ANNUAL REPORT
for the
Year Ended 30 June 2023
S2 RESOURCES LTD ABN 18 606 128 090
Annual Report 2023
Annual Report 2023
Corporate Directory
Directors
Mark Bennett
Jeff Dowling
Anna Neuling
Executive Chairman
Non-Executive Director
Non-Executive Director
Company Secretary
Andrea Betti
Principal Office
Registered Office
Auditor
Share Registry
Level 14, 333 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 17, 221 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
Contents
Chairmans Review .................................................................................................................................... 1
Operations Review ................................................................................................................................... 3
Directors Report ................................................................................................................................................. 15
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 ............................................................................................................................. 60
Auditor’s Independence Declaration ........................................................................................................ 61
Independent Auditor’s Report ................................................................................................................. 62
Additional ASX Information .................................................................................................................... 66
Competent Persons Statement ................................................................................................................ 71
Annual Report 2023
Annual Report 2023
Corporate Directory
Directors
Mark Bennett
Jeff Dowling
Anna Neuling
Executive Chairman
Non-Executive Director
Non-Executive Director
Company Secretary
Andrea Betti
Principal Office
Registered Office
Auditor
Level 14, 333 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
Level 17, 221 St Georges Terrace
Perth, Western Australia 6000
Telephone: 1300 787 575
Share Registry
Computershare Investor Services Pty Limited
Stock Exchange Listing
S2 Resources Ltd shares are listed on the Australian Securities Exchange.
ASX Code
S2R
Contents
Chairmans Review .................................................................................................................................... 1
Operations Review ................................................................................................................................... 3
Directors Report ................................................................................................................................................. 15
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 ............................................................................................................................. 60
Auditor’s Independence Declaration ........................................................................................................ 61
Independent Auditor’s Report ................................................................................................................. 62
Additional ASX Information .................................................................................................................... 66
Competent Persons Statement ................................................................................................................ 71
Annual Report 2023
Annual Report 2023
Chairman’s Review
First and foremost, I would like to acknowledge the patience of our shareholders, who have spent the year waiting for
the granting of the Greater Fosterville exploration licence application in Victoria. I am pleased to say this was granted on
4th October 2023, and exploration will commence in late October.
Our overall strategic objective is to create value for shareholders through exploration success. Our strategy comprises
three components. Firstly, we aim to focus our time and money on the three key projects we believe are capable of
delivering significant exploration success – namely the Greater Fosterville gold project in Victoria, the Koonenberry nickel-
copper project in New South Wales, and the Jillewarra gold project in Western Australia. Secondly, we are always looking
out for new opportunities that have the potential to create value and that can replace those we feel we have tested
sufficiently. Thirdly, we objectively divest those that are non-core, and either monetise them to provide funding for our
core projects or retain a no cost or low cost slice of the pie to be exposed to potential future value uplift through
exploration funded by others. Examples of this during the year include the farmout and sale of various tenements in
Finland to Kinross Gold Corporation, and the vending of two of our non-core Western Australian projects for a significant
shareholding in a company that intends to list on the Australian Securities Exchange prior to end June 2024. Our activities
are described in full in the Operations section of this report, and are summarised below.
Greater Fosterville, Victoria
During the year much time and effort was spent negotiating and formalising exploration access agreements with the two
traditional owner groups whose territories cover the Greater Fosterville licence area. These agreements were
preconditions for the grant of the licence. Additionally, an agreement pertaining to special conditions imposed on the
licence by the minister, was formalised with the Dja Dja Wurrung people, whose claim covers 93% of the licence area.
Whilst not a prerequisite for the granting of the licence, this agreement is a necessary precondition for commencing on-
ground exploration activities once the licence is granted. The Company has forged good relationships with the traditional
owner groups and looks forward to working together and continuing our association now the licence is granted. The
company can now formally 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. In the short term, we will commence drilling from roadsides.
Koonenberry, New South Wales
The exploration licence applications that comprise the Koonenberry project in far northwestern New South Wales were
granted late in the year, and the Company has since begun meeting pastoral lease holders to formalise access agreements
to conduct exploration, which is expected to commence in October/November 2023. 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 belt-scale opportunity.
Jillewarra, Western Australia
The company is earning a 70 percent interest in the Jillewarra project from private company Black Raven Resources. We
have spent much of the year continuing to negotiate a Heritage Protection Agreement with the traditional owners of the
area in order to enable the grant of key exploration licence applications over what is considered the most
gold-prospective part of the project. Although we have previously drilled several small, high grade 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. Once we have concluded these negotiations and the tenements are
granted, we plan to commence a large reconnaissance aircore drilling program to test the 35 kilometres of concealed
shear zone within our tenure.
Polar Bear nickel rights, Western Australia
The company drilled ten diamond core holes to test various electromagnetic conductors and geological targets at Polar
Bear during the year. These successfully intersected prospective ultramafic rocks with zones of disseminated nickel
sulphides, but failed to find economic grades and widths of mineralisation, as detailed in the operations section of this
annual report. Much of the Polar Bear area remains uncovered by EM so there is still considerable potential, especially
given the abundance of disseminated nickel sulphide encountered in the area tested to date.
Central Lapland Greenstone Belt, Finland
The Company retains a strategic landholding in the mineral-rich Central Lapland Greenstone Belt of northern Finland, but
recognises that it cannot be everywhere and do everything. To this end, we have been systematically divesting parts of
the package, either by sales of tenements or farmouts. In this way, we are able to not only reduce our financial
commitments, but we are able to either monetise these non-core assets and use the proceeds to fund our key projects
or retain a no or low cost minority interest to benefit from exploration funded by third parties. Kinross Gold Corporation
and Rupert Resources continued exploring and earning in to our ground during the year, and we also sold two exploration
licence applications to Kinross for cash.
Yilgarn nickel-copper-PGE targets, Western Australia
The Company signed a binding agreement with Pacific State Metals (Holdings) Ltd (“Pacific State”) to vend its West
Murchison and Fraser Range tenements into Pacific State. Pacific State is an unlisted Australian-incorporated public
company that has indicated to S2 that it has an intention to list on the Australian Securities Exchange (“ASX”) by 30 June
In return for the sale of its West Murchison and Fraser Range tenements to Pacific State, S2 has received 7 million ordinary
fully paid shares in the issued capital of Pacific State, representing approximately 28.6% of Pacific State’s issued capital.
Based on an agreed proforma capital structure post the planned initial public offering (IPO) on ASX, it is expected that S2
will hold approximately 13% of the issued capital in Pacific State post-completion of the IPO. This will provide the
Company with exposure to exploration upside at these projects and others in Pacific State’s project portfolio, whilst
eliminating the holding costs and thereby enabling us to focus our spend on our core projects.
2024.
Summary
We have maintained our approach of prudent financial management to ensure we remain well funded to explore whilst
defraying costs wherever possible.
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 and return on investment for its shareholders. We have the capability of finding these and
developing them into mines should they be financially robust, technically low risk, environmentally responsible, and
beneficial to local communities and traditional owners. 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 an active and successful 2024.
Mark Bennett
Executive Chairman
1
1
2
Annual Report 2023
Annual Report 2023
Chairman’s Review
First and foremost, I would like to acknowledge the patience of our shareholders, who have spent the year waiting for
the granting of the Greater Fosterville exploration licence application in Victoria. I am pleased to say this was granted on
4th October 2023, and exploration will commence in late October.
Our overall strategic objective is to create value for shareholders through exploration success. Our strategy comprises
three components. Firstly, we aim to focus our time and money on the three key projects we believe are capable of
delivering significant exploration success – namely the Greater Fosterville gold project in Victoria, the Koonenberry nickel-
copper project in New South Wales, and the Jillewarra gold project in Western Australia. Secondly, we are always looking
out for new opportunities that have the potential to create value and that can replace those we feel we have tested
sufficiently. Thirdly, we objectively divest those that are non-core, and either monetise them to provide funding for our
core projects or retain a no cost or low cost slice of the pie to be exposed to potential future value uplift through
exploration funded by others. Examples of this during the year include the farmout and sale of various tenements in
Finland to Kinross Gold Corporation, and the vending of two of our non-core Western Australian projects for a significant
shareholding in a company that intends to list on the Australian Securities Exchange prior to end June 2024. Our activities
are described in full in the Operations section of this report, and are summarised below.
Greater Fosterville, Victoria
During the year much time and effort was spent negotiating and formalising exploration access agreements with the two
traditional owner groups whose territories cover the Greater Fosterville licence area. These agreements were
preconditions for the grant of the licence. Additionally, an agreement pertaining to special conditions imposed on the
licence by the minister, was formalised with the Dja Dja Wurrung people, whose claim covers 93% of the licence area.
Whilst not a prerequisite for the granting of the licence, this agreement is a necessary precondition for commencing on-
ground exploration activities once the licence is granted. The Company has forged good relationships with the traditional
owner groups and looks forward to working together and continuing our association now the licence is granted. The
company can now formally 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. In the short term, we will commence drilling from roadsides.
Koonenberry, New South Wales
The exploration licence applications that comprise the Koonenberry project in far northwestern New South Wales were
granted late in the year, and the Company has since begun meeting pastoral lease holders to formalise access agreements
to conduct exploration, which is expected to commence in October/November 2023. 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 belt-scale opportunity.
Jillewarra, Western Australia
The company is earning a 70 percent interest in the Jillewarra project from private company Black Raven Resources. We
have spent much of the year continuing to negotiate a Heritage Protection Agreement with the traditional owners of the
area in order to enable the grant of key exploration licence applications over what is considered the most
gold-prospective part of the project. Although we have previously drilled several small, high grade 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. Once we have concluded these negotiations and the tenements are
granted, we plan to commence a large reconnaissance aircore drilling program to test the 35 kilometres of concealed
shear zone within our tenure.
Polar Bear nickel rights, Western Australia
The company drilled ten diamond core holes to test various electromagnetic conductors and geological targets at Polar
Bear during the year. These successfully intersected prospective ultramafic rocks with zones of disseminated nickel
sulphides, but failed to find economic grades and widths of mineralisation, as detailed in the operations section of this
annual report. Much of the Polar Bear area remains uncovered by EM so there is still considerable potential, especially
given the abundance of disseminated nickel sulphide encountered in the area tested to date.
Central Lapland Greenstone Belt, Finland
The Company retains a strategic landholding in the mineral-rich Central Lapland Greenstone Belt of northern Finland, but
recognises that it cannot be everywhere and do everything. To this end, we have been systematically divesting parts of
the package, either by sales of tenements or farmouts. In this way, we are able to not only reduce our financial
commitments, but we are able to either monetise these non-core assets and use the proceeds to fund our key projects
or retain a no or low cost minority interest to benefit from exploration funded by third parties. Kinross Gold Corporation
and Rupert Resources continued exploring and earning in to our ground during the year, and we also sold two exploration
licence applications to Kinross for cash.
Yilgarn nickel-copper-PGE targets, Western Australia
The Company signed a binding agreement with Pacific State Metals (Holdings) Ltd (“Pacific State”) to vend its West
Murchison and Fraser Range tenements into Pacific State. Pacific State is an unlisted Australian-incorporated public
company that has indicated to S2 that it has an intention to list on the Australian Securities Exchange (“ASX”) by 30 June
2024.
In return for the sale of its West Murchison and Fraser Range tenements to Pacific State, S2 has received 7 million ordinary
fully paid shares in the issued capital of Pacific State, representing approximately 28.6% of Pacific State’s issued capital.
Based on an agreed proforma capital structure post the planned initial public offering (IPO) on ASX, it is expected that S2
will hold approximately 13% of the issued capital in Pacific State post-completion of the IPO. This will provide the
Company with exposure to exploration upside at these projects and others in Pacific State’s project portfolio, whilst
eliminating the holding costs and thereby enabling us to focus our spend on our core projects.
Summary
We have maintained our approach of prudent financial management to ensure we remain well funded to explore whilst
defraying costs wherever possible.
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 and return on investment for its shareholders. We have the capability of finding these and
developing them into mines should they be financially robust, technically low risk, environmentally responsible, and
beneficial to local communities and traditional owners. 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 an active and successful 2024.
Mark Bennett
Executive Chairman
1
2
2
Annual Report 2023
Annual Report 2023
Operations Review
AUSTRALIAN PROJECTS
Greater Fosterville, Victoria (S2 100%)
S2’s 100% owned subsidiary, Southern Star Exploration Pty Ltd, was the winner of the highly competitive tender
for Block 4 in the Victorian Government North Central Victoria Gold ground release and has had this granted as
Exploration Licence (EL) 7795 over the ground surrounding Agnico Eagle’s (Agnico) world class Fosterville gold
mine. The EL covers an area of 394km², extending 55 kilometres north to south, and abutting and surrounding
Agnico’s mine lease (Figure 1). Agnico’s Fosterville gold mine includes the Swan Zone that had an initial Mineral
Ore Reserve of 2.34Moz of gold at a grade of 49.6g/t (refer to the NI 43-101 Report dated 31 December 2018).
By virtue of its position surrounding Agnico’s mine lease, its size, and its inherent prospectivity, EL7795 is a highly
strategic asset that 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 EL7795 together with recently granted EL8074 and
further applications EL8166, 8167 & 8292, together with the Fosterville mine and gold endowment of selected fields.
Figure 2. Map of EL7795 showing gold deposits/occurrences/prospects, key structures and the favourable corridor
for gold mineralisation west of the Redesdale Fault.
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Annual Report 2023
Annual Report 2023
Operations Review
AUSTRALIAN PROJECTS
Greater Fosterville, Victoria (S2 100%)
S2’s 100% owned subsidiary, Southern Star Exploration Pty Ltd, was the winner of the highly competitive tender
for Block 4 in the Victorian Government North Central Victoria Gold ground release and has had this granted as
Exploration Licence (EL) 7795 over the ground surrounding Agnico Eagle’s (Agnico) world class Fosterville gold
mine. The EL covers an area of 394km², extending 55 kilometres north to south, and abutting and surrounding
Agnico’s mine lease (Figure 1). Agnico’s Fosterville gold mine includes the Swan Zone that had an initial Mineral
Ore Reserve of 2.34Moz of gold at a grade of 49.6g/t (refer to the NI 43-101 Report dated 31 December 2018).
By virtue of its position surrounding Agnico’s mine lease, its size, and its inherent prospectivity, EL7795 is a highly
strategic asset that 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 EL7795 together with recently granted EL8074 and
further applications EL8166, 8167 & 8292, together with the Fosterville mine and gold endowment of selected fields.
Figure 2. Map of EL7795 showing gold deposits/occurrences/prospects, key structures and the favourable corridor
for gold mineralisation west of the Redesdale Fault.
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Annual Report 2023
Annual Report 2023
In July 2023 the Company advised that the final prerequisite agreement with the traditional owners had been
executed. This agreement with the Taungurung Land and Waters Council (TLaWC) is a Deed of Exploration
(“Deed”) pursuant to the Traditional Owner Settlement Act 2010 (TOSA) and Taungurung Land Use Activity
Agreement (LUAA) and is the first of its kind between TLaWC and a mineral exploration company. This Deed,
together with an earlier agreement signed with the Dja Dja Wurrung Aboriginal Corporation (DJAARA) traditional
owners, was the final agreement required by the Victorian Government as a prerequisite for processing the
Company’s application for EL7795.
This was supplemented by the execution of an agreement with DJAARA on 12th April 2023 covering special
conditions stipulated by the Victorian Government as part of the North Central Victorian Gold (NCVG) ground
release tender process. While this was not a prerequisite for the grant of EL7795, it is required to commence
work on Dja Dja Wurrung land within the licence. The Dja Dja Wurrung land covers 93% of EL7795 and will be
the focus for exploration activities.
The Exploration Licence was granted on 4th October 2023.
EL7795 has been supplemented by the granting of a second licence, EL8074, which is along trend from the >20
million ounce Bendigo goldfield. A further licence, EL8292, is under application.
As winners of the tender for Block 4, S2 also inherited a substantial amount of data acquired by previous
explorers over the area, including the relatively recent exploration work undertaken by Kirkland Lake Gold (the
owner of Fosterville prior to its acquisition by Agnico) on the previous tenement before it expired.
This data includes extensive and high quality geophysical and geochemical surveys such as gravity, induced
polarisation (IP), electromagnetic (EM), seismic, magnetic and LIDAR surveys, which are being used to generate
drill targets. The inheritance of such a significant amount of data represents a huge saving for the Company in
terms of time and money that would otherwise be required to get it to the point of having drill ready targets for
testing.
It also includes drilling data and drill core from holes drilled immediately prior to the expiry of the previous
tenement, which although widely spaced and/or shallow and/or highly localised, have identified gold
mineralisation in several locations. Consequently, the Company has a range of targets at various stages of
definition up to and including defined prospects simply requiring further drilling to determine the extent and
quality of gold mineralisation at those locations.
