ANNUAL
REPORT
2020
Rox Resources Annual Report 2020
CORPORATE DIRECTORY
Directors:
Mr Stephen Dennis
Non-Executive Chairman
Dr John Mair
Non-Executive Director
Mr Alex Passmore
Managing Director
Mr Brett Dickson
Finance Director
Company Secretary:
Mr Brett Dickson
Banker:
Westpac Banking Corporation
40 St George’s Terrace
Perth WA 6000
Auditor:
Pitcher Partners BA&A Pty Ltd
Level 11
12-14 The Esplanade
Perth WA 6000
Telephone: (08) 9322 2022
Facsimile: (08) 9322 1262
Solicitor:
K & L Gates
Level 32
44 St George’s Terrace
Perth WA 6000
Telephone: (08) 9216 0900
Facsimile: (08) 9216 0601
For shareholder information contact:
Share Registry:
Computershare Registry Services Pty Ltd
Level 11
172 St George’s Terrace
Perth WA 6000
Telephone: (08) 9323 2000
Facsimile: (08) 9323 2033
Stock Exchange:
ASX Limited
Company Code:
RXL (Fully Paid Shares)
Issued Capital:
2,045,828,463
Fully paid ordinary shares
4,000,000
2.4 cent, 30 November 2020 options
67,000,000
3.3 cent, 30 November 2022 options
20,000,000
1.5 cent, 31 January 2022 options
20,000,000
10.0 cent, 31 December 2023 options
20,000,000
12.5 cent, 31 December 2023 options
20,000,000
15.0 cent, 31 December 2023 options
For information on your company contact:
Principal & Registered Office:
Level 1
34 Colin Street
West Perth WA 6005
Telephone: (08) 9226 0044
Facsimile: (08) 9322 6254
Web: www.roxresources.com.au
www.roxresources.com.au
CONTENTS
CHAIRMAN’S REVIEW ..............................................................................................................02
PROJECTS ..................................................................................................................................03
DIRECTORS’ REPORT ...............................................................................................................12
AUDITORS INDEPENDENCE DECLARATION ..........................................................................23
CORPORATE GOVERNANCE ....................................................................................................24
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position .............................................................30
Consolidated Statement of Comprehensive Income ...................................................31
Consolidated Statement of Cash Flows .........................................................................32
Consolidated Statement of Changes in Equity .............................................................33
Notes to and Forming Part of the Consolidated Financial Statements .....................34
Directors’ Declaration ......................................................................................................64
Independent Audit Report to the Members of Rox Resources Limited ....................65
SCHEDULE OF MINING TENEMENTS .....................................................................................71
OTHER INFORMATION ............................................................................................................72
Chairman’s Review
Dear Shareholder,
I am pleased to report on what has been a very busy and successful year for Rox.
When I wrote to you at this time last year we had just been through a significant period of transition. Alex Passmore had only recently
commenced as our Managing Director, and we had just completed the potentially transformational acquisition of an interest in the
Youanmi Gold Project.
That acquisition comprised several components, including an initial 50% interest in the Youanmi Gold Mine, and interests in the
gold rights of several joint ventures in the Youanmi region. In June this year, Rox exercised an option to acquire an additional 20% of
Youanmi, increasing our interest in the project to 70%.
Youanmi is Rox’s primary exploration target, and already we have completed a number of successful drilling campaigns which
encompass some 37,000 metres of Reverse Circulation (RC) drilling, 1,300 metres of diamond core drilling and 12,000 metres of air
core drilling.
Results from those programs have been very encouraging with many high-grade gold intercepts having been reported, and discovery
of the near-surface, high-grade Grace zone. These results are detailed in the project section of our Annual Report. The Grace
mineralisation has been drilled over a strike length of 700 metres (and remains open) and is hosted within strongly sheared, fractured
and altered granite within a broad mineralised corridor trending NNW. This structural corridor within the Youanmi granite, and its
orientation, had not been recognised by previous explorers and miners, and it provides us with a significant opportunity to explore for
similar structures along the extensive granite contact within the Youanmi boundary.
While the Youanmi Gold Project is very exciting and holds significant promise, we have also conducted further work programs at our
Fisher East Nickel Project which hosts several nickel sulphide deposits. A Reverse Circulation (RC) exploration drilling program was
recently completed at the project, and at the time of writing we are awaiting results from this program.
No review of the year past year can be made without a mention of COVID-19 pandemic, which has brought its own set of challenges.
We responded quickly to the pandemic and continue to manage the potential spread of the virus and to ensure the well-being and
safety of our employees, contractors and local communities. I am pleased to report that there has been no material impact on the
Company’s activities to date.
We have a very exciting year ahead of us at Rox, in particular we look forward to building on our recent exploration success at
Youanmi. I take this opportunity to thank our shareholders for their ongoing support, and I also thank Alex and his team for their
dedication and efforts towards making Rox a great success.
Stephen Dennis
2
Rox Resources Annual Report 2020
Projects
Rox Resources Limited (Rox) has a suite of advanced projects that are prospective for either
nickel or gold.
Gold Projects
Youanmi Gold Project
Mt Fisher Gold Project
Nickel Projects
Fisher East Nickel
Collurabbie Nickel Project
All projects contain JORC resources and are located in Western Australia (Figure 1)
Youanmi Gold Project
Figure 1 - Project Location Map
The Youanmi Gold Project is located 480 km to the northeast of Perth, Western Australia, accessed by the sealed Great Northern
Highway for a distance of 418 km from Perth to Paynes Find and then for 150 km by the unsealed Paynes Find to Sandstone Road.
The Youanmi Gold Project consist of four joint ventures with Venus Metals Corporation Limited (VMC) (refer Figure 3) and tenements
100% owned by Rox (figure 2). The joint ventures are:
1. The OYG JV (all minerals) - covers 65km2, is circa 10km x 7km wide, and surrounds the Youanmi Gold Mine and nearby
extensions;
2.
the VMC JV (gold rights) - covers 302km2;
3.
the Youanmi JV (gold rights) - covers 270km2 ; and
4.
the Currans Find JV (all minerals) – covers 4km2
3
Projects
Youanmi Gold Project (continued)
The Youanmi Mining Centre has produced an estimated 667,000 oz of gold (at 5.47 g/t Au) since discovery in 1901 during three main
periods: 1908 to 1921, 1937 to 1942, and 1987 to 1997. Most of the gold was produced from the Youanmi Mine with an estimated
96,000oz produced from Youangarra, Penny West, Columbia-Magenta, Currans and other minor prospects.
The structure of the Youanmi Project is dominated by the north-trending Youanmi Fault Zone. Most of the gold mineralisation seen at
the project is hosted within north-northwest splays off the north-northeast trending Youanmi Fault.
Figure 2 – Youanmi Gold Project
4
Rox Resources Annual Report 2020
Projects
OYG JV (Rox 70%, VMC 30%)
The OYG JV comprises an approximate 8km by 10km area of granted mining leases which cover the historic Youanmi Mining Centre.
This area contains the projects current resource inventory and also covers growth projects including Grace Prospect. The site has
significant infrastructure in place with access roads, an accommodation village (suitable for exploration), borefield, powerlines in place
providing a head start for development.
The current Resource Estimate at the Youanmi Gold Project is 2.4Mt at 2.97g/t Au for 1,190,600 ounces of gold (ASX: 7 April 2019)
Rox completed significant resource confirmation and step out drilling at the OYG JV in 2019 and early 2020 embarked on a follow-on
program focussed on the newly discovered high-grade Grace Prospect and the structural corridor to the north of Grace. This program
is ongoing and is testing depth and strike extensions to Grace, together with infill drilling on some sections where a higher drill density
was required due to the very high gold grades that have been received.
In general, at Grace, the Company’s drilling has defined a significant very high-grade zone of mineralisation (greater than 30 gram-
metres) extending from surface, open to the north and which lies within a broader wide zone of mineralisation. It is currently
interpreted as a northerly plunging high-grade, gold mineralised body; In places multiple shoots are present.
At the time of writing, the Company has defined a mineralised corridor within the Youanmi granite up to 1.5km to the north of
historical mine infrastructure (Figure 3). This corridor has mineralisation developed variably over a strike length of 2.5km. Key areas
within this corridor include Grace, Grace North, and Plant Zone. Mineralisation is hosted within brittle-ductile fault-fracture arrays
within the Youanmi granite and is associated with quartz-sericite alteration.
Gold mineralisation at the Grace Prospect is interpreted to be shear / fracture zone related occurring in the granite footwall rocks
relative to the historically mined Youanmi gold mine sequence. Grades seen at the Grace Prospect are high relative to historical mining
grades at Youanmi.
Discovery of the Grace Prospect demonstrates the exceptional prospectivity of the Youanmi belt. It has opened-up the margin of the
Youanmi granite as a key target for additional resources in an area that was previously unrecognised.
Drilling is ongoing and is expected to continue through to the end of the 2020. Numerous high-grade drill intercepts have been
received, with better results including (ASX: 14 Nov 19, 2 APR, 6 May, 16 & 19 June, 23 and 28 Jul, 1 Sept 2020):
• MLRC020: 5m @ 125.7 g/t Au from 0m (Grace)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
RXRC111: 4m @ 32.5 g/t Au from 6m (Grace)
RXRC114: 14m @ 31.3 g/t Au from 1m (Grace)
RXRC132: 4m @ 11.20 g/t Au from 48m (new FW zone)
RXRC133: 4m @ 18.06 g/t Au from 16m (Grace)
RXRC135: 4m @ 73.8 g/t Au from 48m (Grace)
RXRC151: 7m @ 54.6g/t Au from 8m (Grace)
RXRC152: 1m @ 29.7g/t Au from 23m (Grace)
RXRC153: 6m @ 5.7g/t Au from 24m (Grace)
RXRC154: 4m @ 4.5g/t Au from 9m, and 3m @ 5.32g/t Au from 53m (Grace)
RXRC158: 4m @ 69.5 g/t Au from 28m (Grace)
RXRC201: 2m @ 18.96g/t Au from 48m to end of hole (Grace nth)
RXRC219: 3m @ 7.41g/t Au from 109m (Grace)
RXRC227: 2m @ 7.34g/t Au from 34m (Grace)
RXRC239: 13m @ 60.49g/t Au from 177m (Grace)
RXRC252: 4m @ 7.56g/t Au from 17m (Grace)
RXRC260: 11m @ 18.75g/t Au from 8m (Grace)
RXRC266: 4m @ 88.81g/t Au from 27m (Grace)
RXRC268: 9m @ 9.28g/t Au from 9m (Grace)
RXRC287: 25m @ 34.79g/t Au from 143m (Grace)
RXRC305: 3m @ 10.26g/t Au from 107m (Grace North)
RXRC308: 3m @ 22.67g/t Au from 10m (Grace)
RXRC310: 4m @ 18.53g/t Au from 88m (Grace)
RXRC312: 3m @ 5.72g/t Au from 217m at EOH (Grace North)
5
Projects
OYG JV (Rox 70%, VMC 30%)
Figure 3 – drill hole collars and intercepts over generalised geology
6
Rox Resources Annual Report 2020
Projects
VMC JV – Gold Rights (Rox 50%, VMC 50%)
The VMC JV lies immediately south of the OYG JV and covers 302km2 with some 35km of strike the Youanmi shear zone (figure 2). Rox
was required to spend $800,000 on exploration to earn a 50% interest in the gold rights which it completed in August 2020.
A ground magnetic survey totalling 232-line kilometres (with 50m line spacing) was recently completed at the Penny West Deep South
Prospect covering 8.3km strike of the Youanmi Shear Zone south of the historical Penny West Gold Mine. The survey highlighted a
number of prospective stratigraphic and structural target positions for Penny West-style gold mineralization. In addition, an Xcite
electromagnetic survey (HEM) carried out at the Penny West Deep South Project in early 2020 (ASX: 15 Mar 20) highlighted 9 priority
anomalies. Five high priority anomalies (PWDS1 to PWDS3, PWDS5 and PWDS13) were considered most significant as they lie south
and along strike from the Penny West gold deposit and are adjacent to the interpreted Youanmi Shear Zone (ASX: 7 Apr 20).
An Aircore (AC) drilling program in 2019 generated geochemical anomalies (for lead and other base metals) that were interpreted to
resemble the geochemical signatures of Currans North and Penny West high-grade gold mineralization (ASX: 15 Oct 2019).
At the Sovereign prospect, RC drilling followed up on previous AC and RC results (ASX: 4 & 28 Nov 19, 27 Jul 20 and 18 Sep 20) and
extended the high-grade gold mineralization down dip. Best results include from the prospect include:
•
•
•
•
•
•
•
•
VRAC151: 4m @ 7.02 g/t Au from 24m, and 5m @ 2.41 g/t Au from 60m to EOH
VRAC161: 4m @ 0.94 g/t Au from 32m
VRAC173: 8m @ 1.92 g/t Au from 28m
YSRC05: 3m @ 6.61 g/t Au from 78m
YSRC09: 4m @ 2.68 g/t Au from 116m
YSRC10: 7m @ 3.97 g/t Au from 59m
YSRC11: 3m @ 1.24 g/t Au from 56m
YSRC014: 8m @ 5.03 g/t Au from 160m
An interpretation of recent ground-magnetic surveys covering the Sovereign Prospect (E57/1019) shows prominent northeast (NE) and
north-northeast (NNE) trending structures that align with the orientation of high-grade gold mineralization in the area.
YOUANMI JV – Gold Rights (Rox 45%, VMC 45%, Other 10%)
The Youanmi JV covers 270km2 and lies to the south west and north east of the OYG JV Figure 2). Rox is required to spend $200,000
on exploration to earn a 45% interest in the gold rights. At 31 August 2020 Rox had spent $52,703 however the company anticipated
the earn-in to be met in coming months as work on these tenements is increased.
A ground magnetic survey was recently completed on an area to the northwest of the OYG JV with follow up Aircore and RC drilling
planned.
7
Projects
Currans Find and Pinchers Hill (Rox 45%, VMC 45%, Others 10%)
The Currans Find project area is located within the Youanmi Greenstone Belt and situated approximately 5 km north-northwest of
the historical Penny West gold mine (Figure 2). High-grade gold mineralization is associated with quartz veins that generally plunge to
the southwest and steeply dip to the southeast. The mineralization is hosted by mafic rocks (amphibolite), ultramafics (talc-tremolite
schist) and diorite. Similar rocks are host to the gold mineralisation at Penny West.
Ground magnetic surveys have been completed at Currans Find and Pinchers Hill totalling 62.7- and 12.6-line kilometres respectively.
At Currans Find (M57/641), the survey generated a new target that has been prioritised for drill-testing. Recent RC drilling (7 holes for
1,030m) extended the strike extent of the Red White and Blue Prospect lodes (ASX: 19 Jun 20). A Heli-borne Xcite EM survey covered
Currans Find (M57/641) and parts of E57/1019 to the north and west of Currans Find.
Some of the better intercepts received include (ASX: 13 & 24 Jun, 5 Aug, 5 Sep 19):
•
•
•
•
•
•
•
•
CFRC14: 2m @ 13.34 g/t Au from 61m
CFRC16: 3m @ 27.5 g/t Au from 39m
CFRC26: 3m @ 32.58 g/t Au from 115m
CFRC31: 3m @ 25.00 g/t Au from 109m
CFRC32: 1m @ 39.61 g/t Au from 94m
CFRC42: 4m @ 9.25 g/t Au from 46m
CFRC46: 1m @ 13.32 g/t Au from 110m and 2m @ 3.84 g/t Au from 128m
CFRC47: 4m @ 5.28 g/t Au from 90m and 2m @ 5.05 g/t Au from 111m
It was recently announced (ASX: 11 Sep 20) that high-grade gold mineralization was intersected in RC and aircore drilling at the Taylor’s
Reef Prospect. Taylor’s Reef Prospect is a new unworked zone where high- grade gold was recovered from surface workings in recent
times by Mr D Taylor (ASX: 23 Apr 19). Best results from the recent drilling at Taylor’s Reef Prospect include:
•
•
CFRC084: 3m @ 19.58g/t Au from 21m and 3m @ 14.30g/t Au from 73m
CFAC047: 2m @ 6.67 g/t Au from 57m
This high-grade gold mineralisation at Taylor’s Reef Prospect is interpreted as a continuation of high-grade gold lodes at Currans North
Prospect, offset by a north-northeast trending fault. With widespread gold anomalies in laterite to the southwest of Taylor’s Reef, it
forms an approximately 900m long northeast-trending target zone for further drilling and evaluation.
Mt Fisher Nickel and Gold Project (100%) & Mt Eureka JV
(RXL earning up to 75%, Cullen Resources 25%)
The Mt Fisher / Mt Eureka Nickel and Gold Project is located in the Northern Goldfields, about 600km northeast of Kalgoorlie
(approximately 120km east of Wiluna).
Rox holds 1142km2 of the Mt Fisher greenstone belt and surrounding prospective zones (RXL 100% 808km2 and in the Cullen Resources
JV, 334km2 (ASX: 21 Aug 2019).
The Mt Fisher greenstone is typical Archean greenstone comprising basalts, dolerites, ultramafic and sedimentary rocks. Following
Rox’s discovery of Fisher East the belt has been recognised as containing significant komatiite hosted nickel deposits. More recently
the VMS (i.e. Cu, Zn, Pb sulphide) potential of the belt has also been recognised.
The Fisher East Nickel Project lies on the eastern ultramafic horizon of the belt. It has mineral deposits with JORC resources at
Camelwood, Cannonball and Musket (4.2Mt @ 1.9% Ni for 78,000t contained nickel) (ASX: 5 February 2016). These occur along an
ultramafic flow ‘basal contact’ which extends north into the Rox-Cullen JV.
