
Accountant and Chartered Secretary.
Mr Kopias has over 20 years’ industry
experience in a wide range of financial
and secretarial roles within the resources
industry. As an accountant, Mr Kopias
worked in numerous financial roles
for companies, specialising in the
OPERATING AND
FINANCIAL REVIEW
The net loss of the Group for the year
after providing for income tax amounted
to $1,281,967 (2019: $1,370,357) primarily
due to administrative costs, employee
benefit expense and preliminary
exploration expenditure not capitalised.
During the year, the Group raised a further
$6.0 million through share placements
and $96,000 via exercise of options to
progress its existing and newly acquired
exploration tenements.
resource sector – including 5 years at
The risks associated with the projects
WMC Resources Limited’s (now BHP)
listed below are those common
Olympic Dam operations, 5 years at
to exploration activities generally.
Newmont Mining Corporation - Australia’s
Exploration targets are conceptual
corporate office and 5 years at oil and gas
in nature such that there has been
producer and explorer, Stuart Petroleum
insufficient exploration to define a Mineral
Limited (prior to its merger with Senex
Resource and that it is uncertain if further
Energy Limited).
exploration will result in the determination
He is currently the Company Secretary of
of a Mineral Resource.
Core Lithium Ltd (ASX: CXO), Iron Road
The main environmental and sustainability
Limited (ASX: IRD) and Lincoln Minerals
risks that Resolution Minerals currently
Limited (ASX: LML). Mr Kopias has held
faces are through ground disturbance
3,000,000 unquoted options with
similar roles with other ASX entities in
when undertaking sampling or drilling
exercise price of $0.2493 and expiry of
the past and has other business interests
activities. The Group’s approach to
21 March 2021.
with numerous unlisted public and
exploration through environmental,
private entities.
PRINCIPAL ACTIVITIES
Resolution Minerals’ ongoing principal
activities are the exploration for gold in
Alaska (USA), copper, cobalt and other
battery metals in the Northern Territory
and gold, vanadium and iron ore in
Alaska (USA).
heritage and other clearances allows
these risks to be minimised.
The financial impact of the projects
listed below is a requirement for further
expenditure where successful exploration
leads to follow-up activities. All exploration
activities may be funded by the Group’s
own cash reserves or through joint
venture arrangements.
Further technical detail on each of the
prospects listed below is in the Review of
Operation in the Annual Report.
DIRECTORS’ REPORT, continued
The 64North Project in Alaska has been
EL31550. The project area adjoins the
the focus of exploration efforts since
Queensland border with the main focus of
October 2019 when the company entered
operations occurring on the Wollogorang
into a binding agreement to earn-in to the
Station (Northern Territory). The Project
project. The 64North Project surrounds
is approximately 1,000 km by road from
the world-class high-grade operating
Darwin and a similar distance from Cairns
Pogo Gold Mine, owned by Northern Star
in Queensland. The MacArthur River
Resources Ltd (ASX: NST) and the West
Mine is approximately 200 km to the west
Pogo Block has been, and continues to
and the large mining service centre of
be the focus of diamond core drilling
Mount Isa lies 500 km to the southeast in
activities beyond 30 June 2020. The
Group holds a land package of 660 km2
surrounding the Pogo Gold Mine and is
Queensland. Other smaller service centres
are Borroloola and Burketown, 150 km
to the west and east respectively. The
on track to earn-in to a 30% interest in
Stanton cobalt Mineral Resource Estimate
year 1 in line with the earn-in agreement.
has been upgraded as announced
In parallel to undertaking drilling activities,
on 9 April 2018 as “Stanton Resource
the Group continues to explore the
Upgrade Increases Contained Cobalt”.
regional potential of the 64North project
targeting advanced prospects in addition
to the Wet Pogo Block. Resolution has
the ability to earn up to 60% in the project
via a total of US$20 million in expenditure
at the project and a further 20% thought
funding BFS and development activities.
The future strategy at the 64North Project
is to continue drilling at the West Pogo
Block and regional exploration activities,
maturing prospects across the 9 block
portfolio and continuing to increase its
interest in the project.
The Wollogorang copper and cobalt
project covers 3,824 km2 of pastoral
land in the north-eastern corner of the
Northern Territory – NT Exploration
Licences EL30496, EL30590, EL31272,
EL31546, EL31548, EL31549 and
The future strategy at the Wollogorang
copper and cobalt project is for
Resolution to focus on seeking project
partners to increase the global Mineral
Resource inventory and to assess further
exploration targets in the vicinity of the
Stanton resource.
SIGNIFICANT CHANGES IN
THE STATE OF AFFAIRS
There have been no significant changes
in the state of affairs of the Group that
occurred during the reporting period that
have not otherwise been disclosed in this
report or the financial statements.
DIVIDENDS
There were no dividends paid or declared
during the reporting period or to the date
of this report.
EVENTS ARISING SINCE THE
END OF THE REPORTING YEAR
No matters or circumstances have arisen
since the end of the financial year which
significantly affected or may significantly
affect the operations of the Group, the
results of those operations or the state
of affairs of the Group in subsequent
financial years other than those
described below.
On 28 July, the Company issued
51,608,421 shares under a placement to
raise $3.6 million (before costs) followed
by an SPP, issuing 21,428,682 shares
on 11 August 2020 to raise a further
$1.5 million.
On 17 August 2020, the Company
announced the appointment of
Mr Craig Farrow as a non-executive
director transitioning to Chair following
the 2020 AGM.
LIKELY DEVELOPMENTS
The Group continues its exploration
program focussed on gold and
battery metals and will assess other
complementary projects.
24
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DIRECTORS’ MEETINGS
The number of Directors’ meetings held during the reporting period and the number of
meetings attended by each Director is as follows:
Directors
L A Dean
D C Chessell
A N Shearer
M P Schwarz
Board meetings
Audit and risk committee
meetings
Remuneration committee
meetings
A
18
19
19
4
E
19
19
19
4
A
1
2
2
-
E
2
2
2
-
A
1
1
1
-
E
1
1
1
-
A = Attended, E = Entitled to attend
UNISSUED SHARES UNDER OPTION
Unissued ordinary Shares of Resolution Minerals under option at the date of this
report are:
Date options granted
Expiry date
Exercise price of options
Number under option
21 March 2017
21 March 2021
6 September 2017
6 September 2021
27 November 2019*
30 November 2022
$0.2493
$0.2493
$0.06
Total unquoted options
25 June 2019
30 June 2022
$0.10
Total quoted options
Total options on issue
6,450,000
5,800,000
13,400,000
25,650,000
6,098,225
6,098,225
31,748,225
* Exercise price $0.06 if exercised on or before 30 November 2020, $0.08 if exercised on or
before 30 November 2021 and $0.10 if exercised on or before 30 November 2022. Expiry
30 November 2022.
During the year, 15,000,000 unquoted options were issued to brokers as remuneration –
of these, 1,600,000 were exercise during the year.
These options do not entitle the holders to participate in any share issue of the
Company or any other body corporate.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
25
DIRECTORS’ REPORT, continued
PERFORMANCE RIGHTS
Unissued ordinary Shares of Resolution Minerals subject to vesting and exercise of performance rights at the date of this report are:
Date rights granted
28 September 2018
27 November 2019
27 November 2019
13 February 2020
13 February 2020
23 March 2020
23 March 2020
Total rights on issue
KPI vesting
Vested
31 December 2021
31 December 2023
31 January 2021
31 March 2022
31 January 2021
31 March 2022
Expiry date
Number of rights
31 December 2024
31 December 2024
31 December 2026
31 January 2024
31 December 2024
31 January 2024
31 December 2024
2,000,000
2,000,000
2,000,000
500,000
500,000
250,000
250,000
7,500,000
During the year, unquoted performance rights with performance based vesting conditions were issued as remuneration under the
Company’s Performance Share Plan as follows:
•
•
•
4,000,000 rights to the Managing Director
1,000,000 rights to the Exploration Manager
500,000 rights to technical consultants
These rights do not entitle the holders to participate in any share issue of the Company or any other body corporate.
PERFORMANCE SHARES
The Company has on issue 13,175,000 class A and class B performance shares as detailed in the table below:
Class of performance shares
Grant date
Expiry date
Exercise price of shares
Number on issue
Class A
Class B
4 September 2017
4 September 2022
4 September 2017
4 September 2022
$Nil
$Nil
Total performance shares
9,600,000
3,575,000
13,175,000
There were no performance shares converted or cancelled during the reporting period and no vesting conditions were met during the
reporting period.
26
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED)
The Directors of Resolution Minerals
key management personnel are
as part of the IPO process. However,
Ltd present the Remuneration Report
remunerated on a consultancy
to align Directors’ interests with
in accordance with the Corporations
or salary basis based on services
shareholder interests, the Directors
Act 2001 (Cth) and the Corporations
provided by each person. The Board
are encouraged to hold shares in the
Regulations 2001 (Cth).
annually reviews the packages of key
Company and are able to participate in
The Remuneration Report is set out under
the following main headings:
management personnel by reference
the Company’s Share Option Plan and
to the Group’s performance and
Performance Share Plan, which may
comparable information from industry
exist from time to time.
Principles used to determine the nature
and amount of remuneration
sectors and other listed companies in
similar industries.
During the reporting period, performance
reviews of senior executives were not
A. Details of remuneration
B. Service agreements
C. Share-based remuneration
D. Other information
A. PRINCIPLES USED TO
DETERMINE THE NATURE AND
AMOUNT OF REMUNERATION
The Group’s remuneration policy has
been designed to align objectives of key
management personnel with objectives
of shareholders and the business,
by providing a fixed remuneration
component and offering specific long-
term incentives through the issue of
options and / or performance rights. The
Board believes the remuneration policy
to be appropriate and effective in its
ability to attract and retain the best key
management personnel and Directors
to run and manage the Group. The key
management personnel of the Group
are the Board of Directors, Company
Secretary and Executive Officers.
The Board’s policy for determining the
nature and amount of remuneration
for its members and key management
personnel of the Group is as follows:
• The remuneration policy, setting
the terms and conditions for the
key management personnel,
was developed by the Board. All
• The Board may exercise discretion
conducted. There were no remuneration
in relation to approving incentives,
consultants used by the Group during
bonuses, options and performance
the period.
rights. The policy is designed
to attract the highest calibre of
key management personnel and
reward them for performance
that results in long-term growth in
shareholder wealth.
• Key management personnel are
also entitled to participate in the
Company’s Share Option Plan and
Performance Share Plan as disclosed
to shareholders in the Company’s
IPO prospectus and announced to
the ASX.
• The Board policy is to remunerate non-
executive Directors at market rates
for comparable companies for time,
commitment and responsibilities.
The Board determines payments
to the non-executive Directors and
reviews their remuneration annually,
based on market practice, duties and
accountability. Independent external
advice is sought when required. The
maximum aggregate amount of fees
that can be paid to non-executive
Directors is subject to approval by
shareholders (currently $400,000).
Fees for non-executive Directors are
not linked to the performance of the
Group, except in relation to exploration
based KPI performance shares issued
Consequences of performance
on shareholder wealth
In considering the Group’s performance
and benefits for shareholder wealth, the
Board will have regard to a number of key
performance metrics such as profitability,
shareholders’ equity and the Company’s
share price.
