ANNUAL REPORT 2021
RESOURCE MINING
CORPORATION LIMITED
ABN 97 008 045 083
TABLE OF CONTENTS
Company Information ................................................................................................................................... 1
Chairman’s Letter ......................................................................................................................................... 2
Review of Strategic Intent............................................................................................................................. 3
Directors’ Report ......................................................................................................................................... 11
Financial Statements .................................................................................................................................. 19
Notes to the Consolidated Financial Statements ....................................................................................... 23
Directors’ Declaration ................................................................................................................................. 41
Independent Auditor’s Report to the Members........................................................................................... 42
Independent Auditor’s Independence Declaration ..................................................................................... 46
Additional Information ................................................................................................................................. 47
RMC ANNUAL REPORT 2021
COMPANY INFORMATION
ABN
Directors
97 008 045 083
William (Bill) Mackenzie (Non-Executive Chairman)
Warwick Davies (Managing Director)
Zhang Chi (Andy) (Non-Executive Director)
Company Secretaries
Amanda Sparks
Registered Office
Principal Place of Business
Share Registry
Auditor
Bankers
Securities Exchange Listing
Suite 14, Level 2
210 Bagot Road
SUBIACO, WESTERN AUSTRALIA 6008
Suite 14, Level 2
210 Bagot Road
SUBIACO, WESTERN AUSTRALIA 6008
Telephone:
Website:
+61 8 6494 0025
www.resmin.com.au
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
PERTH, WESTERN AUSTRALIA 6000
Telephone
Within Australia:
Outside Australia:
www.investorcentre.com/contact
1300 850 505
+61 3 9415 4000
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO, WESTERN AUSTRALIA 6008
Telephone:
Facsimile:
+61 8 6382 4600
+61 8 6382 6401
Westpac Bank
116 James Street
NORTHBRIDGE, WESTERN AUSTRALIA 6000
Resource Mining Corporation Limited shares
are listed on the Australian Securities Exchange
(Home Exchange – Perth)
ASX Code: Shares RMI
RMC ANNUAL REPORT 2021
1
CHAIRMAN’S LETTER
Dear Shareholder
On behalf of the Board of Directors, it is with pleasure that I present Resource Mining Corporation Limited’s (RMC or
Company) Annual Report for the year ended 30 June 2021.
Despite the past year dominated by COVID-19 and its impacts worldwide and particularly in PNG, your Company
continues to maintain its 100% interest in the Wowo Gap project pending a sustained improvement in market conditions.
The Exploration Licence for EL1165 expired on 28 February 2020 with a renewal application being submitted and
accepted on 24th February 2020 by the Minerals Resources Authority (MRA). The first stage of the licence renewal
process, the conduct of a Warden’s Court Hearing, has been the subject of COVID-19 related cancellations and
deferral. A date for the hearing is yet to be confirmed, however under PNG law, EL1165 remains in force until the
renewal process is concluded.
Onsite at Wowo Gap, project activity was in keeping with the commitments for the EL 1165 license. Site-based activities
included maintaining the project area and exploration equipment in a ‘ready state’ for future exploration and potential
development. Routine environmental activity including water sampling and environmental monitoring was undertaken
during the year. The well-established training and upskilling of casual labourers continued as the policies of local
villages of providing employment opportunities for as many local residents as possible, means frequent staff turnover,
with regular training programs was undertaken with benefits of improved performance providing flexibility for key tasks
on site being experienced.
COVID-19 had and continues to have significant negative impacts on the conduct of routine operations on site. Charter
flights are subjected to increased oversight by the relevant authorities as tight regulations regarding potential
passenger’s vaccination and temperature conditions severely impacted on the ability of people to travel to and from
site.
The Company continued to provide support for local schools, community groups as well as clan groups on a cooperative
basis. Logistical and financial reasons, together with social engagement, drives the local purchase of labour and fresh
food for the satisfaction and mutual benefit of the Company and communities.
On 12 August 2021, the Company’s subsidiary, Resource Exploration Pty Ltd (REX), signed a binding but conditional
Share Purchase Agreement (SPA) with Regency Mines Australasia Pty Ltd (Purchaser) to sell 100% of the issued
share capital in REX’s subsidiary, Niugini Nickel Pty Ltd (NN). NN owns 100% of the Wowo Gap Nickel Laterite Project
in Papua New Guinea. Regency Mines Australasia Pty Ltd is a wholly owned subsidiary of Corcel plc. As consideration
for the sale, Corcel is releasing all liabilities and obligations in connection with its AUD $4,761,087 of loans owing by
the Company. The Company will seek to obtain the approval of its Shareholders at a Shareholder meeting to be held
on 8 October 2021. Further details of the proposed transaction, together with an Independent Expert’s Report and
recommendation were included in the Notice of Meeting sent to all shareholders on 8 September 2021.
During the year, the Company acquired a majority interest in the Kabulanywele Nickel Project in Tanzania. The
Company acquired 75% of the issued capital of Eastern Nickel Pty Ltd (ENPL) which in turn holds holds 99% of the
issued capital of Eastern Nickel Tanzania Limited (ENT). ENT holds a 100% interest in the Kabulanywele Nickel Project
(KNP) located approximately 45 km south-west of Mpanda, the administrative centre for the Katavi Region in Western
Tanzania. The KNP comprises 2 x granted Prospecting Licences, PL/11534/2021 and PL/11535/2021, covering
approximately 20.5 square kilometres in total.
The Project is located approximately 35km from the western shore of Lake Tanganyika. The area is part of the western
limb of East African Rift systems. The acquisition of the KNP was undertaken to provide the Company with a dual focus
on nickel and cobalt. Initial exploration activity was conducted on the prospecting licences during the year with company
geologists undertaking a mapping and soils sampling exercise. As a result of the encouraging results from the mapping
and sampling work, the Company has applied for an additional prospecting licence covering approximately 0.27 square
kilometres adjacent to the granted licence areas.
Off-site activity was spent understanding the battery minerals business and the roles nickel and cobalt play in the
various lithium ion battery types. An understanding of end-user’s product requirements continues as a management
focus.
On behalf of the Board, I thank the RMC team for their commitment during the year and my fellow directors for their
support. Most importantly, I thank you, the Shareholders, for your continued support.
Yours sincerely
William Mackenzie
Chairman
RMC ANNUAL REPORT 2021
2
REVIEW OF STRATEGIC INTENT
Resource Mining Corporation Limited (ASX: RMI) (Resource Mining, RMC or the Company) is an innovative, Perth-
based, mineral exploration company with interests in Tanzania and Papua New Guinea (PNG).
The development of the Wowo Gap Nickel/Cobalt Project in south east PNG together with the exploration of the recently
acquired majority interest in the Kabulaywele Nickel Project in Tanzania provides the Company with a dual
project/geographic focus in the nickel and cobalt industries. Recent developments in the world’s nickel industry have
focussed attention on the nickel laterite projects in Africa and the South Pacific.
TANZANIA KABULANYWELE NICKEL PROJECT
As announced to the market on 9th February 2021, the Company acquired a controlling interest in a Nickel Project in
Tanzania. The key points of the acquisition are:
The Company has acquired 75% of the issued capital of Eastern Nickel Pty Ltd (ENPL);
•
• ENPL holds 99% of the issued capital of Eastern Nickel Tanzania Limited (ENT);
• ENT holds a 100% interest in the Kabulwanyele Nickel Project (KNP) located approximately 45 km south west
•
of Mpanda, the administrative centre for the Katavi Region in Western Tanzania
The KNP comprises 2 x granted Prospecting Licences, PL/11534/2021 and PL/11535/2021, covering
approximately 20.5 square kilometres in total.
Figure 1: Transaction Structure
Consideration for the acquisition was entirely share based being the issue of 29,626,735 RMI shares to Kabunga
Holdings Pty Ltd or its nominees (Consideration Shares) to acquire a 75% interest in ENPL (based on the closing price
on 5/2/2021 of $0.016/share, the implied value is $474,028). A 1.5% NSR royalty is payable to Kabunga Holdings Pty
Ltd on future production from the KNP.
The controlling interest in the Kabulwanyele Nickel Project provides the Company with an additional interest in the
Nickel/Cobalt exploration and development arena and spreads the Company’s risk profile from reliance on Papua New
Guinea.
RMC ANNUAL REPORT 2021
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REVIEW OF STRATEGIC INTENT
Kabulwanyele Nickel Project:
The Kabulwanyele Nickel Project, (KNP), is located near the Western border of Tanzania in an area of known nickel
mineralisation. Figure 2 shows the Project location.
KNP
Figure 2 - Project location
An initial exploration program commenced in April 2021and involved comprehensive geological mapping of the
tenement area in conjunction with systematic soils and rock sampling.
Mapping
The geological mapping program concentrated in the area where historical exploration had identified the presence of
Nickel laterite mineralization. Continuous ferruginous siliceous laterites have been mapped in a hilly area which form
three hill grouping. (See Figure 3 and 4 below). Geological interpretation suggests the laterites resulted from the
strongly weathered mafic-ultramafic layered intrusion. The three hills extend for a length of 2.0km NW-SW direction
with an average width of 0.8km. Maximum thickness of laterization was observed on the upper areas of the hills with
laterite horizons thickness ranging between 20 –35m.
RMC ANNUAL REPORT 2021
4
REVIEW OF STRATEGIC INTENT
Figure 3: Ferruginous Siliceous Laterite
Figure 4: Serpentine Saprolitic Laterite
The mapping program identified additional laterite mineralization outside of the granted exploration tenements. RMI
has subsequently filed a new application to cover the newly identified mineralized area. Figure 5 shows the mapped
geology, newly applied license area along with the completed soil sampling locations.
Soil sampling
A total of 264 samples were collected systematically from the project area. The samples have been dispatched SGS
Mwanza for sample preparation and thereafter will be shipped to SGS South Africa for chemical analysis.
New Prospecting License Application
An application for a new and additional prospecting license has been made to cover the area where laterite
mineralization has been identified. (See Figure 5 below for the recent application area). The license application covers
an area of 0.27km2 and essentially includes the majority of identified laterites outside the granted tenements.
RMC ANNUAL REPORT 2021
5
REVIEW OF STRATEGIC INTENT
Figure 5. Mapped Area Including, Geology, Soil Sample Locations and New License Application
Area
Future Work Programs
After receipt and review of the chemical assay results of the soils sampling program and assuming positive results, the
company is planning to conduct an aircore drilling program to test any targets generated from the assay results.
PAPUA NEW GUINEA - WOWO GAP NICKEL/COBALT/ LATERITE PROJECT (the Project): EL 1165 (RMC
100% interest)
PROJECT OVERVIEW
The Project is located 200 kilometres east of the PNG capital Port Moresby and approximately 35 kilometres inland
from the coastal town of Wanigela, situated on Collingwood Bay. The Project hosts significant nickel-cobalt
mineralisation within the laterite profile overlying an ultramafic plateau.
Tenement Status EL 1165
Niugini Nickel Pty Ltd (Niugini Nickel), a 100% owned subsidiary of Resource Mining, is the sole owner of Exploration
Licence 1165. The Exploration Licence consists of 28 sub-blocks with an area of 94.40 square kilometres.
The Exploration Licence for EL1165 expired on 28 February 2020 with a renewal application being submitted and
accepted on 24th February 2020. The first stage of the licence renewal process, the conduct of a Warden’s Court
Hearing has been the subject of cancellations and deferrals during the year from a combination of events including
COVID-19, the declaration of a State of Emergency in PNG as well as a serious local event.
On 28th July 2020, the MRA advised that “the hearing has been adjourned and deferred indefinitely”. Subsequently,
after various dates were set and deferred, the latest hearing date was set to 14 September 2021. The Hearing was
unable to proceed due to the helicopter charter operator cancelling the flight from Port Moresby to Wowo Gap due to
“unforeseen issues arising”. A revised Hearing date has yet to be set. During the period from renewal application on,
the tenement remains in force with the company meeting its obligations under the terms and conditions of the Mining
Act.
