ASX Release
29 September 2023
Annual Report 2023
Attached is the Annual Report for the year ended 30 June 2023 of Resources & Energy
Group Limited.
Authorised for release by the Board.
Warren Kember
Company Secretary
Investor enquiries:
J. Daniel Moore
Chief Executive Officer
E: rjpoole@rezgroup.com.au
P: +61 2 9227 8900
Suite 301 Level 3, 66 Hunter Street Sydney NSW 2000
GPO Box 2537, Sydney NSW 2001
T: +612 9227 8900
E: communications@rezgroup.com.au
W: www.rezgroup.com.au
1
ANNUAL REPORT
30 June 2023
Business Objective
Contents
Corporate Directory
Directors' Report
Mineral Resources & Ore Reserves
Financial Report
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Auditor's Independence Declaration
Independent Auditor's Report
Security Holders' Information
2
3-16
17
18
19
20
21
22-50
51
52
53-56
57-58
Resources and Energy Group Limited (ASX:REZ) is
an independent, ASX-listed mineral resources
explorer, developer and producer, holding mining
leases in Western Australia and Queensland. REZ
aims to develop a portfolio of mining tenements
through to production. REZ is currently focused on
the development of the flagship East Menzies Gold
Project (EMGP) 130km north of Kalgoorlie in
Western Australia. EMGP represents a +100km2
package of contiguous mining, exploration, and
prospecting licenses, which are located within a
significant orogenic lode gold province.
Cover photo
Mining operations at Granny Venn in the East
Menzies Gold Project
Annual Report
June 2023
1
Corporate Directory
Directors
Gavin Rezos
Richard Poole
J Daniel Moore
Company Secretary
Warren Kember
Share Registry
Automic Group
Level 5, 126 Phillip St,
Sydney, NSW 2000
Telephone 1300 288 664/(02) 9698 5414
Email: hello@automicgroup.com.au
Auditor
RSM Australia Partners
Level 13, 60 Castlereagh Street
Sydney, NSW 2000
Stock Exchange Listing
Resources & Energy Group Limited's fully paid
ordinary shares are listed on the Australian
Securities Exchange (ASX:REZ)
Registered Office
Level 3, Suite 301
66 Hunter Street
Sydney, NSW 2000
Telephone +(612) 9227 8900
Facsimile +(612) 9227 8901
ABN: 12 110 005 822
Web site: www.rezgroup.com.au
Solicitor
Steinepreis Paganin
Level 4, 16 Milligan Street
Perth, WA 6000
Bankers
National Australia Bank
255 George Street
Sydney, NSW 2000
Annual Report
June 2023
2
Directors' Report
The directors present their report together with the annual Financial Report of Resources & Energy Group Limited
(Company) and its controlled entities (the Group or consolidated entity) for the year ended 30 June 2023 and the
Independent Audit Report thereon.
Directors
The details of directors of the Company at any time during or since the end of the financial year to the date of this
report are set out below.
Names, qualifications, experience and special responsibilities
Mr Gavin Rezos
Bachelor of Laws, LLB, BA
Chairman, non-executive director, independent
Appointed: 22 April 2016
Completed years of service: 7 years
Mr Rezos has extensive Australian and international investment banking experience and is a former investment
banking Director of HSBC Group with regional roles during his career in London, Sydney and Dubai. Mr Rezos has
held CEO or directorship roles of companies in the technology and resources sectors in Australia, the UK and the
US and was formerly a non-executive director Iluka Resources Limited and of Rowing Australia. He is currently non-
exective deputy Chairman of Vulcan Energy Resources Limited, non-executive Chairman of Kuniko Limited and
principal of Viaticus Capital. Non-executive director positions held during the past 3 years: Vulcan Energy Resources
Limited and Kuniko Limited.
Mr Richard Poole
Bachelor of Laws, Bachelor of Commerce, LLB, ASIA
Director and Chief Executive Officer, non-independent
Appointed: 12 July 2004
Completed years of service: 18 years
Mr Poole commenced his career as a lawyer specialising in mergers and acquisitions. He left the law in 1990 to build
a research and development operation with operations in Japan, USA and Australia and added a manufacturing
company in China in 1994. He successfully built the R&D company from its early stages to a public listed vehicle
raising the necessary capital up to his departure in 1999. Since 1999 he has continued his involvement in fund raising
and the development of companies. He is a principal of Arthur Phillip Pty Limited a corporate advisory firm providing
investment services and he is an experienced corporate advisor and entrepreneur.
Mr J Daniel Moore
Chief Executive Officer and Director, non-independent
Appointed: 14 July 2021
Completed years of service: 2 years
Mr Moore has extensive experience working with emerging companies in natural resources. He has been involved
with Resource & Energy Group’s East Menzies Goldfields since 2013 when it was first listed on the ASX. Daniel is
currently a Director of Marquee Resources (ASX: MQR) and a founder of Koch Metals and Centenario Lithium.
Previously he held Non-Executive Director roles at iCollege (ASX: ICT), Coronado Resources now Race Oncology
(ASX: RAC) and Stratum Metals now Locality Planning Energy (ASX: LPE).
Annual Report
June 2023
3
Directors' Report
Company Secretary
Mr Warren Kember
Bachelor of Commerce, MBA, Dip Applied Finance
Chief Financial Officer and Company Secretary
Completed years of service: 7 years
Mr Kember is the Chief Financial Officer and Company Secretary of the Group and is responsible for directing all
financial, legal and risk management. Mr Kember has significant experience in executive finance having served as
Chief Financial Officer for a number of ASX listed companies in the construction, mining and technology sectors.
Interests in the shares and options of the company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of the Company were:
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Number of
Ordinary
Shares
Number of
Options over
Ordinary
Shares
15,258,700 8,000,000
67,987,302 8,000,000
12,000,000 25,000,000
Directors' meetings
The number of meetings of directors (including meetings of committees of directors) held during the financial year and
the number of meetings attended by each director were as follows:
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Dividends
Directors' meetings
Eligible to
attend
Attended
8 8
8 8
8 8
No dividends have been paid or declared since the end of the previous financial year, nor do the directors
recommend the declaration of a dividend (2022: Nil).
Principal Activities
The principal activities of the Group are to explore and develop suitable mineral deposits, including gold and silver.
The Group had 2 employees at 30 June 2023 (2022: 3 employees).
Operating Results for the Year
Financial results
The loss after tax of the Group of continuing operations for the year ended 30 June 2023 was $1,333,066 (2022:
Profit $317,898).
Annual Report
June 2023
4
Directors' Report
East Menzies Prospect (EMP)
The East Menzies Gold Project is located 130km north of Kalgoorlie, with a collective surface area of 103km2 and
consists of over 50 tenements, a mixture of mining leases, mining lease applications, prospecting leases and
prospecting lease applications. These mining and exploration instruments are host to a 20km continuous strike of a
mineralised Greenstone Belt, including the Springfield Venn Gold Corridor, and the Goodenough Syncline. The
package of contiguous mining, exploration, and prospecting licenses which are prospective for precious metals,
nickel, and other technology metals. The tenements are located within a significant orogenic lode gold province.
The EMP currently encompasses seven operational areas, including the Gigante Grande Gold prospect on the east
side project area, which has been subdivided into three geographical domains (North, Central and South. In the
southwest, drilling investigations at Springfield have intersected magmatic Nisulphides. This is a significant and
material exploration result that has opened a large tract of prospective ground for nickel, cobalt, copper, and platinum
group elements. In the central west, the Company is investigating opportunities for mining operations in M29/189
Granny Venn, M29/141 Goodenough, and M29/427 Maranoa. In the north exploration planning is underway to
investigate the Venn Springfield corridor, from the northern end of the Granny Venn Open Pit to the Cock Robin
prospect located in E29/929.
During the financial year the Company focused on its Springfield Nickel Project where activities identified a large and
shallow nickel deposit with prospects for open cut development. Modelling and mine planning work on the
Companies Goodenough and Maranoa Gold projects has also commenced with emphasis on exploiting zones of
shallow gold mineralisation which have potential to support short campaign style mining operations.
A drilling campaign at the Springfield Nickel Prospect showed multi element and precious metal assay results. Drill
hole number SFRC016 confirmed the hole intersected a significant interval of Meta-Komatiite hosted Nickel
sulphides. This comprises a principal mineralized interval of 8m @ 0.64% Ni, 469ppm Co and 45ppb (Pt+Pd) from
102m, within a broader interval of 17m @ 0.40% Ni, 295 ppm Co and 32ppb (Pt+Pd) from 96m downhole.
SFRC016 also returned several zones of polymetallic mineralisation within the Nickel intercepts including 8m @
0.38% Zn from 102m. From 58m down the hole, the upper volcano-sedimentary sequence also hosted elevated
Silver, Lead and Zinc mineralisation comprising 15m @ 3.2gt/ag and 0.08% As, including 3m@ 0.14% Pb and 0.41%
Zn from 68m.
The Nickel and Zinc mineralisation encountered in SFRC16 is consistent with drill assays by CRA in 1969, (3m @
0.38% Zn in MEPD01), BHP in 1986 (22m @ 0.29% Zn in JR011), and Great Australian Resource in 2004 (8m @
1.5% Zn in MZR005). From this association it is reasonable to conclude these intervals are part of a system of
mineralisation which is potentially ~3.5km long (north to south), and ~1.5km wide (east to west).
Annual Report
June 2023
5
Directors' Report
East Menzies Project Location Plan
Annual Report
June 2023
6
Directors' Report
A summary of the significant results obtained to date on the Springfield Prospect is presented below.
Springfield Prospect Schematic Long Section
The prospective sequence at Springfield is interpreted to dip to the west, and run to surface, where it is represented
by several gossanous outcrops along the eastern side of the prospect. Only skeletal regolith cover is present, with
little or no lateritic duricrust. Lower saprocks transition to fresh rock at relatively shallow depths of between 50 and
60m. Whilst these observations are preliminary in nature, they indicate that the Springfield Prospect has the potential
to progress into a significant nickel discovery with potential for open cut operations.
Annual Report
June 2023
7
Directors' Report
A program of diamond drilling has been designed as a step out from SFRC016 to recover additional sample for
petrological, metallurgical, and structural analysis. This work will also involve the installation of 50mm casing sleaves
to enable completion of down hole geophysical surveys. Borehole SFRC017, which was terminated at 112m depth
due to excessive water make, will also be completed to the original target depth of 180m. In parallel with coring
operations a program of RC drilling commence in July. This work will be drill testing the current structural
interpretation to the north-south, east, and west of SFRC016. These step out holes will assist in confirming the
continuity of mineralisation in terms of thickness and grade, along strike, and dip.
