Annual Report
2022
Corporate
Directory
Directors
Mr Stephen Dennis
Non-Executive Chairman
Dr John Mair
Non-Executive Director
Mr Robert Ryan
Non-Executive Director
Mr Alex Passmore
Managing Director
Company Secretary
Mr Christopher Hunt
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
Solicitors
Thomson Geer
Level 27, Exchange Tower
2 The Esplanade
Perth WA 6000
Telephone: (08) 9404 9100
Facsimile: (08) 9300 1338
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 Limited
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)
Capital Structure
168,940,947
Fully paid ordinary shares
4,466,668
$0.433, 30 November 2022 options
4 holders
1,333,333
$1.438, 31 December 2023 options
1 holder
1,333,333
$1.813, 31 December 2023 options
1 holder
1,333,333
$2.188, 31 December 2023 options
1 holder
660,000
$0.763, 25 May 2024 options
2 holders
10,476,190
$0.988, 26 March 2025 options
1 holder
1,000,000
$0.720, 4 March 2026 options
1 holder
For information on the Company contact
Principal & Registered Office
Level 2, 87 Colin Street
West Perth WA 6005
Telephone: (08) 9226 0044
Facsimile: (08) 9322 6254
Email: admin@roxresources.com.au
Web: www.roxresources.com.au
Contents
CHAIRMAN’S REVIEW
REVIEW OF OPERATIONS
ENVIRONMENT, SOCIAL & GOVERNANCE
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position
Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report
SCHEDULE OF MINING TENEMENTS
OTHER INFORMATION
2
4
16
26
49
51
60
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61
62
63
64
99
100
106
107
1
Rox Resources
Annual Report 2022
Chairman’s
Review
The next 12
months are
shaping up to be
transformational
for Rox. The
Company will
continue to grow
the resource
base and explore
Dear Shareholder,
I am pleased to report on the significant
progress that Rox Resources Limited
has made over the last 12-months, as
we work towards the eventual restart
of operations at our flagship Youanmi
Gold Project in Western Australia.
One of the highlights for the year has
been the near doubling of the total
mineral resource at Youanmi, from
1.7Moz Au at 2.85 grams per tonne to
3.2Moz Au at 3.57 grams per tonne.
This resource consists of a 2.2Moz Au
at 6.9 grams per tonne underground
resource, and a 1Moz Au surface
resource at 1.74 grams per tonne.
Rox’s discovery cost is just $7 per
resource ounce which is well below
industry standard.
pathways to
The Youanmi resource remains open
along strike and down dip, so there is
development at
significant potential for the resource to
increase in size with further drilling. An
Youanmi...
additional focus for upcoming drilling
programs will be inferred to indicated
Non-Executive Chairman
appointed August 2015
resource conversion which will highlight
the high-grade nature of the
mineralisation that we see at Youanmi.
Youanmi was mined for 10 years until
operations ceased in 1997 when the
Australian dollar gold price was around
$400 per ounce, and it is our firm belief
that we will soon see mining operations
recommence at Youanmi.
Studies for the potential mine are
progressing well. In April we appointed
MACA Interquip to complete feasibility-
level metallurgical testwork for the
Youanmi open pit and underground
Resources design, as well as the
costing of a dual-purpose processing
plant to scoping level accuracy.
The Company expects concept level
project economics to be very robust,
and we will continue to rapidly pursue
appropriate development pathways,
with the aim of delivering a Scoping
Study this year with further studies
to follow.
In late June, Rox was delighted to
welcome experienced mining engineer
Robert Ryan to the Board as a non-
executive director. Mr Ryan brings more
than 20 years of experience in the
resources sector including exploration,
resource development, feasibility
studies, project development, mining
operations and corporate merger
and acquisitions.
In March, Rox raised $4 million through
a placement of 10 million shares at
$0.40 per share to institutional
investors. It was very encouraging to
have our largest shareholder, Hawke’s
Point, participate in the placement on a
pro-rata basis to its existing interest.
In August 2021, our company
successfully spun-out and listed its
nickel and base metals assets via the
IPO of Cannon Resources Limited,
which has performed strongly since
listing and has hence unlocked
significant value for Rox shareholders.
The next 12 months are shaping up to
be transformational for Rox. The
Company will continue to grow the
resource base and explore pathways to
development at Youanmi, and we look
forward to providing a resource update
at Mt Fisher as we continue with our
systematic exploration programs.
I would like to take the opportunity to
thank shareholders for their ongoing
support, and also Rox senior
management as we advance
our projects.
Stephen Dennis
Rox Resources
Annual Report 2022
Chairman’s Review
2
2
2022 3
Rox Resources Annual Report2022 Review of Operations
Rox Resources Limited (“Rox” or “the
Company”) and its consolidated entities
Highlights
(together “the Group”) is a West Australian
focused gold exploration and development
company. It is the 70 per cent owner and
operator of the historic Youanmi Gold
Project near Mt Magnet, approximately
• Quality high grade resource at
Youanmi 3.2Moz at 3.57 g/t Au
•
Significantly advanced studies into
the potential restart of Youanmi
480 kilometres northeast of Perth, and
• Mt Fisher, high gold grades
wholly-owns the Mt Fisher Gold Project
intersected at the Damsel Prospect
approximately 140 kilometres southeast of
Wiluna. All projects contain JORC
resources and are located in Western
Australia (Figure 1).
•
Successfully demerged nickel and
base metals assets by completing an
IPO, Cannon Resources Limited listed
12 August 2021
•
Capital raising of A$4.0 million
(before costs) in March 2022
4
Rox Resources Annual Report 2022Review of Operations Figure 1 - Project Location Map
Meekatharra
Mt Magnet
Jundee
Leinster
Agnew
Penny West
Super Pit
Kalgoorlie
Perth
5
Rox Resources Annual Report 2022Review of OperationsYouanmi Project (Au)Mt Fisher Project (Au) 6
The
Youanmi
Gold Project
The Youanmi Gold Project is located
480km to the northeast of Perth,
Western Australia.
7
Projects
Youanmi Gold Project
The Youanmi Gold Project
480km Northeast of Perth,
Western Australia
The Youanmi Gold Project is located
During the financial year, the Youanmi
480km to the northeast of Perth, Western
Gold Project was significantly advanced
Australia, accessed by the sealed Great
through exploration and study activities
Northern Highway for a distance of
which are further outlined below.
418km from Perth to Paynes Find and
then for 150km by the unsealed Paynes
Find to Sandstone Road.
As a result of more than 50,000 metres of
drilling, the Youanmi Gold Project
resources substantially increased by 93%
The Youanmi Gold Project consists of four
from 1.7M ounces at 2.85 g/t of Au as at
unincorporated joint ventures (JV) with
30 June 2021 to 3.2M ounces at 3.57 g/t
Venus Metals Corporation Limited
of Au as at 30 June 2022. The resource
(“VMC”) and tenements 100% owned by
includes a high-grade underground
Rox (Figure 2). The joint ventures are
component of 2.2M ounces at 6.9 g/t of
outlined below:
1. OYG JV (all minerals) - covers
65km2, is circa 10km x 7km wide,
and surrounds the Youanmi Gold
Mine and nearby extensions
(Rox 70%)
2. VMC JV (gold rights) - covers
302km2 (Rox 50%)
Au. The resource remains open along
strike down dip with further growth likely
(see Figure 3). The discovery cost since
acquisition is approximately $7 per
ounce, which is well below industry
averages.
The Company also progressed
metallurgical testwork during the
financial year, with scoping study level
3. Youanmi JV (gold rights) - covers
testwork completed for both Albion and
270km2 (Rox 45%)
4. Currans Find JV (all minerals) -
covers 4km2 (Rox 45%)
The Youanmi Project has produced an
Pressure Oxidation Leach (“POX”). Both
oxidation processes achieved high
extraction rates, POX 95.6% and Albion
92.2% for the Youanmi underground
mineralisation. Further sampling has
estimated 667,000 oz of gold at 5.47 g/t
been undertaken to progress feasibility
Au since discovery in 1901 during three
study level testwork.
main periods: 1908 to 1921, 1937 to
1942, and 1987 to 1997. The last parcel
of ore mined underground at Youanmi
(November 1997) was at 14.6 g/t Au.
Youanmi gold deposits are situated in the
Youanmi greenstone belt. The geological
structure of the belt is dominated by the
north-trending Youanmi Fault Zone. The
majority of gold mineralisation found at
the project is hosted within the north-
northwest splays off the north-northeast
trending Youanmi Fault.
During the financial year the Group
significantly advanced its Scoping Study
into the potential restart of Youanmi with
results due to be released in the 2nd half
of calendar year 2022.
8
Rox Resources Annual Report 2022Review of Operations Figure 2 – Youanmi Gold Project
Rox Resources
OYG Joint Venture
Youanmi Joint Venture
VMC Joint Venture
Currans Find Joint Venture
Youanmi Joint Venture
• Rox 45%
• VMC 45%
• Prospector 10%
Currans Find Joint Venture
• Rox 45%
• VMC 45%
• Prospector 10%
Rox Resources
• Rox 100%
OYG Joint Venture
• Rox 70%
• VMC 30%
VMC Joint Venture
• Rox 50%
• VMC 50%
9
Rox Resources Annual Report 2022Review of OperationsPenny WestYouanmi The Group continues its approach of
simultaneously exploring and conducting
mining studies. Planned activities at the
Youanmi Gold project include:
•
•
Finalisation of the Scoping Study;
Investigating early cash flow
opportunities;
•
Inferred to indicated resource
conversion and exploration drilling;
•
Feasibility level underground and
open pit metallurgical testwork;
The Group progressed an initial
22,000m aircore drilling programme to
explore for Penny West style deposits
on the Youanmi Regional joint venture
tenements.
This aircore drilling intersected regolith
gold anomalism associated with
interpreted NW trending structures over
approximately four kilometres of strike
(see Figure 4). Based on the results of
the initial drilling programme the forward
work plan is as follows:
•
Follow up infill and extensional
aircore drilling to further define the
geometry and extent of oxide
mineralisation; and
•
Regional targeting generation along
the strike of the Youanmi Shear Zone
Figure 3 - 3D View of Youanmi Underground Resource Model and Near Mine Part
of Near Surface Model
Figure 4 - Target area 1 returned several zones of gold anomalism over NW trending
structures interpreted from aeromagnetic data.
10
Rox Resources Annual Report 2022Review of Operations Mt Fisher Gold – Rox 100%;
The Mt Fisher Gold/Mt Eureka Project is
Mt Eureka – Rox 51%, earning to 75%,
Cullen Resources Limited 49%
Mt Fisher Gold/Mt Eureka Project
Mineralisation remains open down dip
and down plunge. The forward work
located in the Northern Goldfields,
roughly 500km north of Kalgoorlie (about
plan includes:
120km east of Wiluna). The Group holds
850km2 of the Mt Fisher greenstone belt
and surrounding prospective zones,
comprised 500km2 held wholly by the
Group and 350km2 in an unincorporated
joint venture with Cullen Resources
Limited (“Cullen”) which the Group has
earnt a 51% interest during the financial
year and is currently incurring
expenditure to progress to a 75% stake.
Following the demerger of the Fisher East
Nickel Project, the Group renewed its
focus on gold exploration in the belt and
completed an extensive project scale
review, with drilling undertaken to
advance the project. The drilling
campaign in December 2021 produced
exceptional results with high gold grades
intersected across broad widths at the
Damsel Prospect (see Figure 5).
•
Follow up drilling (RC) planned along
strike and down dip of newly
identified mineralisation;
•
Samples submitted for multi-
element assays to provide additional
insight into the bed-rock geology
and key pathfinder elements (such
as arsenic and antimony) and will be
of assistance in planning follow-up
drilling and more detailed
geochemical evaluation;
•
Regional target generation is
ongoing over 850km² of highly
prospective greenstone terrane; and
•
Project wide high resolution (50m
spaced) aeromagnetic surveying will
assist with further geological
interpretation and target generation.
Figure 5 - Cross Section of MFRC081 at the Damsel Prospect looking north.
11
Rox Resources Annual Report 2022Review of Operations Corporate
During the financial year the following
The Placement grew the institutional
key activities were undertaken by the
shareholder component of the Company’s
Group from a corporate perspective:
register from 17% to 22%, a stated
objective of the Company.
Hawke’s Point, which currently has a
13.18% interest in the Company,
participated in the placement on a
pro-rata basis to its existing interest.
Additional Non-Executive Director
Mr Robert Ryan was appointed as a
Non-Executive Director of the Company
on 29 June 2022. Mr Ryan is a mining
engineer with over 20 years of experience
in the resource sector, including
exploration, resource development,
feasibility studies, project development,
mining operations and corporate merger
and acquisitions. Mr Ryan holds a
Bachelor of Engineering (Mining
Engineering) from Curtin University
School of Mines and a First Class Mine
Managers Certificate of Competency. He
has prior Senior Executive experience
with Bardoc Gold Limited, Norton Gold
Fields, Barrick Gold, Goldfields – St Ives
and Newmont Corporation.
Mr Ryan brings strong mining
engineering capabilities to the Group,
which at its current stage of development
is important as the Group progresses its
studies showing the pathway for a return
to mining at Youanmi.
Cannon Demerger
The Group demerged its nickel and base
metals assets through its newly
incorporated 100% owned subsidiary
Cannon Resources Limited by way of an
Initial Public Offering (IPO). Cannon was
admitted to the Australian Securities
Exchange (ASX) on 10 August 2021 and
commenced trading on 12 August 2021.
Teck Receivable
Rox and Teck Australia Pty Ltd agreed to
bring forward a deferred cash settlement
due to Rox from the sale of Rox’s interest
in the Reward Zinc-Lead Project. Rox
completed the sale of its interest in
Reward Zinc-Lead Project in February
2017 and as part of the consideration,
$3.75 million was due to Rox at the
earlier of the completion of a Bankable
Feasibility Study or 6 years, being 16
February 2023. On 20 July 2021, Rox
and Teck agreed to settle the deferred
cash consideration for $3.1 million,
payable to Rox by 1 September 2021.
Payment was subsequently received on
26 August 2021.
Institutional Placement
The Company completed an institutional
placement for 10 million new fully paid
ordinary shares at $0.40 per share to
raise $4 million (before costs).
The Company received significant interest
from key investors following the recent
Youanmi Resource upgrade to 3Moz Au
(ASX: 20 January 2022) and successful
metallurgical testwork for Youanmi ore
(ASX: 23 December 2021).
12
Rox Resources Annual Report 2022Review of Operations Mineral Resources
During the year, the Group announced significant increases to the mineral resource estimate for the Youanmi Gold Project, both
in the underground and near surface resources. Drilling and exploration work at the Youanmi Gold Project, predominantly in
the OYG JV area, yielded substantial increases in known and defined tonnages and ounces since acquisition and
commencement of drilling in mid-2019. The resources increased by 1,543k oz Au since 30 June 2021, at a discovery cost of
approximately $7 per ounce since project acquisition with further upside potential remaining.
Youanmi Gold Project, WA (Reported to the ASX on 20 April 2022)
Area
Classification
Cut-off (g/t Au)
Tonnes (dmt)
Grade (g/t Au)
Au Metal (oz)
Near Surface
Indicated
Underground
Indicated
Sub-total
Indicated
Near Surface
Inferred
Underground
Inferred
Sub-total
Inferred
Near Surface
Indicated + Inferred
Underground
Indicated + Inferred
Total
Indicated + Inferred
1. Grace 1.5 g/t cutoff.
0.51
3.0
0.51
3.0
0.51
3.0
9,070,000
3,060,000
12,130,000
8,930,000
6,840,000
15,770,000
18,000,000
9,900,000
27,900,000
1.89
7.55
3.32
1.58
6.59
3.75
1.74
6.89
3.57
552,000
744,200
1,296,000
453,000
1,450,000
1,903,000
1,004,000
2,194,000
3,199,000
Mt Fisher Gold, WA (Reported to the ASX on 11 July 2018, 0.8 g/tAu cut-off)
Deposit
Category
Tonnes
Uncut
Cut
Damsel
Inferred
Indicated
Measured
Mt Fisher
Inferred
Indicated
Measured
Moray Reef
Inferred
Total
Indicated
Measured
Inferred
Indicated
Measured
Total
Grade
(g/t Au)
Metal
(Ozs)
Grade
(g/t Au)
Metal
(Ozs)
Value
(g/t Au)
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
1,024,762
2.29
2.33
2.80
2.32
3.44
3.63
3.73
3.65
3.87
6.09
10.92
9.89
2.37
2.78
4.65
2.84
43,627
11,358
2,135
57,120
4,528
6,948
15,045
26,521
155
966
8,960
10,081
48,309
19,273
26,140
93,721
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
30
30
30
30
50
50
50
50
80
80
80
80
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
Figures in all tables may not add up exactly due to rounding.
