More annual reports from Sheffield Resources:
2023 ReportABN 29 125 811 083
2020
Annual Report
1
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Table of Contents
Corporate Directory
Chairman’s Letter
Review of Operations
Ore Reserves & Mineral Resources
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Interests in Mining Tenements
3
4
5
10
17
40
41
42
43
44
45
73
74
79
82
2
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Corporate Directory
Directors
Mr John Richards, Non-Executive Chairman
Mr Bruce McFadzean, Managing Director
Mr Bruce Griffin, Commercial Director
Mr David Archer, Non-Executive Director
Mr Will Burbury, Non-Executive Director
Mr Ian Macliver, Non-Executive Director
Company Secretary
Mr Mark Di Silvio
Registered Office
Level 2, 41-47 Colin Street
West Perth WA 6005
T: +61 8 6555 8777
F: +61 8 6555 8787
E: info@sheffieldresources.com.au
Share Register
Link Market Services
178 St Georges Terrace
Perth WA 6000
+61 8 9211 6670
Solicitors
Ashurst
Level 32, Exchange Plaza
The Esplanade
Perth WA 6000
Bankers
Australia and New Zealand Banking Corporation
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Securities Exchange
Australian Securities Exchange (ASX: SFX)
Website
www.sheffieldresources.com.au
Australian Business Number (ABN)
29 125 811 083
3
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Chairman’s Letter
Dear Shareholders,
The past year has seen your Company actively engaged in seeking a strategic partner to enable the development of the
Thunderbird Mineral Sands Project.
Key milestones during this year have included the completion of an Updated Bankable Feasibility Study (the BFSU),
completion of all required permitting to commence construction of the Thunderbird Project and the restructure of the
Board’s composition to ensure that your Company is best placed to achieve success and drive value for Shareholders
and Stakeholders.
During the year we welcomed Mr Bruce Griffin to the Board as Commercial Director. Mr Griffin has extensive knowledge
of the global mineral sands industry and recently led the Company through a study to assess a range of project
development options for the Thunderbird Project. We look forward to drawing on Mr Griffin’s experience during the future
phases of the project. November 2019 also saw the retirement of one of the founding Directors of Sheffield Resources,
Mr Bruce McQuitty. Mr McQuitty had been a Director for nearly 10 years and was Managing Director from 2010 to 2015.
He has been a pivotal part of the discovery and advancement of the Thunderbird Mineral Sands Project. We wish Mr
McQuitty all the best for his retirement.
While substantial progress was made, 2020 was not without its challenges. The process of identifying a strategic partner
and concluding an acceptable funding solution was not achieved within our original timeline which targeted a Final
Investment Decision by early 2020.
To address these challenges, the Company completed a project development review and implemented cost management
initiatives. The project development review, led by Mr Griffin, had the objective of identifying a project scope with the
scale and product mix to reduce upfront capital expenditure and maximise investment returns. Activities were scaled
back to focus on only the protection of assets, additionally an organisational review saw a reduction in staff located in
both Perth and the Kimberley, and a sale of non core assets was undertaken to ensure the Company had adequate cash
reserves to support the ongoing strategic partner process.
As the project development review and cost management activities progressed, focus has remained on identifying an
appropriate strategic partner to develop the Thunderbird Mineral Sands Project. Subsequent to the end of the financial
year, your Company was very pleased to announce that a non-binding term sheet to form a 50:50 Joint Venture for the
development of the Thunderbird Project was signed with Yangang (Hong Kong) Co., Ltd’s wholly owned subsidiary YGH
Australia Investment Pty Ltd (Yansteel). This joint venture means that Stage 1 of the Thunderbird Project would be fully
funded. The agreement is subject to the Foreign Investment Review Board approval process, negotiation and execution
of formal agreements and any other applicable regulatory or shareholder approval. Yansteel have also entered into an
offtake agreement to take or pay for 100% of the ilmenite produced from stage 1 of the project.
In addition to the joint venture, I would also like to extend a welcome to Yansteel as a significant shareholder of Sheffield
Resources Limited. A placement approved by the Board and completed on 11 August 2020 has seen Yansteel invest
A$12.9m for a 9.9% shareholding of the Company.
So whilst the past 12 months have been challenging for the Company, the dedication of the team at Sheffield Resources
have culminated in an exceptional outcome and clear pathway for development of the Thunderbird Project.
In closing, I thank all Sheffield Resources shareholders for your continued support and faith in our Company.
