2 0 2 1
ANNUAL REPORT
ACN 617 789 732
CORPORATE INFORMATION
Directors
Craig Farrow
NON-EXECUTIVE CHAIR
Duncan Chessell
MANAGING DIRECTOR
Andrew Shearer
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
RMLOB – quoted options exercise
price $0.12 and expiry 30 September 2023
Share Registry
Automic
GPO Box 5193
SYDNEY NSW 2001
2
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT CONTENTS
Corporate Information
Chair’s Letter
Operation Highlights 2020–2021
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
6
14
16
17
29
30
31
32
33
34
50
51
55
Resolution Minerals Ltd ACN 617 789 732
This Annual Report covers Resolution Minerals Ltd (“Resolution Minerals”,
“Resolution”, “RML” or the “Company”). 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 1 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 to report to shareholders that despite difficult
At the 64North Gold Project in Alaska, which surrounds Northern
operating conditions over the past year, Resolution Minerals has
Star’s world-class high-grade operating Pogo Gold Mine, we
been very active across all three of our major projects in Australia
commenced testing high priority targets which were generated
and the USA. The continuing high gold and copper price, as well
by regional fieldwork and a project-wide review undertaken in
as the rising uranium price have put the company in an excellent
2020. We completed three drill programs, including a first pass
position to continue our hunt for big targets in big country.
shallow drill program at East Pogo and identified a high-priority
This year has seen a marked increase in activity on Resolution’s
target zone for follow up diamond core drilling in 2022.
Northern Territory Projects. These projects give shareholders
We also drill tested the Sunrise Prospect on the western side
exposure to the growing suite of battery metals that will underpin
of the project and identified a 280m wide mineralised corridor.
the world’s transition to renewable energy.
Importantly, the results revealed the potential of the 64North
At the Wollogorang Project, we executed a new exploration
strategy and saw immediate results. An extensive VTEM
survey identified 40 new conductors and led to a major farm-in
agreement with Oz Minerals (ASX: OZL). We believe that this deal
Project to host a mineralisation style similar to the Fort Knox
Gold Mine. We have now completed a trenching program at the
nearby Tourmaline Ridge Prospect and are now in a position to
hit the ground running next year.
is a fantastic outcome for shareholders as it gives Resolution
On the corporate side, the high gold price and the growing
Minerals long-term funding, as well as access to additional
interest in battery metals have seen well supported capital
technical and mining expertise that will help progress the project
raises. When combined with the Oz Minerals agreement, this
over the next five years without requiring further dilution to
puts the company in a strong financial position to continue our
current shareholders.
Resolution also significantly expanded its footprint in the
commitment to ‘boots on the ground’ exploration and provide
investors with consistent news flow over the next year.
Northern Territory with the acquisition of the Benmara Project
On behalf of the Resolution team, I want to thank you for your
from Strategic Energy Resources Limited (ASX: SER), as well
support and I look forward to keeping you updated on the
as the adjoining tenements from Cedar Resources, giving
progress over the next year.
Resolution a commanding ground position in the emerging
South Nicholson Basin. At the time of writing, we have
commenced a 2,500m drilling program on two compelling
shallow targets that were derived from Resolution’s VTEM
geophysics survey and new Geoscience Australia research.
Craig Farrow
Chair
Resolution Minerals Ltd
4
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT OPERATIONS HIGHLIGHTS 2020–2021
July 2020
64North
Core drilling Aurora prospect hole #4 (1093m)
Aug 2020
Geophysics surveys West Pogo Block ZTEM and magnetic
Capital Raise
Placement $3.6m + $1.5m SPP (closed early oversubscribed)
64North
64North
64North
64North
Core drilling Echo prospect holes #5 (321m)
Geophysics surveys E1 and LMSX – Magnetics
Geophysics surveys Boundary prospects – CSAMT and ZTEM
Core drilling Reflection prospect holes #6 (553m)
Sept 2020
64North
Core drilling continues Aurora prospect holes #7 (712m)
Oct 2020
64North
Trenching Sunrise and E1 prospects
Nov 2020
64North
Core drilling continues Aurora prospect holes #8 (596m)
Dec 2020
64North
Core drilling concludes Aurora prospect holes #9 (360m)
Corporate
Corporate
Added new claims to East Pogo Block, 64North Project
New Benmara copper project acquisition, Northern Territory
Jan 2021
Corporate
30% interest earned into the 64North Project
Feb 2021
Corporate
Revised JV agreement for 64North Project
Capital Raise
Placement $3.25m
Mar 2021
64North
RAB drilling program Sunrise prospect (27 holes)
April 2021
Wollogorang
Geophysics survey – VTEM
May 2021
Benmara
Geophysics survey – VTEM
June 2021
64North
Heli-RC drilling program East Pogo prospect (12 holes)
Wollogorang
Ground truthing VTEM targets
Aug 2021
Corporate
Corporate
Significant $5m JV with OZ Minerals Wollogorang project
Divest the Snettisham project, Alaska
Sep 2021
Capital Raise
Placement $1.7m + SPP (open – seeking $1.5m)
Corporate
New tenements acquired Benmara project
64North
Benmara
Trenching Tourmaline Ridge prospect
RC drilling program commenced (2,500m planned)
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REVIEW OF OPERATIONS
Figure 1 Resolution’s projects 27 September 2021.
OVERVIEW
2020/21 has been the most active year in
In post 30 June 2021 events, a significant
At the time of writing Resolution field
Resolution’s history. We have been active
JV agreement was reached with
crews are engaged in drilling in the heat
on three projects in two countries hunting
Australia’s third-largest copper producer
at the Benmara Project in the Northern
for big deposits in big country – for gold
OZ Minerals to farm-in to the Wollogorang
Territory and completing a chilly trenching
and copper in Alaska and Northern
Copper Project in the NT, spending close
program on the Tourmaline Ridge
Australia. Transactions were completed
to $5m to earn a 51% interest. This is a
Prospect in Alaska. This demonstrates
to acquire the battery metal-uranium
major milestone for Resolution, validating
the capacity of Resolution’s geology team
Benmara Project in the Northern Territory
our exploration strategy for the project
to get boots on the ground and hunt for
and divest the non-core vanadium-
by using modern geophysics to identify
big deposits in all conditions in multiple
magnetite Snettisham Project in southern
large scale potential sediment hosted
mineral systems across two continents.
Alaska. The team managed to navigate
targets. Resolution will operate the project
around COVID-19 issues and get the work
with technical collaboration from the
done with minimal impact to operations.
OZ Minerals team, with extensive drilling
planned for 2022.
6
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT REVIEW OF OPERATIONS, continued
64NORTH GOLD PROJECT, ALASKA USA
On 17 October 2019, Resolution entered
of the 31 January 2022 anniversary date.
into a binding term sheet with Millrock
Overspend from 2021 carries towards
Resources Inc (Millrock TSXV: MRO) to
year 3 requirements, and Resolution
acquire, via joint venture earn-in, up to
can elect to earn a 51% interest by
80% in the 64North Project in Alaska.
31 January 2023, as set out in Table 1.
During 2020/21 Resolution also built
a strong pipeline of regional prospects
including the East Pogo Prospect,
acquired new geophysical data sets
and built jurisdictional expertise while
completing extensive deep diamond core
drilling at the West Pogo Block – Aurora
Prospect and surrounds.
In February 2021, Resolution assumed
operational control of the 64North Project
before commencing the first of four
significant programs for the 2021 season
as outlined below. In early September
2021, Resolution reduced tenements to
focus on 20 best prospects and reduce
carrying costs.
The project surrounds Northern Star’s
Pogo Gold Mine (Figure 2), a world-class
high-grade mine which has a total
endowment of over 11 million ounces
of gold. The 64North Project lies in the
highly prospective Tintina Gold Province,
which hosts over 100 Moz of gold across
a 2,000km east-west arc from the Yukon
to the west coast of Alaska.
Resolution has earned a 30% interest
in the 64North Project and completed
year 1 requirements (to 31 January
2021) by spending US$5m. The focus
in 2020/21 was drilling deep core holes
targeting Pogo-style gold prospects west
of, and immediately adjacent to, the Pogo
Gold Mine and Good Paster Discovery
(which is undergoing a $21m resource
drill out literally on the project boundary
at West Pogo). The 64North Project
has a dominant 357km2 land package,
which is prospective for Pogo-style and
Fort Knox style gold as well as copper-
gold porphyry deposits. Resolution has
exceeded the year 2 earn-in exploration
expenditure to earn a 42% interest ahead
Figure 2 Deposit sizes stated as Endowment (Resources & Reserves + Historic Production)
* sourced from Company websites.
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REVIEW OF OPERATIONS, continued
64NORTH GOLD PROJECT, ALASKA USA, continued
Figure 3 The 64North Project prospects map, 26 September 2021; RML claims in blue,
others in pink, yellow polygons are surface projections of the Pogo Gold Mine Deposits.
Table 1 Terms of the sole funding earn-in agreement summary.
64NORTH PROJECT: 30% INTEREST
RML CASH SPEND
US$
% EARN-IN RML
RML SHARES TO
MILLROCK
STAGE COMPLETION
FEE US$
DUE DATE*
STAGE
Year 2
Year 3
Key terms of the agreement
(updated terms RML announcement 9/2/21)
• Resolution can elect to form a JV at
the end of any period and parties
contribute by % ownership
• Pathway to 80% on one “best block” of
nine blocks, by loan carrying vendor to
first production.
