SILVER CITY MINERALS LIMITED
ABN 68 130 933 309
ANNUAL REPORT 2020
Directors’ Report
CONTENTS & CORPORATE DIRECTORY
Directors’ Report - Review of Operations
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Consolidated Notes to the Financial Statements
Directors' Declaration
Independent Auditor’s Report
Additional Information
Board of Directors
Roland Gotthard
Tom Pickett
Sonu Cheema (Director and Company Secretary)
ASX Share Register
Boardroom Pty Limited
GPO Box 3993
Sydney, NSW 2001
Telephone: +61 2 9290 9600
www. boardroomlimited.com.au
Auditor
BDJ Partners
Level 8, 124 Walker Street
North Sydney, NSW 2060
3
17
18
19
20
21
43
44
48
Principal and Registered Office
Suite 9, 330 Churchill Avenue
Subiaco, WA 6008
Telephone: +61 8 6489 1600
Email: reception@cicerogroup.com.au
Website: www.silvercityminerals.com.au
Securities Exchange Listing
Australian Securities Exchange
ASX Code: SCI
2 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
During the Period ended 30 June 2020, the Company completed the following operational and corporate activities.
Operations
Silver City Minerals Ltd (SCI, or, the Company) holds a considerable portfolio of mineral exploration tenure in the highly
endowed and highly prospective Broken Hill region of the Curnamona Province. The Company’s Projects include Copper
Blow, interpreted to be an Iron Oxide Copper Gold (IOCG) deposit, the Razorback West Project and tenure over the
Euriowie Block including the Yalcowinna Cu-Co prospect.
Wellington Project
Silver City recently settled acquisition of the Wellington Project which is located circa 15kms to the south of the Boda
discovery (Alkane Resources NL). By way of background, the Company announced on 11 March that it had has entered
into a binding option agreement with Syndicate Minerals Pty Ltd to acquire the Wellington Project confirmed settlement on
21 July 2020. The exploration license application (formerly ELA5852) was granted to the Vendor as EL8971, and is now
pending transfer to Silver City Minerals upon all normal statutory consents being received.
Silver City has identified a number of areas of interest for follow up. One of the key targets will be the significant 1.2km
copper anomaly identified from historic works at the Wilunga Copper Prospect. The copper anomaly at Wilunga identified
from soils, recorded coherent copper mineralisation over 1.2kms and peak values of 2,000ppm copper. The area has seen
limited gold assaying in historic soil sampling and requires follow up work (refer Announcement 16 April 2020).
Figure 1: Location of EL8971 Wellington
Historical Exploration
Silver City Minerals has collated and reviewed all historical exploration from the New South Wales DIGS online database.
Exploration on the Wellington Project is detailed in historical exploration reports, annual reports and tenement
relinquishment reports.The Project has been explored by Placer Prospecting Australia (1967-1968), AMAX Exploration
(1972-1974), Banlona Pty Ltd (Paradigm Gold) in 2014. The majority of the project area has been covered with regional
scale stream sediment sampling. Assaying has primarily been for base metals (copper, lead and zinc) with limited precious
metals (gold, silver) and very limited trace element geochemistry (Figure 2, below).
3 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Figure 2: Historical Exploration EL8971Wellington
Willunga Copper Prospect
Placer Prospecting (Australia) Pty Ltd (Placer) pegged EL74 in 1967 covering the Willunga Copper Prospect, in the south-
western margin of the Carboniferous Wuuluman Granite. Placer undertook stream sediment sampling for Cu, Pb, Zn and
Mo, soil sampling, gridding and mapping.
Placer’s geological map, dating from 1967 showed a series of workings over a strike length of approximately 600m. No
production is recorded from the Willunga prospect.
Silver City Minerals has reviewed the historical exploration of the Wellington Project EL8971 and has concluded that
contact zone of the Carboniferous Wuuluman Granite represents an hydrothermal mineralisation target related to porphyry
dykes. The Company believes that EL9871 Wellington has potential to host porphyry copper-gold mineralisation and other
styles of mineralisation, and that historical exploration was insufficient to test this potential.
The Company has engaged a land access consultant and has begun the process of negotiating access to the Willunga
Prospect for the purposes of undertaking soil sampling, prospecting and mapping.
Silver City Minerals has assumed operatorship of the Wellington Project and will progress land access agreements in the
current quarter prior to undertaking exploration activities. Planned activities include low-impact exploration activities such
as soil sampling, petrology and geological mapping.
Tindery Project
EL8579 Tindery is located 45 km north of Cobar, and covers an area of 138km2. EL8579 was reduced via partial
relinquishment in line with statutory obligations during the preceding Quarter, with gold prospective portions of the tenement
retained.
Silver City Minerals has identified that the contact of the Silurian Tindarey Granite is prospective for gold mineralisation.
The Cobar Basin is intruded by a suite of Silurian aged granitoids, including the Tindery Granite. Several mineral
occurrences of gold and reported historical small-scale mines and workings are reported within the Girilambone Group
within proximity to the contacts of the Tindery Granite.
4 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Silver City Minerals has renegotiated land access agreements with
landholders at Tindery, paving the way for field activities. The Company
has engaged a consultancy and field operations manager to undertake
soil sampling on accessible portions of the tenement.
Copper Blow (EL8863, EL8333 SCI 75%)
The Copper Blow prospect is a copper and magnetite mineralised
system with copper mineralisation present over a strike length of 1
kilometre where the mineralisation demonstrates the geological
characteristics of an iron oxide copper gold deposit (IOCG), similar to
those which form within an arcuate domain on the eastern side of the
Gawler Craton in South Australia.
To date the Company has drilled approximately 8,500 metres at Copper
Blow prospect (see ASX Release 4 October 2018), defining a +200m
vertical extent of copper mineralisation interpreted to be hosted within
a shear of structural zone.
The Company is reviewing Copper Blow with an objective of
understanding the scope of work required to bring the known
mineralisation envelope into a JORC 2012 compliant quantification.
This work is proposed to include a thorough review of the existing
drilling database, geophysics and targeted drilling to upgrade the
mineralisation classification to a reportable level.
The Company has worked on renegotiating
land access
agreements with affected pastoral landholders during the year. The
Company is reviewing its land use and access on EL8263 including
auditing of registered Aboriginal Heritage sites and land access
agreements with affected native title holders and claimant groups, to
bring them in to line with community expectations.
the
Figure 4 Yalcowinna Cu-Co Project Target Redox
Zones
EL8077 Razorback
Silver City Minerals has reviewed the Razorback prospect, with a thorough reinterpretation of the Company’s drilling and
geophysical data undertaken. The review, undertaken by both external and Company personnel, has identified significant
opportunity still exists within the Razorback tenement for discovery of Broken Hill Type lead and zinc sulphide
mineralisation. The Company is in the process of updating its land access agreements with affected landholders, and
auditing auditing of registered Aboriginal Heritage sites and land access agreements with affected native title holders and
claimant groups, to bring them in to line with community expectations. The Company will then commence on ground
exploration on Razorback.
Yalcowinna Cu-Co Project (EL8078, EL8685 SCI 92%)
The Yalcowinna Project contains extensive copper-cobalt mineralised gossans hosted within the Thackaringa Group
sequence in the Euriowie Block, approximately 25km east of Broken Hill. The Company compiled and reviewed a new
exploration model that more associates the Yalcowinna copper and cobalt occurrences to the Big Hill, Railway and Pyrite
Hill cobaltiferous pyrite deposits (refer Cobalt Blue Holdings Ltd ASX:COB).
These deposits are formed of massive and disseminated cobaltiferous pyrite hosted within albitised gneisses within the
Thackaringa Group. The mineral system models for these deposits are analogous to redox-boundary hosted sedimentary
copper mineralisation common to Proterozoic sedimentary basins. Redox boundaries occur as the host basin transitions
from shallow, oxygenated conditions to deep water anoxic conditions, which occurs at the top of the Thackaringa Group
within the Curnamona Craton.
Silver City has identified regional redox boundaries, which are associated with ferruginous outcrops across the Yalcowinna
tenure, that may be related to a similar style of Cu-Co mineralising event as in the Big Hill-Pyrite Hill deposits.
The Company has identified that these horizons have not all been systematically sampled.
Land access agreements for the Yalcowinna Project are being renegotiated with affected landholders, with a land access
manager appointed to undertake the work. The Company is also undertaking a process of auditing of registered Aboriginal
Heritage sites and land access agreements with affected native title holders and claimant groups, to bring them in to line
with community expectations.
The Company has appointed an external consultancy and field operations manager to undertake exploration on the
Yalcowinna Project and is planning on undertaking regional sampling of gossans and ironstone outcrops to understand
5 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
whether these represent IOCG mineralisation or sedimentary copper-cobalt mineralisation. This activity is pending the
completion of land access agreements.
Covid-19
The outbreak of COVID-19 is impacting global financial and commodity markets. The Directors are monitoring the situation
closely and have considered the impact of COVID-19 on the Company’s business, however the situation is continuing to
change and evolve. In compliance with its continuous disclosure obligations, the Company will continue to update the
market in regard to any material impact of COVID-19 on its operations, work programs or any other material adverse impact
on the Company.