John Richards
Chairman
4
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
OVERVIEW
During the reporting period, Sheffield Resources Limited (Group, Company or Sheffield) continued to focus on the
Thunderbird Mineral Sands Project (Thunderbird or Project), located near Derby in the Canning Basin region of Western
Australia. The completion of the Bankable Feasibility Study Update (BFSU) in July 2019 enabled the continuation of the
strategic partner funding process. This structured and formal process evaluated and progressed potential equity funding
partners to support the development of Thunderbird, along with established debt financing arrangements by Taurus
Mining Finance (Taurus) and the Northern Australia Infrastructure Facility (NAIF). The Company actively pursued
expressions of interest and proposals received from credible third parties, although the Company was unable to conclude
an acceptable equity funding solution during the reporting period.
In early 2020, following a strategic business review and in the context of the elevated cost level associated with
maintaining the Project in a “shovel-ready” state, the Company paused the strategic partner funding process, whilst the
Company underwent an assessment to deliver a materially lower capital and financeable Project development strategy
with reduced operational and corporate costs.
The Company implemented appropriate corporate and organisational changes to preserve cash and allow the Project
development review to advance under a materially lower cost structure, with estimated savings of A$7.5 million per
annum. Consequently, the number of executive management and employee positions in both Perth and the Kimberley
were materially reduced, including the closure of care and maintenance activities at Thunderbird. Closure of the
Thunderbird Project site included the implementation of new security and caretaking arrangements whilst maintaining
the integrity of all environmental and other approvals, permits and licences for the Project. Environmental and statutory
monitoring and reporting will ensure the Project can be readily restarted once funding has been secured.
The Company reviewed non-core assets resulting in the disposal of non-core accommodation units to realise A$1.75m
and has rationalised non-core exploration tenements resulting in further savings of approximately $0.5m in annual
expenditure commitments. Our key partners Taurus and NAIF, along with corporate advisors supported and endorsed
this new approach with financing commitment fees payable to Taurus being suspended from the end of the March 2020
quarter, until such time that a Final Investment Decision (FID) is reached for Thunderbird.
The Project development review, led by mineral sands expert Mr Bruce Griffin, considered a range of scale and product
mix options to identify a project scope with reduced upfront capital expenditure and maximised investment returns. A
small range of development strategies that all include the production of a zircon rich non-magnetic concentrate in
conjunction with alternate ilmenite streams was identified by the review. The market for zircon rich non-magnetic
concentrates has emerged as an alternative route to market for zircon in recent years and continues to grow strongly.
Moving forward, Sheffield is focused on the following key objectives:
• Defining a revised project scope for Thunderbird which will provide a lower capital cost and a more readily
•
•
•
•
financeable project.
Through engagement with potential strategic and funding partners, pursue funding strategies to support
Thunderbird’s development.
Undertake further evaluation of ilmenite product options to identify ilmenite streams suitable for direct sale into the
sulfate pigment or chloride slag markets, significantly reducing the ilmenite product market risk.
Preserving cash reserves to ensure that the Company has a cash runway well into 2021.
Securing Foreign Investment Review Board approval and signing definitive agreements for the Yansteel Joint
Venture.
The current Project status, is described as follows:
Granted State and Federal environmental approval
Executed Native Title Agreement
Granted Thunderbird mining lease
Establish support infrastructure enabling rapid commencement of construction activities
Executed US$175 million project finance facility with Taurus Mining Finance
A$95m Northern Australia Infrastructure Fund term sheet approved
Material agreements in a ‘shovel-ready’ state, subject to FID
Executed binding offtake agreements
Ore Reserve at Thunderbird of 748 million tonnes at 11.2% HM
Signed Non-binding term sheet with Joint Venture Partner Yansteel
Inferred Mineral Resource at Night Train of 130 million tonnes at 3.3% HM
5
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Bankable Feasibility Study Update
In the first quarter of the reporting period, Sheffield concluded an update to the Bankable Feasibility Study originally
published in March 2017. The BFSU estimated a material reduction in Project capital requirements and execution risk,
increased zircon production and Project revenue by more than 30%, substantially enhancing the Project financial
metrics. The mining and processing feed rate increased by 38% to 1,085 dry tph to the Wet Concentrate Plant (WCP),
targeting an average annual zircon production of 202ktpa over the 37 year Life of Mine (LOM), which would elevate
Thunderbird into the top tier of global zircon producers.