Modelling and mine planning work on the Companies Goodenough and Maranoa Gold projects was commenced with
emphasis on exploiting zones of shallow gold mineralisation which have potential to support short campaign style
mining operations. As part of these investigations samples recovered from the March 2023 Maranoa and
Goodenough gold drilling programs have been submitted to ALS for bulk leach extractable gold test work (BLEG). In
the absence of any historical process recovery details, the BLEG results will provide an indication for amenability of
the ore for gold recovery by conventional cyanide leach extraction.
An evaluation of the drilling investigations completed by the Company at Maranoa (M29/427) indicates that upper
level stoping is not as extensive as has been modelled. To test this finding, a program of four shallow holes have
been designed to investigate the historical workings at depths typically less than 10m. A program of work application
has also been lodged to excavate several costeans, and recover a bulk sample of ore from the northern end of the
Maranoa Lode.
At Goodenough (M29/141) the Company is investigating potential for the development of a opencut which would
advance southwards from resource outcrop to a depth of about 25-30m. As with Maranoa, the Companies initial
evaluation indicates that historical underground and open cut/underlay development is not as extensive as indicated
on plan.
Mount Mackenzie
The Mount Mackenzie Gold Project is located 150km north west of Rockhampton, Queensland. The project includes a
28.4km2 tenement package held by the Group.
During the year the Board undertook an evaluation of the benefits of continuing to hold and fund the development of
the Mount Mackenzie prospect. The results of this review determined that for the current level of financial resources,
the Company could be expected to obtain greater value from its interests in its East Menzies tenement package. The
Board then began a process of discussion with possible parties for either a joint venture or outright sale. This
cummulated in an offer being made which the Board accepted for the outright sale of the Mount Mackenzie tenement
package (refer Subsequent Events section below).
Annual Report
June 2023
8
Directors' Report
Tenements
Tenements held by the Group as of 30 June 2023 were as follows.
State
Project
Number
Status
Queensland
Queensland
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Mt Mackenzie
Mt Mackenzie
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
MDL2008
EPM10006
E29/0979
L29/0061
M29/0141
M29/0189
M29/0427
P29/2225(2)
P29/2270(1)
P29/2391
P29/2395
P29/2408
P29/2409
P29/2455(3)
P29/2456
P29/2457
P29/2458
P29/2459
P29/2460
P29/2461
P29/2469
P29/2470
P29/2471
P29/2472
P29/2473
P29/2474
P29/2492
P29/2494
P29/2496
P29/2497
P29/2500
P29/2528
P29/2553
P29/2554
P29/2555
P29/2556
P29/2557
P29/2558
P29/2563
P29/2564
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
REZ
beneficial
ownership
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Expiry
01 Nov 2024
28 Mar 2028
23/02/2027
31/03/2041
31/07/2033
15/10/2040
11/02/2040
4/09/2020
22/04/2021
2/04/2025
19/04/2025
2/07/2025
28/09/2025
31/01/2027
31/01/2027
31/01/2027
31/01/2027
31/01/2027
31/01/2027
31/01/2027
24/03/2024
16/07/2023
14/06/2024
25/03/2024
25/03/2024
12/03/2024
14/06/2024
14/06/2024
25/03/2024
25/03/2024
25/03/2024
24/10/2023
15/11/2024
15/11/2024
15/11/2024
15/11/2024
15/11/2024
15/11/2024
17/11/2024
16/11/2024
Annual Report
June 2023
9
Directors' Report
State
Project
Number
Status
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
Menzies
P29/2565
P29/2566
P29/2567
P29/2568
P29/2595
P29/2596
P29/2599
P29/2600
P29/2601
P29/2602
P29/2603
P29/2604
P29/2619
P29/2620
P29/2621
P29/2622
P29/2623
P29/2624
P29/2625
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
REZ
beneficial
ownership
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Expiry
16/11/2024
16/11/2024
16/11/2024
16/11/2024
3/11/2025
3/11/2025
15/11/2025
18/05/2025
18/05/2025
18/05/2025
Pending
18/05/2025
4/11/2025
4/11/2025
4/11/2025
4/11/2025
4/11/2025
4/11/2025
4/11/2025
Note 1,2: Mining licence application in progress, prospecting licence remains in place until granted
Note 3 : Extension of 4 years applied for, will continue as prospecting tenement until determined
Significant Changes in State of Affairs
During the financial year there were no significant changes to the Group's activities.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and the discharge of liabilities in the normal course of business. As
disclosed in the financial statements, the Group incurred a loss of $1,333,066 from continuing operations and had net
cash outflows from operating activities of $1,110,259 for the year ended 30 June 2023. The ability to continue as a
going concern and realise its exploration assets is dependent on a number of factors, the most significant of which is
to source additional funding via share placement to continue its operations.
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue
as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report.
Annual Report
June 2023
10
Directors' Report
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue as a going
concern, after consideration of the following factors:
• The Group has net current assets of $1,515,505 and net assets of $9,683,173 at balance date;
• The Group has a cash balance of $704,982 as at the end of current financial year;
• The Group raised $2,422,850 net of costs in prior year (per note 14)
and is in the process of inititiating a further capital raise;
• The ability for the directors to scale back activities in order to preserve cash when required; and
• If required, the Group has the ability to reduce discretionary spending in its consultancy expenditures.
Accordingly, the Directors believe that the consolidated entity will be able to continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or
liabilities that might be necessary if the Group does not continue as a going concern.
Significant Events After Balance Date
Other than as set out below there have been no significant events occurring after the balance date which may affect
either the Group's operations, results of those operations or the Group's state of affairs.
On 19 September 2023 the Company entered into a binding heads of agreement (Agreement) for the sale of the
tenements and land held at the Mount Mackenzie prospect. The Agreement, which is conditional upon the purchaser
completing due diligence, provides the following consideration:
* $750,000 payable by 26 October 2023;
* $750,000 upon receipt of approval to commence mining activities or upon Aureus listing its securities on a
recognised stock exchange; and
* an ongoing royalty of 1% of the market value of gold extracted.
Likely Development and Expected Results
Apart from the matters referred to above in the Operating Results for the year, other likely developments in the
operations of the Group and the expected results of those operations in subsequent financials years have not been
included in this report because the directors believe this could result in unreasonable prejudice to the Group.
Environmental Regulation and Performance
Exploration and development activities are subject to State and Federal laws and regulations. The Group has a policy
of complying with its environmental performance obligations as a minimum, and during the reporting period, there has
been no known breach of the environment regulations. The Group is committed to ensuring the activities of its
business are conducted in a way so as to minimise adverse impacts on the environment and local communities.
Annual Report
June 2023
11
Directors' Report
Unissued Shares Under Securities
There were 83,000,000 share options on issue as at 30 June 2023 that can convert to ordinary shares in the ratio of
one fully paid ordinary share for each share option. No share options have been issued subsequent to the end of the
financial year to the date of this report.
Option class
Class P
Vesting conditions
Vested
Class R
Class S
Class T
Class U
Class V
Vested
Vested
Vested
Vested
Grant date
14/10/2020
15/07/2021
Expiry date
30/09/2025
31/08/2026
Exercise
price
Number of
share options
$0.050 15,000,000
$0.080 8,000,000
14/09/2021
31/08/2026
$0.080 21,000,000
15/09/2021
31/08/2026
$0.080 11,000,000
27/10/2021
31/08/2026
$0.080 8,000,000
Not vested
24/11/2022
24/11/2027
$0.080 20,000,000
Share options on issue at 30 June 2023
83,000,000
No shares were issued during the financial year as a result of the exercise of options
Indemnification and Insurance of Officers and Directors
REZ’s constitution indemnifies, to the extent permitted by law, officers of the Group when acting in their capacity in
respect of:
• liability to third parties (other than related entities) when acting in good faith; and
• costs and expenses of successfully defending legal proceedings and ancillary matters.
The Directors and the Company Secretary named earlier in this report have the benefit of the indemnity together with
any other person in or who takes part in the management of the Group.
During the year REZ did not pay any premiums of insurance in respect of contracts insuring Directors, Company
Secretary or other members of management against liabilities incurred in their capacity as Director or officers of the
Group.
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest $1 (where rounding
is applicable) under the option available to the company under ASIC Class Order 98/0100. The company is an entity
to which the Class Order applies.
Proceedings on Behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is party for the purpose of taking responsibility for the company for all or any part
of those proceedings. The Company and Group were not party to any such proceedings during the financial year.
Auditor Independence
A copy of the external auditor's declaration under Section 370C of the Corporations Act in relation to the audit for the
financial year is attached to the Financial Statements.
Annual Report
June 2023
12
Directors' Report
Non-audit services
No non-audit services were provided during the current year by the auditor.
Remuneration Report (Audited)
The remuneration report, which has been audited, outlines the key management personnel remuneration
arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its
Regulations. For the purposes of this report Key Management Personnel (KMP) of the Group are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of the Group,
including executive and non-executive directors.
During the financial year ended 30 June 2023, KMP consisted of:
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Mr Warren Kember
Non-executive director and Chairman
Executive Director
Non-executive director
Chief Financial Officer and Company Secretary
Principles used to determine the nature and amount of remuneration
In order for the Company and Group to prosper and enhance shareholder value, the Group must be able to attract
and retain the highest calibre of executives. At this stage of the Group's development, a framework has not been
developed that links performance and KMP remuneration. The responsibilities of the Remuneration Committee,
which have been assumed by the full Board, include reviewing the remuneration of KMP and determining the nature
and amount of emoluments of KMP on an annual basis. In conducting this review reference is made to market and
industry conditions. Remuneration packages, can consist of base salary, fringe benefits, incentive schemes
(including performance related bonuses), superannuation, and entitlements upon retirement or termination, are
reviewed with due regard to performance and other relevant factors.
Where appropriate, share-based remuneration is provided to encourage KMP to focus on improving shareholder
value and also to reduce cash costs during the Group's development phase.
The aggregate amount of non-executive director fees is limited to $200,000 per annum as per a resolution of
shareholders. For further information, please refer to our corporate governance plan and annual governance
statement on our web site at www.rezgroup.com.au.
Short-term incentives and long-term incentives
Due to the current size of the Group and the extent of its operations limited short-term incentives, such as
performance based bonuses or longer term incentives, were provided to KMP other than as shown below.
Annual Report
June 2023
13
Directors' Report
Details of remuneration
Amounts paid or owing to KMP during the financial year ended 30 June 2023 are set out below.