Performance based remuneration
The remuneration policy has been
tailored to increase goal congruence
between shareholders, directors and
other key management personnel.
Currently, this is facilitated through the
issue of options and/or performance
rights to key management personnel to
encourage the alignment of personal and
shareholder interests. The Group believes
this policy will be effective in increasing
shareholder wealth.
Voting and comments made at the
Company’s 2019 Annual General Meeting
Resolution Minerals received 99.8% “yes”
votes on its remuneration report for the
2019 financial year. The Group did not
receive any specific feedback at the AGM
on its remuneration report.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
27
DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED)
B. DETAILS OF REMUNERATION
Details of the nature and amount of each element of the remuneration of the Group’s key management personnel (KMP) are
shown below:
All KMP were appointed on 6 March 2017. All directors were issued with KPI based performance rights during the 2018/19 year and
Mr Chessell was issued with KPI based performance rights during the 2019/20 year.
Director and other key management personnel remuneration
2020
Short term benefits
Post-employment
benefits
Share-based
payments
Salary and fees
$
Contract payments
$
Other benefits
$
Superannuation
$
Options / rights
$
Total
$
At risk1
%
Non-executive directors
L Dean
A Shearer
Executive directors
D Chessell2
M Schwarz3
56,371
33,283
157,682
118,574
-
-
-
-
Other key management personnel
J Kopias4
Total
-
365,910
127,365
127,365
-
-
-
-
-
-
-
3,162
14,980
10,396
-
-
-
(22,057)
56,371
36,445
172,662
106,913
-
-
28,538
(22,057)
127,365
499,756
-
-
-
-
-
1 Represents share based payments linked to performance conditions.
2 Mr Chessell was appointed Managing Director on 15 October 2019.
3 Mr Schwarz resigned as director on 26 August 2019 – salaries and fees includes a termination payment for M Schwarz..
4 Contract payments are made to Kopias Consulting – an entity associated with Mr Kopias.
2019
Short term benefits
Post-employment
benefits
Share-based
payments
Salary and fees
$
Contract payments
$
Other benefits
$
Superannuation
$
Options / rights5
$
Total
$
At risk6
%
Non-executive directors
L Dean
D Chessell7
A Shearer
60,000
98,678
31,964
Executive directors
M Schwarz8
161,333
Other key management personnel
-
-
-
-
J Kopias9
Total
-
351,975
109,063
109,063
-
-
-
-
-
-
-
9,374
3,036
22,057
22,057
22,057
82,057
130,109
57,057
15,327
22,057
198,717
-
22,057
27,737
110,285
131,120
599,060
27
17
39
11
17
5 Performance rights issued in September 2018 as approved at the 2018 AGM.
6 Represents share based payments linked to performance conditions.
7 Mr Chessell acted in the capacity of an executive director to 17 November 2018.
8 Mr Schwarz reduced his time to 4 days per week commencing 1 February 2019.
9 Contract payments are made to Kopias Consulting – an entity associated with Mr Kopias.
28
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
C. SERVICE AGREEMENTS
Remuneration and other terms of employment for the Executive Directors and other KMP are formalised in service agreements. The
major provisions of the agreements relating to remuneration are set out below:
Name
D Chessell
Managing Director
J Kopias
CFO & Company Secretary
Base remuneration
Unit of measure
Term of agreement
Notice period
Termination benefits
$225,000
Salaried employee
Indefinite
Two months
Three months
variable
hourly rate contract
Unspecified
One month
None
Termination payments
During the year, the employment contract of former Managing Director, Mr Schwarz, was terminated in accordance with the terms
of the agreement. As a result, Mr Schwarz received a termination payment of his employment entitlements, in accordance with his
employment contract of $97,138.
D. SHARE-BASED REMUNERATION
Details of performance rights convertible to ordinary shares in the Company that were granted as remuneration to each KMP during
the year are set out below. All performance rights refer to a right to convert one right to one ordinary share in the Company, under the
terms of the performance rights. Details of performance rights convertible to ordinary shares in the Company that were granted as
remuneration to each KMP during the year are set out below:
2020
Granted
D Chessell
D Chessell
Total
Number granted
Grant date
Fair value at grant date
First vesting date1
Last vesting date
2,000,000
2,000,000
4,000,000
27/11/2019
27/11/2019
per right
$0.0484
$0.0449
Full value $
96,872
89,575
0.5 Moz Au resource
31/12/2021
1.0 Moz Au resource
31/12/2023
1 Meeting criteria of the KPI listed below determines vesting of rights.
Resource (0.5 million ounces) KPI – 2,000,000 Managing Director Performance Rights
The vesting of Director Performance Rights under this KPI is tied to the announcement by 31 December 2021 of at least 0.5 million ounce
JORC Mineral Resource (in the Inferred category or better) with a grade of at least 5 g/t equivalent from all of the Company’s current or future
mineral leases. The vesting of this KPI must be determined by the Board by 31 March 2022 and, if vested, the Performance Rights will expire on
31 December 2024.
Resource (1.0 million ounces) KPI – 2,000,000 Managing Director Performance Rights
The vesting of Director Performance Rights under this KPI is tied to the announcement by 31 December 2023 of at least 1.0 million ounce JORC
Mineral Resource (in the Inferred category or better) in total with a grade of at least 5 g/t equivalent from all of the Company’s current or future
mineral leases. The vesting of this KPI must be determined by the Board by 31 March 2024 and, if vested, the Performance Rights will expire on
31 December 2026.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
29
DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED)
Share holdings of key management personnel
The number of ordinary shares of Resolution Minerals Ltd held, directly, indirectly or beneficially, by each Director and Company
Secretary, including their personally-related entities as at reporting date:
Directors and company secretary
Held at 30 June 2019
Movement during year
Options / rights exercised
Held at 30 June 2020
L Dean1
M Schwarz2
D Chessell3
A Shearer
J Kopias
Total
390,478
405,335
4,908,750
940,000
440,000
64,000
(405,335)
(3,588,031)
-
-
7,084,563
(3,929,366)
-
-
-
-
-
-
454,478
-
1,320,719
940,000
440,000
3,155,197
1 Movement represents an on-market purchase.
2 Movement represents resignation as director.
3 Movement represents in-specie distribution of registered holder to underlying beneficial holders of Coolabah Group (the original vendor shares
from the IPO in 2017), no resultant change in Mr Chessell’s beneficial holding. Net movement includes 68,219 Shares purchased on-market on
18 October 2019.
Option holdings of key management personnel
The number of quoted options over ordinary shares in Resolution Minerals Ltd held, directly, indirectly or beneficially, by each
specified Director and KMP, including their personally-related entities as at reporting date, is as follows:
UNQUOTED OPTIONS – Exercise price of $0.2493 and expiry of 21 March 2021
Directors and company secretary
Held
at 30 June 2019
Granted
during year
L Dean
M Schwarz1
D Chessell
A Shearer
J Kopias
Total
1,000,000
3,000,000
697,500
450,000
450,000
5,597,500
-
-
-
-
-
-
1 Movement represents resignation as director.
QUOTED OPTIONS – Exercise price of $0.10 and expiry of 30 June 2022
Directors and company secretary
Held
at 30 June 2019
Granted
during year
L Dean
M Schwarz1
D Chessell
A Shearer
J Kopias
Total
-
-
-
-
-
-
1 Movement represents resignation as director.
48,810
50,668
-
50,000
20,000
Disposed
during year
-
(3,000,000)
-
-
-
(3,000,000)
Disposed
during year
-
(50,668)
-
-
-
169,478
(50,668)
Exercised
-
-
-
-
-
-
Held
at 30 June 2020
1,000,000
-
697,500
450,000
450,000
Vested and exercisable
at 30 June 2020
1,000,000
-
697,500
450,000
450,000
2,597,500
2,597,500
Exercised
Held
at 30 June 2020
Vested and exercisable
at 30 June 2020
-
-
-
-
-
-
48,810
48,810
-
-
50,000
20,000
118,810
-
-
50,000
20,000
118,810
30
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Performance rights holdings of key management personnel
The number of performance rights over ordinary shares in Resolution Minerals Ltd held, directly, indirectly or beneficially, by each
specified Director and KMP, including their personally-related entities as at reporting date, is as follows:
Key management
personnel
L Dean
M Schwarz1
D Chessell2
A Shearer
J Kopias
Total
Held at 30 June 2019
Acquired during year
Disposed during year
Exercised
Held at 30 June 2020
Vested and exercisable
at 30 June 2020
500,000
500,000
500,000
500,000
500,000
-
-
-
(500,000)
4,000,000
-
-
-
-
-
2,500,000
4,000,000
(500,000)
-
-
-
-
-
-
500,000
500,000
-
4,500,000
500,000
500,000
-
500,000
500,000
500,000
6,000,000
2,000,000
1 Movement represents forfeiture upon resignation as director.
2 Represents issue of performance rights as remuneration as approved at the 2019 AGM under the Company’s Performance Share Plan.
Performance share holdings of key management personnel
The number of performance shares over ordinary shares in Resolution Minerals Ltd held, directly, indirectly or beneficially, by each
specified Director and KMP, including their personally-related entities as at reporting date, is as follows:
Directors
Held at 30 June 2019
Acquired during year
Disposed during year
Exercised
Held at 30 June 2020
Vested and exercisable
at 30 June 2020
Class A
D Chessell
A Shearer
Class B
D Chessell
A Shearer
Total
1,800,000
800,000
658,125
325,000
3,583,125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,800,000
800,000
658,125
325,000
3,583,125
-
-
-
-
-
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
31
DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED)
E. OTHER INFORMATION
Transactions with key
management personnel
ENVIRONMENTAL LEGISLATION
The Directors believe that the Group has,
in all material respects, complied with all
Transactions with key management
particular and significant environmental
personnel are made on normal
regulations relevant to its operations.
The Company has not otherwise, during
or since the end of the reporting period,
except to the extent permitted by law,
indemnified, or agreed to indemnity any
current or former officer or auditor of the
Company against a liability incurred as
The Group’s operations are subject to
such by an officer or auditor.
commercial terms and conditions and at
market rates. Outstanding balances are
unsecured and are repayable in cash.
Duncan Chessell
Resolution Minerals has sought the
provision of consultancy services from
Magill Consulting Pty Ltd on commercial
terms – prior to Mr Chessell’s appointment
as Managing Director of Resolution
Minerals, Mr Chessell is a director and
shareholder of the company. During the
year $28,800 + GST has been paid in
relation to these services. The total amount
of fees due to Magill Consulting Pty Ltd as
at 30 June 2020 was $Nil (2019: $Nil).
Andrew Shearer
Resolution Minerals has entered into an
agreement with PAC Partners Pty Ltd,
the employer of Mr Shearer, joint lead
manager in relation to the Company’s
various environmental regulations under
the Commonwealth and State Laws of
Australia and Alaska, USA. The majority of
its activities involve low level disturbance
associated with exploration drilling
programs. Approvals, licences, hearings
and other regulatory requirements are
performed, as required, by the Group’s
management for each permit or lease in
which the Group has an interest.
