ANNUAL REPORT
for the Year Ended 30 June 2022
S2 RESOURCES LTD ABN 18 606 128 090
Annual Report 2022
Corporate Directory
Directors
Mark Bennett
Executive Chairman
Jeff Dowling
Non-Executive Director
Anna Neuling
Non-Executive Director
Company Secretary
Andrea Betti
Principal Office
Registered Office
Auditor
Share Registry
Level 8, 350 Collins Street,
Melbourne, Victoria 3000
Telephone: +61 8 6166 0240
Website: www.s2resources.com.au
Level 2, 22 Mount Street,
Perth, Western Australia 6000
BDO Audit (WA) Pty Ltd
Level 9 Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Telephone: (08) 6382 4600
Computershare Investor Services Pty Limited
Level 2, 45 St Georges Terrace
Perth, Western Australia 6000
Telephone: 1300 787 575
Stock Exchange Listing
S2 Resources Ltd shares are listed on the Australian Securities Exchange.
ASX Code
S2R
Annual Report 2022
Contents Page
Chairmans Review ..............................................................................................................................................1
Operations Review ............................................................................................................................................... 3
Directors Report ................................................................................................................................................13
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................................30
Consolidated Statement of Financial Position ...................................................................................................31
Consolidated Statement of Changes in Equity ..................................................................................................32
Consolidated Statement of Cash Flows .............................................................................................................34
Notes to the Consolidated Financial Statements ..............................................................................................35
Directors’ Declaration ........................................................................................................................................69
Declaration of Independance ............................................................................................................................70
Independent Auditor’s Report ..........................................................................................................................71
Additional ASX Information ...............................................................................................................................75
Competent Persons Statement .........................................................................................................................80
Annual Report 2022
Chairman’s Review
During the year ending June 2022 your company continued repositioning itself to be primarily focussed on Australia, and
in October 2021, through a very competitive tender process, was awarded the sole right to apply for the highly sought
after block of ground surrounding the world-class Fosterville gold mine in Victoria. To reflect this, the company recently
changed its principal place of business to Melbourne.
Subsequent to the year’s end, Anna Neuling, S2’s long serving Executive Director and Company Secretary, stepped back
from an executive role but remains a Non-Executive Director. I thank Anna for her service during her time with S2 and its
predecessor Sirius Resources and look forward to maintaining this relationship as the company continues in its quest to
find the next big one. I also welcome Andrea Betti, who has replaced Anna as Company Secretary.
We have maintained our approach of prudent financial management to ensure we remain well funded to explore whilst
defraying costs wherever possible. This includes our policy of monetising or otherwise divesting non-core projects, and
our ongoing services and office sublease agreement with Todd River Resources (ASX:TRT). The Company is also exposed
to the potential future success of TRT as its largest shareholder.
Details of the company’s activities can be found in the Operations section of this report, but the following is a high level
summary of our key projects.
Greater Fosterville, Victoria
Following a lengthy, comprehensive and highly competitive government tender process covering four large blocks of
ground around the Fosterville gold mine, S2 was named as the successful tenderer for Block 4. This block was the most
highly prized block, covering 55 strike kilometres and 394 square kilometres of ground that abuts and surrounds the
Fosterville mining lease, now owned by Agnico Eagle. Since then, the company has progressed through various stages of
the process required by the government to grant an exploration licence. It is not possible to predict the grant date but
we hope that this may be late in 2022. Once this happens the company can commence negotiations with landholders
with a view to accessing an array of compelling gold targets on the same geological structures that host the high grade
Fosterville orebodies, and in some cases, immediate strike and plunge projections of them. Although patience is required,
this represents a geologically compelling and strategically important opportunity for the company.
Polar Bear nickel rights, Western Australia
The company has revamped its ongoing nickel exploration at the Polar Bear project. The prospectivity of the area for
hosting komatiitic nickel sulphide mineralisation is extremely high, as demonstrated by our discoveries at prospects such
as Halls Knoll, Taipan and Gwardar. Despite this, S2 (and its predecessor Sirius Resources) had previously been unable to
effectively explore for nickel on 80 percent of the area due to most of the prospective stratigraphy being located beneath
salt lake sediments not amenable to conventional electromagnetic (EM) techniques. In 2022, we were finally able to
access the previously proprietary SQUID EM technology which can see through the hypersaline (and conductive)
overburden. Subsequent to June 2022, a new SQUID survey over approximately half of the new search space identified a
number of new EM conductors spatially associated with zones of strongly anomalous nickel and copper values seen in
previous aircore holes. This represents an exciting near term opportunity for the company.
Central Lapland Greenstone Belt, Finland
As a major mineral rights holder in the mineral-rich Central Lapland Greenstone Belt of northern Finland, we are well
positioned to benefit from these assets, whether by direct discovery (as is the case with our Aarnivalkea gold discovery),
by partially farming out selected packages (as is the case with our two current joint ventures with Kinross Gold
Corporation and Rupert Resources), by asset sales (as is the case with two small licences sold to Aurion Resources), or by
vending the balance into other companies for a variety of considerations. Our aims are to maintain maximum exposure
to the upside of these assets, monetise them in order to fund exploration in Australia, and minimise holding costs and
overheads. To this end the company is in active discussions with several parties.
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Annual Report 2022
Koonenberry, New South Wales
The Company is in negotiations with traditional owners as part of the pre-grant process for the large area of exploration
licences pegged in 2021. The project area is prospective for the discovery of magmatic nickel-copper-cobalt-PGE sulphide
mineralisation, comprising mafic-ultramafic intrusions with known occurrences of magmatic sulphides in a setting
reminiscent of the Fraser Range belt of Western Australia (where the S2 team discovered the Nova-Bollinger nickel-
copper mine as Sirius Resources), the Circum-Superior belt of northern Canada (which hosts the giant Raglan and
Thompson nickel districts), and the Pechenga belt of northwestern Russia (which hosts numerous large nickel sulphide
deposits). It represents a significant mid-term belt-scale opportunity.
Jillewarra, Western Australia
The company is earning a 70 percent interest in the Jillewarra project. Although we have previously drilled several high
grade but small prospects, our current focus is a relatively unexplored major north-northeast striking shear zone that has
similarities to those that host Westgold’s Big Bell gold mine (to the south west) and Northern Star’s Thunderbox gold
mine (also discovered by the S2 team when with LionOre). This particular target area is one of very few under or
ineffectively explored district-scale gold opportunities remaining in the Yilgarn craton. We are in negotiations with
traditional owners as part of the pre-grant process for several large exploration licences covering this target.
West Yilgarn nickel-copper-PGE targets, Western Australia
Although embryonic, the company has had an early technical success at its West Murchison project, where disseminated
sulphides were intersected in the first reverse circulation (RC) drilling program. Reconnaissance EM and geochemical
surveys have been undertaken across this project and the Three Springs project, also located on the western margin of
the Yilgarn Craton.
In summary, our aim remains the same. It is to make substantial discoveries capable of having a significant impact on the
value of the company. We have the capability of finding these and developing them into mines should they be financially
robust, technically low risk and in stable jurisdictions, but we are also prepared to monetise those deemed financially
marginal and/or technically risky and/or operationally/technically onerous rather than persist with opportunities that
can become a management diversion and an opportunity cost.
Although we have not yet made that company making discovery, we continue to diligently work towards that end. I
sincerely thank our loyal shareholders for their patience and look forward to a successful 2023.
Mark Bennett
Executive Chairman
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Annual Report 2022
Operations Review
AUSTRALIAN PROJECTS
Greater Fosterville, Victoria (S2 100%, application stage)
In October 2021, S2 received notification from the Victorian Department of Jobs, Precincts and Regions (DJPR)
that it had been awarded Block 4 of the North Central Victorian Goldfields (NCVG) ground release (Figure 1),
giving the company the sole right to apply for an Exploration Licence over what is arguably the most prospective
and highly contested gold ground in Australia. The new application (EL7795) covers an area of 394 square
kilometres, extending 55 kilometres north to south, and surrounds Agnico Eagle’s world class Fosterville Gold
Mine which produced 509,601 ounces of gold in 2021 and has current Ore Reserves of 1.9 million ounces grading
10.3g/t gold (refer to Agnico Eagle 2021 Annual Report). The project area includes extensions of the stratigraphy
and key structures which host the Fosterville mine mineralisation, as well as several known gold occurrences
(Figure 2).
Figure 1. Regional map of the Victorian Goldfields showing the location of the awarded Block 4 (blue), the Fosterville mine and
gold endowment of selected fields.
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Figure 2. Map of the Greater Fosterville Project showing gold deposits/occurrences/prospects, key structures and
the favourable corridor for gold mineralisation running 1.5 to 5 kilometres west of the Redesdale Fault.
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Annual Report 2022
S2 is progressing the application process for the grant of an Exploration Licence at Greater Fosterville. The
current stage in this process is establishing agreements with the appropriate traditional owner groups. The
Company is following largely prescribed procedures controlled by state and federal legislation to attain the
requisite agreements with traditional owners. Following this, the final stage before granting the Exploration
Licence is an assessment of the Company and its planned activities by the Government of Victoria’s Earth
Resources Regulator (ERR). Note that in this case much of this assessment was completed as part of the ground
release tender process which afforded S2 the sole right to apply for an Exploration licence.
In parallel with the permitting process, S2 has been undertaking data collation and target generation utilising
the extensive historical datasets that have been inherited from previous explorers over the area, including the
relatively recent exploration work undertaken by Kirkland Lake Gold (recently acquired by Agnico Eagle) on their
tenement before it expired. This includes prior drilling, which although widely spaced and/or shallow and/or
highly localised, has identified gold mineralisation in several locations. Much of this drilling was undertaken
immediately before the licence expired and was placed under moratorium for inclusion in the NCVG tender
process. In addition to historic drill data, the Company has inherited high quality geophysical (including gravity,
magnetics, IP, seismic and LIDAR) and geochemical datasets.
Towards the end of the financial year, S2’s geological team commenced a program of relogging historical
diamond core, drilled by Kirkland Lake. The aim of relogging is to validate structures and stratigraphy in key
target areas to help refine future drill targets. S2 has identified several priority targets which it aims to diamond
drill upon the grant of the licence, subject to access being granted by landowners and/or farmers. Early
engagement with the local community has been very positive, but until agreements are formalized there is no
guarantee of unrestricted access. As such, the Company aims to establish its reputation as a responsible and
value adding member of the community by applying the highest level of social and environmental standards and
operating procedures.
Polar Bear, Western Australia (S2 100% nickel rights)
S2 holds the nickel (and associated base metal and PGE) rights over an area of 435 square kilometres at the Polar
Bear project, which covers the southeast extension of the prolific Kambalda and Widgiemooltha nickel belts
(Figure 3). S2 retained these rights when it sold the Polar Bear project (comprising the Polar Bear and Norcott
projects and the Eundynie Joint Venture) to Higginsville Gold Operations (now owned by Karora Resources Inc.).
S2 has intensified its nickel exploration with the aims to extend and build upon the three known zones of
confirmed nickel sulphide mineralisation it has previously discovered associated within cumulate facies
ultramafic channels at the Halls Knoll, Taipan and Gwardar prospects (Figure 4). Previous nickel exploration by
S2 and its predecessor Sirius Resources has covered only one kilometre of strike out of the ten strike kilometres
of prospective ultramafic stratigraphy at Polar Bear.
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Annual Report 2022
Figure 3. Location map of the Polar Bear Project relative to the Kambalda and Widgemooltha nickel fields, showing
distribution of prospective ultramafic stratigraphy (in pink) and location of S2’s prospects.
S2 commenced a moving loop electromagnetic (MLEM) survey in the June Quarter, using a low temperature
superconducting quantum interference device (SQUID) instrument. Preliminary interpretation of this survey
has identified multiple new conductors, several of which are located in zones considered prospective for nickel
sulphide mineralisation based on independent evidence such as lithology, geochemistry and stratigraphic
position (Figure 4).
S2 plans to commence drilling these conductors at Polar Bear in the second half of calendar 2022 as soon as a
suitable salt lake capable diamond and/or RC rig becomes available. This drilling will target the new conductors
and also down-dip extensions of known nickel sulphide mineralisation.
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Annual Report 2022
Figure 4. Location of electromagnetic conductors identified in the SQUID survey at the Polar Bear Project, over regional
magnetics and interpreted geology. The location of known nickel sulphide occurrences at the Gwardar, Taipan and Halls
Knoll prospects is also shown.
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Annual Report 2022
West Murchison, Western Australia (S2 100%)
The West Murchison project comprises three Exploration Licences covering 693 square kilometres over
interpreted mafic-ultramafic intrusions prospective for magmatic nickel-copper-PGE mineralisation. Five
priority target areas were identified based on magnetic anomalies and presence of mafic-ultramafic rocks in
outcrop.
S2’s regional exploration within the project area includes regional soil geochemical sampling over the five
priority target areas, MLEM geophysical surveys over the Whitehurst and Woodrarung targets, and SkyTEM
airborne EM surveys over the Aubrey, Aubrey South and Yalgamine target areas. While no standout EM
conductors were identified, all five areas contained anomalous nickel, copper and chrome in soils.
S2 completed the maiden RC drilling program testing the Woodrarung and Whitehurst targets during the year.
Drilling intersected disseminated sulphides within two zones in the northernmost hole at Woodrarung
(SWMC007), returning 5 metres @ 0.34% Cu, 0.35% Ni, 0.33g/t Au and 3.7g/t Ag, including 2 metres @ 0.62%
Cu, 0.68% Ni, 0.64g/t Au and 7.2g/t Ag from 61 metres and 3 metres @ 0.68% Cu, 0.39% Ni, 0.51g/t Au and
5.9g/t Ag (including 1 metres @ 1.06% Cu, 0.70% Ni, 0.51g/t Au and 6.2g/t Ag) from 68 metres. Further heritage
clearance is required before follow-up drilling.
Three Springs, Western Australia (S2 100%)
S2 has two Exploration Licenses at its Three Springs project covering approximately 361 square kilometres over
several targets interpreted to represent mafic-ultramafic intrusions prospective for magmatic nickel-copper-PGE
mineralisation.