Year ended 30 June 2023
Short-term
benefits
Post
employment
Share-based
payments
Total
Salary & fees Superannuation
$
$
Equity settled
$
Directors
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Management
42,375
33,000
234,850
Mr Warren Kember (i)
-
310,225
2,100
-
-
2,100
Percentage of
renumeration
in form of
share based
payments
%
0%
0%
18%
0%
15%
$
44,475
33,000
288,150
-
-
53,300
-
-
53,300
365,625
(i) Remuneration forms part of the fees charged by a director related entity. Details of the nature of the engagement
and the amount of fees charged are provided in Note 21 of the financial statements.
Amounts paid or owing to KMP during the financial year ended 30 June 2022 are set out below.
Year ended 30 June 2022
Short-term
benefits
Post
employment
Share-based
payments
Salary & fees Superannuation
$
$
Equity settled
$
Total
$
Directors
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Management
50,800
33,000
154,550
Mr Warren Kember (i)
-
238,350
-
-
-
-
-
148,800
148,800
93,000
199,600
181,800
247,550
83,600
474,200
83,600
712,550
Percentage of
renumeration
in form of
share based
payments
%
75%
82%
38%
0%
67%
(i) Remuneration forms part of the fees charged by a director related entity. Details of the nature of the engagement
and the amount of fees charged are provided in Note of the financial statements.
Service agreements
The non-executive directors did not enter into any service agreements with the Group. The responsibilities of the
Nomination Committee, which have been assumed by the full board, includes reviewing the appointment and
retirement of Non-Executive Directors on a case by case basis. Currently all directors are required to be re-elected at
least every three years and at least one-third of directors must retire at each Annual General Meeting.
The Company has entered into a Corporate Advisory and Business Development Mandate (Agreement) with entities
ultimately controlled by interests associated with Mr Richard Poole (Arthur Phillip). The Agreement provides for the
payment of fees for the raising of debt or equity capital and the charging of costs associated with the administration of
the Group.
Annual Report
June 2023
14
Directors' Report
Arthur Phillip invoiced fees and expenses for the provision of management, accounting, office administration,
consulting and company secretarial services to the Company, amounting to $292,920 (2022: $411,800), consisting of:
Directors fees (as shown above under Details of Renumeration)
Share-based payment
Office rent
Accounting and company secretarial services
Management services
2023
$
2022
$
33,000
-
5,500
122,420
132,000
292,920
33,000
148,800
33,000
76,000
121,000
411,800
At the end of the financial year an amount of $493,364 for fees owing in prior years, which is subject to performance
conditions, is included as a contingent liability in the financial statements.
Share options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of KMP in the prior,
current or future financial years are as follows:
Option class/Holder
Class L Mr Christian Price
Class M Mr Christian Price
Class S Mr Gavin Rezos
Class S Mr Richard Poole
Class S Mr J Daniel Moore
Class T Mr Warren Kember
Class V Mr J Daniel Moore
Number of share
options
1,000,000
1,000,000
8,000,000
8,000,000
5,000,000
4,000,000
20,000,000
47,000,000
Grant date
18/12/2017
18/12/2017
14/09/2021
14/09/2021
14/09/2021
15/09/2021
24/11/2022
Expiry date
15/12/2022
15/12/2022
31/08/2026
31/08/2026
31/08/2026
31/08/2026
24/11/2027
Exercise
price
$0.14
$0.14
Fair value per
option at grant
date
$0.03
$0.03
$0.08
$0.08
$0.08
$0.08
$0.08
$0.02
$0.02
$0.02
$0.02
$0.01
Share options carry no entitlement to dividends or right to vote. No share options were exercised, cancelled or lapsed
during the current or prior financial year. No person entitled to exercise share options had or has any right by virtue of
the options to participate in any share issue of any other body corporate.
Movements in Shares held by Key Management Personnel
2023
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Mr Warren Kember
Balance at the
start of the year
Granted as
compensation
Net other
change
15,258,700
67,987,302
12,000,000
625,000
-
-
-
-
-
-
-
-
Balance at
the end of the
year
15,258,700
67,987,302
12,000,000
625,000
Annual Report
June 2023
15
Directors' Report
Movements in Share Options held by Key Management Personnel
2023
Balance at the
start of the year
Granted as
compensation
Net other
change
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Mr Warren Kember
8,000,000 - -
8,000,000 - -
5,000,000 20,000,000 -
4,000,000 - -
Balance at
the end of the
year
8,000,000
8,000,000
25,000,000
4,000,000
End of remuneration report
Signed in accordance with a resolution of the directors.
Mr Gavin Rezos, Chairman
Sydney, 29 September 2023
Annual Report
June 2023
16
Mineral Resources and Ore Reserves
Group mineral resources as at 30 June 2023 were estimated at 4.4 million tonnes at 1.37g/t Au for 183,000 ounces AU and 862,000 ounces AG. Mineral resource figures have
been prepared in accordance with the requirements of 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results'.
Mineral Resources
Project
Type
Cut off
30 June 2023
Mount Mackenzie
Open Cut
Oxide
Primary
Menzies
Goodenough
Granny Venn
Maranoa
Open Cut
Open Cut
Open Cut
30 June 2022
Mount Mackenzie
Open Cut
Oxide
Primary
Menzies
Goodenough
Granny Venn
Maranoa
Open Cut
Open Cut
Open Cut
(g/t)
0.35
0.55
1.00
1.00
1.00
0.35
0.55
1.00
1.00
1.00
Tonnes
(kt)
Indicated
Gold
metal
(koz)
Gold
grade
(g/t)
Silver
grade
(g/t)
Tonnes
(kt)
Silver
metal
(koz)
Inferred
Gold
metal
(koz)
Gold
grade
(g/t)
Silver
grade
(g/t)
Silver
metal
(koz)
Tonnes
(kt)
Gold
grade
(g/t)
Total
Gold
metal
(koz)
Silver
grade
(g/t)
Silver
metal
(koz)
500
1,200
1.09
1.25
18.0
48.0
8.0
13.0
136
482
700
1,030
0.96
1.28
21.0
42.0
4.0
5.0
87
157
1,200
2,230
634
1.84
38.0
82
41
46
1.99
2.14
5.70
5.2
2.9
8.0
716
41
46
6.0
9.0
223
639
1.01
1.26
1.86
2.14
5.70
39.0
90.0
43.0
2.9
8.0
2,334
1.38
104.0
7.4
618
1,899
1.32
79.1
3.7
244
4,233
1.35
182.9
5.7
862
500
1,200
1.09
1.25
18.0
48.0
8.0
13.0
136
482
700
1,030
0.96
1.28
21.0
42.0
4.0
5.0
87
157
1,200
2,230
634
1.84
38.0
82.0
41.0
46.0
1.99
2.14
5.7
5.2
2.9
8.0
716
41
46
6.0
9.0
223
639
1.01
1.26
1.86
2.14
5.70
39.0
90.0
43.0
2.9
8.0
2,334
1.38
104.0
7.4
618
1,899
1.32
79.1
3.7
244
4,233
1.35
182.9
5.7
862
Competent Persons Statement and Consent
The information in this release that relates to mineral resources is based on and fairly represents information compiled by Mr. Michael Johnstone and Mr Todd Axford and who are members of the Australasian Institute of Mining and Metallurgy, and
Principal Consultants for Minerva Geological Services (MGS) and Geko‐Co (GKC) respectively. MGS and GKC have been contracted by Resources & Energy Group Limited (the Company) to provide exploration management, advice and guidance to
the company. Both Mr. Axford and Mr Johnstone have sufficient technical experience that is relevant to the reporting of exploration results 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’. Mr. Axford and Mr Johnstone consent to the inclusion in this release of the matters based on their information in the form and context in which it appears.
This presentation contains information provided in releases made by the Company to the ASX on 26 February 2016, 21 June 2016 and 19 May 2020 concerning the Mt Mackenzie Resource and 11 June 2020, 3 November 2020, 14 January 2021, 22
March 2021 and 4 May 2021 concerning Menzies. The Company is not aware of any new information or data that materially affects the information included in previous ASX announcements and that all material assumptions and technical parameters
underpinning the estimates in the announcement continue to apply and have not materially changed.
Annual Report
June 2023
17
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2023
Continuing operations
Other income
Corporate and other administration costs
Director fees
Exploration and evaluation costs expensed
Employee benefits expense
Finance income
Depreciation
Amortisation of exploration and evaluation costs
Share-based payments expense
Insurance
Other expenses
Profit/(loss) before income tax
Income tax benefit
Profit/(loss) after tax from continuing operations
Discontinued operations
Loss after tax from discontinued operations
Other comprehensive income
Notes
2023
$
2022
$
4(a)
-
3,353,131
4(b)
4(c)
10
18
(345,076)
(252,365)
(360,455)
(71,135)
74
(1,334)
-
(68,329)
(39,561)
(194,885)
(321,670)
(201,242)
(187,492)
(69,125)
6
(1,334)
(1,236,892)
(828,905)
(45,383)
(143,197)
5
(1,333,066)
-
(1,333,066)
317,898
-
317,898
11
(1,786,954)
(155,741)
-
-
Total comprehensive income/(loss) for the year
(3,120,020)
162,157
Total comprehensive income/(loss) is attributable to:
Shareholders of Resource & Energy Group Limited
Continuing operations
Discontinued operations
Non- controlling interests
Continuing operations
Discontinued operations
(1,332,279)
(1,786,954)
(3,119,233)
319,532
(155,741)
163,791
(787)
-
(787)
(1,634)
-
(1,634)
(3,120,020)
162,157
Earnings per share for continuing operations
Earnings/(loss) per share (cents per share) – basic
Earnings/(loss) per share (cents per share) – diluted
16
16
(0.27)
(0.27)
0.07
0.07
This consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
notes to the financial statements.