Tenement Schedule
TenementId Project
EL 7300
EL 7390
EL 8020
EL 8075
EL 8077
EL 8078
EL 8236
EL 8333
EL 8495
EL 8579
EL 8685
ARAGON
YELLOWSTONE
RIDDOCK
WILLYAMA
RAZORBACK
YALCOWINNA
NATIVE DOG
ENMORE
SOUTHERN CROSS
TINDERY
ASPEN
ExpiryDate Comments
GrantDate
23/02/2009 23/02/2020 Previously ELA 3584, 3585 & 3586
20/08/2009 20/08/2023 Previously ELA 3705
23/11/2012 23/11/2023 Previously ELA 4558
15/04/2013 15/04/2022 Previously ELA 4646
15/04/2013 15/04/2022 Previously ELA 4655
15/04/2013 15/04/2022 Previously ELA 4654
11/02/2014 11/02/2020 Previosuly ELA 4925
17/12/2014 17/12/2023 Previously ELA 5076
22/12/2016 22/12/2024 Previously ELA 5362
26/05/2017 26/05/2020 Renewl Pending
23/01/2018 23/01/2024
EL 8862
CLEVEDALE
17/06/2019 17/06/2025
HIMALAYA
EL 8863
ORANGE
EL 8971
Table 1: Tenement Schedule
17/06/2019 17/06/2025
23/04/2020 22/04/2025
Previously ELA 5731 (ELA 5731 was applied for to consolidate EL 8074 and part
of EL 8255)
Previously ELA 5732 (EL 5732 was applied for to consolidate EL 8076, part of
EL 8255, EL 8629 and ELA 5702 plus some additional ground)
EL = Exploration Licence
Els 8075, 8078, 8236 are subject to agreements with Variscan Mines Limited and Eaglehawk Geological Consulting Pty Ltd whereby
Variscan and Eaglehawk hold an NSR (Net Smelter Return) interest in parts of these tenements.
Silver City has an agreement with Impact Minerals on the lead-zinc-silver metal rights for EL 7390. Silver City’s interest is free-carried
to a Decision to Mine.
Eaglehawk has an 8% interest carried to the completion of a BFS in EL 8695 and in 45 of the 50 units that are now EL 8078. On
completion of a BFS, Eaglehawk can contribute to retain the 8% interest or revert to a 0.2% NSR. The percentages for ELs 8076,
8074, 8255 and 8629 should be 0% in 2019. These licences were cancelled and consolidated into ELs 8862 and 8863.
ASX Listing Rules Compliance
In preparing the Annual Report for the period ended 30 June 2020, the Company has relied on the following ASX announcements
ASX Announcement
1 Aug 2019
Quarterly Activities Report and Appendix 5B
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
12 Aug 2019
Response to ASX Price Query
2 Sep 2019
Change of Address
26 Sep 2019
Annual Report including Full Year Statutory Accounts
22 Oct 2019
Notice of Annual General Meeting and Proxy Form
1 Nov 2019
Placement to raise $300,000
1 Nov 2019
Quarterly Activities Report and Appendix 5B
5 Nov 2019
Becoming a substantial holder
5 Nov 2019
Notice under section 249D of the Corporations Act
7 Nov 2019
Appendix 3B and Cleansing Notice
11 Nov 2019
Change in substantial holding
22 Nov 2019
Results of Meeting
26 Nov 2019
Notice of General Meeting/Proxy Form
26 Nov 2019
Letter to Shareholders
19 Dec 2019
Change in substantial holding
30 Dec 2019
Share Trading Policy
6 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
ASX Announcement
2 Jan 2020
Results of Meeting
2 Jan 2020
Placement to raise $200,000
6 Jan 2019
Ceasing to be a substantial holder
14 Jan 2020
Notice of Initial Substantial Holder
17 Jan 2020
Change in substantial holding
31 Jan 2020
Quarterly Activities Report and Appendix 5B
21 Feb 2020
Director Appointment
21 Feb 2020
Final Director's Interest Notice
21 Feb 2020
Initial Director's Interest Notice
9 Mar 2020
Trading Halt
11 Mar 2020
Highly Prospective Lachlan Fold Copper Gold Project Secured
11 Mar 2020
Proposed issue of Securities - SCI
12 Mar 2020
Half Year Financial Report
18 Mar 2020
Placement Completion and Extension of Option
25 Mar 2020
DD Progressing on Acquisition 15kms from Boda
3 Apr 2020
Change in substantial holding
3 Mar 2020
Change in substantial holding
16 Apr 2020
Significant 1.2km copper anomaly identified in Lachlan Fold
27 Apr 2020
Trading Halt
28 Apr 2020
SILVER CITY EXERCISES OPTION TO ACQUIRE WELLINGTON PROJECT
30 Apr 2020
Quarterly Activities Report and Appendix 5B
29 May 2020
Board Appointment
12 Jun 2020
Notice of General Meeting/Proxy Form
report contains
Compliance Statement
This
the website
www.silvercityminerals.com.au. In relying on the above ASX announcements and pursuant to ASX Listing Rule 5.23.2, the Company
confirms that it is not aware of any new information or data that materially affects the information included in the abovementioned
announcements or this Annual Report for the period ended 30 June 2020.
reports cited herein. These are available
information extracted
to view on
from
Directors
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Tom Pickett
Non-Executive Director
Director since 28 February 2019
Tom has experience in a range of sectors including mining, exploration, law, tourism and hotels, having held executive
appointments in these areas for both ASX listed and private companies. Tom is currently the Executive Chairman of
Cannindah Resources and has held numerous board positions on other ASX listed companies over the past 15 years. His
experience in the management of exploration activity across a number of projects in North Queensland for both gold and
copper is a valuable asset to Cannindah Resources Limited. Tom holds a Law Degree from Bond University, along with a
Graduate Certificate in Applied Finance and Investment.
7 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Roland Gotthard
Non-Executive Director
Director since 20 February 2020
Mr Gotthard is an Exploration Geologist with over 15 years’ experience and discovering mineralisation and ore deposits in
both greenfields and brownfields environments. Roland’s experience has predominantly been in exploring for Archaean
and Proterozoic lode gold, Proterozoic and Archaean VMS deposits, Proterozoic copper, iron ore and lithium. Mr. Gotthard
holds a Bachelor of Science degree from the University of Queensland (Honours) and has held positions previously with
companies such as Mincor Resources NL, LionOre Australia Ltd and Ramelius Resources Ltd.
Sonu Cheema
Non-Executive Director and Company Secretary
Director since 29 May 2020
Mr Cheema has over 10 years’ experience working with public and private companies in Australia and abroad. He currently
serves as the Company Secretary of eMetals Limited (ASX: EMT), Yojee Limited (ASX: YOJ), Avira Resources Limited
(ASX: AVW), Comet Resources Limited (ASX: CRL) and Technology Metals Australia Limited (ASX: TMT). He has
completed a Bachelor of Commerce majoring in Accounting and is a CPA member.
Josh Puckridge
Non-Executive Director
Director since 3 February 2017 – Resigned 29 May 2020
Josh is a Corporate Finance Executive formerly working as a specialist Equity Capital Markets Advisor for Fleming
Australia, a Corporate Advisory and Funds Management firm. He has significant experience within funds management,
capital raising, mergers, acquisitions and divestments of projects by companies listed on the Australian Securities
Exchange.
Darren Wates
Non-Executive Director
Director since 28 February 2019 – Resigned 20 February 2020
Darren is a corporate lawyer with over 20 years’ experience in equity capital markets, merger and acquisitions, resources,
project acquisitions and corporate governance gained through private practice and in-house roles in Western Australia.
Darren holds Bachelor degrees in Law and Commerce and a Graduate Diploma in Applied Finance and Investment.
Directors' interests in shares and options
As at the date of this report, the interests of the Directors in the shares and options of Silver City Minerals Limited were:
Directors
T Pickett
R Gotthard
S Cheema
Principal activities
Shares directly and indirectly held
Options directly and indirectly held
-
-
-
-
-
-
The principal activity of the Company is exploration for the discovery and delineation of high-grade base and precious
metal deposits and the development of those resources into economic, cash flow generating businesses.
Results
The net result of operations of the consolidated entity after applicable income tax expense was a loss of $554,321 (2019:
loss of $1,531,863).
Dividends
No dividends were paid or proposed during the period.
8 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Review of operations
A review of the operations commences on page 4 of this Annual Financial Report. This, together with the Director’s Letter
and the sections headed “Significant changes in the state of affairs” and “Significant events after the balance date” in this
report, provides a review of operations of the Company during the year and subsequent to reporting date.
Significant changes in the state of affairs
The Directors are not aware of any significant changes in the state of affairs of the Group occurring during the financial
period, other than as disclosed in this report.
Significant events after the balance date
On 21 July 2020, the Company announced the advancement of the completion of acquisition and settlement for the
Wellington Project (EL 5852). This follows the exercise of an option under the binding option agreement (Agreement)with
Syndicate Minerals Pty Ltd(Vendor)to acquire its holdings in EL 5852 and in accordance with shareholder approval
received at the General Meeting held on 13 July 2020 (GM).
On 29 July 2020, the Company announced that had received commitments for a placement of up to 100,000,000 fully paid
ordinary shares (Placement Shares) at a price of $0.015 per share to raise $1,500,000 before costs. This was subsequently
completed on 4 August 2020.
On 19 August 2020, the Company announced the commence and assessment of its strategic tenement holdings in New
South Wales to identify exploration opportunities, particularly for gold mineralisation. EL8579 Tindery is located 45 km
north of Cobar and covers an area of 288km2. The prospective Chesney Fault System strikes onto the southern portion of
EL8579, with 15km of prospective fault on the tenure.
On 26 August 2020, the Company applied for an exploration tenement in the Murchison region of Western Australia,
E59/2445 Tallering. E59/2445 covers an area of 48 subblocks (143km2) in the northern Tallering Greenstone Belt, Western
Australia, and is prospective for Volcanogenic Massive Sulphides.
There were, at the date of this report, no matters or circumstances which have arisen since 30 June 2020 that have
significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of
affairs of the Group, in future financial years.
Likely developments and expected results
As the Company’s areas of interest are at an early stage of exploration, it is not possible to postulate likely developments
and any expected results. The Company is hoping to establish resources from some of its current prospects and to identify
further base and precious metal targets.