Rox conducted aircore drilling along the northern part of the Mt Fisher greenstone belt earlier in 2020 to test regolith geochemistry
ahead of a targeted RC program. The Company also conducted a VTEM survey which provides the Company with detailed magnetics
and delineates EM conductors which may be present.
The results of the VTEM survey in conjunction with the air core drilling have now been interpreted and identified 5 key locations where
there are coincident EM conductors with nickel indicator geochemistry (i.e. anomalous platinum and palladium) in the regolith.
The Company recently deployed an RC drilling rig to test whether these targets contain commercial quantities and grades of
mineralisation. Results are awaited.
8
Rox Resources Annual Report 2020
Mt Fisher Nickel and Gold Project (100%) & Mt Eureka JV
(RXL earning up to 75%, Cullen Resources 25%)
Projects
Mineral Resources
Youanmi Gold Project, WA (Reported to the ASX on 17 April 2019)
Deposit
Near Surface Deposits
(cut-off 0.5 g/t Au)
Deposit
Deposit
Deeps
Deeps
(cut-off 4.0 g/t Au)
(cut-off 4.0 g/t Au)
Category
Indicated
Inferred
TOTAL
Category
Category
Indicated
Indicated
Inferred
Inferred
TOTAL
TOTAL
Tonnes
(Mt)
4.72
5.36
10.07
Tonnes
Tonnes
(Mt)
(Mt)
0.81
0.81
1.60
1.60
2.41
2.41
Grade Au
(g/t)
Contained Gold
(oz)
1.76
1.55
1.65
266,200
266,500
532,700
Grade Au
Grade Au
(g/t)
(g/t)
Contained Gold
Contained Gold
(oz)
(oz)
8.1
8.1
8.7
8.7
8.5
8.5
210,200
210,200
447,700
447,700
657,900
657,900
Mt Fisher Gold, WA (Reported to the ASX on 11 July 2018, 0.8 g/tAu cut-off)
Deposit
Category
Tonnes
Uncut
Damsel
Mt Fisher
Moray Reef
TOTAL
Inferred
Indicated
Measured
TOTAL
Inferred
Indicated
Measured
TOTAL
Inferred
Indicated
Measured
TOTAL
Inferred
Indicated
Measured
591,820
151,464
23,712
766,997
40,934
59,533
125,605
226,073
1,242
4,930
25,521
31,693
633,997
215,928
174,838
TOTAL
1,024,762
Grade
(g/tAu)
2.29
2.33
2.80
2.32
3.44
3.63
3.73
3.65
3.87
6.09
Metal
(Ozs)
43,627
11,358
2,135
57,120
4,528
6,948
15,045
26,521
155
966
10.92
8,960
9.89
2.37
2.78
4.65
2.84
10,081
48,309
19,273
26,140
93,721
Grade
(g/tAu)
2.23
2.27
2.59
2.25
3.41
3.63
3.61
3.58
3.87
5.95
8.02
7.53
2.31
2.73
4.11
2.70
Value
(g/tAu)
30
30
30
30
50
50
50
50
80
80
80
80
Cut
Metal
(Ozs)
42,339
11,060
1,974
55,373
4,494
6,948
14,569
26,011
155
943
6,577
7,675
46,987
18,951
23,121
89,059
9
Projects
Mineral Resources (continued)
Fisher East Nickel, WA (Reported to the ASX on 5 February 2016)
Deposit
Camelwood
Cannonball
Musket
TOTAL
Category
Indicated
Inferred
TOTAL
Indicated
Inferred
TOTAL
Indicated
Inferred
TOTAL
Indicated
Inferred
TOTAL
Tonnes
(Mt)
Grade
Ni%
Contained Metal
Nickel (kt)
1.7
0.3
2.0
0.24
0.02
0.26
1.8
0.1
1.9
3.7
0.5
4.2
2.0
1.5
1.9
2.9
1.9
2.8
1.7
1.5
1.7
1.9
1.5
1.9
34.0
5.0
39.0
7.0
0.3
7.3
30.0
1.6
31.6
71.0
7.0
78.0
Collurabbie Nickel, WA (Reported to the ASX 18 August 2017)
Deposit
Category
Tonnes
(kt)
Grade
Ni%
Grade
Cu%
Grade
Co%
Grade Pd
g/t
Grade Pt
g/t
Olympia
Inferred
573
1.63
1.19
0.082
1.49
0.85
Figures in all tables may not add up exactly due to rounding.
10
Rox Resources Annual Report 2020
Mineral Resources Estimation Governance Statement
Governance of Rox’s mineral resources is a responsibility of the Executive Management of the Group.
Rox has ensured that its mineral resources estimates are subject to appropriate levels of governance and internal controls. The
mineral resources reported for the Fisher East and Collurabbie nickel projects and the Youanmi Gold Project have been estimated
by independent external consultants who are experienced in best practices in modelling and estimation methods. The consultants
have also undertaken reviews of the quality and suitability of the underlying information used to generate the resource estimations.
Additionally, the Group carries out regular internal peer reviews of processes and contractors engaged. The Mt Fisher gold resource was
estimated by Mr Ian Mulholland, the Group’s Managing Director at the time of the Resources Estimate. Mr Mulholland is experienced
in best practices in modelling and estimation methods.
Rox has reported its Mt Fisher gold mineral resource on an annual basis in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Resources (the JORC code) 2004 Edition.
Rox has reported its Fisher East nickel mineral resource on an annual basis in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Resources (the JORC code) 2012 Edition.
Rox has reported its Collurabbie nickel mineral resource on an annual basis in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Resources (the JORC code) 2012 Edition.
Rox has reported its Youanmi gold mineral resource on an annual basis in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Resources (the JORC code) 2012 Edition.
Competent Persons named by Rox are members of the Australian Institute of Mining and Metallurgy and/or the Australian Institute of
Geoscientists and/or of a “Recognised Professional Organisation”, as included in a list on the JORC and ASX websites.
Competent Person Statements
Resource Statements
The information in this report that relates to nickel Mineral Resources for the Fisher East project was reported to the ASX on 5 February
2016 (JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in
the announcement of 5 February 2016, and that all material assumptions and technical parameters underpinning the estimates in the
announcement of 5 February 2016 continue to apply and have not materially changed.
The information in this report that relates to nickel Mineral Resources for the Collurabbie project was reported to the ASX on 18 August
2017 (JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in
the announcement of 18 August 2017, and that all material assumptions and technical parameters underpinning the estimates in the
announcement of 18 August 2017 continue to apply and have not materially changed.
The information in this report that relates to gold Mineral Resources for the Mt Fisher project was reported to the ASX on 11 July 2018
(JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in the
announcement of 28 March 2018, and that all material assumptions and technical parameters underpinning the estimates in the
announcement of 28 March 2018 continue to apply and have not materially changed.
The information in this report that relates to gold Mineral Resources for the Youanmi project was reported to the ASX on 17 April
2019 (JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in
the announcement of 17 April 2019, and that all material assumptions and technical parameters underpinning the estimates in the
announcement of 17 April 2019 continue to apply and have not materially changed.
Exploration Results
The information in this report that relates to previous Exploration Results, was either prepared and first disclosed under the JORC
Code 2004 or under the JORC Code 2012 and has been properly and extensively cross-referenced in the text to the date of original
announcement to ASX. In the case of the 2004 JORC Code Exploration Results and Mineral Resources, they have not been updated to
comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
11
Directors’ Report
The Directors present their report on the consolidated entities (referred to as the Group) consisting of the Parent entity, Rox Resources
Limited (Rox or the Company), and the entities it controlled at the end of, or during, the year ended 30 June 2020 (the reporting period).
Directors
The names and details of the Directors of the Company in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Names, Qualifications, Experience and Special Responsibilities
Mr Stephen Dennis (Non-Executive Chairman, appointed 1 August 2015) - BCom, BLLB, GDipAppFin(Finsia)
Mr Dennis has been actively involved in the mining industry for over 35 years. He has held senior executive roles in a number of
Australian resources companies and was previously the CEO and Managing Director of CBH Resources Ltd, the Australian subsidiary
of Toho Zinc Co Ltd of Japan.
Mr Dennis is currently the Non–Executive Chairman of Heron Resources Ltd, Marvel Gold Limited (formerly Graphex Mining Ltd), Lead
FX Inc., EHR Resources Ltd and Kalium Lakes Ltd. He has not been a director of any other listed company in the last three years.
Mr Alex Passmore (Managing Director, appointed 1 May 2019 - B.Sc (Hons), GradDipAppFin, FIASIG, GAICD
Mr Passmore was appointed as Chief Executive Officer of Rox from 1 February 2019 and on the 1 May was appointed as Managing
Director, is a qualified geologist with extensive corporate experience. He holds a Bachelor of Science degree with First Class Honours in
Geology from the University of Western Australia and a Graduate Diploma of Applied Finance from the Securities Institute of Australia.
Mr Passmore is an experienced corporate executive and company director with recent appointments including Managing Director
of Cockatoo Iron NL, Non-Executive Director of Aspire Mining Ltd, Non-Executive (and Executive) Director of Equator Resources Ltd/
Cobalt One Ltd (which merged with TSX-listed First Cobalt Corp), and CEO of Draig Resources Ltd (now Bellevue Gold Ltd).
Mr Passmore has also spent a considerable time in the finance sector, where he became well known over ten years at Patersons
Securities Ltd in roles such as Director – Corporate Finance, Head of Research, Resources Analyst, and Institutional dealer. He was also
Executive Director – Natural Resources & Institutional Banking for Commonwealth Bank of Australia for two years.
In the last three years Mr Passmore has been a director of Cockatoo Iron NL (public unlisted) and Blencowe Resources Limited (London
listed)
Dr John Mair (Non-Executive Director, appointed 24 October 2019) PhD (Econ Geol), Member AusIMM
Dr Mair is an economic geologist with extensive international experience across technical, managerial and corporate fields. He holds
a PhD in Economic Geology (UWA) and held the position of post-doctoral research fellow at the Mineral Deposit Research Unit, UBC,
Canada.
Dr Mair brings a deep understanding of a range of gold deposits types from experience working in Western Australia, New South
Wales, Alaska, Yukon, British Columbia amongst other places. He has authored numerous papers in leading scientific journals on the
geology of gold deposits.
Dr Mair is the Managing Director of Greenland Minerals Ltd who is developing the globally significant Kvanefjeld rare earths project
in Greenland. He has been integral in the technical development of Kvanefjeld, the corporate evolution of Greenland Minerals Ltd,
and the commercial and strategic alignment with international rare earths group Shenghe Resources Holding Co Ltd. Dr Mair has
worked closely with the Greenland and Danish governments on matters pertaining to regulation. He has significant experience and
connections in global capital markets.
In the last three years Dr Mair has not been a director of any other company.
Mr Brett Dickson (Executive Company Secretary, appointed director 31 March 2010) - B.Bus, FCPA, FGIA, MAICD
Mr Dickson is experienced in the financial management of companies, principally companies in early stage development of its resource
or production and offers broad financial management skills. He has been Company Secretary and Chief Financial Officer (CFO) for a
number of successful resource companies listed on the ASX and in addition to Rox Resources currently also acts as Company Secretary
and CFO for Azure Minerals Limited.
Mr Dickson is a director of Ionic Resources Limited and has not been a director of any other listed company in the last three years.
12
Rox Resources Annual Report 2020
Interest in the Share and Options of the Company
As at the date of this report, the interest of the Directors in the shares and options of Rox Resources Limited were:
S Dennis
J Mair
B Dickson
A Passmore
Ordinary Shares
Unlisted Options
9,127,245
1,618,164
24,284,149
32,927,245
13,000,000
10,000,000
-
60,000,000
(Loss)/ Profit Per Share
Basic and Diluted (Loss)/ Profit per share
2020: (0.52) cents
2019: (0.22) cents
Dividends
No amounts have been paid or declared by way of dividend of the Company since the date of incorporation and the Directors do not
recommend the payment of any dividend.
Operating and Financial Review
Rox Resources Limited is a company limited by shares which is incorporated and domiciled in Australia.
Nature of Operations and Principal Activities
The principal activity of the Group during the year was mineral exploration.
Results from Operations and Financial Position
During the year, the Group has incurred a net loss after tax for the year ended 30 June 2020 of $7,469,580 (2019 Loss: $2,790,816). The
loss includes exploration expenditure charged directly to the statement of comprehensive income of $4,870,758 (2019: $1,640,078).
Net cash outflows from operating activities were $6,686,475 (2019: $2,947,183).
At 30 June 2020, the Group had cash on hand of $10,567,910 (2019: $3,912,742) The Directors believe the Group maintains a sound
capital structure and is in a good position to progress its projects.
Review of Operations
During the year, the Group was principally focussed on the OYG and other joint ventures/earn-in joint ventures at the Youanmi Gold
Project. Additionally, further exploration was undertaken on the Mt Fisher Gold and Fisher East Nickel Projects in Western Australia.
For further information on these projects please refer to the Project Review within this Annual Report.
Employees
At 30 June 2020 the Group had five full-time employees and one casual employee (2019: four full-time and two casual employees).
Risk Management
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities,
are identified on a timely basis and the Group’s objectives and activities are aligned with the risks and opportunities identified by the
Board.
The Group believes that it is important for all Board members to be part of this process, and as such the Board has not established a
separate risk management committee.
The Board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with the risks
identified by the Board. These include the following:
• Board approval of a strategic plan, which encompasses the Group’s vision, mission and strategy statements, designed to meet
stakeholders needs and manage business risk; and
•
Implementation of Board approved budgets and Board monitoring of progress against those budgets.
13
Directors’ Report
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the numbers of
meetings attended by each Director were as follows:
Directors’ Normal
Meetings
Directors’ Remuneration
Meetings
Directors’ Nomination
Meetings
Directors’ Audit
Meetings
No.
Eligible
No.
Attended
No.
Eligible
No.
Attended
No.
Eligible
No.
Attended
No.
Eligible
No.
Attended
S Dennis
J Mair
B Dickson
A Passmore
9
6
9
9
9
6
9
9
1
1
1
-
1
1
1
-
1
-
1
1
1
-
1
1
1
-
1
1
1
-
1
1
Committee Membership
As at the date of this report, the Group does not have separately constituted Audit & Risk, Nomination or Remuneration Committees.
The full Board acts as those committees under specific charters.
Significant Changes in State of Affairs
During the year, the Company issued 697,820,332 shares at $0.024 each to raise $16,747,683 (before costs). There were no other
significant changes in the state of affairs of the Group during the year.
Matters Subsequent to the End of the Financial Year
Since the end of the financial year the Group has:
1.
2.
3.
Subsequent to year end, on 28 July 2020, shareholders approved the issue of 41,666,667 shares to Venus Metals Corporation
Ltd in final settlement for an additional 20% interest in the OYG Joint Venture.
Issued 5,250,000 shares at $0.024 as a result of the exercise of 5,250,000 employee options raising $126,000; and
Issued 9,810,893 shares as a result of the cashless exercise of 16,000,000 employee options.
No other matter or circumstance has arisen since the end of the financial year which significantly affected or may significantly affect
the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial periods.
Environmental Issues
The Group carries out mineral exploration at its various projects which are subject to environmental regulations under both
Commonwealth and State legislation. During the financial year, there has been no breach of these regulations.
Likely Developments and Expected Results of Operations
The Group will continue to explore its mineral tenements, with particular focus on the Youanmi Gold Project.
Indemnification and Insurance of Directors and Officers
During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company
covered by the insurance policy include the Directors and the Company Secretary named in this report.
The Director and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or
criminal proceedings that fall within the scope of the indemnity and that may be brought against the Directors and officers in their
capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers
of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause
under the insurance policy.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Pitcher Partners BA & A Pty Ltd (“Pitcher Partners”),
as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Pitcher Partners during or since the financial year.
14
Rox Resources Annual Report 2020
Share Options
At the date of the Directors’ Report, there were 4,000,000 unlisted options exercisable at $0.024, 20,000,000 unlisted options exercisable
at $0.015, 67,000,000 unlisted options exercisable at $0.033, 20,000,000 options exercisable at $0.10, 20,000,000 options exercisable
at $0.125 and 20,000,000 options exercisable at $0.15. No options were exercised during the year. Since the end of the financial year
5,250,000 options exercisable at $0.024 and 16,000,000 options exercisable at $0.033 have been exercised. Refer to note 19 of the
Financial Statements for further details on options outstanding.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body
corporate or in the interest issue of any other registered scheme.
Auditor Independence and Non-Audit Services
Section 307C of the Corporations Act 2001 requires the Company’s Auditors to provide the Directors of Rox Resources Limited with
an Independence Declaration in relation to the audit of the full-year financial report. This report has been received and is attached to
the Directors’ Report at page 26.
Non-Audit Services
There were no non-audit services were provided by the entity’s auditor, Pitcher Partners.
15
Directors’ Report
Remuneration Report (Audited)
This Remuneration Report outlines the Director and executive remuneration arrangements of the Company in accordance with the
requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, Key Management Personnel (KMP) are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group,
directly or indirectly, including all Directors of the Company.
Details of Key Management Personnel
Alex Passmore
Managing Director (appointed CEO on 1 February, appointed MD 1 May 2019)
Brett Dickson
Executive Director and Company Secretary (appointed director 31 March 2010)
John Mair
Non-executive Director (appointed 24 October 2019)
Stephen Dennis Non-executive Chairman (appointed 1 August 2015)
There were no changes of KMP after the reporting date and before the date the financial report was authorised for issue.
