Annual Report
2023
1
Rox Resources Annual Report 2023Review of Operations Corporate
Directory
Directors
Mr Stephen Dennis
Non-Executive Chairman
Mr Robert Ryan
Managing Director
Dr John Mair
Non-Executive Director
Mr Matthew Hogan
Non-Executive 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 29, Central Park Tower
152-158 St Georges Terrace
Perth WA 6000
Telephone: (08) 9404 9100
Facsimile: (08) 9300 1338
For shareholder information contact:
Share Registry
Computershare Limited
Level 17
221 St George’s Terrace
Perth WA 6000
Telephone: 1300 850 505 (Australia)
+61 3 9415 4000 (International)
Facsimile: (08) 9323 2033
Stock Exchange
ASX Limited
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
2
Rox Resources Annual Report 2023Review of Operations Contents
CHAIRMAN’S REVIEW
REVIEW OF OPERATIONS
ENVIRONMENT, SOCIAL AND 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
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70
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107
113
115
3
Rox Resources
Annual Report 2023
Chairman’s
Review
We were pleased to
receive overwhelming
shareholder support
for a transaction which
has seen Rox and Venus
Metals Corporation
Limited (“Venus”)
consolidate their
respective ownership
interests in Youanmi
under Rox’s 100%
ownership. This is an
important and logical
step towards unlocking
the full potential of the
Youanmi Gold Project.
4
Rox Resources Annual Report 2023Review of Operations Dear Shareholder,
On behalf of the Board of Directors, I am pleased to present the Company’s 2023 Annual Report and to reflect on a year
which saw a number of positive developments at Rox that will see us move closer to an eventual restart of operations at our
flagship asset, the Youanmi Gold Project in Western Australia.
In October 2022, we released a Scoping Study to the ASX following substantial upgrades to the Youanmi underground gold
resource. The study demonstrated compelling financial outcomes for Youanmi, reflecting the high grade and low capital
intensity of the project, based on average annual gold production of approximately 71koz per annum with an average head
grade of 5.0g/t Au for total gold production of 569koz over an 8-year life of mine.
In January this year, we commenced an extensive resource drill program focused on converting Inferred Resources to
Indicated classification at the high-priority areas, Link and Kathleen, which are integral to the Youanmi Project and which we
expect will underpin early production for the purposes of upcoming feasibility studies.
At the same time, we commenced an exploration drilling program focused on the ‘Midway’ discovery made in 2021, and the
exciting ‘Youanmi South’ prospect – since re-named ‘Paddy’s Lode’ – following the discovery of a significant new mineralised
lode south of the Youanmi Main Lode. These drill programs are continuing throughout the current year, and we look forward
to progressively releasing further results prior to completing final technical and economic feasibility studies.
In June this year, we were pleased to receive overwhelming shareholder support for a transaction which has seen Rox and
Venus Metals Corporation Limited (“Venus”) consolidate their respective ownership interests in Youanmi under Rox’s 100%
ownership. This is an important and logical step towards unlocking the full potential of the Youanmi Gold Project. The
transaction was completed on July 7, 2023 and, with Venus now owning approximately 17.9% of Rox, we welcomed Venus
Managing Director Mr Matthew Hogan as a Non-Executive Director who will provide his invaluable experience as we
advance Youanmi.
Following completion of the Scoping Study referred to earlier, Mr Alex Passmore stepped down as the Company’s Managing
Director in October last year, this being a logical time for a leadership transition. Non-Executive Director Mr Robert Ryan, who
has extensive experience in feasibility studies, project development and mining operations, transitioned to the role of Managing
Director and Chief Executive Officer, and the Board has confidence in Rob’s ability to take the Youanmi Gold Project forward to
development. On behalf of all shareholders, I would like to take this opportunity to thank Alex for his contribution.
Our immediate priorities at Rox are to further evaluate the recent discoveries at Midway and Paddy’s Lode, and to undertake
drilling on high-priority regional targets to the south of Youanmi. It is also our intention to complete a Pre-Feasibility Study
for Youanmi by June next year, which we expect will lay a strong foundation for commencing mining operations.
During August, we announced we had received binding commitments for a $7.0m (before costs) placement to institutional
and sophisticated investors at $0.20 per share with funds being utilised to progress these activities.
I welcome new shareholders who participated in this recent placement, and I also thank all of our shareholders for your
continued support.
Stephen Dennis
Rox Resources
Annual Report 2023
Chairman’s Review
5
5
Rox Resources Annual Report 2023Review of Operations
Review of
Operations
Rox Resources Limited (“Rox” or “the
Company”) and its consolidated entities
(together “the Group”) is a West
Australian focused gold exploration and
development company. It is the 70 per
cent owner and operator (100% as at 7
July 2023) of the historic Youanmi Gold
Project near Mt Magnet, approximately
480 kilometres northeast of Perth, and
owns the Mt Fisher - Mt Eureka Project
approximately 140 kilometres southeast
of Wiluna with 100% ownership of
certain tenure with the remaining tenure
held via a joint venture (Rox 51%, earning
into 75%). All projects contain JORC
resources and are located in Western
Australia (Figure 1).
Highlights
•
Transformational transaction to
acquire 100% of the Youanmi Gold
Project and remaining gold rights in
regional tenure from Venus
(completed 7 July 2023)
• Divested Cannon Resources Limited
for $3.8 million
•
Leadership transition to Mr Robert
Ryan to advance the Youanmi Gold
Project
•
Successful drilling campaign, with
positive resource infill results and
new near-mine discoveries
•
Capital raising via a placement and
share purchase plan of A$9.0 million
(before costs)
6
6
Review of Operations
Rox Resources
6
Annual Report 2023
Rox Resources Annual Report 2023Review of Operations Jundee (5Moz)
Meekatharra
Cue Gold Operation (4Moz)
Meekatharra Gold
Operation (3Moz)
Mt Fisher Project (Au)
Mt Magnet Minw (3Moz)
Leinster
Agnew (2Moz)
Mt Magnet
Kirkalocka (1Moz)
Golden Grove (1Moz)
Youanmi Project (Au)
Penny(0.3Moz)
Lenora
Kalgoorlie
Super Pit (27Moz)
Southern Cross
Perth
Rox Resources
Annual Report 2023
Review of Operations
7
7
Rox Resources Annual Report 2023Review of Operations Historical
High-Grade
Production
Over 660koz of historical production at high-grade, mine closed due to low gold
price of ~A$450/oz
1908 - 1921
Historical shaft
mining production
166koz @ 15.2g/t
1937 - 1942
Historical shaft
mining production
95koz @ 8.1g/t and
15koz @ 3.1g/t
1987 - 1993
Open pit mining
production
263koz @ 3.1g/t
8
Historical High-Grade Production
Rox Resources
8
Annual Report 2023
Rox Resources Annual Report 2023Review of Operations 1994 - 1997
Mechanized UG Mining
128koz @ 9.7g/t
1997 - 2019
Operation closed in 1997 due to the
prevailing gold price of ~A$450/oz
2019 - Current
•
In 2019, Rox entered a joint
venture with Venus Metals
Corporation Limited (VMC) to
acquire Youanmi Gold Project.
•
In March 2023, Rox and VMC
consolidated their respective
ownership interests in Youanmi
under Rox’s 100% ownership.
Rox Resources
Annual Report 2023
Historical High-Grade Production
9
9
Rox Resources Annual Report 2023Review of Operations 10
Rox Resources Annual Report 2023Review of Operations The
Youanmi
Gold Project
The Youanmi Gold Project is located 480km
to the northeast of Perth, Western Australia.
11
Rox Resources Annual Report 2023Review of Operations Projects
Youanmi Gold Project
The Youanmi Gold Project
480km Northeast of Perth,
The Youanmi Gold Project is located 480km to the northeast of Perth, Western
Australia, accessed by the sealed Great Northern Highway for a distance of 418km
from Perth to Paynes Find and then for 150km by the unsealed Paynes Find to
Western Australia
Sandstone Road.
The Youanmi Gold Project consists of the following (see Figure 2):
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%)
3. Youanmi JV (gold rights) - covers 270km2 (Rox 45%)
4. Currans Find JV (all minerals) - covers 4km2 (Rox 45%)
Review of Operations
The Youanmi Gold Project has produced an estimated 667,000 oz of gold at 5.47 g/t Au
since discovery in 1901 during three main periods: 1908 to 1921, 1937 to 1942, and
1987 to 1997. The last parcel of ore mined underground at Youanmi (November 1997)
was at 14.6 g/t Au.
Youanmi Gold Project 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 Youanmi Gold Project was significantly advanced through
exploration and study activities which are further outlined below.
The Group released a Scoping Study in relation to the Youanmi Gold Project which is
targeting average annual gold production of approximately 71koz per annum with an
average gold head grade of 5.0g/t Au for a total gold production target of approximately
569koz over an 8-year life of mine. The first three years of production are underpinned
by a 79:21 ratio of Indicated to Inferred Resource feed material. As a historic mining
centre, the economics for the Youanmi Gold Project benefit significantly from existing
infrastructure and mining approvals.
A combination of gold-in-concentrate and carbon-in-leach (CIL) bullion production has
been pursued as the optimum commercialisation strategy for initial cashflow generation
at the Youanmi Gold Project. The Youanmi Gold Project will require funding of
approximately $134m, consisting of the following:
•
•
Total pre-production capital expenditure of approximately $99m;
Total pre-production operating cost of approximately $31m (including pre-
production mining and site general and administrative costs in the first 7 months
until first gold production); and
• Assumed financing charges until the first gold production of approximately $4m.
12
Rox Resources Annual Report 2023Review 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%
13
Rox Resources Annual Report 2023Review of OperationsPenny WestYouanmi The Scoping Study shows compelling financial outcomes reflecting the high grade and
low capital intensity of the Youanmi Gold Project, including:
Project life of 8 years;
•
• Cumulative EBITDA of approximately $577m over the life of the Project;
•
Pre-tax undiscounted free cash flow of approximately $418m over the life of the
Project;
•
•
•
Pre-tax and unleveraged Net Present Value (NPV5%) of approximately $303m;
Pre-tax and unleveraged Internal Rate of Return (IRR) of approximately 45%; and
Pre-tax and unleveraged payback of approximately 3.0 years (from commencing
production).
Importantly, the operating plan envisaged in the Scoping Study retains considerable
upside for future growth, with the production target accounting for only 3% of the near
surface mineral resource and approximately 27% of the underground mineral resource.
Following a successful capital raising in late calendar year 2022 the Group commenced
a 23,000m (subsequently increased to 28,500m) multi-rig resource definition and
exploration drill campaign at the Youanmi Gold Project.
The resource definition drilling focused on the conversion of resources from inferred to
indicated classification to upgrade the Youanmi Gold Project Resource and the
exploration drilling tested near-mine exploration targets to delineate additional ounces
which can be incorporated into the Youanmi Gold Project.
The program, which completed in June 2023, was highly successful with the following
key highlights:
Midway
Midway is a newly defined exploration
corridor that is located within 300m of
the hanging-wall of the Youanmi Main
lode and is open in all directions.
The following high-grade results were
announced to ASX 20 February 2023:
•
•
•
2.86m @ 22.03 g/t Au from 356.39m
in RXDD047 and;
3.73m @ 10.25 g/t Au from 405.80m
in RXDD047
6.76m @ 15.40 g/t Au from 169.13m
in RXDD048
Drilling has shown thick continuous
high-grade intersections with the
potential to add additional resources to
the Youanmi Gold Project.
Figure 3 - Midway results with magnetic
geophysical background (ASX: 16 May
2023)
14
Rox Resources Annual Report 2023Review of Operations Paddy’s Lode (formerly Youanmi South)
A new mineralised lode just 250m from
the Youanmi pit is a structurally complex
zone south of the granite margin, with
recent interpretations from magnetic data
highlighting a range of structural trends,
including the east-northeast trending
Youanmi South Structure. The area has
limited shallow historical drilling, which is
primarily drilled parallel to the
060-degree trending targeted structure.
The following high-grade results were
announced to ASX 2 March 2023:
• RXRC458: 28m @ 34.81g/t Au from
204m, including:
•
18m @ 51.96g/t from 207m,
including;
•
•
10m@ 79.55g/t from 211m,
including;
3m @ 138.07g/t from 218m
• RXDD080: 5.70m @ 8.26g/t Au from
233.30m
• RXDD095: 5.08m @ 9.56g/t Au from
225.80m
• RXDD098: 3.32m @ 8.29g/t Au from
200.05m
Infill drilling results (Link)
Drilling at Link targeted an upgrade in
resource category over a 460m strike
length between 230m and 475m below
surface. The consistency of the high-
grade results being received bodes well
for future resource updates as well as for
potential depth extensions with the
following high-grade standout intercepts
(ASX: 5 April 2023 and 26 April 2023):
• RXDD052: 4.00m @ 14.85g/t Au
• RXDD058: 6.53m @ 10.31g/t Au;
and 7.61m @ 8.20g/t Au
• RXDD059: 8.25m @ 8.54g/t Au
• RXDD062: 22.00m @ 6.31g/t Au,
including:
•
11.20m @ 10.37g/t Au
• RXDD076: 4.26m @ 9.67g/t Au
Figure 4 - Plan view of the Youanmi Gold Project showing the location of the newly
discovered Paddy Lode.
Figure 5 - Long Section of the resource definition drilling for the Link Area. Existing
underground workings are located in close proximity to the strong gold mineralisation
at Link (ASX: 13 June 2023).
15
Rox Resources Annual Report 2023Review of Operations Mt Fisher – Mt Eureka Project
Mt Fisher Gold – Rox 100%
The Mt Fisher - Mt Eureka Project (“the Project”) is in the Northern Goldfields,
Mt Eureka Gold and Nickel –
Rox 51%, earning to 75%,
approximately 500km northeast of Kalgoorlie (about 120km east of Wiluna) within the
Mt Fisher greenstone belt which is located 40km east of the prolific Yandal greenstone
belt, host of significant gold deposits including Jundee, Bronzewing and Mt McClure.