Following successful negotiation of landholder access agreements over several key areas, on-ground exploration
commenced in early 2022, with the timing of these programs governed by local farming cycles.
A soil auger geochemical program was completed over the Three Springs project, identifying several semi-
coincident nickel (max. 1,280 ppm), copper (max. 795 ppm), platinum (max 23 ppm) and palladium (max 30 ppb)
anomalies that appear to be associated with potential WNW trending mafic-ultramafic intrusive bodies, as well
as a prominent NNW trending, cross-cutting mafic dyke swarm.
A MLEM survey, completed over the same area did not identify any responses consistent with a bedrock
conductor, although this does not preclude the potential for a disseminated dominated mineralised system, as
seen elsewhere in the Western Yilgarn.
Jillewarra Joint Venture (S2 earning up to 70%)
S2 is earning a majority interest in the Jillewarra project which covers 793 square kilometres of gold and base
metal prospective greenstones situated approximately 50 kilometres west of Meekatharra in the Murchison
Goldfields of Western Australia. Jillewarra is an under explored Archaean greenstone belt with very limited
drilling below 70 metres. S2 is taking a systematic approach to identify and drill test targets throughout the
Jillewarra Belt.
During financial year ending June 2022, S2 continued the approach of reconnaissance aircore drilling to test
regional gold targets within the project area, including the Revenge, Zapata and Western Trend targets. Drilling
has defined “live” gold bearing structures at each of the prospects, with better drill results including:
•
•
•
4 metres @ 4.3 g/t gold from 28 metres in SJWA0346 (Western Trend)
40 metres @ 0.2g/t gold from surface, including 4.0 metres @ 0.9g/t gold from 32 metres, and 8 metres
@ 0.5g/t gold from 52 metres in SJWA0413 (Zapata)
4.0 metres @ 0.2 g/t gold from 12 metres, and 4.0 metres @ 1.0/t gold from 28 metres and 4.0 metres
@ 0.2 g/t gold from 48 metres in SJWA0238 (Revenge)
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Annual Report 2022
Koonenberry, New South Wales (S2 100%, application)
S2 has three Exploration Licence applications covering 2,712 square kilometres in northwestern New South
Wales (NSW) extending over a strike length of 143 kilometres along the Koonenberry Belt, which incorporates
the Mt Arrowsmith volcanic sequence. The scale and cratonic margin setting of this belt is analogous to the
Fraser Zone of the Albany Fraser Orogen, which hosts the Nova-Bollinger Nickel-Copper-PGE deposit (discovered
by S2’s predecessor, Sirius Resources in 2012) and the Circum-Superior belt of northern Canada, which hosts the
giant Thompson and Raglan nickel districts.
The belt contains early breakup gabbros and comagmatic orthocumulate ultramafic picrite sills and intrusions
similar in age and petrography to those that host nickel sulphide mineralisation in the Russian Pechenga nickel-
copper-PGE district. Early-stage exploration by Vale-Inco between 2005 and 2010, detected the presence of
nickel sulphides in the limited drilling completed by the company, whilst the greater project area still remains
largely untested.
S2 is currently undertaking the right to negotiate process under the Native Title Act ahead of the grant of an
Exploration Licence. Planned activities for financial year 2023, once the tenements are granted, include
establishing land access agreements, target generation, regional mapping, soil and rock chip sampling as well as
EM surveys over prioritised target areas.
Fraser Range, Western Australia (S2 100%)
The Company has three exploration licenses covering 176 square kilometres of the Fraser Range nickel province.
The licenses are located 40 to 80 kilometres to the northeast of the Nova-Bollinger nickel-copper mine
(discovered by S2’s predecessor, Sirius Resources in 2012).
S2 undertook a wide-spaced regional soil sampling program over the southernmost exploration licence
(E28/2794). The soil program, sampling the ultrafine fraction (-2µm) has returned anomalous gold results (up
to 17.6 ppb gold) on wide spaced traverses, focused towards the eastern boundary of the tenement.
FINLAND PROJECTS
Central Lapland Greenstone Belt, Finland (S2 100%)
S2 holds a 100% interest in 369 square kilometres in the prospective Central Lapland Greenstone Belt (“CLGB”)
of northern Finland via a mix of granted Exploration Licences and Exploration Licence applications (Figure
5). These areas have not been extensively or effectively explored in the past, despite the CLGB hosting “world-
class” gold and nickel-copper-cobalt-PGE deposits, including Agnico Eagle’s 7.4 million ounce Kittilä gold mine,
Boliden’s 298 million tonne Kevitsa copper-nickel-gold-PGE mine and Anglo American’s 44 million tonne Sakatti
nickel-copper–PGE deposit.
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Annual Report 2022
Figure 5. Location map showing S2’s landholding in the Central Lapland Greenstone Belt, Finland. The map shows the areas
related to the Rupert and Kinross earn-in agreements. The map also shows neighbouring companies, mines and defined
resources. Resources and are sourced from public company statements.
On the Paana Central tenement, S2 completed 10 deeper diamond drill holes at the Aarnivalkea prospect, where
earlier shallow reconnaissance diamond drilling defined a broad zone of near surface basement mineralisation
over a 1.3kilometre strike extent (Figure 6). Significant gold mineralisation was intersected in all drillholes.
Better results from this drilling includes:
•
•
•
2.00 metres @ 1.5g/t gold from 127.0 metres, and 19.80 metres @ 0.7g/t gold (including 0.58 metres
@ 7.3 g/t gold), and 1.87 metres @ 3.0g/t gold from 329.1 metres, and 5.81 metres @ 2.7g/t gold
(including 0.62 metres @ 16.7g/t gold) from 381.1, from 386.3 metres, and 5.64 metres @ 3.1g/t gold
(including 1.04m @ 14.2g/t gold) from 393.4 metres in FAVD0065.
18.8 metres @ 2.5g/t gold (including 7.9 metres @ 5.2g/t gold, including 1.4 metres @ 14.0g/t gold)
from 173.4 metres, and 8.2 metres @ 3.6g/t gold from 253.9 metres, (including 2.5 metres @ 11.2g/t
gold, including 0.8 metres @ 32.2g/t gold) from 255.8 metres, and 2.0 metres @ 20.4g/t gold
(including 1.2 metres @ 32.3g/t gold) from 323.0 metres in FAVD0071.
2.0 metres at 9.4g/t gold from 303.0 metres in FAVD0074
The drilling has defined a zone of higher-grade mineralisation in and around holes FAVD0062, FAVD0065 and
FAVD0071 in the south part of the Aarnivalkea prospect, and another potential high-grade zone could be
emerging in the north around holes FAVBD0064 and FAVD0073. Due to the broad spacing of drilling to date,
mineralisation remains unconstrained and open in every direction.
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Annual Report 2022
Figure 6. Long projection of the Aarnivalkea prospect showing the target zone for the latest drill program (pink) and selected
intercepts from diamond drilling (white labels). Intercept grades are quoted as g/t Au.
As part of S2’s ongoing tenement selection and target generation processes, several regional ionic leach
geochemical surveys were completed. Encouraging geochemical anomalies were detected on two of the
Company’s northernmost application areas, including Rovaselkä and Pahasvuoma.
At Rovaselkä, sampling highlighted a strong coincident Au-Cu-Sb-As-Ag anomaly (greater than 90th percentile
of sample population) over two adjacent 200 metre spaced lines along a geological contact, approximately 1.3
kilometres south of a historical gold-copper occurrence discovered by Outokumpu in 1983, including one till
sample grading 4.0 g/t gold and 0.45% copper. Holes previously drilled by Outokumpu at this historical
occurrence recorded better intercepts including:
•
•
1.6 metres @ 1.5g/t gold from 61.7 metres in hole ROV-3, and
1.3 metres @ 2.6g/t gold from 38.8 metres in hole ROV-4
At Pahasvuoma, ionic leach sampling has defined a 3.6 kilometre long Au-As-Ag anomalous zone on the western
flank of the licence application area, coincident with the contact between tholeiitic basalts and sericitic
quartzites within the Kittila Group, which can be traced south to S2’s Paana East prospect. A second geochemical
anomaly with coherent Zn-Au-Ag-Ba was detected across multiple sample points over a 1.4kilometre strike
extent in the central southern area of the licence application. anomalism sits within mapped units of the
Porkonen Formation, which is the host rock sequence of the Kittila gold mine to the south. The geological setting
and element suite make this anomaly prospective for both orogenic gold and potentially volcanogenic massive
sulphide (VMS) base metal mineralisation.
Kinross Option Agreement, Finland (S2 100%, reducing to 30%)
In June 2021, S2 entered into a farm-in option agreement with Kinross Gold Corporation (K:TSX) on four
Exploration Licence and licence applications covering an area of 83 square kilometres prospective for gold
mineralisation. Under the agreement, Kinross can spend up to US$9.5 million to earn a 70% interest in
the Palvanen/Mesi and Home blocks (Figure 5), with a minimum expenditure requirement of US$3.5 million
over the first 3 years.
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Annual Report 2022
The Palvanen/Mesi block is located immediately south of Agnico Eagle’s 7.4Moz Kittila gold mine and
incorporates the southern extensions of the Kiistala Shear Zone, a key structural control of mineralisation at the
mine. The Home block is located along the east-west trending Sirkka Thrust Zone which hosts multiple gold
occurrences including Rupert Resources’ (“Rupert”) (RUP.V) recently discovered 3.95Moz Ikkari gold deposit.
During the year, Kinross undertook surface mapping, reconnaissance geochemical sampling and UAV magnetic
surveys on both blocks. In addition, Kinross completed regional BoT drilling on the Palvanen/Mesi licenses, In
June 2022, Kinross commenced a diamond drill program, targeting the Kiistala and Pahaslethto shear zones as
well as gold and pathfinder element (As, Bi, Sb, W and S) geochemical anomalies identified from BoT drilling.
Rupert Option Agreement, Finland (S2 100%, reducing to 30%)
In August 2021, S2 entered into a farm-in option agreement with Canadian explorer Rupert Resources on two
exploration licence applications covering an area of 37 square kilometres in the Central Lapland Greenstone Belt
(Figure 5). Under this agreement, Rupert can spend up to €3.4 million to earn a 70% interest in the Sikavaara
East and Sikavaara West licences, with an initial expenditure requirement of €1.2 million over the first three
years.
Sikavaara East is just 16 kilometres west of Rupert’s Area 1, host to six discoveries including the standout Ikkari
discovery. Sikavaara West is located 6 kilometres west of Sikavaara East, and its boundary is 400 metres east of
Rupert’s Hirvi project, where 2019 RC drilling included intercepts of 38 metres at 1.4g/t gold and 53 metres at
1.3g/t gold.
Both licences achieved validity in January 2022 enabling Rupert to undertake on-ground exploration activities
within the option area. Rupert commenced BoT drilling on the Sikavaara West licence in late March 2022, with
scout diamond drilling to follow-up several clustered BoT gold anomalies scheduled to commence in August
2022, after the end of the reporting period.
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Annual Report 2022
Directors Report
The Directors of S2 Resources Ltd ("Directors") present their report on the consolidated entity consisting of S2 Resources
Ltd (“the Company” or “S2”) and the entities it controlled at the end of, or during, the year ended 30 June 2022 (“Group”).
Directors
The names and details of the Directors in office during the financial year and until the date of this Report are as follows.
Directors were in office for the entire year unless otherwise stated.
Mark Bennett
Jeff Dowling
Anna Neuling
Principal Activities
The principal continuing activity of the Group is mineral exploration.
Dividends
No dividends were paid or proposed to be paid to members during the financial year.
Review of Operations
Operating Result
The loss from continuing operations for the year ended 30 June 2022 after providing for income tax amounted to
$7,365,625.
The loss results from $4,720,963 of exploration expenditure incurred and expensed, $1,364,243 of share-based payments
expenses, $1,060,327 of administration costs, $361,810 of business development costs including travel, $139,029 of
depreciation costs, $155,409 from the sale of data, $161,738 of gain on sale of exploration permit, $11,503 interest
income and $47,903 of other losses including finance costs. The exploration expenditure incurred and expensed mainly
relates to the Company’s Australian and Finnish projects.
Dividends
No dividends were paid or proposed to be paid to members during the year ended 30 June 2022.
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Directors Report (cont)
Significant Changes in the State of Affairs
• On 16 August 2021, the Group through its wholly owned Finnish subsidiary Sakumpu Exploration Oy entered into a
binding farm-in agreement with Rupert Resources on two exploration licence applications covering an area of 37
square kilometres in the Central Lapland Greenstone Belt in northern Finland. Under the agreement, Rupert can
spend up to 3.4 million EUR to earn a 70% interest in the Sikavaara East and Sikavaara West licences, with an initial
expenditure requirement of 1.2 million EUR over the first three years.
• On 30 August 2021, the Group completed its placement by issuing 41,483,676 shares to institutional and
sophisticated investors at an issue price of $0.12 resulting in the Group having additional working capital of
$4,978,041. The placement was undertaken within the Group’s 25% capacity under ASX Listing Rule 7.1 and 7.1A and
accordingly no shareholder approval was required in connection with the equity raising.
• On 20 May 2022, the Group through its wholly owned Finnish subsidiary Sakumpu Exploration Oy entered into an
agreement to sell the Keulakkopää exploration permit in Central Lapland Greenstone Belt in northern Finland. Pursuant
to the Agreement, on completion, Aurion Resources Ltd issued 200,000 common shares (the “Consideration Shares”)
to S2. The Consideration Shares are subject to a statutory four month and one day hold period from completion, and
subject to a voluntary escrow agreement which provided that the Consideration Shares be released to S2 when the
Finnish mining authorities approved the extension of the permit.
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Annual Report 2022
Directors Report (cont)
After Balance Date Events
On 1 August 2022 Executive Director Anna Neuling moved to a Non-Executive Director role.
As part of this role change, Anna relinquished her Company Secretary responsibilities effective 26 July 2022 and Andrea
Betti was appointed Company Secretary to the Company and its subsidiaries.
Ms Betti is an accounting and corporate professional with over 20 years’ experience in accounting, corporate governance,
finance and corporate banking. She has acted as Chief Financial Officer and Company Secretary for a number of
companies in the private and publicly listed sectors. Ms Betti is currently a Director of a corporate advisory company
based in Perth that provides corporate and other advisory services to public listed companies.