Remuneration Committee
The full Board acts as the Remuneration Committee and is responsible for determining and reviewing compensation arrangements
for the Directors and the Managing Director (“MD”).
The Board assesses the appropriateness of the nature and amount of remuneration of Directors on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a
high-quality board and executive team.
Remuneration Philosophy
The performance of the Group depends upon the quality of its Directors and executives. To prosper, the Group must attract, motivate
and retain highly skilled Directors and executives.
To this end, the Group embodies the following principles in its remuneration framework:
• Provide competitive rewards to attract high calibre executives
•
•
Establish appropriate hurdles for variable executive remuneration
Encouragement for Directors to sacrifice a portion of their fees to acquire shares in the Company at market price
Remuneration Structure
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive Remuneration is
separate and distinct.
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors
of the highest calibre, whilst keeping costs acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined
from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as
agreed. The latest determination was in 2004 when shareholders approved an aggregate remuneration of $150,000 per year.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst
Directors is reviewed annually. The Board considers the fees paid to Non-Executive Directors of comparable companies when
undertaking the annual review process.
Each Non-Executive Director receives a fee for being a Director of the Company. The remuneration of Non-Executive Directors for the
years ended 30 June 2020 and 30 June 2019 is detailed later in this report.
Non-Executive Directors have long been encouraged by the Board to hold shares in the Company (purchased by the Director on
market). It is considered good governance for Directors to have a stake in the Company on whose board he or she sits. In addition,
long term incentives in the form of options may be awarded to Non-Executive Directors, subject to shareholder approval, in a manner
which aligns this element of remuneration with the creation of shareholder wealth.
16
Rox Resources Annual Report 2020
Executive Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities
within the Group and so as to:
•
•
•
•
reward executives for company and individual performance against targets set by reference to appropriate benchmarks;
align the interests of executives with those of shareholders;
link reward with the strategic goals; and
ensure total remuneration is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration the Board considered market conditions and remuneration paid to
senior executives of companies similar in nature to Rox Resources Limited.
Remuneration consists of the following key elements:
•
Fixed Remuneration
• Variable Remuneration
·
·
short term incentive (“STI”); and
long term incentive (“LTI”)
Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is
competitive in the market.
Fixed remuneration is reviewed annually by the Board and the process consists of a review of individual performance, relevant
comparative remuneration in the market and, where appropriate, external advice on policies and practices.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe
benefits such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating
undue cost for the Company.
The fixed remuneration component of all of the Directors is detailed later in this report.
Variable Remuneration – Short Term Incentive (“STI”)
Objective
The objective of the STI program is to link the achievement of the Group’s operational targets with the remuneration received by the
executives charged with meeting those targets. The total potential STI available is set at a level so as to provide sufficient incentive to
the executive to achieve those operational targets and such that the cost to the Company is reasonable in the circumstances.
Structure
Actual STI payments granted to executives depend on the extent to which specific targets, set at the beginning of the review period,
being a calendar year, are met. The targets generally consist of a number of Key Performance Indicators (KPI’s) covering both financial
and non-financial, corporate and individual measures of performance. Typically included are measures such as contribution to
exploration success, share price appreciation, risk management and cash flow sustainability. These measures were chosen as they
represent the key drivers for the short-term success of the business and provide a framework for delivering long term value.
The Board has predetermined benchmarks that must be met in order to trigger payments under the STI scheme. On an annual basis,
after consideration of performance against KPI’s, the Board, acting as a Remuneration Committee, determines the amount, if any, of
the STI to be paid to each executive. This process usually occurs in the first quarter of the following calendar year. Payments made are
delivered as a cash bonus in the fourth quarter of the fiscal year.
17
Directors’ Report
Remuneration Report (Audited)
STI bonus for 2019 and 2020
For the financial year ended 30 June 2019 no STI was paid.
For the 2020 year the maximum bonus available for Mr Passmore was $150,000. Mr Passmore was paid a bonus of $140,000 for the
2020 year.
Variable Remuneration – Long Term Incentive (“LTI”)
Objective
The objective of the LTI plan is to reward executives in a manner which aligns this element of remuneration with the creation of
shareholder wealth. As such LTI grants are only made to executives who are able to influence the generation of shareholder wealth.
The Company considers that shareholder wealth is measured by changes to the Company’s share price.
Structure
LTI grants to executives are delivered in the form of options. The options, when issued to executives, will not be exercisable for a price
less than the then current market price of the Company’s shares. The grant of LTI’s is reviewed annually, though LTI’s may not be
granted each year. Exercise price and performance hurdles, if any, are determined at the time of grant of the LTI.
To date no performance hurdles have been set on options issued to executives. The Company may, and at times has, imposed
time-based service conditions. The Company believes that as options are issued at not less than the current market price of the
Company’s shares there is an inherent performance hurdle on those options as the share price of the Company’s shares must increase
significantly before there is any benefit to the executive.
Employment Contracts
The Managing Director, Mr Passmore is employed under contract. The current employment contract has no fixed term. Under the
terms of the present contact:
• Mr Passmore is paid an annual salary of $380,000 plus superannuation up to the maximum statutory concessional amount,
currently $25,000pa.
• Mr Passmore may resign from his position and terminate this contract by giving three months’ notice.
•
•
The Company may terminate this employment agreement by providing three months’ written notice. If the employment is
terminated by the Company the Company will make an additional payment of 6 months’ Base Salary, inclusive of any amount
of notice paid in lieu upon termination of the Employment. The amount paid will be adjusted if necessary, to ensure compliance
with section 200F (2) of the Corporations Act.
The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination
with cause occurs, the Managing Director is only entitled to that portion of remuneration, which is fixed, and only up to the date
of termination. On termination with cause any unvested options he holds will immediately be forfeited.
The Company Secretary, Mr Dickson is employed under a service contract through Coolform Investments Pty Ltd (“Coolform”). The
current contract terminates on 31 December 2021, at which time the Company may choose to commence negotiation to enter into a
new service contract with Coolform. Under the terms of the present contact:
• Coolform is paid a fixed monthly fee of $15,125 per month.
• Coolform may terminate the contract by giving three months written notice.
The Company may terminate the service contract agreement by providing three months written notice. On termination on
notice by the Company, subject to ASX Listing Rule 10.19 and section 200F(3) of the Corporations Act 2001, will pay Coolform an
amount equal to six months of the fixed component of his remuneration.
The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with
cause occurs, Coolform is only entitled to that portion of remuneration, which is fixed, and only up to the date of termination.
On termination with cause any unvested options he holds will immediately be forfeited.
•
•
18
Rox Resources Annual Report 2020
Remuneration of Key Management Personnel
Short Term
Long
Term
Post
Employment
Share Based
Payments
Total
Percentage
Performance
Related
2020
Salary & Fees
$
Bonus
$
Other1
$
Directors
S Dennis
J Mair2
80,000
34,375
-
-
A Passmore
306,666
140,000
-
-
-
B Dickson
-
-
181,500
Total
421,041
140,000
181,500
$
-
-
-
-
-
Superannuation
$
7,600
3,264
25,000
-
35,864
LTI
Options
$
83,000
83,000
332,000
124,500
$
170,600
120,639
803,666
306,000
622,500
1,400,905
%
-
17.4
-
10.0
Short Term
Long
Term
Post
Employment
Share Based
Payments
Total
Percentage
Performance
Related
2019
Salary & Fees
$
Bonus
$
Other
$
Superannuation
$
Options
$
$
%
Directors
S Dennis
I Mulholland3
A Passmore4
B Dickson
Total
80,000
271,419
125,000
-
476,419
-
-
-
-
-
$
-
42,983
-
-
-
-
-
181,500
7,600
20,833
10,416
-
-
-
79,600
-
87,600
335,235
215,016
181,500
181,500
42,983
38,849
79,600
819,351
1 Paid to Coolform Investments Pty Ltd for services a related entity of Mr Dickson.
2 Mr Mair appointed 24 October 2019.
3 Mr Mulholland retired on 30 April 2019, on retirement his long service leave totalling $42,983 was paid out.
4 Mr Passmore commenced as CEO on 1 February 2019 and Managing Director on 1 May 2019.
-
-
-
-
-
19
Directors’ Report
Remuneration Report (Audited)
Compensation options: Granted and vested during the year
During the year 75,000,000 options were issued to Directors (2019: 20,000,000)
Granted in 2020
Terms and Conditions for Each Grant
Vested 2020
Lapsed 2020
Number
Date
Fair
value
$
Total
fair
value
Exercise
Price
$
Expiry
date
First
exercise
date
Last
exercise
date
Number
%
Lapsed during
the year
Directors
A Passmore 40,000,000 12 Dec 19 0.0083 332,000 $0.033 30 Nov 22 12 Dec 19 30 Nov 22 40,000,000
100%
-
S Dennis
10,000,000 12 Dec 19 0.0083
83,000
$0.033 30 Nov 22 12 Dec 19 30 Nov 22 10,000,000
100%
3,000,000
J Mair
10,000,000 12 Dec 19 0.0083
83,000
$0.033 30 Nov 22 12 Dec 19 30 Nov 22 10,000,000
100%
-
B Dickson
15,000,000 12 Dec 19 0.0083 124,500 $0.033 30 Nov 22 12 Dec 19 30 Nov 22 15,000,000
100%
5,000,000
Total
75,000,0001
622,500
75,000,000
8,000,0002
Granted in 2019
Terms and Conditions for Each Grant
Vested 2019
Lapsed 2019
Number
Date
Fair
value
$
Total fair
value
Exercise
Price
$
Expiry
date
First
exercise
date
Last
exercise
date
Number
%
Lapsed during
the year
Directors
A Passmore
20,000,000 1 Feb 19 $0.004
$79,600
$0.015
31 Jan
22
1 Feb
19
31 Jan
22
20,000,000
100
-
S Dennis
I Mulholland3
B Dickson
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
30,000,000
5,000,000
Total
20,000,000
$79,600
20,000,000
38,000,000
For details of options granted and exercised during the 2019 and 2020 years refer to Note 19 of the Financial Statements.
There were no alterations to the terms and conditions of options granted as remuneration since their grant.
The Group’s remuneration policy prohibits directors and executives from entering into transactions or arrangements which limit the
economic risk of participating in unvested entitlements. To ensure compliance with this policy Directors and executives are required
to disclose all dealings in company securities, whether vested or not.
1 Issued pursuant to Employee Share Option Plan
2 Options exercisable at $0.026 lapsed on 30 November 2019
3 At time of retirement on 30 April 2019.
20
Rox Resources Annual Report 2020
Share holdings of Key Management Personnel
2020
Balance at 1
July 2019
Granted as
Remuneration
Purchased
Net Change/
Other
Shares Issued on
Exercise of Options
Balance at 30
June 2020
A Passmore
32,000,000
J Mair
S Dennis
B Dickson
-
4,200,000
9,775,000
45,975,000
-
-
-
-
-
927,245
618,164
927,245
309,082
-
1,000,000 1
-
-
2,781,736
1,000,000
-
-
-
-
-
32,927,245
1,618,164
5,127,245
10,084,082
49,756,736
2019
Balance at 1
July 2018
Granted as
Remuneration
Purchased
Net Change/
Other
Shares Issued on
Exercise of Options
Balance at 30
June 2019
A Passmore
-
I Mulholland2
15,033,103
S Dennis
B Dickson
2,200,000
7,775,000
25,008,103
-
-
-
-
-
32,000,000
1,000,000
2,000,000
2,000,000
37,000,000
-
-
-
-
-
-
-
-
-
-
32,000,000
16,033,103
4,200,000
9,775,000
62,008,103
Options holdings of Key Management Personnel
2020
Balance at 1
July 2019
Granted as
Remuneration
Options
Exercised
Options
Expired 3
Balance at 30 June
2020
Options
Vested
Not Yet
Ex-ercised4
S Dennis
A Passmore
J Mair
B Dickson
6,000,000
20,000,000
-
10,000,000
36,000,000
10,000,000
40,000,000
10,000,000
15,000,000
75,000,000
-
-
-
-
-
3,000,000
13,000,000
13,000,000
-
-
5,000,000
8,000,000
60,000,000
60,000,000
10,000,000
10,000,000
20,000,000
20,000,000
103,000,000
103,000,000
Other Transactions with Key Management personnel
Coolform Investments Pty Ltd, a company in which Mr. Dickson is a Director and shareholder, received fees totalling $181,500 (2019:
$181,500) for the provision of services.
During the year the Company paid an amount of $123,095 (2019: $121,359 including GST) to Azure Minerals Limited, a company of
which Mr Dickson is an officer, for the provision of office accommodation. The Company also received fees totalling $48,428 (2019:
$43,800 including GST) from Azure Minerals Limited being reimbursement for the provision of office staff support. An amount of
$10,950 (2019: $10,950) is receivable at year end.
1 Holding at date of appointment.
2 As at date of retirement on 30 April 2019.
3 Options exercisable at $0.026 which expired on 30 November 2019.
4 All options which have vested are exercisable.
21
Directors’ Report
Remuneration Report (Audited)
Company’s Performance
Company’s share price performance
The Company’s share price performance shown in the below graph is a reflection of the Company’s performance during the year.
The variable components of the executives’ remuneration including short-term and long-term incentives are indirectly linked to the
Company’s share price performance.
The graph below shows the Company’s share price performance during the financial year ended 30 June 2020.
The table below sets out information about the Group’s earnings and movements in shareholder wealth for the past five years up to
and including the current financial year.
Net (loss)/profit after tax ($)*
(7,469,580)
(2,790,816)
(3,239,946)
13,427,391
(2,486,685)
Basic (loss)/profit per share (cents)*
Share Price at year end (cents)
Total dividends (cents per share)
(0.52)
8.4
-
(0.22)
(0.26)
1.4
-
1.1
-
1.09
1.4
-
(0.22)
2.1
-
2020
2019
2018
2017
2016
*Historical results have not been assessed and adjusted for the impact of new accounting standards.
End of Remuneration Report
Signed in accordance with a resolution of the Directors.
A Passmore
Managing Director
Perth, 29 September 2020
22
Rox Resources Annual Report 2020
Auditor’s Independence Declaration
to the Directors of Rox Resources Limited
23
Corporate Governance
Corporate Governance Statement
Rox Resources Limited ACN 107 202 602 (Company) has established a corporate governance framework, the key features of which
are set out in this statement. In establishing its corporate governance framework, the Company has referred to the recommendations
set out in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 4th edition. The Company
has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its
corporate governance practices. Where the Company’s corporate governance practices follow a recommendation, the Board has
made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not” reporting
regime, where, after due consideration, the Company’s corporate governance practices do not follow a recommendation, the Board
has explained the reasons for not following the recommendation and disclosed what, if any, alternative practices the Company has
adopted instead of those in the recommendation.
The following governance-related documents can be found on the Company’s website at http://www.roxresources.com.au/about-rox-
resources/corporate-governance/
Charters
Board
Audit and Risk Committee
Nomination Committee
Remuneration Committee
Policies and Procedures
Policy and Procedure for the Selection and (Re)Appointment of Directors
Process for Performance Evaluations
Securities Trading Policy
Shareholder Communication and Investor Relations Policy
Code of Conduct (summary)
Compliance Procedures (summary)
Procedure for the Selection, Appointment and Rotation of External Auditor
Policy on Continuous Disclosure (summary)
Diversity Policy (summary)
Induction Program
Whistle Blower Policy
The Company reports below on whether it has followed each of the recommendations during the 2019/2020 financial year (Reporting
Period). The information in this statement is current at 29 September 2020. This statement was approved by a resolution of the Board
on 29 September 2020.
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Recommendation 1.1
The Company has established the respective roles and responsibilities of its Board and management, and those matters expressly
reserved to the Board and those delegated to management and have documented this in its Board Charter, which is disclosed on the
Company’s website.
Recommendation 1.2
The Company undertakes appropriate checks before appointing a person or putting forward to shareholders a candidate for election
as a director and provides shareholders with all material information in its possession relevant to a decision on whether to elect or
re-elect a director.
The Company appointed Dr John Mair to the board on 24 October 2019 and the checks referred to in the Company’s Policies and
Procedures for the selection and (Re)Appointment of Directors were undertaken.
The Company provided shareholders with all material information in relation to the re-election of Mr Stephen Dennis and the election
of Dr John Mair as directors at its 2019 Annual General Meeting.
24
Rox Resources Annual Report 2020
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT (CONTINUED)
Recommendation 1.3
The Company has a written agreement with each director and senior executive setting out the terms of their appointment. The
material terms of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with
its Managing Director, any of its directors, and any other person or entity who is related party of the Managing Director or any of
its directors has been disclosed in accordance with ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure
outlined in that rule).
Recommendation 1.4
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of
the Board as outlined in the Company’s Board Charter. The Company’s Secretary’s role is also outlined in the consultancy agreement
between the Company Secretary and the Company.
Recommendation 1.5
The Company has a Diversity Policy. However, the Diversity Policy does not include requirements for the Board to set measurable
objectives for achieving gender diversity and to assess annually both the objectives and the Company’s progress in achieving them. Nor
has the Board set measurable objectives for achieving gender diversity. Given the Company’s stage of development as an exploration
company and the number of employees, the Board considers that it is not practical to set measurable objectives for achieving gender
diversity at this time.