Shares under option or issued on exercise of options
Details of unissued shares or interests under option for Silver City Minerals Limited as at the date of this report are:
Number of shares
under option
Class of share
Exercise price
of option
Expiry date of options
63,625,000
3,000,000
4,000,000
2,000,000
26,750,000
99,375,000
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
$0.02
$0.03
$0.06
$0.05
$0.03
31 October 2022
16 January 2021
5 June 2022
29 November 2020
27 February 2022
The holders of these options do not have the right, by virtue of the option, to participate in any share issue of the Company
or of any other body corporate or registered scheme.
9 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Indemnification and insurance of directors and officers
Indemnification
The Company has not, during or since the end of the financial period, in respect of any person who is or has been an
officer of the Company or a related body corporate indemnified or made any relevant agreement for indemnifying against
a liability incurred as an officer, including costs and expenses in successfully defending legal proceedings.
Insurance premiums
During the financial period the Company has paid premiums to insure each of the Directors and officers against liabilities
for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the
capacity of Director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the
Company. The premiums paid are not disclosed as such disclosure is prohibited under the terms of the contract.
Environmental performance
Silver City Minerals holds exploration titles issued by New South Wales Department of Planning and Environment –
Resources and Geoscience, which specify guidelines for environmental impacts in relation to exploration activities. The
licence conditions provide for the full rehabilitation of the areas of exploration in accordance with the Department’s
guidelines and standards. There have been no significant known breaches of the licence conditions.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
10 > Silver City Minerals Limited Annual Report 2020
Auditor's Independence Declaration
To the directors of Silver City Minerals Limited
As engagement partner for the audit of Silver City Minerals Limited for the year ended 30 June
2020, I declare that, to the best of my knowledge and belief, there have been:
i) no contraventions of the independence requirements of the Corporations Act 2001 in
relation to the audit; and
ii) no contraventions of any applicable code of professional conduct in relation to the
audit.
BDJ Partners
…………………………………………………
Anthony Dowell
Partner
24 September 2020
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Liability limited by a
scheme approved
under Professional
Standards Legislation.
Please refer to the
website for our
standard terms of
engagement.
Directors’ Report
Non-audit services
The Company’s auditor, BDJ Partners provided non-audit services to the Company during the period ended 30 June 2020
amounting to $2,600 for tax return and business activity statement lodgement (2019: Nil). The Directors are satisfied that
the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence
was not compromised.
Remuneration report (audited)
This remuneration report for the year ended 30 June 2020 outlines the remuneration arrangements of the Company and
the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information
has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined
as those persons having authority and responsibility for planning, directing and controlling the major activities of the
Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent
company.
Details of key management personnel
Details of KMP including the top five remunerated executives of the Parent and Group are set out below.
Directors
T Pickett
R Gotthard
S Cheema
J Puckridge
D Wates
Non-Executive Director – Appointed 28 February 2019
Non-Executive Director – Appointed 20 February 2020
Non-Executive Director and Company Secretary - Appointed 29 May 2020
Non-Executive Director – Resigned 29 May 2020
Non-Executive Director – Resigned 20 February 2020
Remuneration philosophy
The objective of the Company’s remuneration framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and
the creation of value for shareholders. The Board believes that executive remuneration satisfies the following key criteria:
(cid:102) Competitiveness and reasonableness
(cid:102) Acceptability to shareholders
(cid:102) Performance linkage/alignment of executive compensation
(cid:102) Transparency
(cid:102) Capital management
These criteria result in a framework which can be used to provide a mix of fixed and variable remuneration, and a blend of
short and long-term incentives in line with the Company’s limited financial resources.
Fees and payments to the Company’s Non-Executive Directors and Senior Executives reflect the demands which are
made on, and the responsibilities of, the Directors and the senior management. Such fees and payments are reviewed
annually by the Board. The Company’s Executive and Non-Executive Directors, Senior Executives and Officers are entitled
to receive options under the Company’s Employee Share Option Scheme.
At the Company’s AGM in 2019, 37% of shareholders voted against an advisory resolution to adopt the Company’s
remuneration report. Following this result, the Company is required, under the Corporations Act, to provide investors with
an update on any action that has been taken in response to the shareholder vote. The Company has used this result as
an opportunity to re-evaluate both the structure of the Board and its approach to remuneration to ensure that the
arrangements are appropriate given the stage of the Company’s development.
As a result of the review, the Board has been reduced in size from four Directors to three. To ensure that the Board retains
a strong mix of skills, Company Secretary Sonu Cheema was appointed as a Director of the Company. Mr Cheema has
elected not to receive an additional fee for the assuming the role of Non-executive director of the Company.
12 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
The Company has not made or agreed to make any bonus or performance related payments to its Directors or Key
Management Personnel during the year ended 30 June 2020.
Non-executive director remuneration arrangements
Directors are entitled to remuneration out of the funds of the Company, but the remuneration of the Non-Executive Directors
may not exceed in any year the amount fixed by the Company in general meeting for that purpose. The aggregate
remuneration of the Non-Executive Directors has been fixed at a maximum of $200,000 per annum to be apportioned
among the Non-Executive Directors in such a manner as the Board determines. Directors are also entitled to be paid
reasonable travelling, accommodation and other expenses incurred in consequence of their attendance at Board meetings
and otherwise in the execution of their duties as Directors.
13 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Non-executive director remuneration arrangements (continued)
The Chairman’s fee is set at $50,000 p.a. and Non-Executive Director fees at $40,000 p.a. At present, no Committee fees
are paid to Directors.
Service agreements
Remuneration and other terms for key management personnel are formalised in contractor agreements. Details of these
agreements are set out below:
Non-Executive Director – Josh Puckridge – resigned 29 May 2020
(cid:102) Director Fee. Term: As per Constitution of the Company.
(cid:102) Fee rate: $40,000 per annum. (2019: $40,000)
(cid:102) Termination payments: Nil
(cid:102) Termination period: 1 Month Notice
Non-Executive Director – Darren Wates – resigned 20 February 2020
(cid:102) Director Fee. Term: As per Constitution of the Company
(cid:102) Fee rate: $40,000 per annum.
(cid:102) Termination payments: Nil
(cid:102) Termination period: 1 Month Notice
Non-Executive Director – Tom Pickett – appointed 28 February 2019
(cid:102) Director Fee. Term: As per Constitution of the Company
(cid:102) Fee rate: $40,000 per annum.
(cid:102) Termination payments: Nil
(cid:102) Termination period: 1 Month Notice
Non-Executive Director – Roland Gotthard – appointed 21 February 2019
(cid:102) Director Fee. Term: As per Constitution of the Company
(cid:102) Fee rate: $40,000 per annum.
(cid:102) Termination payments: Nil
(cid:102) Termination period: 1 Month Notice
Non-Executive Director and Company Secretary– Sonu Cheema – Appointed 28 February 2019 as
Company Secretary and 29 May 2020 as Non-Executive Director
Director Fee.
(cid:102) Term: As per Constitution of the Company
(cid:102) Fee rate: $Nil per annum.
(cid:102) Termination payments: Nil
(cid:102) Termination period: 1 Month Notice
Directorship and Company Secretary Fee:
(cid:102) 12 month rolling contract. Either party may terminate the contract with 30 days’ notice.
(cid:102) Remuneration: $10,000 per month plus GST as at 28 February 2019.1
(cid:102) Termination payment: Nil
1 Includes payments to Cicero Group, for all Financial reporting, corporate office rent and all administration services.
Sonu Cheema is a director of Cicero Corporate Services Pty Ltd and a 15% shareholder of Cicero Group Pty Ltd.
14 > Silver City Minerals Limited Annual Report 2020
Directors’ Report
Director and key management personnel remuneration for the year ended 30 June 2020
Short-term benefits
Post
employment
Share-based
payments
Consulting
$
Superannuation
$
Options
$
Total
$
Consisting
of options
%
Cash salary
and fees
$
44,333
13,333
-
26,666
57,356
Directors
T Pickett
R Gotthard (a)
S Cheema (c)
D Wates (b)
J Puckridge (d)
Total Directors
141,688
Other key management personnel
-
-
-
-
-
-
S Cheema (c)
Total other KMP
-
-
Totals
141,688
108,192
108,192
108,192
-
1,267
-
-
-
1,267
-
-
1,267
-
-
-
-
-
-
-
-
44,333
14,600
-
26,666
57,356
142,955
108,192
108,192
-
251,147
-
-
-
-
-
-
-
-
-
No performance-based remuneration was paid in the 2020 and 2019 financial period.
(a)
(b)
Appointed 21 February 2020
Resigned 21 February 2020
(c)
Appointed 29 May 2020 as director and 28 February 2019 as Company Secretary
(d)
Resigned 29 May 2020
Director and key management personnel remuneration for the year ended 30 June 2019
Short-term benefits
Post
employment
Share-based
payments
Consulting
$
Superannuation
$
Options
$
Total
$
Consisting
of options
%
Cash salary
and fees
$
30,581
180,481
28,148
13,333
13,665
56,163
Directors
B Besley(b)
C Torrey (b)
G Jones (b)
D. Wates (a)
T. Pickett (a)
J Puckridge
Total Directors
322,371
Other key management personnel
-
-
-
-
-
-
2,941
16,269
2,674
-
-
-
-
5,200
-
-
-
-
33,522
201,950
30,882
13,333
13,665
56,163
21,884
5,200
349,455
S Cheema (a)
I Polovineo (b)
Total other KMP
-
-
-
Totals
322,371
40,000
27,000
67,000
67,000
-
-
-
-
-
-
40,000
27,000
67,000
21,884
5,200
416,455
(a)
(b)
Appointed 28 February 2019.