Annual Report
June 2023
18
Consolidated Statement of Financial Position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Assets held for sale
Total current assets
Non-current Assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Notes
2023
$
2022
$
6
7
8
11
9
10
704,982
-
20,000
1,500,000
3,839,241
335,331
20,000
-
2,224,982
4,194,572
61,991
8,485,787
32,555
9,525,406
8,547,778
9,557,961
10,772,760
13,752,533
12
13
695,139
14,338
660,771
15,255
709,477
676,026
13
380,110
341,642
380,110
341,642
1,089,587
1,017,668
9,683,173
12,734,865
14
15
36,811,242
1,778,024
(31,268,804)
36,811,242
1,709,695
(28,149,571)
Total equity attributable to the shareholders of
Resources & Energy Group Limited
Non-controlling interests
Total equity
7,320,462
10,371,366
2,362,711
9,683,173
2,363,498
12,734,865
This consolidated statement of financial position should be read in conjunction with the notes to the financial
statements
Annual Report
June 2023
19
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Issued
capital
$
Share option
reserve
$
Accumulated
losses
$
Non-
controlling
interests
$
Total
$
Balance at 1 July 2021
34,388,392
763,990
(28,313,361)
2,365,132
9,204,153
Total comprehensive income for the year
Issue of shares
Capital raising cost
Share-based payment
-
2,725,000
(302,150)
-
-
-
-
945,705
163,790
-
-
-
(1,634)
-
-
-
162,157
2,725,000
(302,150)
945,705
Balance at 30 June 2022
36,811,242
1,709,695
(28,149,571)
2,363,498
12,734,865
Balance at 1 July 2022
36,811,242
1,709,695
(28,149,571)
2,363,498
12,734,865
Total comprehensive loss for the year
Share-based payment
-
-
-
68,329
(3,119,233)
-
(787)
-
(3,120,020)
68,329
Balance at 30 June 2023
36,811,242
1,778,024
(31,268,804)
2,362,711
9,683,173
This consolidated statement of changes in equity should be read in conjunction with the notes to the financial
statements
Annual Report
June 2023
20
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Notes
2023
$
2022
$
335,331
(1,445,590)
3,353,131
(1,066,464)
Net cash flows provided by/(used in) operating activities
6(b)
(1,110,259)
2,286,667
Cash flows from investing activities
Purchase of property, plant and equipment
Exploration and evaluation costs capitalised
Net cash flows used in investing activities
Cash flows from financing activities
Share placement
Transaction costs on issue of shares
Net cash flows provided by financing activities
(30,770)
(1,993,230)
-
(2,003,524)
(2,024,001)
(2,003,524)
-
-
-
2,725,000
(185,350)
2,539,650
Net decrease in cash and cash equivalents
(3,134,259)
2,822,793
Cash and cash equivalents at beginning of period
3,839,241
1,016,448
Cash and cash equivalents at end of period
6(a)
704,982
3,839,241
This consolidated statement of cash flow should be read in conjunction with the notes to the financial
statements
Annual Report
June 2023
21
Notes to the Financial Statements
For the year ended 30 June 2023
1
Corporate information
Resources & Energy Group Limited (the “Company”) is a listed public company incorporated and domiciled
in Australia. The consolidated financial statements for the year ended 30 June 2023 comprise the Company
and its controlled entities (together referred to as the “Group”).
The consolidated financial statements are presented in Australian dollars which is the Company's functional
and presentation currency.
The consolidated financial statements were approved by the Board of Directors on 29 September 2023.
The principal accounting policies are set out below. These policies have been consistently applied unless
otherwise noted.
2
a
Summary of significant accounting policies
Basis of preparation
These financial statements are general purpose financial statements which have been prepared in
accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with
other requirements of the law.
For the purposes of preparing the consolidated financial statements, the Company is a for-profit listed public
entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and notes of the company and the Group comply with
International Financial Reporting Standards ('IFRS').
The consolidated financial statements have been prepared on the basis of historical cost, except where
assets or liabilities are measured at revalued amounts or fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is generally based on the fair values of the
consideration given in exchange for goods and services. All amounts are presented in Australian dollars.
b
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
c
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and the discharge of liabilities in the normal course of
business. As disclosed in the financial statements, the Group incurred a loss of $1,333,066 from continuing
operations and had net cash outflows from operating activities of $1,110,259 for the year ended 30 June
2023. The ability to continue as a going concern and realise its exploration assets is dependent on a number
of factors, the most significant of which is to source additional funding via share placement to continue its
operations.
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will
continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the
normal course of business and at the amounts stated in the financial report.
Annual Report
June 2023
22
Notes to the Financial Statements
For the year ended 30 June 2023
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue as
a going concern, after consideration of the following factors:
• The Group has net current assets of $1,515,505 and net assets of $9,683,173 at balance date;
• The Group has a cash balance of $704,982 as at the end of current financial year;
• The Group raised $2,422,850 net of costs in prior year (per note 14)
and is in the process of inititiating a further capital raise;
• The ability for the directors to scale back activities in order to preserve cash when required; and
• If required, the Group has the ability to reduce discretionary spending in its consultancy expenditures.
Accordingly, the Directors believe that the consolidated entity will be able to continue as a going concern and
that it is appropriate to adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded
assets or liabilities that might be necessary if the Group does not continue as a going concern.
d
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or loss and other
comprehensive income from the date the Company gains control until the date when the Company ceases to
control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the
Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the
owners of the Company and to the non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
Annual Report
June 2023
23
Notes to the Financial Statements
For the year ended 30 June 2023
e
Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimate uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below. The Group based its assumptions and estimates
on parameters available when the consolidated financial statements were prepared. Existing circumstances
and assumptions about future developments, however, may change due to market changes or
circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when
they occur.
Carrying value of exploration, evaluation and development assets
The Group capitalises expenditure relating to exploration, evaluation and mine development where it is
considered likely to be recoverable or where the activities have not reached a stage which permits a
reasonable assessment of the existence of reserves. While there are certain areas of interest from which no
reserves have been extracted, the directors are of the continued belief that such expenditure should not be
written off since feasibility studies in such areas have not yet concluded.
The Group reclassifies exploration and evaluation expenditure to mine development assets when the Board
assess that the mine has reached a point where it is certain that extraction of ore will commence in the
immediate future.
Capitalised expenditure for exploration and evaluation is carried at the end of the reporting period at
$8,485,787 (2022: $9,525,406).
Assets held for sale
During the reporting period the Board decided to explore the sale of its interests in the tenements located in
the Mount Mackenzie (MM Asset) region of Queensland. On 31 July 2023 the Company publicly announced
the decision of its Board of Directors to sell the MM Asset. On 19 September 2023 the Group entered into a
binding, conditional heads of agreement. At 30 June 2023 the MM Asset was classified as an asset held for
sale and discontinued operation for the following reasons:
* the MM Asset was available for immediate sale and capable of being sold in its current condition;
* potential buyers of asset had been identified; and
* actions to complete the sale were expected to completed within one year.
The fair value of the MM Asset has been estimated as being the expected cash sale price contained in the
heads of agreement (costs of realisation are expected to be minimal). The ongoing royalty consideration
was not included in the fair value estimate as its realisation is dependant on a numer of events the outcome
of which is uncertain, including the abiity of the purchaser to obtain applicable permits to conduct mining
activities, the purchaser raising sufficent capital to conduct its activities and the extracting of resource
bearing ore.
Annual Report
June 2023
24
Notes to the Financial Statements
For the year ended 30 June 2023
Determination of mineral resources and ore reserves
The Group estimates its Mineral Resources and Ore Reserves in accordance with the Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore Reserves (“the JORC Code”). The information
on mineral resources and ore reserves is prepared by or under the supervision of Competent Persons as
defined in the JORC Code. The amounts presented in the statement of Mineral Resources and Ore
Reserves are determined under the JORC Code where is information is available. When a resource or
reserve amount prepared in accordance with the JORC Code for a particular mine is not available, then no
amounts are disclosed. For the purposes of impairment testing of assets the Board applies JORC Code
verified information when it is available, or otherwise management estimates of potential resources.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and
assumptions that are valid at the time of estimation which may change significantly when new information
becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or
recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being
restated. Such changes in reserves could impact depreciation and amortisation rates, asset carrying values
and impairment assessments.
Determination of rehabilitation provision
Significant estimates and assumptions are required in determining the provision for mine rehabilitation as
there are many transactions and other factors that will affect the ultimate liability payable to rehabilitate the
mine sites. Factors that will affect this liability include changes in technology, changes in regulations, price
increases, changes in timing of cash flows which are based on life of mine plan and changes in discount
rates. When these factors change or become known in the future, such differences will impact the mine
rehabilitation provision in the period in which they change or become known.
Share based payments
The costs of the share-based payments are calculated on the basis of the fair value of the equity instrument
at grant date. Determining the fair value assumes choosing the most suitable valuation model for these
equity instruments, by which the characteristics of the grant have a decisive influence. This assumes also the
input into the valuation model of some relevant judgments, like the estimated expected life of the share
option and the market volatility of the Company's ordinary shares. No share-based payments were issued
during the year.
The judgments made and the model used are further detailed in Note 18.
f
Revenue recognition
The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised
goods or services to customers at an amount that reflects the consideration the Group expects to receive in
exchange for those goods or services. Revenue is recognised by applying a five-step model as follows:
1. identifying the contract with a customer;
2. identifying the performance obligations;
3. determining the transaction price;
4. allocating the transaction price to the performance obligations; and
5. recognising revenue when/as performance obligation(s) are satisfied.
Annual Report
June 2023
25
Notes to the Financial Statements
For the year ended 30 June 2023
Sale of goods
Revenue from sales of gold is recognised when control of the goods has transferred, being the point in time
when the goods have been shipped to the customer. Revenue is only recognised where it is highly probable
that a significant reversal of revenue will not occur and control gets completely passed on to the customers.
Costs to obtain a contract
Costs incurred that would have been incurred regardless of whether the contract was won are expensed,
unless those costs are explicitly chargeable to the customer in any case (whether or not the contract is won).
Other income
Other income is recognised on an accruals basis when the Company is entitled to it.
g
h
Borrowing costs
Borrowing costs are recognised as an expense when incurred.
Cash and short-term deposits
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand,
short-term deposits and highly liquid investments with a maturity of three months or less.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and
short-term deposits as defined above.
i
Financial Instruments
Financial instruments are recognised initially on the date that the Group becomes party to the contractual
provisions of the instrument. On initial recognition, all financial instruments are measured at fair value plus
transaction costs (except for instruments measured at fair value through profit or loss where transaction
costs are expensed as incurred).
Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair
value, depending on the classification of the financial assets.
Classification
On initial recognition, the Group classifies its financial assets at amortised cost. Financial assets are not
reclassified subsequent to their initial recognition unless the Group changes its business model for managing
financial assets. Assets measured at amortised cost are financial assets where the business model is to
hold assets to collect contractual cash flows and the contractual terms give rise on specified dates to cash
flows are solely payments of principal and interest on the principal amount outstanding. The Group's financial
assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in
the statement of financial position. Subsequent to initial recognition, these assets are carried at amortised
cost using the effective interest rate method less provision for impairment. Interest income, foreign
exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is
recognised in profit or loss.
Annual Report
June 2023
26
Notes to the Financial Statements
For the year ended 30 June 2023
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for financial assets
measured at amortised cost. When determining whether the credit risk of a financial assets has increased
significant since initial recognition and when estimating ECL, the Group considers reasonable and
supportable information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis based on the Group's historical experience and informed
credit assessment and including forward looking information.
Credit losses are measured as the present value of the difference between the cash flows due to the Group
in accordance with the contract and the cash flows expected to be received. This is applied using a
probability weighted approach.
Impairment of trade and other receivables have been determined using the simplified approach in AASB 9
which uses an estimation of lifetime expected credit losses. The Group has determined the probability of non-
payment of the receivable and contract asset and multiplied this by the amount of the expected loss arising
from default.