The respective proportions of men and women on the Board, in senior executive positions and across the whole organisation as
at the date of this statement are set out in the following table. “Senior executive” for these purposes means a person who makes,
or participates in the making of, decisions that affect the whole or a substantial part of the business or has the capacity to affect
significantly the Company’s financial standing. For the Reporting Period, this included the Managing Director and the Finance Director:
Whole organisation (including the Board)
Senior executive positions
Board
Recommendation 1.6
Proportion of women
0 out of 4 (0%)
0 out of 2 (0%)
0 out of 3 (0%)
The Chair is responsible for evaluation of the Board and, when deemed appropriate, Board committees and individual directors.
The evaluations are undertaken in accordance with the Company’s Process for Performance Evaluations, which is disclosed on the
Company’s website.
During the Reporting Period an evaluation of the Board, its committees, and individual directors took place in accordance with the
process disclosed in the Company’s Process for Performance Evaluations.
Recommendation 1.7
The Managing Director is responsible for evaluating the performance of senior executives in accordance with the process disclosed in
the Company’s Process for Performance Evaluations.
During the Reporting Period an evaluation of the Finance Director took place in accordance with the process disclosed in the Company’s
Process for Performance Evaluations.
The Chair is responsible for evaluating the Managing Director in accordance with the process disclosed in the Company’s Process for
Performance Evaluations.
During the Reporting Period an evaluation of the Managing Director took place in accordance with the process disclosed in the
Company’s Process for Performance Evaluations.
25
Corporate Governance
PRINCIPLE 2 – STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE
Recommendation 2.1
The Board has not established a separate Nomination Committee. Given the current size and composition of the Board, the Board
believes that there would be no efficiencies gained by establishing a separate Nomination Committee. Accordingly, the Board performs
the role of the Nomination Committee.
Although the Board has not established a separate Nomination Committee, it has adopted a Nomination Committee Charter,
which describes the role, composition and responsibilities of the full Board in its capacity as the Nomination Committee. When the
Board convenes as the Nomination Committee it carries out those functions which are delegated to it in the Company’s Nomination
Committee Charter. Separate meetings of the full Board in its capacity as the Nomination Committee are held, and minutes of those
meetings are taken. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Nomination
Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.
Details of director attendance at meetings of the full Board, in its capacity as the Nomination Committee, during the Reporting Period,
are set out in a table in the Directors’ Report on page 14.
Recommendation 2.2
The mix of skills and diversity for which the Board is looking to achieve in its membership is represented by the Board’s current
composition. While the Company is at exploration stage, it does not wish to significantly increase the size of the Board and considers
that the Board, which includes directors with geological qualifications, exploration and mining industry experience, experience in the
development and operation of mining projects in Australia and accounting and finance qualifications, is an appropriate mix of skills
and expertise relevant to the Company. Notwithstanding the boards current view that the composition of the board is appropriate, as
project acquisitions and development opportunities occur a review of the Board size and composition will be undertaken.
Recommendation 2.3
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the Principles &
Recommendations. The independent directors of the Company are Mr Stephen Dennis, Chairman of the Company and Dr. John Mair
a non-executive director.
The length of service of each director is set out in the Directors’ Report on page 12.
Recommendation 2.4
During the Reporting Period, the Board did not have a majority of directors who are independent. The Board considered that the
composition of the Board was adequate for the Company’s size and operations and included an appropriate mix of skills and expertise
relevant to the Company’s business.
As noted above, a review of the Board’s size and composition, including the balance of independence on the Board may be undertaken.
Recommendation 2.5
The independent Chair of the Board is Mr Stephen Dennis, who is also not the Managing Director.
Recommendation 2.6
The Company has an induction program that it uses when new directors join the Board and when new senior executives are appointed.
The goal or the program is to assist new directors to participate fully and actively in Board decision-making at the earliest opportunity
and to assist senior executives to participate fully and actively in management decision-making at the earliest opportunity. The
Company’s Induction Program is disclosed on the Company’s website.
The Board in its capacity as the Nomination Committee regularly reviews whether the directors as a group have the skills, knowledge
and familiarity with the Company and its operating environment required to fulfil their role on the Board and the Board committees
effectively using a Board skills matrix. Where any gaps are identified, the Board considers what training or development should
be undertaken to fill those gaps. In particular, the Board ensures that any director who does not have specialist accounting skills
or knowledge has a sufficient understanding of accounting matters to fulfil his or her responsibilities in relation to the Company’s
financial statements. Directors also receive ongoing education on developments in accounting standards.
26
Rox Resources Annual Report 2020
PRINCIPLE 3 – INSTALL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY
Recommendation 3.1
The Company expects that its board and senior executives will conduct themselves with integrity and honesty in accordance with the
Code of Conduct. Directors, executives and employees shall deal with the Company’s customers, suppliers, competitors, shareholders
and each other with honesty, fairness and integrity and observe the rule and spirit of the legal and regulatory environment in which
the Company operates.
The Company aims to increase shareholder value within an appropriate framework which safeguards the rights and interests of the
Company’s shareholders and the financial community and to comply with systems of control and accountability which the Company
has in place as part of its corporate governance with openness and integrity.
The Company is to comply with all legislative and common law requirements which affect its business wherever it operates. Where
the Company has operations overseas, it shall comply with the relevant local laws as well as any applicable Australian laws. Any
transgression from the applicable legal rules is to be reported to the Managing Director as soon as a person becomes aware of such
a transgression.
Recommendation 3.2
The Company has established a Code of Conduct for its directors, senior executives and employees, which are disclosed on the
Company’s website. Any breach of that code is reported to the board at the next meeting of directors.
Recommendation 3.3
The Company has adopted a Whistleblower Policy to encourage the raising of any concerns or reporting of instances of any violations
(or suspected violations) of the Code of Conduct (or any potential breach of law or any other legal or ethical concern) without the fear
of intimidation or reprisal.
Recommendation 3.4
The Company has established an anti-bribery and corruption policy which is disclosed on the Company’s website. Any breach of that
policy is immediately reported to the Managing Directors and Chairman of the board of directors.
PRINCIPLE 4 – SAFEGUARD THE INTEGRITY OF CORPORATE REPORTS
Recommendation 4.1
The Board has not established a separate Audit & Risk Committee. Given the current size and composition of the Board, the Board
believes that there would be no efficiencies gained by establishing a separate Audit and Risk Committee. Accordingly, the Board
performs the role of Audit and Risk Committee.
Although the Board has not established a separate Audit and Risk Committee, it had adopted an Audit and Risk Committee Charter.
When the Board convenes as the Audit and Risk Committee it carries out those functions which are delegated to it in the Company’s
Audit and Risk Committee Charter. Separate meetings of the full Board in its capacity as the Audit and Risk Committee are held, and
minutes of those meetings are taken. The Board deals with any conflicts of interest that may occur when convening in the capacity of
the Audit and Risk Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.
The Company has also established a Procedure for the Selection, Appointment and Rotation of its External Auditor, which is disclosed
on the Company’s website. The Board is responsible for the initial appointment of the external auditor and the appointment of a new
external auditor when any vacancy arises. Candidates for the position of external auditor must demonstrate complete independence
from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant
to the Company’s business and circumstances. The performance of the external auditor is reviewed on an annual basis by the Board.
Details of director attendance at meetings of the full Board, in its capacity as the Audit and Risk Committee, held during the Reporting
Period, are set out in a table in the Directors’ Report on page 14.
Recommendation 4.2
Before the Board approved the Company financial statements for the half year ended 31 December 2019 and the full-year ended
30 June 2020, it received from the Managing Director and the Finance Director a declaration that, in their opinion, the financial
records of the Company for the relevant financial period have been properly maintained and that the financial statements for the
relevant financial period comply with the appropriate accounting standards and give a true and fair view of the financial position and
performance of the Company and the consolidated entity and that the opinion has been formed on the basis of a sound system of risk
management and internal control which is operating effectively (Declaration).
The Board did not receive a Declaration for each of the quarters ending 30 September 2019, 31 December 2019, 31 March 2020 and 30
June 2020 because in the Board’s view its quarterly reports are not financial statements to which the Declaration can be appropriately given.
27
Corporate Governance
PRINCIPLE 4 – SAFEGUARD THE INTEGRITY OF CORPORATE REPORTS (CONTINUED)
Recommendation 4.3
Processes are in place to verify the integrity of the Company’s periodic corporate reports released to the market and not audited
or reviewed by the external auditor. Examples of periodic corporate reports released by the company include quarterly cash flow
reports. Rox Resources Limited has adopted a Continuous Disclosure Policy which sets out how market announcements are prepared
and released and has appointed the Company Secretary as the Continuous Disclosure officer who oversees the drafting of and
approves the final release of announcements. The Company Secretary is responsible for satisfying him/herself that the content of any
announcement is accurate and not misleading and is supported by appropriate verification.
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1
The Company has established written policies and procedures for complying with its continuous disclosure obligations under the
ASX Listing Rules. A summary of the Company’s Policy on Continuous Disclosure and Compliance Procedures are disclosed on the
Company’s website.
Recommendation 5.2
The Company secretary circulates all material market announcements to the board prior to release to ASX.
Recommendation 5.3
All new presentations are released to ASX Markets Platform ahead of any presentation to investors.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
Recommendation 6.1
The Company provides information about itself and its governance to investors via its website at www.roxresources.com.au as set out
in its Shareholder Communication and Investor Relations Policy.
Recommendation 6.2
The Company has designed and implemented an investor relations program to facilitate effective two-way communication with
investors. The program is set out in the Company’s Shareholder Communication and Investor Relations Policy.
Recommendation 6.3
The Company has in place a Shareholder Communication and Investor Relations Policy which outlines the policies and processes that
it has in place to facilitate and encourage participation at meetings of shareholders.
Recommendation 6.4
All resolutions put to meetings of shareholders are decided by way of a poll.
Recommendation 6.5
Shareholders are given the option to receive communications from, and send communications to, the Company and its share registry
electronically. The Company engages its share registry to manage the majority of communications with shareholders. Shareholders
are encouraged to receive correspondence from the Company electronically, thereby facilitating a more effective, efficient and
environmentally friendly communication mechanism with shareholders, Shareholders not already receiving information electronically
can elect to do so through the share registry, Computershare Investor Services Pty Ltd at www.computershare.com.au
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
Recommendation 7.1
The Board has not established a separate Risk Committee. Given the current size and composition of the Board, the Board believes
that there would be no efficiencies gained by establishing a separate Risk Committee. As noted above, the Board performs the role
of an Audit and Risk Committee. Please refer to the disclosure above under Recommendation 4.1 in relation to the Audit and Risk
Committee.
28
Rox Resources Annual Report 2020
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK (CONTINUED)
Recommendation 7.2
The Board reviews the Company’s risk management framework annually to satisfy itself that it continues to be sound, to determine
whether there have been any changes in the material business risks the Company faces and to ensure that the Company is operating
within the risk appetite set by the Board. The Board carried out these reviews during the Reporting Period.
Recommendation 7.3
The Company does not have an internal audit function. To evaluate and continually improve the effectiveness of the Company’s risk
management and internal control processes, the Board relies on ongoing reporting and discussion of the management of material
business risks as outlined in the Company’s Risk Management Policy.
Recommendation 7.4
As the Company is not in production, the Company has not identified any significant exposure to any environmental and/or social
sustainability risks. However, the Company does have a material exposure to the following economic risks:
• Market risk – movements in commodity prices. The Company manages its exposure to market risk by monitoring market
conditions and making decisions based on industry experience.
•
Future capital risk – cost and availability of funds to meet the Company’s business requirements. The Company manages this
risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.
The Board has adopted a Risk Management Policy and Risk Management Procedures. Under the Risk Management Policy, the
Board oversees the processed by which risks are managed. This includes defining the Company’s risk appetite, monitoring of risk
performance and those risks that may have a material impact to the business. Management is responsible for the implementation of
the risk management and internal control system to manage the Company’s risk and to report to the Board whether those risks are
being effectively managed.
The Company’s system to manage its material business risks includes the preparation of a risk register by management to identify the
Company’s material business risks, analyse those risks, evaluate those risks (including assigning a risk owner to each risk) and treat
those risks. Risks and their management are to be monitored and reviewed at least annually by senior management. The risk register
is to be updated and a report submitted to the Managing Director. The Managing Director is to provide a risk report at least annually
to the Board.
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
Recommendation 8.1
The Board has not established a separate Remuneration Committee. Given the current size and composition of the Company, the
Board believes that there would be no efficiencies gained by establishing a separate Remuneration Committee. Accordingly, the
Board performs the role of Remuneration Committee. Although the Board has not established a separate Remuneration Committee,
it has adopted a Remuneration Committee Charter, which describes the role, composition and responsibilities of the full Board in its
capacity as the Remuneration Committee. When the Board convenes as the Remuneration Committee it carries out those functions
which are delegated to it in the Company’s Remuneration Committee Charter. Separate meetings of the full Board in its capacity as
the Remuneration Committee are held, and minutes of those meetings are taken. The Board deals with any conflicts of interest that
may occur when convening in the capacity of the Remuneration Committee by ensuring that the director with conflicting interests is
not party to the relevant discussions.
Details of director attendance at meetings of the full Board, in its capacity as the Remuneration Committee, during the Reporting
Period, are set out in a table in the Directors’ Report on page 14.
Recommendation 8.2
Details of remuneration, including the Company’s policy on remuneration and “clawback policy” regarding the lapsing of performance-
based remuneration in the event of fraud or serious misconduct and the clawback of the performance-based remuneration in the
event of a material misstatement in the Company’s financial statements, are contained in the “Remuneration Report” which forms of
part of the Directors’ Report and commences at page 16 of the Company’s Annual Report for year ended 30 June 2020.
Recommendation 8.3
The Company’s Securities Trading Policy includes a statement of the Company’s policy that participations in the Company’s equity-
based remuneration schemes are prohibited from entering into transactions (whether through the use of derivatives or otherwise)
which limit the economic risk of participating in the scheme.
29
Consolidated Statement of Financial Position
As at 30 June 2020
ASSETS
Current Assets
Cash and cash equivalents
Receivables
Prepayments
Financial investments
Total Current Assets
Non-Current Assets
Other financial assets
Plant & equipment
Capitalised exploration expenditure
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other financial liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Notes
11(a)
12(a)
14
12(b)
13
15
12,880,385
16(a)
16(b)
17
2020
($)
2019
($) Restated1
10,567,910
3,912,742
205,848
14,103
67,886
10,855,747
3,037,528
3,879,559
10,736,273
17,653,360
45,065
3,473
230,835
4,192,115
2,652,508
2,786,735
7,441,142
12,880,385
28,509,107
17,072,500
698,163
1,000,000
87,980
1,786,143
483,560
-
68,083
551,643
17
4,344,949
4,344,949
3,103,535
3,103,535
6,131,092
3,655,178
22,378,015
13,417,322
18(i)
18(ii)
20
57,783,306
3,444,622
(38,849,913)
22,378,015
42,041,933
2,755,722
(31,380,333)
13,417,322
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
1.
Amounts for the prior year have been restated, refer to note 28 for further details
30
Rox Resources Annual Report 2020
As at 30 June 2020
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2019
Interest income
Other income
Finance income
Corporate expenses
Short-term lease and occupancy related expenses
Salaries and wages
Superannuation
Exploration expenditure expensed
Share based payments to employees
Depreciation
Fair value movement on equity instruments at fair value through
profit or loss
Gain(Loss) on plant and equipment sales
Loss before income tax
Income tax benefit/(expense)
Loss after income tax
Other Comprehensive Income
Other comprehensive income net of tax
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
Loss per share for loss for the year attributable to ordinary
equity holders:
Basic loss per share (cents)
Diluted loss per share (cents)
Notes
6a
6b
6c
19
13
14
7
8
8
2020
($)
5,072
65,235
266,013
(871,984)
(195,771)
(911,445)
(90,832)
(4,870,758)
(688,900)
(19,433)
2019
($)
146,647
348,653
241,137
(713,067)
(178,982)
(675,600)
(85,337)
(1,640,078)
(97,465)
(17,619)
(155,349)
(117,818)
(1,428)
(7,469,580)
-
(1,287)
(2,790,816)
-
(7,469,580)
(2,790,816)
-
-
(7,469,580)
(2,790,816)
(0.52)
(0.52)
(0.22)
(0.22)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
31
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Government grants
Payments to suppliers and employees
Expenditure on mineral interests
Other
Net cash used in operating activities
11(b)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments
Purchase of mineral properties
Advances to joint venture partner
Expenditure on behalf of joint venture partner
Purchase of equipment
Proceeds on sale of equipment
Security deposits
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares
Share issue costs
Net cash provided by financing activities
12(a)
12(b)
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
11(a)
2020
($)
13,313
62,500
(1,946,319)
(4,805,603)
(10,366)
(6,686,475)
10,335
(2,153,716)
(123,657)
(119,007)
(13,885)
200
-
2019
($)
163,080
-
(1,719,769)
(1,390,494)
-
(2,947,183)
-
(3,513,720)
-
-
(18,160)
200
13,271
(2,399,730)
(3,518,409)
16,747,683
(1,006,310)
15,741,373
6,655,168
3,912,742
10,567,910
-
-
-
(6,465,592)
10,378,334
3,912,742
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
32
Rox Resources Annual Report 2020
For the year ended 30 June 2020
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
At 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners
Issue of share capital
Share issue costs
Share-based payments
Contributed
equity
Reserves
($)
($)
Accumulated
losses
($)
Total
($)
42,041,933
2,755,722
(31,380,333)
13,417,322
-
-
-
16,747,683
(1,006,310)
-
-
-
-
-
-
688,900
(7,469,580)
(7,469,580)
-
-
(7,469,580)
(7,469,580)
-
-
-
16,747,683
(1,006,310)
688,900
Balance as at 30 June 2020
57,783,306
3,444,622
(38,849,913)
22,378,015
At 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners
Issue of share capital
Share issue costs
Share-based payments
41,766,933
2,658,257
(28,589,517)
15,835,673
-
-
-
275,000
-
-
-
-
-
-
-
97,465
(2,790,816)
(2,790,816)
-
-
(2,790,816)
(2,790,816)
-
-
-
275,000
-
97,465
Balance as at 30 June 2019
42,041,933
2,755,722
(31,380,333)
13,417,322
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
33
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 1. CORPORATE INFORMATION
Rox Resources Limited is a for profit company incorporated in Australia whose shares are publicly traded on the Australian Stock
Exchange (ASX). The consolidated financial statements of Rox Resources Limited incorporate Rox Resources Limited (the Parent) as
well as its subsidiaries (collectively, the Group) as outlined in Note 26. The financial statements of the Group for the year ended 30 June
2020 were authorised for issue in accordance with a resolution of the Directors on 29 September 2020.