On 12 August 2022 S2 Resources Ltd advised changes to key roles, its registered office, and its principal place of business.
Principal place of business was changed from Perth to Melbourne. The address of the new office is Level 8, 350 Collins
Street, Melbourne, VIC 3000.
This reflects the Company’s commitment to planned exploration at its flagship Greater Fosterville project in central
Victoria. Mark Bennett S2’s Melbourne based Executive Chairman will manage the Company’s activities and Victoria
based personnel from the new Melbourne office.
As a result of this change, the Perth based position of Chief Executive Officer has become redundant, and consequently,
Mr Matthew Keane ceased his role as CEO.
There has been no other matter or circumstance that has arisen since 30 June 2022 that has significantly affected, or may
significantly affect:
• the Group’s operations in future financial years;
• the result of those operations in future financial years; or
• the Group’s state of affairs in future financial years.
•
Likely Developments and Expected Results of Operations
The Group will continue its exploration activities in Australia and Finland for the foreseeable future. The Group will also
seek other exploration opportunities that will add value to the Group’s portfolio of assets.
Environmental Regulation
The Group’s operations are subject to environmental regulation under the laws of Finland, the Australian Commonwealth
and the State of Western Australia, Victoria, and New South Wales. The Board of Directors (“Board”) is of the view that
all relevant environmental regulation requirements have been met.
15
Annual Report 2022
Directors Report (cont)
Information on Directors
Mark Bennett – Executive Chairman
Experience and Expertise
Dr Bennett was the managing director and CEO of Sirius Resources NL (“Sirius”) from its inception until its merger with
Independence Group NL and was non-executive director of Independence Group following the merger until June 2016.
He is a geologist with 30 plus years of experience in gold, nickel and base metal exploration and mining. He holds a BSc
in Mining Geology from the University of Leicester and a PhD from the University of Leeds and is a Member of the
Australasian Institute of Mining and Metallurgy, a Fellow of the Geological Society of London, a Fellow of the Australian
Institute of Geoscientists and a Member of the Australian Institute of Company Directors.
He has worked in Australia, West Africa, Canada, USA and Europe, initially for LionOre Mining International Limited and
WMC Resources Limited at various locations including Kalgoorlie, Kambalda, St.Ives, LionOre's nickel and gold mines
throughout Western Australia, the East Kimberley, and Stawell in Victoria. His more recent experience, as Managing
Director of Sirius, S2 Resources and as a director of private Canadian company True North Nickel, has been predominantly
in Western Australia (the Fraser Range including Nova-Bollinger, and the Polar Bear project in the Eastern Goldfields),
Quebec (the Raglan West nickel project), British Columbia, Sweden, Finland, and Nevada.
Positions held include various technical, operational, executive and board positions including Executive Chairman,
Managing Director, Chief Executive Officer, Executive Director, Non-Executive Director, Exploration Manager and Chief
Geologist.
Dr Bennett is a two times winner of the Association of Mining and Exploration Companies "Prospector Award" for his
discoveries which include the Thunderbox gold mine, the Waterloo nickel mine and most recently the world class Nova-
Bollinger nickel-copper mine.
In addition to his technical expertise, Dr Bennett is very experienced in corporate affairs, equity capital markets, investor
relations and community engagement and led Sirius from prior to the discovery of Nova through feasibility, financing,
permitting and construction, and through the schemes of arrangement to merge with Independence and to demerge S2.
Other Directorships
Non-Executive Director of Todd River Resources Ltd since 30 November 2018.
Chairman of Falcon Metals since September 2021.
Former Directorships in the Last Three Years
Dr Bennett has had no directorships of any other public listed company in the last three years.
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
12,000,000
5,560,784
16
Annual Report 2022
Directors Report (cont)
Jeff Dowling – Non- Executive Director
Experience and Expertise
Mr Dowling was Sirius’ Non-Executive Chairman until 21 September 2015 and is a highly experienced corporate leader
with 36 years' experience in professional services with Ernst & Young. Mr Dowling held numerous leadership roles
within Ernst & Young which focused on the mining, oil and gas and other industries.
His professional expertise centres around audit, risk and financial management derived from acting as lead partner on
large public company audits, capital raisings and corporate transactions. Mr Dowling's career with Ernst & Young
culminated in his appointment as Managing Partner of the Ernst & Young Western Region for a period of 5 years.
Mr Dowling has a Bachelor of Commerce from the University of Western Australia and is a fellow of the Institute of
Chartered Accountants, the Australian Institute of Company Directors and the Financial Services Institute of Australasia.
Mr Dowling is the Chairman of the Group’s Audit & Risk Committee and Chairman of the Remuneration & Nomination
Committee which was formed on 19 July 2016.
Other Directorships
Non-Executive Director of NRW Holdings Ltd since 22 August 2013.
Non-Executive Director of Fleetwood Corporation Ltd since 1 July 2017.
Non-Executive Director of Battery Minerals since 21 June 2019.
Former Directorships in the Last Three Years
Non-Executive Chairman of Battery Minerals from 25 January 2018 to 20 June 2019.
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
5,250,000
700,000
Anna Neuling – Executive Director (moved to Non-Executive role 1 August 2022)
Experience and Expertise
Ms Neuling was the Company Secretary and Chief Financial Officer of Sirius Resources NL from the company's inception
in 2009 until 22 September 2013 where she was appointed as Executive Director – Corporate and Commercial until its
merger with Independence Group that occurred on 21 September 2015.
Ms Neuling worked at Deloitte in London and Perth prior to joining LionOre Mining International Limited in 2005, until
its takeover by Norilsk Nickel. She holds a degree in mathematics from the University of Newcastle (UK).
She is a Fellow of the Institute of Chartered Accountants in England and Wales and has held a number of senior executive
positions in the resources industry, including CFO and Company Secretarial roles at several listed companies.
Ms Neuling is a member of the Group’s Audit & Risk Committee and Remuneration & Nomination Committee which was
formed on 19 July 2016.
17
Annual Report 2022
Directors Report (cont)
Other Directorships
Non-Executive Director of MLG OZ Ltd since 23 March 2021.
Non-Executive Chair of Tombador Iron Resources Ltd since 25 September 2020.
Former Directorships in the Last Three Years
Non-Executive Director of CZR Resources Ltd from 2 November 2020 to 10 September 2021.
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
7,250,000
799,875
Meetings of Directors
The number of meetings of the Board and of each Board Committee held during the year ended 30 June 2022 and the
number of meetings attended by each Director were:
Name
Mark Bennett (ii)
Anna Neuling
Jeff Dowling
Directors’
Meetings
Audit & Risk Committee
(i) Remuneration &
Nomination Committee
Meeting
Held
9
9
9
Meetings
attended
9
9
9
Meeting
Held
3
3
3
Meetings
attended
3
3
3
Meeting
Held
-
-
-
Meetings
attended
-
-
-
(i)
(ii)
During the reporting period to 30 June 2022 there were no Remuneration & Nomination Committee
meetings held as there was a meeting held in June 2021 which was earlier than normal due to scheduling
and the meeting that was scheduled for June 2022 was rescheduled to October 2022.
Mark Bennett attended the Audit & Risk Committee meetings by invitation he is not a member of the
committee.
Indemnifying of Officers or Auditor
During the year the Group paid a premium in respect of insuring Directors and Officers of the Group against liabilities
incurred as a Director or Officer. The insurer shall pay on behalf of the Group or each Director or Officer all losses for
which the Director or Officer is not indemnified by the Group arising from a claim against a Director or Officer individually
or collectively.
The Group had not, during or since the financial year, indemnified or agreed to indemnify the auditor of the Group against
a liability incurred as an auditor.
18
Annual Report 2022
Directors Report (cont)
Options & Rights
Unissued ordinary shares of the Company under options or rights at 30 June 2022 are as follows:
Options
Number
2,400,000
50,000
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
Grant Date
28/11/2018
05/03/2019
12/11/2019
03/12/2019
27/08/2020
05/10/2020
17/11/2020
12/11/2021
19/04/2022
28/04/2022
Expiry Date
Exercise Price $
27/11/2022
04/03/2023
11/11/2023
02/12/2023
26/08/2024
04/10/2024
16/11/2024
11/11/2025
18/04/2026
27/04/2026
0.14
0.11
0.30
0.30
0.30
0.39
0.38
0.29
0.25
0.23
There were no shares issued since the end of the financial year on the exercise of options. No person entitled to exercise
an option had or has any rights by virtue of the option to participate in any share issue of any other body corporate.
19
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited)
This Remuneration Report, which has been audited, outlines the Key Management Personnel (as defined in AASB 124
Related Party Disclosures) (“KMP”) remuneration arrangements for the Group, in accordance with the requirements of
the section 308 (3c) of the Corporations Act 2001 and its Regulations.
The KMP covered in this remuneration report are:
- Mark Bennett – Executive Chairman
-
-
- Matthew Keane – Chief Executive Officer (CEO)
Anna Neuling – Executive Director and Company Secretary
Jeff Dowling – Non-Executive Director
The principles adopted have been approved by the Board and have been set out in this Remuneration Report. This
audited Remuneration Report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
1.
2. Details of remuneration
Service agreements
3.
Share-based compensation
4.
The information provided under headings 1 to 4 above includes remuneration disclosures that are required under
Accounting Standard AASB 124, Related Party Disclosures.
1. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework which has been set out in detail under the remuneration structure
in this Remuneration Report aligns executive reward with achievement of strategic objectives and the creation of value
for shareholders, it conforms to market best practice for delivery of reward. The Board ensures that executive reward
satisfies the following key criteria for good reward governance practices:
competitiveness and reasonableness;
aligns shareholders and executive interests;
performance based and aligned to the successful achievement of strategic and tactical business objectives;
and
transparency.
Executive Directors
Remuneration to Executive Directors reflects the demands which are made on, and the responsibilities of, the Executive
Directors. Executive Directors’ remuneration is reviewed annually to ensure it is appropriate and in line with the market.
There are no retirement allowances or other benefits paid to Executive Directors other than superannuation guarantee
amounts as required.
The executive remuneration and reward framework has three components:
base pay;
share-based payments; and
other remuneration such as superannuation and long service leave.
20
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
1.PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
(CONTINUED)
The combination of these comprises the Executive Director's total remuneration.
Fixed remuneration, consisting of base salary and superannuation will be reviewed annually by the Remuneration &
Nomination Committee, based on individual contribution to corporate performance and the overall relative position of
the Group to its market peers.
Non - Executive Directors
Remuneration to Non-Executive Directors reflects the demands which are made on, and the responsibilities of, the Non-
Executive Directors. Non-Executive Directors’ remuneration is reviewed annually. The maximum aggregate for
remuneration of Non-Executive Directors is $300,000 and was approved by shareholders prior to the demerger of the
Company from Independence Group NL (formerly Sirius Resources NL) on 21 September 2015.
From 1 July 2021 to 30 June 2022, exclusive of superannuation guarantee the annual cash remuneration for the Non-
Executive Director was $78,750 per annum.
Company Performance
As an exploration company the Board does not consider the operating loss after tax as one of the performance indicators
when implementing an incentive based remuneration policy. The Board considers that identification and securing of new
business growth opportunities, the success of exploration and, if appropriate, feasibility activities, safety and
environmental performance, the securing of funding arrangements and responsible management of cash resources and
the Company’s other assets are more appropriate performance indicators to assess the performance of management at
this stage of the company’s development.
Short-term incentives
To align the remuneration of employees with the company aim of responsible management of cash resources, there were
no short-term incentives paid or proposed to be paid for the year ended 30 June 2022. The company’s approach with
regard to the use of short-term cash incentives will be assessed by the Remuneration & Nomination Committee on an
ongoing basis as the company evolves.
Long-term incentives
To align the board and management with shareholder’s interests and with market practices of peer companies and to
provide a competitive total remuneration package, the Board introduced a long-term incentive (“LTI”) plan to motivate
and reward Executives and Non-Executive Directors. The LTI is provided as options over ordinary shares of the Company
under the rules of the Employee Share Option Plan.
21
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
The table below shows the losses and earnings per share of the Company for the last five financial years.
Net loss
Share price at year end
(cents)
Loss per share (cents)
2022
(7,365,625)
14
2021
(7,234,407)
13
2020
(7,475,048)
9.3
2019
(8,288,971)
12
2018
(1,673,903)
16
(2.11)
(2.34)
(3.02)
(3.34)
(0.68)
2.DETAILS OF REMUNERATION
Year Ended 30 June 2022
The amount of remuneration paid and entitlements owed to KMP is set out below.
CASH REMUNERATION AND ENTITLEMENTS
Cash remuneration
2022
Directors
M Bennett (1)
A Neuling
Non Executive Director
J Dowling
Other Key Management
Personnel
M Keane
Salary
$
Post–employment
benefits
(superannuation)
$
Movement in
annual leave
entitlement owing
$
Total cash
payments and
entitlements
$
267,916
120,366
23,568
12,037
(3,142)
(117)
288,342
132,286
78,750
3,750
-
82,500
280,000
747,032
23,568
62,923
11,845
315,413
8,586
818,541
(1) Dr Bennett has taken unpaid leave in the financial year. His remuneration package is still as per the summary of his
service agreement provided below.
22
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
2.DETAILS OF REMUNERATION (CONTINUED)
Year Ended 30 June 2021
CASH REMUNERATION AND ENTITLEMENTS
Cash remuneration
2021
Salary
Directors
M Bennett (1)
A Neuling
J Dowling
Other Key Management
Personnel
M Keane (2)
$
276,249
130,117
75,000
184,513
665,879
Post–employment
benefits
(superannuation)
$
Movement in annual
leave entitlement
owing
$
Total cash
payments and
entitlements
$
20,902
12,361
7,125
15,076
55,464
9,998
271
-
307,149
142,749
82,125
8,808
208,397
19,077
740,420
1)
2)
As a result of Covid 19 travel restrictions and in order to minimise costs to the Company, Dr Bennett took 1 day a
week of unpaid leave from 1 January 2021 to 31 March 2021 and 2 days a week of unpaid leave from 1 April 2021
to 30 June 2021 resulting a reduction of cash remuneration received in comparison to prior year. His
remuneration package is still as per the summary of his service agreement provided below.