Cullen Resources Limited 49%
The Project is also situated immediately along strike of Cannon Resources Limited’s
(“Cannon”) nickel deposits (134kt of contained nickel at 1.8% Ni) with the host
ultramafic unit extending into the Project’s tenure.
Certain tenure of the Project is held 100% by Rox with the remaining tenure held by Rox
and Cullen Resources Limited (“Cullen”) (ASX: CUL) in a joint venture, with Rox earning
into 75% (currently 51%).
Rox’s tenure covers a large area over the Mt Fisher greenstone belt (1,150km² in total,
comprising 500km² within Mt Fisher, and 650km² within the joint venture).
Mt Fisher – Mt Eureka Gold
The Mt Fisher - Mt Eureka Gold resource comprises five separate gold deposits: Damsel,
Mt Fisher Mine and Wagtail for 124koz on Rox 100% tenements, and Taipan and
Southern for 63koz on Mt Eureka joint venture tenements. The total Indicated and
Inferred Mineral Resource for the Mt Fisher - Mt Eureka Gold Project now stands at
3.5Mt @ 1.65g/t Au for 187koz of contained gold (ASX: 2 November 2022).
During the financial year ended 2023 reverse circulation drilling was completed at the
project with the following significant results received (ASX: 21 October 2022):
• MFRC098: 11m @ 2.74g/t Au from 40m, including 4m @ 6g/t Au from 45m
• MFRC089: 15m @ 1.89g/t Au from 140m, including 6m @ 2.84g/t Au from 142m
• MFRC099: 8m @ 2.55g/t Au from 53m, including 5m @ 3.17g/t Au from 53m
• MFRC100: 8m @ 2.28g/t Au from 17m, including 2m @ 7.86g/t Au from 20m
• MFRC095: 11m @ 1.58g/t Au from 41m, including 1m @ 7.52g/t Au from 45m
• MFRC091: 10m @ 1.68g/t Au from 106m, including 3m @ 3.25g/t Au from 106m
and 1m @ 3.71g/t Au from 115m
• MFRC088: 5m @ 3.18g/t Au from 37m and 2m @ 4.64g/t Au from 70m
• MFRC101: 4m @ 2.81g/t Au from 42m, including 1m @ 8.03g/t Au from 44m and
8m @ 1.82g/t Au from 49m including 2m @ 4.68g/t Au from 54m
• MFRC097: 1m @ 5.36g/t Au from 18m and 1m @ 10.8g/t Au from 24m
• MFRC102: 13m @ 0.79g/t Au from 79m and 5m @ 1.71g/t Au from 108m
• MFRC090: 2m @ 4.33g/t Au from 71m
Following the completion of the drill programme a new mineral resource estimate was
completed, increasing the gold resource by 98koz Au to 187koz Au.
16
Rox Resources Annual Report 2023Review of Operations Mt Eureka Nickel
The Mt Eureka Nickel Project is owned 51% by Rox, currently earning into 75%, with
Cullen owning the remaining interest.
The Fisher East Greenstone Belt has a strike length of ~50km of which ~30km of strike is
in the Mt Eureka Nickel Project. The major NNW trending structure (Hootanui Shear) is
potentially a major mantle-tapping structure. Such features provide optimum conduits
for magma flux from the mantle and are linked to the occurrence of nickel-sulphide
deposits.
Regional scale high resolution aeromagnetic data and associated nickel sulphide
pathfinder geochemistry in regolith (platinum and palladium) has defined the extension
of the fertile Fisher East ultramafic basal contact position from Cannon’s tenure onto the
Mt Eureka Nickel Project tenure.
Numerous ultramafic flows with associated Ni-Cu-PGE anomalism occur throughout the
belt which demonstrates further potential for the project area to host economically
viable nickel deposits.
Figure 6 - Geology plan of the Mt
Eureka Nickel Project and Cannon
Resources’ Fisher East Project and
interpreted ultramafic basal contact
Rox is currently progressing opportunities to monetise the Mt Fisher-Mt Eureka Project.
17
Rox Resources Annual Report 2023Review of Operations Corporate
Youanmi Gold Project Transaction
During the financial year the
following key activities were
undertaken by the Group from a
On 31 March 2023 the Company announced it had entered into an agreement to issue
110 million shares in order to acquire Venus Metals Corporation Limited’s (“Venus”)
interest in the OYG Joint Venture (Rox 70% : Venus 30%) (“OYG JV”) , giving the Group
100% interest, and all of Venus’s gold interests in its other joint ventures covering other
corporate perspective:
regional areas. The key transaction terms were as follows:
•
Joint venture consolidation
The Group will become the tenement holder for the majority of the Youanmi
exploration tenements (where Venus retained the rights to non-gold minerals),
whilst Venus remained the tenement holder of selected tenements deemed core to
their base metals and other mineral interests (the Group gained Venus’ gold rights).
• Consideration shares
The transaction will be funded through the issue of 110 million shares to Venus at
a deemed issue price of $0.25 each, representing a total value of $27,500,000
(after adjustment for the JV loan). Subsequent to 30 June 2023 Venus distributed
55 million shares to eligible Venus shareholders.
•
Escrow
Venus will enter into a voluntary escrow deed for a period of 12 months for the 55
million shares it retains, subject to certain release events occurring.
•
Joint Venture loan
Under the terms of the OYG JV, Venus is entitled to be loan carried by the Company
through to a decision to mine. As at the end of March 2023 a loan balance of
approximately $6.7 million had accrued. The loan (and any future loan carry rights)
will extinguished as part of the transaction.
• Board
Provided that Venus’ voting power in the Company remains above 10%, Venus has
a right to nominate a Director to the Board of the Company. On completion of the
Transaction, Mr Matthew Hogan, Managing Director of Venus, was appointed to
Rox’s Board as a Non-Executive Director.
The rationale for the transaction was as follows:
Simplified ownership structure;
•
• Greater market relevance;
•
• Re-rating potential.
Improved access to capital; and
The transaction completed on 7 July 2023, see “Matters Subsequent to the End of
Financial Year”.
18
Rox Resources Annual Report 2023Review of Operations Leadership Transition
Following the completion of the Youanmi Gold Project Scoping Study, Mr Alex Passmore
decided to step down as the Company’s Chief Executive Officer and Managing Director.
Mr Passmore and the Board believed it was a logical time for a leadership transition as
the Company progressed studies to evaluate the restart of the Youanmi Gold Mine, and
continue its endeavours to unlock the value of the highly-prospective Mt Fisher – Mt
Eureka Project.
Mr Robert Ryan was subsequently appointed as the Company’s Chief Executive Officer
and Managing Director. Mr Ryan’s extensive experience in sulphide gold and
concentrates, offtake agreements and feasibility studies, which the Board considers to
be the right skill set to lead the Company in its priority agenda of restarting the Youanmi
Gold Mine.
Placement and Share Purchase Plan
During November 2022, the Company launched a $4.0m Placement and $1.0m Share
Purchase Plan (“SPP”).
The Placement raised $4.52m before costs, comprised of $3.34m from eligible existing
shareholders (Tranche 1) and $1.18m from Hawke’s Point (Tranche 2). The Placement
to Hawke’s Point enabled the retainment of their 13.12% interest in the Company was
approved at a shareholder meeting on 10 February 2023.
The SPP which was initially targeted to raise $1.0m (before costs) was strongly
supported and completed at $4.44m (before costs).
Cannon Divestment
The Company sold its full interest in Cannon Resources Limited (“Cannon”) as part of
the Kinterra Battery Metals Mining Fund, LP takeover offer for Cannon and received $3.8
million with the funds being utilised to progress the Group’s objectives.
19
Rox Resources Annual Report 2023Review of Operations Mineral Resources
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
Notes:
1. Grace 1.5 g/t cutoff.
2. Figures in all tables may not add up exactly due to rounding.
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 - Mt Eureka Project, WA (Reported to the ASX on 2 November 2022)
Area
Classification
Cut-off (g/t Au)
Tonnes (dmt)
Grade (g/t Au)
Au Metal (oz)
Mt Fisher
Indicated
Mt Eureka
Indicated
Sub-total
Indicated
Mt Fisher
Mt Eureka
Sub-total
Inferred
Inferred
Inferred
Mt Fisher
Indicated + Inferred
Mt Eureka
Indicated + Inferred
Total
Indicated + Inferred
Notes:
1. Includes measured resource of 6,400 oz @ 3.79g/t Au.
2. Figures in all tables may not add up exactly due to rounding.
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
944,100
488,400
1,432,500
988,300
1,098,400
2,086,700
1,932,400
1,586,800
3,519,200
2.22
1.32
1.91
1.78
1.19
1.47
2.00
1.23
1.65
67,3001
20,800
88,100
56,700
42,200
98,900
124,000
63,000
187,000
20
Rox Resources Annual Report 2023Review of Operations Mineral Resources
Estimation Governance
Statement
Governance of the Group’s mineral resources is a responsibility of the Key Management
Personnel of the Group.
The Group has ensured that its mineral resources estimates are subject to appropriate
levels of governance and internal controls.
The underground mineral resources reported for the Youanmi Gold Project have been
estimated by Mr David Allmark MAusIMM (CP), who was a full-time employee of Rox
Resources Limited and who visited the Youanmi site from the 22nd to 23rd of
September 2021, and has sufficient experience that is 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 Results, Minerals Resources and Ore
Reserves’. The Company engaged CSA Global to conduct independent checks of the
modelling and estimation process.
The near surface mineral resources reported for the Youanmi Gold Project 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 exposures, diamond drill core and the
detailed paper data available in the map room and has sufficient experience that is
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 Results, Minerals
Resources and Ore Reserves’.
The Mt Fisher - Mt Eureka Gold Resource is based on information compiled 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 has sufficient experience that is 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 Results, Minerals Resources and Ore Reserves’.
The Group has reported its Youanmi Gold Project and Mt Fisher-Mt Eureka Project
mineral resources on an annual basis in accordance with the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Resources (the JORC code)
2012 Edition.
Additionally, the Group carries out regular internal peer reviews of processes and
contractors engaged.
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.
21
Rox Resources Annual Report 2023Review of Operations 22
Rox Resources Annual Report 2023Review of Operations Competent Person
Statements
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.
The Statement of Estimates of Mineral Resources that relates to gold Mineral Resources
for the Mt Fisher – Mt Eureka project was reported by Rox in accordance with ASX
Listing Rule 5.8 in the announcement released to the ASX on 2 November 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.
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.
23
Rox Resources Annual Report 2023Review of Operations Environment, Social
and Governance
At Rox, we are committed to doing what is right, not just what is easy. This is our
second Environmental, Social, and Governance (ESG) update which demonstrates our
continued commitment to sustainable development and transparent communication
with our stakeholders.
In the past 12 months, we have continued our focus on the development of the Youanmi
Resource, ongoing feasibility work and regional exploration. These activities are
essentially a continuation of our FY22 operations and consequently resulted in little
change to our ESG focus areas from the previous year.
Since our inaugural ESG insert which was integrated into our FY22 Annual Report, we
are pleased to have achieved the following with respect to our ESG program:
•
•
•
•
•
Materiality Assessment – Re-defined our material topics
ESG Baseline – Completed baseline measurements of material ESG topics
Health & Safety – Achieved 0 TRIFR & 0 LTIFR
Shared Value – $7.6m total economic value distributed
Governance Review – Conducted a review of and update of corporate policies
Our Approach and Framework
ESG disclosures for Rox Resources are guided by the following Standards: United
Nations Sustainable Development Goals (SDGs), the Global Reporting Initiative (GRI)
and the Task Force on Climate-related Financial Disclosure (TCFD).
The Sustainable Development Goals
The SDGs, established in 2015 act as a universal call to action to end poverty, protect
the planet, and support a more sustainable world by 2030.
As an explorer and developer, our ability to contribute to the SDGs is shaped by our
operational and corporate activities and our values.
We are pleased to align to the five SDGs as outlined in the table below (Table 1).
24
Rox Resources Annual Report 2023Environment, Social and Governance Table 1: Rox’s
contribution to UN
SDGs
Our Alignment
Good Health and Well-Being
SDG3 - Good Health and
Well-Being
• Workplaces that are free from injury, illness, and harm.
• A diverse and inclusive culture that is celebrated and supports wellbeing,
performance, and fulfillment
Decent Work and Economic Growth
Investing in our projects to support the generation of economic value
•
• Continued support of local and regional businesses
•
Looking after our people, providing a good place to work with opportunities for
SDG8 - Decent Work and
Economic Growth
growth and development
Climate Action
•
Emissions and energy considerations are integrated into preliminary studies to
support the development of a carbon conscious mine.
Life on Land
• Respect for the natural world. Understanding the environments we work in,
minimising our impact on them, and always operating responsibly.
SDG13 - Climate Action
Peace, Justice, and Strong Institutions
• Operating professionally at all times with a deep-seated commitment to ethics and
integrity.
SDG15 - Life on Land
SDG16 - Peace, Justice, and
Strong Institutions
25
Rox Resources Annual Report 2023Environment, Social and Governance Global Reporting Initiative
The GRI Standards are the world’s most widely used standards for sustainability
reporting and assist organisations understand, measure and communicate their impacts
on the economy, environment, and society.
Importantly, the GRI approach to materiality incorporates both financial materiality and
impact materiality. Referred to as double materiality, it considers the significant impacts
an organisation has on the economy, environment or society, and the impact that
society and the environment have on the organization. At Rox Resources, our materiality
assessment is guided by a the GRI endorsed, double materiality perspective.
Taskforce for Climate-related
Financial Disclosures
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.
Consisting of four disclosure areas (Governance, Strategy, Risk, Metrics), at this stage,
our alignment is primarily with the early consideration of climate risks from the
perspective of a mine developer, as well as our ability to measure and track our GHG
emissions. While the TCFD provide guidance on our approach to climate risk, we intend
to formally align to the recommendations and any associated regulatory requirements
in coming years. Further information on our approach to emissions and climate is
outlined below.