The nature of the operations and principal activities of the Group are described in the Directors Report.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board. The financial report has been prepared on a historical cost basis, except for certain financial investments that have
been measured at fair value. The financial report is presented in Australian dollars.
As a result of the uncertainties inherent in business and other activities, certain items in a financial report cannot be measured with
precision but can only be estimated. The estimation process involves best estimates based on the latest information available, which
are set out in Note 4.
Going Concern
This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the
realisation of assets and settlement of liabilities in the normal course of business.
The Group has incurred a net loss after tax for the year ended 30 June 2020 of $7,469,580 (2019: $2,790,816) and experienced net cash
outflows from operating activities of $6,686,475 (2019: $2,947,183). At 30 June 2020, the Group had net current assets of $9,069,604
(30 June 2019: $3,640,472).
The Directors believe there are sufficient funds to meet the Group’s committed minimum expenditure requirements and as at the
date of this report the directors believe they can meet all liabilities as and when they fall due. However, the Directors recognise that
additional funding either through the issue of further shares, or convertible notes, or the sale of assets, or a combination of these
activities will be required for the Group to continue to actively explore its mineral properties. The Directors are also aware that that
the Group can relinquish certain projects in order to maintain its cash at appropriate levels.
The Directors have reviewed the business outlook and the assets and liabilities of the Group and are of the opinion that the use of the
going concern basis of accounting is appropriate.
However, if the Group is unable to obtain additional funding, there is significant uncertainty whether the Group will be able to continue
as a going concern and therefore whether it will be able to pay its debts as and when they fall due and realise its assets and extinguish
its liabilities in the normal course of business at the amounts stated in the financial report.
The financial report does not include any adjustments relating to the recoverability or classification of recorded asset amounts, nor
the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.
34
Rox Resources Annual Report 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Compliance statement
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board.
(b) New accounting standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year and corresponding reporting period except
for the adoption of AASB 16: Leases which became mandatory for the first time this reporting period commencing 1 July 2019. The
adoption of this standard did not result in a material adjustment to the amounts or disclosures in the current or prior year. The Group
has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The following relevant standards and interpretations have been issued by the Australian Accounting Standards Board (AASB) but are
not yet effective for the year ending 30 June 2020:
AASB 2018-6: Amendments to the Australia Accounting Standards – Definition of a business
This standard amends AASB 3 Business Combinations’ (“AASB 3”) definition of a business. To be considered a business, an acquisition
would have to include an input and a substantive process that together significantly contributes to the ability to create outputs. The
new guidance provides a framework to evaluate when an input and a substantive process are present. The revisions to AASB 3 also
introduced an optional concentration test. If the concentration test is met, the set of activities and assets acquired is determined not
to be a business combination and asset acquisition accounting is applied. The concentration test is met if substantially all of the fair
value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The Group’s
assessment of the impact of this new amendment is that it is not expected to have a material impact on the Group in the current or
future reporting periods.
Other standards not yet applicable
A number of other standards, amendments to standards and interpretations issued by the AASB which are not materially applicable
to the Group have not been applied in preparing these consolidated financial statements.
(i) New and Revised standards that are effective for these Financial Statements
From 1 July 2019 the Group had applied, for the first time, AASB 16 Leases.
AASB 16 Leases
AASB 16 Leases (’AASB 16’) became mandatorily effective on 1 January 2019. Accordingly, this standard applies for the first time to this
set of financial statements. AASB 16 replaces AASB 117 Leases and introduces a single lessee accounting model that requires a lessee
to recognise right-of-use assets and lease liabilities for all leases with a term of more than 12 months, unless the underlying asset
is of low value. Right-of-use assets are initially measured at cost and lease liabilities are initially measured on a present value basis.
Subsequent to initial recognition:
a) Right-of-use assets are accounted for on a similar basis to non-financial assets, whereby the right-of-use asset is accounted for on
a cost basis unless the underlying asset is accounted for on a revaluation basis, in which case if the underlying asset is:
i. Investment property, the lessee applies the fair value model in AASB 140 Investment Property to the right-of-use asset; or
ii. Property, plant or equipment, the applies the revaluation model in AASB 116 Property, Plant and Equipment to all of the
right-of-use assets that relate to that class of property, plant and equipment; and
b) Lease liabilities are accounted for on a similar basis to other financial liabilities, whereby interest expense is recognised in respect of
the lease liability and the carrying amount of the lease liability is reduced to reflect the principal portion of lease payments made.
c) AASB 16 substantially carries forward the lessor accounting requirements of the predecessor standard, AASB 117. Accordingly,
under AASB 16 a lessor continues to classify its leases as operating leases or finance leases subject to whether the lease transfers
to the lessee substantially all of the risks and rewards incidental to ownership of the underlying asset, and accounts for each type
of lease in a manner consistent with the current approach under AASB 117.
35
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) New accounting standards and interpretations (continued)
The adoption of AASB 16 for the year ending 30 June 2020 did not have any impact on the transactions and balances recognised in the
Year End Financial Report. The existing lease arrangement at 30 June 2019 expired within 12 months. As a result, the Company has
adopted the exemption available in respect of short-term (less than 12 months) leases and was not required to recognise these at the
date of transition of 1 July 2019 and the previously disclosed lease commitments all related to leases that expired within 12 months
of transition. The current lease continues on a 6 month rolling term. In addition, leases relating to exploration assets are outside the
scope of AASB 16 and hence have also not been recognised in the financial statements.
Other amendments and interpretations relevant to the Group include:
•
Interpretations 23 Uncertainty Over Income Tax Treatments – Effective date of Interpretation 23 Uncertainty over Income Tax
Treatments with effective date 1 January 2019; and
• Annual Improvements to IFRS Standards 2015-2017 Cycle – Effective date on amendments to IFRS 3 Business Combinations,
IFRS 11 Joint Arrangements, IAS 12 Income Taxes and IAS 23 Borrowing Costs with effective date 1 January 2019.
The amendments and interpretations above, all of which apply to the group as at 1 July 2019 have not had a material impact on the
transactions and balances recognised in the financial statements.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Rox Resources Limited and the subsidiaries it controls (as
outlined in Note 27).
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. Generally, there is a presumption that a majority of voting rights
results in control. To support this presumption, and when the Group has less than a majority of the voting or similar rights of an
investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.
The Group re-assesses 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. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of the subsidiary to bring their accounting policies in line with
the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group
loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other
components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
(d) Summary of significant accounting policies
(i) Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement of Financial Position and Consolidated Statement of Cash Flows comprise
cash at bank and in hand and deposits that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
(ii) Deferred exploration and evaluation expenditure
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are carried forward
where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development
and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage
that permits reasonable assessment of the existence of economically recoverable reserves.
Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect
of that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each
accounting period and accumulated costs written off to the extent that they will not be recoverable in the future.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production
commences.
36
Rox Resources Annual Report 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Summary of significant accounting policies (continued)
(iii) Trade and other payables
Trade payables and other payables are initially recognised at fair value and are subsequently carried at amortised costs and represent
liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchase of these goods and services. Refer also to Note 2 (d)(xvi)
Financial instruments.
(iv) Issued capital
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction, net of tax, of the share
proceeds received.
(v) Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and laws used to compute the amount are those that are enacted or substantially enacted
by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
•
•
except where 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, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint
operations, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
• Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, 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 assets and unused tax losses can be utilised:
•
•
except where the deferred income 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;
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interest in joint
operations, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive
income.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the preferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
(vi) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently carried at amortised cost less an allowance for impairment.
Refer also to Note 2 (d)(xvi) Financial instruments.
37
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Summary of significant accounting policies (continued)
(vii) Plant & Equipment
All classes of equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Depreciation
Depreciation is provided on a straight-line basis over the estimated useful life of the specific asset as follows:
Equipment
Amortisation is not charged on plant until production commences.
Impairment
2020
3-10 years
2019
3-10 years
The carrying values of plant & equipment are reviewed for impairment at each balance date, with recoverable amount being estimated
when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate
largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs,
unless the asset’s value in use can be estimated to be close to its fair value.
An impairment exists when the carrying values of an asset or cash generating unit exceeds its estimated recoverable amount. The
asset or cash-generating unit is then written down to its recoverable amount.
The recoverable amount of equipment is the greater of fair value less costs of disposal and value in use. 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.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating
unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.
Derecognition
Plant & equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use
of the asset.
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 item) is included in the Profit or Loss in the period the item is derecognised.
(viii) Employee benefits
Provision is made for the employee benefits accumulated as a result of employees rendering services up to the reporting date. These
benefits include wages and salaries, annual leave, sick leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and other employee benefits expected to be settled within 12 months
of the reporting date are measured at the 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 corporate bonds, which have terms to maturity approximating the terms of the
related liability, are used.
(ix) Revenue recognition
Interest revenue
Interest income is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.
Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions
complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the
related costs, for which it is intended to compensate, are expensed.
Sale of Assets
Revenue from the sale of assets is recognised when the significant risks and rewards of ownership of the assets have passed to the
buyer, usually on delivery of the asset.
38
Rox Resources Annual Report 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Summary of significant accounting policies (continued)
(x) Leases
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease asset and a lease
liability has not been recognised) are recognised as an expense on a straight-line basis over the lease term.
The Group leases office and storage premises with lease terms of 12 months or less.
Expenses relating to these leases, recognised in the Statement off Profit or Loss and Other Comprehensive Income are as follows:
Expense relating to short-term leases
(xi) Goods and service tax (GST)
2020
$
110,398
2019
$
121,359
Revenues, expenses and assets are recognised net of the amount of GST except:
• where 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 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
Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows 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 is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(xii) Earnings/loss per share
Basic earnings/loss per share is calculated by dividing the profit/loss from ordinary activities after related income tax expense by the
weighted average number of ordinary shares outstanding during the financial year.
Diluted earnings/loss per share is calculated as net profit/loss attributable to members, adjusted for:
•
•
costs of servicing equity (other than dividends);
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses; and
• other discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary
shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares adjusted for any bonus element.
(xiii) Share based payment transactions
The Group provides benefits to employees (including Directors) of the Group in the form of share-based payments, whereby employees
render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the shares at the grant date.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of
the shares of Rox Resources Limited (‘market conditions’).
The cost of equity-settled transactions is recognised in the Consolidated Statement of Profit or Loss, together with a corresponding
increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to
which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Company, will ultimately
vest. This opinion is formed based on the best available information at balance sheet date. No adjustment is made for the likelihood of
market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
39
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Summary of significant accounting policies (continued)
(xiii) Share based payment transactions (continued)
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not
been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in the value of the transactions a result of the modification, as
measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated
as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were modification of the
original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.
(xiv) Provisions
Employee entitlements
The Group recognises a liability for long service leave and annual leave measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflows. The Group has classified its long service leave as
current as it is expected to be settled wholly within 12 months of each reporting date as it is unconditional.
Rehabilitation provision
on a discounted basis at the time of acquiring, or developing, the mines and installing and using those facilities.
The rehabilitation provision represents the present value of rehabilitation costs relating to the Group’s mine site. Further information
on the assumptions used in the determining the rehabilitation provision is set out in 17.
(xv) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where unanimous decisions
about relevant activities are required.
Joint operations represent arrangements whereby joint operators maintain direct interests in each assets and exposures to each
liability of the arrangement. The Group’s interests in the assets, liabilities, revenue and expenses of the joint operations are included
in the respective line items of the financial statements. Information about the joint arrangements is set out in Note 25.
(xvi) Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.
For financial assets, this is the date that the Group commits itself to either purchase or sale of assets.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit and loss, loans and borrowings,
payables or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
An instrument is a financial liability when an issuer is, or can be required, to deliver either cash or another financial asset (e.g. ordinary
shares in the company) to the holder.
Where the Group has the choice of settling a financial instrument in cash or otherwise is contingent on the outcome of circumstances
beyond the control of both the Group and the holder, the Group accounts for the instrument as a financial liability.
All financial liabilities are initially recognised at fair value. The Group’s financial liabilities include trade payables and contingent
consideration (compound financial liability).
The compound financial liability owed by the Group in relation to the Additional OYG Interest (see Note 16(b)) is recorded initially at
fair value, and subsequently at amortised cost, representing the value attributed to the liability component of the instrument. No value
was attributed to the equity component.
40
Rox Resources Annual Report 2020
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Summary of significant accounting policies (continued)
(xvi) Financial instruments (continued)
Financial assets
Financial assets are initially recognised at fair value. The Group’s financial assets include cash and cash equivalents, receivables,
financial investments and the deferred consideration and the amounts owing from Venus Metals Corporation (“VMC”) under the
funding arrangement in conjunction with the joint arrangement held with VMC (see Note 12(b)).
The deferred consideration owed to the Group in relation to the Group’s sale of the Reward Zinc-Lead Project in 2017 to Teck Resources
Limited (see Note 12(b)) is recognised at fair value as on initial recognition the amount did not comprise solely payment of principal
and interest.
The Group applies the AASB 9 Financial Instruments (“AASB 9”) simplified approach to measuring the expected credit losses which
uses a lifetime expected loss allowance for all trade receivables.
Where the simplified approach to measuring the expected credit loss does not apply (i.e. the deferred consideration and the amounts
owing to VMC under the funding arrangement), the Group recognises a loss allowance on initial recognition based on the 12 month
expected credit losses. The Group thereafter continues to account for expected credit losses and changes in those expected credit
losses at each reporting date to reflect changes in the credit risk since initial recognition of the financial asset. Specifically, AASB 9
requires the Group to measure the loss allowance at an amount equal to the lifetime expected credit loss.
The Group’s financial investment in listed equity shares (see Note 14) has been designated as Fair Value through Profit and Loss. The
Group has not made the irrevocable election to take changes in fair value, post initial recognition, to Other Comprehensive Income.
NOTE 3. FINANCIAL RISK MANAGEMENT AND POLICIES
Overview
This note presents information about the Group’s exposure to each of the below risks, its objectives, policies and processes for
measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management
monitors and manages the financial risks relating to the operations of the Group through regular reviews of the risks.
The Group has exposure to the following risks from its use of financial instruments:
•
•
•
•
credit risk
liquidity risk
market risk
interest rate risk
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group’s credit risk exposure arises principally from the Group’s other financial assets, receivables, including receivables
from related parties, security deposits and cash and cash equivalents.
Cash and cash equivalents
The Group’s cash and cash equivalents are maintained in banks with credit ratings of AA as per Standard & Poor’s as at year-end.
Trade and other receivables
As the Group operates in the mining exploration sector its receivables generally relate to GST receivable from the Australian Taxation
Authority and the credit risk is assessed similar to other financial instruments under AASB 9 and the credit risk is low.
Presently, the Group undertakes exploration and evaluation activities in Australia. At the balance sheet date there were no significant
concentrations of credit risk and none of the Groups receivables are past due or impaired (2019: Nil).
41
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 3. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED)
Other financial assets
At financial year end the Group has a non-current receivable of $2,918,521 in present value terms resulting from the sale of the
Reward Zinc-Lead project in 2017 (Note 12(b)). This receivable is due from Teck Resources Limited, Canada’s largest diversified mineral
company and as such the risk of non-payment is very low.
The Group has advanced $123,657 to Venus Metals Corporation Ltd (“VMC”) to meet anticipated joint venture expenditure on projects
managed by VMC. This amount is expected to be expended by VMC on joint venture operations in the normal course of business and
as such does not expose the Group to a significant credit risk as at balance date.
In addition, the Group has an amount of $119,007 owing from VMC. This amount arises from the contractual agreement with VMC for
them to draw down on the loan arrangement with the Group where Group has agreed with VMC that they do not have the ability to
fund their percentage interest equivalent share of approved expenditure for the OYG Joint Venture. This arrangement is described in
more detail in Note 12(b). Given the recent commencement of this arrangement on 10 June 2020, the Group intends on monitoring
VMC’s credit risk and amounts drawn down under this loan facility in light of the Group’s own liquidity risk when approving budgets
for the OYG Joint Venture.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the Group’s maximum credit exposure. None of the Group’s trade and
other receivables are past due (2019: nil). At 30 June 2020, the Group does not have any collective impairment on its other receivables
(2019: nil).
Guarantees
At the date of this report there are no outstanding guarantees (2019: nil).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows.
The Group’s liquidity risk arises from other financial liabilities and trade and other payables, together comprising the Group’s financial
liabilities.