13
Rox Resources Annual Report 2022Review of Operations
Mineral Resources
Estimation Governance
Statement
Governance of the Group’s mineral
exposures, diamond drill core and the
resources is a responsibility of the Key
detailed paper data available in the map
Management Personnel of the Group.
room and has sufficient experience that is
The Group has ensured that its mineral
resources estimates are subject to
appropriate levels of governance and
internal controls.
The underground mineral resources
relevant to the style of mineralisation and
type of deposit under consideration and
to the activity that is being undertaken to
qualify as a Competent Person as defined
in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration
reported for the Youanmi Gold Project
Results, Minerals Resources and Ore
have been estimated by Mr David
Reserves’
Allmark MAusIMM (CP), who is a full-time
employee of Rox Resources Limited and
who visited the Youanmi site from the
22nd to 23rd of September 2021, and
Additionally, the Group carries out regular
internal peer reviews of processes and
contractors engaged.
has sufficient experience that is relevant
The Mt Fisher gold resource was
to the style of mineralisation and type of
estimated by Mr Ian Mulholland, the
deposit under consideration and to the
Group’s Managing Director at the time of
activity that is being undertaken to
the resources estimate. Mr Mulholland is
qualify as a Competent Person as defined
experienced in best practices in modelling
in the 2012 Edition of the ‘Australasian
and estimation methods.
Code for Reporting of Exploration
Results, Minerals Resources and Ore
Reserves’. The Company engaged CSA
Global to conduct independent checks of
the modelling and estimation process.
The Group has reported its Youanmi Gold
Project and Mt Fisher Gold Project
mineral resources on an annual basis in
accordance with the Australasian Code
for Reporting of Exploration Results,
The near surface mineral resources
Mineral Resources and Ore Resources
reported for the Youanmi Gold Project
(the JORC code) 2012 Edition.
have been estimated by Mr Lynn
Widenbar, a Competent Person who is a
Member of the Australasian Institute of
Mining and Metallurgy. Mr Widenbar is a
full time employee of Widenbar and
Associates Pty Ltd. Mr Widenbar visited
site on 9th and 10th May 2018 and
reviewed the general site layout, open pit
Competent Persons named by the Group
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.
14
Rox Resources Annual Report 2022Review of Operations Competent Person
Statements
The Statement of Estimates of Mineral
Resources that relates to gold Mineral
Resources for the Mt Fisher project was
reported by Rox in accordance with ASX
Listing Rule 5.8 in the announcement
released to the ASX on 11 July 2018. Rox
confirms it is not aware of any new
information or data that materially
affects the information included in the
previous announcements and that all
material assumptions and technical
parameters underpinning the estimates in
the previous announcements continue to
apply and have not materially changed.
Exploration Results
The information in this report that relates
to previous Exploration Results was
prepared and first disclosed under the
JORC Code 2012 and has been properly
and extensively cross-referenced in the
text to the date of the original
announcement to the ASX.
Resource Statements
The Statement of Estimates of Mineral
Resources for the Youanmi Near Surface
Resource was reported by Rox in
accordance with ASX Listing Rule 5.8 in
the announcement released to the ASX
on 20 April 2022. Rox confirms it is not
aware of any new information or data
that materially affects the information
included in the previous announcements
and that all material assumptions and
technical parameters underpinning the
estimates in the previous announcements
continue to apply and have not materially
changed.
The Statement of Estimates of Mineral
Resources for the Youanmi Underground
Resource was reported by Rox in
accordance with ASX Listing Rule 5.8 in
the announcement released to the ASX
on 20 January 2022. Rox confirms it is
not aware of any new information or
data that materially affects the
information included in the previous
announcements and that all material
assumptions and technical parameters
underpinning the estimates in the
previous announcements continue to
apply and have not materially changed.
15
Rox Resources Annual Report 2022Review of Operations Environment,
Social and Governance
At Rox Resources, we believe that
The Board of Rox Resources Limited is
Environment, Social and Governance
excited to be taking our first steps
(“ESG”) is an opportunity to improve
towards integrating ESG into the Rox
business, environmental and social
way as we focus firmly on unlocking the
outcomes.
true value of our assets for all our
stakeholders.
As we develop and grow, we are
committed to doing what is right, not just
what is easy. We know that our success
depends on delivering value for those
that we depend on.
ESG Goals & Progress
Produced our inaugural sustainability insert
within our annual report
Conduct an ESG gap analysis on company
policies, standards, and actions where
required
Establish baseline measurements for our
material topics
Develop our Employee Value Proposition
Commence preliminary studies into our
carbon management plan
16
Rox Resources Annual Report 2022Review of Operations Our Approach
Our ESG approach has been designed to build understanding, create engagement,
and develop a platform from which we can build and seek continuous improvement
as we grow.
1
Gap Analysis &
Benchmarking
2
Stakeholder
Engagement
5
Communications
& Reporting
Our ESG
Method
3
Risk &
Materiality
Assessment
4
ESG Charter
Development
17
Rox Resources Annual Report 2022Review of Operations Our ESG Framework
UN SDGs
The United Nations Sustainable Development Goals (UN SDGs) was developed in 2015
and has since been adopted by all 193 members states of the United Nations. This is a
global plan of action based around 17 interlinked UN SDGs to achieve a better and
more sustainable future for all by 2030.
GRI
The GRI Standards are the world’s most widely used standards for sustainability
reporting and help organisations understand, measure and communicate their impacts
on the economy, environment, and society.
TCFD
The TCFD was created in 2015 by the Financial Stability Board (FSB) to develop
consistent climate-related financial risk disclosures for use by companies, banks,
investors to improve and increase reporting of climate- related financial information.
SDGs Rox
Contributes to:
18
Rox Resources Annual Report 2022Review of Operations Stakeholder Engagement
In Q1 2022, Rox Resources Limited invited stakeholders to share their thoughts,
interests, and priorities on ESG. This process was aimed at identifying EGS topics that
mattered most to Rox Resources Limited’s stakeholders and the business.
Working Partners
Board & Employees
Investors & Shareholders
Landholders
Government & Regulators
Contractors & Suppliers
Local & Indigenous Communities
Feedback from both internal and external stakeholders was captured through online
surveys. These surveys asked stakeholders to rate a range of defined ESG topics based
on their level of importance to them, which ultimately informed the definition of our
material topics.
Group’s Material Topics
Emissions & Climate
Health, Safety & Wellbeing
Business Ethics & Transparency
Environmental Compliance
Recruitment, Training & Development
Economic Performance & Contribution
19
Rox Resources Annual Report 2022Review of Operations SDG13 - Take urgent action
to combat climate change
and its impacts
SDG15 - Protect, restore,
and promote sustainable
use of terrestrial
ecosystems, sustainably
manage forests, combat
desertification, and halt and
reverse land degradation
and halt biodiversity loss
Environment
Emissions & Climate
We acknowledge the impacts of a changing climate and are committed to playing our
role, addressing the global threat, and managing its impacts on the business.
The Group recognises that there is a global shift towards a low emissions future across
the mining sector. While the Group is at development stage, the Group is committed to
understanding its emissions profile and taking the opportunity to build capacity and
knowledge of climate and emissions strategy within the business.
With the Youanmi project at its scoping stage, the Group has committed to undertaking
preliminary studies to support the development of a carbon conscious mine.
Environmental Compliance
We do what is right and care about what we do. We respect the natural world, minimise
our environmental impact and always operate responsibly.
Rox is committed to conducting our operations in an environmentally responsible and
compliant manner. This includes continuous improvement in the identification,
assessment, mitigation, and monitoring of the environmental impact of our operations.
The Company’s approach to sustainable development includes understanding the
impact of our work on the environment and taking appropriate steps to mitigate any
negative impacts. Rox works with relevant government departments and where
required, expert consultants to ensure responsible operations and compliance.
In FY22, Rox identified a non-compliance in relation to a 5C Water Extraction License.
This has since been rectified.
Rox recorded zero environmental incidents in FY22.
Our Forward Ambitions
• Measure baseline Scope 1 & 2 GHG emissions for FY22
• Adoption of TCFD reporting in FY23
•
Commence preliminary studies into our carbon management plan
• Disclosure of annual performance data on environmental compliance
20
Rox Resources Annual Report 2022Review of Operations SDG8 - Promote sustained,
inclusive, and sustainable
economic growth, full and
productive employment for all
SDG3 - Ensure healthy lives
and promote wellbeing for
all at all ages
Social
Recruitment, Training & Development
Rox people are proactive. We are a business that gets things done, empowering our
people with purpose and responsibility. We are not rigid, we provide dynamic and
interesting work and are committed to growing careers as we grow.
Rox employees are the foundation of the business. The Company believes in recruiting
the best and retaining them by empowering people with purpose and responsibility. The
Group’s Diversity Policy further demonstrates the Company’s commitment to building a
diverse workplace and understands the benefits it brings to corporate performance.
Annual performance evaluations are conducted with two objectives: 1) this ensures that
employees receive timely feedback on their work performance and 2) it allows for Rox to
understand employees’ personal and professional goals, so that Company can better
support the ongoing development of its team.
Rox is entering an exciting phase over the next 12 months that will likely require a
significant recruitment program. To support this, the Company is committed to
crystalising and communicating our unique Employee Value Proposition.
Health, Safety & Wellbeing
We aim to provide a workplace free from injury, illness, and harm. A responsible,
supportive, inclusive culture where people can excel and find fulfilment in their work.
Rox aims to build and maintain a workplace environment and culture that recognises
and values the impact of positive mental and physical health and wellbeing. The
Company understands the inherent risks associated with mining, exploration, and
development and are committed to providing a safe and healthy work environment for
all our employees, contractors, volunteers, and visitors.
To support a safe and healthy workplace for all, Rox has published a Health, Safety, and
Wellbeing Policy.
Rox is proud to have zero Lost-Time Injuries
reported in FY22
Our Forward Ambitions
•
•
Thorough and transparent recruitment process
Conduct salary benchmarking to ensure our remuneration strategy meets market
expectations
• Define our Employee Value Proposition to support staff recruitment, development,
retention and wellbeing
•
Produce Rox recruitment video
• Mental health first aid training for all staff
•
Kickstart Rox’s Employee’s Assistance Program
21
Rox Resources Annual Report 2022Review of Operations SDG16 - Promote peaceful
and inclusive societies for
sustainable development,
provide access to justice
for all and build effective,
accountable, and inclusive
institutions at all levels
SDG8 - Promote sustained,
inclusive, and sustainable
economic growth, full and
productive employment
for all
Governance
Business Ethics & Transparency
We are committed to operating with openness and integrity, pursuing the true spirit of
corporate governance commensurate with the needs of our stakeholders.
Rox is committed to incorporating the highest level of corporate governance into our
operations and business processes. The Company is compliant with the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations.
These commitments are also embedded in Rox’s corporate level policy documents and
standard operating procedures, which are provided to all new employees and
contractors.
Rox is proud to have zero breaches of policies
recorded in FY22
Economic Performance & Contribution
As we grow, we proudly create economic opportunities and actively share our prosperity
with our stakeholders and throughout our value chain.
Rox’s most direct economic contribution comes from wages paid directly to our
employees and contractors, and the procurement of supplies from the local businesses,
all of which further stimulates economy. Ultimately, maintaining a high level of economic
performance and contribution drives financial circularity.
As part of the government requirements, the Company pays the required taxes and
royalties that supports the local and national government on their respective
infrastructure and social support initiatives.
Our Forward Ambitions
•
Perform annual reviews of corporate policies to ensure that these policies remain
informed and current
• Deepen Rox’s engagement with the Shire of Sandstone to continue building on our
exploration work in the region
22
Rox Resources Annual Report 2022Review of Operations 2323
Rox Resources Annual Report 2022Review of Operations 24
24
Rox Resources Annual Report 2022Review of Operations During the financial year,
the Youanmi Gold Project
was significantly advanced
through exploration and
study activities.
25
25
Rox Resources Annual Report 2022Review of Operations Directors’
Report
The Directors present their report on the Group consisting of the Parent entity, Rox
Resources Limited (“Rox” or the “Company”), and the entities it controlled (“the
Group”) at the end of, or during, the year ended 30 June 2022 (the “financial year”).
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.
Mr Stephen Dennis
(Non-Executive Chairman, appointed 1 August 2015)
– Bcom, BLLB, GradDipAppFin
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 Chief Executive Officer 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 Kalium Lakes Limited and Marvel
Gold Limited. In the past three years , he was a director of Lead FX Inc, Heron
Resources Limited, and Burgundy Diamond Mines Ltd.
Mr Alex Passmore
(Managing Director, appointed 1 May 2019)
– B.Sc (Hons), GradDipAppFin, , GAICD
Mr Passmore is Rox’s Managing Director, a position he has held since 1 May 2019. He
is a qualified geologist with extensive corporate experience. Mr Passmore 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 from 2014 until late 2016.
Mr Passmore is currently a director of the following listed entities: Pearl Gull Iron
Limited, Cannon Resources Limited, and Blencowe Resources Limited (London listed).
26
Rox Resources Annual Report 2022Director’s Report 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. He has worked in the minerals sector in WA, NSW,
British Columbia, Yukon, Alaska, Mexico and China.
Dr Mair brings a deep understanding of a range of gold deposits types, and a working
knowledge of other mineral systems. He has authored numerous papers in leading
scientific journals on the geology of gold and other mineral deposit types.
Dr Mair was the Managing Director of Greenland Minerals Ltd from 2014 to late 2021.
He was integral in the technical development of Kvanefjeld (the world’s largest
code-compliant rare earth resource), 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 governments on
matters pertaining to regulation and strategic metal supply. He has significant
experience and connections in global capital markets.
Dr Mair has not been a director of any other listed company in the last three years.
Mr Robert Ryan
(Non-Executive Director, appointed 29 June 2022)
– B.Eng. Mining Engineering
Mr Ryan is a mining engineer with over 20 years of experience in the resource sector,
including exploration, resource development, feasibility studies, project development,
mining operations and corporate merger and acquisitions. Mr Ryan holds a Bachelor
of Engineering (Mining Engineering) from Curtin University School of Mines and a First
Class Mine Managers Certificate of Competency. He has prior Senior Executive
experience with Bardoc Gold Limited, Norton Gold Fields, Barrick Gold, Goldfields
– St Ives and Newmont Corporation.
Mr Ryan has not been a director of any other listed company in the last three years.
Mr Christopher Hunt
(Company Secretary, appointed 6 May 2021) – B.Bus, FCPA, GAICD
Mr Hunt is an experienced finance executive with over 25 years’ experience
predominately in the resources and construction industries. He has held senior
finance roles for close to 15 years and has strong experience in feasibility studies,
corporate financing, and mining operations. Mr Hunt’s most recent resources’
experiences were as the Chief Financial Officer for BC Iron Limited, Crossland
Resources Limited, FerrAus Limited and Cliffs Natural Resources.
Mr Hunt holds a Bachelor of Business, is a Fellow CPA, a graduate from the Australian
Institute of Company Directors and has completed a Graduate Diploma of Applied
Finance from the Securities Institute of Australia.
Mr Hunt has not been a director of any other listed company in the last three years.
27
Rox Resources Annual Report 2022Director’s Report 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 as follows:
Shareholder
Stephen Dennis
John Mair
Alex Passmore
Robert Ryan
(Loss)/Profit Per Share
Basic and diluted (loss)/profit per share
Dividends
Ordinary Shares
Unlisted Options
908,483
107,878
3,860,150
-
2022
(8.64) cents
666,667
666,667
2,666,667
-
2021
(8.30) cents
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.
Rounding of Amounts
The Group is of a kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191, relating to
the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in accordance with
that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
Operating and Financial Review
Rox Resources Limited is a public 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
The Group incurred a net loss after tax for the year ended 30 June 2022 of $14.0 million (2021: $11.8 million). The loss includes
exploration expenditure charged directly to the consolidated statement of comprehensive income of $7.8 million (2021: $6.4
million). Net cash outflows from operating activities were $14.5 million (2021: $9.6 million).