Our Material Topics for FY23
This update and our approach to ESG is grounded in close and consistent engagement
with our stakeholders. We understand that successful, sustainable development relies on
constructive relationships and that as we evolve, so too will our ESG focus areas.
Environmental Compliance
Emissions & Climate
Health, Safety & Wellbeing
Business Ethics & Transparency
Economic Performance & Contribution
Formal materiality assessments with our
stakeholders will be conducted every two
years, to ensure validity and relevance of
our prioritised ESG focus areas.
26
Rox Resources Annual Report 2023Environment, Social and Governance
Environment
Emissions & Climate
We acknowledge the threats and impacts of a changing climate and are committed to
playing our role, addressing the global threat, and managing its impacts on the
business.
We are committed to understanding our emissions profile and to support this, we
conducted a greenhouse gas (GHG) emissions assessment for the CY22. Rox tracked all
relevant Scope 11 and 22 emissions activity data for the Reporting Period, which
includes diesel usage on-site and electricity usage for the corporate office in Perth. This
GHG assessment was conducted with reference to the GHG Protocol Corporate
Standard and the Australian National Greenhouse and Energy Reporting
(Measurement) Determination 2008, using an operational control approach. The
emissions total and breakdown by scope is outlined in Table 2.
Table 2: Rox’s total Scope 1 & 2 GHG emissions for CY22
GHG Scope Category
Scope 1
Scope 2
Total
Emissions
(tCO2-e)
119.58
12.24
131.82
As we continue to explore and develop our projects, our emissions profile will evolve. We
plan to continue to measure and assess our Scope 1 and 2 emissions, and as we look
towards development and a consequent shift in our operations and carbon footprint, we
will re-assess our carbon strategy.
Ongoing feasibility work will also continue to incorporate emissions and energy
considerations 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,
minimising our environmental impact and always operate responsibly.
We respect the biodiversity and the lands of the regions we operate on. We are
committed to sustainable discovery, development, and production of mineral resources.
We have a continuous improvement approach to the identification, assessment,
mitigation, and monitoring of the environmental impact of our operations.
At a minimum, we operate in line with regulatory requirements. To ensure full
compliance, we maintain constructive relationships with relevant government
departments and where required, expert consultants are engaged to support
environmental performance.
In CY22, Rox recorded zero environmental incidents.
1Greenhouse gas emissions emitted as a direct result of an activity, or series of activities at a facility level.
2 Greenhouse gas emissions emitted as an indirect result consumption of an energy commodity.
27
Rox Resources Annual Report 2023Environment, Social and Governance Social
A Culture of Health, Safety & Wellbeing
Rox people are do-ers. 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 developing careers as we grow.
We are committed to providing our employees with a mentally and physically safe
workplace. Our approach to health, safety, and wellbeing is governed by the Board. Rox
will be publicly releasing our Health, Safety and Wellbeing Policy to better guide us in
building a safe workplace for our valued employees.
In FY23 we provided first aid training to all geology and exploration team members. To
continue to build on our employees’ capacities to support each other, we aim to provide
mental health first aid training to all staff in FY24.
Our employees are the foundation of the business. We employ a total of 14 permanent
and one temporary employee, with an 80/20 gender split. Cultural diversity is deeply
valued, with our staff from a varied range of cultural backgrounds including United
Kingdom, Vietnam, Indonesia, and Australia.
The Company values the role of diversity in our workplaces and performance and
expects this to remain a feature of our team.
Continued development of our employees is supported by annual performance and
career development reviews.
Rox recorded zero Lost-Time Injuries in CY22.
All Rox employees received performance and career
development reviews in CY22.
28
Rox Resources Annual Report 2023Environment, Social and Governance 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.
We remain committed to operating with the highest levels of integrity and transparency,
aligning corporate governance with the needs of our stakeholders. As an ASX-listed
company, Rox Resources is compliant with the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations 4th Edition.
Our commitment is guided by corporate policy and standard operating procedures,
which are provided to all new employees and contractors.
In FY23, we ensured that anti-corruption policies and procedures were communicated to
all Board members, employees, contractors, and suppliers.
Rox is proud to share that there were zero policy
breaches and non-compliance notices issued in CY22.
Economic Performance & Contribution
As we grow, we proudly create economic opportunities and actively share our prosperity
with our stakeholders and throughout our value chain.
As an explorer and developer, our most significant economic contributions at this stage
are wages and salaries paid to our employees, contractors, and suppliers. We are proud
to operate in regional Western Australia and actively look for opportunities to work with
suppliers and contractors local to our regional operations.
Wages paid in CY22: Over $3 million
Payments to local3 suppliers in CY22: Over $3
million
“We acknowledge the Traditional Custodians of country throughout Australia and their
connections to land, sea and community. We pay our respects to their Elders past and
present and extend that respect to all Aboriginal and Torres Strait islander peoples today.”
3Rox’s definition of local refers to suppliers based in Western Australia.
29
Rox Resources Annual Report 2023Environment, Social and Governance 30
30
Rox Resources Annual Report 2023Review of Operations During the financial year,
the Youanmi Gold Project
was significantly advanced
through exploration and
study activities.
31
31
Rox Resources Annual Report 2023Review 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 2023 (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 Marvel Gold Limited (appointed 4
March 2016) and a Non-Executive Director of Evolution Energy Minerals Ltd (appointed
6 September 2023). In the past three years, he was a director of Lead FX Inc, Heron
Resources Limited (16 July 2021), Burgundy Diamond Mines Ltd (resigned 9 December
2021) and Kalium Lakes Limited (resigned 25 November 2022).
Mr Robert Ryan
(Managing Director and Chief Executive Officer,
appointed 24 October 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 Matthew Hogan
(Non-Executive Director, appointed 7 July 2023) – MAICD
Mr Hogan is currently the Managing Director of Venus Metals Corporation Limited. He
was until February 2010, the Chief Executive Officer of United Minerals Corporation
NL (UMC), which successfully discovered the Railway direct shipping iron ore deposit
in the Central Pilbara. In February 2010, UMC was acquired by BHP Billiton for $204m
through a scheme of arrangement.
Mr Hogan has over 25 years’ experience in the stockbroking industry and was closely
involved in bringing a number of company listings to the ASX, the underwriting of
shareholder entitlement issues and corporate placements.
Mr Hogan has previously worked in the business services division of international
accounting firm Ernst & Young.
Mr Hogan is currently the Managing Director of Venus Metals Corporation Limited
(appointed 22 December 2006). Mr Hogan has not been a director of any other listed
company in the last three years.
32
Rox Resources Annual Report 2023Directors’ 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 was 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 Alex Passmore
(Managing Director and Chief Executive Officer, resigned 24 October
2022) – B.Sc (Hons), GradDipAppFin, GAICD
Mr Passmore 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 has spent 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 Pearl Gull Iron Limited (appointed 15 August
2017). In the last three years he was a director of Cannon Resources Limited
(resigned 24 January 2023).
Mr Christopher Hunt
(Company Secretary, appointed 6 May 2021) – B.Bus, FCPA, GAICD
Mr Hunt is an experienced finance executive with nearly 30 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.
33
Rox Resources Annual Report 2023Directors’ Report Interest in the Shares and Performance Rights of the Company
As at the date of this report, the interest of the Directors in the shares and performance rights of Rox Resources Limited were as
follows:
Shareholder
Stephen Dennis
John Mair
Matthew Hogan
Robert Ryan
(Loss)/Profit Per Share
Basic and diluted (loss)/profit per share
Dividends
Ordinary Shares
Performance Rights
1,059,998
107,878
1,526,261
600,000
2023
(4.39) cents
1,500,000
1,500,000
1,500,000
4,500,000
2022
(8.64) 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 2023 of $8.8 million (2022: $14.0 million). The loss includes the
follow items charged directly to the consolidated statement of comprehensive income:
•
•
Exploration and evaluation $8.7 million (2022: $7.8 million);
Corporate expenses and salaries and wages $2.9 million (2022: $2.5 million);
Partly offset by:
• Gain on the disposal of Cannon Resources Limited $2.3 million (2022: nil); and
• Unwind of the finance expense on the OYG loan $1.6 million (2002: loss of $0.7 million)
Net cash outflows from operating activities were $13.1 million (2022: $14.5 million). At 30 June 2023, the Group had cash on hand
of $3.5 million (2022: $4.4 million). The Directors believe that the Group maintains a prudent capital structure and is in a robust
position to continue progressing its projects.
34
Rox Resources Annual Report 2023Directors’ Report 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 2023, the Group had 9 full-time employees, and 2 part-time employees (2022: 14 full-time, 2 part-time employees and 1
casual employee).
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
Matthew Hogan1
Robert Ryan
Alex Passmore2
12
12
-
12
4
12
12
-
12
4
-
-
-
-
-
Notes:
1.Mr Hogan was appointed as Non-Executive Director 7 July 2023.
2.Mr Passmore resigned 24 October 2022.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
2
-
2
1
2
2
-
2
1
Committee Membership
As at the date of this report, the Group have separately constituted Audit, Nomination and Remuneration Committees.
35
Rox Resources Annual Report 2023Directors’ Report
Significant Changes in State of Affairs
During the financial year, the following significant changes in state of affairs occurred:
•
The Company completed a placement and share purchase plan raising approximately $9.0 million before costs at $0.165 per
share;
•
The Company sold its full interest in Cannon Resources Limited (“Cannon”) as part of the Kinterra Battery Metals Mining Fund,
LP takeover offer for Cannon and received $3.8 million; and
• On 31 March 2023 the Company announced its intention to issue 110 million shares to acquire Venus Metals Corporation
Limited’s (“Venus”) interest in the OYG JV, giving the Group 100% interest, and all of Venus’s gold interests in its other joint
ventures covering other regional areas. The transaction completed on 7 July 2023.
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
The Group completed the acquisition of the remaining 30% of the OYG JV that was held by Venus, and all of Venus’s gold interests
in its other joint ventures covering regional Youanmi Gold Project areas on 7 July 2023. As part of the transaction Mr Matthew
Hogan joined the Board as a Non-Executive Director as Venus’ nominee on 7 July 2023.
On 23 August 2023, the Company announced it had received binding commitments for a $7.0m (before costs) placement to
institutional and sophisticated investors at $0.20 per share. Tranche 1 of the placement completed on 29 August 2023 with $5.13
million proceeds received (before costs). Tranche 2 of the placement for $1.87 million (before costs) is subject to the Company
obtaining shareholder approval at the Company’s Annual General Meeting in late November 2023.
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.
Key risks relating to the Youanmi Gold Project are outlined below (the list is not exhaustive):
1) Nature of mineral exploration and mining
The business of mineral exploration, development and production is subject to risk by its nature. Shareholders should understand that
mineral exploration, development and mining are high-risk enterprises, only occasionally providing high rewards (with no guarantee of
ever becoming producing assets).
The success of the Company depends on (among other things) successful exploration, feasibility of projects, securing and maintaining
title to tenements and consents, successful design, construction, commissioning and operating of mining and processing facilities,
successful development and production in accordance with forecasts and successful management of the operations. Exploration and
mining activities may also be hampered by force majeure circumstances, land claims and unforeseen mining problems.
There is no assurance that exploration and development of the mineral tenement interests currently owned by the Company, or any other
36
Rox Resources Annual Report 2023Directors’ Report projects that may be acquired in the future, will result in the discovery of mineral deposits which are capable of being exploited economi-
cally. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited. If such commercial viabili-
ty is never attained, the Company may seek to transfer its property interests or otherwise realise value, or the Company may even be
required to abandon its business and fail as a “going concern”.
Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without limitation, the particular
attributes of the deposit, such as size, grade and proximity to infrastructure, metal prices, which fluctuate widely, and government regula-
tions, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, exporting of minerals and environ-
mental protection. The combination of these factors may result in the Company expending significant resources (financial and otherwise)
on tenements without receiving a return. There is no certainty that expenditures made by the Company towards the search and evalua-
tion of mineral deposits will result in discoveries of an economically viable mineral deposit.
The Company has relied on and may continue to rely on consultants and others for mineral exploration and exploitation expertise. The
Company believes that those consultants and others are competent and that they have carried out their work in accordance with interna-
tionally recognised industry standards. However, if the work conducted by those consultants or others is ultimately found to be incorrect
or inadequate in any material respect, the Company may experience delays or increased costs in exploring or developing its tenements.
2) Results of Studies
The Company released its Scoping Study to ASX on 19 October 2022.
Following a substantial upgrade to the Youanmi underground gold resource in January 2022, and a subsequent increase to the near
surface resource in April 2022, the Company commenced scoping work to understand the economics and likely development scenarios for
the Project. The project-wide resource currently stands at 27.9Mt at 3.57g/t Au for 3.2Moz Au contained gold. The Scoping Study is based
on this resource estimate.
The Company is targeting average annual gold production of approximately 71koz per annum with an average gold head grade of 5.0g/t
Au for total gold production target of approximately 569koz over an 8-year life of mine at Youanmi.
The first three years of the production target are underpinned by 79% / 21% Indicated to Inferred Resource Material in the production
target plan. As a historic mining centre, the economics for Youanmi benefit significantly from existing infrastructure and mining approvals.
A combination of gold-in-concentrate and carbon-in-leach (CIL) bullion production has been pursued by the Company as the optimum
commercialisation strategy for initial cashflow generation at Youanmi. The Project will require funding of approximately A$134 million,
consisting of the following:
(i) total pre-production capital expenditure of approximately A$99 million;
(ii) total pre-production operating cost of approximately A$31 million (including pre-production mining and site general and admin
istrative costs in the first seven months until the first gold production); and
(iii) assumed financing charges until the first gold production of approximately A$4 million.