Financial liabilities
The Group measures all financial liabilities initially at fair value less transaction costs, subsequently financial
liabilities are measured at amortised cost using the effective interest rate method. The financial liabilities of
the Group comprise trade and other payables, borrowings and finance lease liabilities.
(i) Financial assets
Financial assets are classified as financial assets as fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of
its financial assets at initial recognition based on the nature and purpose of a financial asset.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. After initial measurement, such financial assets are subsequently measured at
amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated
by taking into account any discount or premium on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in the income statement in finance costs for loans or other
operating expenses for receivables.
(iii) Impairment of financial assets
The Group assesses, at each reporting date, whether there is objective evidence that a financial asset or a
group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be
impaired if there is objective evidence of impairment as a result of one or more events that has occurred
since the initial recognition of the asset (an incurred "loss event") and that loss event has an impact on the
estimated future cash flows of the financial asset or the group of financial assets that can be reliably
estimated.
Annual Report
June 2023
27
Notes to the Financial Statements
For the year ended 30 June 2023
(iv) Financial liabilities
Financial liabilities are classified as trade and other payables, loans and borrowings. The Group
determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of
directly attributable transaction costs.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at
the initial date of recognition, and only if the criteria in AASB 139 are satisfied. The Group has not
designated any financial liability as, at fair value through profit or loss.
(v) Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the income
statement.
j
Income tax
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting date in the countries where the Group
operates and generates taxable income.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
Annual Report
June 2023
28
Notes to the Financial Statements
For the year ended 30 June 2023
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences and the carry forward of
unused tax credits and unused tax losses can be utilised, except:
when the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred
tax items are recognised in correlation to the underlying transaction either in other comprehensive income or
directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable
entity and the same taxation authority.
k
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.
l
Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the cost of replacing part of property, plant and equipment and
borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts
of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as
individual assets with specific useful lives and depreciates them accordingly. Likewise, when a major
inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in
profit or loss as incurred.
Annual Report
June 2023
29
Notes to the Financial Statements
For the year ended 30 June 2023
Depreciation is calculated using a combination of straight-line and diminishing-value basis over the estimated
useful life of all assets.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate. Property, plant and equipment are
depreciated over periods of three to five years.
m
Exploration and evaluation expenditure
Exploration and evaluation activity involves the search for mineral resources, including gold and copper, and
includes assessing all available geophysical data including gravity, magnetic and seismic and collation of
additional data; exploratory drilling; determining and examining the volume and grade of the resource; and
cost of acquisition of exploration tenements.
Administration costs that are not directly attributable to a specific exploration area are charged to the profit or
loss. Licence costs paid in connection with a right to explore in an existing exploration area are capitalised
and amortised over the term of the permit. Exploration and evaluation expenditure is capitalised in respect of
each identifiable area of interest as the exploration and evaluation activity has not reached a stage which
permits a reasonable assessment of the existence of commercially recoverable gold deposits that are of
sufficient scale to support the project concept.
As the asset is not available for use, it is not depreciated. All capitalised exploration and evaluation
expenditure is monitored for indication of impairment. Where a potential impairment is indicated, assessment
is performed for each area of interest in conjunction with the group of operating assets (representing a cash
generating unit) to which the exploration is attributed. When production commences, the assets for the
relevant area of interest are amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves.
Accumulated exploration and evaluation expenditure in relation to an abandoned area are written-off in full in
profit and loss in the period in which the decision of abandon the area is made.
n
Site restoration
Site restoration costs include the dismantling and removal of mining plant, equipment and building structures,
waste removal and rehabilitation of the site in accordance with the requirements of the mining permits. Such
costs are determined using estimates of future costs, current legal requirements and technology.
Costs of site restoration are recognised in full at present value as a non-current liability. An equivalent
amount is capitalised as part of the cost of the asset when an obligation arises to decommission or restore a
site to a certain condition after abandonment as a result of bringing the assets to its present location. In
determining the costs of site restoration there is uncertainty regarding the nature and extent of the restoration
due to community expectations and future legislation.
Annual Report
June 2023
30
Notes to the Financial Statements
For the year ended 30 June 2023
o
Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Group estimates the
asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating
unit's ("CGU's") fair value less costs to sell and its value-in-use. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs to sell, recent market transactions are taken into account. If
no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair
value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Group's CGU's to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in the income statement in expenses.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is
an indication that previously recognised impairment losses no longer exist or have decreased. If such
indication exists, the Group estimates the asset's or CGU's recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the
asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the
carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognised for the asset in
prior years. Such reversal is recognised in the income statement unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation increase.
p
Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value
less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and
the asset or disposal group is available for immediate sale in its present condition. Actions required to
complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that
the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the
sale expected to be completed within one year from the date of the classification.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of
financial position. Discontinued operations are excluded from the results of continuing operations and are
presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit
or loss. Additional disclosures are provided in Note 11. All other notes to the financial statements include
amounts for continuing operations, unless indicated otherwise.
Annual Report
June 2023
31
Notes to the Financial Statements
For the year ended 30 June 2023
q
Share-based payment transactions
Equity-settled share-based payments to employees and others providing similar services are measured at
the fair value of the equity instrument at the grant date. Fair value is measured by use of either a binominal or
Black Scholes model. The expected life used in the model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Further details on how the fair value of equity-settled share-based transactions has been determined can be
found in Note 18.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will
eventually vest, with a corresponding increase in equity.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair
value of the goods and services received, except where the fair value cannot be estimated reliably, in which
case they are measured at the fair value of the equity instruments granted, measured at the date the entity
obtains the goods or the counterparty renders the service. For cash-settled share-based payments, a liability
equal to the portion of the goods or services received is recognised at the current fair value determined at
each reporting date, with any changes in fair value recognised in profit or loss for the year.
r
Employee benefits provision
Provision is made for employee benefits accumulated as a result of employees rendering services up to the
reporting date. These benefits include wages and salaries, annual leave, and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other short-term employee benefits
are measured at their nominal amounts based on remuneration rates which are expected to be paid when
the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated
future cash outflow to be made in respect of services provided by employees up to the reporting date. In
determining the present value of future cash outflows, the market yield as at the reporting date on national
government bonds, which have terms to maturity approximating the terms of the related liability, are used.
s
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
t
Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current year
disclosures.
u
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended
30 June 2023. The consolidated entity has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
Annual Report
June 2023
32
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
3 Segment information
As at the date of this report, the Group has two operating segments: gold mine exploration and
development and other activities (primarily corporate costs). The Group has identified its operating
segments based on internal reports that are reviewed and used by the chief operating decision maker in
assessing performance. The accounting policies and amounts reported for internal reporting are
consistent with the financial information in this financial report.
2023
Segment revenue
Finance income
Segment expenses
Gold
$
Corporate
$
Total
$
- 74 74
Administration and employment costs
Depreciation, impairment and amortisation
1,331,806
1,334
- 1,331,806
- 1,334
1,333,140
- 1,333,140
Income tax benefit
- - -
Income/(loss) after tax from continuing
operations
Segment assets
Segment liabilities
2022
Segment revenue
Revenue
Finance income
Segment expenses
(1,333,140)
74
(1,333,066)
8,547,778
709,477
2,224,982
380,110
10,772,760
1,089,587
3,353,131
- 3,353,131
- 6 6
3,353,131 6 3,353,137
Administration and employment costs
Depreciation, impairment and amortisation
3,033,905
1,334
- 3,033,905
- 1,334
3,035,239
- 3,035,239
Income tax benefit
-
- -
Loss after tax from continuing operations
317,892
6
317,898
Segment assets
Segment liabilities
9,557,961
676,026
4,194,572
341,642
13,752,533
1,017,668
Annual Report
June 2023
33
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
4 Other income and expenses
(a) Other Income
Share of net operating profit from ore extraction agreement
-
3,353,131
Note
2023
$
2022
$
(b) Employee benefits expense
Wages and salaries
Superannuation benefits
Total employee benefits expense
(c) Finance income
Interest expense - borrowings
Less: interest income
Finance income (net)
5 Income tax
71,135
-
71,135
61,346
24,677
86,023
-
(74)
(74)
(4)
(2)
(6)
Income tax expense - tax benefit written off
-
-
The Group has estimated tax losses as at the 30 June 2023 of $24,662,377 (2022: $20,986,371). The benefit
relating to these and the current year losses has not been recognised in the financial report at 30 June 2023 as
it is not probable that future taxable profit will be available against which the Group would be able to utilise these
losses.
Tax returns for the Group for the year ended 30 June 2023 are in progress at the date of this report.
Current and prior year tax losses will only be available to offset against future profits if:
(i) the Group and the Company derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised;
(ii) the Group and the Company continue to comply with the conditions for deductibility imposed by tax
legislation; and
(iii) no changes in tax legislation adversely affect the Group and the Company in realising the benefit from the
The Company and its wholly owned entities have not formed a consolidated income tax group as of 30 June
2023.
6 Cash and cash equivalents
(a) Cash and bank balances
Cash at bank earns interest at floating rates based on daily bank
deposit rates.
704,982
3,839,241
Annual Report
June 2023
34
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
(b)
Reconciliation from the net profit after tax to the net cash flows from operations
Profit/(loss) from continuing operations after tax
Loss from discontinued operations after tax
Adjustments for:
Depreciation and amortisation
Share-based payments
Impairment of exploration costs
Other
(1,333,066)
(1,786,954)
317,898
(155,741)
1,334
68,329
1,571,317
(1)
1,235,558
828,905
-
2,669
Changes in operating assets and liabilities, net of effects from purchase of controlled entity
Decrease/(increase) in receivables
Increase in payables
(Decrease)/increase in provision for annual leave
Net cash used in operating activities
7 Trade and other receivables
Trade receivable
335,331
34,368
(917)
(270,950)
327,204
1,124
(1,110,259)
2,286,668
-
-
335,331
335,331
Trade receivable is the residual amount owing of the net operating profit from an extraction program
8 Other assets
Deposits
Deposits of $20,000 (2022: $20,000) are subject to a charge refer Note 19.