INDEMNITIES GIVEN AND
INSURANCE PREMIUMS PAID
TO AUDITORS AND OFFICERS
During the reporting year, the Company
paid a premium to insure officers of the
Company. The officers of the Company
covered by the insurance policy include
all officers.
capital raisings and provider of broker
The liabilities insured are legal costs
support services. During the year PAC has
that may be incurred in defending civil or
been paid fees of $187,450 + GST. The
criminal proceedings that may be brought
total amount of fees due to PAC Partners
against the officers in their capacity as
Pty Ltd as at 30 June 2020 was $Nil
officers of the Company, and any other
(2019: $1,320).
Jarek Kopias
Kopias Consulting, a business of which
Jarek Kopias is a Director, was paid
consulting fees in relation to the year
totalling $127,365 (2019: $109,063) and
is disclosed in the remuneration report.
The total amount of fees due to Kopias
Consulting as at 30 June 2020 was $7,500
(2019: $9,413).
END OF AUDITED REMUNERATION REPORT
payments arising from liabilities incurred
by the officers in connection with such
proceedings, other than where such
liabilities arise out of conduct involving
a wilful breach of duty by the officers
or the improper use by the officers of
their position or of information to gain
advantage for themselves or someone
else to cause detriment to the Company.
NON-AUDIT SERVICES
During the reporting period Grant
Thornton performed certain other
services in addition to its statutory duties.
The Board has considered the non-audit
services provided during the reporting
period by the auditor and is satisfied
that the provision of those non-audit
services is compatible with, and did not
compromise, the auditor independence
requirements of the Corporations Act
2001 (Cth) for the following reasons:
The non-audit services do not undermine
the general principles relating to auditor
independence as set out in APES
110 Code of Ethics for Professional
Accountants, as they did not involve
reviewing or auditing the auditor’s
own work, acting in a management or
decision-making capacity for the Group,
acting as an advocate for the Group or
jointly sharing risks and rewards.
Details of the amounts paid to the auditors
of the Group and its related practices for
audit and non-audit services provided
during the reporting period are set out in
note 13 to the Financial Statements.
A copy of the Auditor’s Independence
Declaration as required under
s307C of the Corporations Act 2001
(Cth) is included on page 34 of this
Financial Report and forms part of this
Details of the amount of the premium paid
Directors’ Report.
in respect of the insurance policies is not
disclosed as such disclosure is prohibited
under the terms of the contract.
32
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Signed in accordance with a resolution
of the Directors.
Leonard Dean
Chair
Adelaide
18 September 2020
ROUNDING OF AMOUNTS
The Group is of a kind referred to in Corporations Instrument
2016/191, issued by the Australian Securities and Investments
Commission, relating to ‘rounding-off’. Amounts in this report
have been rounded off in accordance with that Corporations
Instrument to the nearest dollar.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the
Corporations Act 2001 (Cth) for leave to bring proceedings
on behalf of the Company, or intervene in any proceedings
to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or any part of
those proceedings.
CORPORATE GOVERNANCE
The Board has adopted the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations – 3rd
Edition (ASX Recommendations). The Board continually monitors
and reviews its existing and required policies, charters and
procedures with a view to ensuring its compliance with the ASX
Recommendations to the extent deemed appropriate for the size
of the Company and its development status.
A summary of the Company’s ongoing corporate governance
practices is set out annually in the Company’s Corporate
Governance Statement and can be found on the Company’s
website at www.resolutionminerals.com.
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33
AUDITOR’S INDEPENDENCE DECLARATION
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
Level 3, 170 Frome Street
T +61 8 8372 6666
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Resolution Minerals Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Resolution
Auditor’s Independence Declaration
Minerals Ltd for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
To the Directors of Resolution Minerals Ltd
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Resolution
Minerals Ltd for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 18 September 2020
J L Humphrey
Partner – Audit & Assurance
Adelaide, 18 September 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
Grant Thornton Audit Pty Ltd ACN 130 913 594
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Grant Thornton Australia Limited.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
Liability limited by a scheme approved under Professional Standards Legislation.
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Liability limited by a scheme approved under Professional Standards Legislation.
34
www.grantthornton.com.au
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2020
Interest income
Government grants
Other income
Broker and investor relations
Employee benefits expense
Exploration expense
Impairment expense
Depreciation
Loss on sale of assets
Other expenses
Loss before tax
Income tax (expense) / benefit
Loss for the year from continuing operations attributable to owners of the parent
Other comprehensive income attributable to owners of the parent
Total comprehensive loss for the year attributable to owners of the parent
Earnings per share from continuing operations
Basic and diluted loss – cents per share
Notes
7
8
2
3
4
30 June
2020
$
890
50,000
44,557
(152,218)
(373,382)
(51,936)
(332,424)
(15,316)
(7,868)
(444,270)
(1,281,967)
30 June
2019
$
25,030
-
-
(168,500)
(364,495)
(121,897)
(409,601)
(41,360)
(308)
(289,226)
(1,370,357)
-
-
(1,281,967)
(1,370,357)
-
-
(1,281,967)
(1,370,357)
(1.02)
(2.55)
This statement should be read in conjunction with the notes to the financial statements.
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35
STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Other assets
Total current assets
Non-current assets
Exploration and evaluation expenditure
Plant and equipment
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Employee provisions
Derivative financial instruments
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
30 June
2020
$
30 June
2019
$
5
6
7
8
9
10
11
2,161,012
24,499
2,185,511
10,536,621
75,706
10,612,327
12,797,838
540,423
20,871
9,322
570,616
570,616
12,227,222
14,944,312
1,353,852
(4,070,942)
12,227,222
741,889
23,163
765,052
6,809,980
137,573
6,947,553
7,712,605
138,784
10,930
-
149,714
149,714
7,562,891
9,520,723
831,143
(2,788,975)
7,562,891
This statement should be read in conjunction with the notes to the financial statements.
36
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STATEMENT OF CHANGES IN EQUITY
For the year 30 June 2020
2020
Opening balance
Share placements
Option exercise
Fair value of shares issued for project acquisition
Exercise of unquoted options
KMP performance rights issued and lapsed
Issue costs
Transactions with owners
Comprehensive income:
Total profit or loss for the reporting year
Total other comprehensive income for the reporting year
Issued
capital
$
9,520,723
6,048,337
96,000
245,000
63,296
-
(1,029,044)
5,423,589
-
-
Option / rights
reserve
$
Accumulated
losses
$
831,143
(2,788,975)
Total
equity
$
7,562,891
6,048,337
96,000
245,000
-
(7,398)
(435,641)
5,946,298
-
-
-
-
-
-
-
(1,281,967)
(1,281,967)
-
-
-
-
-
(63,296)
(7,398)
593,403
522,709
-
-
Balance 30 June 2020
14,944,312
1,353,852
(4,070,942)
12,227,222
2019
Opening balance
Share placement and Rights Issue
Fair value of shares issued for the acquisition of projects
KMP performance rights
Issue costs
Transactions with owners
Comprehensive income:
Total profit or loss for the reporting year
Total other comprehensive income for the reporting year
Issued
capital
$
Option / rights
reserve
$
Accumulated
losses
$
Total
equity
$
8,958,098
720,858
(1,418,618)
8,260,338
609,820
50,000
-
-
-
110,285
(97,195)
562,625
-
110,285
-
-
-
-
-
609,820
50,000
110,285
(97,195)
672,910
-
-
-
-
(1,370,357)
(1,370,357)
-
-
Balance 30 June 2019
9,520,723
831,143
(2,788,975)
7,562,891
This statement should be read in conjunction with the notes to the financial statements.
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37
STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
Operating activities
Interest received
Government grants
Other receipts
Payments to suppliers and employees
Net cash used in operating activities
Investing activities
Payments for capitalised exploration expenditure
Payments for plant and equipment
Proceeds from sale of plant and equipment
Net cash used in investing activities
Financing activities
Proceeds from issue of share capital
Proceeds from exercise of options
Payments for capital raising costs
Net cash from financing activities
Notes
12
30 June
2020
$
890
50,000
44,557
(935,324)
(839,877)
(3,424,765)
(15,003)
5,491
30 June
2019
$
30,166
-
-
(832,540)
(802,374)
(2,926,452)
(49,270)
-
(3,434,277)
(2,975,722)
6,048,337
96,000
(451,060)
5,693,277
609,820
-
(81,776)
528,044
Net change in cash and cash equivalents
1,419,123
(3,250,052)
Cash and cash equivalents, beginning of the year
741,889
3,991,941
Cash and cash equivalents, end of year
5 (a)
2,161,012
741,889
This statement should be read in conjunction with the notes to the financial statements.
38
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This general purpose financial statements of the Group have been
prepared in accordance with the requirements of the Corporations Act
2001 (Cth), 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).
Resolution Minerals Ltd is a listed public company, registered and
domiciled in Australia. Resolution Minerals Ltd is a for profit entity for the
purpose of preparing the financial statements.
The financial statements for the year ended 30 June 2020 were approved
and authorised by the Board of Directors on 18 September 2020.
The Financial Report has been prepared on an accruals basis, and is
based on historical costs, modified by the measurement at fair value of
selected on-current assets, financial assets and financial liabilities.
COMPARATIVES
Comparative information for 2019 is for the full year commencing on
1 July 2018.
The significant policies which have been adopted in the preparation of
this financial report are summarised below.
a) Principles of consolidation
Subsidiaries
The Group financial statements consolidate those of the parent
company and all of its subsidiary undertakings drawn up to 30 June
2020. Subsidiaries are all entities (including structured entities)
over which the Group control. The Group controls an 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 fully transferred to the Group. They are
deconsolidated from the date that control ceases. All subsidiaries
have a reporting date of 30 June.
A list of controlled entities is contained in note 17 to the Financial
Statements.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised
losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a Group
perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted, where necessary, to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss of subsidiaries acquired or disposed of during the
reporting period are recognised from the effective date of acquisition,
or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the
portion of a subsidiary’s profit or loss and net assets that is not held
by the Group. The Group attributes total comprehensive income or
loss of subsidiaries between the owners of the parent and the non-
controlling interests based on their respective ownership interests.
Joint arrangements
Under AASB11 Joint Arrangements investments in joint
arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and
obligations of each investor, rather than the legal structure of the joint
arrangement. The Group currently has a joint arrangement in relation
to its 64North Project in Alaska, USA.
The Group recognises its direct right to the assets, liabilities,
revenues and expenses of joint operations and its share of jointly
held or incurred assets, liabilities, revenues and expenses. These
have been incorporated into the financial statements under the
appropriate headings. Details of the joint operations are set out in
note 7.
b) Operating segments
An operating segment is a component of an entity that engages
in business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions
with other components of the same entity), whose operating results
are regularly reviewed by the entity’s chief operating decision
maker to make decisions about resources to be allocated to the
segment and assess its performance and for which discrete financial
information is available. This includes start-up operations which are
yet to earn revenues. Management will also consider other factors
in determining operating segments such as the existence of a line
manager and the level of segment information presented to the
Board of Directors.
Operating segments have been identified based on the information
provided to the chief operating decision makers – being the Board.
The Group aggregates two or more operating segments when they
have similar economic characteristics, and the segments are similar
in the nature of the minerals targeted.
Operating segments that meet the quantitative criteria, as prescribed
by AASB 8, are reported separately. However, an operating segment
that does not meet the quantitative criteria is still reported separately
where information about the segment would be useful to users of the
financial statements.