Financial liabilities maturing profiles as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not later than 5 years
Over 5 years
Total
Consolidated Entity
2020
$
2019
$
1,698,163
483,560
-
-
-
-
-
-
1,698,163
483,560
42
Rox Resources Annual Report 2020
NOTE 3. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED)
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
Equity risk
As at 30 June 2020, the Group held shares in listed entity, Thor Mining Plc. During the year, the Group sold 950,000 shares, with
13,577,205 held at year end. The Group consider its exposure to equity risk minimal and has not developed any policies or procedures
to manage such risk.
A change of 10% (2019: 10%) in equity prices would have increased or decreased the Group’s equity and profit by $6,787 (2019:
$23,083) and would have had the same effect on cash. The 10% sensitivity is based on reasonable possible movements over a financial
year, after observation of a range of actual historical rate movement over the past five years.
Currency risk
The Group considers that its exposure to currency risk is minimal and has not developed any policies or procedures to manage such
risk. The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts
or payments that are denominated in a foreign currency.
Exposure to currency risk
The Group’s exposure to foreign currency risk at reporting date was nil (2019: nil).
Interest rate risk
The Group is exposed to interest rate risk. The Group considers that its exposure to interest risk is minimal, however it has a policy of
monitoring interest rates offered by competing financial institutions to ensure it is aware of market trends and it receives competitive
interest rates.
Profile
At the reporting date the Group’s only exposure to interest rate risk is related to the balance of its cash and cash equivalents. The
following table represents the Group’s exposure to interest rate risk:
Variable rate instruments
Cash and cash equivalents
Carrying amount
2020
$
2019
$
10,567,910
3,912,742
A change of 1% (2019: 1%) in variable interest rates would have increased or decreased the Group’s equity and profit by $105,679
(2019: $39,127) and would have had the same effect on cash. The 1% sensitivity is based on reasonable possible movements over a
financial year, after observation of a range of actual historical rate movement over the past five years.
43
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 3. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED)
Fair Values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are
as follows:
Consolidated
2020
Carrying amount
Fair Value Carrying amount
Cash and cash equivalents
Receivables (Note 12(a)(i))
Advances to JV Partner (Note 12(a)(ii))
Financial Investments (Note 14)
Other financial assets (Note 12(b)(i))
Amount owing from JV Partner (Note 12(b)(ii)
Trade and other payables (Note 16(a))
Other financial liabilities (Note 16(b))
10,567,910
10,567,910
82,191
123,657
67,886
2,918,521
119,007
(484,491)
(1,000,000)
12,394,681
82,191
123,657
67,886
2,918,521
119,007
(484,491)
(1,000,000)
12,394,681
2019
Fair value
3,912,742
45,065
-
230,835
2,652,508
-
3,912,742
45,065
-
230,835
2,652,508
-
(453,560)
(453,560)
-
-
6,387,590
6,387,590
The directors consider the carrying amount of the financial instruments to be a reasonable approximation of their fair value on
account of the short maturity cycle.
The fair value of the Group’s financial assets in quoted equity shares held for trading on an active market (financial investments) is
based on quoted (unadjusted) market prices at the end of the reporting period. These instruments are included in level 1.
Assets measured at fair value
2020
Financial investments – shares in listed
company (Note 14)
Other financial assets – deferred
consideration (Note 12(b))
2019
Financial investments - shares in listed
company (Note 14)
Other financial assets – deferred
consideration (Note 12(b))
Quoted prices
in active
markets
Significant
observable
inputs
Significant
unobservable
inputs
Date of
valuation
30 June 2020
Total
$
67,886
(Level 1)
$
67,886
30 June 2020
2,918,521
-
30 June 2019
230,835
230,835
30 June 2019
2,652,508
-
(Level 2)
$
-
-
-
-
(Level 3)
$
-
2,918,521
-
2,652,508
Valuation techniques and significant unobservable inputs used in level 3 fair value measurements
2020
Fair Value
$
Valuation Technique
Description of Valuation Technique
and Inputs Used
Other financial assets – deferred
consideration (Note 12(b))
2,918,521
Net present value calculation
The fair value of the deferred consider-
ation is calculated using discounted cash
flow analysis
Significant unobservable inputs used in calculating the deferred consideration are as follows:
- Nominal amount due: $3,750,000
- Payment due date: 15 February 2023 (being the earlier of the acquirer completing a bankable feasibility study date, or 6 years)
- Discount rate: 10% (pre-tax nominal)
44
Rox Resources Annual Report 2020
NOTE 3. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED)
Reconciliation of recurring level 3 fair value movements
For each asset categorised as level 3:
2020
Opening balance
Total gains recognised in profit or loss
Closing balance
Total gains and losses recognised in profit or loss
Remeasurement of financial instrument
Sensitivity analysis for recurring level 3 fair value measurements
Level 3
Other financial assets – deferred consideration
$
2,652,508
266,013
2,918,521
266,013
For fair values in level 3, if the events below were to vary from that used to determine fair value as at the reporting date, assuming all other
variables that might impact on fair value remain constant, then the impact on profit for the 2020 financial year and equity is as follows:
Other financial assets – deferred consideration
Bankable feasibility study completed one year earlier (15 February 2022)
Cost of debt decreases by 1%
Impact on profit after tax
$
Impact on equity
$
26,601
(18,528)
26,601
(18,528)
The sensitivity analysis was calculated by adjusting the net present value workings for the changes in inputs. Each input was changed
separately leaving all other variables constant.
Capital Management
When managing capital, managements objective is to ensure the Group continues as a going concern as well as to maintain optimal
returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the
lowest cost of capital available to the Group.
The Group will raise equity through the issue of shares from time to time as the board sees fit to ensure it meets its objective of
continuing as a going concern. The Group does not have any borrowings and has no current plans to obtain any debt facilities; as a
result, the Group’s total capital is defined as shareholders’ equity, and at 30 June stood at:
Equity
The Group is not subject to any externally imposed capital requirements.
2020
$
2019
$
22,378,015
13,417,322
45
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 4 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. Management bases its judgements and estimates on historical experience and
on various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of
assets and liabilities that are not readily apparent from other sources.
Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are
made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial
results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.
Exploration and Evaluation
The Group’s accounting policy for exploration and evaluation is set out in Note 2(d)(ii) to the accounts. The application of this policy
necessarily requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the
assessment of whether economic quantities of reserves have been found. Any such estimates and assumptions may change as new
information becomes available. If, after having capitalised expenditure under our policy, management conclude that they are unlikely
to recover the expenditure by future exploitation or sale, then the relevant capitalised amount will be written off to the Consolidated
Statement of Comprehensive Income.
Share options
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value is determined using the binominal formula. For options issued in this financial year,
the assumptions detailed as per Note 19 were used.
Fair value measurement
The Group’s accounting policy for Financial Instruments is set out in Note 2(d)(xvi).
Where the fair values of financial assets and liabilities recorded in the consolidated statement of financial position cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including discounted cashflows. The
input into these models are taken from observable inputs where possible. Judgements to determining the fair value of the compound
financial instrument (see Note 16(b)) included consideration of the timing and likelihood of shareholders approving the issue of shares
to Venus Corporation. Changes in assumptions about these actors could affect the reported fair value of financial instruments, which
also may differ from amounts at settlement.
Joint control
The Group’s accounting policy for Joint Arrangements is set out in Note 2(d)(xv). AASB 11 Joint Arrangements requires an investor to
have contractually agreed the sharing of control when making decisions about the relevant activities (in other words requiring the
unanimous consent of the parties sharing control). However, what these activities are is a matter of judgement.
Please see Note 25 for more information on the Group’s joint operations.
Rehabilitation
The Group made a full provision for its share of the future cost of rehabilitating the Younami Gold Project and related production
facilities on a discounted basis at the time of acquiring its interest in mine and related facilities.
The rehabilitation provision represents the present value of rehabilitation costs relating to Younami Gold Project under the OYG joint
venture. Assumptions based on the current economic environment have been made, which management believes are a reasonable
basis upon which to estimate the future liability. These estimates are reviewed regularly to take into account any material changes to
the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation
works required that will reflect market conditions at the relevant time.
Furthermore, the timing of rehabilitation is likely to depend on when, or if, the Group and its joint venture partner make a decision to
produce at economically viable rates. This, in turn, will depend upon future gold prices, which are inherently uncertain.
46
Rox Resources Annual Report 2020
NOTE 4 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTMATES AND ASSUMPTIONS (CONTINUED)
Benefit from Deferred Tax Losses
The future recoverability of the carried forward tax losses are dependent upon Group’s ability to generate taxable profits in the future
in the same tax jurisdiction in which the losses arise. This is also subject to determinations and assessments made by the taxation
authorities. The recognition of a deferred tax asset on carried forward tax losses (in excess of taxable temporary differences) is
dependent on management’s assessment of these two factors. The ultimate recoupment and the benefit of these tax losses could
differ materially from management’s assessment.
Potential future income tax benefits attributable to gross tax losses carried forward have not been brought to account at 30 June 2020
because the Directors do not believe it is appropriate to regard realisation of the future tax benefit as probable. These benefits will
only be obtained if:
(i)
(ii)
(iii)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from
the losses and deductions to be released;
the Group continues to comply with the conditions for deductibility imposed by the law; and
no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the losses.
NOTE 5 SEGMENT INFORMATION
Identification of Reportable Segments
Operating segments that meet the quantitative criteria of AASB 8 are reported separately. However, an operating segment that does
not meet the quantitative criteria is still reported separately where information about the segment would be useful to the users of the
financial statements.
The Group operates within the mineral exploration industry within Australia.
The Group determines its operating segments by reference to internal reports that are reviewed and used by the Board of Directors
(the chief operating decision maker) in assessing performance and in determining the allocation of resources. The Board of Directors
currently receive Consolidated Statement of Financial Position and Consolidated Statement of Comprehensive Income information
that is prepared in accordance with Australian Accounting Standards.
The Consolidated Statement of Financial Position and Consolidated Statement of Comprehensive Income information received by
the Board of Directors does not include any information by segment. The executive team manages each exploration activity of each
exploration concession through review and approval of statutory expenditure requirements and other operational information. Based
on this criterion, the Group has only one operating segment, being exploration, and the segment operations and results are the same
as the Group results.
NOTE 6. INCOME
NOTE 6A. INTEREST INCOME
Interest income
NOTE 6B. OTHER INCOME
Gain on sale of the Bonya Project
Gain on sale of investments
Government grant income
NOTE 6C. FINANCE INCOME
Unwind of discount (i)
2020
$
5,072
-
2,735
62,500
2019
$
146,647
-
348,653
-
266,013
241,137
(i) In 2017, the Group sold its interest in the Reward Zinc-Lead Project for $15,827,273 in cash and a further deferred cash payment of
$3,750,000 to be received at the earlier of the acquirer completing a bankable feasibility study or six years. The deferred cash payment
has been discounted to its present value and recognised as a non-current receivable refer Other financial asset (Note 12(b).
47
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 7. INCOME TAX EXPENSE
The major components of income tax expenses are:
Income Statement
Current Income Tax
Current income tax charge/(benefit)
Deferred Income Tax
Relating to origination and reversal of temporary differences
Income tax expense/(benefit) reported in the statement of comprehensive income
2020
($)
2019
($)
-
-
-
-
-
-
Accounting (loss)/ profit before tax from continuing operations
(7,469,580)
(2,790,816)
At the Group’s statutory income tax rate of 30.0% (FY19 27.5%)
(2,240,874)
(767,474)
Other
Share based payments
Share registry costs
Prior year adjustment to deferred tax balances
Deferred tax assets not brought to account (gross)
Income tax expense/(benefit) reported in the Statement of Com-prehensive Income
(47,077)
206,670
(76,285)
(304,846)
2,462,412
-
298,464
26,803
(98,768)
21,120
519,855
-
Statement of financial position
Statement of comprehensive income
2020
$
2019
$
2020
$
2019
$
Deferred Income Tax
Deferred income tax at 30 June relates
to the following
Deferred tax liabilities
Prepayments
Plant & equipment
Deferred tax assets
Accruals
Provision for employee entitlements
13,978
(2,369)
34,845
26,394
5,316
(2,171)
8,250
18,723
8,662
(198)
26,595
7,671
Revenue tax losses
9,368,540
6,906,129
2,462,411
265
1,534
-
(7,479)
519,855
Deferred tax assets not brought to
account as realisation is not probable
(9,441,388)
(6,936,247)
(2,505,141)
(514,175)
Deferred tax assets
-
-
-
-
Potential future income tax benefits attributable to gross tax losses of $31,228,466 (2019: $25,113,196) carried forward have not been
brought to account at 30 June 2020 because the Directors do not believe it is appropriate to regard realisation of the future tax benefit
as probable. These benefits will only be obtained if:
(i)
(ii)
(iii)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from
the losses and deductions to be released;
the Group continues to comply with the conditions for deductibility imposed by the law; and
no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the losses.
Tax losses carried forward have no expiry date.
48
Rox Resources Annual Report 2020
NOTE 8. EARNINGS PER SHARE
The following reflects the income and share data used in the calculation of basic and
diluted earnings per share
2020
$
2019
$
Net loss
(7,469,580)
(2,790,816)
Weighted average number of ordinary shares used in calculating basic earnings per share
1,450,206,084
1,260,116,187
Effect of dilutive securities:
- Share options (i)
-
-
Adjusted weighted average number of ordinary shares used in calculating diluted
earnings per share
1,450,206,084
1,260,116,187
(i) Share options are not dilutive as their inclusion would give rise to a reduced loss per share.
There was a total of 125,250,000 share options that were potentially dilutive to shares on issue at 30 June 2020 (2019: 64,000,000).
The above weighted average number of shares incorporates an adjustment to the calculation to incorporate the effects of bonus
elements (if any) in relation to rights issues in the current and previous financial year.
Conversion, calls, subscriptions or issues after 30 June 2020
Since the reporting date 5,250,000 options exercise able at $0.024 and 16,000,000 options exercisable at $0.033 have been exercised
(refer Note 23). There have been no other conversions to, calls of, or subscriptions for ordinary shares since the reporting date and
before the completion of this financial report.
NOTE 9. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Key Management Personnel
Stephen Dennis
Non-executive Chairman (appointed 1 August 2015)
John Mair
Non-executive Director (appointed 24 October 2019)
Alex Passmore
Managing Director (commenced as CEO on 1 February 2019 and appointed MD on 1 May 2019)
Brett Dickson
Executive Director (appointed 31 March 2010)
Company Secretary (appointed 27 November 2003)
(b) Compensation of Key Management Personnel by Category
Short Term
Long Term
Post-Employment
Share-Based Payments
2020
$
742,541
-
35,864
622,500
1,400,905
2019
$
657,919
42,983
38,849
79,600
819,351
49
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 10. AUDITOR’S REMUNERATION
Remuneration of the auditor of the Group, Pitcher Partners BA&A Pty Ltd for:
Auditing and reviewing the financial report
Remuneration of prior auditor of the Group, Ernst & Young for:
Auditing and reviewing the financial report
Taxation services
NOTE 11. CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents
Cash at bank earns interest at floating rates based on daily deposit rates
2020
$
39,500
-
35,000
74,500
2019
$
-
46,500
11,041
57,541
2020
$
2019
$
10,567,910
3,912,742
(b) Reconciliation of net loss after income tax to net cash flow from operations:
(7,469,580)
(2,790,816)
Net loss after Income Tax
Adjustments for reconcile profit before tax to net operating cash flows
- Depreciation
-
Share based payments
- Profit on sale of Bonya project
-
-
-
Finance income
Loss(Profit) on sale of plant and equipment
Fair value movement on equity instruments at fair value through profit or loss
Changes in assets and liabilities
-
-
-
-
(Increase) decrease in prepayments
Increase (decrease) in provisions
Increase (decrease) in trade payables/accruals
(Increase) decrease in receivables
Cash out-flow from operations
19,433
688,900
-
(266,013)
(1,307)
155,349
(10,630)
19,897
214,602
(37,126)
17,619
97,465
(348,653)
(241,137)
1,287
117,818
117
(27,196)
223,390
2,923
(6,686,475)
(2,947,183)
(c) There were no non-cash financing and investing activities in the 2020 or 2019 financial years, other than those detailed in Note 19B.
(d) The Group does not have any credit standby arrangements, used or unused loan facilities.
(e) Total cash outflow for short-term leases was $123,095.
50
Rox Resources Annual Report 2020
NOTE 12. RECEIVABLES
NOTE 12. (a) RECEIVABLES
Current
Receivables (i)
Advances to JV partner (ii)
Other related parties (i)
2020
$
71,241
123,657
10,950
205,848
2019
$
34,115
-
10,950
45,065
(i) Receivables, including from related parties, generally have 30-day terms and are unsecured.
(ii) Cash held by Venus Metals Corporation Limited (“VMC”) as manager of the following earn-in/ joint arrangements:
- OYG Joint Venture (RXL 70%, VMC 30%) $nil;
- Venus Joint Venture (RXL earn-in to 50%, VMC 100%) $98,486;
-
Youanmi Joint Venture (RXL earn-in to 45%, VMC 90%, 10% Legendre) $14,834; and
- Currans Find & Pincher Joint Venture (RXL 45%, VMC 45%, 10% Murchison Earthmoving & Rehabilitation Pty Ltd) $10,337.
NOTE 12. (b) OTHER FINANCIAL ASSETS
Non-Current
Deferred consideration (i)
Amounts owing from JV partner (ii)
2020
$
2019
$
2,918,521
119,007
3,037,528
2,652,508
-
2,652,508
(i)
In 2017, the Group sold the Reward Zinc-Lead project which included a deferred consideration component of $3,750,000 to be
received at the earlier of the acquirer completing a bankable feasibility study or 6 years. The non-current receivable represents the
net present value of that deferred consideration using a pre-tax nominal discount rate of 10%.