The Study shows compelling financial outcomes reflecting the high grade and low capital intensity of the Project, including:
(i) a project life of eight years;
(ii) cumulative EBITDA of approximately A$577 million over the life of the Project;
(iii) pre-tax undiscounted free cash flow of approximately A$418 million over the life of the Project;
(iv) pre-tax and unleveraged Net Present Value (NPV 5%) of approximately A$303 million;
(v) pre-tax and unleveraged Internal Rate of Return (IRR) of approximately 45%; and
(vi) pre-tax and unleveraged payback of approximately three years (from commencing the production target).
Importantly, the plan retains plenty of upside for future growth, with the production target accounting for only 3% of the near surface
mineral resource and about 27% of the underground mineral resource.
On 16 January 2023, the Company announced that it commenced substantial reverse circulation (RC) and diamond drilling (DD) programs
at the Project. On 20 February 2023 and 2 March 2023, the Company released drilling results, alongside structural information. The
results from the drilling programs identified (among other things) high-grade, mineralised structures nearby the Youanmi Main Pit (Mid-
37
Rox Resources Annual Report 2023Directors’ Report
way and Youanmi South, subsequently renamed “Paddy’s Lode”) which represent new opportunities for exploration. On 5 April 2023, 26
April 2023 and 13 June 2023, the Company announced details of assay results on the Project. The resource and development drilling are
designed to convert Inferred Resources to the higher confidence Indicated Resource classification for the inclusion in a pre-feasibility
study. On 16 May 2023, the Company released further drilling results on Paddy’s Lode.
Refer to the Company’s ASX announcements dated 16 January 2023, 20 February 2023, 2 March 2023, 5 April 2023, 26 April 2023, 16
May 2023, 13 June 2023 and 21 June 2023 for further information.
The Company intends to continue its drilling programs, and subject to the results of any future exploration and testing programs, the
Company may progressively undertake a number of studies in respect to the Company’s current projects or any new projects. These
studies may include scoping studies, pre-feasibility studies and bankable feasibility studies.
These studies may not occur, but if they are completed, they would be prepared within certain parameters designed to determine the
economic feasibility of the relevant project within certain limits. There can be no guarantee that any of the studies will confirm the
economic viability of the Company’s projects or the results of other studies undertaken by the Company (e.g. the results of a feasibility
study may materially differ to the results of a scoping study).
Further, even if a study determines the economics of the Company’s projects, there can be no guarantee that the projects will be success-
fully brought into production as assumed or within the estimated parameters in the feasibility study, once production commences includ-
ing but not limited to operating costs, mineral recoveries and commodity prices.
In addition, the ability of the Company to complete a study would be dependent on the Company’s ability to raise further funds to com-
plete the study as required.
3) Resource and Reserve estimates
Ore reserve and mineral resource estimates are expressions of judgment based on drilling results, past experience with mining proper-
ties, knowledge, experience, industry practice and many other factors. Estimates which are valid when made may change substantially
when new information becomes available. Mineral resource and ore reserve estimation is an interpretive process based on available data
and interpretations and thus estimations may prove to be inaccurate. The Company has no ore reserves. Further, there is no guarantee
that any of the Company’s projects will become feasible and consequently no forecast is made of whether or not any ore reserve will be
defined in future.
The actual quality and characteristics of mineral deposits cannot be known until mining takes place and will almost always differ from
the assumptions used to develop resources. Further, ore reserves are valued based on future costs and future prices and, consequently,
the actual ore reserves and mineral resources may differ from those estimated, which may result in either a positive or negative effect on
operations.
Should the Company encounter mineralisation or formations different from those predicted by past drilling, sampling and similar exam-
inations, resource estimates may have to be adjusted and mining plans may have to be altered in a way which could adversely affect the
Company’s operations.
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 end of the financial year.
38
Rox Resources Annual Report 2023Directors’ Report Share Options & Performance Rights
Share Options
At the date of the Directors’ Report, the following unlisted options are exercisable:
Options (Number)
Exercise Price ($)
1,333,333
1,333,333
1,333,333
333,333
10,476,190
1,000,000
15,809,522
1.438
1.813
2.188
0.763
0.988
0.720
Expiry Date
31 December 2023
31 December 2023
31 December 2023
25 May 2024
26 March 2025
4 March 2026
During the financial year ended 30 June 2023 nil options were issued and the following options lapsed without exercise:
Options (Number)
Exercise Price ($)
4,466,668
326,667
4,793,335
Performance Rights
0.433
0.763
During the financial year ended 30 June 2023 the following performance rights were issued:
Expiry Date
30 November 2022
25 May 2024
Performance (Number)
7,500,000
5,940,000
13,440,000
Type
Director
Employee
Expiry Date
31 December 2027
31 December 2027
Subsequent to the end of the financial year ended 30 June 2023, 1,500,000 performance rights were issued to Mr Matthew Hogan on
7 July 2023.
No options or performance rights have been exercised since the end of the financial year.
Option and performance right 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 53.
Non-Audit Services
During the financial year the Group’s auditor, Pitcher Partners did not provide any non-audit services.
39
Rox Resources Annual Report 2023Directors’ 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
Stephen Dennis
Non-Executive Chairman
John Mair
Non-Executive Director
Robert Ryan
Managing Director and Chief Executive Officer (appointed 24 October 2022)
Matthew Hogan
Non-Executive Director (appointed 7 July 2023)
Alexander
Passmore
Managing Director and Chief Executive Officer (resigned 24 October 2022)
Christopher Hunt
Chief Financial Officer and Company Secretary
Travis Craig
Exploration Manager (appointed 30 January 2023)
Daniel Marchesi
General Manager - Studies (appointed 6 March 2023)
Matthew Antill
General Manager - Youanmi Operations (resigned, effective 22 March 2023)
Gregor Bennett
Exploration Manager (resigned, effective 31 December 2022)
Subsequent to year end, on 7 July 2023 Mr Matthew Hogan was appointed as a Non-Executive Director. There are no other changes to
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.
40
Rox Resources Annual Report 2023Directors’ Report Non-Executive Director Remuneration
Objective
The Remuneration Committee 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 2023 and 30 June 2022 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”)
41
Rox Resources Annual Report 2023Directors’ 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 Short-Term Incentive (“STI”) plan 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 plan. 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 2023 and 2022
During financial year ended 30 June 2023 Executives were granted performance rights in relation to certain long-term deliverables for
the Youanmi Gold Project, accordingly no short-term incentives were awarded or paid in relation to financial year ended 30 June 2023.
As a result of the majority of KPIs being met or exceeded in relation to financial year ended 30 June 2022, the Board resolved during
the financial year ended 30 June 2023, to pay short term bonuses as a mixture of cash ($230,500) and shares in the Company
($135,500).
Variable Remuneration – LTI
Objective
The objective of the LTI (“Long-Term Incentive”) 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 or performance rights. 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 performance rights when issued will
typically be at a nil price, with performance hurdles included.
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.
42
Rox Resources Annual Report 2023Directors’ Report 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
Robert Ryan
(Managing
Director and Chief
Executive Officer)
Chris Hunt
(Chief Financial
Officer and
Company
Secretary)
Travis Craig
(Exploration
Manager)
Daniel Marchesi
(General Manager
- Studies)
Alex Passmore
(Managing
Director and Chief
Executive Officer)
Mr Ryan is paid an annual salary of $380,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
Mr Ryan may resign from his position and terminate his contract by giving 6 months’ notice. The Company
may terminate this employment agreement by providing 6 months’ written notice. The Company may
terminate the contract at any time without notice if serious misconduct has occurred.
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.
Mr Craig is paid an annual salary of $250,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
Employment can be terminated with 4 weeks’ notice by Mr Craig or the Company. The Company may
terminate the contract at any time without notice if serious misconduct has occurred.
Mr Marchesi is paid an annual salary of $270,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
Employment can be terminated with 4 weeks’ notice by Mr Marchesi or the Company. The Company may
terminate the contract at any time without notice if serious misconduct has occurred.
Mr Passmore was 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.
Gregor Bennett
(Exploration
Manager)
Matt Antill
(General Manager
- Operations)
Mr Bennett was paid an annual salary of $225,000 plus superannuation up to the maximum statutory
concessional amount, currently $27,500 pa.
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.
Mr Antill was 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.
Name
Base Salary (ex-superannuation)
Non-Executive:
Stephen Dennis
$80,000
John Mair
$50,000
Matthew Hogan1
$50,000
Notes: 1.Mr Hogan was appointed as Non-Executive Director 7 July 2023.
43
Rox Resources Annual Report 2023Directors’ 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
$
Share based
payments
$
Superannuation
$
$
%
2023
Directors
Stephen Dennis
80,000
John Mair1
55,250
Robert Ryan2
278,236
-
-
-
Alex Passmore3
425,004
95,000
Total Directors
838,490
95,000
-
-
-
-
-
Executives
Chris Hunt
300,000
40,000
40,000
Daniel Marchesi4
86,931
Travis Craig5
106,061
-
-
-
-
Matt Antill6
265,058
58,000
58,000
Gregor Bennett7
185,244
37,500
37,500
Total
Executives
943,295
135,500
135,500
TOTAL KMP
1,781,785
230,500
135,500
-
-
-
-
37,238
37,238
111,715
-
8,400
5,801
125,638
98,289
21,977
411,928
13,750
533,754
-
186,192
49,928
1,169,609
-
-
-
-
-
-
-
33,383
33,383
33,383
-
-
27,500
440,883
8,915
129,229
11,136
150,580
20,625
401,684
13,750
273,994
100,149
81,296
1,396,370
286,340
131,854
2,565,979
30
38
27
18
24
26
26
22
29
27
27
25
Notes:
1.Mr Mair performed additional duties for the Company separate to his role as a Non-Executive Director totalling $5,250.
2.Mr Ryan was appointed as Non-Executive Director 29 June 2022 and was subsequently appointed Managing Director and Chief Executive Officer 24
October 2022.
3.Mr Passmore resigned as Managing Director and Chief Executive Officer 24 October 2022. Mr Passmore’s salary and fees included payments for notice
in lieu and annual leave as per his contractual terms with the Company upon resignation.
4.Mr Marchesi commenced 6 March 2023.
5.Mr Craig commenced 30 January 2023.
6.Mr Antill resigned effective 22 March 2023. Mr Antill’s salary and fees included $34,073 for annual leave on resignation.
7.Mr Bennett resigned effective 31 December 2022. Mr Bennett’s salary and fees included $74,359 for annual and long service leave on resignation.
8.The Board resolved during financial year ended 2023 to pay cash and share based payments in relation to financial year 2022 as the majority of short
term KPI’s were met or exceeded.
44
Rox Resources Annual Report 2023Directors’ Report 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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
-
Notes:
1.Mr Ryan was appointed as Non-Executive Director 29 June 2022.
2.Mr Bennett salary sacrificed $5,000 to superannuation.
Compensation Options: Granted and Vested during the year
During the financial year ended 2023, nil options were issued to the KMP of the Group (2022: nil) with 4,793,334 options lapsing
without exercise.
Compensation performance rights: granted and vested during the year
During the financial year ended 2023, 11,100,000 performance rights were issued to the KMP of the Group (2022: nil).
Number
Grant Date
Expiry Date
Risk free
rate at grant
date (%)
Value per
right at grant
date
Value at
grant date
$
Number
vested
Number
lapsed
2023
Directors
Stephen Dennis
1,500,000
10 Feb 2023
31 Dec 2027
3.363
$0.1641
246,150
John Mair
Robert Ryan
Executives
Chris Hunt
1,500,000
10 Feb 2023
31 Dec 2027
3.363
$0.1641
246,150
4,500,000
10 Feb 2023
31 Dec 2027
3.363
$0.1641
738,450
1,200,000
3 Mar 2023
31 Dec 2027
3.599
$0.2112
253,435
Daniel Marchesi
1,200,000
3 Mar 2023
31 Dec 2027
3.599
$0.2112
253,435
Travis Craig
Total
1,200,000
3 Mar 2023
31 Dec 2027
3.599
$0.2112
253,435
11,100,000
1,991,055
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45
Rox Resources Annual Report 2023Directors’ Report Compensation Performance Rights: Granted and Vested during the year (continued)
For the financial year ended 30 June 2023, the fair value of performance rights was calculated using the Monte Carlo valuation
methodology for market based vesting conditions.
Security
Number
Vesting Condition
Exercise price
Expiry Date
Tranche 1
3,700,000
• Delivery of a pre-feasibility study for the
Nil
31 December 2027
Youanmi Gold Project; and
• Company share price achieving a 20-day
VWAP of $0.25 or more
Tranche 2
3,700,000
• Delivery of a definitive feasibility study for the
Youanmi Gold Project; and
Nil
31 December 2027
• Company share price achieving a 20-day
VWAP of $0.35 or more
Tranche 3
3,700,000
• Decision to mine for the Youanmi Gold
Project; and
Nil
31 December 2027
• Company share price achieving a 20-day
VWAP of $0.40 or more
Total
11,100,000
There were no alterations to the terms and conditions of performance rights 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.
Other Transactions with Key Management personnel
1) LG Mining Pty Ltd
• Mr Alex Passmore was the Managing Director and Chief Executive Officer of the Company until 24 October 2022 and was also a
Director of LG Mining Pty Ltd (“LG Mining”), a company which provides labour hire services, specifically geologists and field assis-
tants to the Group.
•
An amount of $151,172 (30 June 2022: $888,328) was paid to LG Mining up until 24 October 2022. An amount of $49,990 was
payable to LG Mining as at 30 June 2022. The transactions were on an arms-length basis and utilised by the Company, on a discre-
tionary 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 Group as required and including when terms are offered on
an equal basis.
2) Cannon Resources Limited
• Mr Passmore was a Non-Executive Director of Cannon Resources Limited (“Cannon”) until 24 January 2023. Mr Passmore received
Non-Executive Director fees from Cannon.
• Mr Chris Hunt is the Chief Financial Officer and Company Secretary of the Company as well as the Company Secretary and a
Non-Executive Director of Cannon. Mr Hunt did not receive any remuneration from Cannon.