At 30 June 2022, the Group had cash on hand of $4.4 million (2021: $11.9 million). The Directors believe the Group maintains a
prudent capital structure and is in a robust position to continue progressing its projects.
Review of Operations
During the financial year, the Group was principally focussed on the OYG joint venture and other regional joint ventures at the
Youanmi Gold Project. Additionally, further exploration was undertaken on the Mt Fisher Gold/Mt Eureka Project.
For further information on these projects please refer to the Review of Operations within this Annual Report.
Employees
At 30 June 2022, the Group had 14 full-time employees, 2 part-time employees and 1 casual employee (2021:11 full-time and 1
casual employees).
28
Rox Resources Annual Report 2022Director’s Report 29
29
29
Rox Resources Annual Report 2022Director’s Report Risk Management
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, including emerging
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 whole Board are members
of the Audit 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 designed to meet stakeholders needs and manage business risk; and
Implementation of Board approved budgets and Board monitoring of progress against those budgets.
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the financial 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
Stephen Dennis
John Mair
Alex Passmore
Robert Ryan1
17
17
17
-
17
16
17
-
1
1
1
-
1
1
1
-
-
-
-
-
-
-
-
-
2
2
2
-
2
2
2
-
Notes: 1. Mr Ryan was appointed as Non-executive Director 29 June 2022
Committee Membership
As at the date of this report, the Group has separately constituted Audit, Nomination and Remuneration Committees.
30
Rox Resources Annual Report 2022Director’s Report Significant Changes in State of Affairs
During the financial year, the following significant changes in state of affairs occurred:
•
The Company completed an institutional placement for 10 million new fully paid ordinary shares at $0.40 per share to raise
$4.0 million before costs;
•
Youanmi Gold Project resources increased to 3.2Moz Au at 3.57 g/t Au an increase of 93% from 30 June 2021 (1.7m oz at 2.85
g/t Au);
•
Rox and Teck Australia Pty Ltd agreed to bring forward a deferred cash settlement due to Rox from the sale of Rox’s interest in
the Reward Zinc-Lead Project. Rox completed the sale of its interest in Reward Zinc-Lead Project in February 2017 and as
part of the consideration $3.75 million was due to Rox at the earlier of the completion of a Bankable Feasibility Study or 6
years, being 16 February 2023. On 20 July 2021 Rox and Teck agreed to settle the deferred cash consideration for $3.1 million,
payable to Rox by 1 September 2021. Payment was subsequently received on 26 August 2021; and
•
The Group demerged its nickel and base metals assets through its newly incorporated 100% owned subsidiary Cannon
Resources Limited by way of an IPO. Cannon Resources Limited was admitted to the ASX on 10 August 2021 and commenced
trading on 12 August 2021.
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
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 financial year, the Company paid an insurance premium to insure certain officers of the Company.
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 Group. The total amount of insurance premium paid is confidential under the terms of 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.
31
Rox Resources Annual Report 2022Director’s Report 32
Rox Resources Annual Report 2022Director’s Report Share Options
At the date of the Directors’ Report, the following unlisted options are exercisable:
Options (Number)
Exercise Price ($)
4,466,668
1,333,333
1,333,333
1,333,333
660,000
10,476,190
1,000,000
20,602,857
0.433
1.438
1.813
2.188
0.763
0.988
0.720
Expiry Date
30 November 2022
31 December 2023
31 December 2023
31 December 2023
25 May 2024
26 March 2025
4 March 2026
During the year the following options were issued:
Options (Number)
Exercise Price ($)
1,000,000
0.720
Expiry Date
4 March 2026
During the year the following options were exercised:
Options (Number)
1,333,333
Exercise Price
0.163
Expiry Date
31 January 2022
No options have been exercised since the end of the financial year.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body
corporate or in the interest issue of any other registered scheme.
Auditor Independence and Non-Audit Services
Section 307C of the Corporations Act 2001 requires the Company’s Auditors to provide the Directors of Rox Resources Limited with an
Independence Declaration in relation to the audit of the full-year financial report. This report has been received and is attached to the
Directors’ Report at page 49.
Non-Audit Services
During the financial year the Group’s auditor, Pitcher Partners, provided the following non-audit services:
Non-audit service
Demerger accounting assistance in relation to Cannon Resources Limited
Total
Fees ($)
1,638
1,638
33
Rox Resources Annual Report 2022Director’s Report 34
34
Rox Resources Annual Report 2022Director’s Report During the financial year, the
Group was principally focussed
on the OYG joint venture and
other regional joint ventures at
the Youanmi Gold Project.
35
35
Rox Resources Annual Report 2022Director’s Report Remuneration Report (Audited)
This Remuneration Report outlines the Director and Executive remuneration arrangements of the Group 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 2019, appointed Managing Director 1 May 2019)
Stephen Dennis
Non-Executive Chairman (appointed 1 August 2015)
John Mair
Non-Executive Director (appointed 24 October 2019)
Robert Ryan
Non-Executive Director (appointed 29 June 2022)
Chris Hunt
Matt Antill
Chief Financial Officer (appointed 3 May 2021) and Company Secretary (appointed 6 May 2021)
General Manager – Youanmi Operations (appointed 5 April 2021)
Gregor Bennett
Exploration Manager (1 July 2020)
There were no changes of KMP after the reporting date and before the date the financial report was authorised for issue.
Remuneration Committee
The Remuneration Committee is responsible for determining and reviewing compensation arrangements for the Directors and the
Managing Director. The Managing Director does not participate in discussions or resolutions on his own compensation arrangements.
The Remuneration Committee 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; and
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.
36
Rox Resources Annual Report 2022Director’s Report Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group 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 2020 when shareholders approved an aggregate remuneration of $400,000 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 serving as a Director of the Company. The remuneration of Non-Executive Directors for
the years ended 30 June 2022 and 30 June 2021 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 they reside. 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.
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 interests of Executives with those of shareholders;
•
•
Link reward with strategic goals; and
Ensure total remuneration is competitive by market standards.
Structure
In determining the level and make-up of Executive remuneration the Board considers 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”)
- long term incentive (“LTI”)
37
Rox Resources Annual Report 2022Director’s Report 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. It is intended that the manner
of payment chosen will be optimal for the recipient without creating undue cost for the Group.
The fixed remuneration component of the Directors is detailed later in this report.
Variable Remuneration - 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 Group 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 financial year (previously 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 achieved in order to trigger payments under the STI scheme. On an annual
basis, after consideration of performance against KPI’s, the 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 financial year.
STI bonus for 2022 and 2021
Despite the majority of KPIs being met or exceeded no bonuses were paid during financial year ended 30 June 2021 and 30 June 2022
to KMPs due to cost saving initiatives.
38
Rox Resources Annual Report 2022Director’s Report Variable Remuneration – 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, although LTI’s may not be
granted each year. Exercise price and performance hurdles, if any, are determined at the time the LTIs are granted.
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
Name
Terms/Notice Periods/Termination Payment
Alex Passmore
(Managing Director)
Mr Passmore is paid an annual salary of $380,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
Mr Passmore may resign from his position and terminate his contract by giving 3 months’ notice.
The Company may terminate this employment agreement by providing 3 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 2001. 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 held will be immediately forfeited.
Chris Hunt
(Chief Financial
Officer and Company
Secretary)
Mr Hunt is paid an annual salary of $300,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
Employment can be terminated with 3 months’ notice by Mr Hunt or the Company. The Company may
terminate the contract at any time without notice if serious misconduct has occurred.
Matt Antill
(General Manager)
Mr Antill is paid an annual salary of $290,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
Employment can be terminated with 3 months’ notice by Mr Antill or the Company. The Company may
terminate the contract at any time without notice if serious misconduct has occurred.
Gregor Bennett
(Exploration Manager)
Mr Bennett is paid an annual salary of $225,000 plus statutory superannuation at 10%.
Employment can be terminated with 4 weeks’ notice by Mr Bennett or the Company. The Company may
terminate the contract at any time without notice if serious misconduct has occurred.
Name
Base Salary (ex-superannuation)
Non-Executive:
Stephen Dennis
John Mair
Robert Ryan
$80,000
$50,000
$50,000
39
Rox Resources Annual Report 2022Director’s Report Remuneration of Key Management Personnel
The remuneration tables below set out the remuneration information for the Directors and Executives, which includes the Managing
Director, who are considered to be KMP of the Group.
Short-term
Long-term
Post-employment
Total
Performance
related
Salary
& fees
$
STI
bonus
$
SBP
Options
$
Other
$
Other
$
Superannuation
$
$
%
2022
Directors
Stephen Dennis
80,000
John Mair
Robert Ryan1
50,000
378
Alex Passmore
380,000
Total Directors
510,378
Executives
Chris Hunt
Matt Antill
300,000
290,000
Gregor Bennett2
220,000
Total
Executives
810,000
TOTAL KMP
1,320,378
Notes:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000
5,000
40
88,000
55,000
418
27,500
407,500
40,540
550,918
27,500
327,500
27,500
317,500
27,500
247,500
82,500
892,500
123,040
1,443,418
1. Mr Ryan was appointed as Non-Executive Director 29 June 2022.
2. Mr Bennett salary sacrificed $5,000 to superannuation.
-
-
-
-
-
-
-
-
-
-
40
Rox Resources Annual Report 2022Director’s Report Short-term
Long-term
Post-employment
Total
Performance
related
Salary
& fees
$
STI
bonus
$
SBP
Options
$
Other
$
Other
$
Superannuation
$
$
%
2021
Directors
Stephen Dennis
80,000
John Mair
50,000
Alex Passmore
380,000
Brett Dickson3,4
-
Total Directors
510,000
Executives
Chris Hunt1
Matt Antill2
50,000
72,500
-
-
-
-
-
-
-
Gregor Bennett5
179,909
55,000
Brett Dickson3,4
-
-
-
-
-
-
-
58,333
57,167
-
-
-
-
-
81,088
81,088
-
-
-
174,638
Total
Executives
302,409
55,000
115,500
174,638
TOTAL KMP
812,409
55,000
115,500
255,726
-
-
-
-
-
-
-
-
-
-
-
7,600
4,750
87,600
54,750
25,000
405,000
-
81,088
37,350
628,438
4,167
6,250
112,500
135,917
25,000
259,909
-
174,638
35,417
682,964
72,767
1,311,402
-
-
-
-
-
51.9
42.1
21.7
-
25.0
13.0
Notes:
1. Mr Hunt was appointed as Chief Financial Officer 3 May 2021 and Company Secretary 6 May 2021.
2. Mr Antill was appointed 5 April 2021.
3. Mr Dickson resigned as a Director 16 October 2020, continued as Chief Financial Officer and Company Secretary until 30 June 2021.
4. Paid to Coolform Investments Pty Ltd for services, a related entity of Mr Dickson.
5. Mr Bennett considered a KMP from 1 July 2020.
Compensation Options: Granted and Vested during the year
During the financial year ended 2022, nil options were issued to the KMP of the Group (2021: 660,000).
During the financial year ended 2022, 1,333,333 options were exercised and converted to shares at an exercise price of $0.163 per
option, with $217,333 paid in total.
Granted in 2021
Terms and conditions for each grant
Vested
2021
Lapsed
2021
2021
Number
Date
Fair
value
$
Total fair
value
Exercise
price
$
Expiry
date
First
exercise
date
Last
exercise
date
Number
%
Lapsed
during the
year
Executives
Chris Hunt
Matt Antill
Total
Notes:
333,333
18 Jun 21
0.175
58,333
0.7631
25 May 24 18 Jun 21 25 May 24
326,667
18 Jun 21
0.175
57,167
0.7631
25 May 24 18 Jun 21 25 May 24
660,0001
115,500
100
100
333,333
326,667
660,000
-
-
-
1. The option price was reduced by 6.19 cents per share following the demerger of Cannon Resources Limited (28 July 2021).
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.
41
Rox Resources Annual Report 2022Director’s Report Other Transactions with Key Management personnel
During the financial year, the Group had the following transactions with KMP:
• An amount of $888,328 (30 June 2021: $469,823) was paid to LG Mining Pty Ltd, a company of which Mr Passmore is a Director,
for the provision of labour hire services, specifically geologists and field assistants. An amount of $49,490 was payable as at
30 June 2022 (30 June 2021: $136,193). The transactions were on an arms-length basis and utilised by the Company, on a
discretionary basis, for recruitment and labour hire of predominantly field staff which are in high demand in the current tight
labour market. Other recruitment and labour hire firms are also utilised by the Company as required and including when terms are
offered on an equal basis. Mr Passmore does not receive any remuneration from LG Mining Pty Ltd.
•
The Company entered into a Demerger Agreement with its subsidiary, Cannon Resources Limited on 13 May 2021. On 10
August 2021, Cannon successfully demerged and listed on the ASX and raised $6.0 million through the issue of 30 million shares.
As at 30 June 2021, Cannon had a loan payable of $542,009 to Rox. The loan payable was related to all costs and expenses
associated with the listing of Cannon and operating costs up to the listing date. The loan was unsecured, non-interest bearing
and repayable to Rox with 5 business days of completion of Cannon’s Initial Public Offering. The loan was repaid on 20 August
2021.
•
The Demerger Agreement included a provision for Rox to sub-lease office space to Cannon at $2,000 per month (amended as
mutually agreed). The amount received by Rox under the Demerger Agreement for the financial year 30 June 2022 for rent was
$22,000.
•
Following the demerger of Cannon Resources Limited (“Cannon”), Rox entered into a Shared Services Agreement (the Agreement)
with Cannon whereby Rox will provide Company Secretarial and Finance Services for $8,000 per month (amended as mutually
agreed). In addition, under the Agreement, Cannon can engage Rox to provide Geological services at a 10% mark-up on the cost.
The Agreement commenced on 1 September 2021. The amount received by Rox under the Shared Services Agreement for the
financial year 30 June 2022 was $130,625. Mr Chris Hunt is the Company Secretary of Cannon. Mr Chris Hunt, Mr Matt Antill and
Mr Gregor Bennett do not receive any remuneration from Cannon.
•
Rox funded $103,375 of expenditure on behalf of Cannon. Mr Alex Passmore is the Non-Executive Chairman and Mr Chris Hunt is
the Company Secretary of Cannon. The balance outstanding to Rox as at 30 June 2022 was $44,852.
•
Rox entered into two agreements with Pearl Gull Iron Limited (“Pearl Gull”) whereby Rox will provide Company Secretarial and
Finance Services for $8,000 per month (amended as mutually agreed) and to sub-lease office space to Pearl Gull at $2,000
per month (amended as mutually agreed). The amount received by Rox for the financial year 30 June 2022 were $24,000 and
$22,000, respectively. Mr Alex Passmore is a Non-Executive Director of Pearl Gull and Mr Chris Hunt is the Company Secretary of
Pearl Gull. Mr Chris Hunt does not receive any remuneration from Pearl Gull.
• All the amounts quoted above are excluding GST.
42
Rox Resources Annual Report 2022Director’s Report Company’s Performance
The Company’s share price performance shown in the below graph is a reflection of the Company’s performance over the past 5 years.
The variable components of the Executives’ remuneration including short-term and long-term incentives are indirectly linked to the
Company’s share price performance.
Rox Resources Limited - 5 Year Share Price Performance
$
e
c
i
r
P
e
r
a
h
S
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jun 17
Dec 17
Jun 18
Dec 18
Jun 19
Dec 19
Jun 20
Dec 20
Jun 21
Dec 21
Jun 22
The table below sets out information about the Group’s earnings and movements in shareholder value for the past 5 years up to and
including the current financial year.