RMC ANNUAL REPORT 2021
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REVIEW OF STRATEGIC INTENT
Geology
Wowo Gap is located at the south-eastern end of the Papuan Ultramafic Belt, a complex of peridotite, pyroxenite and
gabbro which form the prominent east-west trending Didana Range.
The most prominent rock types are of the Papuan Ultramafic Belt, which occur as an east trending block through the
Didana Range and are bounded to the east and southeast by the Bereruma Fault. The Bereruma Creek is controlled
by this fault and is positioned in Wowo Gap between the Didana Range to the west and the Goropu Mountains to the
east. In the Didana Range the ultramafic rocks consist of tectonite ultramafics, cumulate ultramafics and gabbro and
granular gabbro.
The tectonite ultramafics crop out at the eastern end of the Didana Range adjacent to and within the western section
of the Wowo Gap Nickel Laterite Project. The Sivai Breccia, co-host of the Wowo Gap mineralisation, flanks the
tectonite ultramafic at the eastern end of the Didana Range adjacent to the Bereruma Fault.
The ultramafic rocks are flanked by younger clastic sediments and basaltic volcanics of the Pliocene Domara River
Conglomerate, the Musa Volcanics and the Silimidi Conglomerate. In the northern foothills of the Didana Range the
Bonua Porphyry is associated with the Musa Volcanics.
The Project area lies within an erosional regime of an east dipping lateritic profile developed over the underlying
ultramafics. The Project area is the physiographic expression of the northeast trending Bereruma Fault.
A complete lateritic profile is preserved, with partial truncation associated with recent drainage systems. The depth of
weathering varies according to rock type and the degree of brecciation. The lateritic profile is typically 10 to 15 metres
thick, occasionally more than 20 metres proximal to the Sivai Breccia.
Mineral Resources
Exploration has outlined mineralisation along the 12-kilometre strike length with a total Indicated and Inferred Mineral
Resource Estimate of 125 million tonnes at 1.06 per cent Nickel (Ni), 0.07 per cent Cobalt (Co). See Table 1 below for
further details.
Mineral Resource
Classification
(JORC 2004)
Indicated
Inferred
Total
Mt
72
53
125
Nickel (%)
Cobalt (%)
1.03
1.09
1.06
0.07
0.06
0.07
Contained Metal
1,325,000 t
83,000 t
Wowo Gap
Table 1 – Mineral Resource Estimate1
COVID-19 and the uncertainty regarding the tenement renewal process had serious negative impacts on the ability to
undertake anything more than basic care and maintenance activities. The requirement to operate under conditions of
initial education with subsequent reinforcement of COVID-19 safe conditions including ‘social distancing’ meant all site-
based personnel learning a new way of working.
Changes to daily routines were implemented along with a process of changes to portage, visitor behaviour, and
education in local villages as to acceptable safe-working practice proved a continuous challenge for many months until
the “new” acceptable operations behaviour was established and accepted by all employees and visitors.
COVID-19 caused lockdowns, travel restrictions both domestic and international, disrupted personal and corporate
lives and resulted in changes to working arrangements both in PNG and in Australia. In addition, with the tenement
under a renewal status, the combination of the two events, resulted in only basic maintenance and general activities
taking place on site.
1 Refer to ASX announcement 14 December 2011, RMC confirms that it is not aware of any new information or data that affects
the information included in that market announcement and that all the material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. RMC’s
policy for Mineral Resources estimates is to have the estimates prepared by a suitably qualified and experienced external
consultant and have these estimates reviewed internally by the Board periodically.
RMC ANNUAL REPORT 2021
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REVIEW OF STRATEGIC INTENT
COVID-19 was the most significant impact/task/focus with considerable management time devoted to the continually
reinforcement of social distancing and safe working practices. In the remote location of EL 1165, little or no Provincial
or National Government support is available. The Company has accepted a role to deliver the messages of COVID-19
firstly on site and secondly to the local villages through the village liaison offer network. Whilst not directly linked to
time/money spent on EL 1165 in the ground, the Company believes that safety of personnel and local residents is
paramount hence the significant and major focus on spreading COVID-19 facts and information.
The normally simple activities of running supply charters to site became a major logistics exercise complete with the
additional documentation required when operating in a COVID-19 environment.
Site Activities
Exploration camp facilities have been maintained and local personnel rotated through regular training programs. The
impact of COVID-19 has been significant in terms of numbers of people on site, social distancing, and general
arrangements with porters. Considering social distancing, work programs have been arranged to tasks involving 2 or 3
people with limited supervision, operators being trained and encouraged to be ‘self-reliant’.
The COVID-19 situation has affected the arrangements casual labour is provided from local villages. With Company
support, a program of offering employment opportunities to as many people as possible on a rotation basis has meant
regular “first-timers” arriving on site. This has been a positive providing opportunities to reinforce the COVID-19
message and provide a platform for continuous improvement in the site training regime.
The extensive campaign of updating all policies and procedures and training manuals completed last year has provided
its worth in the current changed circumstances.
Environmental
Regular environmental investigations were undertaken including the routine monitoring of stream and river flows as
well as routine sampling of water quality. A system of track clearance is routinely undertaken in conjunction with local
landowners to oversee the clearance activity. Where possible, access to sampling points is made from local walking
tracks where the Company maintains the walking paths in good condition for locals as well as site-based personnel.
The impact of COVID-19 restricted the ability to conduct water sampling on the desired frequency basis. However,
amended procedures consistent with COVID-19 practices continued in force as indicated by Figure 6 below, showing
typical testing and measurement location with creek conditions at the time testing was conducted.
Figure 6: Water testing & measurement
Other environmental activity focussed on tailings disposal methods for nickel processing metallurgical practices
reviewed in the associated studies.
Social
The ongoing negative effects from COVID-19 together with the after-effects of severe flooding of the Musa River, the
main transport artery for villages adjacent to EL 1165, resulted in significant increases in requests for assistance from
the local communities. The initial impact of the flooding of the Musa River, was the destruction of many local gardens
and the elimination of a means for many households to feed themselves. In turn, this placed stress on the availability
of local garden produce available for purchase by the Company to provide fresh vegetables and fruit to employees
working in the exploration camps.
RMC ANNUAL REPORT 2021
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REVIEW OF STRATEGIC INTENT
A secondary and perhaps more important impact of the severe flood was the re-routing of the river and the creation of
spoil banks which restricted and, in some cases, eliminated navigable sections of the river. The Musa River is the
transport lifeline for local communities. Without a navigable river, the local people are forced to walk many days to
move from their local villages to the Provincial Capital, Popondetta. Without a navigable river, the Company has no
means of economically arranging the delivery of vital fuel, (petrol and diesel).
The villagers formed work teams to attempt to re-open sections of the river using a variety of equipment including
Company water pumps. Recent bursts of heavy rains have aided the clearance efforts with major sections being re-
opened at the year’s end.
During the year, requests for assistance, specifically for education and health services were received reflecting the on-
going ‘fall-off’ of service delivery by local, provincial and national governments. The requests for assistance with were
for funding, for equipment and for basic facilities. Whilst RMC’s subsidiary company, Niugini Nickel Pty Ltd, provides
an active social engagement policy, the Company is unable to step-in and provide basic government services.
During the SOE, access to Popondetta, was totally restricted. During the SOE, the COVID-19 domestic travel
restrictions caused some minor site manning issues as Company personnel were ‘caught’ in Popondetta unable to
travel home due to quarantine and general travel restrictions. Local villagers sought assistance form the Company to
facilitate communications with family members and officials during what was a difficult communications period.
The Company’s emergency communications protocols were tested during these conditions with mixed success.
Lessons have been learnt and modifications to the protocols instituted and successfully tested in practice and a real-
life situation. Site personnel have appreciated the revised contact protocols as they look to adapt their lives to new
normal.
Reinforcement of the Company’s COVID-19 operations and awareness campaigns together with updated information
regarding COVID-19, is a regular activity. Experience from information sourced from World Health Organisation,
Australian and PNG Government sources, together with regular news information is regularly being shared with
employees and the residents of the villages serving the EL 1165 exploration facilities.
The site-based supervisors together with the Village Liaison Officers, have maintained effective control over the
numbers of people travelling to site. Experience has demonstrated that quite strict controls over the frequency of
portage and numbers of porters has to be a focus for the supervisory personnel.
With satellite internet on site, the Company provides regular updates to local communities regarding Government and
PNG newspaper information to ensure these communities have relevant information that assists in their understanding
of actions being undertaken by the Company.
The National PNG Government implemented a COVID-19 awareness campaign which was rolled out across the
country and when delivered to the villages by the EL 1165 exploration area, served to reinforce the messages provided
by company staff and casual employees. No evidence of the COVID-19 virus infection has been identified in the broad
area surrounding EL 1165.
The Company continued to provide support for local schools, community groups as well as clan groups on a cooperative
basis. Logistical and financial reasons together with social engagement drives the local purchase of labour and fresh
food for the satisfaction and mutual benefit of the company and communities.
Weather Impacts
Adverse weather conditions impacted badly on operations during the second half of the report period. Fuel supply,
essential for equipment operation has been effectively cut-off with changes to the Musa River’s path to the coast. (The
Musa River is the main transport corridor from Embessa, major population centre adjacent to Wowo Project, to Oro
Bay/Popondetta the capital of Oro Province).
Unseasonal rains resulted in flooding of the Musa River with significant changes in its path including major erosion of
riverbanks, causing the river’s path to spread across relatively flat landforms leaving the river wide and very shallow.
This has prevented the passage of all craft including canoes. With limited navigable water, it is not possible to transport
fuel drums from Oro Bay to Embessa.
The flooding of the river caused major problems near the town of Embessa where many of the residents lost +50% of
their gardens, their local food source and the source of fresh vegetables for the operations at Wowo Gap.
Fuel management, weather conditions and COVID-19 restrictions all contributed to reduced on-site activity where
essential operations only were undertaken. By necessity, camp maintenance, access track repair, routine
environmental monitoring and training were the main activities undertaken. With COVID-19 infections being recorded
in Popondetta, considerable time was spent conducting ‘Awareness Lectures’ for the workforce, porters and the
occasional travellers who pass through the exploration area.
RMC ANNUAL REPORT 2021
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REVIEW OF STRATEGIC INTENT
With the Company’s satellite communication links, the local villages rely on the Company to pass on COVID-19
information, a service provided to endeavour to keep local communities up to date.
Planned Disposal of Wowo Gap
On 12 August 2021, the Company’s subsidiary, Resource Exploration Pty Ltd (REX), signed a binding but conditional
Share Purchase Agreement (SPA) with Regency Mines Australasia Pty Ltd (Purchaser) to sell 100% of the issued
share capital in REX’s subsidiary, Niugini Nickel Pty Ltd (NN). NN owns 100% of the Wowo Gap Nickel Laterite Project
in Papua New Guinea. Regency Mines Australasia Pty Ltd is a wholly owned subsidiary of Corcel plc. As consideration
for the sale, Corcel is releasing all liabilities and obligations in connection with its AUD $4,761,087 of loans owing by
the Company. The Company will seek to obtain the approval of its Shareholders at a Shareholder meeting to be held
on 8 October 2021. Further details of the proposed transaction, together with an Independent Expert’s Report and
recommendation were included in the Notice of Meeting sent to all shareholders on 8 September 2021.
Competent Persons Statement
The information in this document that relates to Exploration Results or Mineral Resources is based on information
compiled by Mr Mark Hill, a Competent Person who is a member of the Australian Institute of Geoscientists. Mark Hill
is an employee of Exman Consultancy and has sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Information on the Wowo Gap Nickel Laterite Project was prepared and first disclosed under JORC Code
2004*. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not
materially changed since it was last reported. Mark Hill consents to the inclusion in this report of the matters based
on his information in the form and context in which it appears.