46
Rox Resources Annual Report 2023Directors’ Report •
The Company entered into a Demerger Agreement with its subsidiary Cannon on 13 May 2021. The Demerger Agreement included
a provision for the Company to sub-lease office space to Cannon at $2,000 per month and subsequently increased to $4,000 per
month (amended as mutually agreed). The amount received by the Company under the Demerger Agreement for the financial year
30 June 2023 for rent was $32,000 (30 June 2022: $22,000). Cannon relocated to an alternative premises and, accordingly, the
sub-leasing agreement with the Company was terminated on 28 February 2023.
•
Following the demerger of Cannon, the Company entered into a Shared Services Agreement (the Agreement) with Cannon whereby
the Company will provide Company Secretarial and Finance Services for $8,000 per month, subsequently increased to $10,000 per
month (amended as mutually agreed). In addition, under the Agreement, Cannon can engage the Company to provide Geological
services at a 10% mark-up on the cost. The Agreement commenced on 1 September 2021. The amount received by the Company
under the Shared Services Agreement for the financial year 30 June 2023 was $227,660 (30 June 2022: $130,625).
•
The balance outstanding to Rox as at 30 June 2023 was $10,000 (30 June 2022: $44,852).
3) Pearl Gull Iron Limited
• Mr Passmore is a Non-Executive Director of Pearl Gull Iron Limited (“Pearl Gull”). Mr Passmore received Non-Executive Director fees
from Pearl Gull.
• Mr Hunt was the Company Secretary of Pearl Gull until 28 April 2023. Mr Hunt did not receive any remuneration from Pearl Gull.
•
The Company entered into two (2) agreements with Pearl Gull Iron Limited (“Pearl Gull”) whereby the Company will provide Compa-
ny Secretarial and Finance Services for $8,000 per month, subsequently amended to $10,000 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 the
Company for the financial year 30 June 2023 was $105,000 and $20,000, respectively (30 June 2022 $24,000 and $22,000 respec-
tively).
4) Cockatoo Iron NL
• Mr Passmore is a Director of Cockatoo Iron NL (“Cockatoo Iron”). Mr Passmore did not receive any remuneration from Cockatoo Iron.
• Mr Hunt is the Company Secretary and a Director of Cockatoo Iron. Mr Hunt received $11,616 remuneration from Cockatoo Iron as
the Company Secretary (2022: nil).
•
The Company entered into an agreement with Cockatoo Iron whereby the Company will provide Financial Services for $2,000 per
month (amended as mutually agreed). The amount received by the Company for the financial year 30 June 2023 was $14,000 (30
June 2022 $4,000). The balance outstanding to the Company as at 30 June 2023 was $2,200 (30 June 2022: nil).
All key management personnel transaction amounts disclosed above are exclusive of GST.
47
Rox Resources Annual Report 2023Directors’ 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 18
Dec 18
Jun 19
Dec 19
Jun 20
Dec 20
Jun 21
Dec 21
Jun 22
Dec 22
Jun 23
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:
2023
(8.8)
(4.39)
31.50
-
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
-
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.
48
Rox Resources Annual Report 2023Directors’ Report
Shareholdings of Key Management Personnel
The share interests of KMP of the Group at the end of the 2023 and 2022 financial years are as follows:
Balance as at
1 July 2022
Granted as
Remuneration
Purchased
Net Change/
Other
Shares Issued
on Exercise of
Options
Balance as at
30 June 2023
2023
Stephen Dennis1
John Mair
Robert Ryan
Chris Hunt2
Daniel Marchesi
Travis Craig
908,483
107,878
-
-
-
-
66,666
242,425
-
-
-
-
-
Alex Passmore3
3,860,150
Matt Antill4
-
351,515
Gregor Bennett5
137,060
227,272
151,515
-
600,000
121,212
-
-
-
-
-
-
-
-
-
-
-
(3,860,150)
(351,515)
(364,332)
-
-
-
-
-
-
-
-
-
-
1,059,998
107,878
600,000
430,303
-
-
-
-
-
2,198,179
Total
Notes:
5,080,237
821,212
872,727
(4,575,997)
1.Mr Dennis holds his shares through the Dennis Super Fund A/C.
2.Mr Hunt holds 187,878 jointly with Mrs Jody Hunt and Mrs Jody Hunt holds 242,425 directly.
3.Mr Passmore, held 3,593,483 shares directly and 266,667 shares through Venus Corporation Pty Ltd at the time of his
resignation, 24 October 2022.
4.Mr Antill held 351,515 shares at the time of his resignation, 22 March 2023.
5.Mr Bennett held 364,332 shares at the time of his resignation, 31 December 2022.
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, held 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 jointly with Mrs Jody Hunt.
49
Rox Resources Annual Report 2023Directors’ Report Options holdings of Key Management Personnel
The options held by the KMP of the Group at the end of the financial year 2023 and financial year 2022 are as follows:
Balance as at
1 July 2022
Granted as
Remuneration
Options
Exercised
Options
Expired
Balance as at 30
June 2023
Options
Vested
Not Yet Exercised1
2023
Stephen Dennis
John Mair
Robert Ryan
Chris Hunt2,3
Daniel Marchesi
Travis Craig
666,667
666,667
-
333,333
-
-
Alex Passmore4
2,666,667
Matt Antill5
Gregor Bennett6
Total
Notes
326,667
466,666
5,126,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(666,667)
(666,667)
-
-
-
-
(2,666,667)
(326,667)
(466,666)
-
-
-
-
-
-
333,333
333,333
-
-
-
-
-
-
-
-
-
-
(4,793,334)
333,333
333,333
1. All options which have vested are exercisable.
2. Mr Hunt holds through Mrs Jody Hunt.
3. $0.763 per share options with an expiry of 25 May 2024
4. Mr Passmore, held 2,666,667 options at the time of his resignation, 24 October 2022.
5. Mr Antill, held 326,667 options at the time of his resignation, effective 22 March 2023.
6. Mr Bennett, held 466,666 options at the time of his resignation, effective 31 December 2022.
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
50
Rox Resources Annual Report 2023Directors’ Report Performance Rights of Key Management Personnel
The performance rights held by the KMP of the Group at the end of the financial year 2023 are as follows:
Balance as at
1 July 2022
Granted as
Remuneration
Exercised
Expired
Balance as at 30
June 2023
Vested
Not Yet
Exercised1
2023
Stephen Dennis1
John Mair
Robert Ryan
Chris Hunt2
Daniel Marchesi3
Travis Craig
Total
-
-
-
-
-
-
-
1,500,000
1,500,000
4,500,000
1,200,000
1,200,000
1,200,000
11,100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
4,500,000
1,200,000
1,200,000
1,200,000
11,100,000
Notes:
1. Mr Dennis holds his performance rights through the Dennis Super Fund A/C.
2. Mr Hunt holds his performance rights through Mrs Jody Hunt.
3. Mr Marchesi holds his performance rights through Ms Andrea Marchesi.
End of Remuneration Report
Signed in accordance with a resolution of the Directors.
Robert Ryan
Managing Director
Perth, 27 September 2023
-
-
-
-
-
-
-
51
Rox Resources Annual Report 2023Directors’ Report
Auditor’s Independence
Declaration
to the Directors of Rox Resources Limited
52
Rox Resources Annual Report 2023Review of Operations AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ROX RESOURCES LIMITED
In relation to the independent audit for the year ended 30 June 2023, 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
MICHAEL LIPRINO
Executive Director
Perth, 27 September 2023
53
Rox Resources Annual Report 2023Independent Audit Report
54
Rox Resources Annual Report 2023Review of Operations 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 https://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
Policy of 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
55
Rox Resources Annual Report 2022Corporate Governance The Company reports below on whether it has followed each of the recommendations during financial year 2023. The information in
this statement is current at 30 June 2023. This statement was approved by a resolution of the Board on 27 September 2023.
Principle 1 - Lay solid foundations for management and oversight
Recommendation 1.1
The Company has established the respective roles and responsibilities of its Board and management, and those matters expressly
reserved to the Board and those delegated to management and have documented this in its Board Charter, which is disclosed on the
Company’s website 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 John Mair as Director at its 2022
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 its number of employees, the Board considers that it is not practical to set measurable objectives for
achieving gender diversity at this time.
The respective proportions of men and women on the Board, in Senior Executive positions and across the whole organisation as at the
date of this statement are set out in the following table. “Senior Executive” for these purposes means a person who makes, or
participates in the making of, decisions that affect the whole or a substantial part of the business or has the capacity to affect
significantly the Company’s financial standing. For the financial year, this included the Managing Director:
Whole organisation (including the Board)
Senior Executive positions
Board
Proportion of women
2 out of 13 (15%)
0 out of 4 (0%)
0 out of 3 (0%)
56
Rox Resources Annual Report 2022Corporate Governance Recommendation 1.6
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 - Studies 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.
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 35.
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 and Dr John Mair 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 32.
57
Rox Resources Annual Report 2022Corporate Governance 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.
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 - Instil 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.
58
Rox Resources Annual Report 2022Corporate Governance 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.
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 35.
Recommendation 4.2
Before the Board approved the Company financial statements for the half year ended 31 December 2022 and the full-year ended 30
June 2023, 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 2022, 31 December 2022, 31 March 2023 and
30 June 2023 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 is 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.
59
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
are disclosed on the Company’s website.
Recommendation 5.2
The Company Secretary circulates all material market announcements to the Board prior to release to 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.computershare.com.au
60
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.
61
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 35.
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
40 of the Company’s Annual Report for year ended 30 June 2023.
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.
62
Rox Resources Annual Report 2023Directors’ Report 63
Rox Resources Annual Report 2023Directors’ Report Consolidated Statement
of Financial Position
As at 30 June 2023
Notes
2023
($000’s)
2022
($000’s)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
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 non-current 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
17
18
13
14
16
19
20
21
20
21
22
22
24
3,467
6,793
14
10,274
-
648
11,060
241
-
234
12,183
22,457
1,579
108
149
1,836
5,650
219
5,869
7,705
14,752
73,630
15,222
(74,100)
14,752
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
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
64
Rox Resources Annual Report 2023Consolidated Financial Statements Consolidated Statement
of Comprehensive Income
For the year ended 30 June 2023
Income
Interest income
Gain on disposal of investment in associate
Gain on disposal of property, plant and equipment
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 attributable to shareholders
Other comprehensive income
Other comprehensive income net of tax
Total comprehensive loss for the year attributable to
shareholders
Loss per share for the year attributable to shareholders
Basic loss per share
Diluted loss per share
Notes
6
6
6
6
23(a & b)
17
15
14
7
8
8
2023
($000’s)
53
2,262
197
1,573
(1,422)
2
(1,438)
-
(8,684)
(574)
(257)
(287)
-
-
(188)
(8,763)
-
(8,763)
-
(8,763)
cents
(4.39)
(4.39)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
2022
($000’s)
2
-
-
13
(1,356)
(19)
(1,182)
(32)
(7,758)
(59)
(735)
(245)
(1,774)
(110)
(695)
(13,950)
-
(13,950)
-
(13,950)
cents
(8.64)
(8.64)
65
Rox Resources Annual Report 2023Consolidated Financial Statements Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Notes
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Expenditure on mineral interests
Net cash used in operating activities
11
Cash flows from investing activities
Proceeds from sale of investments
Proceeds on sale of property, plant and equipment
Purchase of property, plant and equipment
Purchase of mineral properties
Repayment of loan by Cannon Resources Limited
Net cash provided by 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 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
2023
($000’s)
53
(3,019)
(10,080)
(13,046)
3,850
123
(221)
(171)
-
3,581
8,958
-
(344)
(123)
8,491
(974)
4,441
3,467
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2022
($000’s)
2
(2,750)
(11,741)
(14,489)
3,100
-
(393)
(198)
665
3,174
4,000
217
(227)
(148)
3,842
(7,472)
11,913
4,441
66
Rox Resources Annual Report 2023Consolidated Financial Statements Consolidated Statement
of Changes in Equity
For the year ended 30 June 2023
Contributed equity
Reserves
Accumulated losses
Notes
($000’s)
70,596
($000’s)
4,828
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
Demerger of Cannon Resources Limited
32
Balance as at 30 June 2022
Balance as at 1 July 2022
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 2023
-
-
-
4,000
(227)
217
-
(9,756)
64,830)
-
-
-
-
-
-
59
9,947
14,834
64,830
14,834
-
-
-
8,958
(344)
186
73,630
-
-
-
-
-
388
15,222
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
($000’s)
(50,613)
(13,950)
-
Total
($000’s)
24,811
(13,950)
-
(13,950)
(13,950)
-
-
-
-
(774)
(65,337)
(65,337)
(8,763)
-
4,000
(227)
217
59
(583)
14,327
14,327
(8,763)
-
(8,763)
(8,763)
-
-
-
8,958
(344)
556
(74,100)
14,752
67
Rox Resources Annual Report 2023Consolidated Financial Statements 68
Rox Resources Annual Report 2023Directors’ 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.
69
Rox Resources Annual Report 2023Directors’ Report Notes to the Consolidated
Financial Statements
For the year ended 30 June 2023
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 31. The financial statements of the Group for the year ended 30
June 2023 were authorised for issue in accordance with a resolution of the Directors on 27 September 2023.
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 2023 of $8,763k (2022: $13,950k) and experienced net cash
outflows from operating activities of $13,046k (2022: $14,489k). As at 30 June 2023, the Group had net current assets of $8,438k (30
June 2022: $3,313k).
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.
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.
70
Rox Resources Annual Report 2023Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
Going concern (continued)
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 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 differences.
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 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:
(i) AASB 7 – clarifies that information about measurement bases for financial instruments is expected to be material to an
entity’s financial statements;
(ii) AASB 101 – requires entities to disclose their material accounting policy information rather than their significant
accounting policies;
(iii) AASB 108 – clarifies how entities should distinguish changes in accounting policies and changes in accounting
estimates;
(iv) AASB 134 – to identify material accounting policy information as a component of a complete set of financial statements;
and
(v) 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.