(ii) Receivable from OYG Joint Venture (ÖYG JV”) Partner Venus Metals Corporation Limited (“VMC”).
In accordance with the draft joint arrangement with VMC, all approved expenditure (the “Expenditure”) incurred in accordance
with the OYG JV must be borne and paid for by the Joint Venturers severally in proportion to their prospective interests (30 June
2020: RXL: 70%, VMC 30%).
Under the draft OYG JV agreement, VMC may elect in writing (until a Decision to Mine is made) to not fund their percentage share
of the expenditure but instead request the Group to fund such expenditure by way of a loan provided to VMC. Accordingly, the
Group agrees to contribute to VMC’s share of costs on the following basis:
1) on receipt from VMC of an Election Notice within 2 business days of a billing statement (cash call) being receipted; and
2) evidence in writing demonstrating (to the Group’s satisfaction) of VMC’s inability to contribute to its percentage share of Expenditure.
No interest is payable on outstanding amounts under this loan arrangement
Repayment
Repayment of amounts loaned to VMC under this arrangement will be repayable solely from:
1) VMC’s percentage share of the sale proceeds from the sale of any OYG JV property, including gold produced;
2) the sale proceeds from any sale by VMC to a third party of all, or part, of its OYG JV interest and interest in the tenements; and
3) the portion of the sale proceeds to which VMC is entitled from a sale arising from the event described in Note 25.
The loan is secured over VMC’s interests in the joint operation.
51
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 13 PLANT & EQUIPMENT
Plant at cost
Equipment at cost
Accumulated depreciation
Total plant & equipment
(a) Movements in plant and equipment
- At 1 July, net of accumulated depreciation
- Plant additions – at cost (Note 15)
- Equipment – at cost
- Disposals – at cost
- Accumulated depreciation on disposals
- Depreciation
- At 30 June, net of accumulated depreciation
1. Refer note 28, Restatement of prior year balances
NOTE 14. FINANCIAL INVESTMENTS
Financial investments at fair value through profit and loss
2020
$
2019
$ Restated1
3,850,000
138,590
(109,031)
3,879,559
2,786,735
1,100,000
13,885
(60,023)
58,395
(19,433)
3,879,559
2,750,000
184,728
(147,993)
2,786,735
37,701
2,750,000
18,160
(3,861)
2,354
(17,619)
2,786,735
2020
$
67,886
2019
$
230,835
Financial investments at fair value through profit or loss include investments in listed equity shares. Fair values are classified as level
1, such that these equity shares are determined by reference to published price quotations in an active market.
NOTE 15. CAPITALISED EXPLORATION AND EVALUATION
Areas of interest in exploration and evaluation phases:
Balance at beginning of period
Acquisitions of a 50% interest in OYG JV
Acquisition of a 45% interest in Currans Find (Note 25)
Acquisition of additional 20% interest in OYG JV
Stamp duty on acquisitions
1. Refer note 28, Restatement of prior year balances
2020
$
2019
$ Restated1
7,441,142
-
-
3,141,414
153,717
10,736,273
3,898,887
3,353,535
150,000
-
38,720
7,441,142
During the year and in the prior period (as described in Note 25) the Group acquired the following interests in the OYG JV:
- an initial 50% interest by contributing consideration with a fair value of $3,000,000, represented by the payment of $2,800,000
in cash and the issue of 25,000,000 fully paid shares with a fair value of $200,000; and
- an additional 20% interest by contributing consideration with a fair value as at 30 June 2020 of $3,000,000, represented
by the payment of $2,000,000 in cash and $1,000,000 being the fair value of the compound financial instrument issued as at
balance date.
The acquisition of the additional 20% in the OYG JV did not give rise to a control transaction, with each relevant interest accounted for
as an asset acquisition with the purchase consideration allocated over the assets and liabilities acquired as follows:
52
Rox Resources Annual Report 2020
NOTE 15. CAPITALISED EXPLORATION AND EVALUATION (CONTINUED)
Fair value of consideration:
- cash
- fair value of compound financial instrument (Note 16(b))
- shares
Allocated over the assets and liabilities as follows:
- Plant & Equipment (Note 13)
- Capitalised exploration & evaluation
- Rehabilitation provision (Note 17)
20%
50%
2,000,000
1,000,000
-
3,000,000
2,800,000
-
200,000
3,000,000
20%
50%
1,100,000
3,141,414
2,750,000
3,353,535
(1,241,414)
(3,103,535)
3,000,000
3,000,000
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and
commercial exploitation or, alternatively, sale of the respective areas.
NOTE 16. TRADE AND OTHER PAYABLES
NOTE 16. (a) TRADE AND OTHER PAYABLES
Trade payables
Accruals
Total trade and other payables (a)
(a) Terms and Conditions
Creditors, including related parties, are non-interest bearing and generally on 30-day terms.
NOTE 16. (b) OTHER CURRENT FINANCIAL LIABILITIES
Compound financial liability (a)
Total other current financial liabilities
(a) Compound financial liability – Youanmi Gold Project
2020
$
484,491
213,672
698,163
2020
$
1,000,000
1,000,000
2019
$
453,560
30,000
483,560
2019
$
-
-
On 8 June 2020, the parties agreed to amend the term sheet whereby the consideration for the additional 20% interest would be
$2,000,000 with 2 business days of the Group delivering its Exercise Notice and either:
(i)
Issuing to VMC the number of Rox Shares equal to $1,000,000 divided by the deemed issue price of $0.024 (being 41,666,667
Rox Shares), with approval by shareholders at a meeting no later than 60 days following the Group delivering the Exercise
Notice; or
(ii) In the event that shareholder approval is not obtained, paying VMC $1,000,000 in cash within 2 business days of the date
of the meeting, or expiry of the 60 day period.
On 10 June 2020, the Group exercised its option to acquire the Additional OYG Interest (increased to 70%) and paid VMC $2,000,000
on 10 June 2020. As at this date, and 30 June 2020, the remaining consideration to acquire the Additional OYG Interest represents a
compound financial instrument with liability component and an equity component.
At 30 June 2020, with no influence over whether shareholders would approve the issue of shares, the Group valued the liability portion
at $1,000,000 (measured first) at fair value with no value being attributed to the equity component.
53
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 17. PROVISIONS
Current
Employee benefits – annual leave
Employee benefits – long service leave
Non-Current
Carrying amount at beginning of period
Acquisition of a 50% interest in the OYG JV
Movement in provision
Carrying amount at end of period
1. Refer note 28, Restatement of prior year balances
2020
$
66,154
21,826
87,980
2019
$
Restated1
36,700
31,383
68,083
3,103,535
-
-
3,103,535
1,241,414
4,344,949
-
3,103,535
Non-current provisions represents a provision for site rehabilitation of the area previously disturbed during mining activities up to the
reporting date, but not yet rehabilitated at the OYG joint venture.
Movements in provisions represent an increased ownership of the OYG joint venture from 50% to 70%, see Note 15.
NOTE 18. CONTRIBUTED EQUITY AND RESERVES
(i) Contributed Equity
(a) Issued and paid up capital
Ordinary shares fully paid
(b) Movement in shares on issue
Ordinary shares at beginning of period – 1,291,280,571 (2019:1,258,780,571)
Issue of 697,820,332 shares at $0.024 per share (net of share issue costs)
Issue of 25,000,000 shares at $0.008 per share (refer note 19B)
Issue of 7,500,000 shares at $0.010 per share (refer note 19B)
2020
$
2019
$
57,783,306
42,041,933
2020
$
42,041,933
15,741,373
-
-
2019
$
41,766,933
-
200,000
75,000
At reporting date: 1,989,100,903 shares (2019: 1,291,280,571)
57,783,306
42,041,933
(c) Share Based Payment Reserve
During the year 83,000,000 options with an exercise price of $0.033 and an expiry date of 30 November 2022 were issued. During the
prior year 20,000,000 options exercisable at $0.015 and an expiry of 31 January 2022 were issued. No other options were issued during
this or the previous year and no options have been exercised during the year.
At the end of the financial year there were 125,250,000 (2019: 64,000,000) unissued ordinary shares in respect of which options were
outstanding. For further information on options issued, exercised and lapsed please refer to note 19.
(d) Terms and Conditions of Contributed Equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting on the Company.
54
Rox Resources Annual Report 2020
NOTE 18. CONTRIBUTED EQUITY AND RESERVES
(ii) Reserves
(a) Share Based Payments Reserve
Movements
Balance at beginning of year
Options issued - employees (refer note 19A)
Balance at end of year
Nature and Purpose of Reserves
Share Based Payment Reserve
2020
$
2019
$
2,755,722
688,900
3,444,622
2,658,257
97,465
2,755,722
This reserve is used to record the value of equity benefits provided to employees and unrelated parties for services and the acquisition
of mineral exploration projects.
NOTE 19. SHARE BASED PAYMENTS
A. Directors and Employees
(i) Employee Share Incentive Scheme
An Employee Share Scheme (ESS) has been established where Rox Resources Limited may, at the discretion of Directors, grant options
over the ordinary shares of Rox Resources Limited to Directors, executives and employees of the Company. The plan is designed to
provide long-term incentives for employees and to deliver long term shareholder returns. Participation in the plan is at the Board’s
discretion and no individual has a contractual right to participate in the plan or to receive guaranteed benefits. In addition, under the
Plan, the Board determines the terms of the options including exercise price, expiry date and vesting conditions, if any.
Options granted under the plan are unlisted and carry no dividend or voting rights. When exercised, each option is convertible into an
ordinary share of the Company with full dividend and voting rights.
During the year 83,000,000 options were issued pursuant to the ESS (2019: nil) and there are no other options on issue that have been
issued under the plan.
Set out below is a summary of options issued.
2020
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance of
the start of
the year
(number)
Granted
during
the year
(number)
Exercised
during the
year
(number)
Forfeited
during the
year
(number)
Balance at
end of the
year
(number)
Vested and
exercisable
at end of
the year
(number)
12 Dec 19
30 Nov 19
15 Dec 16
30 Nov 19
15 Dec 17
30 Nov 20
3.3
2.6
2.4
0.8
0.8
0.8
-
83,000,000
3,750,000
4,250,000
-
-
8,000,000
83,000,000
Weighted average exercise price
$0.025
$0.033
-
-
-
-
-
-
83,000,000
83,000,000
(3,750,000)
-
-
-
4,250,000
4,250,000
(3,750,000)
87,250,000
87,250,00
$0.026
$0.032
$0.032
2019
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance of
the start of
the year
(number)
Granted
during
the year
(number)
Exercised
during the
year
(number)
Forfeited
during the
year
(number)
Balance at
end of the
year
(number)
Vested and
exercisable
at end of
the year
(number)
15 Dec 16
30 Nov 19
15 Dec 17
30 Nov 20
2.6
2.4
0.8
0.8
Weighted average exercise price
3,750,000
4,250,000
8,000,000
$0.025
-
-
-
-
-
-
-
-
-
-
-
-
3,750,000
3,750,000
4,250,000
4,250,000
8,000,000
8,000,000
$0.025
$0.025
55
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 19. SHARE BASED PAYMENTS (CONTINUED)
A. Directors and Employees (Continued)
(i) Employee Share Incentive Scheme (Continued)
The weighted average remaining contractual life of share options outstanding at the end of the year was 1.3 years (2019: 0.9).
Fair value of options granted under ESS
No options were granted in 2019. For 2020, the fair value for options issued was calculated by the Binomial Option valuation
methodology using the following parameters.
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Risk free interest rate
Number issued
Fair value per option ($)
2020
$
3.3 cents
3 years
2.0 cents
100%
0.7%
83,000,000
0.0083
2019
$
-
-
-
-
-
-
-
Historical volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future
trends, which may not eventuate.
The life of the options is based on historical exercise patterns, which may not eventuate in the future.
No other features of options granted were incorporated into the measurement of fair value.
56
Rox Resources Annual Report 2020
NOTE 19. SHARE BASED PAYMENTS (CONTINUED)
A. Directors and Employees (continued)
(ii) Other Share Options
Options issued to Directors and employees other than through the ESS are set out below.
2020
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance of
the start of
the year
(number)
Granted
during
the year
(number)
Exercised
during the
year
(number)
Expired
during the
year
(number)
Balance at
end of the
year
(number)
Vested and
exercisable
at end of
the year
(number)
19 Dec
16
15 Dec
17
1 Feb
19
30 Nov
19
30 Nov
20
31 Jan
22
2.6
2.4
1.5
0.8
0.8
0.4
Weight average exercise price
18,000,000
18,000,000
20,000,000
56,000,000
$0.021
-
-
-
-
-
-
-
-
-
-
(18,000,000)
-
-
-
-
18,000,000
18,000,000
20,000,000
20,000,000
(18,000,000)
38,000,000
38,000,000
$0.026
$0.019
$0.019
The weighted average remaining contractual life of share options outstanding at the end of the year was 1 year. (2019: 1.5).
2019
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance of
the start of
the year
(number)
Granted
during
the year
(number)
Exercised
during the
year
(number)
Expired
during the
year
(number)
Balance at
end of the
year
(number)
Vested and
exercisable
at end of
the year
(number)
11 Dec
15
19 Dec
16
15 Dec
17
1 Feb
19
30 Nov
18
30 Nov
19
30 Nov
20
31 Jan
22
2.7
2.6
2.4
1.5
0.8
0.8
0.8
0.4
21,850,000
18,000,000
18,000,000
-
-
-
-
20,000,000
57,850,000
20,000,000
Weight average exercise price
$0.026
$0.015
Fair value of options granted
-
-
-
-
-
-
(21,850,000)
-
-
-
-
18,000,000
18,000,000
18,000,000
18,000,000
20,000,000
20,000,000
(21,850,000)
56,000,000
56,000,000
$0.027
$0.021
$0.021
No options were granted during 2020. In 2019 20,000,000 options were issued and the fair value for 2019 was $0.004 per option and
was calculated by using the Binomial Option valuation methodology using the following parameters.
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Risk free interest rate
2020
$
-
-
-
-
-
2019
$
1.5
3.0
0.8
100%
1.75%
Historical volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future
trends, which may not eventuate.
No other features of options granted were incorporated into the measurement of fair value.
57
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 19. SHARE BASED PAYMENTS (CONTINUED)
B. Unrelated Parties
Youanmi Gold Project
In the prior year, the Group acquired a 50% interest in the OYG Joint Venture (“OYG JV”). Consideration paid was $2,800,000 in cash and
the issue of 25,000,000 fully paid ordinary shares in the Company. In addition the Group acquired a 45% interest in the Currans Find
Gold project. Consideration paid was $75,000 in cash and the issue of 7,500,000 fully paid ordinary shares in the Company.
In accordance with AASB 2 Share Based Payments, there is a rebuttable presumption that the fair value of goods or services received
can be estimated reliably for transactions with parties other than employees. This presumption has been rebutted given that the
fair value of the underlying assets (being exploration and evaluation assets) could not be reliably measured. Accordingly, the assets
acquired in the prior year have been recorded based on the fair value of the shares issued, calculated at the closing share price on
the date of issue.
Pursuant to the agreement to acquire a 50% interest in the OYG JV, The Group was able to increase its interest by 20% (the “Additional
OYG Interest”) to 70% by delivery of an exercise notice (“Exercise Notice”) and the payment of $3,000,000 to Venus Metals Corporation
(“VMC”) within 2 years.
On 8 June 2020, the parties agreed to amend the term sheet whereby the consideration for the additional 20% interest would be
$2,000,000 paid within 2 business days of the Group delivering its Exercise Notice and either:
(ii) Issuing to VMC the number of Rox Shares equal to $1,000,000 divided by the deemed issue price of $0.024 (being 41,666,667 Rox
Shares), with approval by shareholders at a meeting no later than 60 days following the Group delivering the Exercise Notice; or
(iii) In the event that shareholder approval was not obtained, paying VMC $1,000,000 in cash within 2 business days of the date of the
meeting, or expiry of the 60 day period.
On 10 June 2020, the Group exercised its option to acquire the Additional OYG Interest (increased to 70%) and paid VMC $2,000,000
on 10 June 2020. As at this date, and 30 June 2020, the remaining consideration to acquire the Additional OYG Interest represents a
compound financial instrument with liability component and an equity component.
At 30 June 2020, with no influence over whether shareholders would approve the issue of shares, the Group valued the liability portion
at $1,000,000 with no value being attributed to the equity component.
Subsequent to year end, on 28 July 2020, shareholders approved the issue of 41,666,667 shares to VMC in final settlement of the
Additional OYG Interest.
There were no other options issued to unrelated parties during the 2019 or 2020 financial years.
NOTE 20. ACCUMULATED LOSSES
Balance at beginning of year
Net loss attributable to members of Rox Resources Lim-ited
Balance at end of year
2020
$
31,380,333
7,469,580
38,849,913
2019
$
28,589,517
2,790,816
31,380,333
No dividends were paid during or since the financial year. There are no franking credits available (2019: nil).
58
Rox Resources Annual Report 2020
NOTE 21. EXPENDITURE COMMITMENTS
(a) Exploration Commitments
The Group has entered into certain obligations to perform minimum work on mineral tenements held. The Group is required to
meet tenement minimum expenditure requirement which are set out below. These may be varied or deferred on application and are
expenditures expected to be met in the normal course of business.