* Refer to ASX announcement 14 December 2011, RMC confirms that it is not aware of any new information or data
that affects the information included in that market announcement and that all the material assumptions and technical
parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially
changed. RMC’s policy for Mineral Resources estimates is to have the estimates prepared by a suitably qualified and
experienced external consultant and have these estimates reviewed internally by the Board periodically.
RMC ANNUAL REPORT 2021
10
DIRECTORS’ REPORT
Your Directors present their report for the financial year ended 30 June 2021.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was mineral exploration in Tanzania and Papua New Guinea.
DIRECTORS
The following persons were Directors of Resource Mining Corporation Limited during the whole of the financial year
and up to the date of this report, unless otherwise stated:
William Mackenzie
Warwick Davies
Zhang Chi
Chairman (Non-Executive)
Managing Director (Executive Director)
Director (Non-Executive)
PARTICULARS OF DIRECTORS AND COMPANY SECRETARY
William (Bill) Mackenzie
Chairman (Non-Executive)
Qualifications: Bachelor of Engineering (Mining); MBA; M AusIMM
Term: Chairman and Director since December 2008
Experience: Mr Mackenzie is a mining engineer with over 40 years of experience in the resources sector with
involvement in the assessment, development and operation of mineral projects both within Australia and overseas. Mr
Mackenzie's experience has included direct operating, senior project management and executive roles with
responsibility for business development, project and business unit management of various Australian and offshore
ventures and from 2001 was Principal of a consulting group that provided specialised, independent technical and
commercial advice to boards, banks and investors involved in the development of resources, energy and infrastructure
projects worldwide. He served as a non-executive Director of ASX listed OM Holdings Limited from 2005 till 2007 and
as Managing Director of a privately owned diversified Australian resource development company from 2007 till 2013.
Since 2015, he has been a director of an Australian subsidiary of a privately owned international investment group.
Interest in Shares and Options in Resource Mining Corporation Limited: 2,092,847 ordinary shares
Special Responsibilities: Mr Mackenzie is a Non-Executive Chairman.
Directorships held in other listed entities current or last 3 years: None.
Zhang Chi (Andy)
Director (Non-Executive)
Qualifications: Mr Zhang has an economics degree from Renmin University in China.
Term: Director since April 2006
Experience: Mr Zhang is Managing Director of Sinom (Hong Kong) Limited and has very extensive experience in the
Iron and Steel Industry in China. Prior to becoming involved in Sinom (Hong Kong) Limited, Mr Zhang held several
positions with the BaoSteel Group, (China’s largest steel maker).
Interest in Shares and Options in Resource Mining Corporation Limited: 136,793,768 ordinary shares held by Sinom
(Hong Kong) Limited of which Mr Zhang is a Director and controlling shareholder.
Special Responsibilities: Mr Zhang is a Non-Executive Director.
Directorships held in other listed entities current or last 3 years: None.
RMC ANNUAL REPORT 2021
11
DIRECTORS’ REPORT (continued)
Warwick Davies
Managing Director
Qualifications: Bachelor of Arts (Economics) and has a Certificate of Chemistry.
Term: Director since August 2004
Experience: Mr Davies has over fifty years’ industry experience in the mining, exploration and manufacturing industries.
He has held a variety of leadership roles in both technical and commercial positions during his extensive career with
BHP, Hamersley Iron, Robe River Mining Co and RMC.
As an independent mining industry consultant since 2001, Mr Davies has worked on a wide variety of assignments
initially in the Iron Ore Industry and more recently in the Non-Ferrous industry with specific emphasis on China. He
brings to the Company, considerable practical and international experience, a strong technical background and an
extensive potential customer contact network. Over the past 10 years, Mr Davies has developed detailed knowledge
of the conduct of business in Papua New Guinea as well as the Nickel and emerging Battery Minerals industry.
Interest in Shares and Options in Resource Mining Corporation Limited: 1,679,437 ordinary shares held directly and
2,655,945 ordinary shares held by related parties.
Special Responsibilities: Mr Davies is responsible for the day-to-day operations of the Group and in particular
Metallurgy, Marketing and Infrastructure.
Directorships held in other listed entities current or last 3 years: Fenix Resources Limited.
Amanda Sparks
Company Secretary
Qualifications: B.Bus, CA, F.Fin
Term: Company Secretary since August 2016
Experience: Ms Amanda Sparks is a Chartered Accountant with over 30 years of resources related financial
experience, both with explorers and producers. Ms Sparks has extensive experience in financial management,
corporate governance and compliance for listed companies.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors held during the year ended
30 June 2021, and the number of meetings attended by each Director.
Warwick Davies
William Mackenzie
Zhang Chi
Board Meetings
Number
eligible to
attend
4
4
4
Number
attended
4
4
-
During the year, the Chairman and Managing Director held various discussions via phone calls and informal meetings,
rather than formal Board meetings. In addition, circular resolutions were used to resolve important matters.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group intends to continue its exploration activities with a view to the commencement of mining operations when
practical. The Group intends to dispose of its subsidiary, Niugini Nickel Pty Ltd, which holds the Wowo Gap Project.
Refer to the Subsequent Events section in this Director’s Report.
For further details refer to Review of Strategic Intent immediately preceding this Directors’ Report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during
the financial year under review not otherwise disclosed in this report or in the consolidated accounts.
DIVIDENDS
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
RMC ANNUAL REPORT 2021
12
DIRECTORS’ REPORT (continued)
ENVIRONMENTAL REGULATIONS
The Group has conducted exploration activities on its mineral tenement. The right to conduct these activities is granted
subject to environmental conditions and requirements. The Group aims to ensure a high standard of environmental
care is achieved and, as a minimum, to comply with relevant environmental regulations. There have been no known
breaches of any of the environmental conditions.
OPERATING AND FINANCIAL REVIEW
Review of Operations
Refer to Review of Strategic Intent immediately preceding this Directors’ Report.
Summary of Financial Position, Asset Transactions and Corporate Activities
A summary of key financial indicators for the Group, with prior period comparison, is set out in the following table:
Cash and cash equivalents held at year end
Net loss for the year after tax
Included in loss for the year:
Finance gain – fair value adjustment of loans
Finance costs – implicit interest on fair value adjustment of loans
Exploration costs
Exploration acquisition costs
Basic loss per share (cents) from continuing operations
Net cash (used in) operating activities
Net cash (used in) investing activities
Net cash from financing activities
During the year:
Year
30 June 2021
$
43,060
(744,820)
Year
30 June 2020
$
43,962
(425,278)
650,125
(419,884)
(219,417)
(474,025)
(0.24)
(303,655)
-
307,822
-
-
(202,436)
-
(0.14)
(257,400)
-
252,633
-
The Company continues to be supported by additional funding from RMC’s largest shareholder, Sinom (Hong
Kong) Limited (Sinom). During the year, Sinom loaned an additional $290,000 to the Company. This funding is
interest free and unsecured.
- On 13 November 2020, the Company elected to redeem the two convertible notes for a total of $2,000,000 in
accordance with clause 8.3(g) of Schedule 2 of the Facility and Note Deed dated 14 October 2014, and the letters
of amendment dated 9 December 2016, 15 October 2018 and 1 October 2019 between RMC and Sinom. Sinom
agreed to loan RMC $2,000,000 in accordance with a new unsecured loan agreement for the purpose of
redemption of the two convertible loan notes.
Also in November 2020, RMC documented with Sinom the terms of previous loan funds made by Sinom during
the period 8 June 2017 to 17 February 2020 totalling AUD 1,051,087 (Loan C). On 17 November 2020, Sinom
assigned Loans C and D to Corcel plc, an unrelated UK company listed on AIM.
- On 9 February 2021, the Company announced that it had agreed to acquire 75% of the issued capital of Eastern
Nickel Pty Ltd (ENPL), an Australian company. The remaining 25% is held by Kabunga Holdings Pty Ltd. On 11
February 2021 the transaction was completed and the consideration for the acquisition being 29,626,735 RMI
shares were issued (valued at $474,028 at the closing price on 5 February 2021 of $0.016). The shares were
escrowed for six months from the date of issue to 11 August 2021.
ENPL holds 99% of the shares in Tanzanian subsidiary, Eastern Nickel Tanzania Limited (ENT). The remaining
1% is held by Leticia Herman Kabunga, a Tanzanian resident. ENT holds a 100% interest in the Kabulwanyele
Nickel Project (KNP) located approximately 45 km south west of Mpanda, the administrative centre for the Katavi
Region in Western Tanzania. The KNP comprises 2 x granted Prospecting Licences, PL/11534/2021 and
PL/11535/2021, covering approximately 20.5 square kilometres in total. The KNP covers part of the Ubendian
rock system of lower Proterozoic rocks, comprising mainly of acidic gneisses, granulites, amphibolites and
ultramafic rocks. Laterite hills at Kabulwanyele are prospective for nickel, cobalt and manganese. The area has
not been subject to modern exploration.
RMC ANNUAL REPORT 2021
13
DIRECTORS’ REPORT (continued)
SHARE OPTIONS
As at the date of this report, there are no listed or unlisted options over unissued ordinary shares in the Resource
Mining Corporation Limited.
REMUNERATION REPORT (Audited)
The Directors present the 2021 Remuneration Report, outlining key aspects of Resource Mining Corporation’s
remuneration policy and framework, together with remuneration awarded this year.
The report is structured as follows:
A. Key management personnel (KMP) covered in this report
B. Remuneration policy, link to performance and elements of remuneration
C. Contractual arrangements of KMP remuneration
D. Remuneration of key management personnel
E.
Equity holdings and movements during the year
F. Other transactions with key management personnel
G. Use of remuneration consultants
H. Voting of shareholders at last year’s annual general meeting
A. KEY MANAGEMENT PERSONNEL (KMP) COVERED IN THIS REPORT
For the purposes of this report key management personnel of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including
any Director (whether Executive or otherwise).
Key Management Personnel during the Year
Non-Executive Directors
William Mackenzie
Zhang Chi
Executive Directors
Warwick Davies
–
–
–
Non-executive Chairman (from December 2008)
Non-Executive Director (from April 2006)
Managing Director (from August 2004)
B. REMUNERATION POLICY, LINK TO PERFORMANCE AND ELEMENTS OF REMUNERATION
The Board’s policy is to remunerate Directors, officers and employees at market rates for companies of similar size and
industry, for time, commitment and responsibilities. The Board determines payment to the Directors and reviews their
remuneration as required, based on market practice, duties and accountability. Independent external advice is sought
when required. The maximum aggregate amount of Directors’ fees that can be paid is subject to approval by
shareholders in general meeting, from time to time. Fees for Non-Executive Directors are not linked to the performance
of the Group. However, to align Directors’ interests with shareholders’ interests, the Directors are encouraged to hold
securities in the Company.
The remuneration of Non-Executive Directors is set by reference to payments made by other companies of similar size
and industry, and by reference to the Director’s skills and experience, and for the Reporting Period included a
consideration of the financial restrictions in place on the Company.
Remuneration policy and framework
The Company's policy on remuneration clearly distinguishes the structure of Non-Executive Directors’ remuneration
from that of executive Directors and senior executives. The remuneration of Non-Executive Directors is set by reference
to payments made by other companies of similar size and industry, and by reference to the Director’s skills and
experience, and for the Reporting Period included a consideration of the financial restrictions in place on the Company.
Given the financial restrictions placed on it, the Company may consider it appropriate to issue unlisted options to Non-
Executive Directors, subject to obtaining the relevant approvals. The Remuneration Policy is subject to annual review.
The maximum aggregate amount of fees (including superannuation payments) that can be paid to Non-Executive
Directors is subject to approval by shareholders at general meeting. The maximum aggregate Directors' fees payable
to non-executive Directors is $250,000 per annum as approved by the shareholders at the 2020 AGM on 11 December
2020 (stated in section 14.8 of the constitution adopted at that meeting).