Commenced 4 November 2020
2022 TOTAL REMUNERATION
Directors
M Bennett
A Neuling
J Dowling
Other Key Management
Personnel
M Keane
Total cash
payments and
entitlements
$
Options
issued
Total
$
$
LTI
% of
remuneration
288,342
132,286
82,500
503,129
157,228
157,228
791,471
289,514
239,728
64%
54%
66%
315,413
138,705
454,118
31%
818,541
956,289
1,774,831
23
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
2.DETAILS OF REMUNERATION (CONTINUED)
2021 TOTAL REMUNERATION
Directors
M Bennett
A Neuling
J Dowling
Other Key Management
Personnel
M Keane
Total cash
payments and
entitlements
$
Options
issued
Total
$
$
LTI
% of
remuneration
307,149
142,749
82,125
287,280
215,460
143,640
594,429
358,209
225,765
48%
60%
64%
208,397
208,599
416,996
50%
740,420
854,979
1,595,399
There were no non-monetary benefits other than options paid to the Directors or KMP for the year ended 30 June 2022.
3. SERVICE AGREEMENTS
For the year ended 30 June 2022, the following service agreements were in place with the Directors and KMP of S2:
On 4 September 2015, an Executive Services Agreement was entered into between the Company and Managing Director
and Chief Executive Officer Mark Bennett. Under the terms of the Agreement:
•
•
•
•
Dr Bennett was paid a remuneration package of $325,000 per annum base salary plus statutory superannuation.
Under the general termination of employment provision, the Company may terminate the Agreement by giving
Dr Bennett twelve months’ notice or payment in lieu of notice.
Under the general termination of employment provision, Dr Bennett may terminate the Agreement by giving
the Company three months’ notice.
The Company may terminate the Agreement at any time without notice if serious misconduct has occurred. On
termination with cause, the Executive is not entitled to any payment.
On 3 April 2020, a Change of Role letter was entered into between the Company and Mark Bennett which changed his
role from Managing Director and Chief Executive Officer to Executive Chairman. All other terms remained in line with his
Executive Services Agreement.
24
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
3. SERVICE AGREEMENTS (CONTINUED)
On 10 September 2015, a letter of appointment was entered into between the Company and Non-Executive Chairman
Jeff Dowling. Under the terms of the Agreement:
• Mr Dowling was paid a remuneration package of $75,000 per annum base salary plus statutory superannuation.
• Under the general termination of employment provision, either party may terminate the Agreement by the
giving of written notice.
On 3 April 2020, a Change of Role Letter was entered into between the Company and Jeff Dowling which changed his role
from Non-Executive Chairman to Non-Executive Director. All other terms remained in line with his letter of appointment.
On 4 September 2015, an Executive Services Agreement was entered into between the Company and Executive Director
Anna Neuling. Under the terms of the Agreement as Executive Director:
• Ms Neuling was appointed as Executive Director, including the role of Company Secretary.
• Ms Neuling was paid a remuneration package of $120,000 per annum comprising a base salary plus statutory
superannuation for work on a part time basis (based on $300,000 full time equivalent).
• Under the general termination of employment provision, the Company may terminate the Agreement by giving
Ms Neuling twelve months’ notice or payment in lieu of notice.
• Under the general termination of employment provision, Ms Neuling may terminate the Agreement by giving
•
the Company three months’ notice.
The Company may terminate the Agreement at any time without notice if serious misconduct has occurred. On
termination with cause, the Executive is not entitled to any payment.
On 4 November 2020, the Company entered into an employment contract with Matthew Keane. Under the terms of the
Agreement:
Mr Keane was appointed as CEO and paid a renumeration package of $280,000 per annum base salary plus statutory
superannuation for work on a full-time basis.
• Under the general termination of employment provision, the Company may terminate the Agreement by giving
Mr Keane twelve months’ notice or payment in lieu of notice.
• Under the general termination of employment provision, Mr Keane may terminate the Agreement by giving the
•
Company three months’ notice.
The Company may terminate the Agreement at any time without notice if serious misconduct has occurred. On
termination with cause, Mr Keane is not entitled to any payment.
25
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
4. SHARE-BASED COMPENSATION
Option holdings
The numbers of options in the Company held during the year ended by each KMP of S2, including their related parties,
are set out below:
2022
Director
M Bennett
A Neuling
J Dowling
Balance at
the start of
the year
12,000,000
7,250,000
5,250,000
4,000,000
1,250,000
1,250,000
4,000,000
1,250,000
1,250,000
Granted
during the
year
Expired
during the
year
Other
changes
Balance at the
year ended
Other Key
Management Personnel
M Keane
24,500,000
6,500,000
6,500,000
2,000,000
2,000,000
1,750,000
1,750,000
-
-
-
-
-
-
-
-
12,000,000
7,250,000
5,250,000
24,500,000
3,750,000
3,750,000
As at 30 June 2022, the number of options that have vested and exercisable were 26,500,000. All director options are
vested and exercisable.
The option terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and
other KMP in the year ended or future reporting years are as follows:
Options issued
Series
Grant Date
Expiry date
Directors Option Plan
Directors Option Plan
Directors Option Plan
12
16
17
12 Nov 2019
11 Nov 2023
17 Nov 2020
16 Nov 2024
12 Nov 2021
11 Nov 2025
Options issued
Series
Grant Date
Expiry date
Exercise
price
$
0.30
0.38
0.29
Exercise
price
$
Employee Share
Option Plan
Employee Share
Option Plan
15
17
05 Oct 2020
4 Oct 2024
0.39
12 Nov 2021
11 Nov 2025
0.29
*Options vest a year after grant date.
Fair value per
option
$
0.04
0.14
0.13
Fair value per
option
$
0.14
0.13
Vested
%
100%
100%
100%
Vested
%
100%
*
26
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
4.SHARE-BASED COMPENSATION (CONTINUED)
Options issued in the year were priced using a Black-Scholes option pricing model using the inputs below:
Series 17
Grant date share price 0.20
0.29
Exercise price
100%
Expected volatility
4 years
Option life
0.00%
Dividend yield
0.12578
Fair Value
1.11%
Interest rate
Shareholdings
The numbers of shares in the Company held during the year ended by each KMP of S2, including their related parties, are
set out below:
2022
Directors
M Bennett
A Neuling
J Dowling
Other Key Management
Personnel
M Keane
Balance at the
start of the year
Other changes during
the year
5,035,868
675,000
700,000
-
6,410,868
524,916
124,875
-
51,613
701,404
Balance for
the year
ended
5,560,784
799,875
700,000
51,613
7,112,272
There were no shares granted to KMP’s during the reporting year as remuneration.
Use of remuneration consultants
No remuneration consultants were engaged or used for the Group during the year ended 30 June 2022.
Voting and comments made at the Company's Annual General Meeting
At the 2021 Annual General Meeting, the resolution to adopt the Remuneration Report for the year ended 30 June 2021
was passed on a poll with 98.75% of votes cast on the poll voting “For” the resolution to adopt the Remuneration Report.
The Company did not receive any specific feedback at the Annual General Meeting regarding its remuneration practices.
27
Annual Report 2022
Directors Report (cont)
Remuneration Report (audited) (cont)
Share trading policy
The trading of shares issued to participants under any of the Group’s employee equity plans is subject to, and conditional
upon, compliance with the Group’s employee share trading policy as per the Group’s Corporate Governance Policy.
Directors and executives are prohibited from entering into any hedging arrangements over unvested options under the
Group’s employee option plan. The Group would consider a breach of this policy as gross misconduct which may lead to
disciplinary action and potentially dismissal.
This concludes the Remuneration Report, which has been audited.
28
Annual Report 2022
Directors Report (cont)
Proceedings on behalf of the Group
No person had applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings. No proceedings had been brought or intervened
in on behalf of the Group with leave of the court under section 237 of the Corporations Act 2001.
Audit Services
During the year ended 30 June 2022, $44,000 was paid or is payable for audit services provided by the auditors. There
were no non-audit services performed during the financial year.
Auditor’s Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 59 of the financial report.
Corporate Governance
The Directors support and adhere to the principles of corporate governance, recognising the need for the highest
standard of corporate behaviour and accountability.
Signed in accordance with a resolution of the Board of Directors.
Mark Bennett
Executive Chairman
Melbourne
20 September 2022
29
Annual Report 2022
Annual Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2022
Other income
Corporate salaries and wages
Consulting and legal fees
Share and company registry
Rent, insurance and variable outgoings
Business development
Travel expenditure
Depreciation expense
Share-based payments
Gain on disposal of subsidiary
Gain on sale of exploration permit
Foreign exchange (losses)/gains and bank charges
Finance cost of Lease Liability
Exploration expenditure expensed as incurred
Share of associate’s loss
Fair value adjustment for reclassification of investment
Loss before income tax
Income tax benefit/(expense)
Notes
12
7
7
4
30 June
2022
$
166,912
(674,231)
(159,119)
(134,189)
(92,788)
(258,343)
(103,467)
(139,029)
(1,364,243)
-
161,738
(39,682)
(8,221)
(4,720,963)
-
-
(7,365,625)
-
30 June
2021
$
56,314
(508,227)
(188,163)
(159,726)
(125,408)
(356,763)
(44,217)
(151,849)
(1,155,918)
46,855
-
(315,243)
(10,737)
(5,294,837)
(159,042)
1,132,554
(7,234,407)
-
Loss after income tax for the year
(7,365,625)
(7,234,407)
Other comprehensive income
Items that will not be reclassified to profit or loss
Changes in the fair value of Investments at fair value through other
comprehensive income
Items that may be classified to profit or loss
Exchange differences on translation of foreign operations
Total comprehensive (loss) for the year attributable to the members
of S2 Resources Ltd
6
(4,311,355)
3,536,932
(30,963)
167,982
(11,707,943)
(3,529,493)
Loss per share for loss attributable to the members of S2 Resources
Ltd
Basic loss per share (cents)
16
(2.11)
(2.34)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
30
Annual Financial Report (cont)
Consolidated Statement of Financial Position
as at 30 June 2022
CURRENT ASSETS
Cash and cash equivalents
Restricted cash
Trade and other receivables
Financial assets held at fair value through other comprehensive income
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation
Property, plant and equipment
Right-of-Use Assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease Liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Lease Liabilities
Provision for Long Service Leave
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
Annual Report 2022
Notes
5
5
6
8
9
30 June
2022
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310,729
86,870
2,107,417
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2021
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322,790
101,161
6,246,071
7,916,631
13,986,868
2,366,972
120,855
106,406
2,366,972
150,538
156,892
2,594,233
2,674,402
10,510,864
16,661,270
281,915
87,795
107,203
476,913
33,593
61,844
95,437
756,903
74,715
92,188
923,806
102,205
-
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572,350
1,026,011
9,938,514
15,635,259
10
11
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3,080,648
(58,973,759)
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6,896,328
(52,445,739)
9,938,514
15,635,259
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
31
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3
Annual Financial Report (cont)
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Cash paid to suppliers and employees for corporate activities
Cash paid to suppliers and employees for exploration activities
Interest received
Interest and other finance costs paid
Income taxes refund/(paid)
Net cash used in operating activities
Cash flows from investing activities
Payment of property, plant and equipment
Proceeds from sale of data
Net loss from sale of subsidiary
Transaction costs on sale of exploration permit
Net cash (used in)/derived from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of Borrowings
Receipts/(Payments) for cash backed guarantees
Cash from financing activities
Annual Report 2022
Notes
30 June
2022
$
30 June
2021
$
(1,379,747)
(1,352,586)
(5,163,376)
(4,503,659)
12,412
(13,524)
45,070
(15,374)
-
15
(6,544,235)
(5,826,549)
(34,770)
155,409
(103,939)
-
-
(2,044)
(10,962)
109,677
-
(105,983)
4,978,041
7,747,000
(331,086)
(514,853)
(88,515)
5,266
(85,742)
(6,700)
4,563,706
7,139,705
Net increase in cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
(1,870,852)
1,207,173
(34,378)
(310,218)
7,316,846
6,419,891
5
5,411,615
7,316,846
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
34
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 June 2022
S2 Resources Ltd (“Company” or “S2”) is a company incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange. The consolidated financial statements of the Group as at and for the year ended to 30
June 2022 comprise the Company and its subsidiaries (together referred to as the “Group” or “consolidated entity” and
individually as a “Group entity”).
The separate financial statements of the parent entity, S2 Resources Ltd, have not been presented within this financial
report. Summary parent information has been included in Note 20.
The financial statements were authorised for issue on 20 September 2022 by the Directors of the Company.
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions, events and conditions to which they apply. The financial
statements and notes also comply with International Financial Reporting Standards as issued by the International
Accounting Standard Board (IASB). Material accounting policies adopted in the preparation of this financial report are
presented below. They have been consistently applied unless otherwise stated.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The consolidated
financial statements have been prepared on a going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or OCI.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 1(a)(iii).
(i)
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
(ii)
Adoption of new and revised Accounting Standards
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the AASB
that are mandatory for the current reporting year. The adoption of these Accounting Standards and Interpretations did
35
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a)
(ii)
Basis of preparation (continued)
Adoption of new and revised Accounting Standards (continued)
not have any material impact on the financial performance or position of the consolidated entity.
(iii) Use of estimates and judgements
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, estimates
and assumptions on historical experience and on other various factors, including expectations of future events, that it
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year
are discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the
terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to
equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the
next annual reporting period but may impact profit or loss and equity. Refer to Note 12.
Exploration and evaluation costs
Exploration and evaluation costs for each area of interest in the early stages of the project life are expensed as they are
incurred except for acquisition costs, until they satisfy the requirements that are stated below.
Exploration and evaluation costs are capitalised in an identifiable area of interest upon announcement of a JORC 2012
compliant resource and costs will be amortised in proportion to the depletion of the mineral resources at the
commencement of production. Key judgements are applied in considering costs to be capitalised which includes
determining expenditures directly related to these activities and allocating overheads between those that are expensed
and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors that could impact the future commercial production at the
mine include the level of reserves and resources, future technology changes, which could impact the cost of mining,
future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be
recoverable in the future, they will be written off in the period in which this determination is made.