The Directors have considered the requirements of AASB 8 –
Operating Segments and the internal reports that are reviewed
by the Board in allocating resources have determined that there
are two separately identifiable segments based on the level of
expenditure, namely the Group’s US based operations and Australian
based operations.
c) Finance income and expense
Finance income comprises interest income on funds invested,
gains on disposal of financial assets and changes in fair value of
financial assets held at fair value through profit or loss. Finance
expenses comprise changes in the fair value of financial assets
held at fair value through profit or loss and impairment losses on
financial assets.
Interest income is recognised as it accrues in profit or loss, using the
effective interest rate method. All income is stated net of goods and
services tax (GST).
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39
d) Plant and equipment
Plant and equipment is stated at historical cost less accumulated
depreciation and impairment losses. Historical cost includes
expenditure that is directly attributable to the items. Repairs and
maintenance are charged to profit or loss during the reporting period
in which they were incurred.
Depreciation is calculated and recognised on assets based on the
estimate of useful life and future economic benefits to the Group
as follows:
Exploration equipment
Office equipment
IT equipment
6 years
5 years
3 years
The assets residual values and useful lives are reviewed and adjusted
at the end of each reporting period. An asset’s carrying amount is
written down immediately to its recoverable amount if its carrying
amount is greater than its estimated recoverable amount. The method
was changed from the straight-line method in the prior year.
e) Exploration and evaluation expenditure
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 right of tenure is current and
those costs are expected to be recouped through the successful
development of the area (or, alternatively by its sale) or where
activities in the area have not yet reached a stage which permits
reasonable assessment of the existence of economically recoverable
reserves and operations in relation to the area are continuing.
Accumulated costs, in relation to an abandoned area, are written off
in full against profit in the period in which the decision to abandon
the area is made.
f) Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the
Group becomes a party to the contractual provisions of the financial
instrument, and are measured initially at fair value adjusted by
transactions costs, except for those carried at fair value through
profit or loss, which are measured initially at fair value. Subsequent
measurement of financial assets and financial liabilities are
described below.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the financial
asset and all substantial risks and rewards are transferred. A
financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant
financing component and are measured at the transaction price in
accordance with AASB 15, all financial assets are initially measured
at fair value adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other
than those designated and effective as hedging instruments are
classified into the following categories upon initial recognition:
»
»
»
»
amortised cost
fair value through profit or loss (FVPL)
equity instruments at fair value through other comprehensive
income (FVOCI)
debt instruments at fair value through other comprehensive
income (FVOCI)
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Classifications are determined by both:
»
»
The entities business model for managing the financial asset
The contractual cash flow characteristics of the financial assets
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables, which is presented within other expenses.
Subsequent measurement financial assets
FINANCIAL ASSETS AT AMORTISED COST
Financial assets are measured at amortised cost if the assets meet
the following conditions (and are not designated as FVPL):
»
»
they are held within a business model whose objective is to hold
the financial assets and collect its contractual cash flows
the contractual terms of the financial assets give rise to cash
flows that are solely payments of principal and interest on the
principal amount outstanding
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall into this category of
financial instruments.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVPL)
Financial assets that are held within a different business model other
than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at
fair value through profit and loss. Further, irrespective of business
model financial assets whose contractual cash flows are not solely
payments of principal and interest are accounted for at FVPL. All
derivative financial instruments fall into this category, except for
those designated and effective as hedging instruments, for which the
hedge accounting requirements apply (see below).
IMPAIRMENT OF FINANCIAL ASSETS
AASB 9’s impairment requirements use more forward looking
information to recognise expected credit losses – the ‘expected
credit losses (ECL) model’. Instruments within the scope of the
new requirements included loans and other debt-type financial
assets measured at amortised cost and FVOCI, trade receivables,
contract assets recognised and measured under AASB 15 and loan
commitments and some financial guarantee contracts (for the issuer)
that are not measured at fair value through profit or loss.
The Group considers a broader range of information when assessing
credit risk and measuring expected credit losses, including past
events, current conditions, reasonable and supportable forecasts
that affect the expected collectability of the future cash flows of the
instrument.
In applying this forward-looking approach, a distinction is
made between:
a) financial instruments that have not deteriorated significantly in
credit quality since initial recognition or that have low credit risk
(‘Stage 1’) and
b) financial instruments that have deteriorated significantly in credit
quality since initial recognition and whose credit risk is not low
(‘Stage 2’).
40
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
c)
d)
‘Stage 3’ would cover financial assets that have objective
evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first
category while ‘lifetime expected credit losses’ are recognised
for the second category.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected life
of the financial instrument.
CLASSIFICATION AND MEASUREMENT OF FINANCIAL LIABILITIES
As the accounting for financial liabilities remains largely unchanged
from AASB 139, the Group’s financial liabilities were not impacted by
the adoption of AASB 9. However, for completeness, the accounting
policy is disclosed below.
The Group’s financial liabilities include borrowings, trade and other
payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives
and financial liabilities designated at FVPL, which are carried
subsequently at fair value with gains or losses recognised in profit or
loss (other than derivative financial instruments that are designated
and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument’s fair value that are reported in profit or loss are included
within finance costs or finance income.
INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT OF HEDGE INSTRUMENTS
The Group uses derivative financial instruments, such as forward
currency contracts to hedge its foreign currency risks. Such
derivative financial instruments are initially recognised at fair value
on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as:
»
Fair value hedges when hedging the exposure to changes in the
fair value of a recognised asset or liability or an unrecognised
firm commitment
» Cash flow hedges when hedging the exposure to variability
in cash flows that is either attributable to a particular risk
associated with a recognised asset or liability or a highly
probable forecast transaction or the foreign currency risk in an
unrecognised firm commitment
At the inception of a hedge relationship, the Group formally
designates and documents the hedge relationship to which it wishes
to apply hedge accounting and the risk management objective and
strategy for undertaking the hedge.
The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being hedged
and how the Group will assess whether the hedging relationship
meets the hedge effectiveness requirements (including the analysis
of sources of hedge ineffectiveness and how the hedge ratio is
determined). A hedging relationship qualifies for hedge accounting if
it meets all of the following effectiveness requirements:
»
»
»
There is ‘an economic relationship’ between the hedged item
and the hedging instrument.
The effect of credit risk does not ‘dominate the value changes’
that result from that economic relationship.
The hedge ratio of the hedging relationship is the same as that
resulting from the quantity of the hedged item that the Group
actually hedges and the quantity of the hedging instrument that
the Group actually uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are
accounted for, as described below:
FAIR VALUE HEDGES
The change in the fair value of a hedging instrument is recognised
in the statement of profit or loss as other expense. The change in
the fair value of the hedged item attributable to the risk hedged is
recorded as part of the carrying value of the hedged item and is also
recognised in the statement of profit or loss as other expense.
For fair value hedges relating to items carried at amortised cost, any
adjustment to carrying value is amortised through profit or loss over
the remaining term of the hedge using the effective interest rate
method. The effective interest rate amortisation may begin as soon
as an adjustment exists and no later than when the hedged item
ceases to be adjusted for changes in its fair value attributable to the
risk being hedged.
If the hedged item is derecognised, the unamortised fair value is
recognised immediately in profit or loss.
When an unrecognised firm commitment is designated as a hedged
item, the subsequent cumulative change in the fair value of the
firm commitment attributable to the hedged risk is recognised as
an asset or liability with a corresponding gain or loss recognised in
profit or loss.
g)
Impairment of assets
At each reporting date, the Group reviews the carrying values of its
tangible and intangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, is compared to
the asset’s carrying value. Any excess of the asset’s carrying value
over its recoverable amount is expensed to profit or loss.
Where it is not probable to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
h) Trade and other receivables
Trade and other receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in an
active market. They arise when the Group provides money, goods
or services directly to a debtor with no intention of selling the
receivables. They are included in current assets, except for those
with maturities greater than 12 months after the reporting date which
are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
method, less provision for impairment. Gains and losses on disposals
are determined by comparing proceeds with carrying amount. These
are included in profit or loss.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
41
i) Trade and other payables
k) Cash and cash equivalents
Trade and other payables represent liabilities for goods and services
provided to the Group prior to the end of the reporting period which
are unpaid. The amounts are unsecured and are usually paid within
30 days of recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months from
the reporting date. They are recognised initially at their fair value and
subsequently amortised cost using the effective interest rate method.
Trade and other payables are stated at amortised cost.
j)
Income Tax
Tax expense recognised in profit or loss comprises the sum of
deferred tax and current tax not recognised in other comprehensive
income or directly in equity.
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, the Australian Taxation Office
(ATO) and other fiscal authorities relating to the current or prior
reporting periods, that are unpaid at the reporting date. Current tax
is payable on taxable profit, which differs from profit or loss in the
financial statements.
Calculation of current tax is based on tax rates and tax laws that
have been enacted or substantively enacted by the end of the
reporting period.
Deferred income taxes are calculated using the liability method on
temporary differences between the carrying amounts of assets and
liabilities and their tax bases. Deferred tax on temporary differences
associated with investments in subsidiaries and joint ventures is not
provided if reversal of these temporary differences can be controlled
by the Group and it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting,
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted by
the end of the reporting period. Deferred tax liabilities are always
provided for in full.
Deferred tax assets are recognised to the extent that it is probable
that future taxable profits will be available against which deductible
temporary differences can be utilised.
Deferred tax assets and liabilities are offset only when the Group has
a right and intention to set-off current tax assets and liabilities from
the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a
component of tax income or expense in profit or loss, except where
they relate to items that are recognised in other comprehensive
income (such as the revaluation of land) or directly in equity, in
which case the related deferred tax is also recognised in other
comprehensive income or equity, respectively.
The Company and its wholly-owned Australian resident subsidiaries
have formed a tax-consolidated group. As a consequence, these
entities are taxed as a single entity and the deferred tax assets
and liabilities of these entities are set off in the consolidated
financial statements.
Cash and cash equivalents in the statement of financial position
comprise cash at bank and in hand and short-term deposits with an
original maturity of three months or less.
For the purpose of presentation in the statement of cash flows, cash
and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities in the
balance sheet.
l) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company, excluding costs
of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during
the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after tax effect and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of
additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
m) Share-based payments
The Group has provided payment to related parties in the form
of share-based compensation, whereby related parties render
services in exchange for shares or rights over shares (‘equity-settled
transactions’). The cost of these equity-settled transactions is
measured by reference to the fair value at the date at which they are
granted. The fair value of share options is determined using a Black
and Scholes methodology depending on the nature of the option
terms. The fair value in relation to performance rights is calculated
using a Monte Carlo simulation.
The Black and Scholes option pricing model takes into account the
exercise price, the term of the option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk free interest rate for
the term of the option.
The Monte Carlo simulation used in pricing the performance rights
takes into account the target share price resulting from meeting the
KPI, the term of the right, the share price at grant date and expected
price volatility of the underlying share and the risk free interest rate
for the term of the option.
The fair value of the options and performance rights granted is
adjusted to reflect market vesting conditions, but excludes the
impact of any non-market vesting conditions. Non-market vesting
conditions are included in assumptions about the number of options
and performance rights that are expected to become exercisable
/ vested. At each reporting date, the entity revises its estimates of
the number of options and performance rights that are expected to
become exercisable / vested.