Executive pay and rewards may consist of a base salary and performance incentives. Long term performance
incentives may include options granted at the discretion of the Board and subject to obtaining the relevant approvals.
The grant of options, when made, are designed to recognise and reward efforts as well as to provide additional incentive
RMC ANNUAL REPORT 2021
14
DIRECTORS’ REPORT (continued)
and may be subject to the successful completion of performance hurdles. Executives are offered a competitive level of
base pay at market rates (for comparable companies) and are reviewed to ensure market competitiveness.
There are no termination or retirement benefits for Non-Executive Directors (other than superannuation).
Relationship between remuneration and the Group’s performance
The Company does not pay any performance-based component of salaries.
Non-Executive Directors’ Remuneration
Non-Executive Directors’ remuneration consists of base fees (inclusive of superannuation) and is currently set at
$50,000 per annum for the Chairman. The Directors are entitled to reimbursement of out-of-pocket expenses incurred
whilst on Company business.
C. CONTRACTUAL ARRANGEMENTS OF KMP REMUNERATION
On appointment to the board, all non-executive directors enter into a service agreement with the Company in the form
of a letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the
office of director. Remuneration and other terms of employment for the executive directors and the other key
management personnel are formalised in service agreements.
Executive Directors
Mr Warwick Davies, Managing Director, is responsible for the day-to-day operations of the Group. The Group has an
agreement with Fairstone Holdings Pty Ltd* to provide the services of Mr Davies to the Company in relation to its
activities on normal commercial terms and conditions, which are detailed as follows:
Terms of Agreement
Remuneration excluding GST
Termination benefit
Agreement commenced 31 August
2011 for 3 years, extended to 31
March 2016.
Services continue to be provided
under
this agreement since 31
March 2016.
$14,400 per calendar month based on a minimum of
216 business days per annum plus $100 per hour
there-after.
However, to assist in reducing costs, Mr Davies has
not invoiced the minimum monthly amount, and
instead charged his time at $100/hour, which has
resulted in a significantly lower monthly cost for the
Company.
3 months notice
*Mr Davies is a Director and shareholder of Fairstone Holdings Pty Ltd.
D. REMUNERATION OF KEY MANAGEMENT PERSONNEL
The total remuneration paid to Key Management Personnel is summarised below:
2021
Short-term benefit
Name
Salary and
Fees
Cash
Bonus
W Mackenzie1
W Davies2
Zhang C3
Totals
$
50,000
106,957
-
156,957
$
-
-
-
-
Non-
Monetary
Benefit
$
-
-
-
-
2020
Short-term benefit
Name
Salary and
Fees
Cash
Bonus
W Mackenzie1
W Davies2
Zhang C3
Totals
$
50,000
89,127
-
139,127
$
-
-
-
-
Non-
Monetary
Benefit
$
-
-
-
-
Post-
employment
Benefits
Super-
annuation
Share-
based
payments
Shares
$
$
-
-
-
-
-
-
-
-
Post-
employment
Benefits
Super-
annuation
Share-
based
payments
Shares
$
$
-
-
-
-
-
-
-
-
Total
$
50,000
106,957
-
156,957
Total
$
50,000
89,127
-
139,127
RMC ANNUAL REPORT 2021
15
DIRECTORS’ REPORT (continued)
1. Mr Mackenzie’s fees for the period July 2016 to June 2021 are unpaid as at 30 June 2021 (total $300,000).
2. Mr Davies’ fees for the period May 2015 to June 2021 are unpaid as at 30 June 2021 (total $622,400 excluding GST).
3. Mr Zhang Chi elected not to receive any Director’s fees effective 1 July 2014.
Long term benefits and termination benefits paid for the year were nil (2020: nil).
During the year, no share-based payments were made (2020: none).
E. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
Share holdings of key management personnel (Includes shares held directly, indirectly and beneficially)
30 June 2020
Directors
W Davies
W Mackenzie
Zhang C
Totals
Balance
At the
beginning of
the Year
4,335,382
2,092,847
136,793,768
143,221,997
Granted as
Remuneration
On-market
Sale
Balance
30 June 2021
-
-
-
-
-
-
-
-
4,335,382
2,092,847
136,793,768
143,221,997
There are no options on issue as at year end.
F. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Office Usage
Warwick Davies, Director, is also shareholder and Director of Fairstone Holdings Pty Ltd (Fairstone). During the year,
Fairstone provided office usage to the Company amounting to $4,080 for the year ended June 2021.
Advances from Managing Director
These advances are interest free and unsecured. Mr Davies has agreed not to call for the outstanding payable
balances prior to 30 September 2022 unless Resource Mining Corporation Limited is in a position to repay the amounts.
During the 2020/2021 year, the Managing Director advanced a total of $18,953 (interest free) and $29,234 was repaid
by the Company during the year (2020: advances made to the Company $30,190, and $16,057 repaid).
Convertible notes
On 13 November 2020, the Company elected to redeem the two convertible notes for a total of $2,000,000 in
accordance with clause 8.3(g) of Schedule 2 of the Facility and Note Deed dated 14 October 2014, and the letters of
amendment dated 9 December 2016, 15 October 2018 and 1 October 2019 between RMC and Sinom. Sinom agreed
to loan RMC $2,000,000 in accordance with a new unsecured loan agreement for the purpose of redemption of the two
convertible loan notes. On 17 November 2020, Sinom assigned this loan (Loan D) to Corcel plc, an unrelated UK
company listed on AIM.
Sinom (Hong Kong) Limited is an entity of which Mr Zhang, a Director of RMC, is a Director and controlling shareholder.
Unsecured loans and advances due to Sinom
Movement - Unsecured loans and advances due to Sinom
Opening balance
New loan to repay convertible notes
Assignment of loans to Corcel plc
Other advances
Closing balance - undiscounted
2021
$
1,126,087
2,000,000
(3,051,087)
290,000
365,000
2020
$
2,597,587
-
(1,710,000)
238,500
1,126,087
In November 2020, RMC documented with Sinom the terms of previous loan funds made by Sinom during the period
8 June 2017 to 17 February 2020 totalling AUD 1,051,087 (Loan C). On 17 November 2020, Sinom assigned Loans
C and D to Corcel plc, an unrelated UK company listed on AIM.
Sinom has also provided additional interest free advances to the Company. During the year these advances totalled
$290,000. These advances are unsecured with no set repayment date. Sinom has agreed not to call for repayment of
these advances unless RMC is in a position to repay the amounts.
RMC ANNUAL REPORT 2021
16
DIRECTORS’ REPORT (continued)
Other transactions
There were no other transactions with key management personnel during the year.
G. USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by the Company during the year.
H. VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
The Company received 100% of ‘yes’ votes for its remuneration report for the 2020 financial year and did not receive
any specific feedback at the AGM or throughout the year on its remuneration practices.
This is the end of audited remuneration report.
INDEMNIFICATION ANF INSURANCE OF DIRECTORS AND OFFICERS
The Company does not have insurance for Directors and Officers of the Company.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Resource
Mining Corporation Limited support and adhere to the principles of corporate governance. Please refer to the
for details of corporate governance policies: http://resmin.com.au/corporate/corporate-
Company’s website
governance/.
AUDITOR
BDO Audit (WA) Pty Ltd was appointed auditors in November 2012 in accordance with section 327 of the Corporations
Act 2001.
NON-AUDIT SERVICES
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence in accordance with APES 110: Code
of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
BDO Corporate Finance (WA) Pty Ltd were paid fees for non-audit services totalling $22,660 during the year ended 30
June 2021.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration is included after the Auditor’s Report in this annual report.
MATTERS SUBSEQUENT TO THE END OF FINANCIAL YEAR
Subsequent to year end, the following occurred:
-
The Company has received an additional $110,000 of funding from Sinom (Hong Kong) Limited;
- On 12 August 2021, the Company’s subsidiary, Resource Exploration Pty Ltd (REX), signed a binding but
conditional Share Purchase Agreement (SPA) with Regency Mines Australasia Pty Ltd (Purchaser) to sell 100%
of the issued share capital in REX’s subsidiary, Niugini Nickel Pty Ltd (NN). NN owns 100% of the Wowo Gap
Nickel Laterite Project in Papua New Guinea. Regency Mines Australasia Pty Ltd is a wholly owned subsidiary
of Corcel plc. As consideration for the sale, Corcel is releasing all liabilities and obligations in connection with its
AUD $4,761,087 of loans owing by the Company. The Company will seek to obtain the approval of its
Shareholders at a Shareholder meeting to be held on 8 October 2021. Further details of the proposed transaction,
together with an Independent Expert’s Report and recommendation were included in the Notice of Meeting sent
to all shareholders on 8 September 2021;
- On 6 September 2021, the Company announced that Corel plc (Corcel) has agreed to extend the repayment dates
of debt tranches A to C to 31 October 2021 to allow the Company time to obtain Shareholder approval for the
divestment of the Wowo Gap Project;.and
-
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential
future impact after the reporting date. The situation is rapidly developing and is dependent on measures imposed
by governments, such as maintaining social distancing requirements, quarantine, travel restrictions and any
economic stimulus that may be provided.
RMC ANNUAL REPORT 2021
17
DIRECTORS’ REPORT (continued)
There are no other matters or circumstances that have arisen since 30 June 2021 that have or may significantly affect
the operations, results, or state of affairs of the Group in future financial years.