The BFSU estimated a new Ore Reserve of 748 million tonnes at 11.2% Heavy Mineral (HM), an increase of 68 million
tonnes or approximately 10% to the 2017 BFS Ore Reserve. The new Ore Reserve reflected the change in market product
pricing and increased certainty in costs and revenue for Thunderbird. The Ore Reserve increased the period of mining
higher grade ore from 7 years to 10 years and removed lower grade ore from the process plant feed during that period,
increasing the in-situ zircon grade in the Proved Category to 1.02% zircon.
A staged development strategy was implemented to materially reduce pre-development capital, lower construction risk
and increase revenues by focusing on a substantial increase in zircon production:
•
•
Stage 1: Single Mining Unit Plant (MUP) and processing plant underpinning a 10.4Mtpa mining operation
Stage 2: Duplication in year 5 of Stage 1 mining and processing circuits underpinning a 20.8Mtpa mining operation
The BFSU delivered a pre-finance and post tax NPV8 of A$0.98 billion over the 37 year LOM. The approach targeted
negligible variation to current debt carrying capacity levels, reduced construction and commissioning risk and materially
lowered equity funding requirements to A$143 million.
Project Construction Readiness
During the strategic partner funding process, Project readiness activities focused on maintaining communications with
key Project stakeholders and aligning executed or negotiated agreements with the BFSU scope of works until such time
that FID may be matured.
Early Works Program
A small team of Kimberley and Aboriginal employees implemented care and maintenance programs for the established
site infrastructure at Thunderbird. These activities included the regular inspection of infrastructure and completion of
minor improvements, fire protection and drainage works.
Following a strategic business review in early 2020 and in the context of the high costs associated with maintaining the
Project in a “shovel-ready” state, the care and maintenance programs were suspended and the Project was placed into
a long term suspension, in conjunction with security, fire protection and environmental and water monitoring activities.
The Company assisted redundant Kimberley based employees in their transition to other employment opportunities.
A twenty-tonne bulk sample from the Thunderbird deposit was homogenised and dispatched to Bengbu Zhongheng New
Materials S&T Co. Ltd (‘Bengbu’) to undertake metallurgical test work relating to the production of an ilmenite
concentrate as a chloride slag feedstock.
There are currently 52 accommodation units and associated ancillary buildings, potable and wastewater treatment
equipment and communications infrastructure installed at the Project, securely stored and available for reactivation
upon the decision to commence construction activities.
Aboriginal Engagement
Following the completion of the 2019 Certificate 3 training program in Civil Construction, five graduating trainees
commenced employment at Thunderbird in the care and maintenance work programs. At the completion of these
programs, Sheffield assisted the graduates with their transition to other employment opportunities.
Sustainability
After achieving the significant Project milestones with the grant of the Mining Lease and State and Federal environmental
approvals in the previous year, the Company continued with secondary Western Australian Government approvals with
the Department of Mines, Industry, Regulation and Safety and the Department of Water and Environmental Regulation
regarding the change in the scope of the BFSU. The Mining Proposal and the Works Approval for the BFSU activities
were approved during the year. The Company continued to maintain compliance activities and all approvals, to ensure
the Project remained in a construction ready state.
6
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
The execution of the Co-existence Agreement with the Traditional Owners established a framework for the Company to
communicate directly with the Traditional Owners regarding the protection of Aboriginal heritage, the environment and
the delivery of sustainable employment and business outcomes for Traditional Owners and the wider Aboriginal
community. The Company held regular implementation committee meetings with the nominated representatives of the
Traditional Owners. The meetings established committee governance systems and capacity building in readiness for the
commencement of Project construction.
Through the implementation committee, the Traditional Owners nominated heritage monitors to work with the Company
to complete final artefact clearance surveys over 285 hectares of land required for construction and operations activities.
Sheffield continued its engagement activities with community and government stakeholders to ensure they were
informed on Company activities and consulted in relation to their interests in Thunderbird. The Company engaged with
industry, business, government and community across the broader Kimberley region and the metropolitan area.
Marketing and Offtake
As the Company considered a range of lower capital and operating scenarios, all binding offtake agreements have
remained in place. Sheffield continued to regularly update offtake partners on the development of the Project and
support from these groups has continued to be very positive. Communication will continue with all groups as the
Company pursues each potential operating scenario and affirms the product mix to be produced.
The mineral sands market has performed well considering the global economic conditions and the COVID-19
uncertainty that has prevailed in 2020.
Zircon prices softened throughout the financial year following concerns over weaker demand. China’s demand was weak
in early 2020 due to COVID-19 before recovering later in financial year. European and Indian demand were impacted
and recovered later than China. With reduced production supply from key suppliers, supply and demand has achieved a
balance, keeping prices relatively steady.