Net (loss)/profit after tax ($m)1
Basic (loss)/profit per share (cents)1,2
Share Price at year end (cents)2
Total dividends (cents per share)
Notes:
2022
(14.0)
(8.64)
24.00
-
2021
(11.8)
(8.30)
43.50
-
2020
(7.5)
(7.73)
126.00
-
2019
(2.8)
(3.30)
16.8
-
2018
(3.2)
(3.90)
16.50
-
1. Historical results have not been assessed and adjusted for the impact of new accounting standards.
2. Historical results have been adjusted for the 15 to 1 share consolidation in financial year 21.
43
Rox Resources Annual Report 2022Director’s Report
Shareholdings of Key Management Personnel
The interests of KMP of the Group in shares at the end of the financial year 2022 and financial year 2021 are as follows:
Balance as at
1 July 2021
Granted as
Remuneration
Purchased
Net Change/
Other
Shares Issued
on Exercise of
Options
Balance as at
30 June 2022
2022
Alex Passmore1
2,461,817
Stephen Dennis2
John Mair
Robert Ryan3
Chris Hunt4
Matt Antill
Gregor Bennett
Total
Notes:
808,483
107,878
-
66,666
63,333
137,060
3,645,237
-
-
-
-
-
-
-
-
65,000
100,000
-
-
-
-
-
-
-
-
(63,333)
-
1,333,333
3,860,150
-
-
-
-
-
-
908,483
107,878
-
66,666
-
137,060
165,000
(63,333)
1,333,333
5,080,237
1. Mr Passmore, holds 3,593,483 shares directly and 266,667 shares through Venus Corporation Pty Ltd .
2. Mr Dennis holds his shares through the Dennis Super Fund A/C.
3. Mr Ryan was appointed as Non-Executive Director 29 June 2022.
4. Mr Hunt holds his shares through Mr Chris Hunt and Mrs Jody Hunt.
Balance as at
1 July 2020
Granted as
Remuneration
Purchased
Net Change/
Other
Shares Issued
on Exercise of
Options
Balance as at
30 June 2021
2021
Alex Passmore1
2,461,817
Stephen Dennis2
John Mair
Chris Hunt3
Matt Antill
Gregor Bennett4
Brett Dickson5
Total
Notes:
608,483
107,878
-
-
70,393
672,272
3,920,843
-
-
-
-
-
-
-
-
-
-
-
66,666
-
-
-
-
-
-
-
63,333
-
2,461,817
200,000
-
-
808,483
107,878
66,666
63,333
-
66,667
137,060
(533,333)
946,670
1,085,609
66,666
(470,000)
1,213,337
4,730,846
1. Mr Passmore, holds his shares 2,195,150 directly and 266,667 through Venus Corporation Pty Ltd .
2. Mr Dennis holds his shares through the Dennis Super Fund A/C.
3. Mr Hunt holds his shares through Mr Chris Hunt and Mrs Jody Hunt.
4. Mr Bennett appointed as a KMP 1 July 2020.
5. Mr Dickson resigned as a Director 16 October 2020, continued as Chief Financial Officer and Company Secretary until 30 June 2021.
44
Rox Resources Annual Report 2022Director’s Report Options holdings of Key Management Personnel
The options held by the KMP of the Group at the end of the financial year 2022 and financial year 2021 are as follows:
Balance at 1 July
2021
Granted as
Remuneration
Options
Exercised
Options
Expired
Balance at 30
June 2022
Options
Vested
Not Yet
Exercised1
2022
Alex Passmore4
4,000,000
Stephen Dennis4
John Mair4
Robert Ryan
Chris Hunt2,5
Matt Antill3,5
Gregor Bennett4
Total
Notes:
666,667
666,667
-
333,333
326,667
466,666
6,460,000
-
-
-
-
-
-
-
-
(1,333,333)
-
-
-
-
-
(1,333,333)
-
-
-
-
-
-
-
-
2,666,667
2,666,667
666,667
666,667
-
333,333
326,667
466,666
666,667
666,667
-
333,333
326,667
466,666
5,126,667
5,126,667
1. All options which have vested are exercisable.
2. Mr Hunt holds through Mrs Jody Hunt.
3. Mr Antill holds through Mrs Ranela Antill.
4. $0.433 per share options with an expiry of 30 November 2022
5. $0.763 per share options with an expiry of 25 May 2024
Balance at 1 July
2020
Granted as
Remuneration
Options
Exercised
Options
Expired
Balance at 30
June 2021
Options
Vested
Not Yet
Exercised1
2021
Alex Passmore5,6
4,000,000
Stephen Dennis6
John Mair6
Robert Ryan
Chris Hunt3,7
Matt Antill4,7
Gregor Bennett6
Brett Dickson
Total
Notes:
866,667
666,667
-
-
-
533,333
1,333,333
7,400,000
-
-
-
-
333,333
326,667
-
(200,000)
-
-
-
-
-
-
(66,667)
(1,333,333)
660,000
(1,600,000)
-
-
-
-
-
-
-
-
-
4,000,000
4,000,000
666,667
666,667
-
333,333
326,667
466,666
-
666,667
666,667
-
333,333
326,667
466,666
-
6,460,000
6,460,000
1. All options which have vested are exercisable.
2. Opening values have been adjusted for the 15 to 1 share consolidation undertaken in financial year 2021.
3. Mr Hunt holds through Mrs Jody Hunt.
4. Mr Antill holds through Mrs Ranela Antill.
5. 1,333,333 options at $0.163 per share with an expiry of 31 January 2022.
The option price was reduced by 6.19 cents per share following the demerger of Cannon Resources Limited (28 July 2021).
6. $0.433 per share options with an expiry of 30 November 2022. The option price was reduced by 6.19 cents per share following
the demerger of Cannon Resources Limited (28 July 2021).
7. $0.763 per share options with an expiry of 25 May 2024. The option price was reduced by 6.19 cents per share following
the demerger of Cannon Resources Limited (28 July 2021).
End of Remuneration Report
45
Rox Resources Annual Report 2022Director’s Report 46
Rox Resources Annual Report 2022Director’s Report Other Related Party Transactions
During the financial year ended 30 June 2022, there were no other related party transactions other than as disclosed in the
Remuneration Report.
Refer to Note 27 for further detail on Related Party transactions.
Signed in accordance with a resolution of the Directors.
Alex Passmore
Managing Director
Perth, 27 September 2022
47
Rox Resources Annual Report 2022Director’s Report Auditor’s Independence
Declaration
to the Directors of Rox Resources Limited
48
48
Rox Resources Annual Report 2022Auditor’s Independence Declaration AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ROX RESOURCES LIMITED
In relation to the independent audit for the year ended 30 June 2022, to the best of my
knowledge and belief there have been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act
2001; and
No contraventions of APES 110 Code of Ethics for Professional Accountants
(including Independence Standards).
This declaration is in respect of Rox Resources Limited and the entities it controlled during the
year.
PITCHER PARTNERS BA&A PTY LTD
J C PALMER
Executive Director
Perth, 27 September 2022
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
38
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
49
Rox Resources Annual Report 2022Auditor’s Independence Declaration 50
50
Rox Resources Annual Report 2022Corporate Governance Corporate
Governance
Corporate Governance Statement
Rox Resources Limited (“the 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 www.roxresources.com.au/corporate/corporate-governance.
Charters
•
Board
• Audit Committee
• Nomination Committee
•
Remuneration Committee
Policies and Procedures
•
•
•
•
•
•
Policy and Procedure for the Selection and (Re)Appointment of Directors
Process for Performance Evaluations
Policy on Assessing the Independence of Directors
Policy for Trading in Company Securities
Shareholder Communication and Investor Relations Policy
Code of Conduct
• ASX Listing Rule Compliance
•
•
•
•
•
•
Compliance Procedures
Procedure for the Selection, Appointment and Rotation of External Auditor
Corporate Governance Principles and Recommendations
Risk Management Policy
Policy on Whistleblower
Policy on Continuous Disclosure
• Diversity Policy
•
Induction Program
• Anti-Bribery and Anti-Corruption Policy
• Website Disclosure
51
Rox Resources Annual Report 2022Corporate Governance The Company reports below on whether it has followed each of the recommendations during financial year 2022. The information in
this statement is current at 27 September 2022. This statement was approved by a resolution of the Board on 27 September 2022.
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 has documented this in its Board Charter, which is disclosed on the
Company’s website at https://www.roxresources.com.au/corporate/corporate-governance/
Recommendation 1.2
The Company undertakes appropriate checks before appointing a person or recommending 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 Mr Robert Ryan to the Board on 29 June 2022 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 as Director at its
2021 Annual General Meeting.
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 subsidiaries, has entered into with its
Managing Director, any of its Directors, and any other person or entity who is a 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.
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.
52
Rox Resources Annual Report 2022Corporate Governance 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 financial year, this included the Managing Director:
Whole organisation (including the Board)
Senior Executive positions
Board
Recommendation 1.6
Proportion of women
3 out of 14 (21%)
0 out of 4 (0%)
0 out of 4 (0%)
The Chair is responsible for evaluating 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 financial year 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 financial year, an evaluation of the former Chief Financial Officer and Company Secretary, General Manager - Youanmi
Operations and Exploration Manager 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 financial year, an evaluation of the Managing Director took place in accordance with the process disclosed in the
Company’s Process for Performance Evaluations.
53
Rox Resources Annual Report 2022Corporate Governance Principle 2 - Structure the Board to be effective and add value
Recommendation 2.1
The Board has established a separate Nomination Committee, with the full Board being members of the Committee.
The Company has adopted a separate Nomination Committee which describes the role, composition and responsibilities of the
Committee. The Committee deals with any conflicts of interest that may occur by ensuring that the Director with conflicting interests is
not party to the relevant discussions.
Details of Director attendance at the Nomination Committee, during the financial year, are set out in a table in the Directors’ Report on
page 30.
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. Whilst 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 Board’s 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 and its Policy on Assessing the Independence of Directors. The independent Directors of the Company are Mr
Stephen Dennis, Chairman of the Company, Dr John Mair a Non-Executive Director and Mr Robert Ryan, a Non-Executive Director.
None of the independent Directors of the Company have an interest, position or relationship of the type described in Box 2.3
The length of service of each Director is set out in the Directors’ Report on page 26.
Recommendation 2.4
During the financial year, the Board had a majority of Directors who are independent. The Board considered that its composition 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
in accordance with the Nomination Committee Charter.
Recommendation 2.5
The independent Chair of the Board is Mr Stephen Dennis, who is not also the Managing Director.
54
Rox Resources Annual Report 2022Corporate Governance 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 of 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 the training or development that 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.
Principle 3 - Install a culture of acting lawfully, ethically
and responsibly
Recommendation 3.1
The Company has articulated its values and disclosed them throughout its governance material, including its Code of Conduct which
can be found on the Company website. 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 complies with all legislative and common law requirements which affect its business wherever it operates. Currently the
Company only operates in Australia, should it in the future have 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 is 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. Any material incidents may be reported to the Supervisors or Senior Managers, the Director, Company
Secretary, the Whistleblower Protection Officer appointed by the Company as well as the other person and bodies outlined in the
Company’s Whistleblower Policy.
Recommendation 3.4
The Company has established an Anti-Bribery and Corruption policy which is disclosed on the Company’s website. Any material
breach of that policy is immediately reported to the Managing Director and Chairman of the Board of Directors.
55
Rox Resources Annual Report 2022Corporate Governance Principle 4 – Safeguard the integrity of corporate reports
Recommendation 4.1
The Board has established a separate Audit Committee, with the full Board being members of the Committee.
The Company has adopted an Audit Committee Charter. The Committee deals with any conflicts of interest that may occur 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. Pitcher Partners, the Company’s auditor, was appointed at the 2019 AGM. The
performance of the external auditor is reviewed on an annual basis by the Board.
Details of Director attendance at the Audit Committee, held during the financial year, are set out in a table in the Directors’ Report on
page 30.
Recommendation 4.2
Before the Board approved the Company financial statements for the half year ended 31 December 2021 and the full-year ended 30
June 2022, it received from the Managing Director and the Chief Financial Officer 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 (“the Declaration”).
The Board did not receive a Declaration for each of the quarters ending 30 September 2021, 31 December 2021, 31 March 2022 and
30 June 2022 because in the Board’s view its quarterly reports are not financial statements to which the Declaration can be
appropriately given.
Recommendation 4.3
Processes are in place to verify the integrity of the Company’s periodic corporate reports released to the market that are not audited or
reviewed by the external auditor. Examples of periodic corporate reports released by the Company include quarterly cash flow reports.
The process to verify includes circulation to Senior Executives and the Board for review prior to finalising and releasing to the market.
The Company 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 themself that the content of any announcement is
accurate and not misleading and is supported by appropriate verification.
56
Rox Resources Annual Report 2022Corporate Governance 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, in particular Listing Rule 3.1. A summary of the Company’s Policy on Continuous Disclosure and Compliance Procedures
is disclosed on the Company’s website.
Recommendation 5.2
The Company Secretary circulates all material market announcements to the Board prior to release to the ASX.
Recommendation 5.3
All new and substantive investor or analyst presentations are released to the ASX 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. The Company encourages shareholder
attendance and participation at its meetings. The Chair of the meeting allows a reasonable opportunity for members to ask questions
or make comments on the management of the Company.
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 Limited, at www.computerhare.com.au.
57
Rox Resources Annual Report 2022Corporate Governance Principle 7 - Recognise and manage risk
Recommendation 7.1
The Board has established a separate Audit Committee which considers risks, with the full Board being members. Please refer to the
disclosure above under Recommendation 4.1 in relation to the Audit Committee.
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 that 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 financial year.
Recommendation 7.3
The Company does not have an internal audit function. To evaluate and continually improve the effectiveness of the Company’s
governance 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. The Board also reviews the effectiveness of its
governance, risk management and internal control processes in accordance with its Audit Committee Charter and Board Charter.
Recommendation 7.4
As with most exploration projects and mining operations, the Company’s operations and activities are expected to have an impact on
the environment. This impact will likely increase once the Company is in production. The Company takes care to ensure that its
operations comply with any environmental laws applicable to it, including the conditions attaching to any of its tenements.
Except as identified above the Company has not identified any significant exposure to any environmental and/or social sustainability
risks in this financial year.
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 processes by which risks are managed. This includes defining the Company’s risk appetite, monitoring of risk
performance and the risks that may have a material impact on 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, evaluate, and treat those risks (including assigning a risk owner to each risk). 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.
58
Rox Resources Annual Report 2022Corporate Governance Principle 8 - Remunerate fairly and responsibly
Recommendation 8.1
The Board has established a separate Remuneration Committee, with the full Board being members. The Committee deals with any
conflicts of interest that may occur when by ensuring that the Director with conflicting interests is not party to the relevant discussions.
The Remuneration Committee considers the level and composition of remuneration for Directors and Senior Executives and ensures
that such remuneration is appropriate and not excessive, in accordance with the Remuneration Committee Charter.
Details of Director attendance at meetings of the full Board, in its capacity as the Remuneration Committee, during the financial year,
are set out in a table in the Directors’ Report on page 30.
Recommendation 8.2
Details of remuneration, including details of the Company’s Non-Executive remuneration and Executive remuneration practices and the
Company’s policy on “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
36 of the Company’s Annual Report for year ended 30 June 2022.
Recommendation 8.3
The Company’s Securities Trading Policy includes a statement of the Company’s policy that participants 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.