In addition to the immediate drill targets, detailed evaluation of the extensive dataset inherited has highlighted
the success of IP chargeability ground geophysics as a tool for identifying anomalies related to alteration
proximal to gold mineralisation. The historic dipole-dipole IP-resistivity data, which is publicly available on the
Geological Survey of Victoria discovery Portal, includes 13 lines located on EL7795 that traverse several
mineralised trends and which in places extend across Agnico Eagle’s mine lease where they highlight the high-
grade Swan Zone and the down plunge position of the Curie Zone currently being drilled out by Agnico Eagle
from underground (Figure 3).
Inversion modelling shows chargeability anomalism coincident with several known mineralised structures,
including the Sugarloaf, Fosterville, O’Donnell’s, O’Dwyer’s and Goornong trends. Most anomalous chargeability
responses are broad and extend close to surface. Possible sources for these chargeability responses include
hydrothermal sulphide alteration associated with favourable structures (such as hinge structures and limb
thrusts) which often localise quartz veining and gold mineralisation, or stratigraphic responses localised around
hinge zones, proximal to gold mineralisation. In combination with analysis and interpretation of historic drilling
and surface geochemistry the chargeability surveys appear to provide a primary response related to
mineralisation that can be used to prioritise and vector towards gold mineralisation at specific locations along
these known trends.
S2 plans to use this data to guide drill testing once it has secured land access agreements. New chargeability
surveys will also be undertaken as a district-scale tool that could rapidly highlight priority target areas along the
aggregated hundreds of strike kilometres of prospective structures within the main gold corridor north and
south of Agnico’s Fosterville gold mine (Figure 2), that can then be drill tested, in addition to the already
identified walk-up targets.
Figure 3. 3D view looking NNW showing mineralised trends at the Fosterville Gold Mine that extend into S2’s
EL7795 application and the chargeability inversion models that highlight anomalies associated with alteration
associated with known gold mineralisation on the Fosterville mine lease, and as yet undrilled positions on, or
trending into, S2’s EL7795, such as the Sugarloaf trend, the Goornong trend, and the extensions of the
O’Donnell’s trend and O’Dwyer’s trend, which hosts the Robbins Hill/Curie gold zone currently being mined by
Agnico. Anything coloured yellow or hotter is anomalous.
Koonenberry, New South Wales (S2 100%)
S2 has three Exploration Licences covering 2,712 square kilometres, located 130km northeast of Broken Hill in
northern New South Wales (NSW), with the Silver City Highway passing through the centre of the project area. As
an early mover into the area, S2 has been able to acquire approximately 140 kilometres strike extent of the most
prospective and accessible part of the Koonenberry Belt, which hosts a series of mafic-ultramafic sills that have
intruded the late Proterozoic to Cambrian Mt Arrowsmith volcanics (Figure 4).
The project area covers a coincident gravity and magnetic ridge, interpreted to represent a slice of crust
comprising numerous mafic and ultramafic intrusions, of a similar scale to the Fraser Complex within the Albany-
Fraser Belt that contains the intrusion hosting Nova. Whereas the Albany-Fraser Belt is Proterozoic in age and
wraps around the southeastern margin of the Yilgarn Craton, the Koonenberry Belt is late Proterozoic to Cambrian
in age and wraps around the northeastern margin of the Curnamona Craton (Figure 5). Both are accretionary
mobile belts containing nickel prospective stratigraphy.
Koonenberry 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, that contains roughly 25 Ni-Cu-PGE mines containing approximately 4.7 million tonnes
of nickel and 2.4 million tonnes of copper, mainly localised in the basal sections of the thicker ferropicrite sills
and intrusions.
The belt also resembles other magmatic Ni-Cu-PGE sulphide endowed belts such as the Circum-Superior Belt of
Canada, (which is also an accretionary mobile zone wrapped around the northern margin of the Superior Craton)
which hosts the giant Raglan and Thompson Ni-Cu camps. In fact, this was the model that the S2 team (then as
Sirius Resources) used to identify the prospectivity of the Fraser Range, leading to the discovery of Nova.
5
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6
In July 2023 the Company advised that the final prerequisite agreement with the traditional owners had been
executed. This agreement with the Taungurung Land and Waters Council (TLaWC) is a Deed of Exploration
(“Deed”) pursuant to the Traditional Owner Settlement Act 2010 (TOSA) and Taungurung Land Use Activity
Agreement (LUAA) and is the first of its kind between TLaWC and a mineral exploration company. This Deed,
together with an earlier agreement signed with the Dja Dja Wurrung Aboriginal Corporation (DJAARA) traditional
owners, was the final agreement required by the Victorian Government as a prerequisite for processing the
Company’s application for EL7795.
This was supplemented by the execution of an agreement with DJAARA on 12th April 2023 covering special
conditions stipulated by the Victorian Government as part of the North Central Victorian Gold (NCVG) ground
release tender process. While this was not a prerequisite for the grant of EL7795, it is required to commence
work on Dja Dja Wurrung land within the licence. The Dja Dja Wurrung land covers 93% of EL7795 and will be
the focus for exploration activities.
The Exploration Licence was granted on 4th October 2023.
EL7795 has been supplemented by the granting of a second licence, EL8074, which is along trend from the >20
million ounce Bendigo goldfield. A further licence, EL8292, is under application.
As winners of the tender for Block 4, S2 also inherited a substantial amount of data acquired by previous
explorers over the area, including the relatively recent exploration work undertaken by Kirkland Lake Gold (the
owner of Fosterville prior to its acquisition by Agnico) on the previous tenement before it expired.
This data includes extensive and high quality geophysical and geochemical surveys such as gravity, induced
polarisation (IP), electromagnetic (EM), seismic, magnetic and LIDAR surveys, which are being used to generate
drill targets. The inheritance of such a significant amount of data represents a huge saving for the Company in
terms of time and money that would otherwise be required to get it to the point of having drill ready targets for
testing.
It also includes drilling data and drill core from holes drilled immediately prior to the expiry of the previous
tenement, which although widely spaced and/or shallow and/or highly localised, have identified gold
mineralisation in several locations. Consequently, the Company has a range of targets at various stages of
definition up to and including defined prospects simply requiring further drilling to determine the extent and
quality of gold mineralisation at those locations.
In addition to the immediate drill targets, detailed evaluation of the extensive dataset inherited has highlighted
the success of IP chargeability ground geophysics as a tool for identifying anomalies related to alteration
proximal to gold mineralisation. The historic dipole-dipole IP-resistivity data, which is publicly available on the
Geological Survey of Victoria discovery Portal, includes 13 lines located on EL7795 that traverse several
mineralised trends and which in places extend across Agnico Eagle’s mine lease where they highlight the high-
grade Swan Zone and the down plunge position of the Curie Zone currently being drilled out by Agnico Eagle
from underground (Figure 3).
Inversion modelling shows chargeability anomalism coincident with several known mineralised structures,
including the Sugarloaf, Fosterville, O’Donnell’s, O’Dwyer’s and Goornong trends. Most anomalous chargeability
responses are broad and extend close to surface. Possible sources for these chargeability responses include
hydrothermal sulphide alteration associated with favourable structures (such as hinge structures and limb
thrusts) which often localise quartz veining and gold mineralisation, or stratigraphic responses localised around
hinge zones, proximal to gold mineralisation. In combination with analysis and interpretation of historic drilling
and surface geochemistry the chargeability surveys appear to provide a primary response related to
mineralisation that can be used to prioritise and vector towards gold mineralisation at specific locations along
these known trends.
S2 plans to use this data to guide drill testing once it has secured land access agreements. New chargeability
surveys will also be undertaken as a district-scale tool that could rapidly highlight priority target areas along the
Annual Report 2023
Annual Report 2023
aggregated hundreds of strike kilometres of prospective structures within the main gold corridor north and
south of Agnico’s Fosterville gold mine (Figure 2), that can then be drill tested, in addition to the already
identified walk-up targets.
Figure 3. 3D view looking NNW showing mineralised trends at the Fosterville Gold Mine that extend into S2’s
EL7795 application and the chargeability inversion models that highlight anomalies associated with alteration
associated with known gold mineralisation on the Fosterville mine lease, and as yet undrilled positions on, or
trending into, S2’s EL7795, such as the Sugarloaf trend, the Goornong trend, and the extensions of the
O’Donnell’s trend and O’Dwyer’s trend, which hosts the Robbins Hill/Curie gold zone currently being mined by
Agnico. Anything coloured yellow or hotter is anomalous.
Koonenberry, New South Wales (S2 100%)
S2 has three Exploration Licences covering 2,712 square kilometres, located 130km northeast of Broken Hill in
northern New South Wales (NSW), with the Silver City Highway passing through the centre of the project area. As
an early mover into the area, S2 has been able to acquire approximately 140 kilometres strike extent of the most
prospective and accessible part of the Koonenberry Belt, which hosts a series of mafic-ultramafic sills that have
intruded the late Proterozoic to Cambrian Mt Arrowsmith volcanics (Figure 4).
The project area covers a coincident gravity and magnetic ridge, interpreted to represent a slice of crust
comprising numerous mafic and ultramafic intrusions, of a similar scale to the Fraser Complex within the Albany-
Fraser Belt that contains the intrusion hosting Nova. Whereas the Albany-Fraser Belt is Proterozoic in age and
wraps around the southeastern margin of the Yilgarn Craton, the Koonenberry Belt is late Proterozoic to Cambrian
in age and wraps around the northeastern margin of the Curnamona Craton (Figure 5). Both are accretionary
mobile belts containing nickel prospective stratigraphy.
Koonenberry 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, that contains roughly 25 Ni-Cu-PGE mines containing approximately 4.7 million tonnes
of nickel and 2.4 million tonnes of copper, mainly localised in the basal sections of the thicker ferropicrite sills
and intrusions.
The belt also resembles other magmatic Ni-Cu-PGE sulphide endowed belts such as the Circum-Superior Belt of
Canada, (which is also an accretionary mobile zone wrapped around the northern margin of the Superior Craton)
which hosts the giant Raglan and Thompson Ni-Cu camps. In fact, this was the model that the S2 team (then as
Sirius Resources) used to identify the prospectivity of the Fraser Range, leading to the discovery of Nova.
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Figure 4. Regional magnetic image showing northwest striking linear grain reflecting abundant sills intruding the belt.
Previous exploration for nickel-copper-PGE mineralization within the project has been limited, restricted to small,
focused areas, whilst the greater project area remains largely untested. Despite this, early-stage exploration by
Vale-Inco between 2005 and 2010, detected the presence of nickel sulphides in the limited drilling completed by
the company, confirming the prospectivity of the greater project area.
In late June2023 S2 received notification from the New South Wales (NSW) Department of Mining, Exploration
and Geoscience (DMEG), that the three exploration Licences (EL’s) were granted. Initial meetings have since
been held with owners of various large pastoral leases that cover the project area, the majority of which were
positive, and finalisation of access arrangements is ongoing over key areas to allow commencement of on-ground
exploration activities, including regional mapping, soil, and rock chip sampling as well as systematic ground EM
coverage over prioritised target areas.
Figure 5. Location map of the Koonenberry Belt showing and a comparison to the Fraser Zone of the Fraser Range which hosts
the Nova-Bollinger deposit. The Koonenberry Belt is located on the north-eastern margin of the Curnamona Craton.
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 6). 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.).
The project area hosts three known zones of nickel sulphide mineralisation, associated with cumulate facies
ultramafic channels, at the Halls Knoll, Taipan and Gwardar prospects.
Prior to the current exploration effort, S2 and its predecessor Sirius Resources (“Sirius”), had intermittently
drilled only 10% of the prospective ultramafic stratigraphy for nickel at Polar Bear, due to most of it being located
beneath salt lake sediments, which had previously inhibited the effective use of conventional electromagnetic
(EM) geophysics techniques.
S2 completed a moving loop electromagnetic (MLEM) survey in the September 2022 Quarter, using a low
temperature superconducting quantum interference device (SQUID) instrument. The survey identified six new
conductors considered prospective for nickel sulphide mineralisation based on independent evidence such as
lithology, geochemistry and stratigraphic position (Figure 7).
S2 completed a 10-hole diamond drilling program, testing six moving loop electromagnetic (MLEM) conductors
and four geological targets after securing a rig capable of drilling on the lake surface. Drilling confirmed the
presence of significant accumulations of prospective ultramafic stratigraphy – namely high magnesium cumulate
channel facies ultramafics - with frequent occurrences of trace to disseminated nickel sulphide mineralization,
attesting to the fertility of these rocks.
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Figure 4. Regional magnetic image showing northwest striking linear grain reflecting abundant sills intruding the belt.
Previous exploration for nickel-copper-PGE mineralization within the project has been limited, restricted to small,
focused areas, whilst the greater project area remains largely untested. Despite this, early-stage exploration by
Vale-Inco between 2005 and 2010, detected the presence of nickel sulphides in the limited drilling completed by
the company, confirming the prospectivity of the greater project area.
In late June2023 S2 received notification from the New South Wales (NSW) Department of Mining, Exploration
and Geoscience (DMEG), that the three exploration Licences (EL’s) were granted.
Initial meetings have since
been held with owners of various large pastoral leases that cover the project area, the majority of which were
positive, and finalisation of access arrangements is ongoing over key areas to allow commencement of on-ground
exploration activities, including regional mapping, soil, and rock chip sampling as well as systematic ground EM
coverage over prioritised target areas.
Figure 5. Location map of the Koonenberry Belt showing and a comparison to the Fraser Zone of the Fraser Range which hosts
the Nova-Bollinger deposit. The Koonenberry Belt is located on the north-eastern margin of the Curnamona Craton.
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 6). 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.).
The project area hosts three known zones of nickel sulphide mineralisation, associated with cumulate facies
ultramafic channels, at the Halls Knoll, Taipan and Gwardar prospects.
Prior to the current exploration effort, S2 and its predecessor Sirius Resources (“Sirius”), had intermittently
drilled only 10% of the prospective ultramafic stratigraphy for nickel at Polar Bear, due to most of it being located
beneath salt lake sediments, which had previously inhibited the effective use of conventional electromagnetic
(EM) geophysics techniques.
S2 completed a moving loop electromagnetic (MLEM) survey in the September 2022 Quarter, using a low
temperature superconducting quantum interference device (SQUID) instrument. The survey identified six new
conductors considered prospective for nickel sulphide mineralisation based on independent evidence such as
lithology, geochemistry and stratigraphic position (Figure 7).
S2 completed a 10-hole diamond drilling program, testing six moving loop electromagnetic (MLEM) conductors
and four geological targets after securing a rig capable of drilling on the lake surface. Drilling confirmed the
presence of significant accumulations of prospective ultramafic stratigraphy – namely high magnesium cumulate
channel facies ultramafics - with frequent occurrences of trace to disseminated nickel sulphide mineralization,
attesting to the fertility of these rocks.
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Drill testing of the six EM conductors has successfully identified one new zone of nickel sulphide in SPBD0370,
targeting EM conductor PBC22-1, located approximately one kilometre east of the Halls Knoll prospect. The
hole intersected a zone of disseminated sulphides within ultramafic, immediately above a sulphidic shale (up-
hole from the modelled conductor), which returned 3.8 metres @ 0.3% nickel, 0.03% copper and 0.09 g/t Pt+Pd
from 47.2 metres, and 10.84 metres @ 0.43% nickel, 0.05% copper and 0.26 g/t Pt+Pd from 55.11 metres.
Hole SPBD0373, drilled at the northern end of the Halls Knoll mineralisation, intersected a broad zone of channel
facies ultramafic from approximately 100 metres, including multiple zones of trace to disseminated sulphides
(pyrrhotite -pentlandite) from approximately 200 metres, but was terminated after it became apparent the hole
was drilling in a suboptimal orientation with respect to stratigraphy.
Despite being drilled in a suboptimal orientation, this hole has expanded the extent of known sulphides a further
120 metres vertically, to a depth of approximately 260 metres below surface, with assay results returning 12.81
metres @ 0.53% nickel, 0.03% copper and 0.13 g/t Pt+Pd from 257.19 metres and 4.03 metres @ 0.36% nickel,
0.02% copper and 0.09 g/t Pt+Pd from 294.97 metres.
Figure 6. 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.
geology.