The titanium feedstock market started the financial year in a healthy position and despite concerns around the impacts
of COVID-19 demand remained strong throughout the financial year. China is the largest producer of titanium pigment,
and with an extended Chinese New Year due to the pandemic, market uncertainty was evident during the earlier part of
2020. However, with industry restarting after an extended break, supply of titanium feedstock in China was tight for
domestic and international supply. In the later part of the financial year COVID-19 impacted pigment demand in the
other key markets of North America and Europe and sales and production of pigment were both reduced by major
producers. This is expected to weaken titanium feedstock demand in the second half of the 2020 calendar year.
While some near term weakness is expected during the remainder of 2020 both zircon and titanium feedstock
markets are forecast to have significant supply constraints in the mid to long term and Sheffield is well placed to
supply material into what will be a tight market in the future.
Project Financing
In November 2018, a Project Facility Agreement (Facility) with Taurus Mining Fund and Taurus Mining Finance Annex
Fund (Taurus) was executed based on the 2017 Bankable Feasibility Study development strategy. Under the terms of
the Facility, Taurus provided a US$175 million senior loan facility to fund the construction of Thunderbird. Execution of
the Facility followed thorough technical due diligence by Taurus of process design criteria and commercial, operational
and construction agreements.
In September 2018, the NAIF Board made an investment decision to offer financial assistance to support the
development of Thunderbird through the provision of long term debt facilities totalling A$95 million. The NAIF facilities
enable the Company to construct on-site LNG power generation and storage facilities at Thunderbird, in addition to
enabling the upgrading of mine site roads, in-sourcing of mine site accommodation and facilitate the construction and
revitalisation of ship loading and logistics assets within the Port of Derby in Western Australia.
Going forward, the Company is seeking to maintain the existing debt capacity with Taurus and NAIF. The NAIF facilities
are subject to definitive written agreements entered into between the Company and the State of Western Australia. The
Company continues to work towards the completion of financing arrangements in conjunction with securing strategic
partners to complement debt financing arrangements and Project development.
The Company has engaged third party advisers to assist in the identification of potential strategic partners and achieve
the objective of funding Thunderbird into operations. The introduction of a strategic party to Thunderbird via this process
could have the effect of reducing the equity funding requirement attributable to Sheffield, as the strategic partner would
likely be responsible for their proportionate share of residual capital requirements in the case of a project level
investment.
7
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
In September 2019, the Company concluded an institutional placement which raised approximately A$18 million. The
funds raised were allocated to fund committed initiatives at Thunderbird, along with working capital and corporate costs.
Subsequent Event – Yansteel
On 11 August 2020, the Company announced that it had entered into a Non-Binding Term Sheet with Yangang (Hong
Kong) Co., Ltd’s wholly owned subsidiary YGH Australian Investment Pty Ltd (Yansteel) to form a joint venture to develop
the Thunderbird Mineral Sands Project. Yansteel will invest A$130.1m in equity to acquire a 50% interest in the Project.
Formation of the Yansteel and Sheffield Joint Venture is subject to final negotiation, agreement, and execution of formal
agreements, Foreign Investment Review Board process completion and, where required, any other applicable regulatory
or shareholder approval.
The Company also welcomed Yansteel as a significant shareholder after the Board approved the issue of 34,259,421
fully paid ordinary shares (comprising 9.9% of the post-issue share capital) in Sheffield to Yansteel for a total
consideration of approximately A$12.9m (Share Placement). The Share Placement occurred on August 11, 2020.
Yansteel and Sheffield have also executed a take-or-pay offtake agreement for 100% of the ilmenite produced from
Stage 1 of the Project.
Exploration
During the reporting period, the Company performed a review of its exploration assets to maintain core tenements in
support of the Thunderbird Mineral Sands Project and to relinquish non-core tenements to reduce ongoing exploration
commitments. At the Dampier Project, a voluntarily tenement reduction of a material portion of the 2019 land holding
was achieved, reducing expenditure commitments and overheads by approximately A$1 million per annum. Retention
status was achieved over all Mineral Resources at the Eneabba and McCalls Projects, reducing the requirement for
committed exploration expenditure. The Company withdrew exploration licence applications for the South Australian
Barton and Ceduna Projects, prior to initiation of expenditure commitments.