Classification of investment in Todd River Resources as Investment
The Group have reclassified the investment in Todd River Resources (“TRT”) from being an associate to an investment in
October 2020. Since 30 June 2020, the Group has not taken part in any of the TRT capital raisings, and as a result it is
holding less than 20%.
At less than 20%, significant influence is required to account for an investment as an investment in an associate. The
Group does not consider that it has significant influence over TRT due to the other substantial shareholders in TRT and
the composition of the TRT board.
The date at which significant influence was judged to be no longer held was 26 October 2020.
36
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iv)
Principles of consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by S2 at the end
of the reporting year. A controlled entity is any entity over which S2 has the ability and right to govern the financial and
operating policies so as to obtain benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities is
included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 21 to
the financial statements.
In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the
consolidated Group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported
separately within the equity section of the Consolidated Statement of Financial Position and the Consolidated Statement
of Profit or Loss and Other Comprehensive Income. The non-controlling interests in the net assets comprise their
interests at the date of the original business combination and their share of changes in equity since that date.
(b)
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The consolidated financial statements
are presented in the Australian dollar ($), which is the Company’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally
recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net
investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within
finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis
within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchanges rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss. For example, translation difference on non-monetary assets and liabilities
such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss
and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are
recognised in other comprehensive income.
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency
as follows:
37
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
•
•
•
assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position,
income and expenses for each statement of profit or loss and statement of comprehensive income are translated
at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions), and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities
of the foreign operation and translated at the closing rate.
(c)
Revenue Recognition
Interest income is recognised on a time proportion basis using the effective interest method.
(d)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for
each jurisdiction.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure
the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial
recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary
differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not
affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
38
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
(e)
Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset being
the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value.
Any excess of the asset’s carrying value over its recoverable amount is expensed to the Consolidated Statement of Profit
or Loss and Other Comprehensive Income. Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.
(f)
Cash and Cash Equivalents
For the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
(g)
Trade and Other Receivables
A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of receivables. The amount of the provision is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is
immaterial. The amount of any provision is recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
(h)
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(i)
Investments in Associates
Principles of consolidation and equity accounting
Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This is generally
the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for
by using the equity method of accounting after being initially recognised at cost.
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share
of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or
receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
39
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
When the Group’s share of losses in an equity-accounted investment equals or excess its interest in the entity, including
any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of
the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of
an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment each reporting period.
Equity accounted investments – changes in ownership interests
When the group ceases to equity account for an investment because of a loss of significant influence, any retained
interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This
fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as a
financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity
are accounted for as if the group had directly disposed of the related assets or liabilities.
(j)
Exploration and Evaluation
Exploration and evaluation assets acquired
Exploration and evaluation assets comprise of acquisition of mineral rights (such as joint ventures) and fair value (at
acquisition date) of exploration and expenditure assets from other entities. As the assets are not yet ready for use they
are not depreciated. Exploration and evaluation assets are assessed for impairment if:
•
•
•
•
•
the period for which the Group has the right to explore in the specific area has expired during the period or will
expire in the near future, and is not expected to be renewed; or
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is
neither budgeted nor planned; or
exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in
the specific area; or
sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full, from successful development
or by sale; or
other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Once the technical feasibility and commercial viability of the assets are demonstrable, exploration and evaluation
assets are first tested for impairment and then reclassified to mine properties as development assets.
Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is expensed in respect of each identifiable area of interest until such a
time where a JORC 2012 compliant resource is announced in relation to the identifiable area of interest. These costs are
only carried forward to the extent that they are expected to be recouped through the successful development of the area
or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves.
40
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then
any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development.
Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment annually in
accordance with AASB 6. Where impairment indicators exist, recoverable amounts of these assets will be estimated
based on discounted cash flows from their associated cash generating units.
The Statement of Profit or Loss and Other Comprehensive Income will recognise expenses arising from excess of the
carrying values of exploration and evaluation assets over the recoverable amounts of these assets.
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value,
accumulated costs carried forward are written off in the period in which that assessment is made. Each area of interest
is reviewed at the end of each accounting period and accumulated costs are written off to the extent that they will not
be recoverable in the future.
(k)
Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working
condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they
are located and capitalised borrowing costs.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognised net within other income in
profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained
earnings.
(ii) Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be
measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for
cost, less its residual value.
Depreciation is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each part of an
item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future
economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term or their useful
lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.
41
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The depreciation rates used for each class of asset are:
buildings
fixtures and fittings
leasehold improvements
plant and equipment
•
•
•
•
• motor vehicles
16.67%
22.5% - 40%
20%
22.5% - 40%
20%
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.
(l)
Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
amounts expected to be payable by the group under residual value guarantees
the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that
the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-
use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted
•
to reflect changes in financing conditions since third party financing was received
uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by S2
Resources Limited, which does not have recent third party financing, and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-
line basis. If the group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the
underlying asset’s useful life. While the group revalues its land and buildings that are presented within property, plant
and equipment, it has chosen not to do so for the right-of-use buildings held by the group.
42
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised
on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Low-value assets comprise IT equipment and small items of office furniture.
(m)
Interest in Joint Ventures
The Group accounts for 100% of the assets, liabilities and expenses of joint venture activity. These have been
incorporated in the financial statements.
(n)
Provisions
General
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be
reimbursed the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the Statement of Profit or Loss and Other Comprehensive Income
net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from
the passage of time is recognised in finance costs.
(o)
Employee Benefits
(i) Equity Settled Compensation
The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity
to which employees become entitled is measured at grant date and recognised as an expense over the vesting period,
with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The
fair value of options is ascertained using a Black–Scholes pricing model which incorporates all market vesting conditions.
The number of shares and options expected to vest is reviewed and adjusted at each reporting date such that the amount
recognised for services received as consideration for the equity instruments granted shall be based on the number of
equity instruments that eventually vest.
(ii) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to
be settled within 12 months after the end of the period in which the employees render the related service are recognised
in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be
paid when the liabilities are settled.
The liability for annual leave and accumulating sick leave is recognised in the provision for employee benefits. All other
short-term employee benefit obligations are presented as payables.
(iii) Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of
the period in which the employees render the related service is recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of services provided by employees up
43
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the end of the reporting period on national government bonds with terms to maturity and currency
that match, as closely as possible, the estimated future cash outflows.
(iv) Share-based payments
Share-based compensation benefits are provided to employees via the Employee Option Plan.
The fair value of options granted under the Employee Option Plan is recognised as an employee benefits expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the
options granted, which includes any market performance conditions and the impact of any non-vesting conditions but
excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The
total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any,
in profit or loss, with a corresponding adjustment to equity.
When the options are exercised, the Company transfers the appropriate amount of shares to the employee. The proceeds
received net of any directly attributable transaction costs are credited directly to equity.
(v) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when
it is demonstrably committed to either terminating the employment of current employees according to a detailed formal
plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage
voluntary redundancy.
Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
(p)
Issued Capital
Ordinary shares are classified as equity. Costs associated with capital raisings (exclusive of GST) directly attributable to
the issue of new shares or options are shown in equity as a deduction from the proceeds. If the entity reacquires its own
equity instruments, e.g. as the result of a share buy-back, those instruments are deducted from equity and the associated
shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly
attributable costs associated with capital raisings (net of income taxes) is recognised directly in equity.
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit / (loss) attributable to equity holders of the Group, excluding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
44
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
(q)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.
(r)
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match
them with the costs that they are intended to compensate. This includes Job Keeper received due to COVID-19 during
the year which has been net off with the associated salaries.
(s)
Investments and other financial assets
Investments and other financial assets are recognised and derecognised on settlement date where the purchase or sale
of an investment is under a contract whose terms require delivery of the investment within the time frame established
by the market concerned. They are initially measured at fair value, net of transaction costs, except for those financial
assets classified as fair value through profit or loss, which are initially measured at fair value.
The Group classifies its financial assets in the following measurement categories:
•
•
Those to be measured subsequently at fair value (either through other comprehensive income (OCI), or
through profit or loss); or
Those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, the classification will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at FVOCI.
(i) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded
derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal
and interest.
45
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Group subsequently measures all equity investments at fair value. The fair values of quoted investments are based
on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes
fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions,
involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and
pricing models to reflect the issuer’s specific circumstances.
Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to
receive payments is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported
separately from other changes in fair value.
(ii) Impairment
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial
assets is impaired. For trade and other receivables, the Group applies the simplified approach permitted by AASB 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables. The expected credit losses
on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience.
(t)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for year ended 30 June 2022. The consolidated
entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to
the consolidated entity, are set out below.
Amendment to Conceptual Framework for Financial Reporting
The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria
for assets and liabilities and clarifies some important concepts. It is arranged in eight chapters, as follows:
•
•
•
•
•
•
•
•
Chapter 1 – The objective of financial reporting
Chapter 2 – Qualitative characteristics of useful financial information
Chapter 3 – Financial statements and the reporting entity
Chapter 4 – The elements of financial statements
Chapter 5 – Recognition and derecognition
Chapter 6 – Measurement
Chapter 7 – Presentation and disclosure
Chapter 8 – Concepts of capital and capital maintenance
AASB 2019-1 has also been issued, which sets out the amendments to Australian Accounting Standards, Interpretations
and other pronouncements in order to update references to the revised Conceptual Framework. The changes to the
Conceptual Framework may affect the application of accounting standards in situations where no standard applies to a
particular transaction or event. In addition, relief has been provided in applying AASB 3 and developing accounting
policies for regulatory account balances using AASB 108, such that entities must continue to apply the definitions of an
asset and a liability (and supporting concepts) in the Framework for the Preparation and Presentation of Financial
Statements (July 2004), and not the definitions in the revised Conceptual Framework.
The amendments apply prospectively on or after 1 January 2020, with no material effect to the Group.
46
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Amendments to AASB 3: Definition of a Business
In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations to help
entities determine whether an acquired set of activities and assets is a business or not. They clarify the minimum
requirements for a business, remove the assessment of whether market participants are capable of replacing any missing
elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a
business and of outputs, and introduce an optional fair value concentration test. New illustrative examples were provided
along with the amendments.
Since the amendments apply prospectively to transactions or other events that occur on or after the date of first
application, the Group will not be affected by these amendments on the date of transition.
Amendments to AASB 101: Definition of Material
This Standard amends AASB 101 Presentation of Financial Statements and AAS 108 Accounting Policies, Changes in
Accounting Estimates and Errors to align the definition of ‘material’ across the standards and to clarify certain aspects of
the definition. The amendments clarify that materiality will depend on the nature or magnitude of information. An entity
will need to assess whether the information, either individually or in combination with other information, is material in
the context of the financial statements. A misstatement of information is material if it could reasonably be expected to
influence decisions made by the primary users.
The amendments apply prospectively on or after 1 January 2020, with no material effect to the Group.
Amendments to IAS 1: Presentation of Financial Statements
This Standard aims to improve presentation in financial statements by clarifying the criteria for the classification of a
liability as either current or non-current.
This amendment is to:
•
•
Clarify that the classification of a liability as either current or non-current is based on the entity’s rights at the
end of the reporting period
Clarify the link between the settlement of the liability and the outflow of resources from the entity
The amendments apply prospectively on or after 1 January 2022. The Group has not yet determined the impact of this
amendment.
47
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks, lease liabilities and accounts receivable and
payable.
The Group's activities expose it to a variety of financial risks; market risk (including fair value interest rate risk and price
risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Group. Risk management is carried out by the Board of Directors under policies approved by the Board. The Board
identifies and evaluates financial risks and provides written principles for overall risk management.
The main risks the Group is exposed to through its financial instruments are interest rate risk, foreign currency risk, and
liquidity risk, credit risk and price risk.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily
to the Group’s Australian Dollar current and non-current debt obligations with floating interest rates. The Group is also
exposed to interest rate risk on its cash and short term deposits.
2022
Floating
interest rate
Financial Instruments
Fixed interest
rate maturing in
1 year or less
$
$
Fixed interest
rate maturing
between 1 and
2 years
$
Non-interest
bearing
$
Total Weighted
average
effective
interest rate
%
$
(i) Financial assets
Available cash on hand
Restricted cash
Total financial assets
3,484,984
-
3,484,984
(ii) Financial liabilities
Trade and other payables
Lease liabilities – current
Lease liabilities – non current
Total financial liabilities
-
-
-
-
-
195,000
195,000
-
87,795
-
87,795
-
-
-
1,926,631
115,729
2,042,360
5,411,615
310,729
5,722,344
0.88
0.35
-
-
33,593
33,593
281,915
-
-
281,915
281,915
87,795
33,593
403,303
48
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
2021
Floating
interest rate
Fixed interest
rate maturing
in 1 year or less
$
$
4,312,273
-
4,312,273
-
195,000
195,000
Non-interest
bearing
Total
$
$
3,004,573 7,316,846
322,790
3,132,363 7,639,636
127,790
Weighted
average
effective
interest rate
%
0.34
0.61
Fixed interest
rate maturing
between 1 and
2 years
$
-
-
-
-
-
-
-
-
-
74,715
-
74,715
-
102,205
102,205
756,903
-
756,903
74,715
-
756,903
102,205
933,823
Financial Instruments
(i) Financial assets
Available cash on hand
Restricted cash
Total financial assets
and
other
(ii) Financial liabilities
Trade
payables
Lease liabilities – current
Lease liabilities – non
current
Total financial liabilities
Net Fair Values
The net fair value of financial assets and liabilities approximate carrying values due to their short-term nature.
Sensitivity Analysis – Interest Rate Risk
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at the reporting date. This
sensitivity analysis demonstrates the effect on the current period results and equity which could result from a change in
interest rates.