9 Property, plant and equipment
20,000
20,000
At 30 June 2023
Cost
Accumulated depreciation
Net carrying amount
Movement in property, plant and equipment
Carrying amount at the beginning of the year
Additions
Depreciation charge for the year
Assets held for sale
Carrying amount at the end of the year
Freehold
land
Plant and
equipment
60,770
-
60,770
17,610
(16,389)
1,221
30,000
60,770
-
(30,000)
60,770
2,555
-
(1,334)
-
1,221
Total
78,380
(16,389)
61,991
32,555
60,770
(1,334)
(30,000)
61,991
Annual Report
June 2023
35
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
At 30 June 2022
Cost
Accumulated depreciation
Net carrying amount
Movement in property, plant and equipment
Carrying amount at the beginning of the year
Depreciation charge for the year
Carrying amount at the end of the year
10 Exploration and evaluation assets
Cost
Accumulated amortisation and impairment
Net carrying amount
Movement in exploration and evaluation assets
Carrying amount at the beginning of the year
Additions - other
Remeasurement of rehabilitation provision
Amortisation and impairment
Impairment
Assets held for sale
Carrying amount at the end of the year
Freehold
land
Plant and
equipment
30,000
-
30,000
17,610
(15,055)
2,555
30,000
-
30,000
Note
3,889
(1,334)
2,555
2023
$
Total
47,610
(15,055)
32,555
33,889
(1,334)
32,555
2022
$
9,722,679
(1,236,892)
8,485,787
10,762,298
(1,236,892)
9,525,406
9,525,406
1,963,230
38,468
-
(1,571,317)
(1,470,000)
8,485,787
8,933,030
2,003,524
(174,256)
(1,236,892)
-
-
9,525,406
Exploration licenses are carried at cost of acquisition less impairment losses. The recoverability of the carrying
amount of the exploration and evaluation assets is dependent on successful development and commercial
exploitation, or alternatively, sale of the respective areas of interest. The recoverable amount of development
expenditure is determined as the higher of its fair value less costs to sell and its value in use.
11 Discontinued operations
During the reporting period the Board decided to explore the sale of its interests in the tenements located in the
Mount Mackenzie (MM Asset) region of Queensland. On 31 July 2023 the Company publicly announced the
decision of its Board of Directors to sell the MM Asset. On 19 September 2023 the Group entered into a
conditional heads of agreement. At 30 June 2023 the MM Asset was classified as an asset held for sale and
discontinued operation and the carrying amount reduced to its expected fair value.
Annual Report
June 2023
36
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
The results of the MM Asset for the year are presented below.
Revenue
Exploration expense
Corporate and other administration costs
Employee benefits expense
Director fees
Other
Impairment of exploration costs
Profit/(loss before income tax from discontinued operations
Income tax benefit
Profit/(loss) after income tax from discontinued operations
The major classes of assets and liabilities of the MM Asset
classified as held for sale at 30 June 2023 are as follows.
Assets
Property
Exploration expenditure
Net assets of directly associated with disposal group
Details of the disposal
Total sale consideration
Carrying amount of net assets disposed
Loss on disposal before income tax
Loss on disposal after income tax
The net cash flows incurred by the MM Asset were as follows.
Cash flows from operating activities
Cash flows from investing activities
Net decrease in cash and cash equivalents from discontinued
operations
Earnings per share attributable to the discontinued operations
were as follows.
Loss per share (cents per share) – basic
Loss per share (cents per share) – diluted
Note
Note
9
10
2023
$
-
(82,234)
(26,400)
(18,014)
(63,091)
(25,898)
(1,571,317)
2022
$
-
(34,122)
(26,400)
(16,898)
(46,111)
(32,210)
-
(1,786,954)
-
(1,786,954)
(155,741)
-
(155,741)
2023
$
30,000
1,470,000
1,500,000
1,500,000
1,500,000
-
-
2023
$
2022
$
(215,637)
(365,750)
(155,741)
(491,912)
(581,387)
(647,653)
2023
(0.36)
(0.36)
2022
(0.03)
(0.03)
Annual Report
June 2023
37
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
12 Trade and other payables
Amounts owed to director
Other payables
13 Provisions
Current
Employee entitlements
Non-Current
Rehabilitation provision
Total provisions
Movement in provisions
2023
$
2022
$
22,000
673,139
22,000
638,771
695,139
660,771
2023
$
2022
$
14,338 15,255
380,110 341,642
394,448 356,897
At 30 June 2023
Carrying amount at the beginning of the year
Remeasurement of provision
Employee
benefits
Rehabilitation
Total
15,255 341,642
(917)
38,468
356,897
37,551
Carrying amount at the end of the year
14,338
380,110
394,448
At 30 June 2022
Carrying amount at the beginning of the year
Remeasurement of provision
Employee
benefits
Rehabilitation
Total
14,131
1,124
515,898
(174,256)
530,029
(173,132)
Carrying amount at the end of the year
15,255
341,642
356,897
Annual Report
June 2023
38
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
14 Issued capital
499,805,789 fully paid ordinary shares (2022: 499,805,789)
Movements in fully paid ordinary shares
2023
$
2022
$
36,811,242
36,811,242
Date
$/share
2023
Number
$
$/share
2022
Number
$
Balance at the beginning of the
financial year
Placement
10/11/2021
Cost of equity issues
499,805,789
36,811,242
431,680,789
34,388,392
-
-
-
-
0.040
68,125,000
2,725,000
-
(302,150)
Balance at the end of the financial year
499,805,789
36,811,242
499,805,789
36,811,242
15 Reserves
Share option reserve
Balance at the beginning of the financial year
Share based payment
2023
$
2022
$
1,709,695
68,329
763,990
945,705
Balance at the end of the financial year
1,778,024
1,709,695
(i)
Reserve arises on the issue of options in payment for services or fees. Further information on options issued is
shown in Note 18 to the financial statements.
16 Asset backing and earnings per share
Basic and diluted earnings/(loss) per share - continuing operations
Basic and diluted assets per share - continuing operations
The following reflects the income and share data used in the basic and diluted
per share calculations:
i
2023
cents per
share
2022
cents per
share
(0.27)
1.94
2023
$
0.07
2.68
2022
$
Profit/(loss) attributable to shareholders of the Company used in the calculation of
basic and diluted earnings per share of continuing operations
(1,333,066)
317,898
Annual Report
June 2023
39
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
2023
Number
2022
Number
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution of share options on issue (i)
499,805,789
-
474,982,159
-
Weighted average number of ordinary shares adjusted for the effect of dilution
499,805,789
474,982,159
(i)
Share options on issue that have been assessed as being dilutive for the purpose of calculating earnings per
share have been excluded from the calculation of earnings per share as the Group has incurred a loss after tax.
In that circumstance the inclusion of share options would reduce the earnings/(loss) per share and present a
misleading result.
17 Financial instruments
Financial risk management objectives
(a)
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, loans,
convertible instruments and derivatives. The main purpose of non-derivative financial instruments is to raise finance
for Group operations. The directors consider that the limited risks mean there is no need to enter into risk
management strategies involving derivative instruments.
The Group is exposed to credit risk, liquidity risk and interest rate risk. There have been no substantive changes in
the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes
for managing or measuring the risks from the previous period.
The Group manages liquidity risk by a combination of maintaining cash reserves, banking facilities and continuously
monitoring forecast and actual cash flows. Ultimate responsibility for liquidity risk management rests with the board
of directors, which has built an appropriate liquidity risk management framework for the management of the Group’s
short, medium and long-term funding and liquidity management requirements. Risks are managed through
sensitivity analysis to model the impact of changes upon the Group’s profits.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date of
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the balance sheet and notes to the financial statements.
(b)
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.
Fair value of financial instruments
(c)
The fair values of financial assets and financial liabilities are determined as follows:
-
-
the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active
liquid markets are determined with reference to quoted market prices; and
the fair value of other financial assets and financial liabilities are determined in accordance with generally
accepted pricing models based on discounted cash flow analysis.
Annual Report
June 2023
40
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
(d) Categories of financial instruments
The following table details the carrying amounts and fair values of the Group's financial assets and financial
liabilities. The directors consider that the carrying amounts of financial assets and liabilities recorded at amortised
cost in the financial statements approximate their fair values.
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Liabilities measured at amortised cost:
Trade and other payables
Note
2023
$
2022
$
6 704,982 3,839,241
- 335,331
704,982 4,174,572
Note
2023
$
2022
$
695,139 660,771
695,139 660,771
(i) Financial instruments that are measured subsequent to initial recognition at fair value, are grouped into Levels 1
to 3 based on the degree to which the fair value is observable.
Level 1 - fair value measurements are those derived from quoted sources (unadjusted) in active markets for
identical assets or liabilities.
Level 2 - fair value measurements are those derived from inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
of liability that are not based on observable market data (unobservable inputs).
The fair value of derivative instruments is significantly affected by movements in interest rates. Sensitivity of the
valuation of the derivative liabilities to changes in these factors is shown below at item (j).
(e) Credit risk exposures
Credit risk arises principally from the Group’s receivables and cash and bank balances. Credit risk is kept
continually under review and managed to reduce the incidence of material losses being incurred by the non-receipt
of monies due. The Group’s financial assets include trade and other receivables and loans to related entities.
The maximum exposure to credit risk on financial assets of the Group which has been recognised on the balance
sheets is generally the carrying amount, net of any provisions for doubtful debts. The Group has no significant
concentrations of credit risk with any single counterparty or group of counterparties. The Group's financial assets
are limited to credit risk exposures to Australia on a geographical basis. Trade and other receivables that are
neither past due nor impaired are limited to a few counterparties which are considered credit worthy.
Annual Report
June 2023
41
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
2023
Interest rates
Contractual
repayment
amount
6mths or
less
6-12 mths
1-5 years
Cash and cash equivalents
Receivables
2022
Cash and cash equivalents
Receivables
(f)
Liquidity risk management
2.0%
na
2.0%
na
704,982
704,982
- -
0
0
- -
Contractual
repayment
amount
6mths or
less
6-12 mths
1-5 years
3,839,241
3,839,241
- -
335,331
335,331
- -
The board has put in place liquidity risk management policies for the management of the Group’s short, medium
and long-term funding and liquidity management requirements. The Group manages liquidity risk by having a
combination of:
-
-
-
continuously monitoring forecast and actual cash flows;
having in place loan facilities structured to grow as the size of the business increases; and
arranging issues of securities as required.
To the extent possible maturity profiles of financial assets and liabilities are matched.
The board reviews the capital structure on a regular basis. The board does not have a set debt level target however
the level of borrowings is in line with expectations.
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the Group could be required to pay. The table includes principal and interest cash flows at the face value
of the amount owing and therefore the figures differ from those shown in the financial statements.
2023
Interest
rate
Trade payables
-
Contractual
repayment
amount
695,139
2022
Interest
rate
Trade payables
-
Contractual
repayment
amount
660,771
Less than 1 year
1-5 years
695,139
-
Less than 1 year
1-5 years
660,771
-
Annual Report
June 2023
42
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
The table below reflects an undiscounted view of the contractual maturity for financial liabilities and cash flows
expected to be realised from financial assets. Actual timing may differ from that disclosed. The timing of the cash
flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates.