59
Rox Resources Annual Report 2022Corporate Governance Consolidated Statement
of Financial Position
As at 30 June 2022
Notes
2022
($000’s)
2021
($000’s)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Capitalised exploration and evaluation expenditure
Right of use assets
Investment in associates
Other financial assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Provisions
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued Capital
Reserves
Accumulated losses
Total equity attributable to shareholders
11
12
12
16
17
13
14
15
18
19
20
19
20
21
21
23
4,441
55
28
4,524
3,012
624
10,970
332
1,776
-
16,714
21,238
863
199
149
1,211
5,358
342
5,700
6,911
14,327
64,830
14,834
(65,337)
14,327
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
11,913
835
36
12,784
1,109
4,236
10,885
422
-
3,210
19,862
32,646
2,720
127
116
2,963
4,381
491
4,872
7,835
24,811
70,596
4,828
(50,613)
24,811
60
Rox Resources Annual Report 2022Consolidated Financial Statements Consolidated Statement
of Comprehensive Income
For the year ended 30 June 2022
Income
Interest income
Other income
Expenses
Corporate expenses
Short-term lease and occupancy related expenses
Salaries, wages and superannuation
Restructure expenses
Exploration expenditure
Share based payments
Finance expense
Depreciation and amortisation
Impairment of assets
Fair value movement on financial instruments at fair value
through profit or loss
Share of associates profit or loss
Loss before income tax
Income tax expense
Net loss after income tax
Other comprehensive income
Other comprehensive income net of tax
Total comprehensive loss for the year
Loss per share for the year attributable to shareholders
Basic loss per share
Diluted loss per share
Notes
6
6
22
16
14
7
8
8
2022
($000’s)
2
13
(1,356)
(109)
(1,182)
(32)
(7,758)
(59)
(735)
(155)
(1,774)
(110)
(695)
(13,950)
-
(13,950)
-
(13,950)
cents
(8.64)
(8.64)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
2021
($000’s)
3
67
(1,256)
(122)
(1,005)
(284)
(6,422)
(2,220)
(823)
(81)
-
379
-
(11,764)
-
(11,764)
-
(11,764)
cents
(8.30)
(8.30)
61
Rox Resources Annual Report 2022Consolidated Financial Statements Consolidated Statement of Cash Flows
For the year ended 30 June 2022
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
Cash flows from investing activities
Proceeds from sale of investments
Purchase of mineral properties
Purchase of property, plant and equipment
Proceeds on sale of property, plant and equipment
Repayment of loan by Cannon Resources Limited
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares
Proceeds from exercise of options
Share issue costs
Repayment of lease liabilities
Net cash provided by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
11
2022
($000’s)
2
-
(2,792)
(11,741)
-
(14,531)
3,100
(198)
(393)
-
665
3,174
4,000
217
(227)
(106)
3,885
(7,472)
11,913
4,441
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2021
($000’s)
3
38
(2,169)
(7,052)
(412)
(9,592)
156
-
(197)
2
-
(39)
11,222
-
(246)
-
10,976
1,345
10,568
11,913
62
Rox Resources Annual Report 2022Consolidated Financial Statements Consolidated Statement
of Changes in Equity
For the year ended 30 June 2022
Contributed equity
Reserves
Accumulated losses
Notes
($000’s)
57,783
($000’s)
3,445
Balance as at 1 July 2020
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transactions with shareholders
Issue of share capital
Share issue costs
Share-based payments
Balance as at 30 June 2021
Balance as at 1 July 2021
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transactions with shareholders
Issue of share capital
Share issue costs
Exercise of options
Share-based payments
-
-
-
13,059
(246)
-
70,596
-
-
-
-
-
1,383
4,828
70,596
4,828
-
-
-
4,000
(227)
217
-
(9,756)
64,830
-
-
-
-
-
-
59
9,947)
14,834
Demerger of Cannon Resources Limited
31
Balance as at 30 June 2022
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
($000’s)
(38,849)
(11,764)
-
Total
($000’s)
22,379
(11,764)
-
(11,764)
(11,764)
-
-
-
(50,613)
(50,613)
(13,950)
-
13,059
(246)
1,383
24,811
24,811
(13,950)
-
(13,950)
(13,950)
-
-
-
-
(774)
(65,337)
4,000
(227)
217
59
(583)
14,327
63
Rox Resources Annual Report 2022Consolidated Financial Statements
Notes to the Consolidated
Financial Statements
For the year ended 30 June 2022
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 30. The financial statements of the Group for the year ended 30
June 2022 were authorised for issue in accordance with a resolution of the Directors on 27 September 2022.
The nature of the operations and principal activities of the Group are described in the Directors Report.
Note 2 – 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.
Comparatives
Certain prior financial year amounts have been reclassified for consistency with the current financial year presentation.
Rounding of Amounts
The Group is of a kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191, relating to the
‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in accordance with that
Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
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 2022 of $13,950k (2021: $11,764k) and experienced net cash
outflows from operating activities of $14,531k (2021: $9,592k). As at 30 June 2022, the Group had net current assets of $3,313k (30
June 2021: $9,821k).
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 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 as the Directors believe the Group will be able to pay its debts as when they fall due.
64
Rox Resources Annual Report 2022Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
Going concern (continued)
In forming this view, the Directors have taken into consideration the following:
•
The Group’s ability to reduce expenditure as and when required including, but not limited to, reviewing all expenditure for deferral
or elimination, until the Group has sufficient funds; and
• Assets sales, including sale of tenure.
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.
Should the Group be unsuccessful with the initiatives detailed above then, there is a material uncertainty as to whether the Group
will be able to continue as a going concern and may therefore be required to realise assets and extinguish liabilities other than in the
ordinary course of business with the amount realised being different from those shown in the financial statement.
(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) Accounting standards issued but not yet effective
The Australian Accounting Standards Board (AASB) has issued a number of new and amended Accounting Standards and
Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Group. The Group
has decided not to early adopt any of these new and amended pronouncements. The Group’s assessment of the new and amended
pronouncements that are relevant to the Group but applicable in future reporting periods is set out below.
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018 – 2020 and Other Amendments
(i) AASB 1 – simplifies the application by a subsidiary that becomes a first-time adopter after its parent in relation to the
measurement of cumulative translation differences;
(ii) AASB 3 – updates references to the Conceptual Framework for Financial Reporting;
(iii) AASB 9 – clarifies the fees an entity includes when assessing whether the terms of a new or modified financial liability
are substantially different from the terms of the original financial liability;
(iv) AASB 116 – requires an entity to recognise the sales proceeds from selling items produced while preparing PP&E for its
intended use and the related cost in profit or loss, instead of deducting the amounts received from the cost of the asset;
(v) AASB 137 – specifies the costs that an entity includes when assessing whether a contract will be loss making; and
(vi) AASB 141 – removes the requirement to exclude cash flows from taxation when measuring fair value, thereby aligning
the fair value measurement requirements in AASB 141 with those in other Australian Accounting Standards.
AASB 2020-3 mandatorily applies to annual reporting periods commencing on or after 1 January 2022 and will be first applied by the
Group in the financial year commencing 1 July 2022.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current, AASB
2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current – Deferral of
Effective Date
AASB 2020-1 amends AASB 101 Presentation of Financial Statements to clarify requirements for the presentation of liabilities in the
statement of financial position as current or non-current. It requires a liability to be classified as current when entities do not have a
substantive right to defer settlement at the end of the reporting period.
65
Rox Resources Annual Report 2022Consolidated Financial Statements Note 2 – Significant Accounting Policies (continued)
(b) Accounting standards issued but not effective (continued)
AASB 2020-6 defers the mandatory effective date of amendments that were originally made in AASB 2020-1 so that the
amendments are required to be applied for annual reporting periods beginning on or after 1 January 2023 instead of 1 January 2022.
They will first be applied by the Group in the financial year commencing 1 July 2023.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2021-7a: Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
and Editorial Corrections
AASB 2021-7a amends various standards, interpretations and other pronouncements for editorial corrections made by accounting
standards boards since December 2017.
AASB 2021-7a mandatorily applies to annual reporting periods commencing on or after 1 January 2022 and will be first applied by the
Group in the financial year commencing 1 July 2022.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2021-5: Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
AASB 2021-5 amends AASB 112 Income Taxes to clarify the accounting for deferred tax transactions that, at the time of the
transaction, give rise to equal taxable and deductible temporary differences. In specified circumstances, entities are exempt from
recognising deferred tax when they recognise assets or liabilities for the first time. The amendments clarify that the exemption does
not apply to transactions for which entities recognise both an asset and a liability and that give rise to equal taxable and deductible
temporary difference.
This amending standard mandatorily apply to annual reporting periods commencing on or after 1 January 2023 and will be first
applied by the Group in the financial year commencing 1 July 2023.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2022-1: Amendments to Australian Accounting Standards – Initial Application of AASB 17 and AASB 9 – Comparative
Information
AASB 2022-1 amends AASB 17 Insurance Contracts to provide insurers with a transition option relating to comparative information
about financial assets presented on the initial application of AASB 17. The amendments relate to financial assets for which
comparative information presented on initial application of AASB 17 and AASB 9 has not been restated for AASB 9.
Applying the transaction option would permit an entity to present comparative information about such a financial asset as if the
classification and measurement requirements of AASB 9 had been applied to that financial asset.
AASB 2022- 1 mandatorily applies to annual reporting periods commencing on or after 1 January 2023 and will be first applied by the
Group in the financial year commencing 1 July 2023.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting
Estimates
AASB 2021-2 amends AASB 7 Financial Instruments: Disclosures, AASB 101 Presentation of Financial Statements, AASB 108
Accounting Policies, Changes in Accounting Estimates and Errors, AASB 134 Interim Financial Reporting and AASB Practice
Statement 2 Making Materiality Judgements. The main amendments relate to:
(a) AASB 7 – clarifies that information about measurement bases for financial instruments is expected to be material
to an entity’s financial statements;
(b) AASB 101 – requires entities to disclose their material accounting policy information rather than their significant
accounting policies;
(c) AASB 108 – clarifies how entities should distinguish changes in accounting policies and changes in accounting estimates;
(d) AASB 134 – to identify material accounting policy information as a component of a complete set of financial statements; and
66
Rox Resources Annual Report 2022Consolidated Financial Statements
Note 2 – Significant Accounting Policies (continued)
(b) Accounting standards issued but not effective (continued)
(e) AASB Practice Statement 2 – to provide guidance on how to apply the concept of materiality to accounting policy disclosures.
AASB 2021-2 mandatorily applies to annual reporting periods commencing on or after 1 January 2023 and will be first applied by the
Group in the financial year commencing 1 July 2023.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
(c) New Accounting standards applicable to 30 June 2022 year end
The following new accounting standards were applicable to the Group for the first time from 1 July 2021. There is no material impact
of these newly adopted accounting standards on the financial statements of the Group.
AASB 2020-8: Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2
AASB 2020-4 amends AASB 4 Insurance Contracts, AASB 7 Financial Instruments: Disclosures, AASB 9: Financial Instruments,
AASB 16: Leases and AASB 139 Financial Instruments: Recognition and Measurement to provide financial statement users with
useful information about the effects of the interest rate benchmark reform on those entities financial statements. As a result of the
amendments, an entity:
(a) will not have to derecognise or adjust the carrying amount of financial instruments for changes required by the reform,
but will instead update the effective interest rate to reflect the change to the alternative benchmark rate;
(b) will not have to discontinue hedge accounting solely because it makes changes required by the reform, if the hedge
meets other hedge accounting criteria; and
(c) will be required to disclose information about new risks arising from the reform and how it manages the transition
to alternative benchmark rates.
AASB 2021-3: Amendments to Australian Accounting Standards – Covid 19 Related Rent Concessions beyond 30 June 2021
AASB 2021-3 amends AASB 16: Leases to extend by one year the application period of the practical expedient added to AASB 16
by AASB 2020-4. The practical expedient permits lessees not to assess whether rent concessions that occur as a direct consequence
of the covid-19 pandemic and meet specified conditions are lease modifications and, instead, to account for those rent concessions
as if they were not modifications. The Standard extends the practical expedient to rent concessions that reduce only lease payments
originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient are met.
AASB 2021-3 mandatorily applies to annual reporting periods commencing on or after 1 April 2021 and is available for earlier
application. It will be applied by the Group in the financial year commencing 1 July 2021.
(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) Capitalised 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.
67
Rox Resources Annual Report 2022Consolidated Financial Statements
Note 2 – 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
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 deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
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.
(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.
(vii) Property, plant and equipment
All classes of equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is provided on a straight-line basis over the estimated useful life of the specific asset as follows:
Asset
Equipment
2022
2021
3-10 years
3-10 years
Depreciation is not charged on plant until production commences.
Impairment
The carrying values of property, plant and 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.
68
Rox Resources Annual Report 2022Consolidated Financial Statements Note 2 – Significant Accounting Policies (continued)
(d) Summary of significant accounting policies (continued)
(vii) Property, plant and equipment (continued)
Derecognition
Property, plant and 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 Statement of Comprehensive Income 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.
(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.
Leases of 12-months or greater
Lease Asset
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the
lease or the estimated useful life of the asset, whichever the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over the estimated useful life. Right-of-use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
69
Rox Resources Annual Report 2022Consolidated Financial Statements Note 2 – Significant Accounting Policies (continued)
(d) Summary of significant accounting policies (continued)
(x) Leases (continued)
Lease Liability
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease. Lease payments comprise of fixed payments less any
lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do depend on an index or a rate are expensed
in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method.
The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in
an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying
amount of the right-of-use asset is fully written down
(xi) Goods and services tax (GST)
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
•
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
•
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
70
Rox Resources Annual Report 2022Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(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 Statement of Comprehensive Income, 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
the extent to which the vesting period has expired and 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.
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, unless the Group is loss making, then it is anti-dilutive as the inclusion of these options would reduce the loss per
share.
(xiv) Provisions
Rehabilitation provision
The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities 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 Note 19.
(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 asset 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 28.
71
Rox Resources Annual Report 2022Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(xvi) Financials 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).
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 VMC under the funding
arrangement in conjunction with the joint arrangement held with VMC (see Note 12).
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 (“Teck”) (see Note 15) is recognised at fair value on initial recognition and subsequent remeasurement,
with the movement recorded as a fair value gain or loss on financial instruments in the Consolidated Statement of
Comprehensive Income.
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.
(xvii) Investments in associates
An associate is an entity over which the Group is able to exercise significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies.
The Group’s interests in associates are accounted for using the equity method after initially being recognised at cost. Under
the equity method, the Group’s share of the profits or losses of the associate is recognised in the Group’s profit or loss and the
Group’s share of other comprehensive income items is recognised in the Group’s condensed consolidated statement of other
comprehensive income.
Unrealised gains and losses on transactions between the Group and an associate are eliminated to the extent of the Group’s
interest in the associate.
72
Rox Resources Annual Report 2022Consolidated Financial Statements 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 Group’s receivables are past due or impaired (2021: Nil).
Other financial assets
At the end of the financial year 30 June 2021, the Group had a non-current receivable of $3.2m in present value terms resulting from
the sale of the Reward Zinc-Lead project in 2017 (Note 15) to Teck. Payment was received from Teck on 26 August 2021 as per the
terms of the early settlement agreement, announced to the market on 20 July 2021.
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 (2021: nil). As at 30 June 2022, the Group does not have any collective impairment on its other
receivables (2021: nil).
Guarantees
At the date of this report there are no outstanding guarantees (2021: nil).
73
Rox Resources Annual Report 2022Consolidated Financial Statements Note 3 – Financial Risk Management and Policies continued
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:
Maturity profiles
Less than 6 months
6 months to 1 year
1 year to 5 years
Greater than 5 years
Total
Market risk
2022
($000’s)
847
149
342
-
1,338
2021
($000’s)
2,497
116
491
-
3,104
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
The Group considers its exposure to equity risk minimal and has not developed any policies or procedures to manage such risk.
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.
Exposure to currency risk
The Group’s exposure to foreign currency risk at reporting date was nil (2021: 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.
he following table represents the Group’s exposure to interest rate risk:
Variable rate instruments
Cash and cash equivalents
2022
($000’s)
4,441
2021
($000’s)
11,913
A change of 1% (2021: 1%) in variable interest rates would have increased or decreased the Group’s equity and profit by $0.04m
(2021: $0.12m) 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.
74
Rox Resources Annual Report 2022Consolidated Financial Statements 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:
Financial assets and liabilities
Note
Carrying amount
($000’s)
Fair value
($000’s)
Carrying amount
($000’s)
Fair value
($000’s)
2022
2021
Cash and cash equivalents
Trade and other receivables (current)
Trade and other receivables (non-current)
Investment in associates
Other financial assets (current)
Other financial assets (non-current)
Trade payables
Other financial liabilities (current)
Other financial liabilities (non-current)
Total
11
12
12
14
15
15
18
20
20
4,441
55
3,012
1,776
-
-
(847)
(149)
(342)
7,946
4,441
55
3,012
1,776
-
-
(847)
(149)
(342)
7,946
11,913
835
1,109
-
-
3,210
(2,372)
(116)
(491)
14,088
11,913
835
1,109
-
-
3,210
(2,372)
(116)
(491)
14,088
The Directors consider the carrying amount of the financial instruments to be a reasonable approximation of their fair value on account
of their short to medium-term maturity cycle.
Assets measured at fair value
Financial assets
2022
Other financial assets (non-current)
- Deferred consideration
2021
Other financial assets (non-current)
- Deferred consideration
Note
Date of
Valuation
Value
($000’s)
Level 1a
($000’s)
Level 2b
($000’s)
Level 3c
($000’s)
15
-
-
15
30 Jun 2021
3,210
-
-
-
-
-
3,210
aQuoted prices in active markets; bSignificant observable inputs; cSignificant unobservable inputs.
Valuation techniques and significant unobservable inputs used in level 3 fair value measurements
For the year ended 30 June 2021, the fair value of the deferred consideration totalling $3.2m was valued using the discounted cash
flow method. The significant unobservable inputs used in this method were as follows:
• Nominal amount due: $3.8m;
• Date payment due: 15 February 2023 (being the earlier of the acquirer completing a bankable feasibility study or 6 years from the
contract date); and
• Discount rate: 10% (pre-tax nominal).