• First right of refusal over vendor
interest (Millrock Resources).
• Minor NSR royalties to historic
prospectors range from 0% to
maximum 1.5% with buy downs.
• One-off 6 month “grace period” can
extend any one due date by 6 months.
Field activities July 2020
until 31 December 2020
1 Completion of West Pogo deep
diamond core drilling program, nine
$0.9m
$2.35m
42%
51%
-
10m
$100,000
31/1/2022
holes over 2020:
$100,000
31/1/2023
¬ Highlight was 7m thick
Right to form JV on co-funding basis or continue to earn-in
Year 4
$2.35m
60%
10m
$100,000
31/1/2024
Pogo-style quartz vein (weakly
mineralised) from 488m in hole
20AU07 at the Aurora Prospect
– along strike from Northern
Star’s Goodpaster Prospect
(RML announcement 29/9/20).
¬ Fluid inclusion studies are ongoing
for “near-miss analysis” of the
Aurora Prospect.
2 Extensive regional programs of
trenching, geophysics surveys,
mapping and surface sampling to
define drill targets for 2021 were
undertaken spending over US$1m
regionally as required under the terms
of the earn-in and JV agreement.
8
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT REVIEW OF OPERATIONS, continued
64NORTH GOLD PROJECT, ALASKA USA, continued
Field activities January 2021
until September 2021
1 Drill testing (RAB) Sunrise
Prospect (27 holes) proving a
280m wide low-grade Fort Knox
style gold mineral system
(RML announcement 17/5/21).
2 Drill testing (RC) East Pogo Prospect
(12 holes) striking numerous weakly
gold mineralised quartz veins. The
program defined follow up high
value drill targets for potential
Pogo-style gold mineralisation on
the ‘Pogo Trend’ for summer 2022
using pathfinder element vectors
(RML announcement 6/8/21).
3 Regional programs (ongoing at the
time of writing – results pending) to
prioritise the prospect pipeline, define
drill targets for 2022 and investigate
the porphyry potential of the Elaine
Prospect and gold potential of the
Kramer and Last Chance Prospects.
4 Trenching program (ongoing at the
time of writing – results pending) at
the Tourmaline Ridge Prospect.
Figure 4 Drill core from 2020 hole#7 (20AU07) 7m thick Quartz vein from 488m with fuchsite
and sulphides – arsenopyrite, pyrite, pyrrhotite; part of broader 22m zone of quartz veins.
Currently the subject of near-miss analysis using fluid inclusion analysis.
2 0 2 1 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
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REVIEW OF OPERATIONS, continued
BATTERY METAL PROJECTS, NORTHERN TERRITORY, AUSTRALIA
Wollogorang
Benmara
Figure 5 Location map of Resolution Minerals Wollogorang and Benmara Projects,
Northern Territory.
Figure 6 The 170km “LAB line” or “base metal corridor” empirical
data collected by Geoscience Australia suggest 90% of the worlds
large-scale sediment hosted base metal deposits sit on the 170km LAB
line – which includes Resolution’s Wollogorang Project.
Regional geology
In 2020 a Geoscience Australia research
team identified a 170km deep continent
scale feature. Empirical data suggests
>90% of the world’s large scale (often
blind) sediment hosted base metal
deposits occur on this line (Figure 5
and 6; Hoggard et al., 2020). This feature
is known as the “170km LAB” short for
Lithosphere-Asthenosphere Boundary
or more commonly called “base metal
corridor” and it runs underneath
Resolution’s Wollogorang Project
(Figure 5). It is possible that the LAB is
linked to anomalous copper found on
Resolution’s Wollogorang tenements
and that modern-day explorers have only
scratched the surface of a potential larger
scale copper system.
Further investigation of this new concept
will be undertaken and incorporated
into future exploration planning. The
base metal corridor is newly defined
concept using complex algorithms and
it is possible a wider zone should be
considered which could incorporate the
Benmara Project.
Companies exploring in the
region include BHP, Rio Tinto,
Newcrest and South32
10
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT REVIEW OF OPERATIONS, continued
BATTERY METAL PROJECTS, NORTHERN TERRITORY, AUSTRALIA, continued
Benmara Project
(Cu-Ag-Pb-Zn-Co and U)
Key highlights
• Prospective for sediment hosted
Project ownership details
The Benmara Project consists of five (5)
battery metals and unconformity
exploration tenements. Resolution has
the right to purchase EL32228 outright
for A$250k cash or shares until 14/12/21
from Strategic Energy Resources
(RML announcement 15/12/20).
Furthermore, Resolution has the right
to purchase EL32229 and EL31287
outright for A$250k cash or shares until
25/09/22 from Cedar Resources Pty Ltd
(RML announcement 27/09/21). Two
recent tenements, in application stage,
are held 100% by a Resolution subsidiary
(RML announcement 27/09/21).
style uranium.
• Covering 2,230km2 on the margin of
the Nicholson Basin – Murphy Inlier –
McArthur Basin.
• Along strike on the Fish River Fault
west of the Walford Creek Deposit
40.9Mt @ 2.03% Cu Eq (Aeon Metals
www.aeonmetals.com.au and ASX
announcement 17/12/19 “Substantial
Walford Creek Resource Upgrade”,
Aeon Metals Ltd ASX code AML).
• Two large scale drill targets (4km and
2km strike) identified by VTEM survey.
• The Benmara Project and
Wollogorang Project are part of
Resolution’s strategy to explore for
battery metals in Northern Australia.
•
2,500m RC drilling program
currently underway.
Figure 7 Benmara Battery Metal Project, new tenements overlain on
depth to basement model.
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REVIEW OF OPERATIONS, continued
BATTERY METAL PROJECTS, NORTHERN TERRITORY, AUSTRALIA, continued
Wollogorang Project
(Cu, Co, U)
Subject to OZ Minerals Farm-in Agreement
Wollogorang was the original flagship
project at the time of the Company’s
Key highlights
• Covers 3,825km2 in the McArthur
Basin, prospective for sedimentary
hosted battery metals: copper, cobalt
and hard rock uranium.
listing on the ASX in 2017. It is prospective
• Wollogorang is positioned on
for sediment hosted stratiform base
Geoscience Australia’s newly
metals and uranium with multiple copper
identified base metal corridor – on
occurrences on the property.
During 2017 and 2018 the Company
undertook extensive exploration activities
which 90% of world’s largest sediment
hosted base metal deposits reside
(Hoggard et al., 2020).
aiming to define additional cobalt
• Proven mineralisation with the
resources in the vicinity of the known
Stanton Cobalt Deposit: 942kt @
Stanton Cobalt Deposit. The Company
0.13% Co, 0.06% Ni, 0.12% Cu
was seeking further breccia pipe-style
(RML announcement 9/4/18) and
cobalt deposits. However sufficient
multiple other copper prospects in the
additional resources were not discovered
tenement package.
• Forty conductors identified in
recent VTEM geophysical survey
highlighting the sediment hosted
copper potential of the project. 37 of
40 of the conductors are untested by
historic drilling.
• VTEM surveys can detect sub-surface
conductive bodies to 400m depth,
such as massive base metal sulfides
and other potential trap sites for
base metals.
to warrant a stand-alone mining operation
or further exploration at the time. Cobalt
prices fell significantly during late 2018
and in 2019 subdued cobalt and copper
prices instigated a change in focus to
other projects.
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. In late
2020, a VTEM survey was designed over
the eastern half of the project targeting
large scale structures and prospective
reductive rock units close to the surface.
The survey was eventually able to be
flown in April 2021 and the results of
the successful geophysics survey are
discussed below. The ensuing strong
attention from multiple parties ultimately
led to the significant farm-in agreement
with copper producer OZ Minerals.
12
Figure 8 Tenement map showing 3,825km2
of granted exploration tenements.
• Drill targets at the Gregjo Copper
Prospect to test the chargeable IP
geophysical anomaly that underlies
the copper mineralisation intersected
in shallow RAB drilling – up to 4% Cu
(RML announcement 22/1/19).
•
In August 2021 a significant
farm-in agreement was signed
with OZ Minerals Ltd (ASX: OZL;
RML announcement 24/8/21).
• High priority drill targets have been
identified and a significant drilling
campaign will be conducted in 2022
after heritage surveys and new track
construction is completed.
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT REVIEW OF OPERATIONS, continued
BATTERY METAL PROJECTS, NORTHERN TERRITORY, AUSTRALIA, continued
Wollogorang Project Farm-in Agreement with OZ Minerals (ASX: OZL)
• OZL can earn a 51% interest by spending ~$4.9m over 5 years.
• RML may retain 49% interest by electing to participate from year 6.
•
If RML elects not to participate, OZL has the option to earn a 75% interest,
by sole-funding and delivering a Positive Final Investment Decision to Mine
(at a minimum spend of $1m/year OZL has a further 5 years to complete)
(RML announcement 24/8/21).