71
Rox Resources Annual Report 2023Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
(b) Accounting standards issued but not yet effective (continued)
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current
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.
A liability will be classified as non-current if an entity has the right at the end of the reporting period to defer settlement of the liability
for at least 12 months after the reporting period. Meaning of settlement of a liability is also clarified.
AASB 2020-1 mandatorily applies to annual reporting periods beginning on or after 1 January 2024 (as amended by AASB 2022-6
and AASB 2020-6) and will first be applied by the Group in the financial year commencing 1 July 2024.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and or
Associate or Joint Venture and AASB 2021-7c: Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB126 and Editorial Corrections
AASB 2014-10 amends AASB 10: Consolidated Financial Statements and AASB 128: Investments in Associates and Joint Ventures to
clarify the accounting for the sale or contribution of assets between an investor and its associate or joint venture by requiring:
(i) a full gain or loss to be recognised when a transaction involves a business, whether it is housed in a subsidiary or not;
and;
(ii) a partial gain or loss to be recognised when a transaction involves assets that do not constitute a business, even if
these assets are housed in a subsidiary.
These amending standards mandatorily apply to annual reporting periods commencing on or after 1 January 2025 and will be first
applied by the Group in the financial year commencing 1 January 2025.
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 2023 year end
The following new accounting standards were applicable to the Group for the first time for 30 June 2023 year ends. There is no
material impact of these newly adopted accounting standards on the financial statements of the Group.
AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements 2018 – 2020 and Other Amendments
AASB 2020-3 amends AASB 1 First-time Adoption of Australian Accounting Standards, AASB 3 Business Combinations, AASB 9
Financial Instruments, AASB 116 Property, Plant and Equipment, AASB 137 Provisions, Contingent Liabilities and Contingent Assets
and AASB 141 Agriculture. The main amendments relate to:
(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.
72
Rox Resources Annual Report 2023Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
AASB 2021-7a: Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB128 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.
(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.
(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.
73
Rox Resources Annual Report 2023Consolidated Financial Statements
Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(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
2023
2022
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.
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.
74
Rox Resources Annual Report 2023Consolidated Financial Statements
Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(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.
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.
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.
75
Rox Resources Annual Report 2023Consolidated Financial Statements
Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(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
(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.
76
Rox Resources Annual Report 2023Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(xiii) Share based payment transactions (continued)
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 and performance rights 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 20.
(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 29.
(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).
77
Rox Resources Annual Report 2023Consolidated Financial Statements Note 2 – Significant Accounting Policies continued
(d) Summary of significant accounting policies (continued)
(xvi) Financials instruments (continued)
Financial assets
Financial assets are initially recognised at fair value. The Group’s financial assets include cash and cash equivalents,
receivables, financial investments and the deferred consideration and the amounts owing from 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.
78
Rox Resources Annual Report 2023Consolidated 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 (2022: Nil).
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 (2022: nil). As at 30 June 2023, the Group does not have any collective impairment on its other
receivables (2022: nil).
Guarantees
At the date of this report there are no outstanding guarantees (2022: nil).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows.
The Group’s liquidity risk arises from other financial liabilities and trade and other payables, together comprising the Group’s financial
liabilities.
79
Rox Resources Annual Report 2023Consolidated Financial Statements Note 3 – Financial Risk Management and Policies continued
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
2023
($000’s)
1,532
149
219
-
1,900
2022
($000’s)
847
149
342
-
1,338
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.
Interest rate risk
The Group is exposed to interest rate risk. The Group considers that its exposure to interest risk is minimal, however it has a policy of
monitoring interest rates offered by competing financial institutions to ensure it is aware of market trends and it receives competitive
interest rates.
Profile
At the reporting date the Group’s only exposure to interest rate risk is related to the balance of its cash and cash equivalents. The
following table represents the Group’s exposure to interest rate risk:
Variable rate instruments
Cash and cash equivalents
2023
($000’s)
3,467
2022
($000’s)
4,441
A change of 1% (2022: 1%) in variable interest rates would have increased or decreased the Group’s equity and profit by $0.04m
(2022: $0.04m) 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.
80
Rox Resources Annual Report 2023Consolidated 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:
2023
2022
Financial assets and liabilities
Note
Carrying amount
($000’s)
Fair value
($000’s)
Carrying amount
($000’s)
Fair value
($000’s)
Cash and cash equivalents
Trade and other receivables (current)
Trade and other receivables (non-current)
Investment in associates
Trade payables
Other financial liabilities (current)
Other financial liabilities (non-current)
Total
11
12
12
14
18
20
20
3,467
6,793
-
-
3,467
6,793
-
-
(1,532)
(1,532)
(149)
(219)
8,360
(149)
(219)
8,360
4,441
55
3,012
1,776
(847)
(149)
(342)
7,946
4,441
55
3,012
1,776
(847)
(149)
(342)
7,946
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.
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.
2023
($000’s)
14,752
2022
($000’s)
14,327
81
Rox Resources Annual Report 2023Consolidated 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.
Performance Rights and Share options
The Group measures the cost of equity-settled transactions with Directors and 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 Monte Carlo simulation method for market
based conditions and either the Binominal or Black Scholes option valuation methodology for non-market based conditions. For
performance rights and options issued in the financial year ended 30 June 2023, 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 29 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 ended 30 June 2022, 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.
82
Rox Resources Annual Report 2023Consolidated Financial Statements Note 4 – Significant accounting judgements, estimates and
assumptions continued
Rehabilitation (continued)
Actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works required that will
reflect market conditions at the relevant time.
Furthermore, the timing of rehabilitation is likely to depend on when 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 2023
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.
83
Rox Resources Annual Report 2023Consolidated Financial Statements Note 6 – Income
Interest income
Gain on disposal of investment in associate (i)
Gain on disposal of property, plant and equipment
Gain on remeasurement of OYG loan receivable (ii)
Total other income
2023
($000’s)
2022
($000’s)
53
2,262
197
1,573
4,085
2
-
-
13
13
(i) $3,849k proceeds received for 8,553,130 Cannon shares at $0.45 per share, less $1,588k written down value of investment in
Cannon (refer Note 14).
(ii) The OYG loan receivable extinguishment date was brought forward from 10 June 2025 to 7 July 2023 as part of the Youanmi
Gold Project consolidation transaction. The OYG loan receivable was originally recognised at amortised cost based on the above
expected repayment date. In light of the revised repayment date, a gain of $1,573,000 was recognised (refer Note 12).
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) 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
Movement in unrecognised temporary differences
Deductible equity raising costs
Income tax expense/(benefit) reported in the Statement of Comprehensive Income
2023
($000’s)
2022
($000’s)
-
-
-
(8,763)
30%
(2,629)
172
74
-
3,082
-
(584)
(116)
-
-
-
-
(13,950)
30%
(4,185)
18
342
272
3,116
318
208
(89)
-
84
Rox Resources Annual Report 2023Consolidated Financial Statements
c) Recognised deferred tax assets and liabilities
2023
($000’s)
30%
2022
($000’s)
30%
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
14
741
120
242
1,117
(1,117)
-
(1,117)
(1,117)
1,117
-
d) 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
Total unrecognised deferred tax assets
30%
1,036
16,364
206
17,606
10
754
-
192
956
(956)
-
(956)
(956)
956
-
30%
1,589
13,205
206
15,000
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 $55.2m (2022: $44.7m) carried forward have not been brought
to account at 30 June 2023 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.
85
Rox Resources Annual Report 2023Consolidated Financial Statements Note 8 – Earnings per share
2023
2022
The following reflects the income and share data used in the calculation of basic and
diluted earnings per share:
Net loss
($8,762,808)
($13,950,392)
Weighted average number of ordinary shares used in calculating basic earnings per share
199,741,151
161,415,833
Effect of dilutive securities: share options and performance rightsa
-
-
Adjusted weighted average number of ordinary shares used in calculating diluted earnings
per sharea
199,741,151
161,415,833
Basic and Diluted profit/(loss) cents per share
(4.39)
(8.64)
aShare options and performance rights are not dilutive as their inclusion would give rise to a reduced loss per share.
There was a total of 29,249,522 share options and performance rights on issue as at 30 June 2023 (2022: 20,602,857).
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 2023
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
Stephen Dennis
Non-Executive Chairman
John Mair
Non-Executive Director
Matthew Hogan
Non-Executive Director (appointed 7 July 2023)
Robert Ryan
Managing Director and Chief Executive Officer (appointed 24 October 2022)
Chris Hunt
Chief Financial Officer and Company Secretary
Daniel Marchesi
General Manager - Studies (appointed 6 March 2023)
Travis Craig
Exploration Manager (appointed 30 January 2023)
Alex Passmore
Managing Director and Chief Executive Officer (resigned 24 October 2022)
Matt Antill
General Manager - Operations (resigned effective 22 March 2023)
Gregor Bennett
Exploration Manager (resigned effective 31 December 2022)
There were no other changes of Key Management Personnel after the reporting date and before the date that the financial report was
authorised for issue.
(b) Compensation of Key Management Personnel by category
Incentive plan
Short-term
Long-term
Post-employment
Total
2023
($)
2022
($)
2,147,785
1,320,378
286,340
131,854
1,320,378
123,040
2,565,979
1,443,418
86
Rox Resources Annual Report 2023Consolidated Financial Statements Note 10 – Auditor’s remuneration
Remuneration of the current auditor of the Group, Pitcher Partners, for:
Audit and review of the financial report
Demerger accounting assistance
Total
Note 11 – Cash and cash equivalents
Cash and cash equivalents
Cash at bank earns interest at floating rates based on daily deposit rates
2023
($)
59,817
-
59,817
2022
($)
48,124
1,638
49,762
2023
($000’s)
3,467
2022
($000’s)
4,441
Reconciliation of net loss after income tax to net cash flow from operations
Net loss after income tax
(8,763)
(13,950)
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
Gain on disposal of property, plant and equipment
Gain on disposal of investments
Fair value movement on financial instruments at fair value through profit or loss
Restructure expenses
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.
287
238
574
-
(1,573)
-
(197)
(2,262)
-
-
188
14
(91)
656
(2,117)
(13,046)
245
719
59
1,774
(5)
-
-
-
110
32
695
8
72
(1,709)
(2,539)
(14,489)
87
Rox Resources Annual Report 2023Consolidated Financial Statements Note 12 – Trade and other receivables
Current(i)
Other receivables
Receivables from Venus Metals Corporation Limited(ii)
Cannon Resources Limited
Cockatoo Iron NL
Closing balance
Non-current
2023
($000’s)
2022
($000’s)
83
6,697
11
2
6,793
1
9
45
-
55
Receivables from Venus Metals Corporation Limited(ii)
-
3,012
(i) Current receivables generally have 30-day terms and are unsecured.
(ii) Receivable from Venus Metals Corporation Limited:
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 2023: 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.
On 31 March 2023 the Company announced its intention to issue 110 million shares to acquire Venus Metals Corporation Limited’s
(“Venus”) interest in the OYG JV, giving the Group 100% interest, and all of Venus’s gold interests in its other joint ventures covering
regional Youanmi areas. The key transaction terms included the extinguishment of the OYG receivable, with completion of the
transaction scheduled to occur on 7 July 2023. Completion of the transaction subsequently occurred on 7 July 2023, see Note 27
“Events subsequent to the reporting date”. Accordingly, the OYG receivable has been classified as a current asset with fair value
based on an extinguishment date of 7 July 2023. Accordingly, a gain on remeasurement of the loan receivable of $1,573,000 has
been recognised as income in the Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2023.
Note 13 – Right of use assets
Office lease
Opening balance
Amortisation on lease asset
Closing balance
2023
($000’s)
2022
($000’s)
332
(90)
242
422
(90)
332
88
Rox Resources Annual Report 2023Consolidated Financial Statements
Note 14 – Investment in associates
Ownership
interest
Equity accounted carrying
amount
Cannon Resources Limited
2023
%
-
2022
%
10.01
2023
($000’s)
-
2023
($000’s)
Fair value of investment in Cannon Resources Limited
Summarised financial information for Cannon Resources Limited is set out below:
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
Investment in Cannon Resources Limited
Balance at the beginning of the period
Initial value upon recognition
Share of investments in associate’s profit/(loss)
Divestment of Cannon Resources Limited
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
2022
($000’s)
1,776
2022
($000’s)
2,908
3,283
53
3,336
9,313
12,649
1,395
1,395
1,395
11,254
1,127
-
-
-
-
-
-
-
-
-
-
-
2023
($000’s)
2022
($000’s)
1,776
-
(188)
(1,588)
-
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
2,471
(695)
-
1,776
1
(18)
(6,664)
-
(6,664)
-
(6,664)
-
613
-
89
Rox Resources Annual Report 2023Consolidated Financial Statements Note 14 – Investment in associates (continued)
(i) 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 32.
(ii) Cannon was an ASX Listed Company (ASX: CNR) until the successful takeover by Kedalion Nickel Pty Ltd during financial year
ended 2023. On 22 December 2022 the Company divested its full interest in Cannon to Kedalion Nickel Pty Ltd as part of the
takeover offer to all Cannon shareholders, receiving gross proceeds of $3.85 million. A gain of $2.26 million was recognised on
disposal of Cannon as other income in the Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year
ended 30 June 2023.
(iii) The principal place of business for Cannon Resources Limited is Ground Floor, 437 Roberts Road Subiaco, Western Australia,
6008.
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
2023
($000’s)
2022
($000’s)
-
-
-
-
3,210
(110)
(3,100)
-
(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.
Note 16 – Other non-current assets
Capitalised transaction costs
Total other non-current assets
2023
($000’s)
2022
($000’s)
234
234
-
-
Capitalised legal and other professional expenditure in relation to the acquisition of the OYG JV and Regional tenure from Venus. Costs
to be capitalised to exploration and evaluation expenditure post completion of the transaction (Completion of the transaction occurred
on 7 July 2023, see Note 27 for further details).