Within 1 Year
2022
$
2023
$
1 to 5 Year
2022
$
2023
$
Total
2023
$
2022
$
Group financial liabilities due for payment
Trade payables
695,139
660,771
-
- 695,139 660,771
Total contractual and
expected outflows
695,139
660,771
-
- 695,139 660,771
Group financial assets - cash flows realisable
Cash
Receivables
704,982
3,839,241
- 335,331
-
-
- 704,982 3,839,241
- - 335,331
Total
Net inflows
704,982
4,174,572
-
- 704,982 4,174,572
(9,843)
(3,513,801)
-
-
(9,843)
(3,513,801)
(g) Interest rate risk management
The Group has borrowed funds at fixed rate of interest and therefore currently has limited exposure to movements
in interest rates.
(h) Foreign currency risk management
At its current stage of development the Group is indirectly exposed to foreign currency risk, in respect of the market
price for gold which is based in US dollars.
(i) Commodity price risk management
At its current stage of development the Group is indirectly exposed to commodity price risk, in respect of the market
price for gold.
(j) Sensitivity analysis of risk factors
At 30 June 2023, the effect on profit and equity as a result of changes in interest rates, with all
other variables remaining constant, would not have a material impact.
Annual Report
June 2023
43
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
18 Share-based payments
The Company has the following share options outstanding under share based plans:
2023
2022
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
Number of
options
Balance at the beginning of the financial year
Granted
Expired
91,000,056
20,000,000
(28,000,056)
$0.127
$0.080
$0.131
44,117,556
48,000,000
(1,117,500)
$0.127
$0.080
$0.075
Balance at the end of the financial year
83,000,000
$0.075
91,000,056
$0.127
Exercisable at the end of the financial year
63,000,000
$0.073
91,000,056
$0.127
Share options outstanding at the end of the year have the following expiry date and exercise prices
Class
Vesting Conditions
Grant date
Expiry date
Exercise
price
Number of
share options
Number of
share options
Class L
Class M
Class N
Class P
Class Q
Class R
Class S
Class T
Class U
Class V
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Subject to conditions
18/12/2017
18/12/2017
11/10/2019
14/10/2020
2/11/2020
15/07/2021
14/09/2021
14/09/2021
27/10/2021
24/11/2022
15/12/2022
15/12/2022
11/10/2022
30/09/2025
31/10/2022
31/08/2026
31/08/2026
31/08/2026
31/08/2026
24/11/2027
$0.140
$0.140
$0.080
$0.050
$0.200
$0.080
$0.080
$0.080
$0.080
$0.080
Details of share options granted during the year:
Grant date
Expiry date
Exercisable from
Exercise price
Number of options issued
Fair value at grant date
Fair value at grant date per option
Vesting conditions (1)
2023
2022
-
-
-
15,000,000
-
8,000,000
21,000,000
11,000,000
8,000,000
20,000,000
1,000,000
1,000,000
15,000,000
15,000,000
11,000,056
8,000,000
21,000,000
11,000,000
8,000,000
8,000,000
83,000,000
99,000,056
Class V
24/11/2022
24/11/2027
24/11/2022
$0.08
20,000,000
$159,800
$0.0094
Refer below
Annual Report
June 2023
44
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
(i) Options vest according to the following conditions:
Tranche A 8,000,000 Vest upon further extraction of gold from the Menzies project.
Tranche B 6,000,000: Vest upon the later of generation of $3 million of free cash flow from gold extraction from the
Menzies project; and remain engaged with REZ for a period of 2 years from date of appointment.
Tranche C 6,000,000: Vest upon either
1.
2.
3.
the inferred and indicated gold resource of the Menzies project being increased by 200,000 ounces
over the reported balance as of 30 June 2022; or
the indicated and inferred gold resource of the Mount Mackenzie project increasing by 140,000 ounces
over the reported balance as of 30 June 2022; or
the commencement or ore extraction at the Mount Mackenzie project.
and
remained engaged with REZ for a period of 2 years from date of appointment.
The fair values of the share options were determined using the following parameters:
Expected volatility of ordinary shares %
%
Risk free interest rate
Underlying share price at valuation date$/share
Weighted average life of option
Exercise price
Valuation method
years
$/share
Details of share options granted during the prior year:
Class V
106.00%
3.42%
$0.017
5.0
$0.08
Binomial
Grant date
Expiry date
Exercisable from
Exercise price
Number of options issued
Fair value at grant date
Fair value at grant date per option
Vesting conditions
(i) Options vest either upon being engaged for 24 months or if the Company's ordinary shares have a volume
weight average price above 15 cents over a 30 day during the period 12 months form the date of issue.
Class S
14/09/2021
31/08/2026
14/09/2021
$0.08
21,000,000
$390,600
$0.019
na
Class T
14/09/2021
31/08/2026
14/09/2021
$0.08
11,000,000
$229,900
$0.021
na
Class R
15/07/2021
31/08/2026
15/07/2021
$0.08
8,000,000
$113,600
$0.014
na
Class U
27/10/2021
31/08/2026
27/10/2021
$0.08
8,000,000
$116,800
$0.015
na
The fair values of the share options were determined using the following parameters:
Expected volatility of ordinary shares %
%
Risk free interest rate
Underlying share price at valuation date$/share
Weighted average life of option
Exercise price
Valuation method
years
$/share
Class R
85.00%
0.64%
$0.030
Class S
85.00%
0.62%
$0.040
5.1 5.0
$0.08
Binomial
$0.08
Binomial
Class T
85.00%
0.59%
$0.050
Class U
62.00%
3.09%
$0.042
5.0 4.8
$0.08
Binomial
$0.08
Binomial
28,000,056 options expired unexercised during the reporting period.
Annual Report
June 2023
45
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
Share-based payments expense
Current year expense
Expense of instruments issued in prior period
19 Contingent liabilities
2023
$
2022
$
53,300 734,100
15,029 94,805
68,329 828,905
2023
$
2022
$
Corporate and management fees
493,364 493,364
Amounts invoiced by a director related entity (refer Note 21) in prior years are not payable unless and until the
Group has a proven mineral resources of gold or the equivalent value of another mineral as follows:
a) $246,682 when the Company has announced a resource of 400,000 ounces of gold; and
b) $246,682 when the Company has announced a resource of 600,000 ounces of gold.
Bank guarantees
20,000
20,000
Bank guarantees are issued on behalf of the Group by its bankers. The guarantees provide that the financier will
honour the Group's obligations under specific agreements and are secured against monies held on deposit of
$20,000 (2022: $20,000) (refer Note 8). No material losses are expected.
There are no other contingent liabilities as at 30 June 2023 (2022: nil).
20 Tenement lease commitments
Minimum expenditure commitment on tenement leases
The Group held exploration mineral licences in relation to its mines located at East Menzies, Western Australia for
which minimum expenditure is required to comply with license conditions. Amounts committed but not provided for
and payable:
Within one year
One year or later and no later than for five years
Over 5 years
2023
$
412,673
720,799
815,804
2022
$
1,104,431
3,053,746
-
1,949,276
4,158,177
Annual Report
June 2023
46
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
21 Key management personnel disclosures
Key management personnel are those having authority and responsibility for planning, directing and controlling the
activities of the Group. Key management personnel consists of the directors of the Company and senior
management of the Group as defined in the Remuneration Report section of the Directors' Report.
(a) Compensation of Key Management Personnel
The aggregate compensation made to key management personnel of the Group is set out below (i). The
remuneration shown includes all amounts incurred for the year. Further details of the compensation of key
management personnel is contained in the Directors' Report in the Remuneration Report section.
(i) Mr Kember was appointed on 8 August 2016 and his remuneration forms part of the fees charged by a director
related entity. Details of the nature of the engagement and the amount of fees charged are provided below.
Short-term
Share-based payments
Post employment
(b) Shareholdings
2023
$
2022
$
310,225
53,300
2,100
365,625
238,350
474,200
-
712,550
The number of ordinary shares in the Company held during the financial year by a director of the Company or senior
management of the Group, including their personally related parties, are set out below.
2023
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Mr Warren Kember
2022
Mr Gavin Rezos
Mr Richard Poole
Ms Virginia Bruce
Mr Warren Kember
(c) Share option holdings
Balance at the
start of the year
Granted as
compensation
Net other change
Balance at the
end of the year
15,258,700
67,987,302
12,000,000
625,000
-
-
-
-
-
15,258,700
-
67,987,302
-
12,000,000
-
625,000
Balance at the
start of the year
Granted as
compensation
Net other change
Balance at the
end of the year
14,603,700
67,987,302
12,000,000
625,000
-
-
-
-
655,000
15,258,700
-
67,987,302
-
12,000,000
-
625,000
The number of share options in the Company held during the financial year by a director of the Company or senior
management of the Group, including their personally related parties, are set out below.
Details of share options granted during the year are provided at Note 18.
Annual Report
June 2023
47
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
2023
Balance at the start
of the year
Granted as
compensation
Net other change
Balance at the
end of the year
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Mr Warren Kember
2022
Mr Gavin Rezos
Mr Richard Poole
Mr J Daniel Moore
Mr Warren Kember
8,000,000
8,000,000
-
-
5,000,000
20,000,000
4,000,000
-
-
-
-
-
8,000,000
8,000,000
25,000,000
4,000,000
Balance at the start
of the year
Granted as
compensation
Net other change
Balance at the
end of the year
-
-
-
-
8,000,000
-
8,000,000
8,000,000
-
8,000,000
5,000,000
-
5,000,000
4,000,000
-
4,000,000
(d) Other transactions with key management personnel
Richard Poole
Transactions with, or with persons or entities associated with, Mr Richard Poole, a director and the chief executive
officer of the Company, during the financial year were as follows:
The Company has entered into a Corporate Advisory and Business Development Mandate (Agreement) with
entities ultimately controlled by interests associated with Mr Richard Poole (Arthur Phillip). The Agreement
provides for the payment of fees for the raising of debt or equity capital and the charging of costs associated with
the administration of the Group.
Arthur Phillip invoiced fees and expenses for the provision of management, accounting, office administration,
consulting and company secretarial services to the Company, amounting to $292,920 (2022: $411,800),
consisting of:
Directors fees
Share-based payment
Office rent
Accounting and company secretarial services
Management services
2023
$
2022
$
33,000
-
5,500
122,420
132,000
292,920
33,000
148,800
33,000
76,000
121,000
411,800
At the end of the financial year an amount of $493,364 for fees owing in prior years, which is subject to performance
conditions, is included as a contingent liability (refer Note 19).
Annual Report
June 2023
48
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
22 Related party disclosures
The consolidated financial statements include the financial statements of the Company and its controlled entities
listed in the following table. The Company is the ultimate Australian parent entity and the ultimate parent of the
Group.