TIMELINE
60 days
Due diligence
2 Years
Initial period
3 Years
Stage 1
5 Years
Stage 2
Establish the tenements are in good standing
(due 24/10/21)
$1.6m minimum spend
Reimburse $300k VTEM
to begin Stage 1
$3.0m spend, then a JV is formed and RML has right
to participate
$1.0m/year until deliver positive final investment
decision to mine
% RML OWNERSHIP
100%
100%
49%
25%
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MINERAL RESOURCE STATEMENT
30 June 2020 and 30 June 2021 (unchanged)
STANTON COBALT MINERAL RESOURCE,
NORTHERN TERRITORY
WEATHERING
Inferred
TONNAGE
(Tonnes)
COBALT
(ppm)
NICKEL
(ppm)
COPPER
(ppm)
Oxide
8,000
Transition
242,000
500
800
Indicated
Oxide
406,000
1,200
Transition
286,000
1,800
TOTAL
942,000
1,300
300
400
500
900
600
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 2020 and
30 June 2021 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 Results
is based on information compiled by Mr Duncan Chessell who is
a member of the Australasian Institute of Mining and Metallurgy
and Australian Institute of Geoscientists. Mr Chessell is a
Director and full-time employee of the company. Mr Chessell
holds Shares, Options and Performance Rights in the Company
as has been previously disclosed. Mr Chessell 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 as
cross referenced in this report.
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 this announcements as 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.
14
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT Project ownership structures
64North Project
RML holds a 30% Interest and is earning to a 60% interest from
Vendor Millrock Resources with a pathway to earn up to 80% on
a “best block” (see RML announcement 9/2/21).
Benmara Project
Tintinta Province Map (Alaska) (figure 2)
Source of data: Kensington (Coeur Mining, www.coeur.com),
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
The Benmara Project consists of five (5) exploration tenements.
Gold Corp, www.vgcx.com), Brewery Creek (Golden Predator,
Resolution has the right to purchase EL32228 outright for
A$250k cash or shares until 14/12/21 from Strategic Energy
Resources (RML announcement 15/12/20). Furthermore,
www.goldenpredator.com), White Gold (White Gold Corp,
whitegoldcorp.ca), Coffee (Newmont, www.newmont.com) and
Sharman et al, 2020 – Canadian Institute of Mining, Metallurgy
Resolution has the right to purchase EL32229 and EL31287
and Petroleum.
outright for A$250k cash or shares until 25/09/22 from Cedar
Resources Pty Ltd (RML announcement 27/09/21). Two recent
tenements, in application stage, are held 100% by a Resolution
subsidiary (RML announcement 27/09/21).
Wollogorang Project
100% interest with Farm-in Agreement with OZL to earn-in (see
RML announcement 24/8/21).
Snettisham Project
100% interest at 30 June 2021; subsequently disposed to
Millrock Resource (see RML announcement 7/9/21). Current 0%
direct interest (30% share of proceeds agreement with Millrock
Resources until 31 August 2022).
The Stanton Project Mineral Resource Estimate at 30 June 2020
has remained unchanged as at 30 June 2021. The information
related to the Stanton Project Mineral Resource Estimate at
30 June 2020 and 30 June 2021 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.
Australian Projects Location Map (figure 5)
Source of data Geoscience Australia (LAB 170km Depth
The Company ensures that all Mineral Resource estimates
are subject to appropriate levels of governance and internal
Corridor – Hoggard et al 2020), Northern Territory Government
controls. Exploration results are collected and managed by an
of Australia (STRIKE Tenure and Geoscience Information,
independent competent qualified geologist. All data collection
Queensland Government (Open Data Portal Queensland Mining
activities are conducted to industry standards based on a
and Exploration Tenure Series).
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.
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TENEMENT SCHEDULE
At 30 June 2021
TENEMENT NAME
TENEMENT NUMBER
STATUS
EQUITY
Australia, Northern Territory
Wollogorang
Karns
Selby
Stanton / Running Creek
EL30496
EL30590
EL31272
EL31546
EL31548
EL31549
EL31550
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
AKAA 095408 to
AKAA 095455
Granted
100%
Resolution is earning into to a 60% interest the 64North Project which
is owned by Millrock Resources (TSXV:MRO) the details of which were
announced 17 October 2019 by the Company and updated 9 February
2021.
Calvert
Sandy Creek
Camel Creek
Madulgina Creek
USA, Alaska
Snettisham
Snettisham
64North
64North Project
16
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT DIRECTORS’ REPORT
The Directors of Resolution Minerals
Bulletproof Group (ASX:BPF) and
Ltd have pleasure in submitting their
Murray River Organics (ASX:MRG) and
report on the Group for the year ended
multiple unlisted board roles as both a
30 June 2021.
non-executive Director and Chair.
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
OTHER CURRENT DIRECTORSHIPS
OF LISTED COMPANIES
None
OTHER DIRECTORSHIPS HELD IN LISTED
COMPANIES IN THE LAST THREE YEARS
Bulletproof Group (ASX:BPF) and Murray
Group from 2010 to 2016 making new
River Organics (ASX:MRG)
INTEREST IN SHARES
2,054,286 Ordinary Shares held directly
and by an entity in which Mr Farrow has a
beneficial interest.
INTEREST IN OPTIONS AND RIGHTS
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 &
214,286 quoted options with
Metallurgy and Member of Australian
exercise price of $0.12 and expiry of
Institute of Geoscientists. He was co-
30 September 2023 (RMLOB).
founder and Chair of project generator
DIRECTORS
The names and details of Directors in
office at any time during the reporting
period are:
CRAIG FARROW
FCA, B.Ec, FAICD
Non-executive Chair
(appointed 17 August 2020)
EXPERIENCE AND EXPERTISE
Mr Farrow brings to Resolution a strong
commercial background spanning
multiple industry sectors over a
30 plus year career as a Chartered
Accountant and Company Director.
Mr Farrow was a founding director of
telecommunications business M2 Group,
Chair since 2006, was instrumental in the
750,000 unquoted options with
exercise price of $0.042 and expiry of
merger between Vocus Communications
15 April 2022.
and M2 Group Ltd in 2016 and continuing
as Deputy Chair of Vocus until February
2018 (ASX:VOC). He has also served
as Chair of ASX listed Companies
500,000 unquoted unvested performance
rights expiring on 31 December 2025.
Coolabah Group, the project vendor of the
Wollogorang Project (Northern Territory)
on which Resolution Minerals undertook
its IPO in 2017 (as Northern Cobalt
Limited). He is currently non-executive
Director of The Outdoor Education Group
Ltd, the largest outdoor education provider
across Australia. He was the founding
2 0 2 1 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
DIRECTORS’ REPORT, continued
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
summiteer 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
1,535,005 Ordinary Shares held directly
and by entities in which Mr Chessell has a
beneficial interest.
INTEREST IN OPTIONS, RIGHTS
AND PERFORMANCE SHARES
35,715 quoted options with exercise price
89,285 unquoted options with exercise
price of $0.042 and expiry of 15 April 2022.
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
hurdles expiring on 6 September 2022.
500,000 unquoted vested performance
ANDREW SHEARER
BSc (Geology), Hons (Geophysics), MBA
INTEREST IN OPTIONS, RIGHTS
AND PERFORMANCE SHARES
Non-executive Director
(appointed 6 March 2017)
50,000 quoted options with exercise
price of $0.10 and expiry of 30 June 2022
EXPERIENCE AND EXPERTISE
(RMLOA).
Mr Shearer holds a BSc degree in geology
42,270 quoted options with exercise price
with Honours in geophysics and an MBA.
of $0.12 and expiry of 30 September 2023
He has been involved in the mining and
(RMLOB).
finance industries for more than 25 years.
178,571 unquoted options with
Establishing his career in the resources
exercise price of $0.042 and expiry of
industry as a geologist and geophysicist,
15 April 2022.
in technical and senior management roles
with the South Australian Government,
Mount Isa Mines Limited, and Glengarry
Resources Limited. Andrew then moved
to the corporate and finance sectors in
Resource Analyst roles with PAC Partners
Pty Ltd, Phillip Capital, Austock and Taylor
800,000 class A performance shares
subject to exploration based performance
hurdles expiring on 6 September 2022.
325,000 class B performance shares
subject to exploration based performance
hurdles expiring on 6 September 2022.
Collison. Where he covered small to mid-
500,000 unquoted vested performance
cap resource stocks across a broad suite
rights expiring on 31 December 2024 and
of commodities.
Andrew provides Resolution with
experience in the financial services
industry combined with his technical
experience and understanding of
capital markets. Andrew is also a Non-
executive Director for Andromeda Metals
OTHER CURRENT DIRECTORSHIPS
OF LISTED COMPANIES
500,000 unquoted unvested performance
rights expiring on 31 December 2025.
COMPANY SECRETARY
JAROSLAW (JAREK) KOPIAS
BCom, CPA, AGIA, ACG (CS, CGP)
Company Secretary / Chief Financial
Officer (appointed 6 March 2017)
Mr Kopias is a Certified Practising
Accountant and Chartered Secretary.
Mr Kopias has 25 years’ industry
Andromeda Metals Limited (ASX:ADN)
experience in a wide range of financial
from 27 October 2017.
and secretarial roles within the resources
Investigator Resources Limited (ASX:IVR)
from 14 July 2020.
OTHER DIRECTORSHIPS HELD IN LISTED
COMPANIES IN THE LAST THREE YEARS
industry. As an accountant, Mr Kopias
worked in numerous financial roles for
companies, specialising in the resource
sector – including 5 years at WMC
Resources Limited’s (now BHP) Olympic
of $0.12 and expiry of 30 September 2023
(ASX:ADN) and Investigator Resources
(RMLOB).
(ASX:IVR).
rights expiring on 31 December 2024 and
Okapi Resources Limited (ASX:OKR).