The outcome of the exploration assets review has focused the Company exploration in support of the development of
the Thunderbird Mineral Sands Project. Sheffield now holds a total 1,940 square km of granted exploration and mining
tenements across three key mineral sand projects with 1,526 square km surrounding Thunderbird.
Dampier Project
An updated Thunderbird Ore Reserve (refer to ASX announcement 31 July 2019) delivered an increase of 68 million
tonnes or 10% (ore tonnes) and approximately 9% (HM tonnes) to 748 million tonnes @ 11.2% HM (Proved and Probable)
compared to the previous Ore Reserve of 680.5 million tonnes at 11.3% HM (refer to ASX announcement 16 March
2017).
The Thunderbird Ore Reserve contains exceptionally high in-situ zircon grades of 1.02% in the Proved Category and high
in-situ zircon grades of 0.86% in the Proved and Probable categories. The updated Ore Reserve includes a substantial
increase in contained zircon of 500,000 tonnes to 6.4 million tonnes.
The Dampier Project contains a total Mineral Resource of 3.36 billion tonnes at an average grade of 6.8% HM (Measured,
Indicated and Inferred), containing 96 million tonnes of valuable heavy mineral (VHM), across both the Thunderbird
(3.0% HM cut-off) and Night Train (1.2% HM cut-off) deposits. The Dampier Mineral Resources estimate has increased
by 4% for ore tonnes and by 2% for contained in-situ HM tonnes when compared with the Dampier Mineral Resources
estimate for 2018, due to the addition of the maiden Inferred Night Train Mineral Resource.
The Thunderbird Mineral Resource remains unchanged at 3.23 billion tonnes @ 6.9% HM above a 3.0% HM cut-off
(Measured, Indicated and Inferred) containing 93 million tonnes of VHM. The Mineral Resource includes a high-grade
component of 1.05 billion tonnes @ 12.2% HM above 7.5% HM cut-off (Measured, Indicated and Inferred) containing 50
million tonnes of VHM (refer to ASX announcement 5 July 2016).
Sheffield has undertaken a review of its Dampier Project assets to voluntarily reduce holdings of non-core Dampier
Project tenements. The reductions include the final surrender of fifteen tenements and the partial surrender of eight
tenements within the wider Project area.
Eneabba Project
Sheffield’s 100% owned Eneabba Project is located about 230km north of Perth in Western Australia’s Midwest region.
The Project consists of seven Mineral Resources (Measured, Indicated and Inferred) Yandanooka, Durack, Ellengail,
West Mine North, Drummond Crossing, Thomson and Robbs Cross. The prospects of Beekeepers, Corridor and Ding
Road are also included in the Eneabba Project. During the reporting period, retention status was achieved for the
8
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Drummond Crossing (E70/3814) and Robbs Cross (E70/4292) Mineral Resources. All Eneabba Project Mineral
Resources are now under retention status or are located on granted Mining Leases.
The total combined Mineral Resources for Sheffield’s Eneabba Project are 193 million tonnes @ 3.0% HM (Measured,
Indicated and Inferred) containing 4.8 million tonnes of VHM. This includes in-situ Total Heavy Mineral (THM) of 5,723kt
at various cut-offs containing 705kt zircon, 392kt rutile, 242kt leucoxene, 3,423kt ilmenite (Measured, Indicated and
Inferred) totalling 4,762kt of Valuable Heavy Mineral (see ASX 24 September 2019).
McCall’s Project
Sheffield’s 100% owned McCall’s Project is located about 110km north of Perth near the town of Gingin. Across two
deposits (McCall’s and Mindarra Springs) the Project contains a total combined Indicated and Inferred Mineral Resource
of 5,800 million tonnes @ 1.4% HM (applying a cut-off of 1.1% HM). This includes in-situ THM of 84.0 million tonnes at
a 1.1% HM cut-off with 3,950kt zircon, 2,020kt rutile, 2,570kt leucoxene and 66,810kt of ilmenite totalling 75,340kt of
VHM.
The McCall’s Project contains 67 million tonnes of chloride ilmenite grading 59-66% TiO2 and is considered a longer-
term strategic asset (refer to ASX announcement 03 October 2018 and 24 September 2019). Retention status was
approved for tenement E70/4922 during the period. All McCall’s Project Mineral Resource are now under retention.
Derby East Project
Sheffield is investigating the potential of the Derby East Project tenements, located 25km east of Derby, to yield
commercial quantities of sand for construction purposes. A technical report was completed for the Derby East Project.
Samples attained from drilling are planned to be analysed to test for end-user requirements.