75
Rox Resources Annual Report 2022Consolidated Financial Statements Note 3 – Financial Risk Management and Policies continued
Reconciliation of recurring level 3 fair value movements
Other financial assets - deferred consideration (non-current) (Level 3)
Opening balance
Total loss recognised in the Statement of Comprehensive Income
Proceeds received
Closing balance
Total loss recognised in the Statement of Comprehensive Income
Remeasurement of deferred consideration
Sensitivity analysis for recurring level 3 fair value measurements
Value 2022
($000’s)
3,210
(110)
(3,100)
-
110
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 2021 financial year and equity is as
follows:
Other financial assets - deferred consideration (non-current) (level 3)
Bankable feasibility study completed one year earlier
Cost of debt decreases by 1%
Impact on profit
after tax ($000’s)
Impact on equity
($000’s)
29
(23)
29
(23)
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, management’s objective is to ensure that 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.
2022
($000’s)
14,327
2021
($000’s)
24,811
76
Rox Resources Annual Report 2022Consolidated Financial Statements Note 4 – Significant accounting judgements, estimates
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 22 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 is taken from observable inputs where possible. Changes in assumptions about these factors 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 28 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 Youanmi Gold Project and related production
facilities on a discounted basis, recognised initially on acquisition of its interest in mine and related facilities.
The rehabilitation provision represents the estimated present value of rehabilitation costs relating to the Group’s mine properties as
at balance date. Assumptions are based on the current economic environment at each balance date, which management believe
provide a reasonable basis upon which to estimate the future liability. These estimates are reviewed regularly to consider and material
changes to the assumptions. Accordingly, during the financial year, as the scoping study progressed, the Group undertook a full
third party assessment of the extent and timing of the rehabilitation provision. This included the impact of the decision to utilise an
alternative solution to the existing plant infrastructure.
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.
77
Rox Resources Annual Report 2022Consolidated Financial Statements Note 4 – Significant accounting judgements, estimates and
assumptions continued
Rehabilitation (continued)
Furthermore, the timing of rehabilitation is likely to depend on when the mine commences and ultimately (if a decision to mine is made)
ceases to produce at economically viable rates. This, in turn, will depend upon commodity prices, which are inherently uncertain.
Expected Credit Loss
Under the AASB 9 simplified approach, the Group determines the allowance for credit losses for receivables from contracts with
customers and contract assets on the basis of the lifetime expected credit losses of the financial asset. Judgement is required in
determining the lifetime expected credit loss, and the group uses information from a range of sources in determining the amount,
including publicly available financial information.
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 2022
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)
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;
(ii)
the Group continues to comply with the conditions for deductibility imposed by the law; and
(iii) 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.
78
Rox Resources Annual Report 2022Consolidated Financial Statements Note 6 – Income
Interest income
Interest income
Other income
Government grants
Lease income
Other
Total other income
Note 7 – Income tax
Income Tax Expense
Recognised in the income statement:
a) Tax expense
Current tax expense
Deferred tax expense
Total income tax expense per income statement
Recognised in the income statement:
b) Tax expense
Current tax expense
Deferred tax expense
Total income tax expense per income statement
c) Numerical reconciliation between tax expense and pre-tax net profit /(loss)
Net profit/(loss) before tax
Corporate tax rate applicable
Income tax expense/(benefit) on above at applicable corporate rate
Increase/(decrease) in income tax due to tax effect of:
Share based payments
Other non-deductible expenses
Other assessable income
Current year tax losses not recognised
Derecognition of previously recognised tax losses and temporary differences
Tax gain on sale of tenements
Movement in unrecognised temporary differences
Utilisation of previously unrecognised tax losses
Other
Deductible equity raising costs
Income tax expense/(benefit) reported in the Statement of Comprehensive Income
2022
($000’s)
2021
($000’s)
2
-
-
13
13
3
37
30
-
67
2022
($000’s)
2021
($000’s)
-
-
-
-
-
-
(13,950)
30%
(4,185)
18
342
272
3,116
318
-
208
-
-
(89)
-
-
-
-
-
-
-
(11,764)
30%
(3,530)
666
-
-
-
(348)
2,453
2,188
(1,346)
(83)
-
-
79
Rox Resources Annual Report 2022Consolidated Financial Statements Note 7 – Income tax continued
Deferred tax assets and liabilities
d) Recognised deferred tax assets and liabilities
Deferred tax assets
Employee provisions
Rehabilitation assets and liabilities
Blackhole – equity raising costs
Tax losses
Gross deferred tax assets
Set-off deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Exploration and mine properties
Gross deferred tax liabilities
Set-off of deferred tax assets
Net deferred tax liabilities
e) Unused tax losses and temporary differences for which no deferred tax asset
has been recognised
Deferred tax assets have not been recognised in respect of the following
using corporate tax rates of:
Deductible temporary differences
Tax revenue losses
Tax capital losses
2022
($000’s)
2021
($000’s)
30%
10
754
-
192
956
(956)
-
(956)
(956)
956
-
30%
1,589
13,205
206
15,000
30%
64
476
256
-
796
(796)
-
(796)
(796)
796
-
30%
96
10,617
-
10,713
The corporate tax rates on both recognised and unrecognised deferred tax assets and deferred tax liabilities have been calculated
with respect to the tax rate that is expected to apply in the year the deferred tax asset is realised or the liability is settled.
Potential future income tax benefits attributable to gross tax losses of $44.7m (2021: $35.4m) carried forward have not been brought
to account at 30 June 2022 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)
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
(ii)
the Group continues to comply with the conditions for deductibility imposed by the law
(iii) 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.
80
Rox Resources Annual Report 2022Consolidated Financial Statements Note 8 – Earnings per share
2022
2021
The following reflects the income and share data used in the calculation of basic and
diluted earnings per share:
Net loss
($13,950,392)
($11,764,300)
Weighted average number of ordinary shares used in calculating basic earnings per share
161,415,833
141,809,925
Effect of dilutive securities: Share optionsa
-
-
Adjusted weighted average number of ordinary shares used in calculating diluted earnings
per share
161,415,833
141,809,925
Basic and Diluted profit/(loss) cents per share
(8.64)
(8.30)
aShare options are not dilutive as their inclusion would give rise to a reduced loss per share.
There was a total of 20,602,857 share options that were potentially dilutive to shares on issue at 30 June 2022 (2021: 21,136,190).
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 2022
There have been no other options issued, 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
Alex Passmore
Managing Director (appointed CEO 1 February 2019, appointed MD 1 May 2019)
Stephen Dennis
Non-Executive Chairman (appointed 1 August 2015)
John Mair
Non-Executive Director (appointed 24 October 2019)
Robert Ryan
Non-Executive Director (appointed 29 June 2022)
Chris Hunt
Matt Antill
Chief Financial Officer (appointed 3 May 2021) and Company Secretary (appointed 6 May 2021)
General Manager – Youanmi Operations (appointed 5 April 2021)
Gregor Bennett
Exploration Manager (appointed 1 July 2020)
There were no changes of Key Management Personnel after the reporting date and before the date that the financial report was
authorised for issue.
81
Rox Resources Annual Report 2022Consolidated Financial Statements Note 9 – Director and Executive disclosures continued
(b) Compensation of Key Management Personnel by category
Incentive plan
Short-term
Post-employment
Total
Note 10 – Auditor’s remuneration
Remuneration of the current auditor of the Group, Pitcher Partners, for:
Audit and review of the financial report - Rox Resources Limited
Audit and review of the financial report - Cannon Resources Limited
Demerger accounting assistance
Total
Note 11 – Cash and cash equivalents
Cash and cash equivalents
Cash at bank earns interest at floating rates based on daily deposit rates
2022
($)
2021
($)
1,320,378
1,238,635
123,040
72,767
1,443,418
1,311,402
2022
($)
2021
($)
48,124
-
1,638
49,762
44,054
24,013
24,150
92,217
2022
($000’s)
4,441
2021
($000’s)
11,913
Reconciliation of net loss after income tax to net cash flow from operations
Net loss after income tax
(13,950)
(11,764)
Adjustments to reconcile profit before tax to net operating cash flows
Depreciation and amortisation
Finance expense
Share based payments
Impairment of assets
Other income
Short-term lease and occupancy related expenses
Loss/(profit) on sale of property, plant and equipment
Fair value movement on financial instruments at fair value through profit or loss
Restructure expenses
Repayment of lease liabilities
Share of associates 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
The Group does not have any credit standby arrangements, used or unused loan facilities.
155
735
59
1,774
(8)
-
-
110
32
106
695
8
-
(1,709)
(2,538)
(14,531)
81
823
2,220
-
(16)
(47)
-
(379)
-
-
-
(22)
75
139
(702)
(9,592)
82
Rox Resources Annual Report 2022Consolidated Financial Statements Note 12 – Trade and other receivables
Current
Other receivables (i)
Advances to JV partners (i)
Currans Find & Pincher Joint Venture (RXL 45%, VMC 45%, MER 10%a)
Total advances to JV partners
Cannon Resources Limited (i)
Other related parties (i)
Total
Non-current
Amounts owing from JV partner (ii)
aMurchison Earthmoving & Rehabilitation Pty Ltd
2022
($000’s)
2021
($000’s)
1
9
10
45
-
55
293
-
-
542
-
835
3,012
1,109
(i) Receivables, including from related parties (see Note 27), generally have 30-day terms and are unsecured.
(ii) Receivable from the OYG JV Partner, VMC.
In accordance with the 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 2021: RXL:
70%, VMC 30%).
Under the 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
(2) evidence in writing demonstrating (to the Group’s satisfaction) of VMC’s inability to contribute to its percentage share of the
Expenditure
No interest is payable on outstanding amounts under this loan arrangement. In determining the expected credit loss, for which
judgement is required (refer Note 4), the Group had regard to the Repayment terms and expected timing of each event occurring as
set out below.
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.
(3)
the portion of the sale proceeds to which VMC is entitled from a sale arising from the event described in Note 28.
The loan is secured over VMC’s interests in the OYG joint venture.
83
Rox Resources Annual Report 2022Consolidated Financial Statements Note 13 – Right of use assets
Office lease
Opening balance
Addition of lease asset
Accumulated amortisation on lease asset
Closing balance
Note 14 – Investment in associates
2022
($000’s)
2021
($000’s)
422
-
(90)
332
-
465
(43)
422
Cannon Resources Limited(1)
Ownership
interest
Equity accounted carrying
amount
2022
%
10.01
2021
%
n/a
2022
($000’s)
1,776
2021
($000’s)
n/a
Notes: (1) As at 30 June 2021, Cannon Resources Limited (“Cannon”) was a 100% subsidiary of the Company and hence was not accounted for as an
investment in associate. On 28 July 2021 Cannon demerged from the Company and became an investment in associate as at 30 June 2022, as detailed
in Note 31.
Fair value of investment in Cannon Resources Limited(1)
Summarised financial information for Cannon Resources Limited is set out below:
2022
($000’s)
2,908
2021
($000’s)
n/a
Cash and cash equivalents
Other current assets
Total current assets
Non-current assets
Total assets
Other current liabilities
Total current liabilities
Total liabilities
Net assets
Group’s share of net assets
3,283
53
3,336
9,313
12,649
1,395
1,395
1,395
11,254
1,127
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
84
Rox Resources Annual Report 2022Consolidated Financial Statements Note 14 – Investment in associates continued
2022
($000’s)
2021
($000’s)
Investment in Cannon Resources Limited
Balance at the beginning of the period
Initial value upon recognition
Share of investments in associate’s profit/(loss)
Carrying amount of investment (equity accounted)
Interest income
Depreciation and amortisation
Loss before income tax
Income tax expense
Loss from continuing operations
Other comprehensive income
Total comprehensive loss for the year
Dividends received during the year
Commitments
Contingent liabilities
Notes:
-
2,471
(695)
1,776
1
(18)
(6,664)
-
(6,664)
-
(6,664)
-
613
-
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
(1) Cannon is an ASX Listed Company (ASX: CNR). The Company owns 8,553,130 shares as at 30 June 2022 at a closing share price
of 34 cents per share.
(2) The principal place of business for Cannon Resources Limited is Level 2, 87 Colin Street West Perth, Western Australia, 6005.
Note 15 – Other financial assets
Non-current
Teck Australia Pty Ltd receivable:
Balance at the beginning of the period
Fair value movement through profit or loss
Proceeds received
Closing balance
2022
($000’s)
2021
($000’s)
3,210
(110)
(3,100)
2,919
291
-
3,210
(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%. Payment was received from Teck on 26
August 2021 as per the terms of the early settlement agreement, announced to the market on 20 July 2021.
85
Rox Resources Annual Report 2022Consolidated Financial Statements
Note 16 – Property, plant and equipment
Plant and equipment at cost
Accumulated depreciation
Total property, plant and equipment
Movement in property plant and equipment
Balance as at 1 July, net of accumulated depreciation
Adjustment to rehabilitation provision (i)
Plant and equipment additions - at cost
Disposal - at cost
Accumulated depreciation on disposals
Impairment of assets (ii)
Depreciation
Balance as at 30 June, net of accumulated depreciation
Notes:
2022
($000’s)
2021
($000’s)
925
(301)
624
4,236
(2,076)
393
-
-
(1,774)
(155)
624
4,382
(146)
4,236
3,880
-
396
(3)
2
-
(39)
4,236
(i) Adjustment to property, plant & equipment, resulting from an independent review of the Group’s rehabilitation provision following the commencement
of the scoping study. Refer to Note 19 (i) and Note 4 Significant Judgements & Estimates for further details.
(ii) The Group resolved to scrap the majority of its process plant infrastructure as part of the mineralised resource resides under the process plant
infrastructure. This resulted in an impairment of $3,298k to write to plant down to $nil based on the expected Fair Value less costs to sell.
Note 17 – Capitalised exploration and evaluation expenditure
Areas of interest in exploration and evaluation phases:
Balance at the beginning of the year
Demerger of Cannon Resources Limited (i)
Adjustment to rehabilitation provision (ii)
Stamp duty on OYG acquisition
Total
Notes:
2022
($000’s)
2021
($000’s)
10,885
(3,053)
3,089
49
10,970
10,736
-
-
149
10,885
(i) On 28 July 2021, the Company completed the demerger of Cannon Resources Limited (refer Note 31 for further details).
(ii) Adjustment to capitalised exploration and evaluation, resulting from an independent review of the Group’s rehabilitation provision following the
commencement of the scoping study. Refer to Note 19 (i) and Note 4 Significant Judgements & Estimates for further details.
(iii) Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and commercial
exploitation or, alternatively, sale of the respective areas.
86
Rox Resources Annual Report 2022Consolidated Financial Statements Note 18 – Trade and other payables
Trade payables (i)
Accruals
Payroll liabilities and superannuation
Total
(i) Terms and Conditions
Creditors, including related parties, are non-interest bearing and generally on 30-day terms.
Note 19 – Provisions
Current
Employee benefits – annual leave
Employee benefits – long service leave
Total
Non-current
Provision – rehabilitation
Carrying amount at the beginning of the year
Adjustment to rehabilitation provision (i)
Carrying amount at the end of the year
Employee benefits – long service leave
Total
Notes:
2022
($000’s)
2021
($000’s)
847
16
-
863
2,372
223
125
2,720
2022
($000’s)
2021
($000’s)
158
40
199
4,345
1,013
5,358
-
5,358
127
-
127
4,345
-
4,345
36
4,381
(i) The rehabilitation provision 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.
The Group made a full provision for its share of the future cost of rehabilitating the Youanmi Gold Project and related production facilities on a
discounted basis, recognised initially on acquisition of its interest in mine and related facilities.
The rehabilitation provision represents the estimated present value of rehabilitation costs relating to the Group’s mine properties as at balance date.
These estimates are reviewed regularly to consider and material changes to the assumptions. Accordingly, during the financial year, as the scoping
study progressed, the Group undertook a full third-party assessment of the extent and timing of the rehabilitation provision. This independent
assessment resulted in an increase to the rehabilitation provision as at 30 June 2022 of $1,013k.