Figure 7. Summary of significant drill results from the recently completed diamond drill holes relative to electromagnetic
conductors identified in the 2022 SQUID EM survey at the Polar Bear Project, over regional magnetics and interpreted
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Drill testing of the six EM conductors has successfully identified one new zone of nickel sulphide in SPBD0370,
targeting EM conductor PBC22-1, located approximately one kilometre east of the Halls Knoll prospect. The
hole intersected a zone of disseminated sulphides within ultramafic, immediately above a sulphidic shale (up-
hole from the modelled conductor), which returned 3.8 metres @ 0.3% nickel, 0.03% copper and 0.09 g/t Pt+Pd
from 47.2 metres, and 10.84 metres @ 0.43% nickel, 0.05% copper and 0.26 g/t Pt+Pd from 55.11 metres.
Hole SPBD0373, drilled at the northern end of the Halls Knoll mineralisation, intersected a broad zone of channel
facies ultramafic from approximately 100 metres, including multiple zones of trace to disseminated sulphides
(pyrrhotite -pentlandite) from approximately 200 metres, but was terminated after it became apparent the hole
was drilling in a suboptimal orientation with respect to stratigraphy.
Despite being drilled in a suboptimal orientation, this hole has expanded the extent of known sulphides a further
120 metres vertically, to a depth of approximately 260 metres below surface, with assay results returning 12.81
metres @ 0.53% nickel, 0.03% copper and 0.13 g/t Pt+Pd from 257.19 metres and 4.03 metres @ 0.36% nickel,
0.02% copper and 0.09 g/t Pt+Pd from 294.97 metres.
Figure 6. 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.
Figure 7. Summary of significant drill results from the recently completed diamond drill holes relative to electromagnetic
conductors identified in the 2022 SQUID EM survey at the Polar Bear Project, over regional magnetics and interpreted
geology.
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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.
In June 2023, S2 sold two Exploration Licence Applications (ELA’s) to KG Finland Exploration Oy, a subsidiary of
Kinross Gold Corporation (“Kinross”) (KGC.NYSE, K.TSX), after Kinross exercised its Right Of First Refusal (ROFR),
held over a series of tenements under the terms of its farm-in agreement with S2. Kinross elected to exercise its
ROFR following receipt of an offer by a third party. The ELA’s being sold to Kinross represented approximately
15% of S2’s total ground holdings in Finland.
The sale is part of an ongoing broader strategic rationalisation of the Company’s Finnish assets aimed at
maximising their value via monetisation, maintaining exposure to future success via joint ventures and other
corporate transactions, and minimising holding costs. To this end, the Company is actively assessing various
options relating to its remaining 100% owned tenements which cover 301 square kilometres of ground, including
the Paana tenements which contain the Aarnivalkea gold prospect.
In addition, S2 has active farm-in agreements with north American major gold producer Kinross and Canadian
explorer Rupert Resources (“Rupert”) (RUP.TSX). Under the terms the respective agreements, Kinross can earn
a 70% interest in the Palvanen-Mesi block (58 square kilometres) by spending US$6.5 million (approximately
A$9.3 million) and Rupert can spend up to €3.4 million (approximately A$5.3 million) to earn a 70% interest in
the Sikavaara East and Sikavaara West licences (37 square kilometres).
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. A prospectivity review and targeting exercise has identified a high priority target
zone along a 35-kilometre strike extent of the Karbah Shear Zone (KSZ), a regionally significant NNE
trending striking shear zone, that can be traced to the Big Bell gold mine to the SSW. The KSZ is obscured by
recent cover within the project area and review of historical exploration indicates only limited previous
exploration over the target area.
The tenements covering the KSZ are currently in application and S2 is working with the Ngoonooru Wajarri
(the traditional owners over the project area) to allow for the grant of the tenements.
West Murchison and Fraser Range projects, 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).
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.
Subsequent to the end of the year, the Fraser Range and West Murchison tenements were vended into
unlisted company Pacific State Metals (Holdings) Pty Ltd (PSMH) for a consideration of 7 million PSMH shares.
Based on a nominal 20 cent share valuation this transaction was valued at A$1.4 million. The PSMH shares were
issued to S2’s subsidiary Dark Star Exploration Pty Ltd. As a result, S2 has a 28.6% shareholding in PSMH, which,
based on an agreed proforma capital structure post a planned Initial Public Offering (IPO) before 30th June
2024, will represent an approximate 13% holding in the listed entity post-IPO.
Three Springs, Western Australia (S2 100%)
S2 relinquished the two Exploration Licenses at its Three Springs project following assessment of the results
from work completed the previous year.
FINLAND PROJECTS
Central Lapland Greenstone Belt, Finland (100% S2)
S2 currently holds a 100% interest in 289 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 8). The licences cover areas that has 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.
In June 2023, S2 sold two Exploration Licence Applications (ELA’s) to KG Finland Exploration Oy, a subsidiary of
Kinross Gold Corporation (“Kinross”) (KGC.NYSE, K.TSX), after Kinross exercised its Right Of First Refusal
(ROFR), held over a series of tenements under the terms of its farm-in agreement with S2. Kinross elected to
exercise its ROFR following receipt of an offer by a third party. The ELA’s being sold to Kinross represented
approximately 15% of S2’s total ground holdings in Finland.
Figure 8. 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.
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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. A prospectivity review and targeting exercise has identified a high priority target
zone along a 35-kilometre strike extent of the Karbah Shear Zone (KSZ), a regionally significant NNE trending
striking shear zone, that can be traced to the Big Bell gold mine to the SSW. The KSZ is obscured by recent cover
within the project area and review of historical exploration indicates only limited previous exploration over the
target area.
The tenements covering the KSZ are currently in application and S2 is working with the Ngoonooru Wajarri (the
traditional owners over the project area) to allow for the grant of the tenements.
West Murchison and Fraser Range projects, 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).
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.
chrome in soils.
S2’s regional exploration within the West Murchison project area during the year included 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
S2 also 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.
Subsequent to the end of the year, the Fraser Range and West Murchison tenements were vended into unlisted
company Pacific State Metals (Holdings) Pty Ltd (PSMH) for a consideration of 7 million PSMH shares. Based on
a nominal 20 cent share valuation this transaction was valued at A$1.4 million. The PSMH shares were issued to
S2’s subsidiary Dark Star Exploration Pty Ltd. As a result, S2 has a 28.6% shareholding in PSMH, which, based on
an agreed proforma capital structure post a planned Initial Public Offering (IPO) before 30th June 2024, will
represent an approximate 13% holding in the listed entity post-IPO.
Three Springs, Western Australia (S2 100%)
from work completed the previous year.
FINLAND PROJECTS
Central Lapland Greenstone Belt, Finland (100% S2)
S2 currently holds a 100% interest in 289 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 8). The licences cover areas that has 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-
Annual Report 2023
Annual Report 2023
The sale is part of an ongoing broader strategic rationalisation of the Company’s Finnish assets aimed
at maximising their value via monetisation, maintaining exposure to future success via joint ventures and
other corporate transactions, and minimising holding costs. To this end, the Company is actively assessing
various options relating to its remaining 100% owned tenements which cover 301 square kilometres of ground,
including the Paana tenements which contain the Aarnivalkea gold prospect.
In addition, S2 has active farm-in agreements with north American major gold producer Kinross and
Canadian explorer Rupert Resources (“Rupert”) (RUP.TSX). Under the terms the respective agreements, Kinross
can earn a 70% interest in the Palvanen-Mesi block (58 square kilometres) by spending US$6.5 million
(approximately A$9.3 million) and Rupert can spend up to €3.4 million (approximately A$5.3 million) to earn a
70% interest in the Sikavaara East and Sikavaara West licences (37 square kilometres).
S2 relinquished the two Exploration Licenses at its Three Springs project following assessment of the results
Figure 8. 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.
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Kinross Farm-in Agreement, Finland (S2 100%, reducing to 30%)
In June 2021, S2 entered into a farm-in option agreement with Kinross 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, with a
minimum expenditure requirement of US$3.5 million over the first 3 years.
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’s recently discovered 3.95Moz Ikkari gold deposit.
During the year, Kinross completed Base of Till (BoT) drilling and diamond drilling on the Palvanen/Mesi block.
Kinross has completed 29 diamond drillholes, intersecting low level gold mineralisation along a series of NNE
trending shear zones, including the Pahaslethto Shear and the Kiistila Shear (hosts to Agnico’s Kiitila gold mine
to north), including a best result of 4 metres @ 0.78 g/t Au, and 4.45 metres @ 1.2 g/t gold from 131.55 metres,
including 1.45 metres @ 2.2 g/t gold from 131.55 metres in PM-22-029DD.
In December, Kinross advised S2 that it was withdrawing from the Home project block.
Rupert Farm-in Agreement, Finland (S2 100%, reducing to 30%)
In August 2021, S2 entered into a farm-in option agreement with Rupert on two exploration licence applications
covering an area of 37 square kilometres in the Central Lapland Greenstone Belt (Figure 8). 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.
At Sikavaara West, diamond drilling by Rupert has defined a WNW zone of gold mineralisation extending at least
280 metres in the northwest corner of the permit area (Figure 9). Better results from this zone include 6 metres
@ 0.94 g/t gold from 17 metres (including 1 metre @ 1.69 g/t gold from 17 metres and 2 metres @ 1.69 g/t gold
from 21 metres) and 1 metre @ 3.74 g/t gold from 43 metres in drill hole 122196, and 4 metres @ 1.36 g/t gold
from 35 metres (including 2 metres @ 2.06 g/t gold from 36 metres), and 7 metres @ 0.27 g/t gold from 99
metres in drill hole 123011.
Exploration at Sikavaara East is restricted to the winter field season. Rupert commenced systematic BoT drilling
late in the winter field season and will complete this program upon the onset of the upcoming northern winter
season.
Figure 9. Summary of significant drill results from Rupert Resources (earning 70%) diamond drilling program and gridded BoT
gold results, over reginal magnetic imagery, at the Sikavaara West in the Central Lapland Greenstone Belt, Finland.
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Kinross Farm-in Agreement, Finland (S2 100%, reducing to 30%)
In June 2021, S2 entered into a farm-in option agreement with Kinross 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, with a
minimum expenditure requirement of US$3.5 million over the first 3 years.
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’s recently discovered 3.95Moz Ikkari gold deposit.
During the year, Kinross completed Base of Till (BoT) drilling and diamond drilling on the Palvanen/Mesi block.
Kinross has completed 29 diamond drillholes, intersecting low level gold mineralisation along a series of NNE
trending shear zones, including the Pahaslethto Shear and the Kiistila Shear (hosts to Agnico’s Kiitila gold mine
to north), including a best result of 4 metres @ 0.78 g/t Au, and 4.45 metres @ 1.2 g/t gold from 131.55 metres,
including 1.45 metres @ 2.2 g/t gold from 131.55 metres in PM-22-029DD.
In December, Kinross advised S2 that it was withdrawing from the Home project block.
Rupert Farm-in Agreement, Finland (S2 100%, reducing to 30%)
In August 2021, S2 entered into a farm-in option agreement with Rupert on two exploration licence applications
covering an area of 37 square kilometres in the Central Lapland Greenstone Belt (Figure 8). 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.
At Sikavaara West, diamond drilling by Rupert has defined a WNW zone of gold mineralisation extending at least
280 metres in the northwest corner of the permit area (Figure 9). Better results from this zone include 6 metres
@ 0.94 g/t gold from 17 metres (including 1 metre @ 1.69 g/t gold from 17 metres and 2 metres @ 1.69 g/t gold
from 21 metres) and 1 metre @ 3.74 g/t gold from 43 metres in drill hole 122196, and 4 metres @ 1.36 g/t gold
from 35 metres (including 2 metres @ 2.06 g/t gold from 36 metres), and 7 metres @ 0.27 g/t gold from 99
metres in drill hole 123011.
Exploration at Sikavaara East is restricted to the winter field season. Rupert commenced systematic BoT drilling
late in the winter field season and will complete this program upon the onset of the upcoming northern winter
season.
Figure 9. Summary of significant drill results from Rupert Resources (earning 70%) diamond drilling program and gridded BoT
gold results, over reginal magnetic imagery, at the Sikavaara West in the Central Lapland Greenstone Belt, Finland.
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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 2023 (“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.
Directors Report (cont)
Future Capital Raisings
The Group’s ongoing activities may require substantial further financing in the future. Any additional equity financing
may be dilutive to shareholders and may be undertaken at lower prices than the current market price. Although the
Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or
funding, if and when needed, will be available on terms favourable to the Company or at all. If the Group is unable to
obtain additional financing as needed, it may be required to reduce, delay or suspend its operations and this could
have a material adverse effect on the Group’s activities and could affect the Group’s ability to continue as a going
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 2023 after providing for income tax amounted to
$6,755,677.
The loss results from $4,604,786 of exploration expenditure incurred and expensed, $779,847 of share-based payments
expenses, $1,314,163 of administration costs, $263,427 of business development costs including travel, $147,734 of
depreciation costs, $179,421 of gain on sale of exploration permits, gain on sale of fixed assets $31,482, $98,071 interest
income and $45,305 of other gains including finance costs. The exploration expenditure incurred and expensed mainly
relates to the Company’s Australian projects.
Dividends
No dividends were paid or proposed to be paid to members during the year ended 30 June 2023.
Material Business Risks
The Group’s exploration operations will be subject to the normal risks of mineral exploration, and any revenues will
be subject to factors beyond the Group’s control. The material business risks that may affect the Group are
summarised below.
Key Personnel
In formulating its exploration programs, feasibility studies and development strategies, the Group relies to a significant
extent upon the experience and expertise of the directors and management. A number of key personnel are important
to attaining the business goals of the Group. One or more of these key employees could leave their employment, and
this may adversely affect the ability of the Group to conduct its business and, accordingly, affect the financial
performance of the Group and its share price. Recruiting and retaining qualified personnel is important to the Group’s
success.
concern.
Exploration Risk
The success of the Group depends on the delineation of potentially economic mineral resources, securing and
maintaining title to the Group’s exploration and mining tenements, meeting joint venture earn-in commitments and
obtaining all consents and approvals necessary for the conduct of its exploration activities. Exploration on the Group’s
existing tenements may be unsuccessful, resulting in a reduction in the value of those tenements, diminution in the
cash reserves of the Group and possible relinquishment of the tenements. The exploration costs of the Group are
based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates
and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from
these estimates and assumptions.
Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in
practice, which may materially and adversely affect the Group’s viability. If the level of operating expenditure required
is higher than expected, the financial position of the Group may be adversely affected. The Group may also experience
unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
Feasibility and Development Risks
It may not always be possible for the Group to exploit successful discoveries which may be made in areas in which the
Group has an interest. Such exploitation would involve obtaining the necessary licences or clearances from relevant
authorities that may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or
may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploitation may
require participation of other companies whose interests and objectives may not be the same as the Group’s. In the
event of the discovery of potentially economic mineral resources, there is a risk that a feasibility study and associated
technical works will not achieve the results expected. There is also a risk that, even if a positive feasibility study is
produced, the project may not be successfully developed for commercial or financial reasons.
Regulatory Risk
The Group’s operations are subject to various Commonwealth, State and Territory and local laws and plans, including
those relating to mining, prospecting, development permit and licence requirements, industrial relations,
environment, land use, land access, royalties, water, native title and cultural heritage, mine safety and occupational
health. Approvals, licences and permits required to comply with such rules are subject to the discretion of the
applicable government officials. No assurance can be given that the Group will be successful in maintaining such
authorisations in full force and effect without modification or revocation.
To the extent such approvals are required and not retained or obtained in a timely manner or at all, the Group may be
curtailed or prohibited from continuing or proceeding with exploration. The Group’s business and results of operations
could be adversely affected if applications lodged for exploration licences are not granted. Mining and exploration
tenements are subject to periodic renewal. The renewal of the term of a granted tenement may also be subject to the
discretion of the relevant Minister. Renewal conditions may include increased expenditure and work commitments or
compulsory relinquishment of areas of the tenements comprising the Group’s projects. The imposition of new
15
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Annual Report 2023
Annual Report 2023
Directors
Mark Bennett
Jeff Dowling
Anna Neuling
Dividends
Review of Operations
Operating Result
$6,755,677.
Dividends
Material Business Risks
summarised below.
Key Personnel
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 2023 (“Group”).
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.
Principal Activities
The principal continuing activity of the Group is mineral exploration.
No dividends were paid or proposed to be paid to members during the financial year.
The loss from continuing operations for the year ended 30 June 2023 after providing for income tax amounted to
The loss results from $4,604,786 of exploration expenditure incurred and expensed, $779,847 of share-based payments
expenses, $1,314,163 of administration costs, $263,427 of business development costs including travel, $147,734 of
depreciation costs, $179,421 of gain on sale of exploration permits, gain on sale of fixed assets $31,482, $98,071 interest
income and $45,305 of other gains including finance costs. The exploration expenditure incurred and expensed mainly
relates to the Company’s Australian projects.