42
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
The cost of equity-settled transactions is recognised, together with
a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the
relevant parties become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions
at each reporting date until vesting date reflects (i) the extent to
which the vesting period has expired and (ii) the number of awards
that, in the opinion of the directors of the Group, will ultimately vest.
This opinion is formed based on the best available information at
reporting date. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions
is included in the determination of fair value at grant date.
Where the terms of an equity-settled award are modified, as a
minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase
in the value of the transaction as a result of the modification, as
measured at the date of modification.
n) Employee benefits
The Group provides post-employment benefits through various
defined contribution plans.
A defined contribution plan is a superannuation plan under which
the Group pays fixed contributions into an independent entity.
The Group has no legal or constructive obligations to pay further
contributions after its payment of the fixed contribution. The Group
contributes to several plans and insurances for individual employees
that are considered defined contribution plans. Contributions to
the plans are recognised as an expense in the period that relevant
employee services are received.
Short-term employee benefits are current liabilities included in
employee benefits, measured at the undiscounted amount that the
Group expects to pay as a result on the unused entitlement. Annual
leave is included in ‘other long-term benefit’ and discounted when
calculating the leave liability as the Group does not expect all annual
leave for all employees to be used wholly within 12 months of the
end of the reporting period. Annual leave liability is still presented
as a current liability for presentation purposes under AASB 101
Presentation of Financial Statements.
o) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST, except where the amount of GST incurred is not recoverable
from the Tax Office. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part of an item of
the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross
basis, except for the GST components of investing and financing
activities, which are disclosed as operating cash flows.
p) Critical accounting estimates and judgements
The Directors evaluate estimates and judgements incorporated into
the financial report based on historical knowledge and best available
current information. Estimates assume a reasonable expectation
of future events and are based on current trends of economic data,
obtained both externally and within the Group.
i) Key estimates – impairment
The Group assesses impairment at each reporting date by
evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined.
ii) Key judgements – exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation
expenditure is dependent on a number of factors, including
whether the Group decides to exploit the related lease itself or, if
not, whether it successfully recovers the related exploration and
evaluation asset through sale.
Factors that could impact the future recoverability include the
level of reserves and resources, future technological changes,
which could impact the cost of mining, future legal changes
(including changes to environmental restoration obligations) and
changes to commodity prices.
To the extent that capitalised exploration and evaluation
expenditure is determined not to be recoverable in the future,
profits and net assets will be reduced in the period in which this
determination is made.
In addition, exploration and evaluation expenditure is capitalised
if activities in the area of interest have not yet reached a stage
that permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves. To the extent
it is determined in the future that this capitalised expenditure
should be written off, profits and net assets will be reduced in the
period in which this determination is made.
iii) Share-based payment transactions
The Group measures the cost of equity-settled transactions with
management and other parties by reference to the fair value of
the equity instruments at the date at which they are granted.
The fair value of share options is determined by the Board of
Directors with reference to quoted market prices or using the
Black-Scholes valuation method taking into account the terms
and conditions upon which the equity instruments were granted.
The fair value of performance rights is calculated using a Monte
Carlo simulation. The assumptions in relation to the valuation of
the equity instruments are detailed in note 11 and note 16. 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 expenses and equity.
q) Adoption of the new and revised accounting standards
In the current year, there are no new and/or revised Standards and
Interpretations adopted in these Financial Statements affecting
presentation or disclosure and the reported result or financial
position other than:
AASB16 Leases
AASB 16 supersedes AASB 117 Leases and Interpretation 4
Determining whether an Arrangement contains a lease and became
effective for reporting periods beginning on or after 1 January
2019. The standard sets out the principles for the recognition,
measurement, presentation and disclosure of leases and requires
lessees to account for all leases under a single on-balance sheet
model. Accordingly the Group applied AASB 16 for the first time for
the period ended 30 June 2020.
The Group elected to use the recognition exemptions for lease
contracts that, at the commencement date, have a lease term of 12
months or less and do not contain a purchase option (‘short-term
leases’), and lease contracts for which the underlying asset is of low
value (‘low-value assets’). The leases held by the Group satisfied the
relevant criteria of a short term lease under AASB 16. As a result of
this the standard has had no impact on the Group.
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43
AASB INTERPRETATION 23 UNCERTAINTY OVER INCOME TAX TREATMENT
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB 112
Income Taxes. It does not apply to taxes or levies outside the scope of AASB 12, nor does it specifically include requirements relating to interest
and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:
» Whether an entity considers uncertain tax treatments separately
»
The assumptions an entity makes about the examination of tax treatments by taxation authorities
» How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
» How an entity considers changes in facts and circumstances
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax
treatments. The approach that better predicts the resolution of the uncertainty needs to be followed. The Group applies significant judgement in
identifying uncertainties over income tax treatments. The Group determined, based on its tax compliance that it is probable that its tax treatments
(including those for the subsidiaries) will be accepted by the taxation authorities. The interpretation did not have an impact on the consolidated
financial statements of the Group.
r) Recently issued accounting standards to be applied in future accounting periods
There are no accounting standards that have not been early adopted for the year ended 30 June 2020 but will be applicable to the Group in future
reporting periods.
2 OTHER EXPENSES
Compliance
Office expenses
Legal, insurance and registry
Realised loss on foreign currency
Other expenses
Total other expenses
3
INCOME TAX BENEFIT / (LOSS)
a) The components of income tax expense comprise:
Current income tax expense / (benefit)
b) The prima facie tax loss before income tax is reconciled to the income tax (benefit) /
expense as follows:
Net gain / (loss)
Income tax rate
Prima facie tax benefit on loss from activities before income tax
Non-deductible amounts
Tax effect of temporary differences not brought to account as they do not meet the recognition
criteria
Deferred tax asset not realised as recognition criteria not met
Subtotal
c) Deferred tax assets have not been recognised in respect of the following:
Total tax losses
Deferred tax asset not recognised
44
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
2020
$
79,159
123,696
103,046
52,945
76,624
444,270
2019
$
78,831
98,633
73,300
-
38,462
289,226
2020
$
2019
$
-
-
(1,281,967)
(1,370,357)
30%
(384,590)
1,202,521
(81,518)
736,413
-
30%
(411,107)
88,216
(689,778)
1,012,669
-
10,184,928
2,940,642
5,539,849
1,661,955
A net deferred tax asset of $2,940,642 (2019: $1,661,955) has not been recognised as it is not probable that within the immediate future that
taxable profits will be available against which temporary differences and tax losses can be utilised.
The Group is subject to income taxes in Australia. Significant judgement is required in determining the provision of income taxes. There are many
transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group
estimates its tax liabilities based on the Group’s understanding of the tax law. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which
such determination is made.
4 EARNINGS PER SHARE
The weighted average number of shares for the purpose of diluted earnings per share can be reconciled to the weighted average number of ordinary
shares used in the calculation of basic earnings per share as follows:
Weighted average number of shares used in basic earnings per share
Weighted average number of shares used in diluted earnings per share
2020
#
126,243,296
126,243,296
2019
#
82,865,118
82,865,118
Profit / (loss) per share – basic and basic (cents)
(1.02)
(2.55)
There were 52,423,225 options, performance rights and performance shares outstanding at the end of the year (2019: 40,346,562) that have not been
taken into account in calculating diluted EPS due to their effect being anti-dilutive.
5 CASH AND CASH EQUIVALENTS
Cash and cash equivalents include the following:
Cash at bank and in hand
Cash and cash equivalents
a) Reconciliation of cash at the end of the period.
2020
$
2019
$
2,161,012
741,889
2,161,012
741,889
The above figures are reconciled to cash at the end of the financial year as shown in the
statement of cash flows as follows:
Cash and cash equivalents
Restricted cash held by joint venture partner
953,412
1,207,600
741,889
-
Restricted cash in not available for general use by the Group as this is held by the Millrock Resources, the operator of the 64North Project, for
authorised exploration in the US.
6 OTHER ASSETS
Other current assets include the following:
Exploration bond deposits
GST receivable
Other current assets
Total receivables
No receivables are considered past due and / or impaired.
2020
$
20,956
3,544
-
24,499
2019
$
16,767
3,481
2,915
23,163
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
45
7 EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Expenditure on exploration during the year
Acquisition of projects
Exploration expenditure impaired
Closing balance
Expenditure is capitalised as follows:
Group owned assets
Joint operations
Total exploration and evaluation expenditure
2020
$
6,809,980
3,064,891
994,174
(332,424)
10,536,621
6,748,268
3,788,353
10,536,621
2019
$
4,467,108
2,659,228
93,245
(409,601)
6,809,980
6,809,980
-
6,809,980
During the year, the Group recognised an impairment expense of $332,424 related to the relinquishment of the remaining Arunta Project tenements
$299,234 and one Wollogorang Project tenement of $33,190.
The acquisition of projects includes the fair value of share based payments of $245,000 being the value of 5,000,000 milestone shares as the first
payment to Millrock Resources, operator of the joint arrangement, to commence earn-in to the 64 North Project in Alaska, USA. The full earn-in table
and details of the agreement is below.
RML has the exclusive right to earn to a 60% interest in the entire 64North Project from Canadian listed Millrock Resources (MRO) by sole funding
exploration as set out below in Table 1. Subject to other conditions set out in Table 2 Resolution may earn to 80% on a “best block” on RML’s election, the
project is divided into nine “blocks” (West Pogo, East Pogo, North Pogo, South Pogo, Eagle, LMS-X, Divide, Last Chance, Shaw). During the initial 4 year
earn-in period, the minimum expenditure in a term may be extended by 6 months using a once only “grace period” and Resolution must keep the claims in
good standing during the sole funding period. Resolution has a right to form a Joint-Venture at the completion of any stage, at which time the manager of
the JV will be determined by largest percentage. On formation of a JV both parties must contribute according to their percentage interest or be diluted using
a standard industry formula using a “double rate of dilution”. If either party is diluted to less than 10%, this will convert to a 1% Net Smelter Royalty (NSR).
Resolution can elect to earn-in and complete the next stage or form a JV at the achievement of each stage. During the sole funding period RML is the
Manager of the project, with project vendor MRO appointed as the project operator in the first year with an 8% administration fee. After year 1, Resolution
may assume responsibilities as operator and will pay MRO $50k cash in-lieu of the 8% administration fee. Resolution Minerals holds the first right of refusal
if MRO chooses to sell its interest. An area of interest immediately surrounding the 64North Project exists and any new claims acquired by RML or MRO
are subject to the terms of the agreement. Historic royalties exist on various claims in the project area which vary from 0% to a maximum of 1.5% NSR after
certain buy downs are exercised on RML’s election. On positive decision to mine on the West Pogo Block a NI 43-101 mineral resource estimate report
must be filed and subject to definition of >1m oz Au NI 43-101 Resource, a payment of $1/oz Au is due to previous prospectors. On RML’s election, RML
has the right to earn to 80% interest on a nominated “best block” subject to sole funding a Bankable Feasibility Study (BFS) to earn a 70% interest and on
a positive BFS and RML’s decision to mine, RML must pay MRO US$3 million in cash or RML shares. To earn an 80% interest in the best block, RML must
loan carry MRO to first production. RML may elect to remove un-wanted claims or blocks from the agreement which then revert to MRO un-encumbered.