90
Rox Resources Annual Report 2023Consolidated Financial Statements
Note 17 – 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:
2023
($000’s)
2022
($000’s)
1,113
(465)
648
624
-
251
(63)
33
-
(197)
648
925
(301)
624
4,236
(2,076)
393
-
-
(1,774)
(155)
624
(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 20 (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 the plant down to nil based on the expected Fair Value less costs to sell.
Note 18 – 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)
OYG acquisition costs(iii)
Closing balance
Notes:
2023
($000’s)
2022
($000’s)
10,970
-
90
-
11,060
10,885)
(3,053)
3,089
49
10,970
(i) On 28 July 2021, the Company completed the demerger of Cannon Resources Limited (refer Note 32 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 20 (i) and Note 4 Significant Judgements & Estimates for further details.
(iii) Transaction costs associated with acquisition of additional 20% interest in the OYG JV on 8 June 2020, increasing Rox’s share to 70%.
(iv) Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and commercial
exploitation or, alternatively, sale of the respective areas.
91
Rox Resources Annual Report 2023Consolidated Financial Statements Note 19 – Trade and other payables
Trade payables (i)
Accruals
Total
(i) Terms and Conditions
Creditors, including related parties, are non-interest bearing and generally on 30-day terms.
Note 20 – 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:
2023
($000’s)
2022
($000’s)
1,532
47
1,579
847
16
863
2023
($000’s)
2022
($000’s)
108
-
108
5,358
292
5,650
-
5,650
158
40
199
4,345
1,013
5,358
-
5,358
(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 has 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 any material changes to the assumptions. Accordingly, during financial year ended 2022, 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. For financial year ended 2023 the rehabilitation
provision increased by $292k, due to changes in the estimate as a result of updated inflation and discount factors ($90k) and unwinding of the discount
($202k).
92
Rox Resources Annual Report 2023Consolidated Financial Statements Note 21 – Other financial liabilities
Current
Lease liability – office lease
Total
Non-current
Lease liability – office lease
Opening balance
Finance charges
Repayments
Closing balance
Note 22 – Contributed equity and reserves
(a) Contributed Equity
(i) Issued and paid-up capital
Ordinary shares fully paid
2023
($000’s)
2022
($000’s)
149
149
342
13
(136)
219
149
149
491
4
(153)
342
2023
($000’s)
2022
($000’s)
73,630
64,830
(ii) Movement in ordinary shares on issue
Date
2023
(Number)
2023
($000’s)
2022
(Number)
2022
($000’s)
168,940,947
64,830
157,607,614
70,596
Ordinary shares
Balance at beginning of year
Demerger of Cannon Resources
Cash issue (option exercise)
Capital raising - Placement
Capital raising - Placement (costs)
28 Jul 2021
31 Jan 2022
3 Mar 2022
3 Mar 2022
-
-
-
-
Capital raising - Placement
16 Nov 2022
20,247,864
Capital raising - Placement (costs)
16 Nov 2022
-
Capital raising - Share Purchase Plan
8 Dec 2022
26,884,791
Capital raising - Share Purchase Plan (costs)
8 Dec 2022
-
Employee shares
14 Dec 2022
1,124,246
Capital raising - Placement
16 Feb 2023
7,156,412
Capital raising - Placement (costs)
16 Feb 2023
-
-
-
-
-
3,340
(220)
4,436
(97)
186
1,181
(26)
-
(9,756)
1,333,333
10,000,000
-
-
-
-
-
-
-
-
217
4,000
(227)
-
-
-
-
-
-
-
Balance at end of year
224,354,260
73,630
168,940,947
64,830
The share based payments on 14 December 2022 are in relation to the employee incentive scheme for the financial year ended 30
June 2022 (approved by the Board in financial year 2023) and are subject to a six (6) month voluntary escrow.
93
Rox Resources Annual Report 2023Consolidated Financial Statements Note 22 – Contributed equity and reserves continued
(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.
(b) Reserves
Share based payments reserve
Equity reserve
Closing balance
(i) Share based payments reserve
Balance at the beginning of the year
Performance rights issued to Directors and employees (Note 23(a))
Options exercised by Directors and employees (Note 23(a))
Options issued to unrelated parties (Note 23(b))
Balance at the end of the year
2023
($000’s)
5,275
9,947
15,222
4,887
388
-
-
2022
($000’s)
4,887
9,947
14,834
4,828
-
-
59
5,275
4,887
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
2023
($000’s)
9,947
-
9,947
2022
($000’s)
-
9,947
9,947
This reserve is used to record the profit realised on the demerger of Cannon Resources Limited (Cannon), directly in equity as a
transaction amongst shareholders before the subsequent listing of Cannon on the ASX.
Note 23(a) – Share based payments: Directors and Employees
(i) Employee incentive plan
An Employee Incentive Plan (EIP) has been established where Rox Resources Limited may, at the discretion of Directors, grant
securities of Rox Resources Limited to Directors, Executives and employees of the Company. The plan is designed to provide short
and 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 securities including exercise price, expiry date and vesting conditions, if any.
Performance rights or options granted under the plan are unlisted and carry no dividend or voting rights. When exercised, each
performance right or option is convertible into an ordinary share of the Company with full dividend and voting rights.
Set out below is a summary of the performance rights and options issued.
94
Rox Resources Annual Report 2023Consolidated Financial Statements Note 23(a) – Share based payments: Directors and Employees
continued
(i) Employee incentive plan (continued)
(a) Ordinary shares
During the financial year ended 30 June 2023 1,124,246 fully paid ordinary shares were issued to employees (2022: nil) under the
EIP. The fully paid ordinary shares were issued to employees for services completed in financial year 2022 and were issued at a
price of $0.165 per share which was at the same share price as Share Purchase Plan completed in December 2022.
(b) Performance rights
During the financial year ended 30 June 2023 5,940,000 performance rights were issued to employees (2022: nil) under the EIP. In
addition, 7,500,000 performance rights were issued to Directors (refer to Note 23(a)(iii) for further details). No performance rights
vested or were exercised during the year.
For the year ended 30 June 2023
Grant date
Expiry date
Exercise
price
(cents)
Value
at grant
date
(cents)
3 Mar 23
31 Dec 27
nil
21.30
Balance at the
start of the year
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
Balance at
the end of
the year
Exercise-able at
the end of
the year
- 5,940,000
- 5,940,000
-
-
-
-
5,940,000
5,940,000
-
-
The weighted average remaining contractual life of performance rights outstanding at the end of the year was 4.5 years.
Fair value of performance rights
For the financial year ended 30 June 2023, the fair value of performance rights issued under the EIP was calculated using the
Monte Carlo valuation methodology for market based vesting conditions and the Black Scholes valuation methodology for non-
market vesting based conditions. There were no performance rights issued under EIP for the financial year ended 2022.
Security
Tranche 1
Number
585,000
•
Vesting Condition
Exercise price
Expiry Date
Individual KPIs (non-market performance
Nil
31 Dec 2027
conditions) for 1 January 2023 to 31 Decem-
ber 2023
• Delivery of a pre-feasibility study for the
Youanmi Gold Project; and
• Company share price achieving a 20-day
VWAP of $0.25 or more
• Delivery of a definitive feasibility study for
the Youanmi Gold Project; and
• Company share price achieving a 20-day
VWAP of $0.35 or more
• Decision to mine for the Youanmi Gold
Project; and
• Company share price achieving a 20-day
VWAP of $0.40 or more
Nil
31 Dec 2027
Nil
31 Dec 2027
Nil
31 Dec 2027
Tranche 2
1,785,000
Tranche 3
1,785,000
Tranche 4
1,785,000
Total
5,940,000
95
Rox Resources Annual Report 2023Consolidated Financial Statements Note 23(a) – Share based payments: Directors and Employees
continued
(i) Employee incentive plan (continued)
Methodology
Grant date
Share price at grant date ($)
Expected share price volatility
Dividend yield
Risk-free interest rate
Number of performance rights issued
Fair value per performance right
Total fair value
(c)
Options
For the year ended 30 June 2023
Grant date
Expiry date
12 Dec 19
30 Nov 22
18 Jun 21
25 May 24
Exercise
price
(cents)1
43.3
76.3
Value
at grant
date
(cents)
11.9
17.5
Weighted average exercise price (cents)
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Black Scholes
Monte Carlo
Monte Carlo
Monte Carlo
3 Mar 2023
3 Mar 2023
3 Mar 2023
3 Mar 2023
0.23
70%
nil
3.599%
585,000
$0.2300
$134,550
0.23
70%
nil
3.599%
1,785,000
$0.2231
$398,234
0.23
70%
nil
3.599%
1,785,000
$0.2086
$372,351
0.23
70%
nil
3.599%
1,785,000
$0.2018
$360,213
Balance at the
start of the year
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
Balance at
the end of
the year
Exercise-able at
the end of
the year
4,466,668
660,000
5,126,668
47.5
-
-
-
-
-
-
-
-
(4,466,668)
-
(326,667)
333,333
(4,793,335)
333,333
-
76.3
-
333,333
333,333
76.3
The weighted average remaining contractual life of share options outstanding at the end of the year was 0.9 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 2022
Grant date
Expiry date
12 Dec 19
30 Nov 22
18 Jun 21
25 May 24
Exercise
price
(cents)1
43.3
76.3
Value
at grant
date
(cents)
11.9
17.5
Weighted average exercise price (cents)
Balance at the
start of the year
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
Balance at
the end of
the year
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).
96
Rox Resources Annual Report 2023Consolidated Financial Statements Note 23(a) – Share based payments: Directors and Employees
continued
(ii) Other share options
During the financial year ended 30 June 2023, nil options were issued to Directors and employees (2022: nil).
For the year ended 30 June 2022
Value per
option
at grant
date
(cents)
Exercise
price
(cents)1
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
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
(iii) Other performance rights
During the financial year ended 30 June 2023 7,500,000 performance rights were issued to Directors through the EIP (2022: nil).
For the year ended 30 June 2023
Grant date1
Expiry date
Exercise
price
(cents)1
Value
at grant
date
(cents)
9 Dec 22
31 Dec 27
nil
14.9
Balance at the
start of the year
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
Balance at
the end of
the year
Exercise-able at
the end of
the year
- 7,500,000
- 7,500,000
-
-
-
-
7,500,000
7,500,000
-
-
The weighted average remaining contractual life of performance rights outstanding at the end of the year was 4.5 years
Notes:
(1) Granted subject to shareholder approval which was received 10 February 2023.
Fair value of performance rights
For the financial year ended 30 June 2023, the fair value of performance rights was calculated using the Monte Carlo valuation
methodology for market based vesting conditions.
Security
Number
Vesting Condition
Exercise price
Expiry Date
Tranche 1
2,500,000
• Delivery of a pre-feasibility study for the Youanmi
Gold Project; and
• Company share price achieving a 20-day VWAP of
$0.25 or more
• Delivery of a definitive feasibility study for the
Youanmi Gold Project; and
• Company share price achieving a 20-day VWAP of
$0.35 or more
• Decision to mine for the Youanmi Gold Project; and
• Company share price achieving a 20-day VWAP of
$0.40 or more
Tranche 2
2,500,000
Tranche 3
2,500,000
Total
7,500,000
Nil
Nil
Nil
31 Dec
2027
31 Dec
2027
31 Dec
2027
97
Rox Resources Annual Report 2023Consolidated Financial Statements Note 23(a) – Share based payments: Directors and Employees
continued
(iii) Other performance rights (continued)
Methodology
Grant date
Share price at grant date ($)
Expected share price volatility
Dividend yield
Risk-free interest rate
Number of performance rights issued
Fair value per performance right
Total fair value
Tranche 1
Tranche 2
Tranche 3
Monte Carlo
Monte Carlo
Monte Carlo
10 Feb 2023
10 Feb 2023
10 Feb 2023
0.185
75%
nil
3.363%
2,500,000
$0.1738
$434,500
0.185
75%
nil
3.363%
2,500,000
$0.1620
$405,000
0.185
75%
nil
3.363%
2,500,000
$0.1564
$391,000
Note 23(b) – Unrelated parties
During the financial year ended 30 June 2023, nil options were issued to unrelated parties other than through the EIP (2022: 1,000,000).
For the year ended 30 June 2023
Grant date
Expiry date
Exercise
price
(cents)
Value
grant date
(cents)
Balance at
the start of the
year
Granted
during
the year
Exercised
during
the year
Forfeited
during
the year
Balance at
the end of
the year
Exercise-able at
the end of
the year
16 Sep 20
31 Dec 23
143.81
16 Sep 20
31 Dec 23
181.31
16 Sep 20
31 Dec 23
218.81
3 Mar 22
3 Mar 26
72.0
37.3
33.6
30.3
23.5
Weighted average exercise price (cents)
1,333,333
1,333,333
1,333,333
1,000,000
4,999,999
159.4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 0.94 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 2022
Grant date
Expiry date
Exercise
price
(cents)
Value
grant date
(cents)
Balance at
the start of the
year
Granted
during
the year
Exercised
during
the year
Forfeited
during
the year
Balance at
the end of
the year
Exercise-able at
the end of
the year
16 Sep 20
31 Dec 23
143.81
16 Sep 20
31 Dec 23
181.31
16 Sep 20
31 Dec 23
218.81
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 1.94 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).
98
Rox Resources Annual Report 2023Consolidated Financial Statements Note 23(b) – Unrelated parties continued
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)
3 March 2022
72.0
4 years
41.5
94.79%
2.21%
1,000,000
23.5
Notes:
(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.
Note 24 – 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
2023
($000’s)
65,337
8,763
-
74,100
2022
($000’s)
50,613
13,950
774
65,337
No dividends were paid during or since the financial year. There are no franking credits available (2022: nil).
Note 25 – 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
2023
($000’s)
2022
($000’s)
2,265
-
2,265
2,067
-
2,067
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
2022
($000’s)
2021
($000’s)
-
-
-
-
-
-
99
Rox Resources Annual Report 2023Consolidated Financial Statements Note 26 – Contingent liabilities
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 27 – Events subsequent to the reporting date
On 7 July 2023 the Group completed the acquisition of the remaining 30% of the OYG that was held by Venus and all of Venus’s gold
interests in its other joint ventures covering other regional areas. In addition as part of the completion of this transaction, Mr Matthew
Hogan joined the Board as a Non-Executive Director as Venus’ nominee and the OYG receivable was extinguished.