Not later than one year
Later than one year and not later than five years
(b) Remuneration Commitments
2020
$
2019
$
2,213,960
1,617,060
-
2,213,960
3,000,000
4,617,060
Commitments for the payment of salaries and other remuneration under long-term employment contracts in existence at the
reporting date but not recognised as liabilities, payable:
Not later than one year
Later than one year and not later than five years
NOTE 22. CONTINGENT LIABILITIES
2020
$
181,500
90,750
272,250
2019
$
90,750
-
90,750
At the financial reporting date there are no contingent liabilities. Royalties exist over a number of tenements held by the company and
become payable upon the receipt of revenue from mining activities
NOTE 23. EVENTS SUBSEQUENT TO REPORTING DATE
Since the end of the financial year the Group has:
1. Subsequent to year end, on 28 July 2020, shareholders approved the issue of 41,666,667 shares to Venus Metals Corporation
Ltd in final settlement for an additional 20% interest in the OYG Joint Venture (see Note 19B and 25).
2. Issued 5,250,000 shares at $0.024 as a result of the exercise of 5,250,000 employee options raising $126,000; and
3. Issued 9,810,893 shares as a result of the cash-less exercise of 16,000,000 employee options.
No matter or circumstance has arisen since the end of the financial year, other than mentioned above, which significantly affected or
may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent
financial periods.
NOTE 24. RELATED PARTY TRANSACTIONS
(a) Director Related Transactions
Coolform Investments Pty Ltd, a company in which Mr Dickson is a Director and shareholder, received fees totalling $181,500 (2019:
$181,500) for the provision of services.
During the year, the Group paid fees totalling $123,095 (2019: $121,359 including GST) to Azure Minerals Limited, a company of which
Mr Dickson is an officer, for the provision of office accommodation. An amount of $33,428 (2019: $30,220) is payable at year end. The
Group also received fees totalling $48,428 (2019: $43,800 including GST) from Azure Minerals Limited being reimbursement for the
provision of office secretarial support. An amount of $10,950 (2019: $10,950) is receivable at year end.
The transactions are made on normal terms and conditions. Outstanding balances at the year-end are unsecured and interest free
and settlement occurs in cash.
59
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 25. JOINT OPERATIONS
Youanmi Gold Project
In April 2019, the Group established four separate joint ventures with Venus Metals Corporation Ltd (VMC) whereby the Group has
purchased or may earn between a 45% and 50% interest set out below.
Joint control exists for all joint arrangements where the Group has purchased its rights, or met its earn-in requirements, with each
being classified as joint operations under AASB 11 Joint Arrangements (see Note 2(d)(xv)) on the basis that the binding arrangements
signed between the participants establish a contractually agreed sharing of control with decisions about the relevant activities require
the unanimous consent of the parties sharing control.
Further considerations on management’s assumptions in determining control of the OYG Joint Venture where the Group holds a
majority percentage share interest is set out below.
OYG Joint Venture (Rox 70%, VMC 30%)
In the prior year, the Group acquired a 50% interest in all minerals by the payment of $2,800,000 and the issue of 25,000,000 fully paid
shares at a deemed price of $0.008 (a deemed $200,000).
The Group was required to meet exploration expenditure of $2,000,000 over the two years to June 2021 and to cover the costs of
holding and managing the project. Failure to meet the exploration expenditure of $2,000,000 would give rise to a debt due and
payable to VMC, on demand, for the amount of the expenditure commitment that has not been incurred as at 30 June 2021.
Additionally, at any point up until June 2021 and after it has contributed the $2,000,000 to exploration expenditure, the Group may
elect to move to 70% ownership of the OYG Joint Venture (through delivery of an Exercise Notice) via, at VMC’s election, either:
1. the payment of $3,000,000 cash to VMC; or
2. the payment of $1,500,000 cash and issuing to VMC the number of Rox shares equal to $1,500,000 divided by the volume
weighted average price of Rox’s ordinary shares on the ASX calculated over the 20 trading days immediately prior to the date
the option is exercised.
Joint Venture costs are then to be contributed in proportion to ownership, although if VMC elects it can require Rox to fund its 30% of
costs by way of a joint venture loan secured over VMC’s interests in the Joint Venture (see Note 12(b)(i)).
As described in Note 16(b), on 8 June 2020, the parties agreed to amend the term sheet whereby the consideration for the additional
20% interest would be $2,000,000 with 2 business days of the Group delivering its Exercise Notice and either:
(i) Issuing to VMC the number of Rox Shares equal to $1 million divided by the deemed issue price of $0.024 (being 41,666,667
Rox Shares), with approval by shareholders at a meeting no later than 60 days following the Group delivering the Exercise Notice; or
(ii) In the event that shareholder approval is not obtained, paying VMC $1 million in cash within 2 business days of the date of the
meeting, or expiry of the 60 day period.
On 10 June 2020, the Group met its $2,000,000 expenditure commitment and delivered the Exercise Notice, whereby exercising its
option to acquire the Additional OYG Interest (increasing the Group’s interest to 70%).
The Group paid VMC $2,000,000 on 10 June 2020. As at this date, and 30 June 2020, the remaining consideration to acquire the
Additional OYG Interest represents a compound financial instrument with liability component and an equity component.
At 30 June 2020, with no influence over whether shareholders would approve the issue of shares, the Group valued the liability portion
at $1 million with no value being attributed to the equity component.
Subsequent to year end, on 28 July 2020, shareholders approved the issue of 41,666,667 shares to VMC in final settlement of the
Additional OYG Interest.
Joint control
Under the binding arrangement with VMC, unless the parties agree otherwise, if a Decision to Mine has not been made by 10 June
2025 (being 5 years after the Group exercised its option to acquire the Additional OYG Interest) then the parties must use their best
endeavours to sell all of their interests in the OYG Tenements on terms acceptable to both parties to a third party purchaser, with both
parties agreeing that such interests must be sold in full together.
Neither the Group, or VMC, contractually under the agreement hold a pre-emption right to otherwise mitigate this event occurring.
Despite the Group holding substantive rights over relevant activities in accordance with their 70% contributing interest held given the
significance of the above event requiring unanimous consent, joint control is considered to exist until such time that:
1. A Decision to Mine is agreed by both participants (as defined in the binding agreement); or
2. VMC, for any reason, gives up its substantive right to force the sale of the project if a Decision to Mine is not reached by
10 June 2025.
60
Rox Resources Annual Report 2020
NOTE 25. JOINT OPERATIONS (CONTINUED)
Venus Joint Venture (Rox earn-in to 50%, VMC 100%)
On 5 April 2019, the Group entered into an agreement whereby it may earn a 50% interest in the gold rights of the Venus Joint Venture
by contributing the first $0.8 million of exploration expenditure on the project area across the Joint Venture to June 2021. Following
the earn-in the joint ventures are standard contribute or dilute arrangements.
As at 30 June 2020, the Group has contributed $727,129 to this arrangement.
Youanmi Joint Venture (Rox earn-in to 45%, VMC 90%, 10% Legendre)
On 5 April 2019, the Group entered into an agreement whereby it may earn a 45% interest in the gold rights of the Youanmi Joint
Venture by contributing the first $0.2 million of exploration expenditure on the project area across the Joint Venture to June 2021.
Following the earn-in the joint ventures are standard contribute or dilute arrangements.
As at 30 June 2020, the Group has contributed $38,274 to this arrangement.
Currans Find & Pincher Joint Venture (Rox 45%, VMC 45%, 10% Murchison Earthmoving & Rehabilitation Pty Ltd)
On 12 April 2019, the Group entered into an agreement whereby it acquired a 45% interest in all minerals by the payment of $75,000
and the issue of 7,500,000 fully paid shares at a deemed price of $0.010 (a deemed $75,000).
Joint Venture costs are to be contributed in proportion to ownership.
Cullen Joint Venture (Rox earn-in to 51%, Cullen 100%)
On 5 September 2019 the Group entered into an agreement with Cullen Resources Limited whereby it may earnup to a 75% interest
in the Cullen joint venture. Key terms of the agreement are as follows:
• Rox may earn a 51% interest by spending $1,000,000 on exploration expenditure within a three-year period from satisfaction
of certain Conditions Precedent (Stage 1 Earn In).
• Cullen will receive $40,000 cash upon satisfaction of one of the Conditions Precedent.
•
If Rox earns the 51% interest, it can elect to earn a further 24% interest by expending a further $1,000,000 on exploration
expenditure over a three-year period, commencing at the end of the Stage 1 Earn In.
• Rox must spend a minimum of $333,334 and ensure the Cullen tenements are in good standing on a daily pro rata basis before
it may withdraw.
• Upon Rox earning 51% or, if it earns the additional 24%, upon Rox earning 75%, the parties will be associated in an unincorporated
Joint Venture in relation to the Joint Venture Tenements, which will include certain Rox tenements and applications (see the
Schedule and Fig.1 below).
•
•
•
If Rox earns 75%, Cullen will be free-carried, with no liability for any Joint Venture costs, until completion of a Pre-Feasibility
Study.
If Rox only earns 51%, or earns 75% and completes a Pre-Feasibility Study, thereafter Cullen must contribute to Joint Venture
costs pro-rata , or dilute under a standard dilution formula.
If a Participant’s interest falls to 10% or less, that Participant’s interest will be converted to a Net Smelter Return Royalty of 1%
on those Cullen tenements already subject to a royalty and 2.5% on the balance of the Joint Venture Tenements.
As at the date of this report Rox has not earned an interest in the joint venture. As at 30 June 2020, the Group has contributed
$285,980 to this arrangement.
61
Notes To The Consolidated Financial Statements
For the year ended 30 June 2020
NOTE 26. INFORMATION RELATING TO ROX RESOURCES LIMITED (THE PARENT)
Current assets
Total assets
Current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Net Assets
2020
$
2019
$
10,639,754
4,161,564
29,431,489
16,182,367
(432,376)
(432,376)
(267,483)
(267,483)
57,783,306
42,041,933
3,444,622
2,755,722
(32,228,815)
(28,882,771)
28,999,113
15,914,884
Loss of the Parent entity
(3,346,044)
(293,253)
The Parent entity has contractual obligations for Exploration Commitments of $861,000 at balance date (2019: 4,617,060) and
Remuneration Commitments of $272,250 at balance date (2019: $90,750).
NOTE 27. GROUP INFORMATION
Information about subsidiaries
The consolidated financial statements of the Group include:
Name
Principal Activities
Country of incorporation
30 June 2020
30 June 2019
Rox (Mt Fisher) Pty Ltd
Mineral exploration
Rox (Murchison) Pty Ltd Mineral exploration
Australia
Australia
100
100
100
100
% equity interest
62
Rox Resources Annual Report 2020
NOTE 28. RESTATEMENT OF PRIOR PERIOD BALANCES
Rox, while preparing the financial statements of the Group for the half-year ended 31 December 2019, identified that due to an
oversight, no value had been attributed to the plant and equipment or the rehabilitation provision arising from the acquisition of a
50% interest in the OYG Joint Venture in the year ended 30 June 2019. This resulted in restatement of the following line items for the
year ended 30 June 2019:
• Capitalised exploration expenditure was increased by $353,535;
• Plant and equipment was increased by $2,750,000; and
• Non-current provisions were increased by $3,103,535.
As the plant and equipment and rehabilitation provision were acquired/assumed as part of the Group’s purchase of a 50% stake in the
OYG Joint Venture, which was completed on 21 June 2019, there is no impact on the opening balance at 1 July 2018.
There is no impact on net assets as at 30 June 2019, nor on the consolidated statement of comprehensive income as at 30 June 2019.
The above adjustment had the following impact on the 30 June 2019 consolidated statement of financial position:
Financial report line item / balance affected
Consolidated Statement of Financial Position extract
Actual
30 June 2019
$
Adjustment
$
Restated Actual
30 June 2019
$
Non-Current assets
Plant and equipment
Capitalised exploration expenditure
Total non-current assets
Total assets
Non-Current liabilities
Provisions
Total non-current liabilities
Total liabilities
36,735
7,087,607
9,776,850
13,968,965
-
-
551,643
2,750,000
353,535
3,103,535
3,103,535
3,103,535
3,103,535
3,103,535
2,786,735
7,441,142
12,880,385
17,072,500
3,103,535
3,103,535
3,655,178
Net assets
13,417,322
-
13,417,322
This is the end of the Financial Report.
63
Directors’ Declaration
For the year ended 30 June 2020
In accordance with a resolution of the Directors of Rox Resources Limited, I state that:
1. In the opinion of the Directors’:
(a) The financial statements and notes of the Company are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Company’s financial position as at 30 June 2019 and its performance for the year
ended on that date; and
complying with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001; and
(b) The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2(a);
and
(c) Subject to the matters set out in Note 2, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
(d) This declaration is made after receiving the declarations required to be made to the Directors in accordance with section
295A of the Corporations Act 2001 for the financial year ending 30 June 2020.
On behalf of the Board
A Passmore
Managing Director
Perth, 29 September 2020.
64
Rox Resources Annual Report 2020
Independent Auditor’s Report
65
Independent Auditor’s Report (Continued)
66
Rox Resources Annual Report 2020
Independent Auditor’s Report (Continued)
67
Independent Auditor’s Report (Continued)
68
Rox Resources Annual Report 2020
Independent Auditor’s Report (Continued)
69
Independent Auditor’s Report (Continued)
70
Rox Resources Annual Report 2020
Mining Tenements
Project
Mt Fisher, WA
Fisher East, WA
Collurabbie, WA
Youanmi Gold Project, WA
Youanmi - OYG JV, WA
Youanmi - Sandstone Youanmi JV, WA
Youanmi - VMC JV, WA
Mt Eureka - Cullen JV, WA
Interest
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Application
Application
Application
Application
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Tenement
Number
E53/1061
E53/1106
E53/1836
E53/1319
E53/1788
M53/0009
M53/0127
E36/948
E53/1218
E53/1318
E53/1716
E53/1802
E53/1884
E53/1885
E53/1886
E53/1887
E53/1950
E53/2002
E53/2018
E53/2075
E53/2062
E53/2090
E53/2095
E53/2102
E38/2009
E38/2912
E38/3193
E57/1121
E57/1122
E57/1123
M57/10
M57/51
M57/75
M57/97
M57/109
M57/135
M57/160A
M57/164
M57/165
M57/166
M57/167
E57/985
E57/986
E57/1011-I
P57/1365
P57/1366
E57/982
E57/1018
E57/1019
E57/1023-I
E57/1078
M57/641
M57/642
E53/1209
E53/1299
E53/1637
E53/1893
E53/1957
E53/1958
E53/1959
E53/1961
E53/2052
Interest Held at
beginning of quarter
Interest Held at end of
quarter
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
Earning 45%
Earning 45%
Earning 45%
Earning 45%
Earning 45%
Earning 50%
Earning 50%
Earning 50%
Earning 50%
Earning 50%
45%
45%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
Earning 45%
Earning 45%
Earning 45%
Earning 45%
Earning 45%
Earning 50%
Earning 50%
Earning 50%
Earning 50%
Earning 50%
45%
45%
Earning up to 75%
Earning up to 75%
Earning up to 75%
Earning up to 75%
Earning up to 75%
Earning up to 75%
Earning up to 75%
Earning up to 75%
Earning up to 75%
71
Other Information
The following information was applicable as at 31 August 2020.
(a) Top 20 shareholders of each class of listed security
Ordinary Fully Paid Shares
Name
Citicorp Nominees Pty Limited
Venus Metals Corporation Limited
Mr Alexander Ross Passmore
Mr Gabor Matoricz
Cs Third Nominees Pty Limited
Mr Brett Douglas Dickson + Mrs Georgina Fitzroy Dickson
Longreach 52 Pty Ltd
Morgan Stanley Australia Securities (Nominee) Pty Lim-ited
Loktor Holdings Pty Ltd
Mr Daryl Kenneth Miller
Crescent Nominees Limited
Mr Gregory James Blight + Mr Stephen Maxwell Blight
Nalmor Pty Ltd John Chappell Super Fund A/C
Mr Richard Arthur Lockwood
Ms Kellie Jean Campbell
Mr Alistair Mark Cameron
Mr John William Fawcett
Mr Ram Shanker Kangatharan
Kendali Pty Ltd
Mr Mark John Bahen + Mrs Margaret Patricia Bahen
Teck Australia Pty Ltd
1
2
3
4
5
6
7
8
9
10
11
12
12
14
15
16
17
17
17
17
17
Number of
Shares
% of Issued Share
Capital
67,026,029
41,666,667
32,927,245
25,300,000
22,928,991
18,509,149
13,611,421
13,328,056
13,200,000
12,605,000
12,250,000
11,000,000
11,000,000
10,416,667
10,325,000
10,110,085
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
3.28
2.04
1.61
1.24
1.12
0.91
0.67
0.65
0.65
0.62
0.60
0.54
0.54
0.51
0.51
0.50
0.49
0.49
0.49
0.49
0.49
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:
376,204,310
18.44
No substantial shareholders
(b) Distribution of Shareholders Number
Category (size of Holding)
Number of holders
Number of Shares
1 – 1,000
1,001 – 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Holding less than a marketable parcel
208
86
604
3,092
2,438
6,428
604
28,968
296,375
4,836,307
142,998,296
1,892,668,517
2,040,828,463
2,355,313
There is a total of 1,989,100,903 fully paid ordinary shares on issue, all of which are listed on the ASX. At shareholders meetings each
ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
(c) Restricted Securities
There are no restricted securities.
72
Rox Resources Annual Report 2020
Level 1, 34 Colin Street
West Perth WA 6005
Phone: (08) 9226 0044
Fax: (08) 9322 6254
www.roxresources.com.au