Change in loss:
Increase by 1%
Decrease by 1%
Change in equity:
Increase by 1%
Decrease by 1%
30 June
2022
$
(34,850)
34,850
30 June
2021
$
(43,123)
43,123
(34,850)
34,850
(43,123)
43,123
49
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
Foreign exchange risk
Exposure
The Group holds foreign currency cash in Euro and US Dollar to operate in Finland and the United States. It also has
foreign currency receivables and payables in these countries which are exposed to foreign currency fluctuations. The
Group manages its foreign exchange risk and exposure by purchasing foreign currency for the following budget year and
reviews forecasted exchange rates by various banks on a monthly basis. The Group’s exposure to foreign currency risk
at the end of the reporting year, expressed in Australian dollar, was as follows:
Year ended 30 June 2022
Cash on hand
Restricted cash
Other receivables
Trade and other payables
Year ended 30 June 2021
Cash on hand
Restricted cash
Other receivables
Trade and other payables
$
EUR
$
1,762,765
63,492
8,543
(20,500)
1,814,300
EUR
2,860,296
66,136
15,317
(140,905)
2,800,844
USD
$
163,674
45,037
-
(4,355)
204,356
Total
$
1,926,439
108,529
8,543
(24,855)
2,018,656
USD
$
144,081
49,188
-
(3,990)
189,279
$
Total
3,004,377
115,324
15,317
(144,895)
2,990,123
Amounts recognised in profit or loss and other comprehensive income
During the year ended, the following foreign-exchange related amounts were recognised in profit or loss and other
comprehensive income:
Amounts recognised in profit or loss
Net foreign exchange gain/(loss) included in other income/other
expenses
Total net foreign exchange (losses) recognised in loss before income tax
for the year
2022
$
2021
$
(34,378)
310,218
(34,738)
310,218
Net gains/(losses) recognised in other comprehensive income
Translation of foreign operations
(30,963)
167,982
50
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
Sensitivity
As shown in the table above, the Group is primarily exposed to changes in EUR/$exchange rates. The sensitivity of profit
or loss to changes in the exchange rates arises mainly from Euro and US dollar denominated financial instruments and
the impact on other components of equity arises from translation of foreign operations.
EUR/$ exchange rate – increase 10%*
EUR/$ exchange rate – decrease (10%)*
Impact on
post tax loss
$
(172,876)
172,876
Impact on
other
components
of equity
$
(22,661)
22,661
USD/$ exchange rate – increase 10%*
USD/$ exchange rate – decrease (10%)*
(202)
202
(5,409)
5,409
*Holding all other variables constant
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. Management monitors rolling forecasts of the Group’s cash reserves on the
basis of expected development, exploration and corporate cash flows. This ensures that the Group complies with prudent
liquidity risk management by maintaining sufficient cash and marketable securities and the availability of funding through
the equity markets to meet obligations when due.
Credit Risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and other receivables.
The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal
to the carrying amount of these instruments. The cash and cash equivalents are held with bank and financial institution
counterparties, which are rated AA- based on Standard and Poor’s rating agency.
The credit risk on other receivables is limited as it is comprised of prepayments and GST recoverable from the Australian
Taxation Office and tax authorities in Scandinavia. The credit risk on liquid funds is limited because the counter party is a
bank with high credit rating. There are no receivable balances which are past due or impaired.
Price risk
Exposure
The Group’s exposure to equity securities price risk arises from investments held by the Group and classified in the
statement of financial position as investments (see Note 7). The Group’s investment is publicly traded on the Australian
Stock Exchange (“ASX”).
The Group is not currently exposed to commodity price risk.
51
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
Sensitivity
The table below summarises the impact of increases/decreases of the investment’s share price on the Group’s equity
and post-tax loss for the year. The analysis is based on the assumption that the investment’s share price had increased
or decreased by 10% with all other variables held constant, and that the Group’s equity instrument moved in line with
the indexes.
ASX index – increase 10%
ASX index – decrease (10%)
Impact on
post tax loss
Impact on
post tax loss
2022
$
-
-
2021
$
-
-
Impact on
other
components
of equity
2022
$
(195,660)
195,660
Impact on
other
components
of equity
2021
$
(624,607)
624,607
There would be no impact on post tax loss as the Group does not recognise any financial assets at fair value through
profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities
classified as investments. As the fair value of investments would still be above cost, no impairment loss would be
recognised in profit or loss as a result of the decrease in the index.
Amounts recognised in statement of profit or loss and other comprehensive income
The amounts recognised in profit or loss and other comprehensive income in relation to the investments held by the
Group are disclosed in Note 7.
52
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 3. SEGMENT INFORMATION
For management purposes, the Group has three reportable segments as follows:
•
•
•
Finland exploration activities, which includes exploration and evaluation of mineral tenements in Central
Lapland.
Australia exploration activities, which includes exploration and evaluation of mineral tenements in Western
Australia, New South Wales and Victoria.
Unallocated, which includes all other expenses that cannot be directly attributed to any of the segments above,
this includes the cost of storage of exploration equipment in the US.
Segment information that is evaluated by the Chief Operating Decision Marker (as defined by AASB 8 Operating
Segments) is prepared in conformity with the accounting policies adopted for preparing the financial statements of the
Group.
SEGMENT RESULTS
Statement of profit or loss for
the year ended 30 June 2022
Other income
Corporate expenses
Business Development
Travel
Depreciation expense
Share-based payments
Other gain/(losses) - net
Finance Cost of Right of Use
asset
Exploration expenditure
expensed as incurred
Loss before income tax
Income tax expense
Loss after income tax for the year
Finland
exploration
activities
-
-
-
-
-
-
-
Australia
exploration
activities
-
-
-
-
-
-
-
Unallocated
Total
166,912
(1,06,327)
(258,343)
(103,467)
(139,029)
(1,364,243)
(39,682)
166,912
(1,060,327)
(258,343()
(103,467)
(139,029)
(1,364,243)
(39,682)
-
-
(8,221)
(8,221)
(1,728,763)
(1,728,763)
-
(1,728,763)
(2,990,176)
(2,990,176)
-
(2,990,176)
(2,024)
(2,646,686)
-
(2,646,686)
(4,720,963)
7,365,625)
-
(7,365,625)
53
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 3. SEGMENT INFORMATION (CONTINUED)
Statement of profit or loss for
the year ended 30 June 2021
Other income
Corporate expenses
Business Development
Travel
Depreciation expense
Share-based payments
Other gain/(losses) - net
Finance Cost of Right of Use
asset
Exploration expenditure
expensed as incurred
Gain on disposal of subsidiary
Share of associate's loss
Fair value adjustment for
reclassification of investment
Loss before income tax
Income tax expense
Loss after income tax for the
year
Finland
exploration
activities
-
-
-
-
-
-
-
Australia
exploration
activities
-
-
-
-
-
-
-
Unallocated
Total
56,314
(981,524)
(356,763)
(44,217)
(151,849)
(1,155,918)
(315,243)
56,314
(981,524)
(356,763)
(44,217)
(151,849)
(1,155,918)
(315,243)
-
-
(10,737)
(10,737)
(2,269,676)
(3,019,153)
-
-
(2,269,676)
-
(3,019,153)
-
(6,008)
46,855
(159,042)
1,132,554
(1,945,578)
-
(5,294,837)
46,855
(159,042)
1,132,554
(7,234,407)
-
(2,269,676)
(3,019,153)
(1,945,578)
(7,234,407)
Exploration assets 2022
Exploration assets 2021
Finland
exploration
activities
966,972
966,972
Australia
exploration
activities
1,400,000
1,400,000
Unallocated
Total
- 2,366,972
- 2,366,972
SEGMENT ASSETS AND LIABILITIES
The Group’s other assets (excluding exploration assets) are mostly attributable to the unallocated segment therefore
assets attributable to exploration in Finland and Australia is immaterial for disclosure.
54
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 4. INCOME TAX
Recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Current tax
Deferred tax
Under (over) provided in prior years
Total income tax benefit/(expense) per Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Numerical reconciliation between tax expense and pre-tax net loss
Net loss before tax
Income tax benefit at 25% (2021: 26%)
Income tax expense / (benefit) for overseas entities (at various rates)
Increase in income tax due to:
Non-deductible expenses
Current year tax losses not recognised
Decrease in income tax due to:
Movement in unrecognised temporary differences
Capital losses recognised during the year
Capital losses utilised during the year
Tax losses utilised during the year
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following:
Previous year tax losses brought forward
Tax revenue losses (1)
Annual Report 2022
30 June
2022
$
30 June
2021
$
-
-
-
-
-
-
-
-
(7,365,625)
(1,406,724)
(347,770)
(7,234,407)
(3,536,834)
1,446,803
341,342
1,432,411
392,063
1,618,407
(19,259)
-
-
-
79,561
-
-
-
8,450,662
1,445,361
9,896,023
6,767,436
1,683,226
8,450,662
(1) Net deferred tax assets have not been brought to account as it is not probable that within the immediate future tax
profits will be available against which deductible temporary differences and tax losses can be utilised.
55
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 5. CASH AND CASH EQUIVALENTS
Current
Cash at bank and in hand
Restricted cash
Annual Report 2022
30 June
2022
$
5,411,615
310,729
5,722,344
30 June
2021
$
7,316,846
322,790
7,639,636
NOTE 6. INVESTMENTS AND OTHER FINANCIAL ASSETS
(i) Classification of financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI) comprise of equity securities which are not
held for trading, and which the Group has irrevocably elected at initial recognition to recognise in this category.
(ii) Equity investments at fair value through other comprehensive income
Equity investments at FVOCI comprise the following individual investments:
Investments
Balance at beginning of the year
Todd River Resources Ltd
Movement during the year
30 June
30 June
2022
$
2021
$
6,246,071
-
Todd River Resources Ltd transfer from investment in associate balance (Note 7)
-
2,709,139
Aurion Resources Ltd issued for sale of Keulakkopää exploration permit (i)
172,700
Todd River Resources change in fair value of investment
(4,289,471)
3,536,932
Aurion Resources Ltd change in fair value of investment
(21,884)
Balance as at 30 June
2,107,417
6,246,071
(i)
Valuation based on share price as at 8 June 2022.
56
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 6: INVESTMENTS AND OTHER FINANCIAL ASSETS (CONTINUED)
(iii) Fair values of other financial assets at amortised cost
Financial assets at amortised cost include the following:
Current – Trade and other receivables
Trade and other receivables
30 June
2022
$
86,870
86,870
30 June
2021
$
101,161
101,161
Due to the short term nature of the trade and other receivables and prepayments, their carrying amount is considered
to be the same as their fair value.
NOTE 7. EQUITY INVESTMENT AND INTERESTS IN ASSOCIATES
The Groups investment in Todd River Resources Ltd (ASX:TRT) was reduced from 30.62% to 24.50% in August 2020 due
to a capital raising share issue by TRT that the Group did not participate in, to 18.48% in September 2020 due to a share
issue by TRT in relation to a project acquisition and to 15.57% in October 2020 due to a capital raising share issue by TRT
that the Group did not participate in.
The Group then reclassified the investment from being an associate to an investment as they no longer had significant
influence over TRT. See Note 1 for an explanation of the accounting judgement in relation to this classification.
Investment in associate reconciliation
S2R's investment as at 1 July 2020 (1)
30 June 2021
$
1,735,627
Less Group’s share to October 2020
$
(159,042)
Fair value adjustment of interest retained (2)(3) $
1,132,554
Transfer to financial asset
Carrying amount
(2,709,139)
-
(1) This includes $8,703 of transaction costs.
(2) The share price as at 26 October 2020 which was the date of reclassification was 0.036 cents.
(3) This was taken through the profit or loss statement.
Todd River Resources Ltd have share capital consisting of ordinary shares and options of which 13.17% of the ordinary
shares are held directly by the Group as at 30 June 2022.
57
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 7. EQUITY INVESTMENT AND INTERESTS IN ASSOCIATES (CONTINUED)
Amounts recognised in profit or loss
During the year, the following gains were recognised in the profit or loss and other comprehensive income.
30 Jun 2022
$
30 Jun 2021
$
Fair value adjustment for reclassification of investment
-
1,132,554
NOTE 8. EXPLORATION AND EVALUATION
Exploration costs
Movement during the year
30 June
2022
$
30 June
2021
$
2,366,972
2,366,972
Balance at beginning of the year
Exploration expenditure incurred during the year
Exploration expenditure incurred during the year and expensed (i)
Exploration expenditure relating to acquisitions (ii)
Foreign currency translation differences
Balance at end of the year
2,366,972
4,720,963
(4,720,963)
2,366,972
966,972
5,294,837
(5,294,837)
1,400,000
-
2,366,972
(i) During the year ended 30 June 2022 the exploration expenditure incurred pertains to the following:
Australian Projects
Exploration expenditure incurred and expensed for Australia was $2,990,176.
Finland Projects
Exploration expenditure incurred and expensed for Finland was $1,728,763.
US Projects
Exploration expenditure incurred and expensed for the in the US was $2,024 this relates to the storage of
exploration equipment.
(ii) Expenditure incurred but not expensed for Australia was $1,400,000. In October 2020, S2 entered into a binding
agreement with private company Black Raven Mining Pty Ltd (“BRM”) to earn a majority interest in a group of
tenements known as the Jillewarra project (see S2 ASX announcement dated 5 October 2020). The farm-in
comprised an up-front non-cash consideration, an earn-in phase, and a potential free carry, as summarised
below:
Issue of 5 million S2 shares to BRM at A$0.28, representing a consideration of A$1.4m (issued 5 October 2020)
o
o Minimum expenditure of A$2m within 2 years
o
Cumulative expenditure of A$5m within 5 years to earn a 51% interest
58
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 8. EXPLORATION AND EVALUATION (CONTINUED)
o
Completion of a study on Inferred Mineral Resources of at least 250,000 ounces of gold (or base metal
equivalent) within 7 years to earn a 70% interest
o On completion of this study by S2, BRM can elect to contribute, dilute, or revert to a free carried interest (“FCI”)
to commencement of commercial production
In the event of BRM opting for a FCI, BRM’s interest reduces to 25% and S2’s interest increases to 75%, and
BRM repays its free carry from 100% of its share of future revenue
In the event of S2 not completing a study within 7 years, S2’s interest decreases to 49%
o
There is no reduction in the exploration asset for the Finnish tenement that was sold during the year as the acquisition
costs originally capitalised were for the Finland area of interest which includes a collection of tenements which S2 is
continuing to explore.