Resigned 28 February 2019.
15 > Silver City Minerals Limited Annual Report 2020
-
-
-
-
-
-
-
-
-
-
-
Directors’ Report
Share-based compensation
Employee share option plan
The Company has established the Silver City Minerals Employee Share Option Plan (Plan) to assist in the attraction,
retention and motivation of employees of the Company and its related bodies corporate (Group). At 30 June 2020 there
were 2,000,000 options on issue pursuant to the Plan. The Plan is administered by the Board in accordance with the rules
of the Plan, and the rules are subject to the ASX Listing Rules.
Compensation options: granted and vested during the year
There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There
were no forfeitures during the period.
Meetings of directors
The following table sets out the number of Directors’ meetings (including meetings of Committees of Directors) held during
the financial year and the number of meetings attended by each director:
Directors
T Pickett
R Gotthard
S Cheema
D Wates
J Puckridge
Board of directors
Audit committee
Remuneration committee
Held
Attended
Held
Attended
Held
Attended
3
1
3
2
2
2
1
3
2
2
1
-
1
1
1
1
-
1
1
1
-
-
-
-
-
-
-
-
-
-
Signed at Perth this 28th day of September 2020 in accordance with a resolution of the Directors.
Sonu Cheema
Non-executive Director and Company Secretary
16 > Silver City Minerals Limited Annual Report 2020
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2020
Revenue
ASX and ASIC fees
Audit fees
Computer services/licences
Contract administration services
Employee costs
Exploration expenditure written off
Insurances
Marketing and conference costs
Rent
Share based payments
Travel and accommodation
Other expenses from ordinary activities
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Other comprehensive (loss)
Other comprehensive income/(loss) for the period
Total comprehensive loss for the year attributable to
members of Silver City Minerals Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Consolidated
2020
$
Consolidated
2019
$
28,083
(32,513)
(34,500)
-
(176,575)
(128,355)
(82,490)
(23,184)
(727)
(25,525)
-
-
(78,535)
(554,321)
-
252,141
(35,357)
(28,200)
(17,196)
(129,531)
(259,451)
(1,107,222)
(19,182)
(40,568)
(56,032)
(5,200)
(15,211)
(70,854)
(1,531,863)
-
(554,321)
(1,531,863)
-
-
-
-
(554,321)
(1,531,863)
(0.17)
(0.17)
(0.56)
(0.56)
Note
3
4
12
14
14
The Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
17 > Silver City Minerals Limited Annual Report 2020
Consolidated Statement of Financial Position
As at 30 June 2020
Current assets
Cash assets
Receivables
Total current assets
Non-current assets
Receivables
Tenement security deposits
Property, plant and equipment
Deferred exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Payables
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
Consolidated
2020
$
Consolidated
2019
$
Note
5
6
6
7
8
9
10
11
12
13
650,725
33,056
683,781
1,270
160,000
3,166
5,772,324
5,936,760
6,620,541
72,374
72,374
72,374
446,586
35,189
481,775
6,801
160,000
5,288
5,776,029
5,948,118
6,429,893
42,005
42,005
42,005
6,548,167
6,387,888
19,311,702
18,597,102
(12,763,097)
(12,287,026)
(438)
6,548,167
77,812
6,387,888
The Statement of Financial Position should be read in conjunction with the accompanying notes.
18 > Silver City Minerals Limited Annual Report 2020
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Consolidated
2020
$
Consolidated
2019
$
Note
Cash flows from operating activities
Payment to suppliers and employees
Grants received
R&D tax concession offset
JV and consulting income
Interest received
Net cash flows (used in) operating activities
24
(538,544)
26,000
-
-
2,083
(510,461)
-
-
-
-
-
750,000
(35,400)
714,600
(573,891)
-
37,035
185,845
8,805
(369,206)
(5,531)
(5,733)
(853,543)
(10,000)
(874,807)
570,000
(50,338)
519,662
204,139
(724,351)
-
446,586
650,725
273
1,170,664
446,586
24
Cash flows from investing activities
Rental Bond
Purchase of fixed assets
Expenditure on mining interests (exploration)
Tenement security deposits
Net cash flows (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Equity raising expenses
Net cash flows from financing activities
Net increase/(decrease) in cash held
Net foreign exchange differences
Add opening cash brought forward
Closing cash carried forward
The Statement of Cash Flows should be read in conjunction with the accompanying notes.
19 > Silver City Minerals Limited Annual Report 2020
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
At 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Issue of share capital (net of share issue
costs)
Share-based payment
Expired option value
Foreign currency translation
At 30 June 2019
At 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity
as owners:
Issue of share capital (net of share issue
costs)
Share-based payments
Expired option value
Foreign currency translation
13
Consolidated
Issued
capital
$
Accumulated
losses
$
Reserves
$
Total
equity
$
Note
18,067,440
-
-
-
(10,761,763)
(1,531,863)
78,939
-
7,384,616
(1,531,863)
-
(1,531,863)
-
-
-
(1,531,863)
529,662
-
-
-
-
-
6,600
-
-
529,662
5,200
(6,600)
273
5,200
-
273
18,597,102
(12,287,206)
77,812
6,387,888
18,597,102
(12,287,206)
77,812
6,387,888
-
-
-
(554,321)
-
(554,321)
-
-
-
-
-
(554,321)
-
(554,321)
714,600
-
-
-
714,600
-
-
-
-
-
78,250
(78,250)
-
-
At 30 June 2020
19,311,702
(12,763,097)
(438)
6,548,167
The Statement of Changes in Equity should be read in conjunction with the accompanying notes.
20 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
1.
Corporate information
The financial report of Silver City Minerals Limited (the Company) for the year ended 30 June 2020 was authorised for
issue in accordance with a resolution of the Directors on 25 September 2020.
Silver City Minerals Limited is a company limited by shares, incorporated and domiciled in Australia whose shares are
publicly traded on the Australian Securities Exchange using the ASX code SCI.
The consolidated financial statements comprise the financial statements of Silver City Minerals Ltd and its subsidiaries
(the Group or Consolidated Entity).
The nature of the operations and principal activities of the Consolidated Entity are described in the Directors’ Report.
2.
Summary of significant accounting policies
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001 and Australian Accounting Standards. The financial report has been prepared on a historical
cost basis. All amounts are presented in Australian dollars.
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations
Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. Accounting
Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS
ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards
(IFRS).
Basis of consolidation
The consolidated financial statements comprise the financial statements of Silver City Minerals Limited (Silver City or the
“Company”) and its subsidiaries if applicable (“the Group”) as at 30 June each year. The financial statements of subsidiaries
are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are
made to bring into line any dissimilar accounting policies that may exist. All inter-company balances and transactions,
including unrealised profits arising from intra-group transactions, have been eliminated in full. Subsidiaries are fully
consolidated from date on which control is transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group.
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is
calculated on a straight-line basis over the estimated useful life of the asset as follows:
(cid:102) Plant and equipment – 2 - 5 years
(cid:102) Motor Vehicle – 5 years
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate
the carrying value may not be recoverable. An item of plant and equipment is derecognised upon disposal. Any gain or
loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the item) is included in the income statement in the period the item is derecognised.
21 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Interest in jointly controlled operations – joint ventures
The Company has an interest in exploration joint ventures that are jointly controlled. A joint venture is a contractual
arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A jointly controlled
operation involves use of assets and other resources of the venturers rather than establishment of a separate entity.
The Company recognises its interest in the jointly controlled operations by recognising the assets that it controls and the
liabilities that it incurs. The Company also recognises the expenses that it incurs and its share of any income that it earns
from the sale of goods or services by the jointly controlled operations.
Recoverable amount of assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an
indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount
of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use.
Financial instruments
Financial instruments are recognised initially on the date that the Company becomes party to the contractual provisions of
the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments
measured at fair value through profit or loss where transaction costs are expensed as incurred).
Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending
on the classification of the financial assets.
Classification
On initial recognition, the Company classifies its financial assets into the following categories, those measured at:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
amortised cost
fair value through profit or loss - FVTPL
fair value through other comprehensive income - equity instrument (FVOCI - equity)
fair value through other comprehensive income - debt investments (FVOCI - debt)
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model
for managing financial assets.
Amortised cost
Assets measured at amortised cost are financial assets where:
(cid:120)
(cid:120)
the business model is to hold assets to collect contractual cash flows; and
the contractual terms give rise on specified dates to cash flows are solely payments of principal and
interest on the principal amount outstanding.
The Company's financial assets measured at amortised cost comprise trade and other receivables and cash and cash
equivalents in the statement of financial position.
Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less
provision for impairment.
Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on
derecognition is recognised in profit or loss.
22 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Financial instruments (continued)
Fair value through other comprehensive income
The Company does not hold any assets measured at fair value through other comprehensive income.
Financial assets through profit or loss
The Company does not hold any assets measured at fair value through profit or loss.
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:
(cid:120)
financial assets measured at amortised cost
When determining whether the credit risk of a financial assets has increased significant since initial recognition and when
estimating ECL, the Company considers reasonable and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company's
historical experience and informed credit assessment and including forward looking information.
The Company uses the presumption that an asset which is more than 30 days past due has seen a significant increase in
credit risk.
The Company uses the presumption that a financial asset is in default when:
(cid:120)
(cid:120)
the other party is unlikely to pay its credit obligations to the Company in full, without recourse to the
Company to actions such as realising security (if any is held); or
the financial assets is more than 90 days past due.
Credit losses are measured as the present value of the difference between the cash flows due to the Company in
accordance with the contract and the cash flows expected to be received. This is applied using a probability weighted
approach.