Signed in accordance with a resolution of the Directors
Warwick Davies
Managing Director
Dated at Perth 30th day of September 2021
RMC ANNUAL REPORT 2021
18
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2021
Other Income
Finance Income – fair value adjustment of loans
Interest income
Total other income
Expenses
Administration and corporate expenses
Exploration expenditure
Exploration expenditure – acquisition costs
Borrowing costs
Total expenses
LOSS BEFORE INCOME TAX
Note
11(c)
2(a)
2(b)
2(c)
2(d)
Consolidated
2021
$
650,125
-
650,125
(280,433)
(219,417)
(474,025)
(421,070)
(1,394,945)
(744,820)
2020
$
-
103
103
(221,383)
(202,436)
-
(1,562)
(425,381)
(425,278)
INCOME TAX BENEFIT / (EXPENSE)
4
-
-
LOSS AFTER INCOME TAX FOR THE YEAR
(744,820)
(425,278)
Total loss is attributable to:
Owners of Resource Mining Corporation Limited
Non-Controlling Interests
OTHER COMPREHENSIVE PROFIT/(LOSS)
Items that maybe re-classified to profit or loss
Exchange translation difference
15
(733,705)
(11,115)
(744,820)
14
(16,601)
OTHER COMPREHENSIVE PROFIT/(LOSS)
(16,601)
(425,278)
-
(425,278)
(808)
(808)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(761,421)
(426,086)
Total comprehensive loss is attributable to:
Owners of Resource Mining Corporation Limited
Non-Controlling Interests
(750,306)
(11,115)
(761,421)
(426,086)
-
(426,086)
LOSS PER SHARE FOR THE YEAR ATTRIBUTABLE TO
THE MEMBERS OF RESOURCE MINING CORPORATION
LIMITED
Basic and diluted loss per share (cents per share)
3
(0.24)
(0.14)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
RMC ANNUAL REPORT 2021
19
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2021
CURRENT ASSETS
Cash and cash equivalents
Receivables and other current assets
Total Current Assets
NON CURRENT ASSETS
Plant and equipment
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing liabilities
Non-interest bearing liabilities
Provisions
Total Current Liabilities
TOTAL LIABILITIES
Note
Consolidated
30 June
2021
$
30 June
2020
$
5
7
8
9
10
11
12
43,680
22,097
65,777
75,014
75,014
43,962
19,200
63,162
95,531
95,531
140,791
158,693
1,098,212
2,854
4,901,075
33,655
898,708
5,956
4,912,427
38,149
6,035,796
5,855,240
6,035,796
5,855,240
NET ASSETS / (NET ASSET DEFICIENCY)
(5,895,005)
(5,696,547)
EQUITY
Issued capital
Reserves
Accumulated losses
Capital and reserves attributable to owners of Resource
Mining Corporation Limited
Non-controlling interests
13
14
15
63,768,599
262,392
(69,914,883)
63,294,571
585,555
(69,576,673)
(5,883,892)
(5,696,547)
(11,113)
-
TOTAL EQUITY / (DEFICIENCY IN EQUITY)
(5,895,005)
(5,696,547)
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
RMC ANNUAL REPORT 2021
20
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2021
Group
Issued Capital
Accumulated
Losses
Reserves
$
$
$
Non-
controlling
Interests
$
Total
$
Year ended 30 June 2021
Balance at 1 July 2020
Loss for the year
Other comprehensive loss for the
year
Total comprehensive
profit/(loss) for the year
Transfer of convertible notes
reserve to accumulated losses
Transactions with owners in
their capacity as owners
Shares issued
Fair value adjustment to related
party borrowings
63,294,571
-
(69,576,673)
(733,705)
585,555
-
-
(11,115)
(5,696,547)
(744,820)
-
-
-
-
(16,601)
-
(16,601)
(733,705)
395,495
(16,601)
(395,495)
(11,115)
-
(761,421)
-
474,028
-
-
-
-
88,933
2
-
474,030
88,933
Balance at 30 June 2021
63,768,599
(69,914,883)
262,392
(11,113)
(5,895,005)
Year ended 30 June 2020
Balance at 1 July 2019
Loss for the year
Other comprehensive loss for the
year
Total comprehensive
profit/(loss) for the year
Transactions with owners in
their capacity as owners
Shares issued
63,294,571
-
(69,151,395)
(425,278)
586,363
-
-
-
-
-
(425,278)
(808)
(808)
-
-
Balance at 30 June 2020
63,294,571
(69,576,673)
585,555
-
-
-
-
-
-
(5,270,461)
(425,278)
(808)
(426,086)
-
(5,696,547)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
RMC ANNUAL REPORT 2021
21
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2021
Note
Consolidated
2021
$
2020
$
CASH FLOWS FROM OPERATION ACTIVITIES
Payments to suppliers and employees
Interest income received
Other income received, including GST refunds
Interest expense/finance costs paid
Net Cash Utilised In Operating Activities
6(a)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of other fixed assets
Net Cash Utilised In Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
(320,195)
-
17,726
(1,186)
(303,655)
(279,479)
103
23,883
(1,907)
(257,400)
-
-
-
-
Proceeds from borrowings and advances
Repayment of borrowings and advances
Net Cash From Financing Activities
6(b)
6(b)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the end of the year
5
337,056
(29,234)
307,822
4,167
43,962
(4,449)
43,680
268,690
(16,057)
252,633
(4,767)
49,962
(1,233)
43,962
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
RMC ANNUAL REPORT 2021
22
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated statements and notes represent those of Resource Mining Corporation Limited (“Company”) and
controlled entities (the “Group”). Resource Mining Corporation Limited is a listed public company, incorporated and
domiciled in Australia.
The financial report was authorised for issue on 30 September 2021 by the Board of Directors.
(a)
Basis of Preparation and Accounting Policies
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. The Group is a for profit entity for financial reporting
purposes under Australian Accounting Standards. The financial report has also been prepared on a historical cost
basis.
Material accounting policies adopted in the preparation of this financial report are presented below and have been
consistently applied to all years presented, unless otherwise stated.
The consolidated financial statements are presented in Australian dollars. The functional currency of Resource Mining
Corporation Limited and its subsidiaries is Australian dollars, except for Niugini Nickel Pty Ltd whose functional currency
is Papua New Guinean Kina and Eastern Nickel Tanzania whose function currency is Tanzanian Shillings.
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board.
(c)
Going Concern
The financial report has been prepared on a going concern basis, which assumes continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group has incurred a net loss after tax for the year of $744,820 (2020: $425,278), experienced net cash outflows
from operating activities of $303,655 (2020: $257,400) for the year ended 30 June 2021 and had a working capital
deficiency of $5,970,019 at balance date.
The ability of the Group to continue as a going concern is dependent on the realisation of value of the Group’s projects,
the future successful raising of funding through equity or other available forms of funding and continued support from
its creditors and financiers. These conditions indicate a material uncertainty that may cast a significant doubt about
the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The Directors believe there are reasonable grounds to believe that the Company will be able to meet the entity’s working
capital requirements as at the date of this report.
The financial statements have been prepared on the basis that the Group is a going concern, which contemplates the
continuity of normal business activity, realisation of assets and settlement of liabilities for the following reasons:
•
•
•
The Directors have assessed the cash flow requirements for the 12 month period from the date of approval of the
financial statements and its impact on the Group and have confirmed that Sinom (Hong Kong) Limited will
continue to provide financial support to the Group to meet its liabilities as and when they fall due and keep its
assets in good standing during the next twelve months period (excluding repayment of the Corcel loans);
The working capital deficiency contains amounts not currently owing but that will be due to be settled within the
next 12 months. Prior to these amounts being due and payable, the Directors are in the process of negotiating
settlement for the amounts due to Corcel PLC, as disclosed below; and
Letters of support have been obtained from Sinom (Hong Kong) Limited and the Company’s Directors William
Mackenzie and Warwick Davies to defer amounts owing to them as at 30 June 2021 until the Group has sufficient
funds to repay the debts.
In addition, on 12 August 2021, the Company’s subsidiary, Resource Exploration Pty Ltd (REX), signed a binding but
conditional Share Purchase Agreement (SPA) with Regency Mines Australasia Pty Ltd (Purchaser) to sell 100% of the
issued share capital in REX’s subsidiary, Niugini Nickel Pty Ltd (NN). NN owns 100% of the Wowo Gap Nickel Laterite
Project in Papua New Guinea. Regency Mines Australasia Pty Ltd is a wholly owned subsidiary of Corcel plc.
RMC ANNUAL REPORT 2021
23
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
As consideration for the sale, Corcel is releasing all liabilities and obligations in connection with its AUD $4,761,087 of
loans owing by the Company. The Company will seek to obtain the approval of its Shareholders at a Shareholder
meeting to be held on 8 October 2021. On 6 September 2021, the Company announced that Corel plc (Corcel) has
agreed to extend the repayment dates of debt tranches A to C owed by RMI to 31 October 2021 to allow RMI time to
obtain Shareholder approval for the divestment of the Wowo Gap Project.
Should the entity not be able to continue as a going concern, it may be required to realise its assets and discharge its
liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial
statements and that the financial report does not include any adjustments relating to the recoverability and classification
of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.
(d)
New and Amended Accounting Standards and Interpretations
Early adoption of accounting standards
The Group has not elected to apply any pronouncements before their operative date in the annual reporting year
beginning 1 July 2020.
New and amended standards adopted by the Company
A number of new or amended standards became applicable for the current reporting period for which the Group has
adopted. None of these standards had a material effect on the Group.
New and amended standards not yet adopted by the Group
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The Group’s
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
Group, are set out below.
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current
AASB 2020-1 makes amendments to AASB 101 Presentation of Financial Statements to clarify requirements for the
presentation of liabilities in the statement of financial position as current or noncurrent. A liability is classified as current
if the entity has no right at the end of the reporting period to defer settlement for the liability for at least 12 months after
the reporting period. The AASB recently issued amendments at AASB 101 to clarify the requirements for classifying
liabilities as current. Specifically: • clarifying that the classification of a liability as either current or non-current is based
on the entity’s rights at the end of the reporting period; • stating that management’s expectations around whether they
will defer settlement or not does not impact the classification of the liability; • adding guidance about lending conditions
and how these can impact classification; and • including requirements for liabilities that can be settled using an entity’s
own instruments. This new standard is not expected to impact the Group’s reporting.
There are no other material new or amended standards not yet adopted by the Group.
(e)
Significant Accounting Estimates and Judgements
Estimates and judgements incorporated into the financial report are continually evaluated and are based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and within the Group.
Commitments - Exploration
The Group has certain minimum exploration commitments to maintain its right of tenure to its’ exploration permits.
These commitments require estimates of the cost to perform exploration work required under this permit.
Asset acquisition
The Group has determined that the acquisition of Eastern Nickel Pty Ltd is deemed to be an asset acquisition not a
business combination. In assessing the requirements of AASB 3 Business Combinations, the Group has determined
that the assets acquired do not constitute a business. The assets acquired consists of mineral exploration tenements.
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying
amount based on their relative fair values in the purchase transaction and no deferred tax will arise in relation to the
acquired asset as the initial recognition exemption for deferred tax under AASB 112 applies. No goodwill will arise on
the acquisition. The acquisition cost has been expensed in line with the Group’s accounting policy for acquisition costs.
Discount rate on borrowings
As some of the Company’s borrowings are on interest-free terms, present value calculations have been performed on
the basis of an implied 14% discount rate as determined by the Directors.
RMC ANNUAL REPORT 2021
24
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
Coronavirus (COVID-19) Pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the Group based on known information. Currently there is no significant impact upon the financial statements
or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the
reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
(f)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Resource Mining
Corporation Limited (“Company” or “Parent Entity”) as at 30 June each year and the results of all subsidiaries for the
year then ended. Resource Mining Corporation Limited and its subsidiaries together are referred to in these financial
statements as the “Group”.
Subsidiaries are all entities (including structured entities) over which the Company has control. The Company controls
an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that
control ceases.
All inter-group balances and transactions between entities in the Group, including any unrealised profits or losses, have
been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with those adopted by the parent entity.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated Statement
of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Financial Position
respectively.
(g)
Foreign Currency Transaction and Balances
Functional and presentation currency
The functional currency of each of the entities in the Group is measured using the currency of the primary economic
environment in which the entity operates. The Group’s financial statements are presented in Australian dollars which
is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Exchange differences arising on the transaction of monetary items are recognised in the Statement of Profit or Loss
and Other Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss is directly recognised in equity, otherwise the exchange differences are recognised in the Statement
of Profit or Loss and Other Comprehensive Income.
Controlled entities
The financial results and position of foreign operations whose functional currency is different from the presentation
currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the foreign currency
translation reserve in the Statement of Financial Position. These differences are recognised in the Statement of Profit
or Loss and Other Comprehensive Income in the period in which the operation is disposed of.
RMC ANNUAL REPORT 2021
25
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
2. EXPENSES
Exploration and Evaluation Expenditure
Exploration expenditure is expensed to the profit or loss statement as and when it is incurred and included as part of
cash flows from operating activities. Acquisition costs are expensed to the profit or loss statement as and when it is
incurred and included as part of cash flows from investing activities. Restoration, rehabilitation and environmental costs
necessitated by exploration and evaluation activities are expensed as incurred and treated as exploration and
evaluation expenditure.
The Group has one exploration licence in PNG, and two tenements in Tanzania .
Borrowing Costs
Refer to the accounting policy notes under Interest Bearing Liabilities and Non-Interest Bearing Liabilities.
(a) Administration and Corporate Expenses
Compliance and regulatory expenses
Consultants
Non-Executive directors’ fees
Occupancy
Insurance
Legal fees
Other expenses
(b) Exploration Expenditure
Depreciation – exploration equipment
Other exploration and project costs
(c) Exploration expenditure – acquisition costs
Acquisition of Tanzanian project – refer note 15
(d) Borrowing costs
Finance costs - implicit interest on fair value adjustments of Sinom
loans – refer note 11(b)
Finance costs – implicit interest on fair value adjustments of Corcel
loans – refer note 11(c)
Finance charges on insurance funding
Consolidated
2021
$
75,597
105,398
50,000
23,265
7,167
16,923
2,083
280,433
9,348
210,069
219,417
484,025
20,156
399,728
419,884
1,186
421,070
2020
$
79,337
52,440
50,000
23,012
14,369
56
2,169
221,383
14,243
188,193
202,436
-
-
-
-
1,562
1,562
3.