64North Project – Entire Project Earn-in Summary
Stage
Commence earn-in
– commenced in September 2019
Stage 1 by 31 Jan 2021
Stage 2 within a further 12 months of electing
to earn such further interest
Stage 3 within a further 12 months of electing
to earn such further interest
Stage 4 within a further 12 months of electing
to electing to earn such further interest
Drilling KPI – cumulative total of diamond
drilling metres.
Total
64North Project Best Block Interest
Stage
Bankable feasibility study (BFS)
First production
Total
RML%
interest
0%
30%
42%
Trigger
Expenditure requirement
US$
RML share milestone
Millrock payment
US$
Exclusive option –
Complete due diligence
$250,000
5,000,000
nil
Undertake exploration
$4,750,000
10,000,000
Undertake exploration
$5,000,000
10,000,000
$50,000
$50,000
51%
Undertake exploration
$5,000,000
4,000,000
$50,000
60%
Undertake exploration
$5,000,000
4,000,000
$50,000
n/a
7,500m diamond drilling
n/a
5,000,000
n/a
60%
RML%
Interest
70%
80%
80%
$20,000,000
38,000,000
$200,000
Trigger
Expenditure requirement
US$
RML Share milestone
Complete BFS
BFS expenditure
Commence production
Loan carry
n/a
n/a
Solefund
Millrock payment
US$
$3,000,000
n/a
$3m
The Group, through its US based subsidiary company, is currently in the process of incurring Stage 1 expenditure to earn a 30% interest by 31 January 2021.
46
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
8 PLANT AND EQUIPMENT
2020
Gross carrying amount
Opening balance
Additions
Disposals
Closing balance
Depreciation and impairment
Opening balance
Depreciation1
Disposals
Closing balance
Carrying amount 30 June
Exploration
equipment
$
Office
equipment
$
Software and
IT equipment
$
175,741
-
(37,144)
138,597
(65,916)
(32,895)
17,299
(81,512)
57,085
19,793
634
(12,636)
7,791
(9,190)
(3,729)
7,789
(5,130)
2,661
77,999
14,369
(20,823)
71,545
(60,854)
(11,587)
16,856
(55,585)
15,960
Total
$
273,533
15,003
(70,603)
217,933
(135,960)
(48,211)
41,944
(142,227)
75,706
1 Exploration equipment depreciation is charged to exploration assets. The remaining depreciation of $15,316 is charged to the statement of profit
or loss.
2019
Gross carrying amount
Opening balance
Additions
Disposals
Closing balance
Depreciation and impairment
Opening balance
Depreciation1
Disposals
Closing balance
Carrying amount 30 June
Exploration
equipment
$
Office
Equipment
$
Software and
IT equipment
$
128,584
47,157
-
175,741
(14,735)
(51,181)
-
(65,916)
109,825
19,793
-
-
19,793
(2,154)
(7,036)
-
(9,190)
10,603
77,382
2,113
(1,496)
77,999
(27,718)
(34,324)
1,188
(60,854)
17,145
Total
$
225,759
49,270
(1,496)
273,533
(44,607)
(92,541)
1,188
(135,960)
137,573
1 Exploration equipment depreciation is charged to exploration assets. The remaining depreciation of $41,360 is charged to the statement of profit
or loss.
9 TRADE AND OTHER PAYABLES
Trade creditors
Payroll liabilities
Accrued expenses – 64North Project, Alaska
Accrued expenses – other
Total trade and other payables
2020
$
34,002
13,701
413,100
79,620
540,423
2019
$
28,409
5,435
-
104,940
138,784
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
2 0 2 0 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D
47
10 ISSUED CAPITAL
a)
Issued and paid up capital
Fully paid ordinary shares
b) Movements in fully paid shares
Balance at 30 June 2018
Fair value of shares issued for the acquisition of projects
Controlled placement agreement collateral shares
Share placement
Rights issue and shortfall
Capital raising costs
Balance at 30 June 2019
Fair value of shares issued for the acquisition of projects
Share placements and option exercise
Option exercise (including fair value of options exercised)
Capital raising costs
Balance at 30 June 2020
2020
$
14,944,312
14,944,312
2019
$
9,520,723
9,520,723
Number
$
50,813,406
500,000
2,500,000
9,000,000
3,196,400
-
66,009,806
5,000,000
133,823,882
1,600,000
-
206,433,688
8,958,098
50,000
-
450,000
159,820
(97,195)
9,520,723
245,000
6,048,337
159,296
(1,029,044)
14,944,312
The share capital of Resolution Minerals Ltd consists only of fully paid ordinary shares. All shares are eligible to receive dividends and the
repayment of capital and represent one vote at the shareholders’ meeting of Resolution Minerals Ltd.
The shares do not have a par value and the Company does not have a limited amount of authorised capital.
In the event of winding up the Company, ordinary shareholders rank after all creditors and are fully entitled to any proceeds of liquidation.
c) Capital management
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure accordingly. The
Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of
the business. The Group’s capital is shown as issued capital in the statement of financial position.
11 RESERVES
Share based payments are in line with the Resolution Minerals Ltd remuneration policy. Listed below are summaries of options and performance
rights granted:
Share option reserve
Balance at 30 June 2018
Granted – rights issue and placement
Balance at 30 June 2019
Granted – broker remuneration
Exercised
Lapsed
Balance at 30 June 2020
All options vested upon issue except as stated above.
Number of
options
18,573,337
6,098,225
24,671,562
15,000,000
(1,600,000)
(6,323,337)
31,748,225
$
720,858
-
720,858
593,403
(63,296)
-
1,250,965
Weighted average
exercise price
$0.23
$0.10
$0.20
$0.06
$0.06
$0.20
$0.14
48
R E S O L U T I O N M I N E R A L S LT D | 2 0 2 0 A N N U A L R E P O R T
Performance rights reserve
Balance at 1 July 2018
Granted – KMP
Balance at 30 June 2019
Granted – KMP, employees and consultants
Forfeited
Balance at 30 June 2020
Reconciliation of reserve movements
Options / rights issued to directors / employees
Options issued to brokers as remuneration
Options exercised
Forfeited performance rights
Total share based payments
Options recognised in equity
Net share based payments recognised in statement of financial position
Share based payment classified as employee benefit expense in profit or loss
Net share based payment expense in profit or loss
During the 2019/20 year:
Number of
rights
-
2,500,000
2,500,000
5,500,000
(500,000)
7,500,000
2020
$
14,659
593,403
(63,296)
(22,057)
522,709
530,107
(7,398)
7,398
-
$
-
110,285
110,285
14,659
(22,057)
102,887
2019
$
110,285
-
-
-
110,285
-
110,285
(110,285)
-
•
•
•
•
•
15,000,000 unquoted options were issued as broker remuneration. The unquoted options have an exercise price of $0.06 if exercised on or before
30 November 2020, $0.08 if exercised on or before 30 November 2021 and $0.10 if exercised on or before 30 November 2022 and expiry of 30
November 2022. The fair value fair of the unquoted options is $593,403;
1,600,000 unquoted options were exercised;
6,323,337 quoted options lapsed in accordance with the terms of those securities;
5,500,000 unquoted performance rights with KPI based vesting criteria were issued to KMP, employees and consultants; and
500,000 unquoted performance rights lapsed in accordance with the terms of those securities.
During the 2018/19 year:
•
•
6,098,225 quoted options were issued under a placement and rights issue; and
2,500,000 unquoted performance rights were issued as KMP remuneration.
Performance right valuation assumptions
Valuation methodology
Share price at grant date
Historic volatility
Risk free interest rate
Expected life of securities (years)
Broker options
Black-Scholes option pricing model
$0.055
126.83%
0.79%
3.0
Nature and purpose of reserves
The share option reserve and performance rights reserve is used to recognise the fair value of all options and performance rights.
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12 RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Operating activities
Loss after tax
Share based payments
Depreciation
Exploration costs expensed
Impairment expense
Net change in working capital
Net cash used in operating activities
13 AUDITOR REMUNERATION
Audit services
Auditors of Resolution Minerals Ltd – Grant Thornton
Audit and review of Financial Reports
Audit services remuneration
Other services
Auditors of Resolution Minerals Ltd – Grant Thornton
Taxation compliance
Total other services remuneration
Total remuneration received by Grant Thornton
2020
$
2019
$
(1,281,967)
(1,370,357)
(7,398)
15,316
51,936
332,424
49,812
(839,877)
110,285
41,360
121,897
409,601
(115,160)
(802,374)
2020
$
2019
$
31,000
31,000
5,700
5,700
36,700
29,900
29,900
7,400
7,400
37,300
14 COMMITMENTS AND CONTINGENCIES
Exploration commitments
In order to maintain rights of tenure to exploration permits, the Group has certain obligations to perform minimum exploration work and expend
minimum amounts of money.
The Group’s exploration licence tenements are renewable on an annual basis at various renewal dates throughout the year and the amount of each
expenditure covenant is set by the relevant state’s Minister at the time of each renewal grant.
Within one year
Within two years to five years
2020
$
13,000
-
13,000
2019
$
984,000
2,365,000
3,349,000
Commitments related to the 64North Project are further detailed in the Note 7.
Not meeting the expenditure commitments detailed does not mean that the relevant tenements will require relinquishment.
The exploration commitments have been significantly reduced by the NT government in recognition of difficult operating conditions caused by the
impact of the COVID-19 pandemic.
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15 RELATED PARTY TRANSACTIONS
The Company’s related party transactions include its key management personnel.
a) Transactions with key management personnel
Key management personnel remuneration includes the following are is disclosed in detail in the remuneration report:
Short-term benefits
Post-employment benefits
Share based payments
Total remuneration
2020
$
493,275
28,538
(22,057)
499,756
2019
$
461,038
27,737
110,285
599,060
The following transactions occurred with KMP:
Payment for professional services to entities associated with entities associated with KMP as
listed below.
343,615
201,728
Payables for professional services at reporting date
7,500
10,733
Transactions with key management personnel are made at normal at market rates. Outstanding balances are unsecured and are repayable in cash.
Duncan Chessell
Resolution Minerals has sought the provision of consultancy services from Magill Consulting Pty Ltd on commercial terms – prior to Mr Chessell’s
appointment as Managing Director of Resolution Minerals, Mr Chessell is a director and shareholder of the company. During the year $28,800 +
GST has been paid in relation to these services. The total amount of fees due to Magill Consulting Pty Ltd as at 30 June 2020 was $Nil (2019: $Nil).
Andrew Shearer
Resolution Minerals has entered into an agreement with PAC Partners Pty Ltd, the employer of Mr Shearer, joint lead manager in relation to the
Company’s capital raisings and provider of broker support services. During the year PAC has been paid fees of $187,450 + GST. The total amount
of fees due to PAC Partners Pty Ltd as at 30 June 2020 was $Nil (2019: $1,320).
Jarek Kopias
Kopias Consulting, a business of which Jarek Kopias is a Director, was paid consulting fees in relation to the year totalling $127,365 (2019:
$109,063) and is disclosed in the remuneration report. The total amount of fees due to Kopias Consulting as at 30 June 2020 was $7,500
(2019: $9,413).