Trade receivables and contract assets
Impairment of trade receivables and contract assets have been determined using the simplified approach in AASB 9 which
uses an estimation of lifetime expected credit losses. The Company has determined the probability of non-payment of the
receivable and contract asset and multiplied this by the amount of the expected loss arising from default.
The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance
expense. Once the receivable is determined to be uncollectable then the gross carrying amount is written off against the
associated allowance.
Where the Company renegotiates the terms of trade receivables due from certain customers, the new expected cash flows
are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in profit
or loss.
Other financial assets measured at amortised cost
Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in
AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised.
Where the asset has experienced significant increase in credit risk then the lifetime losses are estimated and recognised.
Financial liabilities
The Company measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities
are measured at amortised cost using the effective interest rate method.
The financial liabilities of the Company comprise trade payables.
23 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Exploration, evaluation, development and restoration costs
Exploration and evaluation
Exploration and evaluation expenditure incurred by or on behalf of the Company is accumulated separately for each area
of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but
does not include general overheads or administrative expenditure not having a specific connection with a particular area
of interest.
Exploration and evaluation costs in relation to separate areas of interest for which rights of tenure are current are brought
to account in the year in which they are incurred and carried forward provided that:
(cid:102) Such costs are expected to be recouped through successful development and exploitation of the area, or alternatively
through its sale; or
(cid:102) Exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves.
Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the
area of interest is aggregated within costs of development.
Exploration and evaluation – impairment
The Directors assess at each reporting date whether there is an indication that an asset has been impaired and for
exploration and evaluation cost whether the above carry-forward criteria are met.
Accumulated costs in respect of areas of interest are written off or a provision made in the Income Statement when the
above criteria do not apply or when the Directors assess that the carrying value may exceed the recoverable amount. The
costs of productive areas are amortised over the life of the area of interest to which such costs relate on the production
output basis, provisions would be reviewed and if appropriate, written back.
Development
Development expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest in
which economically recoverable reserves have been identified to the satisfaction of the directors. Such expenditure
comprises net direct costs and, in the same manner as for exploration and evaluation expenditure, an appropriate portion
of related overhead expenditure having a specific connection with the development property.
All expenditure incurred prior to the commencement of commercial levels of production from each development property
is carried forward to the extent to which recoupment out of revenue to be derived from the sale of production from the
relevant development property, or from the sale of that property, is reasonably assured.
No amortisation is provided in respect of development properties until a decision has been made to commence mining.
After this decision, the costs are amortised over the life of the area of interest to which such costs relate on a production
output basis.
Restoration
Provisions for restoration costs are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, and 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. If the effect of the time value of money
is material, provisions are determined by discounting the expected cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.
Remaining mine life
In estimating the remaining life of the mine at each mine property for the purpose of amortisation and depreciation
calculations, due regard is given not only to the volume of remaining economically recoverable reserves but also to
limitations which could arise from the potential for changes in technology, demand, product substitution and other issues
that are inherently difficult to estimate over a lengthy time frame.
24 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Exploration, evaluation, development and restoration costs (continued)
Mine property held for sale
Where the carrying amount of mine property and related assets will be recovered principally through a sale transaction
rather than through continuing use, the assets are reclassified as Mine Property Held for Sale and carried at the lower of
the assets’ carrying amount and fair value less costs to sell – where such fair value can be reasonably determined, and
otherwise at its carrying amount. Liabilities and provisions related to mine property held for sale are similarly reclassified
as Liabilities – Mine Property Held for Sale and, Provisions – Mine Property Held for sale, as applicable, and carried at the
value at which the liability or provisions expected to be settled.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an
original maturity of one year or less. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist
of cash and cash equivalents as defined above, net of any outstanding bank overdrafts, if any.
Provisions
Provisions are recognised when the Company 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.
Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, 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 income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as
a finance cost.
Employee entitlements
Liabilities for wages and salaries are recognised and are measured as an amount unpaid at the reporting date at current
pay rates in respect of an employee’s services up to that date. A liability in respect of superannuation at the current
superannuation guarantee rate has been accrued at the reporting date.
Share-based payments
In addition to salaries, the Company provides benefits to certain employees (including Directors and Key Management
personnel) of the Company in the form of share-based payment transactions, whereby employees render services in
exchange for shares or rights over shares (“equity-settled transactions”).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value of the options is determined by using the Binomial option pricing model. In valuing
transactions settled by way of issue of options, no account is taken of any vesting limits or hurdles, or the fact that the
options are not transferable. The cost of equity-settled transactions is recognised, together with a corresponding increase
in equity, over the period in which the vesting conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the Company’s best estimate of the number of equity instruments
that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect
of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a
period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition.
25 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Exploration, evaluation, development and restoration costs (continued)
If the terms of an equity-settled award are modified, at a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-
settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet
recognised is recognised immediately. However, if a new award is substituted for the cancelled award and designated a
replacement award on the date it is granted, the cancelled and the new award are treated as if there was a modification of
the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as
additional share dilution in the computation of earnings per share except where such dilution would serve to reduce a loss
per share.
Leases
The Company has adopted AASB 16 from 1 July 2019, which has resulted in changes in classification, measurement and
recognition of leases. All leases where the Company is a lessee are recognised in the Consolidated Statement of Financial
Position and removes the former distinction between ‘operating’ and ‘finance’ leases. The new standard requires
recognition of a right-of-use asset (the leased item) and a financial liability (to pay rentals). The exceptions are short-term
and low value leases.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the
financial asset.
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted at the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
(cid:102) Except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; and
(cid:102)
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in
joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:
(cid:102) Except where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
26 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Income tax (continued)
(cid:102)
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can
be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to
be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the balance sheet date. Income taxes relating to items recognised directly in equity are recognised in equity and not in
the income statement.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
(cid:102) Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
(cid:102) Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
Currency
Functional currency translation
The functional and presentation currency for the parent company is Australian dollars ($). The functional currency of
overseas subsidiaries is the local currency.
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the translation. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
Translation of Group Companies’ functional currency to presentation currency
The results of the New Zealand subsidiary are translated into Australian Dollars (presentation currency) as at the date of
each transaction. Assets and liabilities are translated at exchange rates prevailing at reporting date.
27 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Impairment of assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such
cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment
losses relating to continuing operations are recognised in those expense categories consistent with the function of the
impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation
decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised.
If that is the case the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued
amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis
over its remaining useful life.
Significant accounting judgements, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future
events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of certain assets and liabilities within the next annual reporting period are:
Share-based payment transactions
The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the Binomial
formula taking into account the terms and conditions upon which the instruments were granted, as detailed in Notes 13
and 15.
Capitalisation and write-off of capitalised exploration costs
The determination of when to capitalise and write-off exploration expenditure requires the exercise of judgement based on
various assumptions and other factors such as historical experience, current and expected economic conditions.
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
28 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
2.
Summary of significant accounting policies (continued)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the Company, adjusted to exclude any costs
of servicing equity divided by the weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members of the Company, adjusted for:
(cid:102) Costs of servicing equity;
(cid:102) The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
(cid:102) Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
Going Concern
The financial report is prepared on the going concern basis which contemplates continuity of normal business activities
and realisation of assets and settlement of liabilities in the ordinary course of business. The going concern of the Company
is dependent upon it maintaining sufficient funds for its operations and commitments. The Company has a high level of
confidence in its ability to successfully complete another share placement before the end of the calendar year which will
supplement existing funds. This is supported by the Company’s strong track record in successfully raising capital, to which
the Company had raised $0.75 million via a share placements during the year ended 30 June 2020 and a further $1.5
million completed via share placement on 4 August 2020. The Directors are confident that projected funds are sufficient in
the near term to enable the Company to continue as a going concern and as such are of the opinion that the financial
report has been appropriately prepared on a going concern basis. The Directors continue to monitor the ongoing funding
requirements of the Company and as stated, have the ability to raise monies via a share placement in the near term.
Accounting standards issued but not yet effective
Australian Accounting Standards and interpretations that have been issued or amended but are not yet effective have not
been adopted by the Consolidated Entity for the year ended 30 June 2020. The Consolidated Entity plans to adopt these
standards at their application dates.
It is anticipated that the application of these standards will not have a material effect on the Consolidated Entity’s results
or financial reports in future periods.
The Director’s assessment of the impact of all new standards and interpretations adopted during the current year is that
they have not had a material impact on the financial report of the Company.
3.
Revenue from ordinary activities
Joint venture and consulting income
Rent
R&D tax concession
Grants
Interest received – other financial institutions
29 > Silver City Minerals Limited Annual Report 2020
Consolidated
2020
$
Consolidated
2019
$
-
-
-
26,000
2,083
28,083
180,222
27,078
37,035
-
7,806
252,141
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
4.
Income tax
Consolidated
2020
$
Consolidated
2019
$
Prima facie income tax (credit) on operating profit/(loss) at 27.5% (2019:
27.5%)
Deferred income tax liability in respect of carried forward tax losses – not
recognised
Income tax expense
(152,438)
(421,262)
152,438
421,262
-
-
No provision for income tax is considered necessary in respect of the Company for the period 30 June 2020.
The Group has a deferred income tax liability of Nil (2019: Nil) associated with exploration costs deferred for accounting
purposes but expensed for tax purposes. This liability has been brought to account and offset by deferred tax assets
attributed to available tax losses. No recognition has been given to any deferred income tax asset which may arise from
available tax losses, except to the extent offset against deferred tax liabilities. The Company has estimated its losses at
$17,782,074 (2019: $17,227,753) as at 30 June 2020.
A benefit of 27.5% (2018: 27.5%) of approximately $4,890,070 (2019: $4,737,632) associated with the tax losses carried
forward will only be obtained if:
(cid:102) The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised;
(cid:102) The Company continues to comply with the conditions for deductibility imposed by the law; and
(cid:102) No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.