LOSS PER SHARE
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company,
excluding any 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 adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest 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.
Basic and diluted loss per share (cents per share)
Loss used in the calculation of weighted average basic and diluted
loss per share
2021
(0.24)
(733,705)
Number of
shares
2020
(0.14)
(425,278)
Number of
shares
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic and diluted loss per share
307,549,857
296,267,347
RMC ANNUAL REPORT 2021
26
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
4.
INCOME TAX
The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or
disallowable items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting
date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising
between the tax bases of assets and liabilities and their carrying amount in the financial statements. No deferred income
tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there
is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply
to the period when the asset is realised or liability is settled. Deferred tax is credited in the Statement of Profit or Loss
and Other Comprehensive Income except where it relates to items that may be credited directly to equity, in which case
the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary difference can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the
law.
(a) Income Tax Expense
A reconciliation of income tax (benefit) / expense applicable to
accounting profit before income tax at the statutory income tax rate to
income tax expense at the Company’s effective income tax rate is as
follows:
Loss before tax
Prima facie income tax (benefit) @ 30%
Add:
Non deductible expenses
Temporary differences and losses not recognised
Tax differential
Income tax (benefit) / expense attributable to operating loss
Tax Consolidation
Consolidated
2021
$
2020
$
(744,820)
(223,446)
22,567
235,388
(34,509)
-
(425,278)
(127,583)
2,775
164,314
(39,506)
-
The Company and its 100% owned subsidiaries have formed a tax consolidated group. Under the tax consolidation
regime, all members of a tax consolidated group are jointly and severally liable for the tax consolidated group’s income
tax liabilities. The head entity of the tax consolidated group is Resource Mining Corporation Limited.
(b) Net Deferred Tax Assets Not Recognised Relate to the Following:
Unrecognised deferred tax assets / (liabilities):
Deferred Tax Assets/(Liabilities) – Other Timing Differences, net
Deferred Tax Assets - Capital losses
Deferred Tax Assets - Tax losses – Australia*
Deferred Tax Assets - Tax losses –Tanzania *
Deferred Tax Assets – Exploration tax losses - PNG**
6,900
465,432
6,416,790
12,965
7,048,272
5,610
465,432
6,285,940
-
6,958,290
13,950,359
13,715,272
* The tax losses do not expire under current legislation. Deferred tax assets have not been recognised in respect of
these items because it is not probable that future taxable profit will be available against which the Company can utilise
the benefits.
** Includes all carry forward Exploration Expenditure for PNG (these losses expire 20 years after being incurred).
RMC ANNUAL REPORT 2021
27
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less and less bank overdraft, if any.
Cash at bank and on hand
Note
Consolidated
2021
$
43,680
2020
$
43,962
6. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation from net loss after tax to the net cash flow
from operating activities
Loss after income tax
Non-Cash Items:
Finance income – fair value adjustment of loans
Finance costs – implicit interest on fair value adjustment of
loans
Depreciation
Acquisition of Tanzanian project
11(c)
2(d)
15
Movement in assets and liabilities
Decrease in trade and other receivables
Increase in trade and other payables
Decrease in interest bearing liabilities
(744,820)
(425,278)
(650,125)
419,884
9,348
474,025
(3,371)
194,506
(3,102)
-
-
14,243
-
(4,875)
158,266
244
Net cash used in operating activities
(303,655)
(257,400)
Non-cash financing and investing activities:
On 9 February 2021, the Company announced that it had agreed to acquire 75% of the issued capital of Eastern Nickel
Pty Ltd (ENPL), an Australian company. The remaining 25% is held by Kabunga Holdings Pty Ltd. On 11 February
2021 the transaction was completed and the consideration for the acquisition being 29,626,735 RMI shares were issued
(valued at $474,028 at the closing price on 5 February 2021 of $0.016). Refer to note 15.
(b) Reconciliation of Net Borrowings and Advances
Net borrowings and advances at 1 July
Cash flows:
Proceeds from borrowings and advances
Repayment of borrowings and advances
Net (gain)/loss on measurement of loans fair value
through equity
Net (gain)/loss on measurement of loans fair value
through profit or loss
Finance costs – implicit interest on fair value adjustments
of loans
Net borrowings and advances as at 30 June
7. RECEIVABLES AND OTHER CURRENT ASSETS
11
4,912,427
4,659,794
337,056
(29,234)
(88,933)
(650,125)
419,884
268,690
(16,057)
-
-
-
4,901,075
4,912,427
11(b)
11(c)
2(d)
11
Receivables are initially recognised at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Current receivables for GST are due for settlement within 30 days (Australian GST) and 12 months for
PNG GST, and other current receivables within 12 months. Cash on deposit is not due for settlement until rights of
tenure are forfeited or performance obligations are met.
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office in Australia and the Internal Revenue Commission in Papua New
Guinea. 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 expenses.
RMC ANNUAL REPORT 2021
28
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
7. RECEIVABLES AND OTHER CURRENT ASSETS - continued
Receivables and payables are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the
taxation authority is included with other receivables or payables.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
Current
Secured cash
Prepayments
GST receivables
Other receivables
Consolidated
2021
$
3,547
984
17,510
56
22,097
2020
$
4,021
4,830
10,349
-
19,200
Secured Cash:
There is a lien over deposit at call of $3,547 (9,357 Kina) to secure a Bank Guarantee of 5,000 Kina to the Mineral
Resources Authority (MRA) in Papua New Guinea.
Fair Value and Risk Exposures:
(i) Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.
(ii) The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security.
(iii) Other receivables generally have repayments between 30 and 90 days, except GST receivable from PNG
(A$10,045) which can be up to 365 days.
Receivables do not contain past due or impaired assets as at year end (2020: none).
8. PLANT AND EQUIPMENT
Each class of plant and equipment is carried at cost, less where applicable, any accumulated depreciation and
impairment losses.
Plant and equipment:
Plant and equipment are measured on historical cost basis less depreciation and impairment losses. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future consolidated benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit or Loss and
Other Comprehensive Income during the financial period in which they are incurred.
Depreciation:
The depreciable amount of all fixed assets is depreciated on a reducing balance commencing from the time the asset
is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset Depreciation Rate
Plant and Equipment 10 – 50%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
RMC ANNUAL REPORT 2021
29
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
8. PLANT AND EQUIPMENT - continued
Cost
Accumulated depreciation
Movement in carrying amounts:
Opening balance
Disposals
Depreciation expense
Currency translation differences
Closing balance
9. TRADE AND OTHER PAYABLES
Consolidated
2021
$
221,825
(146,811)
75,014
2020
$
249,024
(153,493)
95,531
95,531
-
(9,348)
(11,169)
75,014
109,521
-
(14,243)
253
95,531
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 60 days of recognition. Trade and other payables
are presented as current liabilities unless payment is not due within 12 months from the reporting date.
Trade payables
Other payables and accruals
Included in the above are related party payables:
Consolidated
2021
$
679,478
418,734
1,098,212
2020
$
614,701
284,007
898,708
Trade payables and accruals – related parties – refer note 16(b)
994,810
830,826
Fair Value and Risk Exposures
(i) Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
(ii) Trade and other payables are unsecured, non-interest bearing and usually paid within 60 days of recognition,
except for payables to Directors and their related entities for remuneration.
10.
INTEREST BEARING LIABILITIES
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised costs. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit of loss over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan, capitalised as a prepayment and
amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Current
Insurance premium funding
Consolidated
2021
$
2,854
2020
$
5,956
RMC ANNUAL REPORT 2021
30
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
11. NON INTEREST BEARING LIABILITIES
Current
Advances from Managing Director
Unsecured loans and advances – Sinom (discounted)
Unsecured loans and advances – Corcel (discounted)
Convertible notes
Other loan
11(a)
11(b)
11(c)
11(d)
11(e)
Consolidated
2021
$
66,059
296,223
4,510,690
-
28,103
4,901,075
2020
$
76,340
1,126,087
1,710,000
2,000,000
-
4,912,427
(a)
Advances from Managing Director
These advances are interest free and unsecured. Mr Davies has agreed not to call for the outstanding payable
balances prior to 30 September 2022 unless Resource Mining Corporation Limited is in a position to repay the amounts.
During the 2020/2021 year, the Managing Director advanced a total of $18,953 (interest free) and $29,234 was repaid
by the Company during the year (2020: advances made to the Company $30,190, and $16,057 repaid).
(b)
Unsecured loans and advances due to Sinom
In November 2020, RMC documented with Sinom the terms of previous loan funds made by Sinom during the period
8 June 2017 to 17 February 2020 totalling AUD 1,051,087 (Loan C). On 17 November 2020, Sinom assigned Loans
C and D to Corcel plc, an unrelated UK company listed on AIM.
Sinom has also provided additional interest free advances to the Company. During the year these advances totalled
$290,000. These advances are unsecured with no set repayment date. Sinom has agreed not to call for repayment of
these advances unless RMC is in a position to repay the amounts.
For accounting purposes, the value of loans due to Sinom have been discounted by applying a market interest rate of
14% with an assumed repayment date of 31 December 2022. The measurement of the loans at fair value resulted in a
gain of $88,933 recorded in equity to the Capital Contribution Reserve. As a result of the effective interest calculation,
finance costs of $20,156 were recorded during the year ended 30 June 2021.
Movement - Unsecured loans and advances due to Sinom
Opening balance
New loan to repay convertible notes
Assignment of loans to Corcel plc
Other advances
Net (gain)/loss on measurement of loans at fair value through
equity as an increase in Capital Contribution Reserve
Finance costs – implicit interest on fair value adjustments of
loans
Consolidated
2021
$
2020
$
1,126,087
2,000,000
(3,051,087)
290,000
(88,933)
20,156
2,597,587
-
(1,710,000)
238,500
-
-
Closing balance – discounted Sinom loans and advances
296,223
1,126,087
Movement - Unsecured loans and advances due to Sinom
Opening balance
New loan to repay convertible notes
Assignment of loans to Corcel plc
Other advances
1,126,087
2,000,000
(3,051,087)
290,000
2,597,587
-
(1,710,000)
238,500
Closing balance - undiscounted Sinom loans and advances
365,000
1,126,087
RMC ANNUAL REPORT 2021
31
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
11. NON INTEREST BEARING LIABILITIES - continued
(c)
Unsecured loans due to Corcel plc
For accounting purposes, the value of loans due to Corcel have been discounted by applying a market interest rate of
14%. The measurement of the loans at fair value resulted in a gain of $650,125 through profit or loss. As a result of the
effective interest calculation, finance costs of $399,728 were recorded during the year ended 30 June 2021.
Movement - Unsecured loans due to Corcel
Opening balance
Assignment of loans by Sinom
Net (gain)/loss on measurement of loans at fair value on
assignment through profit or loss
Finance costs – implicit interest on fair value adjustments of loans
Closing balance – discounted Corcel loans
The undiscounted underlying loan balances are as follows:
Loans A & B – repayable no earlier than 30/9/2021*
Loan C – repayable no earlier than 30/9/2021*
Loan D – repayable no earlier than 14/01/2022
Closing balance – undiscounted Corcel loans
The key terms agreed are as follows:
Consolidated
2021
$
1,710,000
3,051,087
(650,125)
399,728
4,510,690
1,710,000
1,051,087
2,000,000
4,761,087
2020
$
-
1,710,000
-
-
1,710,000
1,710,000
-
-
1,710,000
•
•
•
The loans are unsecured.
The loans are interest free.
The loans are repayable at any time on or following the dates in the table above forthwith on demand by
Corcel. Corcel must give RMC at least thirty days’ notice prior to any requested repayment date for loans C
and D. RMC may repay the loans, in whole or in part, at any time prior to Corcel providing notice of the
requested repayment date.