NOTE 9. TRADE AND OTHER PAYABLES
Trade and other payables (i)
30 June
2022
$
30 June
2021
$
281,915
756,903
(i)
These amounts generally arise from the usual operating activities of the Group and are expected to be settled
within 12 months. Collateral is not normally obtained.
NOTE 10. SHARE CAPITAL
Ordinary shares fully paid
Movement in Share Capital
30 June
2022
No. of
Shares
356,374,85
5
30 June
2022
$
30 June
2021
No. of Shares
30 June
2021
$
65,831,625
314,891,179
61,184,670
Share Placement
Share issue to BRM for Jillewarra Project - See Note 8 ii.
Ordinary shares fully paid
41,483,67
4,646,955
61,976,000
5,000,000
7,238,790
1,393,357
Balance at beginning of year
Balance at year end
314,891,17
9
356,374,85
61,184,670
247,915,179
52,552,523
65,831,625
314,891,179
61,184,670
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion
to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
59
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 11. RESERVES
Share-based payments reserve (i)
Other reserve (ii)
Foreign currency translation reserve (iii)
Revaluation reserve (iv)
Annual Report 2022
30 June 2022
$
3,388,852
144,517
321,702
(774,423)
3,080,648
30 June 2021
$
2,862,214
144,517
352,665
3,536,932
6,896,328
(i) The share-based payments reserve recognises the fair value of the options issued to Directors, employees and service
providers.
Each share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by
the recipient on receipt of the option. The options carry neither rights to dividends or voting rights. Options may be
exercised at any time from the date of vesting to the date of their expiry.
In the year ended 30 June 2022, $837,605 in relation to the fair value of options which has lapsed or expired was
transferred to accumulated losses.
(ii) The other reserve recognises the remaining non-controlling interest (33%) that was purchased from the Sakumpu
vendors on 30 November 2015. Sakumpu Exploration Oy is a registered entity in Finland.
(iii) Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive
income and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss
when the net investment is disposed of.
(iv) The revaluation reserve recognises the change in fair value of investments. Please refer to Note 6 of these
financials.
NOTE 12. SHARE-BASED PAYMENTS
The following share-based payments arrangements were in existence during the current reporting year:
Options
Options Series
Number Issued
Number at 30
June 2022
Grant Date
Expiry Date
Exercise
Price $
Fair value
at Grant
Date $
(10) Issued 28 November 2018
(11) Issued 5 March 2019
(12) Issued 12 November 2019
(13) Issued 3 December 2019
(14) Issued 27 August 2020
(15) Issued 5 October 2020
(16) Issued 17 November 2020
(17) Issued 12 November 2021
(18) Issued 19 April 2022
(19) Issued 28 April 2022
Total
2,900,000
50,000
18,000,000
400,000
200,000
2,000,000
7,350,000
11,050,000
300,000
200,000
42,450,000
2,400,000
50,000
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
41,000,000
28/11/2018 27/11/2022
05/03/2019 04/03/2023
12/11/2019 11/11/2023
03/12/2019 02/12/2023
27/08/2020 26/08/2024
05/10/2020 04/10/2024
17/11/2020 16/11/2024
12/11/2021 11/11/2025
19/04/2022 18/04/2026
28/04/2022 27/04/2026
0.05
0.04
0.04
0.04
0.10
0.14
0.14
0.13
0.11
0.10
0.14
0.11
0.30
0.30
0.30
0.39
0.38
0.29
0.25
0.23
60
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 12. SHARE-BASED PAYMENTS (CONTINUED)
(10) The 2,900,000 options in series 10 comprised 2,500,000 were issued to employees under the Employee Share
Option Plan which vest one year from grant date and 400,000 options were issued to service providers which
vest one year from grant date. For the service provider options, the value of services received was unable to be
measured reliably and therefore the value of services received was measured by reference to the fair value of
options issued.
(11) The 50,000 options in series 11 which vests one year from grant date was issued to an employee under the
Employee Share Option Plan.
(12) The 18,000,000 options in series 12 comprised 15,500,000 options issued to the Directors of the Group which
vested immediately, 2,100,000 options were issued to employees under the Employee Share Option Plan which
vest one year from grant date and 400,000 options were issued to service providers which vest one year from
grant date. For the service provider options, the value of services received was unable to be measured reliably
and therefore the value of services received was measured by reference to the fair value of options issued.
(13) The 400,000 options in series 13 which vests one year from grant date were issued to employees under the
Employee Share Option Plan.
(14) The 200,000 options in series 14 which vests one year from grant date were issued to a service provider under
the Service Provider Option Plan. For the service provider options, the value of services received was unable to
be measured reliably and therefore the value of services received was measured by reference to the fair value
of options issued.
(15) The 2,000,000 options in series 15 which vests one year from grant date was issued to an employee under the
Employee Share Option Plan.
(16) The 7,350,000 options in series 16 comprised 4,500,000 options issued to the Directors of the Group which
vested immediately, 2,450,000 options were issued to employees under the Employee Share Option Plan which
vest one year form grant date and 400,000 options were issued to service providers which vest one year from
grant date. For the service provider options, the value of services received was unable to be measured reliably
and therefore the value of services received was measured by reference to the fair value of options issued.
(17) The 11,050,000 options in series 17 comprised 6,500,000 options issued to the Directors of the Group which
vested immediately, 4,450,000 options were issued to employees under the Employee Share Option Plan which
vest one year form grant date and 100,000 options were issued to service providers which vest one year from
grant date. For the service provider options, the value of services received was unable to be measured reliably
and therefore the value of services received was measured by reference to the fair value of options issued.
(18) The 300,000 options in series 18 which vests one year from grant date was issued to an employee under the
Employee Share Option Plan.
(19) The 200,000 options in series 19 which vests one year from grant date was issued to an employee under the
Employee Share Option Plan. The weighted average fair value of the share options granted during the year is
$0.14.
61
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 12. SHARE-BASED PAYMENTS (CONTINUED)
The total expense of the share based payments for the year was:
Options issued under Directors Option Plan
Options issued under Employee Share Plan
Options issued under Service Provider Plan
Annual Report 2022
30 June
2022
$
817,584
513,565
33,093
1,364,243
30 June
2021
$
646,380
457,557
51,981
1,155,918
The weighted average contractual life for options outstanding at the end of the year was 2.15 years.
Options were priced using a Black-Scholes option pricing model using the inputs below:
Series 10
Grant date share price 0.09
0.14
Exercise price
80%
Expected volatility
4 years
Option life
0.00%
Dividend yield
2.29%
Interest rate
Series 11
0.07
Series 12
0.115
Series 13
0.115
0.11
80%
4 years
0.00%
1.75%
0.30
80%
4 years
0.00%
0.86%
0.30
80%
4 years
0.00%
0.86%
Series 14
Series 15
0.20
0.30
80%
4 years
0.00%
0.43%
0.28
0.39
80%
4 years
0.00%
0.29%
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest rate
Series 16
0.28
0.38
80%
4 years
0.00%
0.29%
Series 17
0.20
0.29
100%
4 years
0.00%
1.11%
Series 18
0.17
0.25
100%
4 years
0.00%
2.77%
Series 19
0.155
0.23
100%
4 years
0.00%
2.77%
The following reconciles the outstanding share options granted in the year ended 30 June 2022:
30 June
2022
30 June
2022
No. of Options Weighted average
exercise price
$
30 June
2021
No. of
Options
30 June
2021
Weighted average
exercise price
$
Balance at the beginning of the
year
Granted during the year
Exercised during the year
Expired during the year (i)
Balance at the end of the year
Un-exercisable at the end of the
year
Exercisable at end of the year
40,300,000
11,550,000
-
(10,850,000)
41,000,000
4,300,000
36,700,000
0.29
0.38
-
0.26
0.31
0.28
0.31
41,600,000
9,550,000
-
(10,850,000)
40,300,000
5,050,000
35,250,000
0.34
0.38
-
0.56
0.29
0.38
0.28
62
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 12. SHARE-BASED PAYMENTS (CONTINUED)
(i) Options expired or cancelled during the year
For the year ended 30 June 2022, 10,850,000 employee, director and service provider share options were lapsed or
expired.
No amounts are unpaid on any of the shares. No person entitled to exercise an option had or has any rights by virtue of
the option to participate in any share issue of any other body corporate.
NOTE 13. DIVIDENDS
There were no dividends recommended or paid during the year ended 30 June 2022.
NOTE 14. KEY MANAGEMENT PERSONNEL DISCLOSURES
Short term employee benefits
Post-employment benefits
Annual Leave benefits
Share-based payment
30 June
2022
$
747,032
62,923
51,054
956,289
1,817,298
30 June
2021
$
665,879
55,464
42,468
854,979
1,618,790
Detailed remuneration disclosures are provided in the Remuneration Report.
NOTE 15. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH USED IN OPERATING ACTIVITIES
Loss for the year
Depreciation
Equity Settled share-based payment transaction
Income tax benefit/(expense)
Other (gain)/losses – net
Gain on disposal of subsidiary
Gain on disposal of asset
Share of associate’s loss
Gain on disposal of exploration permit
Fair Value adjustment for reclassification of investment
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in provisions
(Increase)/Decrease in receivables
30 June
2022
$
(7,365,625)
139,029
1,364,243
-
39,682
-
(155,409)
-
(161,738)
-
(474,988)
76,859
(6,288)
30 June
2021
$
(7,234,407)
151,849
1,155,918
-
310,218
(46,855)
159,042
-
(1,132,554)
687,652
37,385
85,203
Net cash outflow from operating activities
(6,544,235)
(5,826,549)
63
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 16. BASIC LOSS PER SHARE
30 June
2022
$
30 June
2021
$
(a)
Reconciliation of loss used in calculating loss per share
Basic loss per share
Loss attributable to the ordinary equity holders used in calculating basic loss per
share
(7,365,625)
(7,234,407)
(b) Weighted average number of shares used as the Denominator
Number
Number
Ordinary shares used as the denominator in calculating basic loss per share
349,422,920
309,145,641
(c) Basic loss per share
Basic loss per share
Where loss per share is non-dilutive, it is not disclosed.
NOTE 17. COMMITMENTS
Cents
(2.11)
Cents
(2.34)
The Group must meet the following tenement expenditure commitments to maintain them in good standing until they
are joint ventured, sold, reduced, relinquished, exemptions from expenditure are applied or are otherwise disposed of.
These commitments, net of farm outs, are not provided for in the financial statements and are:
Not later than one year
After one year but less than two years
After two years but less than five years
After five years*
* Per annum
NOTE 18. RELATED PARTY TRANSACTIONS
30 June
2022
$
1,037,844
975,278
722,346
217,561
2,953,029
30 June
2021
$
1,096,345
982,189
1,452,591
190,749
3,721,874
Other than the Directors and key management personnel salaries and options described in Note 14 and the Remuneration
Report, there were no related party transactions for the year ended 30 June 2022.
64
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 19. JOINT VENTURES
The Group has interests in the following joint venture operations:
Tenement
Area
Activities
Eundynie
Nickel
NOTE 20. PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Fair value and other comprehensive income reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive income
Annual Report 2022
2022
2021
80%
80%
30 June
2022
$
30 June
2021
$
5,342,322
4,871,585
10,213,907
7,171,975
8,667,169
15,839,144
325,958
95,437
421,395
9,792,512
297,562
102,203
399,765
15,439,379
65,831,625
3,388,852
(21,884)
(59,406,081)
9,792,512
61,184,670
2,862,214
-
(48,607,505)
15,439,379
30 June
2022
$
30 June
2021
$
(11,636,181)
-
11,636,181
(3,725,375)
-
(3,725,375)
65
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 21. SUBSIDIARIES
Name of entity
Third Eye Pty Ltd
Southern Star Exploration Pty Ltd
Sirius Europa Pty Ltd
Norse Exploration Pty Ltd
Sakumpu Exploration Oy
S2 Exploration Quebec Inc.
S2RUS Pty Ltd
S2RUS LLC
Nevada Star Exploration LLC
Country of
incorporation
Australia
Australia
Australia
Australia
Finland
Canada
Australia
United States
United States
Class of Shares
Equity Holding
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
NOTE 22. EVENTS OCCURRING AFTER THE REPORTING YEAR
On 1 August 2022 Executive Director Anna Neuling moved to a Non-Executive Director role.
As part of this role change, Anna relinquished her Company Secretary responsibilities effective 26 July 2022 and Andrea
Betti was appointed Company Secretary to the Company and its subsidiaries.
Ms Betti is an accounting and corporate professional with over 20 years’ experience in accounting, corporate governance,
finance and corporate banking. She has acted as Chief Financial Officer and Company Secretary for a number of
companies in the private and publicly listed sectors. Ms Betti is currently a Director of a corporate advisory company
based in Perth that provides corporate and other advisory services to public listed companies.
On 12 August 2022 S2 Resources Ltd advised changes to key roles, its registered office, and its principal place of business.
Principal place of business was changed from Perth to Melbourne. The address of the new office is Level 8, 350 Collins
Street, Melbourne, VIC 3000.
This reflects the Company’s commitment to planned exploration at its flagship Greater Fosterville project in central
Victoria. Mark Bennett S2’s Melbourne based Executive Chairman will manage the Company’s activities and Victoria
based personnel from the new Melbourne office.
As a result of this change, the Perth based position of Chief Executive Officer has become redundant, and consequently,
Mr Matthew Keane ceased his role as CEO
No other matter or circumstance has arisen since the end of the financial year which significantly affected or may
significantly affect the operation of the group, the results of those operations or the state of affairs of the group in
subsequent financial years.
66
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 23. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services
provided by the auditor of the Group:
Audit services
Total remuneration for audit services
Annual Report 2022
30 June
2022
$
44,000
44,000
30 June
2021
$
40,905
40,905
NOTE 24. FAIR VALUE MEASUREMENT
This note provides an update on the judgements and estimates in determining the fair values of the financial instruments
since the last annual financial report.
Fair Value Hierarchy
To provide an indication about the reliability of the inputs used in determining fair value. The Group classifies its financial
instruments into the three levels prescribed under accounting standards. An explanation of each level follows
underneath the table.
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value.