(cid:102) Silver City and its 100% owned subsidiary (MEPL) formed a tax consolidated group of which Silver City is the head
entity.
5.
Cash and cash equivalents
Cash at bank
Money market securities – bank deposits
Consolidated
2020
$
Consolidated
2019
$
45,172
600,397
650,725
186,523
260,063
446,586
Bank negotiable certificates of deposit, which are normally invested between 7 and 120 days were used during the period
and are used as part of the cash management function.
6.
Receivables
Current
GST receivables
Prepayments
Trade and other debtors
Non - current
Rental bonds
30 > Silver City Minerals Limited Annual Report 2020
Consolidated
2020
$
Consolidated
2019
$
1,436
13,333
18,287
33,056
2,779
24,123
8,287
35,189
1,270
6,801
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
7.
Tenement security deposits
Cash at bank – bank deposits
Consolidated
2020
$
Consolidated
2019
$
160,000
160,000
160,000
160,000
These deposits are restricted so that they are available for any rehabilitation that may be required on exploration tenements
(refer to Note 20). The bank deposits are interest bearing.
8.
Property, plant and equipment
Year ended 30 June 2019 (Consolidated)
Motor vehicle
Plant and
equipment
Opening net book amount
Additions
Depreciation expense
Closing net book amount
At 30 June 2019
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2020 (Consolidated)
Opening net book amount
Additions
Depreciation expense
Closing net book amount
At 30 June 2020
Cost
Accumulated depreciation
Net book amount
-
-
-
-
93,101
(93,101)
-
-
-
-
-
-
-
-
9.
Deferred exploration and evaluation expenditure
Costs brought forward
Costs incurred during the period
Expenditure written off during period
Costs carried forward
Exploration expenditure costs carried forward are made up of:
(cid:102) Expenditure on joint venture areas
(cid:102) Expenditure on non joint venture areas
Costs carried forward
31 > Silver City Minerals Limited Annual Report 2020
9,850
5,733
(10,295)
5,288
125,431
(120,143)
5,288
5,288
-
(2,122)
3,166
5,288
(2,122)
(3,166)
Total
9,850
5,733
(10,295)
5,288
218,532
(213,244)
5,288
5,288
-
(2,122)
3,166
5,288
(2,122)
(3,166)
Consolidated
2020
$
Consolidated
2019
$
5,776,029
(3,705)
-
5,772,324
6,113,964
769,287
(1,107,222)
5,776,029
4,678,552
4,678,552
1,093,772
5,772,324
1,097,477
5,776,029
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
9.
Deferred exploration and evaluation expenditure (continued)
The above amounts represent costs of areas of interest carried forward as an asset in accordance with the accounting
policy set out in Note 2. The ultimate recoupment of deferred exploration and evaluation expenditure in respect of an area
of interest carried forward is dependent upon the discovery of commercially viable reserves and the successful
development and exploitation of the respective areas or alternatively sale of the underlying areas of interest for at least
their carrying value. Amortisation, in respect of the relevant area of interest, is not charged until a mining operation has
commenced.
10. Current liabilities – payables
Trade creditors
Accrued expenses
Superannuation payable
PAYG payable
11. Contributed equity
Share capital
368,710,253 fully paid ordinary shares (2019: 293,710,253)
Fully paid ordinary shares carry one vote per share and carry the
right to dividends.
Share issue costs
Option issue consideration reserve
99,375,000 unlisted options on issue (2019: 11,722,540)
(a) Movements in ordinary shares on issue
At 30 June 2018
Shares issued
Shares issued
At 30 June 2019
Shares issued
Shares issued
Shares issued
At 30 June 2020
Consolidated
2020
$
Consolidated
2019
$
53,289
18,500
950
(365)
72,374
27,580
14,000
-
425
42,005
Consolidated
2020
$
Consolidated
2019
$
(a)
20,445,864
19,702,464
(1,448,157)
(1,419,357)
313,995
313,995
19,311,702
18,597,102
Number
$
(i)
(ii)
(iii)
(iv)
(v)
245,839,883
19,122,464
370,370
47,500,000
10,000
570,000
293,710,253
19,702,464
30,000,000
20,000,000
25,000,000
300,000
200,000
250,000
368,710,253
20,452,464
(i)
In September 2018, 370,370 shares were issued at $0.027 per share in consideration of a land access agreement.
(ii)
In December 2018, 47,500,000 shares were issued at $0.012 per share under a share placement.
(iii) In October 2019, 30,000,000 fully paid ordinary shares were issued at $0.01 per share under a share placement.
(iv) In January 2020, 20,000,000 fully paid ordinary shares were issued at $0.01 per share under a share placement.
(v) In March 2020, 25,000,000 fully paid ordinary shares were issued at $0.01 per share under a share placement.
32 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
11. Contributed equity (continued)
Terms and conditions of contributed equity
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Options
(cid:102) Options do not carry voting rights or rights to dividend until options are exercised.
12. Accumulated losses
Balance at 1 July
Operating loss after income tax expense
Expired option value transferred to Accumulated Losses
Balance at 30 June
13. Reserves/share-based payments
Reserves
Balance at 1 July
Share-based payment expensed during the financial year
Expired option value transferred to Accumulated Losses
Foreign currency translation reserve
Balance at 30 June
Share-based payment reserve
Foreign currency translation reserve
Balance at 30 June
Share-based compensation
Employee share option plan
Consolidated
2020
$
Consolidated
2019
$
12,287,026
554,321
(78,250)
10,761,763
1,531,863
(6,600)
12,763,097
12,287,026
Consolidated
2020
$
Consolidated
2019
$
77,812
-
(78,250)
-
(438)
78,939
5,200
(6,600)
273
77,812
Consolidated
2020
$
Consolidated
2019
$
5,200
(5,638)
(438)
83,450
(5,638)
77,812
The Company has established the Silver City Minerals Employee Share Option Plan (Plan) to assist in the attraction,
retention and motivation of employees of the Company and its related bodies corporate (Group). Subsequent to 30 June
2019 there were no options granted under the Plan. The Plan will be administered by the Board in accordance with the
rules of the Plan, and the rules are subject to the ASX Listing Rules. There have been no cancellations or modifications to
any of the plans during 2020 and 2019.
33 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
13. Reserves/share-based payments (continued)
Summary of ESOP options granted
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Consolidated
2020
no.
10,500,000
-
Consolidated
2019
no.
9,250,000
2,000,000
-
-
(8,500,000)
2,000,000
(750,000)
10,500,000
Option pricing model and terms of options
The following table lists the inputs to the options model and the terms of options granted:
Number of
options
issued
Issue date
Director and KMP options
Exercise
price
Expiry
date
Expected
volatility
Risk-
free
rate
Expected
life
Estimated
fair value
Model
used
Oct 18
(a)
2,000,000
$0.05
9 Oct 21
70.00%
2.00%
3.0 years
$0.0026
Binomial
(a)
2,000,000 options were granted to Directors and employees of the Company which were approved by
shareholders at the AGM in November 2018. The options vested immediately.
The following table lists the inputs to the options model and the terms of options granted:
Number of
options
issued
Issue date
Other Options
Exercise
price
Expiry
date
Expected
volatility
Risk-
free
rate
Expected
life
Estimated
fair value
Model
used
Feb 19
Feb 19
Jan 20
Jun 18
26,750,000
3,000,000
30,000,000
4,000,000
$0.03
$0.03
$0.02
$0.06
27 Feb 22
16 Jan 21
31 Oct 22
5 Jun 22
-
-
-
-
-
-
-
-
3.0 years
3.0 years
3.0 years
3.0 years
-
-
-
-
-
-
-
-
(b)
(c)
(d)
(e)
(b)
(c)
(d)
Issue of 26.75 million options to subscribers to placement in December 2018.
Issue of 3 million options as approved at the Annual General Meeting of shareholders on 21 November 2017.
Issue of 30 million options as approved at the General Meeting of shareholders on 31 December 2019. These are
free attaching options from completed placement.
(e)
Issue of 4 million options as approved at the General Meeting of shareholders on 24 May 2018.
Weighted average disclosures on options
Weighted average exercise price of options at 1 July
Weighted average exercise price of options granted during period
Weighted average exercise price of options outstanding at 30 June
Weighted average exercise price of options exercisable at 30 June
Weighted average contractual life
Range of exercise price
2020
$0.05
$0.02
$0.03
$0.03
2019
$0.06
$0.03
$0.05
$0.05
2.38 Years
1.56 Years
$0.02-$0.06
$0.03-$0.05
34 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
14. Earnings per share
Net loss used in calculating basic and diluted loss per share
Weighted average number of ordinary shares outstanding during the period
used in calculation of basic EPS
Basic earnings loss per share
Diluted earnings loss per share
15. Key management personnel
Key management personnel compensation
2020
2019
(554,321)
Number
(1,531,863)
Number
330,093,814
271,960,481
Cents per share Cents per share
(0.17)
(0.17)
(0.56)
(0.56)
The aggregate compensation made to key management personnel of the Company is set out below:
Short term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments
Consolidated
2020
$
249,880
1,267
Consolidated
2019
$
389,371
21,884
-
-
-
251,147
-
-
5,200
416,455
Shareholdings of key management personnel
Fully paid ordinary shares held in Silver City Minerals Limited
Balance at
1 July
no.
Granted as
compensation
no.
Received on
exercise of
options
no.
Net change
other *
no.
Balance at
30 June
no.
Balance held
nominally
no.