* Subsequent to year end, on 6 September 2021, the Company announced that Corel plc (Corcel) agreed to extend
the repayment dates of debt tranches A to C to 31 October 2021 to allow the Company time to obtain Shareholder
approval for the divestment of the Wowo Gap Project.
Corcel plc is an unrelated UK company listed on AIM. On 23 November 2020, Base Asia Pacific Limited, an entity
related to RMC’s Non-Executive Director, Andy Zhang, acquired a 12.69% interest in Corcel.
(d)
Convertible notes
On 13 November 2020, the Company elected to redeem the two convertible notes for a total of $2,000,000 in
accordance with clause 8.3(g) of Schedule 2 of the Facility and Note Deed dated 14 October 2014, and the letters of
amendment dated 9 December 2016, 15 October 2018 and 1 October 2019 between RMC and Sinom. Sinom agreed
to loan RMC $2,000,000 in accordance with a new unsecured loan agreement for the purpose of redemption of the two
convertible loan notes. On 17 November 2020, Sinom assigned this loan (Loan D) to Corcel plc.
(e)
Other loan
Other loan is a facility of USD 30,000 provided by Leticia Kabunga (the 1% shareholder of Eastern Nickel Tanzania
Limited). As at 30 June 2021, A$28,103 had been drawn down. The loan is unsecured, interest free interest free with
the principal to be repaid at 110% of the loan amount. The maturity date is 23 October 2021.
RMC ANNUAL REPORT 2021
32
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
12. PROVISIONS
Compensation Provision
Obligations associated with compensation are recognised when the Group has an obligation which is probable, and
the provision can be measured reliably. The provision is measured at the estimated value of the future expenditure.
The determination of the provision requires judgement in terms of the best estimate of the costs of the compensation
required.
Current
Provision for compensation
The movement during the year was due to currency translations.
13. CONTRIBUTED EQUITY
Consolidated
2021
$
2020
$
33,655
38,149
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds
received.
Issued and fully paid
2021
Number
325,894,082
2020
Number
296,267,347
2021
$
63,768,599
2020
$
63,294,571
Movement in ordinary share capital of the Company:
On 9 February 2021, the Company announced that it had agreed to acquire 75% of the issued capital of Eastern Nickel
Pty Ltd (ENPL), an Australian company. The remaining 25% is held by Kabunga Holdings Pty Ltd. On 11 February
2021 the transaction was completed and the consideration for the acquisition being 29,626,735 RMI shares were issued
(valued at $474,028 at the closing price on 5 February 2021 of $0.016). Refer to note 15.
There were no movements during the prior year.
Options
There are no options on issue as at 30 June 2021 (2020: nil).
Voting and dividend rights
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number
of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands.
Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as
maintains optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
Management may in the future adjust the capital structure to take advantage of favourable costs of capital and issue
further shares in the market. There are no plans to distribute dividends in the next year.
Dividends
The Group did not pay nor declare dividends in the last financial year (2020: nil).
RMC ANNUAL REPORT 2021
33
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
14. RESERVES
Foreign currency reserve
Capital contributions reserve
Convertible notes reserve
(a) Foreign currency reserve
Balance at the beginning of the year
Currency translation differences arising during the period
Balance at the end of the year
Note
(a)
(b)
(c)
Consolidated
2021
$
173,459
88,933
-
262,392
190,060
(16,601)
173,459
2020
$
190,060
-
395,495
585,555
190,868
(808)
190,060
The foreign currency translation reserve is used to record exchange differences arising on translation of the Group
entities that do not have a functional currency of Australian dollars and have been translated into Australian dollars
for presentation purposes.
(b) Capital contributions reserve
Balance at the beginning of the year
Net (gain)/loss on measurement of loans at fair value through
equity as an increase in Capital Contribution Reserve
11(b)
Balance at the end of the year
-
88,933
88,933
-
-
-
The capital contributions reserve is used to record the fair value adjustments of loans from shareholders who have
provided the Company interest free loans and advances.
(c) Convertible notes reserve
Balance at the beginning of the year
Transfer to accumulated losses upon redemption of the notes
Balance at the end of the year
395,495
(395,495)
-
395,495
-
395,495
Consolidated
2021
$
2020
$
15. NON-CONTROLLING INTERESTS
Non-controlling interests
Movement during the year:
Balance at the beginning of the year
Capital invested by non-controlling interests in subsidiaries
Share of loss for the period
Share of other comprehensive loss
Balance at the end of the year
Non-controlling interests represent:
(11,113)
-
2
(11,115)
-
(11,113)
-
-
a 1% interest in Eastern Nickel Limited held by Leticia Herman Kabunga.
A 25% interest in Eastern Nickel Pty Ltd held by Kabunga Holdings Pty Ltd .
RMC ANNUAL REPORT 2021
-
-
-
-
-
-
34
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
15. NON-CONTROLLING INTERESTS - continued
Acquisition of Eastern Nickel Pty Ltd
On 9 February 2021, the Company announced that it had agreed to acquire 75% of the issued capital of Eastern Nickel
Pty Ltd (ENPL), an Australian company. On 11 February 2021 the transaction was completed and the consideration
for the acquisition being 29,626,735 RMI shares were issued (valued at $474,028 at the closing price on 5 February
2021 of $0.016). ENPL holds 99% of the issued shares in the Tanzanian entity, Eastern Nickel Tanzania Limited (ENT).
ENT holds a 100% interest in the Kabulwanyele Nickel Project (KNP). A 1.5% NSR royalty is payable to Kabunga
Holdings Pty Ltd on future production from the KNP. The Consideration Shares were held under a voluntary escrow for
a period of six (6) months following the date of issue of the Consideration Shares, and were released from escrow on
11 August 2021.
Consideration paid – 29,626,735 RMI shares
Less: carrying amount of net assets of Eastern Nickel Group at
acquisition date*
Cost of exploration project acquired - note 2(c)
Consolidated
2021
$
474,028
(3)
474,025
2020
$
-
-
-
* In addition, the Eastern Nickel Group held 2 x granted Prospecting Licences, PL/11534/2021 and PL/11535/2021,
covering approximately 20.5 square kilometres.
Summarised financial information for Eastern Nickel Pty Ltd and its’ 99% owned subsidiary Eastern Nickel Tanzania
Limited is as follows. The amounts disclosed are before inter-company eliminations:
Summarised Statement of Financial Position
Current assets
Current liabilities
Current net assets
Net Assets
Summarised Statement of Comprehensive Income
Revenue
Loss for the period
Other comprehensive income/(loss)
Total comprehensive loss
ated to Non-Controlling Interests
Other comprehensive loss allocated to Non-Controlling
Interests
ther comprehensive loss
Summarised Statement of Cash Flows
Cashflows (used in) operating activities
Cashflows from financing activities
Net increase/(decrease) in cash and cash equivalents
RMC ANNUAL REPORT 2021
3,112
(46,852)
(43,740)
(43,740)
-
(43,164)
(581)
(43,745)
(11,115)
-
(11,115)
(24,991)
28,103
3,112
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
16. RELATED PARTY TRANSACTIONS
Subsidiaries
The consolidated financial statements included the financial statements of Resource Mining Corporation Limited and
the subsidiaries listed in the following table:
Name
Class of
shares
Country of
incorporation
% Interest
Resource Exploration Pty Ltd
Ordinary
Australia
Niugini Nickel Pty Ltd
Ordinary
Australia
Eastern Nickel Pty Ltd
Eastern Nickel Tanzania Limited
*
*
Ordinary
Australia
Ordinary
Tanzania
2021
100%
100%, held by
Resource Exploration
Pty Ltd
75%
99%, held by Eastern
Nickel Pty Ltd
2020
100%
100%, held by
Resource Exploration
Pty Ltd
-
-
* The 75% interest in Eastern Nickel Pty Ltd was acquired during the year. Refer to note 15 for details on the Eastern
Nickel Group.
Ultimate Parent
Resource Mining Corporation Limited is the ultimate Australian parent entity and the ultimate parent of the Group.
Compensation of Key Management Personnel
Short term benefits
Post-employment benefits
Consolidated
2021
$
156,957
-
156,957
2020
$
139,127
-
139,127
This remuneration remains unpaid. Refer to note 16(b) below.
Transactions with Related Parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. The following transactions occurred with related parties:
a) Warwick Davies, Director, is also shareholder and Director of Fairstone Holdings Pty Ltd (Fairstone). During the
year, Fairstone provided office usage to the Company amounting to $4,080 (2020: $4,080).
b) Outstanding balances arising from services
Current payables (included in trade creditors and accruals)
Key management personnel
Consolidated
2021
$
2020
$
994,810
830,826
Outstanding balances relate to remuneration services during 2015 to 2021 (inclusive of GST where applicable).
c) Loans and Advances from related parties
Advances (unsecured and interest free) from related parties
Warwick Davies
Balance at the beginning of the year
Loans/Advances advanced
Repaid
Balance at the end of the year – refer note 11
RMC ANNUAL REPORT 2021
76,340
18,953
(29,234)
66,059
62,207
30,190
(16,057)
76,340
36
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
16. RELATED PARTY TRANSACTIONS - continued
Loans (unsecured and interest free) from related parties
Sinom (Hong Kong) Limited (i)
Balance at the beginning of the year - undiscounted
Advances during the year
New loan to repay convertible notes
Assignment of loans to Corcel
Balance at the end of the year – undiscounted
Note
11(b)
11(b)
11(b)
Consolidated
2021
$
1,126,087
290,000
2,000,000
(3,051,087)
2020
$
2,597,587
238,500
-
(1,710,000)
365,000
1,126,087
(i) Non-Executive Director Mr Zhang Chi is the Managing Director and Shareholder of Sinom (Hong Kong) Limited.
17. PARENT ENTITY DISCLOSURES
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net liabilities
Issued capital
Reserves
Accumulated losses
Total deficiency in equity
Loss for the year
Total comprehensive loss for the year
Parent Entity
2021
$
13,646
-
13,646
2020
$
11,259
-
11,259
5,930,022
5,930,022
5,787,508
5,787,508
(5,916,376)
(5,776,249)
63,768,599
88,933
(69,773,908)
63,294,571
395,495
(69,466,315)
(5,916,376)
(5,776,249)
(703,088)
(703,088)
(393,271)
(393,271)
i) Guarantees: No guarantees have been entered into by the parent entity on behalf of the subsidiaries.
ii) Contingent liabilities: No contingent liabilities exist.
18. CONTINGENCIES
Resource Mining Corporation Limited and its controlled entities do not have any known material contingent assets or
liabilities as at 30 June 2021 other than a 1.5% net smelter royalty is payable to Kabunga Holdings Pty Ltd on future
production from the Kabulwanyele Nickel Project in Tanzania.
19. REMUNERATION OF AUDITORS
Amount received, or due and receivable, by the auditors for:
Auditing and reviewing of financial reports
Other services – corporate finance
RMC ANNUAL REPORT 2021
Consolidated
2021
$
30,728
22,660
53,388
2020
$
37,718
-
37,718
37
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
20. COMMITMENTS
Mineral Tenement Commitments
In order to maintain current rights of tenure to mining tenements, the Group has exploration and evaluation expenditure
obligations up until the expiry of those licences. The following stated obligations are not provided for in the financial
statements and represent a commitment of the Group for both PNG and Tanzania.
Within 1 Year
Later than 1 year but not later than five years
21. FINANCIAL RISK MANAGEMENT
Consolidated
2021
$
27,784
35,216
63,000
2020
$
24,060
16,040
40,100
The Group’s activities expose it to a variety of financial risks, including market risk (including currency risk), credit risk
and liquidity risks. The Group’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the business. To date, the Group has
not used derivative financial instruments. The Group uses different methods to measure different types of risk to which
it is exposed.