87
Rox Resources Annual Report 2022Consolidated Financial Statements Note 20 – Other financial liabilities
Current
Lease liability – office lease
Total
Non-current
Lease liability – office lease
Opening balance
Finance charges
Repayments
Closing balance
Note 21 – Contributed equity and reserves
2022
($000’s)
2021
($000’s)
149
149
491
4
(153)
342
116
116
-
531
(40)
491
2022
($000’s)
2021
($000’s)
64,830
70,596
(a) Contributed Equity
(i) Issued and paid-up capital
Ordinary shares fully paid
(ii) Movement in ordinary
shares on issue
Ordinary shares
Date
2022
(Number)
2022
($000’s)
2021
(Number)
2021
($000’s)
Balance at beginning of year
157,607,614
70,596
1,989,100,903
57,783
Cash issue (option exercise)
8 Jul 2020
Non-cash issue (option exercise)
8 Jul 2020
Non-cash issue
30 Jul 2020
Cash issue (option exercise)
15 Sep 2020
Cash issue (option exercise)
27 Nov 2020
Cash issue (option exercise)
30 Nov 2020
Cash issue (net of costs)
26 Mar 2021
15:1 Share consolidation
28 Jun 2021
Demerger of Cannon Resources
28 Jul 2021
-
-
-
-
-
-
-
-
-
Cash issue (option exercise)
31 Jan 2022
1,333,333
Capital raising
3 Mar 2022
10,000,000
250,000
9,810,893
41,666,667
5,000,000
1,000,000
3,000,000
6
837
1,000
120
24
72
314,285,714
10,754
-
-
-
-
-
-
-
-
(2,206,506,563)
(9,756)
217
3,773
-
-
-
-
-
-
-
Balance at end of year
168,940,947
64,830
157,607,614
70,596
(iii) 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.
88
Rox Resources Annual Report 2022Consolidated Financial Statements Note 21 – Contributed equity and reserves continued
(b) Reserves
Share based payments reserve
Equity reserve
(i) Share based payments reserve
Balance at the beginning of the year
Options issued to Directors and employees (Note 22(a))
Options exercised by Directors and employees (Note 22(a))
Options issued to unrelated parties (Note 22(b))
Balance at the end of the year
2022
($000’s)
4,887
9,947
14,834
4,828
-
-
59
4,887
2021
($000’s)
4,828
-
4,828
3,445
871
(837)
1,349
3,445
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.
(ii) Equity reserve
Balance at the beginning of the year
Profit from demerger of Cannon Resources Limited
Balance at the end of the year
(c) Share Options
2022
($000’s)
-
9,947
9,947
2021
($000’s)
-
-
-
In March 2021, the Company issued 20,952,381 ordinary shares (post 15:1 share consolidation) to Hawke’s Point for an issue
price of $0.525 per share, raising $11 million before issue costs. Hawke’s Point received 10,476,190 unlisted options (one option
for every two shares issued) with an exercise price of $0.988 (the option price was reduced by 6.19 cents per share following the
demerger of Cannon Resources Limited, 28 July 2021). As at the balance date, Hawke’s Point had not exercised any of
these options.
Note 22(a) – Share based payments: Directors and Employees
(i) Employee share incentive scheme – Rox Resources Limited
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 financial year, nil options were issued pursuant to the ESS (2021: 860,000).
Set out below is a summary of options issued.
89
Rox Resources Annual Report 2022Consolidated Financial Statements Note 22(a) – Share based payments: Directors and Employees continued
For the year ended 30 June 2022
Value per
option
at grant
date
(cents)
11.9
17.5
Exercise
price
(cents)1
43.3
76.3
Grant date
Expiry date
12 Dec 19
30 Nov 22
18 Jun 21
25 May 24
Weighted average exercise price (cents)
Balance of
options at the
start of the year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
4,466,668
860,000
5,326,668
47.5
-
-
-
-
-
-
-
-
-
4,466,668
4,466,668
(200,000)
660,000
660,000
(200,000)
5,126,668
5,126,668
-
47.5
47.5
The weighted average remaining contractual life of share options outstanding at the end of the year was 0.6 years.
Notes:
(1) The weighted average exercise prices have been reduced by 6.19 cents per share following the demerger of Cannon Resources Limited (28 July 2021).
For the year ended 30 June 2021
Exercise
price
(cents)
Value per
option at
grant date
(cents)
Balance of
options at the
start of the
year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
Grant date
Expiry date
15 Dec 17
30 Nov 20
12 Dec 19
30 Nov 22
18 Jun 21
25 May 24
36.0
49.5
82.5
11.9
12.5
17.5
283,334
5,533,334
-
-
(283,334)
(1,066,666)
-
860,000
-
5,816,668
860,000
(1,350,000)
-
-
-
-
-
-
-
4,466,668
4,466,668
860,000
860,000
5,326,668
5,326,668
53.9
53.9
Weighted average exercise price (cents)
48.8
82.5
46.7
The weighted average remaining contractual life of share options outstanding at the end of the year was 1.7 years.
Fair value of options granted under ESS
For the financial year ended 30 June 2021, the fair value for options issued under the ESS was calculated using the Binomial Option
valuation methodology using the following parameters. There were no options issued under ESS scheme in FY2022
Weighted average exercise price (cents)1
Weighted average life of the option
Weighted average underlying share price (cents)
Expected share price volatility
Risk-free interest rate
Number of options issued
Fair value per option (cents)
Notes:
2022
-
-
-
-
-
-
-
2021
82.5
3 years
40.0
93.74%
0.14%
860,000
17.5
(1) The weighted average exercise price has been reduced by 6.19 cents per share following the demerger of Cannon Resources Limited
(28 July 2021). Accordingly the revised weighted average exercise price post demerger is 76.3 cents per share.
(2) 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.
(3) The life of the options is based on historical exercise patterns, which may not eventuate in the future.
(4) No other features of options granted were incorporated into the measurement of fair value.
90
Rox Resources Annual Report 2022Consolidated Financial Statements Note 22(a) – Share based payments: Directors and Employees continued
(ii) Employee share incentive scheme – Cannon Resources Limited
Prior to the demerger of Cannon, an ESS was established where Cannon may, at the discretion of Directors, grant options over
the ordinary shares of Cannon to its Directors, Executives and employees. Following the demerger of Cannon on 28 July 2022, the
discretion for the issue of instruments under the scheme no longer remained with the Rox Directors. Accordingly, no options were
issued pursuant to the Cannon ESS during the financial year (2021; 6,750,000).
Set out below is a summary of options issued in the prior year, as at 30 June 2021, when Cannon remained a controlled subsidiary
of the Group.
For the year ended 30 June 2021
Grant date
Expiry date
Exercise
price
(cents)
Value per
option at
grant date
(cents)
Balance
of options
at the start of
the year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
25 Jun 21
25 Jun 24
30.0
10.7
6,750,000
Weighted average exercise price (cents)
6,750,000
30.0
-
-
-
6,750,000
6,750,000
-
-
30.0
30.0
-
-
-
-
-
-
The weighted average remaining contractual life of share options outstanding at the end of the year was 3.0 years.
Fair value of options granted under ESS
The fair value for options issued under the ESS was calculated using the Black-Scholes valuation methodology using the following
parameters.
Weighted average exercise price (cents)
Weighted average life of the option
Weighted average underlying share price (cents)
Expected share price volatility
Risk-free interest rate
Number of options issued
Fair value per option (cents)
(iii) Other share options
2021
30.0
3 years
20.0
100%
0.10%
6,750,000
10.7
During the financial year ended 30 June 2022, nil options were issued to Directors and employees other than through the ESS (2021: nil).
For the year ended 30 June 2022
Grant date
Expiry date
Exercise
price
(cents)1
Value per
option at
grant date
(cents)
Balance
of options
at the start of
the year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
01 Feb 19
31 Jan 22
16.3
6.0
1,333,333
Weighted average exercise price (cents)
Notes:
1,333,333
16.3
-
-
-
(1,333,333)
(1,333,333)
-
-
-
-
-
-
-
-
-
-
(1) The weighted average exercise price has been reduced by 6.19 cents per share following the demerger of Cannon Resources Limited (28 July 2021),
previously 22.5 cents per share.
(2) The weighted average share price at the date of exercise was 16.3 cents per share
91
Rox Resources Annual Report 2022Consolidated Financial Statements Note 22(a) – Share based payments: Directors and Employees continued
For the year ended 30 June 2021
Grant date
Expiry date
15 Dec 17
30 Nov 20
01 Feb 19
31 Jan 22
Exercise
price
(cents)
36.0
22.5
Value per
option at
grant date
(cents)
11.9
6.0
Weighted average exercise price (cents)
Balance of
options at the
start of the year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
1,200,000
1,333,333
2,533,333
28.9
-
-
-
-
(333,333)
(866,667)
-
-
-
-
1,333,333
1,333,333
(333,333)
(866,667)
1,333,333
1,333,333
36.0
36.0
22.5
22.5
Note 22(b) – Unrelated parties
Options issued to unrelated parties for the year ended 30 June 2022 and 30 June 2021 are set out below.
For the year ended 30 June 2022
Grant date
Expiry date
Exercise
price
(cents)
Value per
option at
grant date
(cents)
Balance of
options at the
start of the
year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
16 Sep 20
31 Dec 23
143.8(1)
16 Sep 20
31 Dec 23
181.3(1)
16 Sep 20
31 Dec 23
218.8(1)
3 Mar 22
3 Mar 26
72.0
37.3
33.6
30.3
23.5
1,333,333
1,333,333
1,333,333
-
-
-
-
1,000,000
3,999,999
4,999,999
Weighted average exercise price (cents)
181.3
72.0
-
-
-
-
-
-
-
-
-
-
-
-
1,333,333
1,333,333
1,333,333
1,333,333
1,333,333
1,333,333
1,000,000
1,000,000
4,999,999
4,999,999
159.4
159.4
The weighted average remaining contractual life of share options outstanding at the end of the year was 1.95 years.
Notes:
(1) The weighted average exercise prices have been reduced by 6.19 cents per share following the demerger of Cannon Resources Limited (28 July 2021).
Fair value of options granted
For the year ended 30 June 2022, the fair value for options issued to Argonaut PCF for financial advisory fees was calculated using the
Binomial Option valuation methodology using the following parameters.
Grant date
Weighted average exercise price (cents)
Weighted average life of the option
Weighted average underlying share price (cents)
Expected share price volatility
Risk-free interest rate
Number of options issued
Fair value per option (cents)
Notes:
3 March 2022
72.0
4 years
41.5
94.79%
2.21%
1,000,000
23.5
(1) 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.
(2) The life of the options are based on historical exercise patterns, which may not eventuate in the future.
(3) No other features of options granted were incorporated into the measurement of fair value.
92
Rox Resources Annual Report 2022Consolidated Financial Statements Note 22(b) – Unrelated parties continued
For the year ended 30 June 2021
Grant date
Expiry date
Exercise
price
(cents)
Value per
option at
grant date
(cents)
Balance of
options at the
start of
the year
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Balance of
options at
the end of
the year
Options
exercise-able at
the end of
the year
16 Sep 20
31 Dec 23
150.0
16 Sep 20
31 Dec 23
187.5
16 Sep 20
31 Dec 23
225.0
37.3
33.6
30.3
Weighted average exercise price (cents)
-
-
-
-
-
1,333,333
1,333,333
1,333,333
3,999,999
187.5
-
-
-
-
-
-
-
-
-
-
1,333,333
1,333,333
1,333,333
1,333,333
1,333,333
1,333,333
3,999,999
3,999,999
187.5
187.5
The weighted average remaining contractual life of share options outstanding at the end of the year was 2.5 years.
Fair value of options granted
For the year ended 30 June 2021, the fair value for options issued to unrelated parties was calculated using the Binomial Option
valuation methodology using the following parameters.
Grant date
16 Sep 2020
16 Sep 2020
16 Sep 2020
Weighted average exercise price (cents) (i) (ii)
150.0
187.5
225.0
Weighted average life of the option
3.4 years
3.4 years
3.4 years
Weighted average underlying share price (cents) (i)
Expected share price volatility
Risk-free interest rate
Number of options issued (i)
Fair value per option (cents) (ii)
Notes:
81.0
89.93%
0.27%
81.0
89.93%
0.27%
81.0
89.93%
0.27%
1,333,333
1,333,333
1,333,333
37.3
33.6
30.3
(1) The options have been converted post the 15:1 share consolidation which occurred on 28 June 2021.
(2) The weighted average exercise prices have been reduced by 6.19 cents per share following the demerger of Cannon Resources Limited (28 July
2021). Accordingly, the revised weighted average exercise prices post demerger are Tranche 1 $1.438, Tranche 2 $1.813 and Tranche 3 $2.188.
(3) 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.
(4) The life of the options are based on historical exercise patterns, which may not eventuate in the future.
(5) No other features of options granted were incorporated into the measurement of fair value.
Note 23 – Accumulated losses
Balance at the beginning of the year
Net loss attributable to members of Rox Resources Limited
Cannon Resources Limited demerger
Balance at the end of the year
2022
($000’s)
50,613
13,950
774
65,337
2021
($000’s)
38,849
11,764
-
50,613
No dividends were paid during or since the financial year. There are no franking credits available (2021: nil).
93
Rox Resources Annual Report 2022Consolidated Financial Statements Note 24 – 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.
No later than one year
Later than one year and not later than five years
Total
(b) Remuneration commitments
2022
($000’s)
2,067
-
2,067
2021
($000’s)
2,404
-
2,404
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:
No later than one year
Later than one year and not later than five years
Total
Note 25 – Contingent liabilities
2022
($000’s)
2021
($000’s)
-
-
-
-
-
-
At the financial reporting date there are no contingent liabilities. Royalties exist over certain tenements held by the Group and become
payable upon the receipt of revenue from mining activities.
Note 26 – Events subsequent to the reporting date
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 27 – Related party transactions
(a) Director related transactions
-
-
An amount of $888,328 (30 June 2021: $469,823) was paid to LG Mining Pty Ltd, a company of which Mr Passmore is a Director,
for the provision of labour hire services, specifically geologists and field assistants. An amount of $49,490 was payable as at
30 June 2022 (30 June 2021: $136,193). The transactions were on an arms-length basis and utilised by the Company, on a
discretionary basis, for recruitment and labour hire of predominantly field staff which are in high demand in the current tight
labour market. Other recruitment and labour hire firms are also utilised by the Company as required and including when terms are
offered on an equal basis. Mr Passmore does not receive any remuneration from LG Mining Pty Ltd.
The Company entered into a Demerger Agreement with its subsidiary, Cannon Resources Limited on 13 May 2021. On 10
August 2021, Cannon successfully demerged and listed on the ASX and raised $6.0 million through the issue of 30 million shares.
As at 30 June 2021, Cannon had a loan payable of $542,009 to Rox. The loan payable was related to all costs and expenses
associated with the listing of Cannon and operating costs up to the listing date. The loan was unsecured, non-interest bearing
and repayable to Rox with 5 business days of completion of Cannon’s Initial Public Offering. The loan was repaid on 20 August
2021.
94
Rox Resources Annual Report 2022Consolidated Financial Statements Note 27 – Related party transactions continued
-
The Demerger Agreement included a provision for Rox to sub-lease office space to Cannon at $2,000 per month (amended as
mutually agreed). The amount received by Rox under the Demerger Agreement for the financial year 30 June 2022 for rent was
$22,000.
-
-
-
-
Following the demerger of Cannon Resources Limited (Cannon), Rox entered into a Shared Services Agreement (the Agreement)
with Cannon whereby Rox will provide Company Secretarial and Finance Services for $8,000 per month (amended as mutually
agreed). In addition, under the Agreement, Cannon can engage Rox to provide Geological services at a 10% mark-up on the cost.
The Agreement commenced on 1 September 2021. The amount received by Rox under the Shared Services Agreement for the
financial year 30 June 2022 was $130,625. Mr Chris Hunt is the Company Secretary of Cannon. Mr Chris Hunt, Mr Matt Antill and
Mr Gregor Bennett do not receive any remuneration from Cannon.
Rox funded $103,375 of expenditure on behalf of Cannon. Mr Alex Passmore is the Non-executive Chairman and Mr Chris Hunt is
the Company Secretary of Cannon. The balance outstanding to Rox as at 30 June 2022 was $44,852.