2020
J Puckridge (a)
T Pickett
D Wates (b)
S Cheema
R Gotthard
Total
2019
B Besley (c)
C Torrey (c)
D Wates
T Pickett
J Puckridge
Total
-
-
-
-
-
-
2,657,044
1,430,889
-
-
-
4,087,933
(a) Resigned 29 May 2020
(b)
Resigned 21 February 2020
(c) Resigned 28 February 2019
-
-
-
-
-
-
-
-
-
-
-
-
35 > Silver City Minerals Limited Annual Report 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,657,044
1,430,889
-
-
-
4,087,933
-
-
-
-
-
-
-
-
-
-
-
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
15. Key management personnel (continued)
Option holdings of key management personnel
Share options held in Silver City Minerals Limited
Balance
at
1 July
no.
Granted
as
compen-
sation
no.
Net
other
change
no.
Balance
at
30 June
no.
Balance
vested at
30 June
no.
Exercised
no.
Vested
but not
exercis
-able
no.
Vested
and
exercis
-able
no.
Options
vested
during
year
no.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
750,000
4,000,000
4,000,000
-
-
1,000,000
1,000,000
1,000,000
1,000,000
750,000
7,500,000
7,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
4,000,000
1,000,000
1,000,000
7,500,000
-
-
-
-
-
-
2019
-
-
-
-
-
2020
J Puckridge (a)
T Pickett
D Wates (b)
S Cheema
R Gotthard
Total
-
-
-
-
-
-
B Besley (c)
1,500,000
-
-
-
-
-
-
-
C Torrey (c)
2,750,000
2,000,000
G Jones (c)
1,000,000
I Polovineo (c)
1,000,000
-
-
Total
13,500,000
2,000,000
(a)
(b)
(c)
Resigned 29 May 2020.
Resigned 21 February 2020.
Resigned 28 February 2019.
16. Related party disclosures
Subsidiaries
The consolidated financial statements include the financial statements of Silver City Minerals Limited (the Parent Entity)
and the following subsidiaries:
Name
Mining Exploration Pty Ltd (MEPL)
Country of incorporation
Australia
Silver City NZ PTY Limited
New Zealand
2020
100
100
2019
100
100
% Equity interest
17. Auditors’ remuneration
Total amounts receivable by the current auditors of the Company for:
Audit of the Company’s accounts
Other services
Consolidated
2020
$
Consolidated
2019
$
34,500
2,600
37,100
28,200
-
28,200
36 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
18.
Joint ventures
The Company is a party to a number of exploration joint venture agreements to explore for copper, gold, zinc and lead.
Under the terms of the agreements the Company will be required to contribute towards the exploration and other costs if it
wishes to maintain or increase its percentage holdings. The joint ventures are not separate legal entities. There are
contractual arrangements between the participants for sharing costs and future revenues in the event of exploration
success. There are no assets and liabilities attributable to the Company at the balance date resulting from these joint
ventures other than exploration expenditure costs carried forward as detailed in Note 9. Costs are accounted for in
accordance with the terms of joint venture agreements and in accordance with Note 2(i). Percentage equity interests in
joint ventures at 30 June 2020 were as follows:
Joint Venture
Silver City Farm In and Joint Venture Agreement
EL 7300
EL 8075
Silver City Broken Hill Project Sale Agreement – Variscan Mines
Limited
Percentage
interest 2020
Percentage
interest 2019
85%
75%
85%
75%
ELs 8236 and 8075
75%
75%
Agreement relating to EL 8078 (Yalcowinna – formerly Ziggys EL 6036
and Euriowie 7319) with Eaglehawk Geological Consulting Pty Ltd
EL 8078 (Eaglehawk has an 8% interest in this EL)
Broken Hill Base Metals Project with Impact Minerals Limited*
EL 7390
Silver City JV with CBH
EL 8495
EL 8236
EL 8075
EL 8862
EL 8863
92%
20%
75%
75%
75%
75%
75%
92%
20%
75%
75%
75%
75%
75%
* Silver City’s interest is free-carried to a decision to mine.
19. Segment information
The operating segments identified by management are as follows:
Exploration projects funded directly by Silver City Minerals Limited (“Exploration”)
Regarding the Exploration segment, the Chief Operating Decision Maker (the Board of directors) receives information on
the exploration expenditure incurred. This information is disclosed in Note 9 of this financial report. No segment revenues
are disclosed as each exploration tenement is not at a stage where revenues have been earned. Furthermore, no segment
costs are disclosed as all segment expenditure is capitalised, with the exception of expenditure written off which is
disclosed in Note 9. Financial information about each of these tenements is reported to the Board on an ongoing basis.
Corporate office activities are not allocated to operating segments as they are not considered part of the core operations
of any segment and comprise of the following:
(cid:102)
Interest revenue.
(cid:102) Corporate costs.
(cid:102) Depreciation and amortisation of non-project specific property, plant and equipment.
37 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
20. Contingent liabilities
The Group has provided guarantees totalling $160,000 (2019: $160,000) in respect of exploration tenements in NSW.
These guarantees in respect of exploration tenements are secured against deposits with a banking institution. The
Company does not expect to incur any material liability in respect of the guarantees.
21. Financial instruments
The Board as a whole is responsible for reviewing the Company’s policies on risk oversight and management and satisfying
itself that Senior Management have developed and implemented a sound system of risk management and internal control.
The Company’s risk management policy has been designed to identify, assess, monitor and manage material business
risks to ensure effective management of risk. These policies are reviewed regularly to reflect material changes in market
conditions and the Company’s risk profile.
The main risks identified in the Company’s financial instruments are capital risk, credit risk, liquidity risk, interest rate risk
and commodity price risk. Summarised below is information about the Company’s exposure to each of these risks, their
objectives, policies and processes for measuring and managing risk, the management of capital and financial instruments.
Capital risk management
The Company manages its capital to ensure that it will be able to continue as a going concern. The Board’s policy is to
maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future development of
the Company. In order to achieve this objective, the Company seeks to maintain a sufficient funding base to enable the
Company to meet its working capital and strategic investment needs.
The Board ensures costs are not incurred in excess of available funds and will seek to raise additional funding through the
issue of shares for the continuation of the Company’s operations when required.
The Company considers its capital to comprise of its ordinary share capital, option reserve and accumulated losses. There
were no changes in the Company’s approach to capital management during the period. The Company is not subject to
externally imposed capital requirements.
Financial risk management objectives
In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This
note describes the Company’s objectives, policies and processes for managing those risks and the methods used to
measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
During the period there have been no substantive changes in the Company’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them from previous periods
unless otherwise stated in this note.
The Board has overall responsibility for the determination of the Company’s risk management objectives and policies and,
whilst retaining ultimate responsibility for them it has delegated the authority for designing and operating processes that
ensure the effective implementation of the objectives and policies to the Company’s finance function. The Company’s risk
management policies and objectives are designed to minimise the potential impacts of these risks on the results of the
Company where such impacts may be material. The Board receives regular reports from the Financial Controller through
which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it
sets. These risks include credit risk, liquidity risk, interest rate risk and commodity price risk. The Company does not use
derivative financial instruments to hedge these risk exposures.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Company’s competitiveness and flexibility. Further details regarding these risks are set out below.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company.
38 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
21. Financial instruments (continued)
Credit risk (continued)
The Company mitigates credit risk on cash and cash equivalents by dealing with banks that have high credit-ratings
assigned by Standard and Poors. There are two counterparties for Cash and Cash equivalents which are Commonwealth
Bank of Australia and Bank of Western Australia Limited. Credit risk of receivables is low as it consists predominantly of
GST recoverable from the Australian Taxation Office and interest receivable from deposits held with regulated banks.
The maximum exposure to credit risk at balance date is as follows:
Cash and cash equivalents
Receivables
Deposits with banks and Joint Venture Partner
Liquidity risk
Consolidated
2020
$
Consolidated
2019
$
650,725
33,056
160,000
843,781
446,586
8,287
160,000
614,873
Liquidity risk is the risk that the Company will not be able to meet its financial obligation as they fall due. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due.
Ultimate responsibility for liquidity risk rests with the Board of Directors, who have built an appropriate risk management
framework for the management of the Company’s short, medium and long-term funding and liquidity requirements. The
Company manages liquidity by maintaining adequate cash reserves by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and liabilities.
The following table details the Company’s contractual maturities of financial liabilities:
Financial liabilities
2020
Payables
2019
Payables
Carrying
amount
$
72,374
72,374
39,226
39,226
< 12 months
$
1-3 years
$
>3 years
$
72,374
72,374
39,226
39,226
-
-
-
-
-
-
-
-
The following table details the Company’s expected maturity for financial assets:
Financial assets
2020
Cash at bank and term deposits
Receivables
Deposits with banks and Joint Venture Partner
2019
Cash at bank and term deposits
Receivables
Deposits with banks and Joint Venture Partner
39 > Silver City Minerals Limited Annual Report 2020
Carrying
amount
$
650,725
33,056
160,000
843,781
446,586
8,287
160,000
614,873
< 12 months
$
1-3 years
$
>3 years
$
650,725
33,056
-
-
-
160,000
683,781
446,586
8,287
-
454,873
-
-
-
160,000
160,000
-
-
-
-
-
-
-
-
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
21. Financial instruments (continued)
Interest rate risk
The Company’s exposure to the risks of changes in market interest rates relates primarily to the Company’s cash holdings
and short term deposits. These financial assets with variable rates expose the Company to cash flow interest rate risk. All
other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Company does
not engage in any hedging or derivative transactions to manage interest rate risk.
At balance date, the Company was exposed to floating weighted average interest rates as follows:
Weighted average rate of cash balances
Cash balances
Weighted average rate of term deposits
Term Deposits
Consolidated
2020
$
Consolidated
2019
$
0.03%
50,328
0.75%
600,397
0.03%
186,523
1.64%
260,063
The Company invests surplus cash in interest-bearing term deposits with financial institutions and in doing so it exposes
itself to the fluctuations in interest rates that are inherent in such a market. Term deposits are normally invested between
7 to 90 days and other cash at bank balances are at call.