Dam operations, 5 years at Newmont
500,000 unquoted unvested performance
rights expiring on 31 December 2025.
INTEREST IN SHARES
4,800,000 unquoted performance rights
subject to KPI based vesting conditions
and various expiry dates.
1,339,412 Ordinary Shares held directly
and by an entity in which Mr Shearer has
a beneficial interest.
Mining Corporation – Australia’s
corporate office and 5 years at oil and gas
producer and explorer, Stuart Petroleum
Limited (prior to its merger with Senex
Energy Limited).
18
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT DIRECTORS’ REPORT, continued
He is currently the Company Secretary
activities. The Group’s approach to
The future strategy at the Benmara
of Core Lithium Ltd (ASX: CXO) and Iron
exploration through environmental,
project is for Resolution to continue
Road Ltd (ASX: IRD). Mr Kopias has held
heritage and other clearances allows
current exploration drilling and follow
similar roles with other ASX entities in
these risks to be minimised.
up any success with further drilling and
the past and has other business interests
with numerous unlisted public and
private entities.
PRINCIPAL ACTIVITIES
Resolution Minerals’ ongoing principal
The financial impact of the projects
listed below is a requirement for further
expenditure where successful exploration
leads to follow-up activities. All exploration
field programs.
The Wollogorang copper and cobalt
project covers 3,824 km2 of pastoral
land in the north-eastern corner of the
activities may be funded by the Group’s
Northern Territory – NT Exploration
own cash reserves or through joint
Licences EL30496, EL30590, EL31272,
activities are the exploration for gold in
venture arrangements.
Alaska (USA), copper, cobalt and other
battery metals in the Northern Territory
and gold, vanadium and iron ore in
Alaska (USA).
OPERATING AND
FINANCIAL REVIEW
The net loss of the Group for the year
after providing for income tax amounted
to $983,485 (2020: $1,281,967) primarily
due to reduced impairment expense,
increased labour recoveries driven by
managed exploration activity and lower
broker relations expenditure.
During the year, the Group raised a further
$5.5 million primarily through share
placements and a share purchase plan to
progress its existing and newly acquired
exploration tenements.
The risks associated with the projects
listed below are those common
to exploration activities generally.
Exploration targets are conceptual
in nature such that there has been
insufficient exploration to define a Mineral
Resource and that it is uncertain if further
exploration will result in the determination
of a Mineral Resource.
The main environmental and sustainability
risks that Resolution Minerals currently
faces are through ground disturbance
when undertaking drilling or sampling
Further technical detail on each of the
prospects listed below is in the Review of
Operation in the Annual Report.
The 64North Project in Alaska has been
the focus of exploration efforts since
EL31546, EL31548, EL31549 and
EL31550. Subsequent to the end of
the year, Resolution executed a farm-in
agreement with OZ Minerals Limited
(ASX:OZL). The agreement allows OZL
to earn a 51% interest in Wollogorang
by spending approximately $4.9 million
October 2019 when the company entered
over 5 years.
The future strategy at the Wollogorang
copper and cobalt project is for
Resolution to continue exploration at the
project with its project partner.
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.
into a binding agreement to earn-in to the
project. The 64North Project surrounds
the world-class high-grade operating
Pogo Gold Mine, owned by Northern
Star Resources Ltd (ASX: NST) in the
highly prospective Tintina Gold Province
in Alaska. Resolution has earned a
30% interest in the 64North Project
and completed year 1 requirements
by spending US$5m. In February 2021
Resolution assumed operational control
of the project and subsequently reduced
tenements to focus on the 20 best
prospects and reduce carrying costs.
The future strategy at the 64North Project
is to continue exploration activities on
the most prospective targets on the
tenement portfolio.
During the year, the Group acquired
the Benmara Project (EL32228) in the
Northern Territory and commenced
exploration drilling in September
2021 following a successful VTEM
survey during the year. Additionally, in
September 2021 additional tenements
were acquired and applications lodged to
expand the project area.
DIRECTORS’ REPORT, continued
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
LIKELY DEVELOPMENTS
The Group continues its exploration program focussed on gold and battery metals and
will assess other complementary projects.
DIRECTORS’ MEETINGS
The number of Directors’ meetings held during the reporting period and the number of
results of those operations or the state of
meetings attended by each Director is as follows:
affairs of the Group in subsequent financial
years other than those described below.
On 24 August 2021, the Company
announced the execution of a farm-in
agreement with OZ Minerals Limited
(OZL) in relation to the Wollogorang
Project. The agreement allows OZL to
earn a 51% interest in Wollogorang by
spending approximately $4.9 million over
5 years and, at Resolution’s election, OZL
has the option to earn a 75% interest, by
sole-funding and delivering a Positive
Directors
CL Farrow
DC Chessell
AN Shearer
LA Dean
BOARD
MEETINGS
AUDIT AND RISK
COMMITTEE MEETINGS
REMUNERATION
COMMITTEE MEETINGS
A
17
22
22
10
E
17
22
22
10
A
2
2
2
1
E
2
2
2
1
A
3
3
3
0
E
3
3
3
0
A = Attended E = Entitled to attend
UNISSUED SHARES UNDER OPTION
Unissued ordinary Shares of Resolution Minerals under option at the date of this
Final Investment Decision to Mine (at a
report are:
minimum spend of $1m/year, OZL has a
further 5 years to complete).
Subsequent to the end of the financial
year, the Group relinquished the
Snettisham Project via sale to Millrock
Resources for nominal consideration.
The disposal entitles the Group to
DATE OPTIONS GRANTED
EXPIRY DATE
EXERCISE PRICE OF OPTIONS
NUMBER UNDER OPTION
27 November 2019*
30 November 2022
15 April 2021
15 April 2022
Total unquoted options
25 June 2019
30 June 2022
21 September 2020**
30 September 2023
$0.06
$0.042
$0.10
$0.12
13,400,000
59,053,569
72,453,569
6,096,558
74,634,643
80,731,201
153,184,770
participate in 30% of any future benefit
Total quoted options
derived from a transaction related to
Total options on issue
* Exercise price $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.
** Options were subsequently issued on 16 October 2020, 27 November 2020 and
23 December 2020.
During the year, 59,053,569 unquoted options were issued to participants in a share
placement undertaken by the Company.
A further 74,634, 643 quoted options were issued to participants in a share placement
and SPP undertaken by the Company – of this amount 5,000,000 were issued to brokers
as remuneration.
These options do not entitle the holders to participate in any share issue of the
Company or any other body corporate.
the Snettisham project by Millrock for a
period of 12 months.
On 22 September 2021 the Company
issued 84,418,223 shares under a
placement to raise $1.7 million (before
costs) followed by an SPP, targeting a
further raise of $1.5 million.
On 27 September 2021 the Company
announced an agreement to acquire
100% of two tenements surrounding
the Benmara project, adding 541km2,
and lodgement of two new tenement
applications adding a further 1,025km2 to
the project area.
20
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT 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
23 March 2020
23 March 2020
27 November 2020
1 February 2021
1 February 2021
15 April 2021
Total rights on issue
KPI VESTING
Vested
31 December 2022
31 December 2024
31 March 2022
31 January 2021
31 March 2022
31 December 2022
31 January 2022
31 December 2022
31 December 2021
EXPIRY DATE
NUMBER OF RIGHTS
31 December 2024
31 December 2025
31 December 2027
31 December 2024
31 January 2024
31 December 2024
31 December 2025
31 January 2024
31 December 2025
31 December 2024
2,000,000
2,000,000
2,000,000
500,000
125,000
125,000
2,000,000
1,350,000
500,000
800,000
11,400,000
During the year, unquoted performance rights with performance based vesting conditions were issued as remuneration under the
Company’s Performance Share Plan as follows:
•
•
•
•
•
2,000,000 rights to officers of the Company
800,000 rights to the Managing Director
600,000 rights to the Exploration Manager
1,000,000 rights to the VP Exploration Alaska
350,000 rights to 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.
2 0 2 1 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
REMUNERATION REPORT (AUDITED)
The Directors of Resolution Minerals
key management personnel are
issued as part of the IPO process
Ltd present the Remuneration Report
remunerated on a consultancy
and share price based performance
in accordance with the Corporations
or salary basis based on services
rights. However, to align Directors’
Act 2001 (Cth) and the Corporations
provided by each person. The Board
interests with shareholder interests,
Regulations 2001 (Cth).
annually reviews the packages of key
the Directors are encouraged to
The Remuneration Report is set out under
the following main headings:
A Principles used to determine the
nature and amount of remuneration
management personnel by reference
hold shares in the Company and are
to the Group’s performance and
able to participate in the Company’s
comparable information from industry
Share Option Plan and Performance
sectors and other listed companies in
Share Plan, which may exist from time
similar industries.
to time.
B Details of remuneration
C Service agreements
D Share-based remuneration
• The Board may exercise discretion
During the reporting period, performance
in relation to approving incentives,
reviews of senior executives were not
bonuses, options and performance
conducted. There were no remuneration
rights. The policy is designed
consultants used by the Group during
E Other information.
to attract the highest calibre of
the period.
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:
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
2020 Annual General Meeting 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).
• The remuneration policy, setting
Fees for non-executive Directors are
the terms and conditions for the
not linked to the performance of the
key management personnel,
Group, except in relation to exploration
was developed by the Board. All
based KPI performance shares
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 2020 Annual General Meeting
Resolution Minerals received 98.6% “yes”
votes on its remuneration report for the
2020 financial year. The Group did not
receive any specific feedback at the AGM
on its remuneration report.