Name
Mount Mackenzie Pty Limited
Radio Gold Pty Limited (formerly Brightsun Enterprises Pty Limited)
Resource & Energy Operations Pty Limited
Menzies Goldfield Pty Limited
Country of
incorporation
Australia
Australia
Australia
Australia
% Equity interest
2023
100.00%
100.00%
100.00%
100.00%
2022
100.00%
100.00%
100.00%
100.00%
Deep Energy Pty Limited
Australia
51.85%
51.85%
23 Auditors' remuneration
Fees charged by the auditor of the Company for auditing or
reviewing the financial report
24 Parent entity financial information
2023
$
2022
$
62,350
60,000
(a) Summary financial information
The individual financial statements for the Company (parent entity) show the following aggregate amounts:
Balance Sheet
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Shareholders' contributed equity
Reserves
Accumulated Losses
Profit or Loss for the year
Total comprehensive loss for the year
2023
$
2022
$
22,319
14,299,987
(471,869)
(471,869)
13,828,118
580,108
14,350,360
(120,634)
(120,634)
14,229,726
36,811,243
1,778,024
(24,761,149)
13,828,118
36,811,243
1,709,695
(24,291,212)
14,229,726
(469,937)
(1,205,254)
(b) Contingent Liabilities of the Parent
The Company did not have any contingent liabilities as at 30 June 2023 or in the prior financial year.
Annual Report
June 2023
49
Notes to the Financial Statements (continued)
For the year ended 30 June 2023
25 Dividend
No dividend has been declared or paid during the financial year or the prior period. The directors do not
recommend the payment of a dividend for the year ended 30 June 2023.
26 Events after balance sheet date
Other than as set out below there have been no significant events occurring after the balance date which may affect
either the Group's operations, results of those operations or the Group's state of affairs.
On 19 September 2023 the Company entered into a binding heads of agreement (Agreement) for the sale of the
tenements and land held at the Mount Mackenzie prospect. The Agreement, which is conditional upon the
purchaser completing due diligence, provides the following consideration:
* $750,000 payable by 26 October 2023;
* $750,000 upon receipt of approval to commence mining activities or upon Aureus listing its securities on a
recognised stock exchange; and
* an ongoing royalty of 1% of the market value of gold extracted.
Annual Report
June 2023
50
Directors' Declaration
In accordance with a resolution of the directors of Resources & Energy Group Limited, the directors declare that:
(a)
The financial statements and notes of the company are in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the company's financial position as at 30 June 2023 and of its performance for
the year ended on that date; and
(ii) complying with Accounting Standards and Corporations Regulations 2001, including compliance with
International Financial Reporting Statements as issued by the International Accounting Standards Board
as stated in Note 2 of the financial statements.
(b)
The Chief Executive Officer has declared that:
(i)
the financial records of the Company for the financial year have been properly maintained in accordance
with Section 286 of the Corporations Act 2001;
(ii)
the financial statements and notes for the financial year comply with the Accounting Standards; and
(iii) the financial statements and notes for the financial year give a true and fair view.
(c)
There are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
On behalf of the Board,
Mr Gavin Rezos
Chairman
Sydney, 29 September 2023
Annual Report
June 2023
51
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Resources & Energy Group Limited for the year ended
30 June 2023, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
C J Hume
Partner
Sydney, NSW
29 September 2023
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
52
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of Resources & Energy Group Limited and its controlled subsidiaries
Opinion
We have audited the financial report of Resources & Energy Group Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2(c) in the financial report, which indicates that the Group incurred a net loss of
$1,333,066 from continuing operations and had net cash outflows from operating activities of $1,110,259 during
the year ended 30 June 2023. As stated in Note 2(c), these events or conditions, along with other matters as set
forth in Note 2(c), indicate that a material uncertainty exists that may cast significant doubt on the Company's
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
53
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Carrying value of capitalised exploration and evaluation
Refer to Note 10 in the financial statements
Our audit procedures included the following:
• Considering the Group’s right to explore in the
relevant exploration area which included obtaining
and assessing supporting documentation such as
obtaining independent searches of the company’s
tenement holdings;
• Considering the Group’s intention to carry out
significant exploration and evaluation activity in the
included an
relevant exploration area which
assessment of
flow
the Group's
forecasts and enquired of management and the
Board of Directors as to the intentions and strategy
of the Group;
future cash
•
•
•
Assessing recent exploration activity in a given
exploration license area to determine if there are
any negative indicators that would suggest a
potential impairment of the capitalized exploration
and evaluation expenditure;
Assessing the commercial viability of results relating
to exploration and evaluation activities carried out in
the relevant license area; and
Assessing the ability to finance any planned future
exploration and evaluation activity.
As disclosed in note 10, the Group held capitalized
exploration and evaluation expenditure of $8,485,787
as at 30 June 2023 which represents a significant asset
of the Group.
We consider the carrying amount of these assets
under AASB 6 Exploration for and Evaluation of
Mineral Resources to be a key audit matter due to the
significant management
involved,
including:
judgments
• whether
the exploration and evaluation
spend can be associated with finding specific
mineral resources, and the basis on which
that expenditure is allocated to an area of
interest
•
the Group's ability and intention to continue
to explore the area
• which costs should be capitalised
•
the existence of any impairment indicators
(such as the potential that mineral reserves
and resources may not be commercially
viable for extraction, or that the carrying
value of the assets may not be recovered
through sale or successful development) -
and if so, those applied to determine and
quantify any impairment loss
• whether exploration activities have reached
the stage at which the existence of an
economically recoverable reserve may be
determined
Provision for site restoration obligations
Refer to Note 13 in the financial statements
The Consolidated Statement of Financial Position of
the Group includes a provision for site restoration of
$380,110 as at 30 June 2023. The group has
obligations to restore the land on which it has
conducted drilling activities. The provision is for future
costs associated with the rehabilitation activities and
Our audit procedures in relation to provision for site
restoration obligations included:
• Understanding management’s process to determine
the provision for restoration and ensuring it was
consistent with our understanding of the activities
associated with those tenements;
54
Key Audit Matter
requires significant judgement in respect of asset lives,
restoration being undertaken and
timing of
environmental legislation requirements.
This is considered as a key audit matter due to the
significant judgement involved and the materiality of the
balance.
How our audit addressed this matter
• Reviewing the cost elements used in the estimation
of rehabilitation of related tenements and ensuring
that these were supported by independent third-
party reports;
• Checking the mathematical accuracy of the model
used to calculate the provision;
• Reviewing the reasonableness of the inflation rate,
the rehabilitation
discount rate and
cashflows assumptions used in the model;
timing of
•
•
Ensuring the movement in the provision has been
accounted
in accordance with Australian
for
Accounting Standards; and
Assessing the appropriateness of the disclosures in
the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
55
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 14 of the directors' report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Resources & Energy Group Limited, for the year ended 30 June 2023,
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.
C J Hume
Partner
RSM Australia Partners
Sydney, NSW
29 September 2023
56
Security Holders' Information
Additional information included in accordance with the Listing Rules of the Australian Securities Exchange Ltd. The
information provided is current as of 15 September 2023.
1. Ordinary share holders
(a) Top 20 shareholders
The names of the 20 largest holders of ordinary shares as shown in the Company's share register are listed below.
Name
Citicorp Nominees Pty Limited
Fontelina Pty Limited
Arthur Phillip Nominees Pty Ltd
Vivien Enterprises Limited
BNP Paribas Nominees Pty Ltd
Vanavo Pty Limited
Arthur Phillip Nominees Pty Ltd (Larraakeyah Pty Ltd)
Mrs Emma Bacci
Mrs Natalie Risinger
Sanjur Pty Limited
Hestian Pty Limited
Sharky Holdings Limited
Mr John Hancock
Guildfords Funds Management Pty Limited
Parkmond Ventures Pty Limited
Minerva Geological Services Pty Limited
Ms Fatima Danium
Jackill Pty Limited
Global Consortium Holdings Pty Limited
Mr Lincoln Topham & Mrs Pauline Topham
Total top 20 holders
Other holders
Total ordinary shares on issue
(b) Shareholder analysis
Number of
Shares
% of Issued
Shares
73,813,579
39,920,000
35,338,294
15,233,700
9,256,478
9,171,905
7,625,000
6,497,150
6,497,150
6,096,747
5,400,000
5,000,000
4,750,000
4,162,611
4,117,700
3,995,385
3,732,096
3,580,658
3,500,000
3,005,700
14.8%
8.0%
7.1%
3.0%
1.9%
1.8%
1.5%
1.3%
1.3%
1.2%
1.1%
1.0%
1.0%
0.8%
0.8%
0.8%
0.7%
0.7%
0.7%
0.6%
250,694,153
249,111,636
499,805,789
50.2%
49.8%
100.0%
An analysis of the numbers of ordinary share holders by size of holding is shown below
Size of holding range
1
1,001
5,001
10,001
100,001 and
1,000
5,000
10,000
100,000
Over
-
-
-
-
Number of
holders
49
152
157
948
466
1,772
Percentage of
holders
2.8%
8.6%
8.9%
53.5%
26.3%
100.0%
Units held
9,215
458,455
1,399,052
39,996,901
457,942,166
499,805,789
There were 976 shareholders that held less than a marketable parcel of ordinary shares.
Annual Report
June 2023
57
Security Holders' Information
(c) Substantial shareholders
Holders of more than 5% of the ordinary shares who have lodged substantial shareholder notices are listed below.
Name of shareholder
Richard Poole and family
Gaffwick Pty Limited
Ordinary
shares held
Percentage of total
ordinary shares on issue
67,987,302
68,213,334
13.6%
13.6%
(d) Voting rights
There are no restrictions on voting rights attached to the ordinary shares. On a show of hands every member
present in person shall have one vote and upon a poll, every member present or by proxy shall have one vote every
share held.
(e) Share buyback
There were no share buybacks during or subsequent to the end of the financial year.
2 Share options
The names of holders of more than 20% of each class of unlisted share options are shown below. Share options
do not have voting rights until converted into ordinary shares.
Class
Name of holder
Number of holders
Share options
issued
Percentage
held of each
class
Q
R
S
T
U
V
Employee options
Barclay Pearce Capital Pty Ltd
Employee & director options
Employee & director options
Guildfords Funds Management Pty
Karantzias Investments Pty Ltd
Spark Plus Pte Ltd
Employee options
1
1
3
3
1
1
1
1
Total share options on issue
15,000,000
8,000,000
21,000,000
11,000,000
4,000,000
2,000,000
2,000,000
20,000,000
83,000,000
100.0%
100.0%
100.0%
100.0%
50.0%
25.0%
25.0%
100.0%
Annual Report
June 2023
58