The Company’s exposure to interest rate risk is set out in the table below:
Sensitivity analysis
2020
Cash and cash equivalents
Tax charge of 27.5%
After tax profit increase/(decrease)
2019
Cash and cash equivalents
Tax charge of 30%
After tax profit increase/(decrease)
Carrying
amount
$
650,725
650,725
-
446,586
446,586
-
+1.0% of AUD IR
-1.0% of AUD IR
Profit
$
6,507
(1,789)
4,718
4,466
(1,228)
3,238
Other
equity
$
-
-
-
-
-
-
Profit
$
(6,507)
1,789
(4,718)
(4,466)
1,228
(3,238)
Other
equity
$
-
-
-
-
-
-
The above analysis assumes all other variables remain constant.
Commodity price risk
The Company is exposed to commodity price risk. This risk arises from its activities directed at exploration and
development of mineral commodities. If commodity prices fall, the market for companies exploring for these commodities
is affected. The Company does not hedge its exposures.
Net fair value of financial assets and liabilities
The carrying amounts of financial assets and liabilities of the Company approximate their net fair values, given the short
time frames to maturity and or variable interest rates.
22. Commitments
In order to maintain the Company’s tenements in good standing with the New South Wales Department of Planning and
Environment – Resources and Geoscience, the Company may be required to incur exploration expenditure under the
terms of each licence. Exploration licences renewed or granted in NSW after 1 July 2016 have no exploration expenditure
commitment. These commitments are not binding as exploration tenements can be reduced or relinquished at any time.
40 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
22. Commitments (continued)
Payable not later than one year
Payable later than one year but not later than two years
Consolidated
2020
$
Consolidated
2019
$
-
-
-
-
-
-
It is likely that the granting of new licences and changes in licence areas at renewal or expiry will change the expenditure
commitment to the Company from time to time.
23. Events after the balance sheet date
On 21 July 2020, the Company announced the advancement of the completion of acquisition and settlement for the
Wellington Project (EL 5852). This follows the exercise of an option under the binding option agreement (Agreement)with
Syndicate Minerals Pty Ltd(Vendor)to acquire its holdings in EL 5852 and in accordance with shareholder approval
received at the General Meeting held on 13 July 2020 (GM).
On 29 July 2020, the Company announced that had received commitments for a placement of up to 100,000,000 fully paid
ordinary shares (Placement Shares) at a price of $0.015 per share to raise $1,500,000 before costs. This was subsequently
completed on 4 August 2020.
On 19 August 2020, the Company announced the commence and assessment of its strategic tenement holdings in New
South Wales to identify exploration opportunities, particularly for gold mineralisation. EL8579 Tindery is located 45 km
north of Cobar and covers an area of 288km2. The prospective Chesney Fault System strikes onto the southern portion of
EL8579, with 15km of prospective fault on the tenure.
On 26 August 2020, the Company applied for an exploration tenement in the Murchison region of Western Australia,
E59/2445 Tallering. E59/2445 covers an area of 48 subblocks (143km2) in the northern Tallering Greenstone Belt, Western
Australia, and is prospective for Volcanogenic Massive Sulphides.
There were, at the date of this report, no other matters or circumstances which have arisen since 30 June 2020 that have
significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of
affairs of the Group, in future financial years.
24. Statement of cash flows
Reconciliation of net cash outflow from operating activities to operating loss
after income tax
(a)
Operating profit/(loss) after income tax
Depreciation
Share based payments
Exploration costs in opening and closing creditors
Annual and long service leave written back (expensed)
Consolidated
2020
$
Consolidated
2019
$
(554,321)
(1,531,863)
2,122
-
-
-
10,295
(5,200)
-
-
Exploration expenditure written off
3,705
1,107,222
Other
Change in assets and liabilities:
(Increase)/decrease in receivables
Decrease)/increase in trade and other creditors
(Decrease)/increase in provisions
Net cash outflow from operating activities
4,887
33,146
-
(510,461)
105,296
(22,513)
(42,843)
(369,206)
41 > Silver City Minerals Limited Annual Report 2020
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
24. Statement of cash flows (continued)
(b)
For the purpose of the Statement of Cash Flows, cash includes cash on hand, at bank, deposits and bank bills
used as part of the cash management function. The Company does not have any unused credit facilities.
The balance at 30 June 2020 comprised:
Cash assets
Bank deposits (Note 5)
Cash on hand
50,328
600,397
650,725
186,523
260,063
446,586
25. Parent entity information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Reserves
Total shareholders’ equity
Loss of the parent entity
Total comprehensive loss of the parent entity
2020
$
681,629
6,892,191
72,373
72,373
2019
$
477,098
6,698,765
39,226
39,226
19,311,702
18,597,102
(12,497,084)
(12,021,013)
5,200
6,819,818
83,450
6,659,539
(554,321)
(554,321)
(1,531,437)
(1,531,437)
42 > Silver City Minerals Limited Annual Report 2020
Directors’ Declaration
In accordance with a resolution of the directors of Silver City Minerals Limited, I state that:
In the opinion of the directors:
(a)
The financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for
the year ended on that date; and
Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001;
The financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 2; and
There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due
and payable.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2020.
(b)
(c)
(d)
On behalf of the Board
Sonu Cheema
Non-executive Director and Company Secretary
Perth, 28 September 2020
43 > Silver City Minerals Limited Annual Report 2020
Independent Auditor’s Report
To the members of Silver City Minerals Limited,
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Silver City Minerals Limited (the
company and its subsidiaries) (“the Group”), which comprises the consolidated statements of
financial position as at 30 June 2020, the consolidated statements of profit or loss and other
comprehensive income, the consolidated statements of changes in equity and the consolidated
statements of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, 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 2020 and of its
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 auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (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.
Phone
(cid:1748)(cid:1093)(cid:1088)(cid:1)(cid:1089)(cid:1)(cid:1096)(cid:1096)(cid:1092)(cid:1093)(cid:1)(cid:1095)(cid:1092)(cid:1087)(cid:1087)(cid:1)(cid:1)(cid:1)
Email
(cid:29)(cid:31)(cid:37)(cid:1213)(cid:29)(cid:31)(cid:37)(cid:1141)(cid:30)(cid:42)(cid:40)(cid:1141)(cid:28)(cid:48)(cid:1)
(cid:1)
Office
(cid:13)(cid:32)(cid:49)(cid:32)(cid:39)(cid:1)(cid:1095)(cid:1142)(cid:1)(cid:1088)(cid:1089)(cid:1091)(cid:1)(cid:1)
(cid:24)(cid:28)(cid:39)(cid:38)(cid:32)(cid:45)(cid:1)(cid:20)(cid:47)(cid:45)(cid:32)(cid:32)(cid:47)(cid:1)(cid:1)
(cid:15)(cid:42)(cid:45)(cid:47)(cid:35)(cid:1)(cid:20)(cid:52)(cid:31)(cid:41)(cid:32)(cid:52)(cid:1)(cid:1)
(cid:15)(cid:20)(cid:24)(cid:1)(cid:1089)(cid:1087)(cid:1093)(cid:1087)(cid:1)
(cid:1)
Postal
(cid:17)(cid:16)(cid:1)(cid:3)(cid:42)(cid:51)(cid:1)(cid:1088)(cid:1093)(cid:1093)(cid:1091)(cid:1142)(cid:1)
(cid:15)(cid:42)(cid:45)(cid:47)(cid:35)(cid:1)(cid:20)(cid:52)(cid:31)(cid:41)(cid:32)(cid:52)(cid:1)
(cid:15)(cid:20)(cid:24)(cid:1)(cid:1089)(cid:1087)(cid:1092)(cid:1096)(cid:1)
Liability limited by a
scheme approved
under Professional
Standards Legislation.
Please refer to the
website for our
standard terms of
engagement.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit
matter
Deferred Exploration and Evaluation Expenditure
$5.8 million
Refer to Note 9
The consolidated entity owns the rights
to several exploration licenses in New
South Wales. Expenditure relating to
these areas is capitalised and carried
forward to the extent they are expected
to be recovered through the successful
development of the respective area or
where activities in the area have not yet
reached a stage that permits reasonable
assessment of the existence of
economically recoverable reserves.
This area is a key audit matter due to:
(cid:120) The significance of the balance;
(cid:120) The inherent uncertainty of the
recoverability of the amount
involved; and
(cid:120) The substantial amount of audit work
performed.
Our audit procedures included amongst
others:
(cid:120) Assessing whether any facts or
circumstances exist that may
indicate impairment of the
capitalised assets;
(cid:120) Performing detailed testing of
source documents to ensure
capitalised expenditure was
allocated to the correct area of
interest;
(cid:120) Performing detailed testing of
source documents to ensure
expenditure was capitalised in
accordance with Australian
Accounting Standards; and
(cid:120) Obtaining external confirmations to
ensure the exploration licences are
current and accurate.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020 but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Directors' Responsibility 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 Responsibility for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
(cid:120)
Identify and assess the risks of material misstatement of the financial report, whether
due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
(cid:120) Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
(cid:120) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
(cid:120) Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in
the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
(cid:120) Evaluate the overall presentation, structure and content of the financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors' report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Silver City Minerals Limited for the year ended 30
June 2020 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.
BDJ Partners
................................................
Anthony Dowell
Partner
28 September 2020
Additional Information
Information relating to shareholders
Information relating to shareholders at 24 September 2020 (per ASX Listing Rule 4.10)
Ordinary fully paid shares
There was a total of 485,960,253 fully paid ordinary shares on issue.
Options
There was a total of 99,375,000 unlisted options on issue.
Substantial shareholders
UPSKY EQUITY PTY LTD
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