22
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED), continued
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 with the exception of Mr Craig Farrow who was appointed to the board 17 August 2020.
Mr Chessell was issued with KPI based performance rights during the 2019/20 year and all directors were issued with KPI based
performance rights during the 2020/21 year.
Director and other key management personnel remuneration
2021
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
C Farrow2
L Dean3
A Shearer
46,835
24,500
36,530
Executive directors
D Chessell
209,285
Other key management personnel
-
-
-
-
J Kopias4
Total
-
317,150
132,688
132,688
-
-
-
-
-
-
-
-
3,470
4,583
51,418
-
4,583
24,500
44,583
19,882
10,094
239,261
-
23,352
4,583
23,843
137,271
497,033
9
-
10
4
3
1 Represents share based payments linked to performance conditions.
2 Mr Farrow was appointed Director on 17 August 2020.
3 Mr Dean resigned as director on 27 November 2020.
4 Contract payments are made to Kopias Consulting – an entity associated with Mr Kopias.
2020
SHORT TERM BENEFITS
POST-EMPLOYMENT
BENEFITS
SHARE-BASED
PAYMENTS
SALARY AND FEES
$
CONTRACT PAYMENTS
$
OTHER BENEFITS
$
SUPERANNUATION
$
OPTIONS / RIGHTS
$
TOTAL
$
AT RISK5
%
Non-executive directors
L Dean
A Shearer
Executive directors
D Chessell6
M Schwarz7
56,371
33,283
157,682
118,574
-
-
-
-
Other key management personnel
J Kopias8
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
-
-
-
-
-
5 Represents share based payments linked to performance conditions.
6 Mr Chessell was appointed Managing Director on 15 October 2019.
7 Mr Schwarz resigned as director on 26 August 2019 – salaries and fees includes a termination payment for M Schwarz.
8 Contract payments are made to Kopias Consulting – an entity associated with Mr Kopias.
2 0 2 1 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
23
DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED), continued
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
$235,000
Salaried employee
Indefinite
Two months
Three months
Variable
Hourly rate contract
Unspecified
One month
None
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:
2021
GRANTED
C Farrow
D Chessell
A Shearer
J Kopias
D Chessell
Total
NUMBER GRANTED
GRANT DATE
FAIR VALUE AT GRANT DATE
FIRST VESTING DATE1
LAST VESTING DATE
PER RIGHT
FULL VALUE $
27/11/2020
27/11/2020
27/11/2020
27/11/2020
15/04/2021
$0.0327
$0.0327
$0.0327
$0.0327
$0.0202
16,369
16,369
16,369
16,369
12,123
Share price
31/12/2022
Share price
31/12/2022
Share price
31/12/2022
Share price
31/12/2022
Short term KPI’s
31/12/2021
500,000
500,000
500,000
500,000
800,000
2,800,000
1 Meeting criteria of the KPI listed below determines vesting of rights.
Share price KPI – 2,000,000 Officer Performance Rights
The vesting of Director Performance Rights under this KPI is tied to the Company’s share price exceeding a VWAP equal to 140% of
the 5 day VWAP prior to the 2020 AGM at any time in the period to 31 December 2022 for a period of at least 1 month. The vesting of
this KPI must be determined by the Board by 31 March 2023 and, if vested, the Performance Rights will expire on 31 December 2025.
Short Term KPIs – 800,000 Managing Director Performance Rights
As determined by the board. 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.
24
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED), continued
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 2020
MOVEMENT DURING YEAR1
OPTIONS / RIGHTS EXERCISED
HELD AT 30 JUNE 2021
C Farrow2
L Dean3
D Chessell
A Shearer
J Kopias
Total
-
454,478
1,320,719
940,000
440,000
2,054,286
(454,478)
214,286
399,412
357,143
3,155,197
2,570,649
-
-
-
-
-
-
2,054,286
-
1,535,005
1,339,412
797,143
5,725,846
1 Movement represents participation in share placement/s and/or share purchase plan.
2 Movement includes shareholding on appointment as director of 554,286 shares.
3 Movement represents resignation as director.
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:
DIRECTORS AND
COMPANY SECRETARY
L Dean1
D Chessell
A Shearer
J Kopias
Total
HELD AT
30 JUNE 2020
1,000,000
697,500
450,000
450,000
2,597,500
UNQUOTED OPTIONS – EXERCISE PRICE OF $0.2493 AND EXPIRY OF 21 MARCH 2021
GRANTED
DURING YEAR
DISPOSED / LAPSED
DURING YEAR
EXERCISED
HELD AT
30 JUNE 2021
VESTED AND EXERCISABLE
AT 30 JUNE 2021
-
-
-
-
-
(1,000,000)
(697,500)
(450,000)
(450,000)
(2,597,500)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Movement represents resignation as director.
UNQUOTED OPTIONS – EXERCISE PRICE OF $0.042 AND EXPIRY OF 15 APRIL 2022
DIRECTORS AND
COMPANY SECRETARY
HELD AT
30 JUNE 2020
C Farrow
D Chessell
A Shearer
Total
-
-
-
-
GRANTED
DURING YEAR
750,000
89,285
178,571
1,017,856
DISPOSED
DURING YEAR
EXERCISED
HELD AT
30 JUNE 2021
VESTED AND EXERCISABLE
AT 30 JUNE 2021
-
-
-
-
-
-
-
-
750,000
89,285
178,571
750,000
89,285
178,571
1,017,856
1,017,856
DIRECTORS AND
COMPANY SECRETARY
HELD AT
30 JUNE 2020
GRANTED
DURING YEAR
DISPOSED DURING YEAR
EXERCISED
HELD AT
30 JUNE 2021
VESTED AND EXERCISABLE
AT 30 JUNE 2021
QUOTED OPTIONS – EXERCISE PRICE OF $0.10 AND EXPIRY OF 30 JUNE 2022 (RMLOA)
L Dean1
A Shearer
J Kopias
Total
48,810
50,000
20,000
118,810
1 Movement represents resignation as director.
-
-
-
-
(48,810)
-
-
(48,810)
-
-
-
-
-
50,000
20,000
70,000
-
50,000
20,000
70,000
2 0 2 1 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
REMUNERATION REPORT (AUDITED), continued
QUOTED OPTIONS – EXERCISE PRICE OF $0.12 AND EXPIRY OF 30 SEPTEMBER 2023 (RMLOB)
DIRECTORS AND
COMPANY SECRETARY
HELD AT
30 JUNE 2020
GRANTED
DURING YEAR1
DISPOSED
DURING YEAR
EXERCISED
HELD AT
30 JUNE 2021
VESTED AND EXERCISABLE
AT 30 JUNE 2021
C Farrow
D Chessell
A Shearer
Total
-
-
-
-
214,286
35,715
42,270
292,271
-
-
-
-
-
-
-
-
214,286
35,715
42,270
292,271
214,286
35,715
42,270
292,271
1 Movement represents participation in the share purchase plan.
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
HELD AT
30 JUNE 2020
ACQUIRED
DURING YEAR2
DISPOSED
DURING YEAR
EXERCISED
HELD AT
30 JUNE 2021
VESTED AND EXERCISABLE
AT 30 JUNE 2021
C Farrow
L Dean1
D Chessell
A Shearer
J Kopias
Total
-
500,000
-
500,000
4,500,000
500,000
500,000
-
(500,000)
1,300,000
500,000
500,000
-
-
-
6,000,000
2,800,000
(500,000)
1 Movement represents resignation as director.
-
-
-
-
-
-
500,000
-
5,800,000
1,000,000
1,000,000
-
-
500,000
500,000
500,000
8,300,000
1,500,000
2 Represents issue of performance rights as remuneration as approved at the 2020 AGM and 2021 General Meeting 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:
HELD AT
30 JUNE 2020
ACQUIRED
DURING YEAR
DISPOSED
DURING YEAR
EXERCISED
HELD AT
30 JUNE 2021
VESTED AND EXERCISABLE
AT 30 JUNE 2021
1,800,000
800,000
658,125
325,000
3,583,125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,800,000
800,000
658,125
325,000
3,583,125
-
-
-
-
-
DIRECTORS
Class A
D Chessell
A Shearer
Class B
D Chessell
A Shearer
Total
26
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT DIRECTORS’ REPORT, continued
REMUNERATION REPORT (AUDITED), continued
E OTHER INFORMATION
Transactions with key
management personnel
Transactions with key management
personnel are made on normal
commercial terms and conditions and at
market rates. Outstanding balances are
unsecured and are repayable in cash.
Duncan Chessell
Resolution Minerals had sought the
provision of vehicle hire services from
Magill Consulting Pty Ltd. The services
are on arms-length terms. During the
period 1 July 2020 and 30 June 2021
$5,978 + GST has been paid in relation to
these services. The total amount of fees
due to Magill Consulting Pty Ltd as at
30 June 2021 was $Nil (2020: $Nil).
Jarek Kopias
Kopias Consulting, a business of which
Jarek Kopias is a Director, was paid
consulting fees in relation to the year
totalling $132,688 (2020: $127,365) and
is disclosed in the remuneration report.
The total amount of fees due to Kopias
ENVIRONMENTAL LEGISLATION
The Directors believe that the Group has,
in all material respects, complied with all
particular and significant environmental
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.
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.