No dividends were paid or proposed to be paid to members during the year ended 30 June 2023.
The Group’s exploration operations will be subject to the normal risks of mineral exploration, and any revenues will
be subject to factors beyond the Group’s control. The material business risks that may affect the Group are
In formulating its exploration programs, feasibility studies and development strategies, the Group relies to a significant
extent upon the experience and expertise of the directors and management. A number of key personnel are important
to attaining the business goals of the Group. One or more of these key employees could leave their employment, and
this may adversely affect the ability of the Group to conduct its business and, accordingly, affect the financial
performance of the Group and its share price. Recruiting and retaining qualified personnel is important to the Group’s
success.
Directors Report (cont)
Future Capital Raisings
The Group’s ongoing activities may require substantial further financing in the future. Any additional equity financing
may be dilutive to shareholders and may be undertaken at lower prices than the current market price. Although the
Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or
funding, if and when needed, will be available on terms favourable to the Company or at all. If the Group is unable to
obtain additional financing as needed, it may be required to reduce, delay or suspend its operations and this could
have a material adverse effect on the Group’s activities and could affect the Group’s ability to continue as a going
concern.
Exploration Risk
The success of the Group depends on the delineation of potentially economic mineral resources, securing and
maintaining title to the Group’s exploration and mining tenements, meeting joint venture earn-in commitments and
obtaining all consents and approvals necessary for the conduct of its exploration activities. Exploration on the Group’s
existing tenements may be unsuccessful, resulting in a reduction in the value of those tenements, diminution in the
cash reserves of the Group and possible relinquishment of the tenements. The exploration costs of the Group are
based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates
and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from
these estimates and assumptions.
Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in
practice, which may materially and adversely affect the Group’s viability. If the level of operating expenditure required
is higher than expected, the financial position of the Group may be adversely affected. The Group may also experience
unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
Feasibility and Development Risks
It may not always be possible for the Group to exploit successful discoveries which may be made in areas in which the
Group has an interest. Such exploitation would involve obtaining the necessary licences or clearances from relevant
authorities that may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or
may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploitation may
require participation of other companies whose interests and objectives may not be the same as the Group’s. In the
event of the discovery of potentially economic mineral resources, there is a risk that a feasibility study and associated
technical works will not achieve the results expected. There is also a risk that, even if a positive feasibility study is
produced, the project may not be successfully developed for commercial or financial reasons.
Regulatory Risk
The Group’s operations are subject to various Commonwealth, State and Territory and local laws and plans, including
those relating to mining, prospecting, development permit and licence requirements, industrial relations,
environment, land use, land access, royalties, water, native title and cultural heritage, mine safety and occupational
health. Approvals, licences and permits required to comply with such rules are subject to the discretion of the
applicable government officials. No assurance can be given that the Group will be successful in maintaining such
authorisations in full force and effect without modification or revocation.
To the extent such approvals are required and not retained or obtained in a timely manner or at all, the Group may be
curtailed or prohibited from continuing or proceeding with exploration. The Group’s business and results of operations
could be adversely affected if applications lodged for exploration licences are not granted. Mining and exploration
tenements are subject to periodic renewal. The renewal of the term of a granted tenement may also be subject to the
discretion of the relevant Minister. Renewal conditions may include increased expenditure and work commitments or
compulsory relinquishment of areas of the tenements comprising the Group’s projects. The imposition of new
15
16
16
Annual Report 2023
Annual Report 2023
Directors Report (cont)
conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or
performance of the Group.
Environmental Risk
The operations and activities of the Group are subject to the environmental laws and regulations of Australia and
Finland. As with most exploration projects and mining operations, there is potential for the Group’s operations and
activities to have an impact on the environment, particularly if mine development proceeds. The Group attempts to
conduct its operations and activities to the highest standard of environmental obligation, including compliance with
all environmental laws and regulations. The Group is unable to predict the effect of additional environmental laws and
regulations which may be adopted in the future, including whether any such laws or regulations would materially
increase the Group’s cost of doing business or affect its operations in any area. However, there can be no assurances
that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the
Group to incur significant expenses and undertake significant investments which could have a material adverse effect
on the Group’s business, financial condition and performance.
Climate Change Risk
We are an exploration company however we acknowledge that the operations and activities of the Group are subject
to changes to local or international compliance regulations related to climate change mitigation efforts, specific
taxation or penalties for carbon emissions or environmental damage, and other possible restraints on industry that
may further impact the Group and its profitability. While the Group will endeavour to manage these risks and limit any
consequential impacts, there can be no guarantee that the Group will not be impacted by these occurrences. Climate
change may also cause certain physical and environmental risks that cannot be predicted by the Group, including
events such as increased severity of weather patterns, incidence of extreme weather events and longer-term physical
risks such as shifting climate pattern.
Macro-Economic Risk
The operations and activities of the Group are exposed to a number of global external factors, including macro-
economic risks affecting profitability and business continuity, increasing interest rates, significant fluctuations in
foreign exchange, and ability to raise equity funding. While the Group has limited direct controls over these issues,
continued oversight is essential to ensuring the ongoing operations and activities of the Group.
Foreign Currency Risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial
liabilities are denominated in a currency that is not the entity’s functional currency. The Group is primarily exposed to
the fluctuations in the Euro, as the Group holds Euro bank deposits however most of the Group’s exploration costs
and contracts are denominated in Australian dollars. The Group aims to reduce and manage its foreign exchange risk
by holding funds in a Euro account so that the exchange rate is crystallised early and future fluctuations in rates for
settlement of Euro denominated payables are avoided. The same applies to potential future expenditures in other
currencies such as the American and Canadian dollar. The Group does not currently undertake any hedging of foreign
currency items.
Directors Report (cont)
Significant Changes in the State of Affairs
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 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
Melbourne. As a result of this change, the Perth based position of Chief Executive Officer was made redundant, and
consequently, Mr Matthew Keane ceased his role as CEO.
On 10 March 2023 S2 Resources Ltd advised a change to its principal place of business. The address of the new office is
Level 14, 333 Collins Street, Melbourne, VIC 3000.
On 5 June 2023 S2 Resources Ltd advised that it signed a binding agreement with KG Finland Exploration Oy, a subsidiary
of Kinross Gold Corporation that they would buy two Exploration Licence Applications (ELA’s) from S2’s wholly owned
Finnish subsidiary Sakumpu Exploration Oy. The two ELA’s are part of a series of tenements over which Kinross has a
Right of First Refusal (ROFR) under the terms of its farm-in agreement with S2.
Kinross elected to exercise its ROFR following receipt by S2 of an offer from a third party. Under the terms of the
agreement, S2 received a cash consideration of USD150,000 on completion, when the Finnish Mining Authority (TUKES)
transferred the ELA’s. A further USD25,000 consideration is payable on the ELA’s being granted by TUKES.
After Balance Date Events
On 7 August S2 Resources Ltd advised that it signed a binding agreement with Pacific State Metals (Holdings) Ltd to vend
its West Murchison and Fraser Range tenements into Pacific State. Pacific State is an unlisted Australian-incorporated
public company that has indicated to S2 that it has an intention to list on the Australian Securities Exchange (“ASX”) by 30
June 2024.
In return for the sale of its West Murchison and Fraser Range tenements to Pacific State, S2 will receive 7,000,000 ordinary
fully paid shares in the issued capital of Pacific State, representing approximately 28.6% of Pacific State’s issued capital (on
a post-transaction basis). Based on the agreed proforma capital structure post the planned initial public offering (IPO) on
ASX, it is expected that S2 will hold approximately 13% of the issued capital in Pacific State post-completion of the IPO.
As part of the sale agreement, Pacific State has undertaken to use its reasonable endeavours to seek to list on ASX as soon
as practicable. In the meantime, Pacific State is required to keep the tenements in good standing. Should Pacific State not
complete an ASX listing by 30 June 2024 (or such later date as the parties may otherwise agree), then each of S2 and Pacific
State must do all things necessary to unwind the transaction (such that the West Murchison and Fraser Range tenements
will be transferred back to S2 and S2 will surrender the shares it holds in Pacific State).
There has been no other matter or circumstance that has arisen since 30 June 2023 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.
17
17
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Annual Report 2023
Annual Report 2023
conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or
Directors Report (cont)
performance of the Group.
Environmental Risk
The operations and activities of the Group are subject to the environmental laws and regulations of Australia and
Finland. As with most exploration projects and mining operations, there is potential for the Group’s operations and
activities to have an impact on the environment, particularly if mine development proceeds. The Group attempts to
conduct its operations and activities to the highest standard of environmental obligation, including compliance with
all environmental laws and regulations. The Group is unable to predict the effect of additional environmental laws and
regulations which may be adopted in the future, including whether any such laws or regulations would materially
increase the Group’s cost of doing business or affect its operations in any area. However, there can be no assurances
that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the
Group to incur significant expenses and undertake significant investments which could have a material adverse effect
on the Group’s business, financial condition and performance.
Climate Change Risk
We are an exploration company however we acknowledge that the operations and activities of the Group are subject
to changes to local or international compliance regulations related to climate change mitigation efforts, specific
taxation or penalties for carbon emissions or environmental damage, and other possible restraints on industry that
may further impact the Group and its profitability. While the Group will endeavour to manage these risks and limit any
consequential impacts, there can be no guarantee that the Group will not be impacted by these occurrences. Climate
change may also cause certain physical and environmental risks that cannot be predicted by the Group, including
events such as increased severity of weather patterns, incidence of extreme weather events and longer-term physical
risks such as shifting climate pattern.
Macro-Economic Risk
The operations and activities of the Group are exposed to a number of global external factors, including macro-
economic risks affecting profitability and business continuity, increasing interest rates, significant fluctuations in
foreign exchange, and ability to raise equity funding. While the Group has limited direct controls over these issues,
continued oversight is essential to ensuring the ongoing operations and activities of the Group.
Foreign Currency Risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial
liabilities are denominated in a currency that is not the entity’s functional currency. The Group is primarily exposed to
the fluctuations in the Euro, as the Group holds Euro bank deposits however most of the Group’s exploration costs
and contracts are denominated in Australian dollars. The Group aims to reduce and manage its foreign exchange risk
by holding funds in a Euro account so that the exchange rate is crystallised early and future fluctuations in rates for
settlement of Euro denominated payables are avoided. The same applies to potential future expenditures in other
currencies such as the American and Canadian dollar. The Group does not currently undertake any hedging of foreign
currency items.
Directors Report (cont)
Significant Changes in the State of Affairs
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 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
Melbourne. As a result of this change, the Perth based position of Chief Executive Officer was made redundant, and
consequently, Mr Matthew Keane ceased his role as CEO.
On 10 March 2023 S2 Resources Ltd advised a change to its principal place of business. The address of the new office is
Level 14, 333 Collins Street, Melbourne, VIC 3000.
On 5 June 2023 S2 Resources Ltd advised that it signed a binding agreement with KG Finland Exploration Oy, a subsidiary
of Kinross Gold Corporation that they would buy two Exploration Licence Applications (ELA’s) from S2’s wholly owned
Finnish subsidiary Sakumpu Exploration Oy. The two ELA’s are part of a series of tenements over which Kinross has a
Right of First Refusal (ROFR) under the terms of its farm-in agreement with S2.
Kinross elected to exercise its ROFR following receipt by S2 of an offer from a third party. Under the terms of the
agreement, S2 received a cash consideration of USD150,000 on completion, when the Finnish Mining Authority (TUKES)
transferred the ELA’s. A further USD25,000 consideration is payable on the ELA’s being granted by TUKES.
After Balance Date Events
On 7 August S2 Resources Ltd advised that it signed a binding agreement with Pacific State Metals (Holdings) Ltd to vend
its West Murchison and Fraser Range tenements into Pacific State. Pacific State is an unlisted Australian-incorporated
public company that has indicated to S2 that it has an intention to list on the Australian Securities Exchange (“ASX”) by 30
June 2024.
In return for the sale of its West Murchison and Fraser Range tenements to Pacific State, S2 will receive 7,000,000 ordinary
fully paid shares in the issued capital of Pacific State, representing approximately 28.6% of Pacific State’s issued capital (on
a post-transaction basis). Based on the agreed proforma capital structure post the planned initial public offering (IPO) on
ASX, it is expected that S2 will hold approximately 13% of the issued capital in Pacific State post-completion of the IPO.
As part of the sale agreement, Pacific State has undertaken to use its reasonable endeavours to seek to list on ASX as soon
as practicable. In the meantime, Pacific State is required to keep the tenements in good standing. Should Pacific State not
complete an ASX listing by 30 June 2024 (or such later date as the parties may otherwise agree), then each of S2 and Pacific
State must do all things necessary to unwind the transaction (such that the West Murchison and Fraser Range tenements
will be transferred back to S2 and S2 will surrender the shares it holds in Pacific State).
There has been no other matter or circumstance that has arisen since 30 June 2023 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.
17
18
18
Annual Report 2023
Annual Report 2023
Directors Report (cont)
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 States 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.
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
Chairman of Falcon Metals since September 2021.
Former Directorships in the Last Three Years
Non-Executive Director of Todd River Resources Ltd November 2018 to 22 September 2022
Former Directorships in the Last Three Years
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
15,000,000
5,560,784
19
19
20
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.
Former Directorships in the Last Three Years
Non-Executive Director of Battery Minerals since 21 June 2019 to 4 September 2023.
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
6,250,000
700,000
Anna Neuling – Non-Executive Director (moved from Executive Director 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.
Other Directorships
Non-Executive Director of MLG OZ Ltd since 23 March 2021, Interim Chair since 21 April 2023.
Non-Executive Chair of Tombador Iron Resources Ltd since 25 September 2020.
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
8,250,000
799,875
Directors Report (cont)
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 States 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.
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.
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
Chairman of Falcon Metals since September 2021.
Former Directorships in the Last Three Years
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
15,000,000
5,560,784
Annual Report 2023
Annual Report 2023
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.
Former Directorships in the Last Three Years
Non-Executive Director of Battery Minerals since 21 June 2019 to 4 September 2023.
Number of interests in shares and options held in S2 Resources Ltd
Options
Shares
6,250,000
700,000
Anna Neuling – Non-Executive Director (moved from Executive Director 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.
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-
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.
Other Directorships
Non-Executive Director of MLG OZ Ltd since 23 March 2021, Interim Chair since 21 April 2023.
Non-Executive Chair of Tombador Iron Resources Ltd since 25 September 2020.
Non-Executive Director of Todd River Resources Ltd November 2018 to 22 September 2022
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
8,250,000
799,875
19
20
20
Annual Report 2023
Annual Report 2023
Directors Report (cont)
Meetings of Directors
The number of meetings of the Board and of each Board Committee held during the year ended 30 June 2023 and the
number of meetings attended by each Director were:
Director
Mark Bennett (i)
Anna Neuling
Jeff Dowling
Directors’
Meetings
Audit & Risk Committee
Remuneration & Nomination
Committee
Meeting
Held
7
7
7
Meetings
attended
7
7
7
Meeting
Held
2
2
2
Meetings
attended
2
2
2
Meeting
Held
2
2
2
Meetings
attended
2
2
2
(i) Mark Bennett attended the Audit & Risk Committee meetings and the Remuneration & Nomination Committee Meetings by
invitation he is not a member of either 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.
Options & Rights
Unissued ordinary shares of the Company under options or rights at 30 June 2023 are as follows:
Options
Number
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
8,100,000
Grant Date
12/11/2019
03/12/2019
27/08/2020
05/10/2020
17/11/2020
12/11/2021
19/04/2022
28/04/2022
21/10/2022
Expiry Date
Exercise Price $
11/11/2023
02/12/2023
26/08/2024
04/10/2024
16/11/2024
11/11/2025
18/04/2026
27/04/2026
20/10/2026
0.30
0.30
0.30
0.39
0.38
0.29
0.25
0.23
0.20
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.
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
•
•
Anna Neuling – Executive Director & Company Secretary to 31 July 2022
– Non-Executive Director 1 August 2022 to present
Jeff Dowling – Non-Executive Director
• Matthew Keane – Chief Executive Officer (CEO) to 12 August 2022
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:
1.
Principles used to determine the nature and amount of remuneration
2. Details of remuneration
3.
4.
Service agreements
Share-based compensation
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.
The combination of these comprises the Executive Director's total remuneration.
21
21
22
Directors Report (cont)
Meetings of Directors
The number of meetings of the Board and of each Board Committee held during the year ended 30 June 2023 and the
number of meetings attended by each Director were:
Director
Mark Bennett (i)
Anna Neuling
Jeff Dowling
Directors’
Meetings
Audit & Risk Committee
Remuneration & Nomination
Committee
Meeting
Held
Meetings
attended
Meeting
Held
Meetings
attended
Meeting
Held
Meetings
attended
7
7
7
7
7
7
2
2
2
2
2
2
2
2
2
2
2
2
(i) Mark Bennett attended the Audit & Risk Committee meetings and the Remuneration & Nomination Committee Meetings by
invitation he is not a member of either 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.
a liability incurred as an auditor.