Risk Management
Risk management is carried out by the Managing Director under policies approved by the Board of Group’s Directors
and includes evaluation of financial risks. The Board provides principles for overall risk management and the finance
function provides policies with regard to financial risk management that are defined and consistently applied.
(a) Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or contract, leading to
a financial loss. The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting
date, is the carrying amount net of any provisions for impairment of debts, as disclosed in the Statement of Financial
Position and notes to the financial statement. In the case of material cash deposited, credit risk is minimised by
depositing with recognised financial intermediaries such as banks, subject to Australian Prudential Regulation Authority
Supervision. For banks and financial institutions, only independently rated parties with a minimum rating of AA are
accepted.
The Group does not have any material risk exposure to any single debtor or Group of debtors under financial
instruments entered into by it.
(b) Liquidity and Capital Risk
The Group has appropriate procedures in place to manage cash flows including continuous monitoring of forecast and
actual cash flows to ensure funds are available to meet commitments. The objectives when managing the Group’s
capital is to safeguard the business as a going concern, to maximise returns to shareholders and to maintain an optimal
capital structure in order to reduce the cost of capital. The table below analyses the Group’s financial liabilities into
relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date.
6 to 12
months
1 to 5
years
Over 5
years
Financial liabilities
2021
Trade and other payables
Interest bearing liabilities
Less
than 6
months
1,098,212
2,854
-
-
Non-interest bearing liabilities
3,220,249
2,000,000
2020
Trade and other payables
Interest bearing liabilities
4,321,315
2,000,000
898,708
5,956
-
-
Non-interest bearing liabilities
3,202,427
1,710,000
4,107,091
1,710,000
Total
Cash
Flows
Carrying
Value
1,098,212
1,098,212
2,854
2,854
5,220,249
4,901,075
6,321,315
6,002,141
898,708
898,708
5,956
5,956
4,912,427
4,912,427
5,817,091
5,817,091
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
RMC ANNUAL REPORT 2021
38
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
21. FINANCIAL RISK MANAGEMENT - continued
(c)
Interest Rate Risk
The Group’s exposure to market risk for changes in interest rates relates primarily to interest on deposits with banking
institutions. The sensitivities of a movement in interest rates have no material impact on the Group due to the small
balances that are interest bearing.
(d) Foreign Exchange Risk
As a result of operations in Papua New Guinea being denominated primarily in Papua New Guinean Kina, and
operations in Tanzania in both united states dollars and Tanzanian shillings, the Group’s Statement of Financial
Position can be affected by movements in exchange rates. The Group does not hedge this exposure.
The Group manages its foreign exchange risk by constantly reviewing its exposure to commitments payable in foreign
currency and ensuring appropriate cash balances are maintained in Kina, to meet current operational commitments.
The Group’s exposure to foreign exchange risk for changes in exchange rates relates has no material impact on the
Group due to the small balances of cash, receivables and payables.
Management believes the balance date risk exposures are representative of the risk exposure inherent in financial
instruments.
(e) Net Fair Values
Disclosure of fair value measurements by level are as follows:
• Level 1 – the fair value is calculated using quoted prices in active markets
• Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices)
• Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market
data
Fair values of other financial instruments
The carrying value of assets and liabilities, due to their short term nature, are assumed to approximate their fair value
other than the following non-interest bearing liabilities. These borrowings are on interest-free terms, and accordingly
present value calculations have been performed on the basis of an implied 14% discount rate as determined by the
Directors.
Consolidated
Non-interest bearing liabilities measured at fair value –
Level 2
Loan funds provided
Net (gain)/loss on measurement of loans fair value through
equity
Net (gain)/loss on measurement of loans fair value through
profit or loss
Initial recognition of financial liabilities at fair value
Finance costs – implicit interest on fair value adjustments of
loans
11(b)
11(c)
2(d)
Consists of:
Non-interest bearing liabilities – Sinom loans
Non-interest bearing liabilities – Corcel loans
11(b)
11(c)
2021
$
5,126,087
(88,933)
(650,125)
4,387,029
419,884
4,806,913
296,223
4,510,690
4,806,913
RMC ANNUAL REPORT 2021
2020
$
-
-
-
-
-
-
-
-
-
-
39
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2021
_____________________________________________________________________________
22. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Managing Director.
Management has determined the operating segments based on the reports reviewed by the board of directors that
are used to make strategic decisions. The Group does not have any material operating segments with discrete
financial information. The Group does not have any customers and all its’ assets and liabilities are primarily related
to the mining industry and its operations are located within Papua New Guinea and Tanzania. The Tanzanian
operations are not material for the year. The Board of Directors review internal management reports on a regular
basis that is consistent with the information provided in the statement of profit or loss and other comprehensive income,
statement of financial position and statement of cash flows. As a result, no reconciliation is required because the
information as presented is what is used by the Board to make strategic decisions.
23. MATTERS SUBSEQUENT TO THE REPORTING PERIOD
Subsequent to year end, the following occurred:
-
The Company has received an additional $110,000 of funding from Sinom (Hong Kong) Limited;
- On 12 August 2021, the Company’s subsidiary, Resource Exploration Pty Ltd (REX), signed a binding but
conditional Share Purchase Agreement (SPA) with Regency Mines Australasia Pty Ltd (Purchaser) to sell 100%
of the issued share capital in REX’s subsidiary, Niugini Nickel Pty Ltd (NN). NN owns 100% of the Wowo Gap
Nickel Laterite Project in Papua New Guinea. Regency Mines Australasia Pty Ltd is a wholly owned subsidiary
of Corcel plc. As consideration for the sale, Corcel is releasing all liabilities and obligations in connection with its
AUD $4,761,087 of loans owing by the Company. The Company will seek to obtain the approval of its
Shareholders at a Shareholder meeting to be held on 8 October 2021;
- On 6 September 2021, the Company announced that Corel plc (Corcel) has agreed to extend the repayment dates
of debt tranches A to C to 31 October 2021 to allow the Company time to obtain Shareholder approval for the
divestment of the Wowo Gap Project; and
-
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential
future impact after the reporting date. The situation is rapidly developing and is dependent on measures imposed
by governments, such as maintaining social distancing requirements, quarantine, travel restrictions and any
economic stimulus that may be provided.
There are no other matters or circumstances that have arisen since 30 June 2021 that have or may significantly affect
the operations, results, or state of affairs of the Group in future financial years.
RMC ANNUAL REPORT 2021
40
DIRECTOR’S DECLARATION
for the year ended 30 June 2021
1.
In the opinion of the directors:
a) The financial statements and notes are in accordance with the Corporations Act 2001, including:
i)
ii)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance
for the year then ended; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations),
the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
iii) complying with International Financial Reporting Standards (IFRS) as stated in note 1 of the financial
statements; and
b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
This declaration is signed in accordance with a resolution of the Board of Directors.
Warwick Davies
Managing Director
Dated this 30th day of September 2021
RMC ANNUAL REPORT 2021
41
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Resource Mining Corporation Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Resource Mining Corporation Limited (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, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 (c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
42
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.
Accounting for Financing Arrangements
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 11 the Group renegotiated its
Our procedures included, but were not limited to:
financing arrangements during the year. This included
entering into new loans, redeeming convertible notes
and loans being assigned between financiers. Loans
entered into during the year are interest free.
Subsequent to reporting date, on 12 August 2021, the
Group entered into a share purchase agreement to
dispose of its subsidiary which holds the Wowo Gap
Nickel project in consideration for releasing all
liabilities and obligations in connection with loans
owing by the Group to Corcel plc.
This was deemed to be a key audit matter as
accounting for these transactions is complex and
requires estimates in relation to the fair value of the
loans on initial recognition and consideration of the
implication of the proposed disposal.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Understanding and reviewing the nature or types
of loans;
Reviewing board minutes relating to loans and the
proposed disposal;
Assessing the terms and conditions under the Loan
Agreements;
Recalculating the fair value of the loans on initial
recognition including involving our valuation
experts where necessary;
Obtaining confirmation from financiers in respect
of balances owing at reporting date and associated
terms and conditions;
Reviewing the share purchase agreement to
identify any accounting implications for the
financial report for the year ended 30 June 2021;
and
Assessing the appropriateness of the disclosures
included in Note 11 and 23 to the Financial Report.
43
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
44
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 17 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Resource Mining Corporation 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.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 30 September 2021
45
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF RESOURCE MINING
CORPORATION LIMITED
As lead auditor of Resource Mining Corporation Limited for the year ended 30 June 2021, I declare
that, to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Resource Mining Corporation Limited and the entities it controlled
during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
46
ADDITIONAL SHAREHOLDER INFORMATION
Additional information required by the Australian Securities Exchange Listing Rules and not disclosed elsewhere in
this report is set out below. The information is current as at 24 September 2021.
ANALYSIS OF SHAREHOLDING - Ordinary Shares
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – or more
TOTAL
Number of
Holders
493
539
224
499
154
Number of
Shares
177,762
1,478,274
1,741,790
18,032,438
304,463,818
1,909
325,894,082
Shareholders holding less than a marketable parcel
1,480
SUBSTANTIAL SHAREHOLDERS
The following substantial shareholders have notified the Company in accordance with the Corporations Act 2001.
Sinom (Hong Kong) Limited
Kabunga Holdings Pty Ltd
136,793,768
22,220,053
41.97%
6.82%
TOP 20 SHAREHOLDERS
The top 20 largest shareholders are listed below:
Name
SINOM (HONG KONG) LIMITED
KABUNGA HOLDINGS PTY LTD
CENTURY THREE X SEVEN RESOURCE FUND INC
MS NADA SAADE
KEEN MERIT LIMITED
THUNDER LUCK INTERNATIONAL LTD
BEST VENTURE DEVELOPMENT LIMITED
ERCEG ENTERPRISES PTY LTD
TIERRA DE SUENOS SA
CLASSIC ROOFING PTY LIMITED
BRISPOT NOMINEES PTY LTD
MANYAMA MAOTORA MAKWEBA
MR HASHIMU MUSEDEM MILLANGA
MOUNT GIBSON IRON LIMITED
INTUICION INC
CENTURY THREE X SEVEN RESOURCE FUND INC
MR DIMITRIOS GRAIKOS
NICAMA INVESTMENTS PTY LTD
MR ROHAN PATNAIK
MR WILLIAM ROSS MACKENZIE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Number of Shares
136,793,768
22,240,053
10,656,250
10,622,146
10,192,024
8,503,171
8,469,895
8,327,055
5,866,819
% of Shares
41.97
6.82
3.27
3.26
3.13
2.61
2.60
2.56
1.80
5,510,000
4,100,000
3,703,341
3,703,341
3,478,025
3,360,271
3,170,000
3,100,000
3,000,000
2,750,000
2,092,847
1.69
1.26
1.14
1.14
1.07
1.03
0.97
0.95
0.92
0.84
0.64
TOTAL TOP 20 HOLDERS
TOTAL REMAINING HOLDERS BALANCE
TOTAL
259,639,006
66,255,076
325,894,082
79.67%
20.33%
100.00%
RMC ANNUAL REPORT 2021
47
ADDITIONAL SHAREHOLDER INFORMATION
VOTING RIGHTS
Article 13.13 of the Constitution specifies that on a show of hands every member present in person, by attorney or by
proxy shall have:
a)
b)
for every fully paid share held by him one vote
for every share which is not fully paid a fraction of the vote equal to the amount paid on the share over the
nominal value of the shares.
INTEREST IN MINING TENEMENTS
Location
Tenement No.
RMC Interest
Tenement
Wowo Gap
Kabulwanyele
Papua New
Guinea
Tanzania
EL1165*
PL/11534/2021
Kabulwanyele
Tanzania
PL/11535/2021
Kabulwanyele
Tanzania
PL/17691/2021**
* Tenement under renewal.
** Tenement applied for but not yet granted.
100%
75%
75%
75%
RMC ANNUAL REPORT 2021
48