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
The liabilities insured are legal costs
own work, acting in a management or
Consulting as at 30 June 2021 was $9,450
that may be incurred in defending civil or
decision-making capacity for the Group,
(2020: $7,500).
END OF AUDITED
REMUNERATION REPORT
criminal proceedings that may be brought
acting as an advocate for the Group or
against the officers in their capacity as
jointly sharing risks and rewards.
officers of the Company, and any other
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.
Details of the amount of the premium paid
in respect of the insurance policies is not
disclosed as such disclosure is prohibited
under the terms of the contract.
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 11 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 29 of this
Financial Report and forms part of this
Directors’ Report.
2 0 2 1 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
ROUNDING OF AMOUNTS
The Group is of a kind referred to in
CORPORATE GOVERNANCE
The Board has adopted the ASX
Corporations Instrument 2016/191,
Corporate Governance Council’s
issued by the Australian Securities and
Corporate Governance Principles
Investments Commission, relating to
and Recommendations – 4th Edition
‘rounding-off’. Amounts in this report
(ASX Recommendations). The Board
have been rounded off in accordance
continually monitors and reviews
with that Corporations Instrument to the
its existing and required policies,
nearest dollar.
charters and procedures with a view to
ensuring its compliance with the ASX
Signed in accordance with a resolution of
the Directors.
Craig Farrow
Chair
Adelaide
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.
Recommendations to the extent deemed
30 September 2021
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
28
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT AUDITOR’S INDEPENDENCE DECLARATION
Level 3, 170 Frome Street
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
Minerals Ltd for the year ended 30 June 2021, 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
I S Kemp
Partner – Audit & Assurance
Adelaide, 30 September 2021
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
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.
Liability limited by a scheme approved under Professional Standards Legislation.
2 0 2 1 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
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2021
Interest income
Government grants
Other income
Broker and investor relations
Employee benefits expense
Share based payments
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
This statement should be read in conjunction with the notes to the financial statements.
NOTES
6
2
3
4
30 JUNE
2021
$
408
50,000
51,620
(96,288)
(293,869)
(5,085)
(27,119)
(244,015)
(20,056)
-
(399,081)
(983,485)
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)
-
-
(983,485)
(1,281,967)
-
-
(983,485)
(1,281,967)
(0.30)
(1.02)
30
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
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
This statement should be read in conjunction with the notes to the financial statements.
NOTES
30 JUNE
2021
$
30 JUNE
2020
$
5
6
7
8
9
1,751,998
41,643
1,793,641
19,261,092
126,272
19,387,364
21,181,005
1,037,859
53,672
-
1,091,531
1,091,531
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
20,089,474
12,227,222
23,558,922
1,527,122
(4,996,570)
20,089,474
14,944,312
1,353,852
(4,070,942)
12,227,222
2 0 2 1 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
STATEMENT OF CHANGES IN EQUITY
For the year 30 June 2021
2021
Opening balance
Share placements and SPP
Option exercise
Fair value of shares issued for project acquisition
Performance rights and options issued and lapsed
Issue costs
Foreign currency reserve
Transactions with owners
Comprehensive income:
Total profit or loss for the reporting year
Total other comprehensive income for the
reporting year
ISSUED
CAPITAL
$
SHARE BASED
PAYMENTS RESERVE
$
FOREIGN CURRENCY
RESERVE
$
ACCUMULATED
LOSSES
$
TOTAL
EQUITY
$
14,944,312
1,353,852
(4,070,942)
12,227,222
8,519,598
167
860,000
28,710
(793,865)
-
-
-
-
(36,350)
192,342
-
8,614,610
155,992
-
-
-
-
-
17,278
17,278
-
-
-
57,857
-
-
8,519,598
167
860,000
50,217
(601,523)
17,278
57,857
8,845,737
-
-
-
-
-
-
(983,485)
(983,485)
-
-
Balance 30 June 2021
23,558,922
1,509,844
17,278
(4,996,570)
20,089,474
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
SHARE BASED
PAYMENTS RESERVE
$
ACCUMULATED
LOSSES
$
831,143
(2,788,975)
-
-
-
(63,296)
(7,398)
593,403
522,709
-
-
-
-
-
-
-
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)
-
-
Balance 30 June 2020
14,944,312
1,353,852
(4,070,942)
12,227,222
This statement should be read in conjunction with the notes to the financial statements.
32
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
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
10
30 JUNE
2021
$
408
50,000
51,620
(752,685)
(650,657)
(7,585,787)
(90,812)
-
30 JUNE
2020
$
890
50,000
44,557
(935,324)
(839,877)
(3,424,765)
(15,003)
5,491
(7,676,599)
(3,434,277)
8,519,598
167
(601,523)
7,918,242
6,048,337
96,000
(451,060)
5,693,277
Net change in cash and cash equivalents
(409,014)
1,419,123
Cash and cash equivalents, beginning of the year
2,161,012
741,889
Cash and cash equivalents, end of year
5 (a)
1,751,998
2,161,012
This statement should be read in conjunction with the notes to the financial statements.
2 0 2 1 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
33
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2021
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 2021 were approved
and authorised by the Board of Directors on 30 September 2021.
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 2020 is for the full year commencing on
1 July 2019.
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
2021. 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 15 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 6.
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).
34
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT
d) 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.
e) 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)
»
»
»
»
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 recognize 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.
equity instruments at fair value through other comprehensive
income (FVOCI)
In applying this forward-looking approach, a distinction is
made between:
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.
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’).
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.
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CLASSIFICATION AND MEASUREMENT OF FINANCIAL LIABILITIES
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:
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.
f)
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.
g) Trade and other payables
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.
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.
h)
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.
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.
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.
»
»
»
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RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT
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.
i) Cash and cash equivalents
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.
j) 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.
k) 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.
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.
l) Employee benefits
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.
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m) Goods and services tax (GST)
o) 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:
Amendments to AASB 3: Definition of a Business. The
amendment to AASB 3 Business Combinations clarifies that to be
considered a business, an integrated set of activities and assets
must include, at a minimum, an input and a substantive process
that, together, significantly contribute to the ability to create output.
Furthermore, it clarifies that a business can exist without including
all of the inputs and processes needed to create outputs. These
amendments had no impact on the consolidated financial statements
of the Group, but may impact future periods should the Group enter
into any business combinations.
Amendments to AASB 1 and AASB 8 Definition of Material.
The amendments provide a new definition of material that states,
“information is material if omitting, misstating or obscuring it could
reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis
of those financial statements, which provide financial information
about a specific reporting entity.” The amendments clarify that
materiality will depend on the nature or magnitude of information,
either individually or in combination with other information, in the
context of the financial statements. A misstatement of information
is material if it could reasonably be expected to influence decisions
made by the primary users. These amendments had no impact on
the consolidated financial statements of, nor is there expected to be
any future impact to the Group.
IFRIC Interpretation to AASB 138 Intangible Assets
Configuration or Customisation Costs in a Cloud Computing
Arrangement. This interpretation in March 2021 provided further
guidance on the accounting treatment of Cloud Computing Costs.
As the Group does not have significant or complex systems the
interpretation did not have an impact on the Group.
p) 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 2021 but will be applicable to the Group in
future reporting periods.
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.
n) 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.
38
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT
2 OTHER EXPENSES
Compliance
Office expenses
Legal, insurance and registry
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) for Resolution Minerals Ltd
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
2021
$
90,311
70,868
166,086
29,999
41,817
399,081
2020
$
79,159
123,696
103,046
52,945
85,424
444,270
2021
$
2020
$
-
-
(983,485)
30%
(295,046)
4,519
(269,305)
(1,281,967)
30%
(384,590)
1,202,521
(81,518)
(559,832)
(736,413)
-
-
10,752,649
3,225,795
9,102,248
2,730,674
A net deferred tax asset of $3,225,795 (2020: $2,730,674) 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
2021
#
328,239,769
328,239,769
2020
#
126,243,296
126,243,296
Profit / (loss) per share – basic and basic (cents)
(0.30)
(1.02)
There were 183,559,770 options, performance rights and performance shares outstanding at the end of the year (2020: 52,423,225) that have not been
taken into account in calculating diluted EPS due to their effect being anti-dilutive.
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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.
2021
$
1,751,998
1,751,998
2020
$
2,161,012
2,161,012
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 operation partner
1,751,998
-
953,412
1,207,600
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 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
2021
$
10,536,621
8,108,486
860,000
(244,015)
2020
$
6,809,980
3,064,891
994,174
(332,424)
19,261,092
10,536,621
7,436,564
11,824,528
19,261,092
6,748,268
3,788,353
10,536,621
The acquisition of projects includes the fair value of share based payments of $760,000 being the value of 25,000,000 milestone shares as to
Millrock Resources to earn-in to the 64North Project in Alaska, USA and $100,000 as an option payment for the Benmara project via the issue of
2,500,000 shares.
Subsequent to the end of the financial year, the Group relinquished the Snettisham Project via sale to Millrock Resources for nominal consideration.
The disposal entitles the Group to participate in 30% of any future benefit derived from a transaction related to the Snettisham project by Millrock for a
period of 12 months.