Rox entered into two agreements with Pearl Gull Iron Limited (“Pearl Gull”) whereby Rox will provide Company Secretarial and
Finance Services for $8,000 per month (amended as mutually agreed) and to sub-lease office space to Pearl Gull at $2,000
per month (amended as mutually agreed). The amount received by Rox for the financial year 30 June 2022 were $24,000 and
$22,000, respectively. Mr Alex Passmore is a Non-Executive Director of Pearl Gull and Mr Chris Hunt is the Company Secretary of
Pearl Gull. Mr Chris Hunt does not receive any remuneration from Pearl Gull
All the amounts quoted above are excluding GST..
Note 27 – Joint operations
Youanmi Gold Project
In April 2019, the Group established four separate joint ventures with 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 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.
In the 2019 financial year, the Group acquired a 50% interest in all minerals by the payment of $2.8 million and the issue of 1.7 million
fully paid shares at a deemed price of $0.12 (a deemed $0.2 million).
The Group was required to meet exploration expenditure of $2 million 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 million 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 30 June 2021 and after the Group has contributed the $2 million 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:
•
•
the payment of $3 million cash to VMC; or
the payment of $1.5 million cash and issuing to VMC the number of Rox shares equal to $1.5 million 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.
The payment of cash and issuing of shares occurred on 30 July 2020 following shareholder approval at a General Meeting on
28 July 2020.
Joint Venture costs are then to be contributed in proportion to ownership, with VMC electing under the joint venture agreement for 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).
95
Rox Resources Annual Report 2022Consolidated Financial Statements Note 27 – Joint operations continued
OYG Joint Venture (Rox 70%, VMC 30%)
As outlined in the prior year, on 8 June 2020, the parties agreed to amend the term sheet whereby the consideration for the additional
20% interest would be $2 million within 2 business days of the Group delivering its Exercise Notice and either:
•
•
issuing to VMC the number of Rox Shares equal to $1 million divided by the deemed issue price of $0.36 (being 2.8m Rox Shares,
post 15:1 share consolidation), with approval by shareholders at a meeting no later than 60 days following the Group delivering
the Exercise Notice; or
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 million 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 million on 10 June 2020. As at this date, and 30 June 2020, the remaining consideration to acquire the
Additional OYG Interest represented 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.
On 28 July 2020, shareholders approved the issue of 2.8 million 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:
• A Decision to Mine is agreed by both participants (as defined in the binding agreement); or
•
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.
Venus Joint Venture (Rox 50% and VMC 50%)
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 2021, the Group has earnt into been appointed manager of the Joint Venture.
Youanmi Joint Venture (Rox 45%, VMC 45% and 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 2021, the Group has earnt into been appointed manager of the Joint Venture.
Currans Find & Pincher Joint Venture (Rox 45%, VMC 45% and 10% MER)
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 500,000 fully paid shares (post 15:1 share consolidation) at a deemed price of $0.15 (a deemed $75,000).
As at 30 June 2021, the Group has earnt into been appointed manager of the Joint Venture.
96
Rox Resources Annual Report 2022Consolidated Financial Statements Note 27 – Joint operations continued
Cullen Resources Earn-In (Rox 51% and Cullen 49%)
On 5 September 2019, the Group entered into an agreement with Cullen Resources Limited whereby it may earn up 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.
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 had earnt in to the 51% target interest and is currently progressing towards earning 75% in the joint
venture. As at 30 June 2022, the Group has contributed $1,299,629 to this arrangement (2021: $759,520).
Note 29 – Information relating to Rox Resources Limited (the Parent)
Current assets
Total assets
Current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Net assets
Income/(loss) of the Parent entity
Total comprehensive income/(loss) for the year
2022
(000’s)
2021
(000’s)
4,356
12,360
(599)
(24,459)
64,830
8,887
(36,898)
(12,099)
4,483
4,483
12,591
45,730
(1,422)
(1,948)
70,596
4,828
(31,642)
43,782
587
587
The Parent entity has contractual obligations for exploration commitments of $533,000 at balance date (2021: $717,000) and $nil
remuneration commitments at the balance date (2021: nil).
97
Rox Resources Annual Report 2022Consolidated Financial Statements Note 30 – Group information
Information about subsidiaries
Entity
Principal activities
Country of incorporation
Rox (Mt Fisher) Pty Ltd
Mineral exploration
Rox (Murchison) Pty Ltd
Mineral exploration
Cannon Resources Limited(1)
Mineral exploration
Australia
Australia
Australia
Note:
% Equity interest
2022
100
100
-
2021
100
100
100
(1) Cannon Resources Limited demerged from the Company on 28 July 2021 and accordingly is no longer a subsidiary as at 30 June 2022.
The Company has recorded Cannon Resources Limited as an investment in associate as at 30 June 2022, as detailed in Note 14 and 31.
Note 31 – Demerger of Cannon Resources Limited
During financial year 2021, the Group announced the demerger of its Fisher East and Collurabbie nickel and base metal assets to focus
on the development of the Youanmi gold project. The Group structured the demerger as an in-specie distribution with a priority offer to
Group shareholders to raise $6.0 million, in a new listed entity, Cannon Resources Limited (Cannon).
The Group successfully completed the demerger of its 100% owned subsidiary Cannon by way of an initial public offering. Cannon
was admitted to the ASX on 10 August 2021 and commenced trading on 12 August 2021.
The Group also obtained a Class Ruling from the Australian Tax Office in relation to the demerger (CR 2021/63) which confirmed that:
•
•
demerger tax relief is available for Australian tax resident Group shareholders who hold their Group shares on capital account;
and
receipt of Cannon shares is not an assessable dividend
As the demerger was affected by way of an in-specie distribution of Cannon shares to Rox shareholders this had the effect of reducing
the Company’s share capital by $9,756k and reducing retained earnings by $773k. After removing the capitalised exploration and
evaluation costs associated with the deposits being demerged ($3,053k), the Company recorded a profit on the demerger of $9,947k
which was recorded in an equity reserve.
The initial Investment in Cannon was recorded at $2,471k.
98
Rox Resources Annual Report 2022Consolidated Financial Statements
Directors’ Declaration
For the year ended 30 June 2022
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 Group are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and its performance for the year ended
on that date; and
(ii) 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 Group 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 2022.
On behalf of the Board
Alex Passmore
Managing Director
Perth, 27 September 2022
99
Rox Resources Annual Report 2022Consolidated Financial Statements ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Rox Resources Limited (the “Company”) and its controlled
entities (the “Group”), which comprises the consolidated statement of financial position as at 30 June
2022, the consolidated statement of comprehensive income, the consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (“the Code”) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report for the year ended 30 June 2022 which indicates
that the Group has incurred a net loss after tax for the year ended 30 June 2022 of $13,950k (2021:
$11,764k) and experienced net cash outflows from operating activities of $14,531k (2021: $9,592k).
As at 30 June 2022, the Group had net current assets of $3,313k (30 June 2021: $9,821k).
These conditions, along with other matters as set forth in Note 2 indicate the existence of a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Pitcher Partners BA&A Pty Ltd
An independent Western Australian Company ABN 76 601 361 095.
Level 11, 12-14 The Esplanade, Perth WA 6000
Registered Audit Company Number 467435.
Liability limited by a scheme under Professional Standards Legislation.
94
Adelaide Brisbane Melbourne Newcastle Perth Sydney
Pitcher Partners is an association of independent firms.
Pitcher Partners is a member of the global network of Baker Tilly International
Limited, the members of which are separate and independent legal entities.
100
Rox Resources Annual Report 2022Independent Audit Report ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key Audit Matter
How our audit addressed the key audit matter
Capitalisation of exploration and evaluation
expenditure
Refer to Note 2(d)(ii) and 17 to the financial
report.
As at 30 June 2022, the Group held capitalised
exploration and evaluation expenditure of
$10,970,000.
The carrying value of exploration and evaluation
expenditure is assessed for impairment by the
Group when facts and circumstances indicate that
the capitalised exploration and evaluation
expenditure may exceed its recoverable amount.
The determination as to whether there are any
indicators to require the capitalised exploration
and evaluation expenditure to be assessed for
impairment involves a number of judgments
including but not limited to:
• Whether the Group has tenure of the relevant
area of interest;
• Whether the Group has sufficient funds to
meet the relevant area of interest minimum
expenditure requirements; and
• Whether there is sufficient information for a
decision to be made that the relevant area of
interest is not commercially viable.
Given the size of the balance and the judgemental
nature of the impairment indicator assessments
associated with exploration and evaluation assets,
we consider this is a key audit matter.
Our procedures included, amongst others:
Obtaining an understating of and evaluating
the design and implementation of the
processes and controls associated with the
capitalisation of exploration and evaluation
expenditure, and those associated with the
assessment of impairment indicators.
Examining the Group’s right to explore in the
relevant area of interest, which included
obtaining and assessing supporting
documentation. We also considered the
status of the exploration licences as it related
to tenure.
Considering the Group’s intention to carry out
significant exploration and evaluation activity
in the relevant area of interest, including an
assessment of the Group’s cash-flow
forecast models, assessing the sufficiency of
funding and discussions with senior
management and Directors as to the
intentions and strategy of the Group.
Reviewing management’s evaluation and
judgement as to whether the exploration
activities within each relevant area of interest
have reached a stage where the commercial
viability of extracting the resource could be
determined.
Assessing the adequacy of the disclosures
included within the financial report.
95
101
Rox Resources Annual Report 2022Independent Audit Report
ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
Share-based payments
Refer to Note 2(d)(xiii) and 22 to the financial
report.
During the year ended 30 June 2022, the Group
has issued options to advisors, totalling $235,285,
for which a share based payment expense has
been recognised in the year of $58,821.
Under Australian Accounting Standards, equity
settled awards issued to advisors are measured at
fair value of the services received, or if not reliably
measurable, the fair value of the equity
instruments granted on the measurement date
taking into consideration the probability of the
vesting conditions (if any) attached. This amount
is recognised as an expense either immediately if
there are no vesting conditions, or over the
vesting period if there are vesting conditions.
In calculating the fair value there are a number of
judgements management must make, including
but not limited to:
•
•
•
•
estimating the likelihood that the equity
instruments will vest;
estimating expected future share price
volatility;
expected dividend yield; and
risk-free rate of interest.
Due to the significance to the Group’s financial
report and the level of judgment involved in
determining the valuation of the share-based
payments, we consider the Group’s calculation of
the share-based payment expense to be a key
audit matter.
Our procedures included, amongst others:
Obtaining an understanding of design and
implementation of the relevant controls
associated with the preparation of the
valuation model used to assess the fair value
of share based payments, including those
relating to volatility of the underlying security
and the appropriateness of the model used
for valuation.
Critically evaluating and challenging the
methodology and assumptions of
management in their preparation of valuation
model, including management’s assessment
of likelihood of vesting, agreeing inputs to
internal and external sources of information
as appropriate.
Assessing the Group’s accounting policy as
set out within Note 2(d)(xiii) for compliance
with the requirements of AASB 2 Share-
based Payment.
Assessing the adequacy of the disclosures
included in the financial report.
96
102
Rox Resources Annual Report 2022Independent Audit Report
ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
Rehabilitation provision
Refer to Note 2(d)(xiv) and 19 to the financial
report.
As a result of the Group’s jointly controlled interest
in the OYG Joint Venture, the Group is jointly and
severally liable to rehabilitate the environment
disturbed by the historical operations at the
Youanmi Gold Project. Rehabilitation activities
are governed by a combination of legislative and
licence requirements.
At 30 June 2022, the consolidated statement of
financial position included a provision for such
obligations of $5,358,000 (2021: $4,345,000).
This was a key audit matter given the
determination of this provision requires evaluating
the key assumptions used by management and
judgement in the assessment of the nature and
extent of future works to be performed, the future
cost of performing the works, the timing of when
the rehabilitation will take place and the economic
assumptions such as the discount and inflation
rates applied to future cash outflows associated
with rehabilitation activities to bring them to their
present value.
Our procedures included, amongst others:
Critically evaluating and challenging the
methodology and assumptions of
management in their preparation of valuation
model, including the appropriateness of the
economic assumptions such as the inflation
rate and provision specific discount rate.
Evaluating the experience and credentials of
the third party engaged to prepare valuation;
and
Assessing the adequacy of the disclosures
included in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2022 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
97
103
Rox Resources Annual Report 2022Independent Audit Report
ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
•
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
•
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
98
104
Rox Resources Annual Report 2022Independent Audit Report
ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 36 to 45 of the directors’ report for the
year ended 30 June 2022. In our opinion, the Remuneration Report of Rox Resources Limited, for the
year ended 30 June 2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
PITCHER PARTNERS BA&A PTY LTD
J C PALMER
Executive Director
Perth, 27 September 2022
99
105
Rox Resources Annual Report 2022Independent Audit Report Schedule
of Mining
Tenements
as at 9 September 2022
Project
Interest
Tenement Number
Interest held
Mt Fisher, WA
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Gold Rights
All Minerals
All Minerals
All Minerals
All Minerals
Application
Application
Application
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
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
Youanmi Gold
Project, WA
Youanmi
- OYG JV, WA
Youanmi
- Sandstone
Youanmi JV
Youanmi - VMC
JV, WA
Youanmi - Currans
JV, WA
Mt Eureka - Cullen
JV, WA
E53/1061
E53/1106
E53/1836
E53/1319
E53/1788
M53/0009
M53/0127
E36/0948
E53/1218
E53/2002
E53/2075
E53/2095
E53/2102
E53/2201
E53/2199
L53/0262
E57/1121
E57/1122
E57/1123
E57/1209
E57/1210
L57/0058
L57/0059
M57/10
M57/51
M57/75
M57/97
M57/109
M57/135
M57/160A
M57/164
M/57165
M57/166
M57167
E57/985
E57/986
E57/1011
P57/1365
P57/1366
E57/0982
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
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
100%
100%
100%
0%
0%
0%
0%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
45%
45%
45%
45%
45%
50%
50%
50%
50%
50%
45%
45%
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
51% (Earning up to 75%)
Schedule of Mining Tenements
106
Rox Resources Annual Report 2022Other Information Other Information
as at 9 September 2022
Top 20 shareholders - Ordinary Shares
No. Shareholder
1
2
3
4
5
6
7
8
9
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd
Mr Alexander Ross Passmore
Redscope Enterprises Pty Ltd
Mr Daryl Kenneth Miller
HSBC Custody Nominees (Australia) Limited
Mr Gabor Matoricz
National Nominees Limited
BNP Paribas Noms Pty Ltd
10 Mr Richard Arthur Lockwood
11 Mr Mark Linfield Longmore Scott
12 Mr Ram Shanker Kangatharan
13 Mr Stephen Bruce Dennis + Mrs Alison Jill Dennis
14 Mrs Marisa Mackow
15
Crescent Nominees Limited
16 Mr John William Fawcett
17 Mr Gregory James Blight + Mr Stephen Maxwell Blight
18 Mr Daniel James Lynch
19
20
Nalmor Pty Ltd
Andalee Superannuation Pty Ltd
Shares held
% of issued
capital
24,581,986
14.55
4,277,905
3,593,483
2,777,778
2,610,685
2,049,872
2,000,000
1,950,000
1,197,041
1,183,333
1,093,639
1,000,000
908,483
846,000
816,667
800,000
760,000
746,090
733,333
729,492
2.53
2.13
1.64
1.55
1.21
1.18
1.15
0.71
0.70
0.65
0.59
0.54
0.50
0.48
0.47
0.45
0.44
0.43
0.43
Total
54,655,787
32.35
107
Rox Resources Annual Report 2022Other Information Other Information Continued
Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2011 are:
Shareholder
Hawke’s Point
Distribution of Shareholders Number
Shares held
22,269,881
% of issued capital
13.18%
Size of
shareholding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 Over
Total
Number of
holders
891
1,892
1,048
1,719
225
5,775
Number of
shares
471,619
5,037,076
7,871,024
53,704,586
101,856,642
168,940,947
% of issued
capital
0.28
2.98
4.66
31.79
60.29
100.00
There is a total of 168,940,947 fully paid ordinary shares on issue, all of which are listed on the ASX. At shareholder 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.
Unmarketable Parcels
There were 1,508 shareholders holding 1,341,515 shares, which is less than a marketable parcel of shares in the Company at $0.265
per share.
Restricted Securities
There are no restricted securities.
108
Rox Resources Annual Report 2022Other Information 109
Rox Resources Annual Report 2022Other Information Rox Resources Limited
ABN 53 107 202 602
Level 2, 87 Colin Street
West Perth WA 6005
T. (08) 9226 0044
F. (08) 9322 6254
E. admin@roxresources.com.au