On 23 August 2023, the Company announced it had received binding commitments for a $7.0m (before costs) placement to
institutional and sophisticated investors at $0.20 per share. Tranche 1 of the placement completed on 29 August 2023 with $5.13
million proceeds received (before costs). Tranche 2 of the placement for $1.87 million (before costs) is subject to the Company
obtaining shareholder approval at the Company’s Annual General Meeting in late November 2023.
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 28 – Related party transactions
LG Mining Pty Ltd
- Mr Alex Passmore was the Managing Director and Chief Executive Officer of the Company until 24 October 2022 and was also
a Director of LG Mining Pty Ltd (“LG Mining”), a company which provides labour hire services, specifically geologists and field
assistants to the Group.
-
An amount of $151,172 (30 June 2022: $888,328) was paid to LG Mining up until 24 October 2022. An amount of $49,990 was
payable to LG Mining as at 30 June 2022. 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 Group as required and including when terms are
offered on an equal basis.
Cannon Resources Limited
- Mr Passmore was a Non-Executive Director of Cannon Resources Limited (“Cannon”) until 24 January 2023. Mr Passmore
received Non-Executive Director fees from Cannon.
- Mr Chris Hunt is the Chief Financial Officer and Company Secretary of the Company as well as the Company Secretary and a
Non-Executive Director of Cannon. Mr Hunt did not receive any remuneration from Cannon.
-
-
-
The Company entered into a Demerger Agreement with its subsidiary Cannon on 13 May 2021. The Demerger Agreement
included a provision for the Company to sub-lease office space to Cannon at $2,000 per month and subsequently increased to
$4,000 per month (amended as mutually agreed). The amount received by the Company under the Demerger Agreement for the
financial year 30 June 2023 for rent was $32,000 (30 June 2022: $22,000). Cannon relocated to an alternative premises and,
accordingly, the sub-leasing agreement with the Company was terminated on 28 February 2023.
Following the demerger of Cannon, the Company entered into a Shared Services Agreement (the Agreement) with Cannon
whereby the Company will provide Company Secretarial and Finance Services for $8,000 per month, subsequently increased
to $10,000 per month (amended as mutually agreed). In addition, under the Agreement, Cannon can engage the Company to
provide Geological services at a 10% mark-up on the cost. The Agreement commenced on 1 September 2021. The amount
received by the Company under the Shared Services Agreement for the financial year 30 June 2023 was $227,660 (30 June 2022:
$130,625).
The balance outstanding to Rox as at 30 June 2023 was $10,000 (30 June 2022: $44,852).
100
Rox Resources Annual Report 2023Consolidated Financial Statements Note 28 – Related party transactions continued
Pearl Gull Iron Limited
- Mr Passmore is a Non-Executive Director of Pearl Gull Iron Limited (“Pearl Gull”). Mr Passmore received Non-Executive Director
fees from Pearl Gull.
- Mr Hunt was the Company Secretary of Pearl Gull until 28 April 2023. Mr Hunt did not receive any remuneration from Pearl Gull.
-
The Company entered into two (2) agreements with Pearl Gull Iron Limited (“Pearl Gull”) whereby the Company will provide
Company Secretarial and Finance Services for $8,000 per month, subsequently amended to $10,000 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 the Company for the financial year 30 June 2023 was $105,000 and $20,000, respectively (30 June 2022 $24,000 and
$22,000 respectively).
Cockatoo Iron NL
- Mr Passmore is a Director of Cockatoo Iron NL (“Cockatoo Iron”). Mr Passmore did not receive any remuneration from Cockatoo Iron.
- Mr Hunt is the Company Secretary and a Director of Cockatoo Iron. Mr Hunt received $11,616 remuneration from Cockatoo Iron
as the Company Secretary (2022: nil).
-
The Company entered into an agreement with Cockatoo Iron whereby the Company will provide Financial Services for $2,000 per
month (amended as mutually agreed). The amount received by the Company for the financial year 30 June 2023 was $14,000 (30
June 2022 $4,000). The balance outstanding to the Company as at 30 June 2023 was $2,200 (30 June 2022: nil).
All related party transaction amounts disclosed above are exclusive of GST.
Note 29 – 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).
101
Rox Resources Annual Report 2023Consolidated Financial Statements Note 29 – 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.
During the year ended 30 June 2021, the Group earnt into and was 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.
During the year ended 30 June 2021, the Group earnt into and was 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).
During the year ended 30 June 2021, the Group earnt into and was appointed manager of the Joint Venture.
102
Rox Resources Annual Report 2023Consolidated Financial Statements Note 29 – 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 2023, the Group has contributed $1,504,227 to this arrangement (2022: $1,299,629).
Note 30 – 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
2023
($000’s)
2022
($000’s)
10,183
46,598
(428)
(647)
73,630
9,275
(36,952)
45,951
(54)
(54)
4,357
37,762
(600)
(942)
64,830
8,887
(36,897)
36,820
(4,483)
(4,483)
The Parent entity has contractual obligations for exploration commitments of $652,500 at balance date (2022: $533,000) and nil
remuneration commitments at the balance date (2022: nil).
Note 31 – Group information
Information about subsidiaries
Entity
Principal activities
Country of incorporation
Rox (Mt Fisher) Pty Ltd
Mineral exploration
Rox (Murchison) Pty Ltd
Mineral exploration
Australia
Australia
2023
100
100
% Equity interest
2022
100
100
103
Rox Resources Annual Report 2023Consolidated Financial Statements 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.
104
Rox Resources Annual Report 2023Consolidated Financial Statements
Directors’ Declaration
For the year ended 30 June 2023
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 2023 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 2023.
On behalf of the Board
Robert Ryan
Managing Director
Perth, 27 September 2023
105
Rox Resources Annual Report 2023Consolidated Financial Statements 106
Rox Resources Annual Report 2023Review of Operations 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 2023, 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 2023 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 Group, 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 2023 which
indicates that the Group has incurred a net loss after tax for the year ended 30 June 2023 of
$8,763k (2022: $13,950k) and experienced net cash outflows from operating activities of
$13,046k (2022: $14,489k). As at 30 June 2023, the Group had net current assets of $8,438k
(30 June 2022: $3,313k).
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.
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.
107
Rox Resources Annual Report 2023Independent 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
Carrying value of exploration and evaluation
expenditure
Refer to Note 2(d)(ii) and 18 to the financial
report.
As at 30 June 2023, the Group held capitalised
exploration and evaluation expenditure of
$11,060,000.
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.
108
Rox Resources Annual Report 2023Independent 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 23 to the financial
report.
During the year ended 30 June 2023, the Group
has issued shares, options, and performance rights
to employees and key management personnel, for
which a share based payment expense has been
recognised in the year of $573,504.
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;
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.
risk-free rate of interest.
expected dividend yield; and
•
•
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.
109
Rox Resources Annual Report 2023Independent 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 20 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 2023, the consolidated statement of
financial position included a provision for such
obligations of $5,650,000 (2022: $5,358,000).
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.
Other Information
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.
Obtaining the assessment completed by
management’s experts in respect of the
rehabilitation provision.
Evaluating the competence, capability and
objectivity of management’s experts; and
Assessing the adequacy of the disclosures
included in the financial report.
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2023 but does not
include the financial report and 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 Group are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations
Act 2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
110
Rox Resources Annual Report 2023Independent Audit Report
ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
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
intentional omissions,
involve collusion,
fraud may
from error, as
misrepresentations, or the override of internal control.
forgery,
• 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.
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.
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.
111
Rox Resources Annual Report 2023Independent Audit Report
ROX RESOURCES LIMITED
ABN 53 107 202 602
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ROX RESOURCES LIMITED
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 40 to 51 of the directors’ report
for the year ended 30 June 2023. In our opinion, the Remuneration Report of Rox Resources
Limited, for the year ended 30 June 2023, complies with section 300A of the Corporations Act
2001.
Responsibilities
The directors of the Group 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
MICHAEL LIPRINO
Executive Director
Perth, 27 September 2023
112
Rox Resources Annual Report 2023Independent Audit Report
Schedule
of Mining
Tenements
As at 25 September 2023
Project
Interest
Tenement Number
Interest held
Mt Fisher, WA
All Minerals
E36/0948
All Minerals
M53/0009
All Minerals
M53/0127
Youanmi Gold
Project, WA
Application
All Minerals
All Minerals
Gold Rights
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Application
Application
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Application
Application
Application
Application
Application
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
L53/0262
E53/1061
E53/1106
E53/1218
E53/1319
E53/1788
E53/1836
E53/2002
E53/2075
E53/2095
E53/2102
E53/2199
E53/2201
E53/2254
E53/2307
E57/1121
E57/1122
E57/1123
E57/1209
E57/1210
E57/1236
E57/1237
E57/1387
L57/0058
L57/0059
M57/10
M57/51
M57/75
M57/97
M57/109
M57/135
All Minerals
M57/160A
All Minerals
All Minerals
All Minerals
All Minerals
M57/164
M/57165
M57/166
M57/167
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
113
Rox Resources Annual Report 2023Other Information Schedule
of Mining
Tenements
(continued)
As at 25 September 2023
Project
Interest
Tenement Number
Interest held
Youanmi -
Sandstone
Youanmi JV
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Youanmi, WA
Gold Rights
Gold Rights
Gold Rights
E57/985
E57/986
E57/1011
P57/1365
P57/1366
E57/0982
E57/1018
E57/1019
Gold Rights
E57/1023-I
Gold Rights
E57/1078
Youanmi -
Currans JV,
WA 1
Mt Eureka -
Cullen JV,
WA
Gold Rights
Gold Rights
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Application
M57/641
M57/642
E53/1209
E53/1299
E53/1637
E53/1893
E53/1957
E53/1958
E53/1959
E53/1961
E53/2052
E53/2063
E53/2101
Notes:
(1) 45% interest in all other minerals
90%
90%
90%
90%
90%
100%
100%
100%
100%
100%
90%
90%
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%)
51% (Earning up to 75%)
0%
114
Rox Resources Annual Report 2023Other Information Other Information
as at 25 September 2023
Top 20 shareholders - Ordinary Shares
No. Shareholder
1
2
3
4
5
6
7
7
9
Venus Metals Corporation Limited
Citicorp Nominees Pty Limited
QGold Pty Ltd
HSBC Custody Nominees (Australia) Limited
Mr Daryl Kenneth Miller
Pazifik Pty Ltd
Matoricz Super Pty Ltd
Redscope Enterprises Pty Ltd
BNP Paribas Noms Pty Ltd
10 Mr Yi Weng + Ms Ning Li
11 Mr Yi Weng + Ms Ning Li
12 Mr Ram Shanker Kangatharan
13
13
15
15
Jarhamche Pty Ltd
Yarraandoo Pty Ltd
IGO Limited
Investment Securities Nominees
17 Mr Yi Weng + Mrs Ning Li
18 Mr Christopher Ian Wallin
19 Mr Yi Weng + Ms Ning Li
20
Investment Holdings Pty Ltd
Shares held
55,000,000
32,671,764
7,876,952
7,644,594
7,099,730
5,874,285
5,000,000
5,000,000
4,686,859
4,330,082
3,800,000
3,328,968
3,000,000
3,000,000
2,608,988
2,608,988
2,500,000
1,739,325
1,550,000
1,539,303
% of issued
capital
15.28
9.07
2.19
2.12
1.97
1.63
1.39
1.39
1.30
1.20
1.06
0.92
0.83
0.83
0.72
0.72
0.69
0.48
0.43
0.43
Total
160,860,838
44.68
115
Rox Resources Annual Report 2023Other Information Other Information (Continued)
as at 25 September 2023
Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2011 are:
Shareholder
Venus Metals Corporation Limited and
Redscope Enterprises Pty Ltd
Shares held
60,000,000
Hawke’s Point Holdings (RRL) L.P.
29,426,292
Distribution of Shareholders Number
Size of
shareholding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 25,000
25,001 – 100,000
100,001 Over
Total
Unquoted (unlisted) securities
Number of
holders
825
2,165
1,092
1,119
1,012
414
6,627
Number of
shares
427,036
5,864,951
8,179,778
18,615,465
52,339,314
274,605,516
360,032,060
% of issued capital
16.67%
8.80%
% of issued
capital
0.12
1.63
2.27
5.17
14.54
76.27
100.00
Holders of 20% or more of the class
Class
Number of
Securities
Number of
holders
Holder name
Number of
securities
$1.438, 31 Dec 2023 options
$1.813, 31 Dec 2023 options
$2.188, 31 Dec 2023 options
$0.763, 25 May 2024 options
1,333,333
1,333,333
1,333,333
333,333
$0.988, 26 Mar 2025 options
10,476,190
$0.720, 04 Mar 2026 options
1,000,000
1
1
1
1
1
1
CG Nominees (Australia) Pty Ltd
1,333,333
CG Nominees (Australia) Pty Ltd
1,333,333
CG Nominees (Australia) Pty Ltd
1,333,333
Jody Hunt
333,333
Hawke’s Point Holdings (RRL) L.P.
10,476,190
Argonaut Investments Pty Limited
1,000,000
31 Dec 2027 performance rights
14,640,000
13
Robert Ryan
4,500,000
Unquoted options and performance rights carry no dividend or voting rights.
Distribution of Shareholders Number (continued)
There is a total of 360,032,060 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 1,515 shareholders holding 1,416,032 shares, which is less than a marketable parcel of shares in the Company at $0.26 per
share.
Restricted Securities
55,000,000 fully paid ordinary shares are held in voluntary escrow for 12 months, until 7 July 2024, subject to certain release events
occurring.
116
Rox Resources Annual Report 2023Other Information 117
Rox Resources Annual Report 2023Review of Operations 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