The Group, through its US based subsidiary company, is currently in the process of incurring Stage 2 expenditure to earn a 42% interest by
31 January 2022.
64North Project – Entire Project Earn-in Summary
STAGE
RML%
INTEREST
TRIGGER
EXPENDITURE
REQUIREMENT US$
RML SHARE
MILESTONE
MILLROCK CASH
PAYMENT US$
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
0%
30%
42%
51%
60%
Completed
Completed
Undertake
exploration
Undertake
exploration
Undertake
exploration
$900,000
n/a
$100,000
$2,350,000
10,000,000
$100,000
$2,350,000
10,000,000
$100,000
40
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT 64North Project Best Block Interest
STAGE
Bankable feasibility study (BFS)
First production
Total
RML%
INTEREST
70%
80%
80%
TRIGGER
EXPENDITURE
REQUIREMENT US$
RML SHARE MILESTONE
Complete BFS
BFS expenditure
Commence
production
Loan carry
Sole fund
n/a
n/a
MILLROCK PAYMENT
US$
$3,000,000
n/a
$3,000,000
The Group, through its US based subsidiary company, has earned a 30% interest (Stage 1) in the project during the year.
The earn-in terms were revised as summarised above and announced on the ASX on 9 February 2021.
7 TRADE AND OTHER PAYABLES
Trade creditors
Payroll liabilities
Accrued expenses – 64North Project, Alaska
Accrued expenses – other
Total trade and other payables
2021
$
598,354
17,102
199,255
223,148
1,037,859
2020
$
34,002
13,701
413,100
79,620
540,423
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
8
ISSUED CAPITAL
a)
Issued and paid up capital
Fully paid ordinary shares
b) Movements in fully paid shares
Balance as 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
Fair value of shares issued for the acquisition of projects
Share placements, SPP and option exercise
Option exercise (including fair value of options exercised)
Capital raising costs
Balance at 30 June 2021
2021
$
2020
$
23,558,922
23,558,922
14,944,312
14,944,312
NUMBER
$
66,009,806
5,000,000
133,823,882
1,600,000
-
206,433,688
27,500,000
213,145,926
600,000
-
9,520,723
245,000
6,048,337
159,296
(1,029,044)
14,944,312
860,000
8,519,765
28,710
(793,865)
447,679,614
23,558,922
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.
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9 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 2019
Granted – broker remuneration
Exercised
Lapsed
Balance at 30 June 2020
Granted – broker remuneration
Granted – shareholders
Exercised
Lapsed
Balance at 30 June 2021
All options vested upon issue except as stated above.
PERFORMANCE RIGHTS RESERVE
Balance at 1 July 2019
Granted – KMP, employees and consultants
Forfeited
Balance at 30 June 2020
Granted – KMP, employees and consultants
Exercised
Forfeited
Balance at 30 June 2021
RECONCILIATION OF RESERVE MOVEMENTS
Rights issued to directors / employees / contractors
Options issued to brokers as remuneration
Options / rights exercised
Forfeited performance rights
Lapsed options
Total share based payments
Options / rights 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 2020/21 year:
NUMBER OF
OPTIONS
24,671,562
15,000,000
(1,600,000)
(6,323,337)
31,748,225
5,000,000
128,688,212
(1,667)
(6,450,000)
158,984,770
$
720,858
593,403
(63,296)
-
1,250,965
192,342
-
-
(57,857)
1,385,450
NUMBER OF
RIGHTS
2,500,000
5,500,000
(500,000)
7,500,000
4,750,000
(600,000)
(250,000)
11,400,000
2021
$
55,150
192,342
(28,710)
(4,933)
(57,857)
155,992
163,001
(35,719)
(12,094)
5,085
WEIGHTED AVERAGE
EXERCISE PRICE
$0.20
$0.06
$0.06
$0.20
$0.14
$0.12
$0.06
$0.20
$0.25
$0.07
$
110,285
14,659
(22,057)
102,887
55,150
(28,710)
(4,933)
124,394
2020
$
14,659
593,403
(63,296)
(22,057)
-
522,709
530,107
(7,398)
7,398
-
5,000,000 unquoted options were issued as broker remuneration. The unquoted options have an exercise price of $0.12 and expiry of 30
September 2023. The fair value fair of the unquoted options is $192,342;
1,667 quoted options were exercised;
6,450,000 unquoted options lapsed in accordance with the terms of those securities;
4,750,000 unquoted performance rights with KPI based vesting criteria were issued to KMP, employees and consultants;
250,000 unquoted performance rights were exercised; and
600,000 unquoted performance rights lapsed in accordance with the terms of those securities.
•
•
•
•
•
•
42
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT During the 2019/20 year:
•
•
•
•
•
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.
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
$0.053
121.92%
0.21%
3.0
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of subsidiaries
which do not have a functional currency of Australian Dollars. The reserve is also used to record exchange gains and losses on hedges of the net
investment in foreign operations.
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. The foreign currency
reserves recognises gains and losses on revaluation of monetary and non-monetary assets and liabilities.
10 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
11 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
2021
$
2020
$
(983,485)
(1,281,967)
50,217
20,056
27,119
244,015
(8,579)
(650,657)
(7,398)
15,316
51,936
332,424
49,812
(839,877)
2021
$
2020
$
33,250
33,250
4,700
4,700
37,950
31,000
31,000
5,700
5,700
36,700
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12 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
2021
$
23,000
-
23,000
2020
$
13,000
-
13,000
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.
13 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 as disclosed in detail in the remuneration report:
Short-term benefits
Post-employment benefits
Share based payments
Total remuneration
The following transactions occurred with KMP:
2021
$
449,838
23,352
23,843
497,033
2020
$
493,275
28,538
(22,057)
499,756
Payment for professional services to entities associated with entities associated with KMP as
listed below.
130,738
343,615
Payables for professional services at reporting date
9,450
7,500
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 had sought the provision of vehicle hire services from Magill Consulting Pty Ltd. The services are on arms-length terms.
During the period 1 July 2020 and 30 June 2021 $5,978 + GST has been paid in relation to these services. The total amount of fees due to Magill
Consulting Pty Ltd as at 30 June 2021 was $Nil (2020: $Nil).
Jarek Kopias
Kopias Consulting, a business of which Jarek Kopias is a Director, was paid consulting fees in relation to the year totalling $132,688 (2020:
$127,365) and is disclosed in the remuneration report. The total amount of fees due to Kopias Consulting as at 30 June 2021 was $9,450
(2020: $7,500).
44
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT
14 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
2021
$
2020
$
882,727
45,132
46,838
10,578
(691,406)
293,869
589,243
(7,398)
32,560
24,994
(266,017)
373,382
b) Share based employee remuneration
As at 30 June 2021 the Group maintained a share option plan and performance share plan for employee and director remuneration. During the
year there were 4,750,000 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 as at 30 June 2019 and 2020 - remuneration options
Lapsed during the year
Outstanding as at 30 June 2021
RANGE OF VALUES
Nil
3.8 years to 5.1 years
$0.027 to $0.04
141.8% to 159.7%
0.07% to 0.09%
$0.027
4.6 years
NUMBER OF
OPTIONS
WEIGHTED AVERAGE
EXERCISE PRICE ($)
5,350,000
(5,350,000)
-
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.
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15 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
N23 LLC
Resolution Minerals Alaska Inc
COUNTRY OF
INCORPORATION
Australia
Australia
USA
USA
USA
CLASS OF
SHARES
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
16 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
5
6
9
PERCENTAGE HELD
2020
PERCENTAGE HELD
2021
100%
100%
100%
100%
100%
2021
$
1,751,998
41,643
1,793,641
1,037,859
1,037,859
100%
100%
100%
100%
100%
2020
$
2,161,012
24,499
2,185,511
47,703
47,703
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 2021 approximates the value of
cash and cash equivalents.
46
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT 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.
2021
Interest rate
2020
Interest rate
SENSITIVITY*
+ 1.65%
- 1.65%
SENSITIVITY*
+ 1.30%
- 1.30%
EFFECT ON: PROFIT
$
EFFECT ON: EQUITY
$
+39,422
-39,422
+39,422
-39,422
EFFECT ON: PROFIT
$
EFFECT ON: EQUITY
$
+17,768
-17,768
+17,768
-17,768
* The method used to arrive at the possible change of 165 basis points (2020: 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 165 basis points. It is considered that 165 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.
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:
i) Monetary financial assets and financial liabilities not readily traded in an organised financial market are carried at book value.
ii) 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.
17 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
2021
$
1,723,081
20,041,416
395,431
23,558,922
5,422,781
1,509,844
1,000,094
1,000,094
2020
$
2,185,512
12,388,237
570,616
14,944,312
4,480,543
1,353,852
1,281,967
1,281,967
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.
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47
18 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.
2021
Income
Interest income
Other income
Expenses
Exploration expense
Impairment expense
Total expenses
Profit / (Loss) before tax
Balance sheet
EXPLORATION
AUSTRALIA
$
EXPLORATION
USA
$
UNALLOCATED
$
-
-
(27,166)
(244,015)
-
(271,181)
-
-
47
-
-
47
Exploration and evaluation
7,436,564
11,824,828
All other assets
Total assets
Total liabilities
Net assets
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
48
-
7,436,564
253,129
7,183,435
EXPLORATION
AUSTRALIA
$
-
-
(51,936)
(332,424)
-
-
(384,360)
-
6,520,821
-
6,520,821
51,600
6,469,221
-
11,824,828
696,099
11,128,429
EXPLORATION
USA
$
-
-
-
-
-
-
-
1,207,600
4,015,800
-
5,223,400
419,620
3,596,180
TOTAL
$
408
101,620
(27,119)
(244,015)
(814,379)
(973,485)
19,261,092
1,919,913
21,181,005
1,091,531
20,089,474
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
408
101,620
-
-
(814,379)
(712,351)
-
1,919,913
1,919,913
142,303
1,777,610
UNALLOCATED
$
890
94,557
-
-
(15,316)
(977,739)
(897,608)
-
-
1,053,617
1,053,617
99,396
2,161,821
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT 19 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. Each performance share is convertible into one ordinary share upon vesting.