Options & Rights
Options
Unissued ordinary shares of the Company under options or rights at 30 June 2023 are as follows:
Expiry Date
Exercise Price $
Number
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
8,100,000
Grant Date
12/11/2019
03/12/2019
27/08/2020
05/10/2020
17/11/2020
12/11/2021
19/04/2022
28/04/2022
21/10/2022
11/11/2023
02/12/2023
26/08/2024
04/10/2024
16/11/2024
11/11/2025
18/04/2026
27/04/2026
20/10/2026
0.30
0.30
0.30
0.39
0.38
0.29
0.25
0.23
0.20
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.
Annual Report 2023
Annual Report 2023
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
•
Anna Neuling – Executive Director & Company Secretary to 31 July 2022
– Non-Executive Director 1 August 2022 to present
Jeff Dowling – Non-Executive Director
•
• Matthew Keane – Chief Executive Officer (CEO) to 12 August 2022
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.
The Group had not, during or since the financial year, indemnified or agreed to indemnify the auditor of the Group against
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.
The combination of these comprises the Executive Director's total remuneration.
21
22
22
Annual Report 2023
Annual Report 2023
Directors Report (cont)
Remuneration Report (audited) (cont)
Directors Report (cont)
Remuneration Report (audited) (cont)
1. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONT)
2. DETAILS OF 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 annual
cash 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 2022 to 30 June 2023, exclusive of superannuation guarantee the annual cash remuneration for the Non-
Executive Directors was $142,858 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 2023. 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.
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)
2023
(6,755,677)
13
2022
(7,365,625)
14
2021
(7,234,407)
13
2020
(7,475,048)
9.3
2019
(8,288,971)
12
(1.81)
(2.11)
(2.34)
(3.02)
(3.34)
-
-
-
The amount of remuneration paid and entitlements owed to KMP is set out below.
Year Ended 30 June 2023
CASH REMUNERATION AND ENTITLEMENTS
2023
Salary
Termination
Post–
Movement in
Movement in
Total cash
Cash remuneration
payment
employment
annual leave
long service
payments and
benefits
entitlement
leave
entitlements
(superannuation)
owing
entitlement
$
$
$
$
$
$
318,125
69,229
82,875
25,292
7,226
-
(18,030)
(4,175)
-
33,255
358,642
72,280
82,875
Directors
M Bennett (i)
A Neuling
J Dowling (ii)
Other Key
Management
Personnel
M Keane (iii)
33,478
324,767
6,323
(20,653)
343,915
(i) Dr Bennett has taken unpaid leave in the financial year. His remuneration package is still as per the summary of his
503,707
324,767
38,841
(42,858)
33,255
857,712
service agreement provided below.
(ii) Salary paid in lieu of superannuation as employer shortfall exception certificate in place.
(iii) Redundant 12 August 2022 with 12 months payment in lieu of notice as per service agreement below.
Year Ended 30 June 2022
CASH REMUNERATION AND ENTITLEMENTS
2022
Salary
Post–employment
Movement in annual
Total cash
Cash remuneration
benefits
leave entitlement
payments and
(superannuation)
$
$
owing
$
entitlements
$
Directors
M Bennett (i)
A Neuling
J Dowling
Personnel
M Keane
Other
Key Management
267,916
120,366
78,750
280,000
747,032
23,568
12,037
3,750
23,568
62,923
(3,142)
(117)
-
288,342
132,286
82,500
11,845
315,413
8,586
818,541
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.
23
23
24
Annual Report 2023
Annual Report 2023
Directors Report (cont)
Remuneration Report (audited) (cont)
Directors Report (cont)
Remuneration Report (audited) (cont)
1. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONT)
2. DETAILS OF REMUNERATION
Fixed remuneration, consisting of base salary and superannuation will be reviewed annually by the Remuneration &
The amount of remuneration paid and entitlements owed to KMP is set out below.
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 annual
cash 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 2022 to 30 June 2023, exclusive of superannuation guarantee the annual cash remuneration for the Non-
Executive Directors was $142,858 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
ongoing basis as the company evolves.
Long-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 2023. The company’s approach with
regard to the use of short-term cash incentives will be assessed by the Remuneration & Nomination Committee on an
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.
The table below shows the losses and earnings per share of the Company for the last five financial years.
Share price at year end
13
14
13
9.3
12
2023
2022
2021
2020
2019
(6,755,677)
(7,365,625)
(7,234,407)
(7,475,048)
(8,288,971)
Net loss
(cents)
Loss per share (cents)
(1.81)
(2.11)
(2.34)
(3.02)
(3.34)
Year Ended 30 June 2023
CASH REMUNERATION AND ENTITLEMENTS
2023
Salary
Termination
payment
Cash remuneration
Post–
employment
benefits
(superannuation)
$
Movement in
annual leave
entitlement
owing
$
Movement in
long service
leave
entitlement
$
25,292
7,226
-
(18,030)
(4,175)
-
33,255
-
-
Total cash
payments and
entitlements
$
358,642
72,280
82,875
$
$
318,125
69,229
82,875
Directors
M Bennett (i)
A Neuling
J Dowling (ii)
Other Key
Management
Personnel
M Keane (iii)
33,478
324,767
6,323
(20,653)
-
343,915
(i) Dr Bennett has taken unpaid leave in the financial year. His remuneration package is still as per the summary of his
503,707
324,767
38,841
(42,858)
33,255
857,712
service agreement provided below.
(ii) Salary paid in lieu of superannuation as employer shortfall exception certificate in place.
(iii) Redundant 12 August 2022 with 12 months payment in lieu of notice as per service agreement below.
Year Ended 30 June 2022
CASH REMUNERATION AND ENTITLEMENTS
2022
Salary
Cash remuneration
Directors
M Bennett (i)
A Neuling
J Dowling
Key Management
Other
Personnel
M Keane
$
267,916
120,366
78,750
280,000
747,032
Post–employment
benefits
(superannuation)
$
Movement in annual
leave entitlement
owing
$
Total cash
payments and
entitlements
$
23,568
12,037
3,750
23,568
62,923
(3,142)
(117)
-
288,342
132,286
82,500
11,845
315,413
8,586
818,541
23
24
24
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.
Annual Report 2023
Annual Report 2023
Directors Report (cont)
Remuneration Report (audited) (cont)
2. DETAILS OF REMUNERATION (CONTINED)
2023 TOTAL REMUNERATION
Directors
M Bennett
A Neuling
J Dowling
Other Key Management Personnel
M Keane
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
325,387
72,279
82,875
219,136
73,045
73,045
544,523
145,324
155,920
343,916
824,457
-
365,226
343,916
1,189,683
40%
50%
47%
-
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
315,413
818,541
138,705
956,290
454,118
1,774,831
64%
54%
66%
31%
There were no non-monetary benefits other than options paid to the Directors or KMP for the year ended 30 June 2023.
Agreement:
3. SERVICE AGREEMENTS
For the year ended 30 June 2023, the following service agreements were in place with the Directors and KMP of S2:
• Under the general termination of employment provision, the Company may terminate the Agreement by giving
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.
25
25
26
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.
Ms Neuling resigned in line with the terms of the Agreement on 31 July 2022.
On 1 August 2022, a letter of appointment was entered into between the Company and Non-Executive Director Anna
Neuling. Under the terms of the Agreement:
• Ms Neuling was paid a remuneration package of $65,000 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 4 November 2020, the Company entered an employment contract with Matthew Keane. Under the terms of the
• Mr Keane was appointed as CEO and paid a remuneration package of $280,000 per annum base salary plus
statutory superannuation for work on a full-time basis.
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.
Mr Keane’s position as CEO was made redundant in line with the terms of the Agreement on 12 August 2022.
Directors Report (cont)
Remuneration Report (audited) (cont)
2. DETAILS OF REMUNERATION (CONTINED)
2023 TOTAL REMUNERATION
Directors
M Bennett
A Neuling
J Dowling
M Keane
Directors
M Bennett
A Neuling
J Dowling
M Keane
Other Key Management Personnel
2022 TOTAL REMUNERATION
Other Key Management Personnel
Total cash
payments and
entitlements
Options
issued
Total
$
$
$
LTI
% of
remuneration
325,387
72,279
82,875
219,136
73,045
73,045
544,523
145,324
155,920
343,916
824,457
-
365,226
343,916
1,189,683
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
315,413
818,541
138,705
956,290
454,118
1,774,831
40%
50%
47%
-
64%
54%
66%
31%
There were no non-monetary benefits other than options paid to the Directors or KMP for the year ended 30 June 2023.
3. SERVICE AGREEMENTS
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.
Annual Report 2023
Annual Report 2023
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.
Ms Neuling resigned in line with the terms of the Agreement on 31 July 2022.
On 1 August 2022, a letter of appointment was entered into between the Company and Non-Executive Director Anna
Neuling. Under the terms of the Agreement:
• Ms Neuling was paid a remuneration package of $65,000 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 4 November 2020, the Company entered an employment contract with Matthew Keane. Under the terms of the
Agreement:
• Mr Keane was appointed as CEO and paid a remuneration package of $280,000 per annum base salary plus
statutory superannuation for work on a full-time basis.
For the year ended 30 June 2023, the following service agreements were in place with the Directors and KMP of S2:
• 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.
Mr Keane’s position as CEO was made redundant in line with the terms of the Agreement on 12 August 2022.
25
26
26
Annual Report 2023
Annual Report 2023
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:
The numbers of shares in the Company held during the year ended by each KMP of S2, including their related parties, are
2023
Director
M Bennett
A Neuling
J Dowling
Other Key
Management
Personnel
M Keane
Balance at
the start
of the year
Granted
during
the year
Expired
during
the year
Balance at year
end
vested &
exerciseable
Balance at
the year
ended
unvested
Total
balance at
the year
end
12,000,000 3,000,000
7,250,000 1,000,000
5,250,000 1,000,000
24,500,000 5,000,000
3,750,000
3,750,000
-
-
-
-
-
-
-
-
12,000,000
7,250,000
5,250,000
3,000,000
1,000,000
1,000,000
15,000,000
8,250,000
6,250,000
24,500,000
5,000,000
29,500,000
3,750,000
3,750,000
-
-
3,750,000
3,750,000
There were no shares granted to KMP’s during the reporting year as remuneration.
As at 30 June 2023, the number of options that have vested and exercisable were 28,250,000.
Use of remuneration consultants
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:
Series
Grant Date
Expiry date
Exercise
price
$
Fair value per
option
$
15
16
17
21
05 Oct 2020
4 Oct 2024
17 Nov 2020
16 Nov 2024
12 Nov 2021
11 Nov 2025
16 Nov 2022
20 Oct 2026
0.39
0.38
0.29
0.20
*Options vest a year after grant date.
0.14
0.14
0.13
0.11
Vested
%
100%
100%
100%
*
Options issued in the year were priced using a Black-Scholes option pricing model using the inputs below:
Series 21
Grant date share price 0.16
0.20
Exercise price
100%
Expected volatility
4 years
Option life
0.00%
Dividend yield
0.1058
Fair Value
3.25%
Interest rate
27
27
28
Directors Report (cont)
Remuneration Report (audited) (cont)
5. SHARE-BASED COMPENSATION (CONTINUED)
Shareholdings
set out below:
2023
Directors
M Bennett
A Neuling
J Dowling
Personnel
M Keane
Other Key Management
Balance at the
Other changes during
start of the year
the year
5,560,784
799,875
700,000
-
-
-
Balance for
the year
ended
5,560,784
799,875
700,000
51,613
7,112,272
(51,613)
(51,613)
-
7,060,659
No remuneration consultants were engaged or used for the Group during the year ended 30 June 2023.
Voting and comments made at the Company's Annual General Meeting
At the 2022 Annual General Meeting, the resolution to adopt the Remuneration Report for the year ended 30 June 2022
was passed on a poll with 98.76% 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.
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 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.
Annual Report 2023
Annual Report 2023
Directors Report (cont)
Remuneration Report (audited) (cont)
4. SHARE-BASED COMPENSATION
Option holdings
are set out below:
The numbers of options in the Company held during the year ended by each KMP of S2, including their related parties,
2023
Balance at
Granted
Expired
Balance at year
Balance at
Total
the start
during
during
of the year
the year
the year
end
the year
balance at
vested &
exerciseable
ended
unvested
the year
end
Director
A Neuling
J Dowling
M Bennett
12,000,000 3,000,000
7,250,000 1,000,000
5,250,000 1,000,000
12,000,000
7,250,000
5,250,000
3,000,000
1,000,000
1,000,000
15,000,000
8,250,000
6,250,000
24,500,000 5,000,000
24,500,000
5,000,000
29,500,000
Other Key
Management
Personnel
M Keane
3,750,000
3,750,000
-
-
3,750,000
3,750,000
-
-
3,750,000
3,750,000
As at 30 June 2023, the number of options that have vested and exercisable were 28,250,000.
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:
Series
Grant Date
Expiry date
Exercise
Fair value per
Vested
option
%
15
16
17
21
05 Oct 2020
4 Oct 2024
17 Nov 2020
16 Nov 2024
12 Nov 2021
11 Nov 2025
16 Nov 2022
20 Oct 2026
*Options vest a year after grant date.
price
$
0.39
0.38
0.29
0.20
$
0.14
0.14
0.13
0.11
100%
100%
100%
*
Options issued in the year were priced using a Black-Scholes option pricing model using the inputs below:
Grant date share price 0.16
Exercise price
Expected volatility
Option life
Dividend yield
Fair Value
Interest rate
Series 21
0.20
100%
4 years
0.00%
0.1058
3.25%
-
-
-
-
-
-
27
Directors Report (cont)
Remuneration Report (audited) (cont)
5. SHARE-BASED COMPENSATION (CONTINUED)
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:
2023
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
5,560,784
799,875
700,000
-
-
-
Balance for
the year
ended
5,560,784
799,875
700,000
51,613
7,112,272
(51,613)
(51,613)
-
7,060,659
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 2023.
Voting and comments made at the Company's Annual General Meeting
At the 2022 Annual General Meeting, the resolution to adopt the Remuneration Report for the year ended 30 June 2022
was passed on a poll with 98.76% 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.
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 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
28
Annual Report 2023
Annual Report 2023
Directors Report (cont)
Annual Financial Report
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 2023, $48,000 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 48 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 2023
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2023
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 sale of exploration permit
Foreign exchange (losses)/gains and bank charges
Finance cost of Lease Liability
Exploration expenditure expensed as incurred
Loss before income tax
Income tax benefit/(expense)
Loss after income tax for the year
Other comprehensive income
Notes
11
30 June
2023
$
129,554
(836,092)
(254,791)
(129,889)
(93,391)
(182,075)
(81,352)
(147,734)
(779,847)
179,421
51,089
(5,784)
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)
(4,604,786)
(4,720,963)
(6,755,677)
(7,365,625)
4
-
-
(6,755,677)
(7,365,625)
6
(1,182,178)
(4,311,355)
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
20,090
(30,963)
Total comprehensive (loss) for the year attributable to the members
of S2 Resources Ltd
(7,917,765)
(11,707,943)
Loss per share for loss attributable to the members of S2 Resources
Ltd
Basic loss per share (cents)
15
(1.81)
(2.11)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
29
29
30
Annual Report 2023
Annual Report 2023
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 2023, $48,000 was paid or is payable for audit services provided by the auditors. There
were no non-audit services performed during the financial year.