16 EMPLOYEE REMUNERATION
a) Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries / contract payments for Directors and employees
Share based payments – Director and employee options
Defined contribution superannuation expense
Other employee expenses
Less: Transfer to exploration assets
2020
$
2019
$
589,243
(7,398)
32,560
24,994
(266,017)
373,382
940,966
110,285
76,834
11,388
(774,978)
364,495
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b) Share based employee remuneration
As at 30 June 2020 the Group maintained a share option plan and performance share plan for employee and director remuneration. During the
year there were 5,500,000 performance rights granted as KMP, employee and consultant remuneration.
The table below outlines the inputs used in the Monte Carlo fair value calculation for the performance rights:
Exercise price
Right life
Underlying share price
Expected share price volatility
Risk free interest rate
Weighted average fair value per right
Weighted average contractual life
Details of rights issued to KMP are provided in the remuneration report.
Share options and weighted average exercise prices are as follows:
Opening balance – remuneration options
Granted as remuneration during the year
Outstanding as at 30 June 2019 and 2020
Range of values
Nil
3.8 years to 7.1 years
$0.049 to $0.068
126.8% to 136.9%
0.39% to 0.82%
$0.0521
6.2 years
Number of
options
5,350,000
-
5,350,000
Weighted average
exercise price ($)
0.25
-
0.25
Fair value of options granted
The fair value at grant date of the Director options has been determined using a Black and Scholes option pricing model that takes into account
the exercise price, the term of the option, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
Fair value of performance rights granted
The fair value at grant date of the Director, KMP and employee performance rights has been determined using a Monte Carlo pricing model that
takes into account the term of the right, the impact of dilution, the impact of the KPI on the underlying share price, the non-tradeable nature of the
right, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate
for the term of the right.
17 INVESTMENTS IN CONTROLLED ENTITIES
Controlled entities
The Company has the following subsidiaries:
Name of subsidiary
Mangrove Resources Pty Ltd
Xavier Resources Pty Ltd
Resolution Minerals Gold LLC
(formerly Northern Vanadium LLC)
N23 LLC
Resolution Minerals Alaska Inc1
1 Registered on 25 October 2019.
Country of
incorporation
Australia
Australia
USA
USA
USA
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Percentage held
2019
100%
100%
100%
100%
-
2020
100%
100%
100%
100%
100%
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18 FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and payable.
The total for each category of financial instruments are as follows:
Financial assets
Cash and cash equivalents
Other assets
Financial liabilities
Trade payables
Note
2020
$
2019
$
5
6
9
2,161,012
24,499
2,185,511
47,703
47,703
741,889
23,163
765,052
33,844
33,844
Financial risk management policy
Risk management is carried out by the Managing Director under policies approved by the Board of Directors. The Board provides written principles for
overall risk management, as well as policies covering specific areas, such as interest rate and credit risk.
a) Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to
financial liabilities.
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate working capital is maintained for the coming
months. Upcoming capital needs and the timing of raisings are assessed by the board.
Financial liabilities are expected to be settled within 12 months.
b)
Interest rate risk
The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result in changes in market interest rates.
Cash is the only asset affected by interest rate risk as cash is the Group’s only financial asset exposed to fluctuating interest rates.
The Group is exposed to interest rate risk on cash balances and term deposits held in interest bearing accounts. The Board constantly monitors its
interest rate exposure and attempts to maximise interest income by using a mixture of fixed and variable interest rates, whilst ensuring sufficient
funds are available for the Group’s operating activities. The Group’s net exposure to interest rate risk at 30 June 2020 approximates the value of
cash and cash equivalents.
c) Sensitivity analysis
INTEREST RATE
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at reporting date. This sensitivity analysis demonstrates
the effect on the current year results and equity which could result from a change in these risks.
2020
Interest rate
2019
Interest rate
Sensitivity*
+ 1.30%
- 1.30%
Sensitivity*
+ 1.30%
- 1.30%
Effect on profit
$
Effect on equity
$
+17,768
-17,768
+17,768
-17,768
Effect on profit
$
Effect on equity
$
+19,267
-19,267
+19,267
-19,267
* The method used to arrive at the possible change of 130 basis points was based on the analysis of the absolute nominal change of the
Reserve Bank of Australia (RBA) monthly issued cash rate. Historical rates indicate that for the past five financial years, interest rate movements
ranged between 0 to 130 basis points. It is considered that 130 basis points a ‘reasonably possible’ estimate as it accommodates for the
maximum variations inherent in the interest rate movement over the past five years.
The fair values of all financial assets and liabilities of the Group approximate their carrying values.
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d) Net fair values of financial assets and financial liabilities
Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
The net fair values of financial assets and liabilities are determined by the Group based on the following:
» Monetary financial assets and financial liabilities not readily traded in an organised financial market are carried at book value.
» Non-monetary financial assets and financial liabilities are recognised at their carrying values recognised in the statement of financial position.
The carrying amount of financial assets and liabilities is equivalent to fair value at reporting date.
19 PARENT ENTITY INFORMATION
Information relating to Resolution Minerals Ltd (the parent entity).
Statement of financial position
Current assets
Total assets
Current and total liabilities
Issued capital
Retained losses
Share based payments reserve
Statement of profit of loss and other comprehensive income
Loss for the year
Total comprehensive loss for the year
2020
$
2,185,512
12,388,237
570,616
14,944,312
4,480,543
1,353,852
1,281,967
1,281,967
2019
$
761,152
7,299,104
145,813
9,520,723
3,198,576
831,143
1,779,958
1,779,958
All contingent liabilities and contractual commitments disclosed elsewhere in this report are entered into by the parent entity.
There are no guarantees entered into in relation to debts of subsidiaries.
20 SEGMENT PARENT ENTITY INFORMATION
This is the first year that the Group has commenced reporting on segments that have been established due to significant exploration activities in
Alaska. Contributions by business segment based on geographical location are:
1. Wollogorang Project, Australia – copper and cobalt exploration.
2. 64North and Snettisham Projects in Alaska, USA – predominantly gold exploration, includes vanadium and iron.
3. Unallocated corporate expenditure.
2020
Income
Interest income
Other income
Expenses
Exploration expense
Impairment expense
Loss on sale of assets
Total expenses
Profit / (Loss) before tax
Balance sheet
Restricted cash
Exploration and evaluation
All other assets
Total assets
Total liabilities
Net assets
Exploration
Australia
$
Exploration
USA
$
Unallocated
$
-
-
(51,936)
(332,424)
-
-
(384,360)
-
6,520,821
-
6,520,821
51,600
6,469,221
-
-
-
-
-
-
-
1,207,600
4,015,800
-
5,223,400
419,620
3,596,180
890
94,557
-
-
(15,316)
(977,739)
(897,608)
-
-
1,053,617
1,053,617
99,396
2,161,821
Total
$
890
94,557
(51,936)
(332,424)
(15,316)
(977,738)
(1,281,967)
1,207,600
10,536,621
1,053,617
12,797,838
570,616
12,227,222
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21 PERFORMANCE SHARES
The following disclosure is a condition of the Company’s admission to ASX. On 4 September 2017, the Company issued 13,175,000 class A and class B
performance shares as detailed in the table below:
Class of performance shares
Grant date
Expiry date
Exercise price of shares
Number on issue
Class A
Class B
Total performance shares
4 September 2017
4 September 2022
4 September 2017
4 September 2022
$Nil
$Nil
9,600,000
3,575,000
13,175,000
There were no performance shares converted or cancelled during the reporting period and no vesting conditions were met during the
reporting period.
Terms associated with performance shares:
1. Conversion and expiry of Class A Performance Shares and Class B Performance Shares
a)
(Conversion on achievement of Class A Milestone)
Each Class A performance share will convert into a share on a one for one basis upon the earlier of:
i)
ii)
the Company announcing to ASX the delineation of an Inferred (or higher category) Mineral Resource in accordance with the JORC Code
containing at least 6,000 tonnes cobalt equivalent, at a grade of 0.12% cobalt equivalent or greater (reported in accordance with clause 50
of the JORC Code), on the Tenements (Class A Resource Estimate Milestone); or
the Company selling or transferring (directly or indirectly) for value of at least $5 million to a third party (being any person or entity other
than a wholly-owned subsidiary of the Company) 100% of the shares of Mangrove, or 100% of the Company’s legal or beneficial interest in
the tenements (Class A Disposal Milestone),
within 5 years after completion (each a Class A Milestone).
b) (A Expiry) A Class A Milestone must be determined to have been achieved or not achieved by no later than 5:00 pm on the date that is one
month after the conclusion of the time period for satisfaction set out in paragraph 1(a) (A Expiry Date).
c) (Conversion on achievement of Class B Milestone)
Each Class B performance share will convert into a share on a one for one basis upon the earlier of:
i)
ii)
the Company announcing to ASX the delineation of an Inferred (or higher category) Mineral Resource in accordance with the JORC Code
containing at least 15,000 tonnes cobalt equivalent, at a grade of 0.12% cobalt equivalent or higher (reported in accordance with clause 50
of the JORC Code), on the tenements (Class B Resource Milestone); or
the Company selling or transferring (directly or indirectly) for value of at least $20 million to a third party (being any person or entity other
than a wholly-owned subsidiary of the Company) 100% of the shares of Mangrove, or 100% of the Company’s legal or beneficial interest in
the tenements, (Class B Disposal Milestone),
within 5 years after completion (each a Class B Milestone).
d) (B Expiry) A Class B Milestone must be determined to have been achieved or not achieved by no later than 5:00 pm on the date that is one
month after the conclusion of the time period for satisfaction set out in paragraph 1(c) (B Expiry Date).
e) (No conversion) To the extent that performance shares in a class have not converted into shares on or before the expiry date applicable to
that class, then all such unconverted performance shares in that class held by each holder will automatically consolidate into one performance
share and will then convert into one share.
f)
(Conversion procedure) The Company will issue a holder with a new holding statement for the share or shares as soon as practicable
following the conversion of each performance share.
g) (Ranking of shares) Each share into which a performance share will convert will upon issue:
i)
rank equally in all respects (including, without limitation, rights relating to dividends) with other issued shares;
ii) be issued credited as fully paid;
iii) be duly authorised and issued by all necessary corporate action; and
iv) be issued free from all liens, charges, and encumbrances, whether known about or not, including statutory and other pre-emptive rights
and any transfer restrictions.
h) (Disposal exclusions) Entering into a joint venture, farm-in or other similar transaction relating to the Tenements, or any disposal or
relinquishment of the Tenements due to failure to renew, failure to comply with conditions of grant, or any government action, will not be
capable of constituting a Class A Disposal Milestone or a Class B Disposal Milestone.
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2. Conversion on change of control
If there is a change of control event in relation to the company prior to the conversion of the performance shares, then:
a)
the milestone will be deemed to have been achieved; and
b) each performance share will automatically and immediately convert into shares,
however, if the number of shares to be issued as a result of the conversion of all performance shares due to a change in control event in relation
to the Company is in excess of 10% of the total fully diluted share capital of the Company at the time of the conversion, then the number of
performance shares to be converted will be pro-rated so that the aggregate number of shares issued upon conversion of all performance shares is
equal to 10% of the entire fully diluted share capital of the Company.