The milestones associated with each class of Performance Share are listed below.
(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).
(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).
20 GOING CONCERN BASIS OF ACCOUNTING
The financial report has been prepared on the basis of a going concern. During the year ended 30 June 2021 the Group recorded a net cash outflow
from operating and investing activities of $8,327,256 and an operating loss of $983,485. 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 $1.7 million subsequent to the end of the reporting period as detailed in Note 21 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.
21 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 24 August 2021, the Company announced the execution of a farm-in agreement with OZ Minerals Limited (OZL) in relation to the Wollogorang
Project. The agreement allows OZL to earn a 51% interest in Wollogorang by spending approximately $4.9 million over 5 years and, at Resolution’s
election, OZL has the option to earn a 75% interest, by sole-funding and delivering a Positive Final Investment Decision to Mine (at a minimum spend of
$1m/year, OZL has a further 5 years to complete).
Subsequent to the end of the financial year, the Group relinquished the Snettisham Project via sale to Millrock Resources for nominal consideration.
The disposal entitles the Group to participate in 30% of any future benefit derived from a transaction related to the Snettisham project by Millrock for a
period of 12 months.
On 22 September 2021 the Company issued 84,418,223 shares under a placement to raise $1.7 million (before costs) followed by an SPP, targeting a
further raise of $1.5 million.
On 27 September 2021 the Company announced an agreement to acquire 100% of two tenements surrounding the Benmara project, adding 541km2,
and lodgement of two new tenement applications adding a further 1,025km2 to the project area.
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49
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 2021 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:
Craig Farrow
Chair
Adelaide
30 September 2021
50
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT INDEPENDENT AUDIT REPORT
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s 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
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss
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
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year
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
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 20 in the financial statements, which indicates that the Group incurred a net loss of $983,485 during
the year ended 30 June 2021, and as of that date, the Group’s recorded a net cash outflow from operating and investing
activities of $8,327,256. As stated in Note 20, these events or conditions, along with other matters as set forth in Note 20,
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
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
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.
Liability limited by a scheme approved under Professional Standards Legislation.
2 0 2 1 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
51
INDEPENDENT AUDIT REPORT, continued
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 6
At 30 June 2021 the carrying value of exploration and
evaluation assets was $19,261,092.
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.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
conducting a detailed review of management’s
assessment of trigger events prepared in accordance with
AASB 6 including;
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 30 June 2021, 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.
52
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT
INDEPENDENT AUDIT REPORT, continued
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.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 for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Resolution Minerals Limited, for the year ended 30 June 2021 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
I S Kemp
Partner – Audit & Assurance
Adelaide, 30 September 2021
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54
RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT 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 31 August 2021.
The Company is listed on the Australian Securities Exchange.
There are no restricted securities or securities subject to voluntary escrow as at 31 August 2021.
There is no current on-market buy-back.
SUBSTANTIAL SHAREHOLDERS
There are no substantial shareholders of the Company at 31 August 2021.
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
ORDINARY
SHARES
RML
#
120
335
242
%
0.01
0.21
0.46
10,001 – 100,000
1,098
10.64
100,001 and over
606
88.68
2,4011
Number
of Holders
Securities
on issue
QUOTED
OPTIONS
30 JUN 22 $0.10
RMLOA
%
0.21
1.68
0.90
18.65
78.56
#
33
41
9
29
10
122
UNQUOTED
OPTIONS
30 SEP 23 $0.12
RMLOB
PERFORMANCE
SHARES
CLASS A
PERFORMANCE
SHARES
CLASS B
PERFORMANCE
RIGHTS
OPTIONS
%
0.00
0.00
0.00
6.77
93.23
#
1
1
0
93
109
204
-
-
-
-
7
7
-
-
-
1
6
7
-
-
-
-
9
9
-
-
-
8
105
113
447,679,614
100.00
6,096,558
100.00
74,634,643
100.00
9,600,0002 3,575,0003
11,400,0004
78,253,5695
1 There were 1,037 holders of less than a marketable parcel of ordinary shares ($500 amounts to 22,727 shares at $0.022).
2 Ms Michelle Braham holds 2,600,000 Class A Performance shares.
3 Ms Michelle Braham holds 950,625 Class B Performance shares.
4 Performance Rights were issued under the Company’s Performance Share Plan.
5 Unquoted options:
»
»
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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ASX ADDITIONAL INFORMATION, continued
TWENTY LARGEST HOLDERS OF ORDINARY SHARES – RML
NO. OF SHARES HELD
% HELD
Millrock Resources Inc
BNP Paribas Nominees Pty Ltd ACF Clearstream
Acuity Capital Investment Management Pty Ltd
Strut Pty Ltd
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
Leet Investments Pty Limited
Leet Investments Pty Limited
Mr David John Rawlings
DJ Coughlan Drilling Pty Ltd
Mr Graham Stewart Campbell & Mrs Heather Roslyn Campbell
ASB Nominees Limited <123619 A/C>
Emerging Equities Pty Ltd
Sandsoft Pty Ltd
Mr David Kennedy
Mr Arjun Plathottathil
Ms Xiaodan Wu
M & K Korkidas Pty Ltd
3-29 KWS P/L <3-29 KWS Unit A/C>
Nelson Enterprises Pty Ltd
Total ordinary shares on issue
23,100,000
21,157,024
13,626,971
10,000,000
7,520,549
6,582,102
5,300,000
4,900,000
4,787,322
4,021,960
4,000,000
3,758,175
3,514,286
3,500,000
3,500,000
3,361,163
3,360,720
3,133,329
3,004,465
2,898,572
5.16
4.73
3.04
2.23
1.68
1.47
1.18
1.09
1.07
0.90
0.89
0.84
0.79
0.78
0.78
0.75
0.75
0.70
0.67
0.65
135,026,638
447,679,614
30.15
100.00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT ASX ADDITIONAL INFORMATION, continued
TWENTY LARGEST HOLDERS OF QUOTED OPTIONS – RMLOA ($0.10 / 30 JUNE 2022)
NO. OF OPTIONS HELD
% HELD
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 Tri Hung Lam
Rivacre Investments Pty Ltd
Mr Eli Ekman
Mr Sean Donahugh Vanderfield Foley
Bell Potter Nominees Ltd <2272984 A/C>
Mr Feisal Ahmed Paruk & Mrs Fathima Yonoos Ahmed
Mr Maxwell Guy Harvey & Mrs Alice Harvey & Mr Julian Graeme Harvey
Mr Simon John Spinks
Mr Robert Hall
Max Gorbach Pty Ltd
Mr Jeffrey Philip Cockrem
Mr Peter George Benson & Mrs Karn Lesley Benson
Valas Investments Pty Ltd
Mrs Anne-Marie Fett
Lacasuper Pty Ltd
Mr Craig Russell Stranger
Total quoted options on issue
1,887,737
1,000,000
762,500
250,000
200,000
200,000
150,000
125,000
111,336
103,334
100,000
100,000
100,000
83,334
70,000
68,334
50,000
50,000
48,810
46,667
30.96
16.40
12.51
4.10
3.28
3.28
2.46
2.05
1.83
1.69
1.64
1.64
1.64
1.37
1.15
1.12
0.82
0.82
0.80
0.77
5,507,052
6,096,558
90.33
100.00
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TWENTY LARGEST HOLDERS OF QUOTED OPTIONS – RMLOB ($0.12 / 30 SEPTEMBER 2023)
NO. OF OPTIONS HELD
% HELD
Palisades Goldcorp Ltd
CS Third Nominees Pty Limited
Mr Peter Hendry
Mr Graham Stewart Campbell & Mrs Heather Roslyn Campbell
Strut Pty Ltd
M & K Korkidas Pty Ltd
Taycol Nominees Pty Ltd <211 A/C>
Prosperity Fund Pty Ltd
Ms Susan Lavertu
Coldaw Pty Ltd
Mrs Maria Rontziokos & Mr Fotios Rontziokos
Mr Bill Rontziokos & Miss Georgina Vardakas
Bell Potter Nominees Ltd <2272984 A/C>
Mr Edwin Charles Laurence Parker & Ms Christine Melissa Ireland
Mr Alan Conigrave
Mr Sean Anthony Faherty
Mr David Kennedy
PAC Partners Securities Pty Ltd
Mr Gary Mark Colman
Mr Craig Russell Stranger
Total quoted options on issue
12,428,571
7,857,143
5,000,000
3,000,000
2,500,000
1,999,067
1,950,000
1,688,363
1,677,143
1,625,000
1,500,000
850,000
800,000
784,539
753,617
750,000
703,746
675,000
631,390
625,000
16.65
10.53
6.70
4.02
3.35
2.68
2.61
2.26
2.25
2.18
2.01
1.14
1.07
1.05
1.01
1.00
0.94
0.90
0.85
0.84
47,798,579
74,634,643
64.04
100.00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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RESOLUTION MINERALS LTD | 2021 ANNUAL REPORT 2 0 2 1 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
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