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out
Auditor’s Independence Declaration
on page 48 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 2023
Annual Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2023
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 sale of exploration permit
Foreign exchange (losses)/gains and bank charges
Finance cost of Lease Liability
Exploration expenditure expensed as incurred
Loss before income tax
Income tax benefit/(expense)
Notes
11
4
30 June
2023
$
129,554
(836,092)
(254,791)
(129,889)
(93,391)
(182,075)
(81,352)
(147,734)
(779,847)
179,421
51,089
(5,784)
(4,604,786)
(6,755,677)
-
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)
-
Loss after income tax for the year
(6,755,677)
(7,365,625)
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
(1,182,178)
(4,311,355)
20,090
(30,963)
(7,917,765)
(11,707,943)
Loss per share for loss attributable to the members of S2 Resources
Ltd
Basic loss per share (cents)
15
(1.81)
(2.11)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
29
30
30
Annual Financial Report (cont)
Consolidated Statement of Financial Position
as at 30 June 2023
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 2023
Notes
5
5
6
7
8
30 June
2023
$
5,767,312
340,389
129,685
752,539
30 June
2022
$
5,411,615
310,729
86,870
2,107,417
6,989,925
7,916,631
2,426,570
119,743
148,840
2,366,972
120,855
106,406
2,695,153
2,594,233
9,685,078
10,510,864
503,482
74,672
68,013
646,167
85,139
73,437
158,576
804,743
281,915
87,795
107,203
476,913
33,593
61,844
95,437
572,350
8,880,335
9,938,514
9
10
71,911,364
2,599,278
(65,630,307)
65,831,625
3,080,648
(58,973,759)
8,880,335
9,938,514
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
31
31
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3
Annual Financial Report (cont)
Consolidated Statement of Financial Position
as at 30 June 2023
Financial assets held at fair value through other comprehensive income
CURRENT ASSETS
Cash and cash equivalents
Restricted cash
Trade and other receivables
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 2023
Notes
5
5
6
7
8
30 June
2023
$
340,389
129,685
752,539
30 June
2022
$
310,729
86,870
2,107,417
5,767,312
5,411,615
6,989,925
7,916,631
2,426,570
2,366,972
119,743
148,840
120,855
106,406
2,695,153
2,594,233
9,685,078
10,510,864
503,482
74,672
68,013
646,167
85,139
73,437
158,576
804,743
281,915
87,795
107,203
476,913
33,593
61,844
95,437
572,350
8,880,335
9,938,514
9
10
71,911,364
2,599,278
65,831,625
3,080,648
(65,630,307)
(58,973,759)
8,880,335
9,938,514
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
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Notes
30 June
2023
$
30 June
2022
$
(1,602,026)
(1,379,747)
(4,404,447)
(5,163,376)
80,704
(10,063)
12,412
(13,524)
14
(5,935,832)
(6,544,235)
(74,491)
-
51,932
179,421
172,700
329,562
(34,770)
155,409
-
(10,962)
109,677
6,413,500
4,978,041
(375,761)
(331,086)
(95,572)
(33,546)
(88,515)
5,266
5,908,621
4,563,706
302,351
(1,870,852)
53,346
(34,378)
5,411,615
7,316,846
5
5,767,312
5,411,615
3
3
Annual Financial Report (cont)
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
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
Proceeds from sale of assets
Proceeds from sale of tenement
Proceeds from sale of investments
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
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
34
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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A
Annual Financial Report (cont)
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
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
Proceeds from sale of assets
Proceeds from sale of tenement
Proceeds from sale of investments
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
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
3
3
Annual Report 2023
Notes
30 June
2023
$
30 June
2022
$
(1,602,026)
(1,379,747)
(4,404,447)
(5,163,376)
80,704
(10,063)
12,412
(13,524)
14
(5,935,832)
(6,544,235)
(74,491)
-
51,932
179,421
172,700
329,562
(34,770)
155,409
-
(10,962)
109,677
6,413,500
4,978,041
(375,761)
(331,086)
(95,572)
(33,546)
(88,515)
5,266
5,908,621
4,563,706
302,351
(1,870,852)
53,346
(34,378)
5,411,615
7,316,846
5
5,767,312
5,411,615
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
34
34
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
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 2023 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 19.
The financial statements were authorised for issue on 19 September 2023 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 financial statements.
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
(ii)
Adoption of new and revised Accounting Standards (continued)
not have any material impact on the financial performance or position of the consolidated entity.
35
35
36
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a)
(iii)
Basis of preparation (continued)
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 11.
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.
(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 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 20 to
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.
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 2023 comprise the Company and its subsidiaries (together referred to as the “Group” or “consolidated entity” and
(a)
(iii)
Basis of preparation (continued)
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 11.
Accounting Standard Board (IASB). Material accounting policies adopted in the preparation of this financial report are
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.
(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 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 20 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.
35
36
36
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 19.
The financial statements were authorised for issue on 19 September 2023 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
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.
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.
Historical cost convention
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
(ii)
Adoption of new and revised Accounting Standards (continued)
not have any material impact on the financial performance or position of the consolidated entity.
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b)
Foreign currency translation
(d)
Income Tax
(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:
•
•
•
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.
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
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.
37
37
38
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
(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:
•
•
•
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.
Annual Report 2023
Annual Report 2023
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
(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
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.
37
38
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
impairment losses.
(i)
Exploration and Evaluation
(i) 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.
(ii) 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.
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.
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i)
Exploration and Evaluation (continued)
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.
(j)
Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
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
(iii) Depreciation
cost, less its residual value.
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.
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for
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.
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%
20%
22.5% - 40%
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.
appropriate.
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
39
40
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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
(i)
Exploration and Evaluation
(i) Exploration and evaluation assets acquired
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.
•
•
•
•
•
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
or by sale; 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
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.
(ii) 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.
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.
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i)
Exploration and Evaluation (continued)
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.
(j)
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.
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%
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.
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.
39
40
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k)
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.
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.
(l)
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.
(iv) Share-based payments
Share-based compensation benefits are provided to employees via the Employee Option Plan.
41
42
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m)
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.
(n)
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
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.
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.
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k)
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.
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.
(l)
Interest in Joint Ventures
incorporated in the financial statements.
The Group accounts for 100% of the assets, liabilities and expenses of joint venture activity. These have been
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m)
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.
(n)
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
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.
41
42
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
(o)
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.
(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.
(p)
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.
(q)
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.
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r)
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.
(i) Measurement
and interest.
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.
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
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
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported
receive payments is established.
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.
(s)
New Accounting Standards and Interpretations not yet mandatory or early adopted
The Group has adopted all standards which became effective for the first time for the year ended 30 June 2023. The
adoption of any new accounting standards applicable to the Group has not had a material impact on the financial
The Group has chosen not to early-adopt any accounting standards that have been issued but are not yet effective. The
impact of accounting standards that have been issued, but are not yet effective, is not material to these financial
statements.
statements.
43
44
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
voluntary redundancy.
(o)
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.
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.
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
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
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
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.
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.
(i) Basic earnings per share
(ii) Diluted earnings per share
ordinary shares.
(p)
Goods and Services Tax
part of the expense.
financial position.
(q)
Government grants
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r)
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.
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.
(s)
New Accounting Standards and Interpretations not yet mandatory or early adopted
The Group has adopted all standards which became effective for the first time for the year ended 30 June 2023. The
adoption of any new accounting standards applicable to the Group has not had a material impact on the financial
statements.
The Group has chosen not to early-adopt any accounting standards that have been issued but are not yet effective. The
impact of accounting standards that have been issued, but are not yet effective, is not material to these financial
statements.
43
44
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
The Group’s financial instruments consist mainly of deposits with banks, lease liabilities and accounts receivable and
payable.
Net Fair Values
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.
2023
Financial Instruments
(i) Financial assets
Available cash on hand
Restricted cash
Total financial assets
(ii) Financial liabilities
Trade and other payables
Lease liabilities – current
Lease liabilities – non current
Total financial liabilities
2022
Financial Instruments
(i) Financial assets
Available cash on hand
Restricted cash
Total financial assets
Floating
interest rate
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
%
$
$
$
$
1,805,758
-
1,805,758
3,000,000
195,000
3,195,000
$
-
-
-
961,554
145,389
1,106,943
5,767,312
340,389
6,107,701
4.18
4.38
-
-
-
-
-
74,672
-
74,672
-
-
85,139
85,139
503,482
-
-
503,482
503,482
74,672
85,139
663,293
Floating
interest rate
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
%
$
$
-
-
-
1,926,631
115,729
2,042,360
5,411,615
310,729
5,722,344
0.86
0.35
3,484,984
-
3,484,984
(ii) Financial liabilities
Trade & other payables
Lease liabilities – current
Lease liabilities – non current
Total financial liabilities
-
-
-
-
-
195,000
195,000
-
87,795
-
87,795
45
-
-
33,593
33,593
281,915
-
-
281,915
281,915
87,795
33,593
403,303
Amounts recognised in profit or loss and other comprehensive income
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%
Foreign exchange risk
Exposure
30 June
2023
$
(18,058)
18,058
30 June
2022
$
(34,850)
34,850
(18,058)
18,058
(34,850)
34,850
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 2023
Cash on hand
Restricted cash
Other receivables
Trade and other payables
Year ended 30 June 2022
Cash on hand
Restricted cash
Other receivables
Trade and other payables
$
USD
$
450,817
46,796
(6,700)
490,913
-
-
USD
$
$
163,674
45,037
(4,355)
204,356
Total
$
961,482
115,389
10,596
(85,091)
1,002,376
Total
1,926,439
108,529
8,543
(24,855)
2,018,656
EUR
$
510,665
68,593
10,596
(78,391)
511,463
EUR
1,762,765
63,492
8,543
(20,500)
1,814,300
46
Annual Report 2023
Annual Report 2023
The Group’s financial instruments consist mainly of deposits with banks, lease liabilities and accounts receivable and
Net Fair Values
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
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%
Foreign exchange risk
30 June
2023
$
(18,058)
18,058
30 June
2022
$
(34,850)
34,850
(18,058)
18,058
(34,850)
34,850
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 2023
Cash on hand
Restricted cash
Other receivables
Trade and other payables
Year ended 30 June 2022
Cash on hand
Restricted cash
Other receivables
Trade and other payables
$
EUR
$
510,665
68,593
10,596
(78,391)
511,463
EUR
1,762,765
63,492
8,543
(20,500)
1,814,300
USD
$
450,817
46,796
-
(6,700)
490,913
Total
$
961,482
115,389
10,596
(85,091)
1,002,376
USD
$
163,674
45,037
-
(4,355)
204,356
$
Total
1,926,439
108,529
8,543
(24,855)
2,018,656
Amounts recognised in profit or loss and other comprehensive income
46
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT
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.
2023
Financial Instruments
Floating
Fixed interest
Fixed interest rate
Non-interest
Total Weighted
interest rate
rate maturing in
maturing between
bearing
1 year or less
1 and 2 years
average
effective
interest rate
$
%
Floating
Fixed interest
Fixed interest rate
Non-interest
Total Weighted
interest rate
rate maturing in
maturing between
bearing
1 year or less
1 and 2 years
Available cash on hand
1,805,758
(i) Financial assets
Restricted cash
Total financial assets
1,805,758
(ii) Financial liabilities
Trade and other payables
Lease liabilities – current
Lease liabilities – non current
Total financial liabilities
2022
Financial Instruments
(i) Financial assets
Restricted cash
Available cash on hand
3,484,984
Total financial assets
3,484,984
(ii) Financial liabilities
Trade & other payables
Lease liabilities – current
Lease liabilities – non current
Total financial liabilities
$
-
-
-
-
-
-
-
-
-
-
$
$
3,000,000
195,000
3,195,000
-
-
74,672
74,672
195,000
195,000
87,795
87,795
$
-
-
-
45
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
$
-
-
961,554
145,389
1,106,943
5,767,312
340,389
6,107,701
4.18
4.38
503,482
503,482
503,482
74,672
85,139
663,293
85,139
85,139
average
effective
interest rate
$
%
0.86
0.35
1,926,631
115,729
2,042,360
5,411,615
310,729
5,722,344
281,915
281,915
281,915
87,795
33,593
403,303
33,593
33,593
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
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
2023
$
2022
$
(55,368)
(34,378)
(55,368)
(34,378)
Net gains/(losses) recognised in other comprehensive income
Translation of foreign operations
(20,090)
(30,963)
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
$
(53,827)
53,827
Impact on
other
components
of equity
$
(24,442)
24,442
USD/$ exchange rate – increase 10%*
USD/$ exchange rate – decrease (10%)*
(1,161)
1,161
(5,638)
5,638
*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 Finland. 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.
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
Price risk
Exposure
Sensitivity
the indexes.
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 6). The Group’s investment is publicly traded on the Australian
Stock Exchange (“ASX”).
The Group is not currently exposed to commodity price risk.
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
Impact on
Impact on
Impact on
post tax loss
post tax loss
other
Impact on
other
2023
2022
$
-
-
components
components
of equity
of equity
2023
$
(75,254)
75,254
2022
$
(195,660)
195,660
$
-
-
ASX index – increase 10%
ASX index – decrease (10%)
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 6.
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
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
Lapland.
•
•
•
Group.
47
48
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
comprehensive income:
Amounts recognised in profit or loss
Net foreign exchange gain/(loss) included in other income/other
(55,368)
(34,378)
Total net foreign exchange (losses) recognised in loss before income tax
(55,368)
(34,378)
2023
$
2022
$
Net gains/(losses) recognised in other comprehensive income
Translation of foreign operations
(20,090)
(30,963)
expenses
for the year
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.
Impact on
post tax loss
$
(53,827)
53,827
Impact on
other
components
of equity
$
(24,442)
24,442
USD/$ exchange rate – increase 10%*
USD/$ exchange rate – decrease (10%)*
(1,161)
1,161
(5,638)
5,638
EUR/$ exchange rate – increase 10%*
EUR/$ exchange rate – decrease (10%)*
*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 Finland. 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.
Annual Report 2023
Annual Report 2023
During the year ended, the following foreign-exchange related amounts were recognised in profit or loss and other
Price risk
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
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 6). The Group’s investment is publicly traded on the Australian
Stock Exchange (“ASX”).
The Group is not currently exposed to commodity price risk.
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
2023
$
-
-
2022
$
-
-
Impact on
other
components
of equity
2023
$
(75,254)
75,254
Impact on
other
components
of equity
2022
$
(195,660)
195,660
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 6.
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.
47
48
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 3. SEGMENT INFORMATION (CONTINUED)
SEGMENT RESULTS
Statement of profit or loss for the year ended 30 June 2023
Other income
Corporate expenses
Business Development
Travel
Depreciation expense
Share-based payments
Other gain/(losses) - net
Gain on disposal of tenement
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
-
-
-
-
-
-
-
-
(538,268)
(538,268)
-
(538,268)
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
Gain on disposal of tenement
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
-
-
-
-
-
-
-
-
-
(1,728,763)
(1,728,763)
-
(1,728,763)
Australia
exploration
activities
-
-
-
-
-
-
-
-
(4,054,911)
(4,054,911)
-
(4,054,911)
Australia
exploration
activities
-
-
-
-
-
-
-
-
-
(2,990,176)
(2,990,176)
-
(2,990,176)
Unallocated
Total
129,554
(1,314,163)
(182,075)
(81,352)
(147,734)
(779,847)
51,089
179,421
(5,784)
(11,608)
(2,162,499)
-
(2,162,499)
129,554
(1,314,163)
(182,075)
(81,352)
(147,734)
(779,847)
51,089
179,421
(5,784)
(4,604,787)
(6,755,678)
-
(6,755,678)
Unallocated
Total
166,912
(1,060,327)
(258,343)
(103,467)
(139,029)
(1,364,243)
(39,682)
161,738
(8,221)
(2,024)
(2,646,686)
-
(2,646,686)
166,912
(1,060,327)
(258,343)
(103,467)
(139,029)
(1,364,243)
(39,682)
161,738
(8,221)
(4,720,963)
7,365,625)
-
(7,365,625)
Exploration assets 2023
Exploration assets 2022
Finland
exploration activities
966,972
966,972
Australia exploration
activities
1,459,598
1,400,000
Unallocated
Total
-
-
2,426,570
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.
Movement in unrecognised temporary differences
(62,754)
(19,259)
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
Income tax expense / (benefit) for overseas entities (at various rates)
Net loss before tax
Income tax benefit at 30% (2022: 25%)
Increase in income tax due to:
Non-deductible expenses
Current year tax losses not recognised
Decrease in income tax due to:
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 (1)
Tax revenue losses (2)
NOTE 5. CASH AND CASH EQUIVALENTS
Current
Cash at bank and in hand
Restricted cash
30 June
2023
30 June
2022
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
(6,755,677)
(1,971,740)
125,509
(7,365,625)
(1,406,724)
(347,770)
238,916
1,670,070
341,342
1,432,411
9,909,266
1,705,607
11,614,873
8,450,662
1,458,604
9,909,266
30 June
2023
$
5,767,312
340,389
6,107,701
30 June
2022
$
5,411,615
310,729
5,722,344
(1) Tax losses have been adjusted to reflect 2022 actual tax return.
(2) 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.