3. Rights attaching to performance shares
a)
(Share capital) Each performance share is a share in the capital of the Company.
b) (General meetings) Each performance share confers on a holder the right to receive notices of general meetings and financial reports
and accounts of the Company that are circulated to shareholders. A holder has the right to attend general meetings of shareholders of
the Company.
c) (No voting rights) A performance share does not entitle a holder to vote on any resolutions proposed at a general meeting of shareholders of
the Company.
d) (No dividend rights) A performance share does not entitle a holder to any dividends.
e) (Rights on winding up) A performance share does not entitle a holder to participate in the surplus profits or assets of the Company upon
winding up of the Company.
f)
(Not transferable) A performance share is not transferable.
g) (Reorganisation of capital) If there is a reorganisation (including, without limitation, consolidation, sub-division, reduction or return) of the
issued capital of the Company, the rights of a holder will be varied (as appropriate) in accordance with the ASX Listing Rules which apply to a
reorganisation of capital at the time of the reorganisation.
h) (Quotation of shares on conversion) An application will be made by the Company to ASX for official quotation of the shares issued upon the
conversion of each performance share within the time period required by the ASX Listing Rules.
i)
(Participation in entitlements and bonus issues) A performance share does not entitle a holder to participate in new issues of capital
offered to holders of shares, such as bonus issues and entitlement issues.
(No other rights) A performance share does not give a holder any other rights other than those expressly provided by these terms and those
provided at law where such rights at law cannot be excluded by these terms.
22 GOING CONCERN BASIS OF ACCOUNTING
The financial report has been prepared on the basis of a going concern. During the year ended 30 June 2020 the Group recorded a net cash outflow
from operating and investing activities of $4,274,154 and an operating loss of $1,281,967. These conditions give rise to a material uncertainty that may
cast significant doubt upon the Group’s ability to continue as a going concern.
The ability of the Group to continue to pay its debts as and when they fall due is dependent upon the entity successfully continuing the development of
its exploration assets and raising additional funds which may be from a variety of means inclusive of, but not limited to issue of new equity, debt, asset
sales or entering into joint venture arrangements on mineral properties.
The Directors believe it is appropriate to prepare these accounts on a going concern basis because Directors will not commit to expenditure unless
sufficient funding has been sourced.
The Group has been successful in raising $5.1 million subsequent to the end of the reporting period as detailed in Note 23 below.
If additional capital is not obtained, the going concern basis may not be appropriate, with the result that the group may have to realise its assets and
extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated in the interim financial report. No
allowance for such circumstances has been made in the interim financial report.
23 EVENTS ARISING SINCE THE END OF THE REPORTING PERIOD
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the
Group, the results of those operations or the state of affairs of the Group in subsequent financial years other than those described below.
On 28 July, the Company issued 51,608,421 shares under a placement to raise $3.6 million (before costs) followed by an SPP, issuing 21,428,682 shares
on 11 August 2020 to raise a further $1.5 million.
On 17 August 2020, the Company announced the appointment of Mr Craig Farrow as a non-executive director transitioning to Chair following the
2020 AGM.
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DIRECTORS’ DECLARATION
In the opinion of the Directors of Resolution Minerals Ltd:
a) the consolidated financial statements and notes of Resolution Minerals Ltd are in
accordance with the Corporations Act 2001 (Cth), including:
i) giving a true and fair view of its financial position as at 30 June 2020 and of its
performance for the financial year ended on that date; and
ii) complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001 (Cth); and
b) there are reasonable grounds to believe that Resolution Minerals Ltd will be able to
pay its debts when they become due and payable.
Note 1 confirms that the consolidated financial statements comply with International
Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Leonard Dean
Chair
Adelaide
18 September 2020
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INDEPENDENT AUDIT REPORT
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
Level 3, 170 Frome Street
GPO Box 1270
Adelaide SA 5000
Adelaide SA 5001
Correspondence to:
T +61 8 8372 6666
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
Independent Auditor’s Report
To the Members of Resolution Minerals Ltd
Report on the audit of the financial report
To the Members of Resolution Minerals Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of Resolution Minerals Ltd (the Company) and its subsidiaries (the Group), which
Opinion
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
We have audited the financial report of Resolution Minerals Ltd (the Company) and its subsidiaries (the Group), which
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
policies, and the Directors’ declaration.
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
policies, and the Directors’ declaration.
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
ended on that date; and
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
Basis for opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
our other ethical responsibilities in accordance with the Code.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 22 in the financial statements, which indicates that the Group incurred a net loss of $1,281,967
Material uncertainty related to going concern
during the year ended 30 June 2020, and as of that date, the recorded a net cash outflow from operating and investing
activities of $4,274,154. As stated in Note 22, these events or conditions, along with other matters as set forth in Note 22,
We draw attention to Note 22 in the financial statements, which indicates that the Group incurred a net loss of $1,281,967
indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our
during the year ended 30 June 2020, and as of that date, the recorded a net cash outflow from operating and investing
opinion is not modified in respect of this matter.
activities of $4,274,154. As stated in Note 22, these events or conditions, along with other matters as set forth in Note 22,
indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
Grant Thornton Audit Pty Ltd ACN 130 913 594
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
Grant Thornton Australia Limited.
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Liability limited by a scheme approved under Professional Standards Legislation.
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
www.grantthornton.com.au
www.grantthornton.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets - Notes 7
At 30 June 2020 the carrying value of exploration and
evaluation assets was $10,536,621.
Our procedures included, amongst others:
obtaining the management reconciliation of capitalised
In accordance with AASB 6 Exploration for and Evaluation of
Mineral Resources, the Group is required to assess at each
reporting date if there are any triggers for impairment which
may suggest the carrying value is in excess of the recoverable
value.
exploration and evaluation expenditure and agreeing to the
general ledger;
reviewing management’s area of interest considerations
against AASB 6;
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
conducting a detailed review of management’s
assessment of trigger events prepared in accordance with
AASB 6 including;
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
tracing projects to statutory registers, exploration
licenses and third party confirmations to determine
whether a right of tenure existed;
enquiry of management regarding their intentions to
carry out exploration and evaluation activity in the
relevant exploration area, including review of
management’s budgeted expenditure;
understanding whether any data exists to suggest that
the carrying value of these exploration and evaluation
assets are unlikely to be recovered through
development or sale;
assessing the accuracy of impairment recorded for the
year as it pertained to exploration interests;
evaluating the competence, capabilities and objectivity of
management’s experts in the evaluation of potential
impairment triggers; and
assessing the appropriateness of the related financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
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.
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Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included the Directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Resolution Minerals Ltd, 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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 18 September 2020
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ASX ADDITIONAL INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.
This information is effective as at 21 August 2020.
The Company is listed on the Australian Securities Exchange.
There are no restricted securities or securities subject to voluntary escrow as at 21 August 2020.
There is no current on-market buy-back.
SUBSTANTIAL SHAREHOLDERS
There are no substantial shareholders of the Company at 21 August 2020.
VOTING RIGHTS
Ordinary shares
On a show of hands, every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
Performance Shares – Class A and B
No voting rights.
Performance Rights
Options
No voting rights.
No voting rights.
DISTRIBUTION OF EQUITY BY SECURITY HOLDERS
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of holders
QUOTED
Ordinary shares
RML
QUOTED
Options 30Jun22 $0.10
RMLOA
UNQUOTED
Performance Shares
Class A
UNQUOTED
Performance Shares
Class B
UNQUOTED
Performance Rights
UNQUOTED
Options
#
110
375
366
1,086
481
2,4181
%
0.01
0.38
1.09
16.46
82.06
%
0.22
1.74
1.13
17.98
78.93
#
34
43
11
29
10
127
-
-
-
-
7
7
-
-
-
1
6
7
-
-
-
-
7
7
-
-
-
-
20
20
Securities on issue
279,470,791
100.00
6,098,225
100.00
9,600,0002
3,575,0003
7,500,0004
25,650,0005
1 There were 599 holders of less than a marketable parcel of ordinary shares ($500 amounts to 7,247 shares at $0.069).
2 Ms Michelle Braham holds 2,600,000 Class A Performance shares.
3 Ms Michelle Braham holds 950,625 Class B Performance shares.
4 Lobuje Pty Ltd holds 4,500,000 unquoted performance rights.
5 Unquoted options:
6,450,000 unquoted options with an exercise price of 24.993 cents each and expiry of 21 March 2021 – 3,000,000 held by Mr Michael Peter
Schwarz .
5,800,000 unquoted options with an exercise price of 24.993 cents each and expiry of 6 September 2021 – 4,400,000 held by PAC Partners Pty Ltd.
13,400,000 unquoted options with various exercise prices and expiry of 30 November 2022 – 5,900,000 held by Taycol Nominees Pty Ltd <211 A/C>.
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TWENTY LARGEST HOLDERS OF ORDINARY SHARES – RML
No. of shares held
% held
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Palisades Goldcorp Ltd
Citicorp Nominees Pty Limited
Mr Peter Hendry
Millrock Resources Inc
DJ Coughlan Drilling Pty Ltd
Mr Philip John Cawood
PAC Partners Securities Pty Ltd
Strut Pty Ltd
Mr Brian John Gilbert
Mr Alan Conigrave
CS Third Nominees Pty Limited
Acuity Capital Investment Management Pty Ltd
HSBC Custody Nominees (Australia) Limited
Mr Stephen Robert Harper
BNP Paribas Nominees Pty Ltd
PAC Partners Pty Ltd
M & K Korkidas Pty Ltd
Mr George Theodore
Mr Graham Stewart Campbell & Mrs Heather Roslyn Campbell
Nelson Enterprises Pty Ltd
8,175,000
5,125,122
5,000,000
5,000,000
4,021,960
4,000,000
3,299,056
3,238,617
3,208,572
2,753,618
2,620,143
2,500,000
2,422,531
2,392,000
2,254,434
2,220,000
2,166,182
1,774,231
1,750,000
1,717,902
2.93
1.83
1.79
1.79
1.44
1.43
1.18
1.16
1.15
0.99
0.94
0.89
0.87
0.86
0.81
0.79
0.78
0.63
0.63
0.61
Total ordinary shares on issue
65,639,368
279,470,791
23.50
100.00
TWENTY LARGEST HOLDERS OF QUOTED OPTIONS – RMLOA ($0.10 / 30 JUNE 2022)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Mr Nicholas Dermott Mcdonald
National Nominees Limited
PAC Partners Pty Ltd
Serlett Pty Ltd
Mr Sean Foley
Mr John Anogianakis
Rivacre Investments Pty Ltd
Mr Eli Ekman
M & K Korkidas Pty Ltd
Mr Gerard Peter Pagliaro
Mr Maxwell Guy Harvey & Mrs Alice Harvey & Mr Julian Graeme Harvey
Mr Robert Hall
Mr Simon John Spinks
Gorbach Super Pty Ltd
Mr Peter George Benson & Mrs Karn Lesley Benson
Valas Investments Pty Ltd
Mrs Anne-Marie Fett
Lacasuper Pty Ltd
Mr Craig Russell Stranger
Mr Adib Olinga Sabet
Total quoted options on issue
No. of options held
1,734,546
1,000,000
762,500
250,000
250,000
225,000
200,000
150,000
136,336
105,000
100,000
100,000
100,000
83,334
65,000
50,000
50,000
48,810
46,667
45,454
% held
28.44
16.40
12.50
4.10
4.10
3.69
3.28
2.46
2.24
1.72
1.64
1.64
1.64
1.37
1.07
0.82
0.82
0.80
0.77
0.75
5,502,647
6,098,337
90.25
100.00
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