As at 30 June 2022
Financial assets as FVOCI –
Equity Securities
Level 1
Level 2
Level 3
$
2,107,417
$
-
$
-
Level 1
Level 2
Level 3
As at 30 June 2021
$
Financial assets as FVOCI –
Equity Securities
6,246,071
$
-
$
-
Total
$
2,107,417
Total
$
6,246,071
There were no transfers between levels during the year. The Group’s policy is to recognise transfers into and out of the
fair value hierarchy levels at balance date.
The fair value of the financial assets and liabilities held by the Group must be estimated for recognition, measurement
and /or disclosure purposes. The Group measures fair value by level, per the following fair value measurement
hierarchy:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or the liability,
either directly (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
•
67
Annual Report 2022
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 24. FAIR VALUE MEASUREMENT (CONTINUED)
Valuation techniques used to determine fair values
The Group did not have any financial instruments that are recognised in the financial statements where their carrying
value differed from the fair value. The fair value of assets and liabilities are included at an amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The
carrying value of amounts of cash and short term trade and other receivables, trade payables and other current liabilities
approximate their fair value largely due to the short term maturities of these payments.
Financial assets at fair value through other comprehensive income – equity securities
The fair value of the equity holdings held in ASX and TSXV companies are based on the quoted market prices from the
ASX and TSXV on the last trading day prior to the period end.
68
Annual Report 2022
Directors’ Declaration
The Directors of the Group declare that:
1. The financial statements and notes as set out on pages 19 to 57 are in accordance with the Corporations Act 2001,
and
(a)
comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(b)
give a true and fair view of the financial position of the Group as at 30 June 2022 and of its performance for the
year ended on that date.
2. The financial report also complies with International Financial Reporting Standards as disclosed in note 1 to the
financial statements.
3. The Director acting in the capacity of Chief Executive Officer has declared that:
(a)
the financial records of the Company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
(b)
the financial statements and notes for the financial year comply with the accounting standards; and
(c)
the financial statements and notes for the financial year give a true and fair view.
4.
In the opinion of the Directors there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
5. The remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report comply with
Australian Accounting Standards AASB 124 Related Party Disclosures, the Corporations Act 2001 and the Corporations
Regulations 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Mark Bennett
Executive Chairman
Melbourne
20 September 2022
69
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDECE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF S2 RESOURCES
LIMITED
As lead auditor of S2 Resources Limited for the year ended 30 June 2022, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of S2 Resources Limited and the entities it controlled during the period.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth
20 September 2022
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation
70
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of S2 Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of S2 Resources Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation
71
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.
Carrying value of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
As the carrying value of the capitalised exploration and
Our procedures included, but were not limited to:
evaluation asset represents a significant asset of the
Group at 30 June 2022, we considered it necessary to
assess whether any facts or circumstances exist to
suggest that the carrying amount of this asset may
exceed its recoverable amount.
Judgement is applied in determining the treatment of
exploration expenditure in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular, whether
facts and circumstances indicate that the exploration
and evaluation assets should be tested for impairment.
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
rights to tenure of those areas of interest
remained current at balance date;
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements and
director’s minutes;
Considering whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
Considering whether any facts or
circumstances existed to suggest impairment
testing was required; and
Assessing the adequacy of the related
disclosures in Notes 10 and 1(a) to the
Financial Statements.
72
Other information
The directors are responsible for the other information. The other information comprises the
information contained in directors report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s
report, and the annual report, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom
our report is prepared.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion.
73
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of S2 Resources Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth
20 September 2022
74
Annual Report 2022
Additional ASX Information
The shareholder information set out below was applicable as at the dates specified.
Unlisted Securities
Options (Current as at 26 September 2022)
Options expiring 27 November 2022 at an exercise price of $0.14
Options expiring 4 March 2023 at an exercise price of $0.11
Options expiring 11 November 2023 at an exercise price of $0.30
Options expiring 2 December 2023 at an exercise price of $0.30
Options expiring 26 August 2024 at an exercise price of $0.30
Options expiring 4 October 2024 at an exercise price of $0.39
Options expiring 16 November 2024 at an exercise price of $0.38
Options expiring 11 November 2025 at an exercise price of $0.29
Options expiring 18 April 2026 at an exercise price of $0.25
Options expiring 27 April 2026 at an exercise price of $0.23
Number on issue
2,400,000
50,000
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
Number of holders
5
1
10
1
1
1
11
14
1
1
Holders of over 20% of unlisted securities
These are the following holders of more than 20% of unlisted securities as at 26 September 2022:
Number held
10,000,000
Mark Bennett
Distribution of Equity Securities
Analysis of numbers of ordinary shareholders by size of holding:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of Shareholders
1,964
1,200
556
1,006
326
5,052
There are 2,889 holders holding less than a marketable parcel of ordinary shares based on the closing market price as at 26
September 2022.
Ordinary Shares Subject to Escrow
There are zero ordinary shares subject to either regulatory or voluntary escrow.
On-Market Buy-Back
There is no current on-market buy-back.
Voting Rights
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary Shares: On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
(b) Options: These securities have no voting rights.
75
Additional ASX Information (cont)
Substantial Holders (Current as at 26 September 2022)
Ordinary Shares
Mark Gareth Creasy, Yandal Investments Pty Ltd, Ponton Minerals Pty Ltd,
Lake Rivers Gold Pty Ltd and Free CI Pty Ltd
Merian Global Investors (UK) Limited
Paradice Investment Management Pty ltd
Equity Security Holders (Current as at 26 September 2022)
Annual Report 2022
Number held
Percentage of issued shares
67,419,935
46,621,574
23,341,794
18.92%
14.93%
7.53%
The names of the twenty largest holders of quoted equity securities (ordinary shares) are listed below:
Rank Name
Units
% of Units
1
2
3
4
5
6
6
8
9
10
11
12
13
14
15
16
17
18
19
20
CITICORP NOMINEES PTY LIMITED
YANDAL INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
PONTON MINERALS PTY LTD
FREE CI PTY LTD
LAKE RIVERS GOLD PTY LTD
BT PORTFOLIO SERVICES LIMITED
MARTINI 29 PTY LTD
BOND STREET CUSTODIANS LIMITED
BLACK RAVEN MINING PTY LTD
DR MARK ANTHONY BENNETT
CRANPORT PTY LTD
CITITEL PTY LTD
BRINDABELLA CAPITAL MANAGEMENT PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMS PTY LTD
MR ALAIN CHEVALIER
ROXTRUS PTY LTD
MR ANDREW JOHN CLARINGBOLD
Total of Top 20
Total Remaining Holders Balance
62,718,118
42,482,707
29,927,860
9,837,147
8,312,410
8,312,409
8,312,409
7,500,000
5,992,895
5,000,000
4,900,000
4,619,916
3,100,000
3,053,314
3,000,000
2,907,478
2,616,172
2,100,000
2,005,946
2,000,000
17.60
11.92
8.40
2.76
2.33
2.33
2.33
2.10
1.68
1.40
1.37
1.30
0.87
0.86
0.84
0.82
0.73
0.59
0.56
0.56
218,698,781
137,676,074
61.37
38.63
76
Annual Report 2022
Additional ASX Information (cont)
Tenement Schedule as at 30 June 2022
Project
Tenement ID
Registered Holder
Location
Ownership %
Status
Western Australia
Three Springs
Three Springs
E70/5380
E70/5381
Southern Star Exploration Pty Ltd
Three Springs
Southern Star Exploration Pty Ltd
Three Springs
West Murchison
E70/5382
Southern Star Exploration Pty Ltd
West Murchison
West Murchison
E09/2390
Southern Star Exploration Pty Ltd
West Murchison
West Murchison
E09/2391
Southern Star Exploration Pty Ltd
West Murchison
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
E51/1602
E51/1603
E51/1604
E51/1617
E51/1906
E51/1915
E51/2050
E51/2051
E51/2052
E51/2053
E51/2054
M51/270
M51/353
M51/451
P51/2696
P51/2950
P51/3082
Tanzi Pty Ltd
Tanzi Pty Ltd
Tanzi Pty Ltd
Black Raven Mining Pty Ltd
Black Raven Mining Pty Ltd
Black Raven Mining Pty Ltd
Third Eye Resources Pty Ltd
Third Eye Resources Pty Ltd
Third Eye Resources Pty Ltd
Third Eye Resources Pty Ltd
Third Eye Resources Pty Ltd
Tanzi Pty Ltd
Tanzi Pty Ltd
Tanzi Pty Ltd
Wood, Sandra
Black Raven Mining Pty Ltd
Black Raven Mining Pty Ltd
E51/1955
Black Raven Mining Pty Ltd
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
E51/1956
Black Raven Mining Pty Ltd
Jillewarra
Jillewarra
E51/1965
Black Raven Mining Pty Ltd
Jillewarra
Jillewarra
E51/1966
Black Raven Mining Pty Ltd
Jillewarra
Jillewarra
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
M51/885
Wood, Sandra
E15/1298
E15/1461
E15/1541
E63/1142
E63/1712
E63/1725
E63/1756
M15/651
M15/710
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Jillewarra
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
100%
100%
100%
100%
100%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51%
earning 51% when
granted
earning 51% when
granted
earning 51% when
granted
earning 51% when
granted
earning 51% when
granted
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
77
Additional ASX Information (cont)
Tenement Schedule as at 30 June 2022
Project
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Tenement ID
Registered Holder
M63/230
M63/255
M63/269
M63/279
P15/5958
P15/5959
P63/1587
P63/1588
P63/1589
P63/1590
P63/1591
P63/1592
P63/1593
P63/1594
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Polar Bear
M63/662
Polar Metals Pty Ltd
Annual Report 2022
Location
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Ownership %
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
100% nickel
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100% nickel when
granted
Application
Lake Cowan
80% nickel
Granted
Lake Cowan
80% nickel
Granted
Lake Cowan
80% nickel
Granted
Lake Cowan
80% nickel
Granted
Lake Cowan
80% nickel
Granted
Lake Cowan
80% nickel
Mt Norcott
Mt Norcott
100% nickel
100% nickel
Granted
Granted
Granted
Granted
Granted
Granted
Polar Metals Pty Ltd / Shumwari Pty
Ltd
Polar Metals Pty Ltd / Shumwari Pty
Ltd
Polar Metals Pty Ltd / Shumwari Pty
Ltd
Polar Metals Pty Ltd / Shumwari Pty
Ltd
Polar Metals Pty Ltd / Shumwari Pty
Ltd
Polar Metals Pty Ltd / Shumwari Pty
Ltd
Polar Metals Pty Ltd
Polar Metals Pty Ltd
Eundynie JV
E15/1458
Eundynie JV
E15/1459
Eundynie JV
E15/1464
Eundynie JV
E63/1726
Eundynie JV
E63/1727
Eundynie JV
E63/1738
E15/1487
E63/1728
E28/2791
E28/2792
E28/2794
Norcott
Norcott
Fraser Range
Fraser Range
Fraser Range
New South Wales
Koonenberry
Koonenberry
Koonenberry
Victoria
Southern Star Exploration Pty Ltd
Fraser Range
Southern Star Exploration Pty Ltd
Fraser Range
Southern Star Exploration Pty Ltd
Fraser Range
100%
100%
100%
ELA6198
ELA6199
ELA6200
Third Eye Resources Pty Ltd
Third Eye Resources Pty Ltd
Third Eye Resources Pty Ltd
Koonenberry
Koonenberry
Koonenberry
100% when granted Application
100% when granted Application
100% when granted Application
Greater Fosterville
EL7795
Southern Star Exploration Pty Ltd
Greater Bendigo
100% when granted Application
78
Annual Report 2022
Additional ASX Information (cont)
Tenement Schedule as at 30 June 2022
Tenement ID
Registered Holder
Location
Ownership %
Status
Project
Finland
Exploration Licenses
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Central Lapland
Kinross JV
Kinross JV
Kinross JV
Kinross JV
Central Lapland
Central Lapland
Central Lapland
Paana Central
ML2018:0081
Aakenusvaara
ML2018:0105
Paana W2
ML2018:0107
Selkä
ML2017:0037
Putaanperä
ML2016:0063
Paana West
ML2017:0028
Paana East
ML2017:0029
Nuttio
ML2017:0041
Hanhijarvi
ML2017:0112
Pahasvuoma
ML2019:0085
Rova
ML2019:0086
Ruopas
ML2020:0043
Paana Silas
ML2021:0057
Paanapyytö
ML2021:0058
Palvanen
ML2016:0062
Mesi
ML2017:0034
Home
ML2017:0042
Home 1
ML2018:0109
Sikavaara E
ML2016:0056
Sikavaara W
ML2019:0107
Keulakkopää
ML2016:0058
Sakumpu Exploration Oy
Central Lapland
100%
Sakumpu Exploration Oy
Central Lapland
100%
Sakumpu Exploration Oy
Central Lapland
100%
Sakumpu Exploration Oy
Central Lapland
100%
Granted
Granted
Granted
Granted (pending
30 day appeal)
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
100% when granted Application
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
Exploration Reservations
Central Lapland
Central Lapland
Kehrävarsi
VA2021:0028
Kevuvuoma
VA2021:0029
Sakumpu Exploration Oy
Central Lapland
Sakumpu Exploration Oy
Central Lapland
100% (Kinross
earning 70%)
100% (Kinross
earning 70%)
100% (Kinross
earning 70%)
100% (Kinross
earning 70%)
100% (Rupert
earning 70%)
100% (Rupert
earning 70%)
100% - (subject to
sale to Aurion
Resources)
100% (Kinross
earning 70%)
100% (Kinross
earning 70%)
Granted
Granted
Granted
Granted
Granted
Granted
Extension
Application
Granted
Granted
79
Annual Report 2022
Competent Persons Statement
The information in this report that relates to exploration results from Australia and Finland is based on information
compiled by John Bartlett who is an employee of the company. Mr Bartlett is a member of the Australasian Institute of
Mining and Metallurgy. Mr Bartlett has sufficient experience of relevance to the style of mineralisation and the types of
deposits under consideration, and to the activities undertaken, to qualify as Competent Persons as defined in the 2012
Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Mr Bartlett consents to the inclusion in this report of the matters based on information in
the form and context in which it appears.
80