49
50
Annual Report 2023
Annual Report 2023
Unallocated
Total
129,554
129,554
(1,314,163)
(1,314,163)
(182,075)
(81,352)
(147,734)
(779,847)
51,089
179,421
(5,784)
(11,608)
(2,162,499)
-
(182,075)
(81,352)
(147,734)
(779,847)
51,089
179,421
(5,784)
(4,604,787)
(6,755,678)
-
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 3. SEGMENT INFORMATION (CONTINUED)
SEGMENT RESULTS
Statement of profit or loss for the year ended 30 June 2023
Finland
exploration
activities
Australia
exploration
activities
Other income
Corporate expenses
Business Development
Travel
Depreciation expense
Share-based payments
Other gain/(losses) - net
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Gain on disposal of tenement
Finance Cost of Right of Use asset
Exploration expenditure expensed as incurred
Loss before income tax
Income tax expense
(538,268)
(538,268)
(4,054,911)
(4,054,911)
Loss after income tax for the year
(538,268)
(4,054,911)
(2,162,499)
(6,755,678)
Statement of profit or loss for the year ended 30 June 2022
Finland
exploration
activities
Australia
exploration
activities
Unallocated
Total
166,912
166,912
(1,060,327)
(1,060,327)
Other income
Corporate expenses
Business Development
Travel
Depreciation expense
Share-based payments
Other gain/(losses) - net
Gain on disposal of tenement
Finance Cost of Right of Use asset
Exploration expenditure expensed as incurred
Loss before income tax
Income tax expense
(1,728,763)
(1,728,763)
(2,990,176)
(2,990,176)
Loss after income tax for the year
(1,728,763)
(2,990,176)
(2,646,686)
(7,365,625)
Exploration assets 2023
Exploration assets 2022
exploration activities
966,972
966,972
activities
1,459,598
1,400,000
Finland
Australia exploration
Unallocated
Total
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.
(1,364,243)
(1,364,243)
(258,343)
(103,467)
(139,029)
(39,682)
161,738
(8,221)
(2,024)
(2,646,686)
-
-
-
(258,343)
(103,467)
(139,029)
(39,682)
161,738
(8,221)
(4,720,963)
7,365,625)
-
2,426,570
2,366,972
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 30% (2022: 25%)
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 (1)
Tax revenue losses (2)
30 June
2023
$
30 June
2022
$
-
-
-
-
-
-
-
-
(6,755,677)
(1,971,740)
125,509
(7,365,625)
(1,406,724)
(347,770)
238,916
1,670,070
341,342
1,432,411
(62,754)
-
-
-
-
(19,259)
-
-
-
-
9,909,266
1,705,607
11,614,873
8,450,662
1,458,604
9,909,266
(1) Tax losses have been adjusted to reflect 2022 actual tax return.
(2) 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.
NOTE 5. CASH AND CASH EQUIVALENTS
Current
Cash at bank and in hand
Restricted cash
30 June
2023
$
5,767,312
340,389
6,107,701
30 June
2022
$
5,411,615
310,729
5,722,344
49
50
50
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
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
Aurion Resources Ltd
30 June
30 June
2023
$
2022
$
1,956,601
150,816
6,246,071
-
Movement during the year
Aurion Resources Ltd issued for sale of Keulakkopää exploration permit (i)
-
172,700
Todd River Resources change in fair value of investment
(1,204,062)
(4,289,471)
Aurion Resources Ltd change in fair value of investment
Aurion shares disposal of shares
Balance as at 30 June
(i)
Valuation based on share price as at 8 June 2022.
(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
-
(21,884)
(150,816)
-
752,539
2,107,417
30 June
2023
$
129,685
129,685
30 June
2022
$
86,870
86,870
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.
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 7. EXPLORATION AND EVALUATION
Exploration costs
Movement during the year
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)
Balance at end of the year
30 June
2023
$
30 June
2022
$
2,366,972
2,366,972
2,366,972
4,604,786
2,366,972
4,720,963
(4,604,786)
(4,720,963)
59,598
-
2,426,570
2,366,972
(i) During the year ended 30 June 2023 the exploration expenditure incurred pertains to the following:
Exploration expenditure incurred and expensed for Australia was $4,054,911.
Exploration expenditure incurred and expensed for Finland was $538,268.
Australian Projects
Finland Projects
US Projects
Exploration expenditure incurred and expensed for the in the US was $11,608
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.
(ii) Stamp duty in relation to Jillewarra farm in agreement October 2020.
NOTE 8. TRADE AND OTHER PAYABLES
Trade and other payables (i)
(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.
30 June
2023
$
30 June
2022
$
503,482
281,915
51
51
52
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
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:
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 7. EXPLORATION AND EVALUATION
Exploration costs
Movement during the year
30 June
2023
$
30 June
2022
$
2,366,972
2,366,972
Aurion Resources Ltd issued for sale of Keulakkopää exploration permit (i)
Todd River Resources change in fair value of investment
(1,204,062)
(4,289,471)
Investments
Balance at beginning of the year
Todd River Resources Ltd
Aurion Resources Ltd
Movement during the year
Aurion Resources Ltd change in fair value of investment
Aurion shares disposal of shares
Balance as at 30 June
(i)
Valuation based on share price as at 8 June 2022.
(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
30 June
2023
$
2022
$
1,956,601
150,816
6,246,071
-
-
-
172,700
(21,884)
(150,816)
-
752,539
2,107,417
30 June
2023
$
129,685
129,685
30 June
2022
$
86,870
86,870
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)
Balance at end of the year
2,366,972
4,604,786
(4,604,786)
59,598
2,426,570
2,366,972
4,720,963
(4,720,963)
-
2,366,972
(i) During the year ended 30 June 2023 the exploration expenditure incurred pertains to the following:
Australian Projects
Exploration expenditure incurred and expensed for Australia was $4,054,911.
Finland Projects
Exploration expenditure incurred and expensed for Finland was $538,268.
US Projects
Exploration expenditure incurred and expensed for the in the US was $11,608
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.
(ii) Stamp duty in relation to Jillewarra farm in agreement October 2020.
NOTE 8. TRADE AND OTHER PAYABLES
Trade and other payables (i)
30 June
2023
$
30 June
2022
$
503,482
281,915
(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.
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.
51
52
52
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 9. SHARE CAPITAL
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 11. SHARE-BASED PAYMENTS
30 June
2023
No. of
Shares
30 June
2023
$
30 June
2022
No. of
Shares
30 June
2022
$
Options
Ordinary shares fully paid
Movement in Share Capital
Share Placement
Share issue for consulting services
Options exercised
Ordinary shares fully paid
Balance at beginning of year
Balance at year end
410,091,522
71,911,364
356,374,855
65,831,625
53,166,667
300,000
250,000
6,007,989
40,750
31,000
41,483,676
4,646,955
356,374,855
65,831,625
314,891,179
61,184,670
410,091,522
71,911,364
356,374,855
65,831,625
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.
NOTE 10. RESERVES
Share-based payments reserve (i)
Other reserve (ii)
Foreign currency translation reserve (iii)
Revaluation reserve (iv)
30 June 2023
$
4,069,570
144,517
341,792
(1,956,601)
2,599,278
30 June 2022
$
3,388,852
144,517
321,702
(774,423)
3,080,648
(i) The share-based payments reserve recognises the fair value of the options issued to Directors, employees, and service providers.
Option Plan.
(ii) 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 right 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 2023, $99,128 in relation to the fair value of options which has lapsed or expired was transferred to
accumulated losses.
(iii) 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.
(iv) 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.
(v) The revaluation reserve recognises the change in fair value of investments. Please refer to Note 6 of these financials.
53
53
54
The following share-based payments arrangements were in existence during the current reporting year:
Options Series
June 2023
Number Issued
Number at 30
Grant Date
Expiry Date
Exercise
Fair value
Price $
at Grant
Date $
(12) Issued 12 November 2019
18,000,000
18,000,000
12/11/2019 11/11/2023
(13) Issued 3 December 2019
(14) Issued 27 August 2020
(15) Issued 5 October 2020
(16) Issued 17 November 2020
(18) Issued 19 April 2022
(19) Issued 28 April 2022
(20) Issued 21 October 2022
(21) Issued 16 November 2022
400,000
200,000
2,000,000
7,350,000
300,000
200,000
3,100,000
5,000,000
200,000
03/12/2019 02/12/2023
200,000
27/08/2020 26/08/2024
2,000,000
05/10/2020 04/10/2024
7,350,000
17/11/2020 16/11/2024
300,000
19/04/2022 18/04/2026
200,000
28/04/2022 27/04/2026
3,100,000
21/10/2022 20/10/2026
5,000,000
16/11/2022 20/10/2026
(17) Issued 12 November 2021
11,050,000
10,300,000
12/11/2021 11/11/2025
0.30
0.30
0.30
0.39
0.38
0.29
0.25
0.23
0.20
0.20
0.04
0.04
0.10
0.14
0.14
0.13
0.11
0.10
0.09
0.11
Total
47,600,000
46,650,000
(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.
Option Plan.
(13) The 400,000 options in series 13 which vests one year from grant date were issued to employees under the Employee Share
(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
(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.
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
(20) The 3,100,000 options in series 20 which vest one year from grant date comprised 2,900,000 issued to employees under the
Employee Share Option Plan and 200,000 issued to service providers. 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.
(21) The 5,000,000 options in series 21 which vest one year from proposed date were issued to directors.
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 9. SHARE CAPITAL
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 11. SHARE-BASED PAYMENTS
Ordinary shares fully paid
Movement in Share Capital
Share Placement
Share issue for consulting services
Options exercised
Ordinary shares fully paid
Balance at beginning of year
Balance at year end
NOTE 10. RESERVES
Share-based payments reserve (i)
Other reserve (ii)
Foreign currency translation reserve (iii)
Revaluation reserve (iv)
30 June
2023
No. of
Shares
30 June
2023
$
30 June
2022
No. of
Shares
30 June
2022
$
410,091,522
71,911,364
356,374,855
65,831,625
53,166,667
6,007,989
41,483,676
4,646,955
300,000
250,000
40,750
31,000
356,374,855
65,831,625
314,891,179
61,184,670
410,091,522
71,911,364
356,374,855
65,831,625
30 June 2023
30 June 2022
$
4,069,570
144,517
341,792
(1,956,601)
2,599,278
$
3,388,852
144,517
321,702
(774,423)
3,080,648
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.
(ii) 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 right 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 2023, $99,128 in relation to the fair value of options which has lapsed or expired was transferred to
(iii) 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.
(iv) Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income and
accumulated losses.
is disposed of.
(v) The revaluation reserve recognises the change in fair value of investments. Please refer to Note 6 of these financials.
The following share-based payments arrangements were in existence during the current reporting year:
Options
Options Series
Number Issued
Number at 30
June 2023
Grant Date
Expiry Date
Exercise
Price $
Fair value
at Grant
Date $
(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
(20) Issued 21 October 2022
(21) Issued 16 November 2022
Total
18,000,000
400,000
200,000
2,000,000
7,350,000
11,050,000
300,000
200,000
3,100,000
5,000,000
47,600,000
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
3,100,000
5,000,000
46,650,000
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
21/10/2022 20/10/2026
16/11/2022 20/10/2026
0.30
0.30
0.30
0.39
0.38
0.29
0.25
0.23
0.20
0.20
0.04
0.04
0.10
0.14
0.14
0.13
0.11
0.10
0.09
0.11
(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
(i) The share-based payments reserve recognises the fair value of the options issued to Directors, employees, and service providers.
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.
accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment
(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.
(20) The 3,100,000 options in series 20 which vest one year from grant date comprised 2,900,000 issued to employees under the
Employee Share Option Plan and 200,000 issued to service providers. 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.
(21) The 5,000,000 options in series 21 which vest one year from proposed date were issued to directors.
53
54
54
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 11. SHARE-BASED PAYMENTS (CONTINUED)
The weighted average fair value of the share options granted during the year is $0.10.
There were no dividends recommended or paid during the year ended 30 June 2023.
The total expense of the share based payments for the year was:
Options issued to Directors
Options issued under Employee Share Plan
Options issued under Service Provider Plan
30 June
2023
$
365,226
397,361
17,259
779,846
30 June
2022
$
817,584
513,565
33,093
1,364,243
The weighted average contractual life for options outstanding at the end of the year was 2.1 years.
Options were priced using a Black-Scholes option pricing model using the inputs below:
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest rate
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest rate
Series 12
0.115
0.30
80%
4 years
0.00%
0.86%
Series 17
0.20
0.29
100%
4 years
0.00%
1.11%
Series 13
0.115
0.30
80%
4 years
0.00%
0.86%
Series 18
0.17
0.25
100%
4 years
0.00%
2.77%
Series 14
0.20
0.30
80%
4 years
0.00%
0.43%
Series 19
0.155
0.23
100%
4 years
0.00%
2.77%
Series 15
0.28
0.39
80%
4 years
0.00%
0.29%
Series 20
0.14
0.20
100%
4 years
0.00%
3.75%
Series 16
0.28
0.38
80%
4 years
0.00%
0.29%
Series 21
0.16
0.20
100%
4 years
0.00%
3.20%
The following reconciles the outstanding share options granted in the year ended 30 June 2023:
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 12. DIVIDENDS
NOTE 13. KEY MANAGEMENT PERSONNEL DISCLOSURES
Short term employee benefits
Post-employment benefits
Annual Leave benefits
Share-based payment (i)
30 June
30 June
2023
$
828,474
38,841
(43,962)
2022
$
747,032
62,923
51,054
956,289
365,226
1,188,579
1,817,298
(6,755,677)
(7,365,625)
30 June
2023
$
147,734
779,847
-
(55,368)
(51,932)
221,567
(27,597)
(14,985)
(179,421)
30 June
2022
$
139,029
1,364,243
-
39,682
(155,409)
(161,738)
(474,988)
76,859
(6,288)
30 June
2023
$
30 June
2022
$
(i) Share payment payments expensed in the period.
Detailed remuneration disclosures are provided in the Remuneration Report.
NOTE 14. 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 asset
Gain on disposal of exploration permit
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in provisions
(Increase)/Decrease in receivables
NOTE 15. BASIC LOSS PER SHARE
Net cash outflow from operating activities
(5,935,832)
(6,544,235)
(a)
Reconciliation of loss used in calculating loss per share
Basic loss per share
Loss attributable to the ordinary equity holders in calculating basic loss per share
(6,755,677)
(7,365,625)
(b) Weighted average number of shares used as the Denominator
Number
Number
Ordinary shares used as the denominator in calculating basic loss per share
373,655,991
349,422,920
(c) Basic loss per share
Basic loss per share
Where loss per share is non-dilutive, it is not disclosed.
Cents
(1.81)
Cents
(2.11)
(i) Options expired or cancelled during the year
For the year ended 30 June 2023, 2,200,000 employee 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.
55
55
56
30 June
2023
No. of Options Weighted average
exercise price $
0.31
0.20
0.13
0.14
0.30
0.20
0.31
30 June
2022
No. of Options
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
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
41,000,000
8,100,000
(250,000)
(2,200,000)
46,650,000
8,100,000
38,550,000
30 June
2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 11. SHARE-BASED PAYMENTS (CONTINUED)
The total expense of the share based payments for the year was:
Options issued to Directors
Options issued under Employee Share Plan
Options issued under Service Provider Plan
The weighted average contractual life for options outstanding at the end of the year was 2.1 years.
Options were priced using a Black-Scholes option pricing model using the inputs below:
Series 12
Series 13
Series 14
Series 15
Series 16
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest rate
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest rate
0.115
0.30
80%
4 years
0.00%
0.86%
0.20
0.29
100%
4 years
0.00%
1.11%
0.115
0.30
80%
4 years
0.00%
0.86%
0.17
0.25
100%
4 years
0.00%
2.77%
0.20
0.30
80%
4 years
0.00%
0.43%
0.155
0.23
100%
4 years
0.00%
2.77%
0.28
0.39
80%
4 years
0.00%
0.29%
0.14
0.20
100%
4 years
0.00%
3.75%
0.28
0.38
80%
4 years
0.00%
0.29%
0.16
0.20
100%
4 years
0.00%
3.20%
Series 17
Series 18
Series 19
Series 20
Series 21
The following reconciles the outstanding share options granted in the year ended 30 June 2023:
30 June
2023
30 June
2023
30 June
2022
No. of Options Weighted average
No. of Options
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
41,000,000
8,100,000
(250,000)
(2,200,000)
46,650,000
8,100,000
38,550,000
(i) Options expired or cancelled during the year
0.31
0.20
0.13
0.14
0.30
0.20
0.31
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
For the year ended 30 June 2023, 2,200,000 employee 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.
Annual Report 2023
Annual Report 2023
The weighted average fair value of the share options granted during the year is $0.10.
There were no dividends recommended or paid during the year ended 30 June 2023.
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 12. DIVIDENDS
30 June
30 June
2023
$
365,226
397,361
17,259
779,846
2022
$
817,584
513,565
33,093
1,364,243
NOTE 13. KEY MANAGEMENT PERSONNEL DISCLOSURES
Short term employee benefits
Post-employment benefits
Annual Leave benefits
Share-based payment (i)
30 June
2023
$
828,474
38,841
(43,962)
365,226
1,188,579
30 June
2022
$
747,032
62,923
51,054
956,289
1,817,298
(i) Share payment payments expensed in the period.
Detailed remuneration disclosures are provided in the Remuneration Report.
NOTE 14. 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 asset
Gain on disposal of exploration permit
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in provisions
(Increase)/Decrease in receivables
30 June
2023
$
(6,755,677)
30 June
2022
$
(7,365,625)
147,734
779,847
-
(55,368)
(51,932)
(179,421)
221,567
(27,597)
(14,985)
139,029
1,364,243
-
39,682
(155,409)
(161,738)
(474,988)
76,859
(6,288)
Net cash outflow from operating activities
(5,935,832)
(6,544,235)
NOTE 15. BASIC LOSS PER SHARE
Reconciliation of loss used in calculating loss per share
(a)
Basic loss per share
Loss attributable to the ordinary equity holders in calculating basic loss per share
30 June
2023
$
30 June
2022
$
(6,755,677)
(7,365,625)
(b) Weighted average number of shares used as the Denominator
Ordinary shares used as the denominator in calculating basic loss per share
Number
373,655,991
Number
349,422,920
(c) Basic loss per share
Basic loss per share
Where loss per share is non-dilutive, it is not disclosed.
Cents
(1.81)
Cents
(2.11)
55
56
56
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 16. COMMITMENTS
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:
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 19. PARENT ENTITY DISCLOSURES (CONTINUED)
Financial performance
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 17. RELATED PARTY TRANSACTIONS
30 June
2023
$
1,727,196
2,065,360
2,080,054
1,003,318
6,875,928
30 June
2022
$
1,037,844
975,278
722,346
217,561
2,953,029
Other than the Directors and key management personnel salaries and options described in Note 13 and the Remuneration
Report, there were no related party transactions for the year ended 30 June 2023.
NOTE 18. JOINT VENTURES
The Group has interests in the following joint venture operations:
Tenement Area
Activities
Eundynie
Nickel
NOTE 19. 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
2023
80%
2022
80%
30 June
2023
$
5,762,862
3,404,398
9,167,260
365,634
158,576
524,210
8,643,050
30 June
2022
$
5,342,322
4,871,585
10,213,907
325,958
95,437
421,395
9,792,512
71,911,365
4,069,570
-
(67,337,885)
8,643,050
65,831,625
3,388,852
(21,884)
(59,406,081)
9,792,512
57
57
58
Loss for the year
Other comprehensive income
Total comprehensive income
NOTE 20. SUBSIDIARIES
Name of entity
Third Eye Pty Ltd
Dark Star Exploration 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
Australia
Finland
Canada
Australia
United States
United States
30 June
2023
30 June
2022
$
-
(8,019,340)
(11,636,181)
(8,019,340)
(11,636,181)
$
-
Class of Shares
Equity Holding
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2022
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
NOTE 21. EVENTS OCCURRING AFTER THE REPORTING YEAR
On 07 August S2 Resources Ltd advised that it signed a binding agreement with Pacific State Metals (Holdings) Ltd to vend
its West Murchison and Fraser Range tenements into Pacific State. Pacific State is an unlisted Australian-incorporated
public company that has indicated to S2 that it has an intention to list on the Australian Securities Exchange (“ASX”) by 30
June 2024.
In return for the sale of its West Murchison and Fraser Range tenements to Pacific State, S2 will receive 7,000,000 ordinary
fully paid shares in the issued capital of Pacific State, representing approximately 28.6% of Pacific State’s issued capital (on
a post-transaction basis). Based on the agreed proforma capital structure post the planned initial public offering (IPO) on
ASX, it is expected that S2 will hold approximately 13% of the issued capital in Pacific State post-completion of the IPO.
As part of the sale agreement, Pacific State has undertaken to use its reasonable endeavours to seek to list on ASX as soon
as practicable. In the meantime, Pacific State is required to keep the tenements in good standing. Should Pacific State not
complete an ASX listing by 30 June 2024 (or such later date as the parties may otherwise agree), then each of S2 and Pacific
State must do all things necessary to unwind the transaction (such that the West Murchison and Fraser Range tenements
will be transferred back to S2 and S2 will surrender the shares it holds in Pacific State).
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 16. COMMITMENTS
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 19. PARENT ENTITY DISCLOSURES (CONTINUED)
The Group must meet the following tenement expenditure commitments to maintain them in good standing until they
Financial performance
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:
Loss for the year
Other comprehensive income
Total comprehensive income
NOTE 20. SUBSIDIARIES
Name of entity
Third Eye Pty Ltd
Dark Star Exploration 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
Australia
Finland
Canada
Australia
United States
United States
30 June
2023
$
30 June
2022
$
(8,019,340)
-
(8,019,340)
(11,636,181)
-
(11,636,181)
Class of Shares
Equity Holding
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2022
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
NOTE 21. EVENTS OCCURRING AFTER THE REPORTING YEAR
On 07 August S2 Resources Ltd advised that it signed a binding agreement with Pacific State Metals (Holdings) Ltd to vend
its West Murchison and Fraser Range tenements into Pacific State. Pacific State is an unlisted Australian-incorporated
public company that has indicated to S2 that it has an intention to list on the Australian Securities Exchange (“ASX”) by 30
June 2024.
In return for the sale of its West Murchison and Fraser Range tenements to Pacific State, S2 will receive 7,000,000 ordinary
fully paid shares in the issued capital of Pacific State, representing approximately 28.6% of Pacific State’s issued capital (on
a post-transaction basis). Based on the agreed proforma capital structure post the planned initial public offering (IPO) on
ASX, it is expected that S2 will hold approximately 13% of the issued capital in Pacific State post-completion of the IPO.
As part of the sale agreement, Pacific State has undertaken to use its reasonable endeavours to seek to list on ASX as soon
as practicable. In the meantime, Pacific State is required to keep the tenements in good standing. Should Pacific State not
complete an ASX listing by 30 June 2024 (or such later date as the parties may otherwise agree), then each of S2 and Pacific
State must do all things necessary to unwind the transaction (such that the West Murchison and Fraser Range tenements
will be transferred back to S2 and S2 will surrender the shares it holds in Pacific State).
Other than the Directors and key management personnel salaries and options described in Note 13 and the Remuneration
Report, there were no related party transactions for the year ended 30 June 2023.
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 17. RELATED PARTY TRANSACTIONS
NOTE 18. JOINT VENTURES
The Group has interests in the following joint venture operations:
Tenement Area
Activities
Eundynie
Nickel
NOTE 19. 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
Accumulated losses
Total equity
Share-based payments reserve
Fair value and other comprehensive income reserve
30 June
2023
$
1,727,196
2,065,360
2,080,054
1,003,318
6,875,928
30 June
2022
$
1,037,844
975,278
722,346
217,561
2,953,029
2023
80%
2022
80%
30 June
2023
$
5,762,862
3,404,398
9,167,260
365,634
158,576
524,210
30 June
2022
$
5,342,322
4,871,585
10,213,907
325,958
95,437
421,395
8,643,050
9,792,512
71,911,365
4,069,570
-
65,831,625
3,388,852
(21,884)
(67,337,885)
(59,406,081)
8,643,050
9,792,512
57
58
58
Annual Report 2023
Annual Report 2023
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 22. 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
NOTE 23. FAIR VALUE MEASUREMENT
30 June
2023
$
48,000
48,000
30 June
2022
$
44,000
44,000
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 2023
Financial assets as FVOCI –
Equity Securities
As at 30 June 2022
Financial assets as FVOCI –
Equity Securities
Level 1
$
752,539
Level 1
$
Level 2
$
-
Level 2
$
2,107,417
-
Level 3
$
-
Level 3
$
-
Total
$
752,539
Total
$
2,107,417
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.
Directors’ Declaration
The Directors of the Group declare that:
and
reporting requirements; and
year ended on that date.
financial statements.
1. The financial statements and notes as set out on pages 17 to 46 are in accordance with the Corporations Act 2001,
(a) comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional
(b) give a true and fair view of the financial position of the Group as at 30 June 2023 and of its performance for the
2. The financial report also complies with International Financial Reporting Standards as disclosed in note 1 to the
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 2023
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).
•
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 companies are based on the quoted market prices from the ASX on the
last trading day prior to the period end.
59
59
60
Annual Report 2023
Annual Report 2023
30 June
2023
$
48,000
48,000
30 June
2022
$
44,000
44,000
Annual Financial Report (cont)
Notes to the Consolidated Financial Statements
NOTE 22. 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
NOTE 23. FAIR VALUE MEASUREMENT
since the last annual financial report.
Fair Value Hierarchy
This note provides an update on the judgements and estimates in determining the fair values of the financial instruments
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 2023
Financial assets as FVOCI –
Equity Securities
As at 30 June 2022
Financial assets as FVOCI –
Equity Securities
Level 1
$
752,539
Level 1
$
2,107,417
Level 2
Level 3
Level 2
Level 3
$
-
$
-
Total
$
752,539
Total
$
2,107,417
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).
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 companies are based on the quoted market prices from the ASX on the
last trading day prior to the period end.
$
-
$
-
59
Directors’ Declaration
The Directors of the Group declare that:
1. The financial statements and notes as set out on pages 17 to 46 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 2023 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 2023
60
60
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
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
Australia
PO Box 700 West Perth WA 6872
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF S2 RESOURCES
LIMITED
As lead auditor of S2 Resources Limited for the year ended 30 June 2023, 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
Opinion
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, WA
20 September 2023
INDEPENDENT AUDITOR'S REPORT
To the members of S2 Resources Limited
Report on the Audit of the Financial Report
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 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
declaration.
Act 2001, including:
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
time of this auditor’s report.
for our opinion.
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.
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.
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.
61
61
62
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
Australia
PO Box 700 West Perth WA 6872
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 INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF S2 RESOURCES
To the members of S2 Resources Limited
LIMITED
As lead auditor of S2 Resources Limited for the year ended 30 June 2023, I declare that, to the best of
my knowledge and belief, there have been:
Report on the Audit of the Financial Report
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
Opinion
INDEPENDENT AUDITOR'S REPORT
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, WA
20 September 2023
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 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial 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 2023 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.
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.
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.
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.
61
62
62
Carrying value of exploration and evaluation assets
Other information
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 2023, 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 7 and 1(i) to the
Financial Statements.
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or 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. 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.
63
63
64
Carrying value of exploration and evaluation assets
Other information
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 2023, 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 7 and 1(i) to the
Financial Statements.
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or 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. 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.
63
64
64
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 15 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of S2 Resources Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Holders of over 20% of unlisted securities
These are the following holders of more than 20% of unlisted securities as at 10 October 2023:
Ashleigh Woodley
Director
Perth,
20 September 2023
Annual Report 2023
10
11
14
1
1
1
1
1
9
3
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
3,100,000
5,000,000
Number held
15,000,000
Additional ASX Information
The shareholder information set out below was applicable as at the dates specified.
Unlisted Securities
Options (Current as at 10 October 2023)
Number on issue
Number of holders
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
Options expiring 20 October 2026 at an exercise price of $0.20
Options expiring 20 October 2026 at an exercise price of $0.20
Distribution of Equity Securities
Analysis of numbers of ordinary shareholders by size of holding:
Number of Shareholders
1,956
1,176
522
1,080
390
5,124
Mark Bennett
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
October 2023.
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:
There are 2,565 holders holding less than a marketable parcel of ordinary shares based on the closing market price as at 10
(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.
65
65
66
75
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 15 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of S2 Resources Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
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
Responsibilities
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth,
20 September 2023
Annual Report 2023
Additional ASX Information
The shareholder information set out below was applicable as at the dates specified.
Unlisted Securities
Options (Current as at 10 October 2023)
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
Options expiring 20 October 2026 at an exercise price of $0.20
Options expiring 20 October 2026 at an exercise price of $0.20
Number on issue
18,000,000
200,000
200,000
2,000,000
7,350,000
10,300,000
300,000
200,000
3,100,000
5,000,000
Number of holders
10
1
1
1
11
14
1
1
9
3
Holders of over 20% of unlisted securities
These are the following holders of more than 20% of unlisted securities as at 10 October 2023:
Number held
15,000,000
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
1,956
1,176
522
1,080
390
5,124
There are 2,565 holders holding less than a marketable parcel of ordinary shares based on the closing market price as at 10
October 2023.
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.
65
66
66
75
Annual Report 2023
Annual Report 2023
Additional ASX Information (cont)
Substantial Holders (Current as at 10 October 2023)
Ordinary Shares
Mark Gareth Creasy, Yandal Investments Pty Ltd, Ponton Minerals Pty Ltd,
Lake Rivers Gold Pty Ltd and Free CI Pty Ltd
Jupiter Asset Management
Paradice Investment Management Pty ltd
Equity Security Holders (Current as at 10 October 2023)
Additional ASX Information (cont)
Tenement Schedule as at 30 June 2023
Number held
Percentage of issued shares
Project
Tenement ID
Registered Holder
Location
Ownership %
Status
67,419,935
60,155,987
29,770,727
16.44%
14.67%
7.26%
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
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
BT PORTFOLIO SERVICES LIMITED
PONTON MINERALS PTY LTD
FREE CI PTY LTD
LAKE RIVERS GOLD PTY LTD
MARTINI 29 PTY LTD
DR MARK ANTHONY BENNETT
BLACK RAVEN MINING PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITITEL PTY LTD
BNP PARIBAS NOMS PTY LTD
MR GRAEME BRUCE HATHWAY
RETZOS EXECUTIVE PTY LTD
MR ANTHONY MARK SAIA + MRS CARMEN SAIA
MR SANJIN VATRIC
PALM BEACH NOMINEES PTY LIMITED
MR ALAIN CHEVALIER
Total of Top 20
Total Remaining Holders Balance
67,891,240
42,482,707
36,528,692
10,259,323
9,000,000
8,312,410
8,312,409
8,312,409
7,292,895
4,619,916
4,550,000
4,078,395
4,010,174
3,844,941
3,500,000
3,400,000
2,600,000
2,525,000
2,300,000
2,100,000
16.56
10.36
8.91
2.50
2.19
2.03
2.03
2.03
1.78
1.13
1.11
0.99
0.98
0.94
0.85
0.83
0.63
0.62
0.56
0.51
235,920,511
174,171,011
57.53
42.47
67
67
75
68
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
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
P51/2950
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
Black Raven Mining Pty Ltd
Black Raven Mining Pty Ltd
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
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%
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
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
E51/1955
Black Raven Mining Pty Ltd
Jillewarra
E51/1956
Black Raven Mining Pty Ltd
Jillewarra
E51/1965
Black Raven Mining Pty Ltd
E51/1966
Black Raven Mining Pty Ltd
earning 51% when
earning 51% when
earning 51% when
granted
granted
granted
earning 51% when
Application
Application
Application
Application
Annual Report 2023
Annual Report 2023
Additional ASX Information (cont)
Substantial Holders (Current as at 10 October 2023)
Additional ASX Information (cont)
Tenement Schedule as at 30 June 2023
Ordinary Shares
Number held
Percentage of issued shares
Project
Tenement ID
Registered Holder
Location
Ownership %
Status
Mark Gareth Creasy, Yandal Investments Pty Ltd, Ponton Minerals Pty Ltd,
Lake Rivers Gold Pty Ltd and Free CI Pty Ltd
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
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
P51/2950
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
Black Raven Mining Pty Ltd
Black Raven Mining Pty Ltd
E51/1955
Black Raven Mining Pty Ltd
Jillewarra
E51/1956
Black Raven Mining Pty Ltd
Jillewarra
E51/1965
Black Raven Mining Pty Ltd
Jillewarra
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
Polar Bear
E51/1966
Black Raven Mining Pty Ltd
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
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
Jillewarra
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% 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
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
67
68
68
Jupiter Asset Management
Paradice Investment Management Pty ltd
Equity Security Holders (Current as at 10 October 2023)
67,419,935
60,155,987
29,770,727
16.44%
14.67%
7.26%
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
BT PORTFOLIO SERVICES LIMITED
PONTON MINERALS PTY LTD
FREE CI PTY LTD
LAKE RIVERS GOLD PTY LTD
MARTINI 29 PTY LTD
DR MARK ANTHONY BENNETT
BLACK RAVEN MINING PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITITEL PTY LTD
BNP PARIBAS NOMS PTY LTD
MR GRAEME BRUCE HATHWAY
A/C>
MR SANJIN VATRIC
PALM BEACH NOMINEES PTY LIMITED
MR ALAIN CHEVALIER
Total of Top 20
Total Remaining Holders Balance
RETZOS EXECUTIVE PTY LTD
MR ANTHONY MARK SAIA + MRS CARMEN SAIA