Barton and Ceduna Project
The exploration licence applications of Sherrin (ELA2018/0046), Sleeper (ELA2019/0152) and Camel (ELA2019/0145)
were withdrawn removing Sheffield’s interest from South Australia.
Figure 1: Location of Sheffield’s Dampier Mineral Sands Projects
9
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Ore Reserve
Sheffield announced an updated Ore Reserve totalling 748 million tonnes @ 11.2% HM for the Thunderbird deposit, in
the Kimberley Region of Western Australia, on 31 July 2019, and has completed a Bankable Feasibility Study Update for
development of the Thunderbird Mineral Sands Project, on 31 July 2019. The Ore Reserve estimate is based on the
current, July 2016 Thunderbird Mineral Resource estimate, announced to the ASX on 5 July 2016. Measured and
Indicated Mineral Resources were converted to Proved and Probable Ore Reserves respectively, subject to mine design,
modifying factors and economic evaluation.
Ore Reserve for Dampier Project at 30 June 2020
Dampier Project Ore Reserve 1,2,3,4
Deposit
Ore Reserve
Category
Ore
Tonnes
(millions)
In-situ HM
Tonnes7
(millions)
HM
Grade
(%)
Valuable HM Grade (In-situ)5
Zircon
(%)
HiTi
Leuc
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
Proved
Thunderbird
Probable
Total
219
529
748
30.0
13.7
1.02
0.30
0.28
3.68
16.1
14.0
53.4
10.1
0.79
0.26
0.27
2.87
14.5
10.5
83.8
11.2
0.86
0.27
0.27
3.11
15.0
11.6
Deposit
Ore Reserve
Category
Ore
Tonnes
(millions)
In-situ HM
Tonnes7
(millions)
HM
Grade
(%)
Mineral Assemblage6
Zircon
(%)
HiTi
Leuc
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
Proved
Thunderbird
Probable
Total
219
529
748
30.0
13.7
53.4
10.1
83.8
11.2
7.4
7.8
7.7
2.2
2.0
26.9
16.1
14.0
2.6
2.7
28.4
14.5
10.5
2.4
2.4
27.8
15.0
11.6
1) The Ore Reserve estimate was prepared by Entech Pty Ltd and first disclosed under the JORC Code (2012), refer to ASX announcement 31 July
2019 for further details including Table 1. Ore Reserve is reported to a design overburden surface with appropriate consideration of modifying factors,
costs, mineral assemblage, process recoveries and product pricing.
2) Ore Reserve is a sub-set of Mineral Resource
3) HM is within the 38µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -38µm fraction and oversize is the
+1mm fraction.
4) Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns may not equal.
5) The in-situ assemblage grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy
mineral assemblage at the Resource block model scale.
6) Mineral assemblage as a percentage of HM Grade, it is derived by dividing the in-situ grade by the HM grade.
7) The contained in-situ tonnes derived from HM and material tonnes from information in the Mineral Resource tables
The Ore Reserve estimate was prepared by Entech Pty Ltd, an experienced and prominent mining engineering
consultancy with appropriate mineral sands experience in accordance with the JORC Code (2012 Edition). The Ore
Reserve is estimated using all available geological and relevant drill hole and assay data, including mineralogical
sampling and test work on mineral recoveries and final product qualities.
The Company is not aware of any new information or data that materially affects the information included in the Ore
Reserve estimate and confirms that all material assumptions and technical parameters underpinning the estimate
continue to apply and have not materially changed.
10
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Mineral Resource
The Company’s Mineral Resources are detailed below:
Mineral Resources for Dampier Project at 30 June 2020
Dampier Project Mineral Resources 1,2,3
Deposit
(cut-off)
Mineral
Resource
Category
Cut-off
(THM%)
Material
Tonnes
(millions)
In-situ
HM
Tonnes7
(millions)
HM
Grade
(%)
Mineral Assemblage
Zircon
(%)
HiTi
Leuc6
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
Thunderbird4
(low-grade)
Night Train5
(low-grade)
All Dampier
(low-grade)
Thunderbird4
(high-grade)
Night Train5
(high-grade)
All Dampier
(high-grade)
Measured
Indicated
Inferred
Total
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Inferred
Total
Measured
Indicated
Inferred
Total
3.0
3.0
3.0
3.0
1.2
1.2
3.0
3.0
Various
Various
7.5
7.5
7.5
7.5
2.0
2.0
7.5
7.5
Various
Various
510
2,120
600
3,230
130
130
510
2,120
730
3,360
220
640
180
1,050
50
50
220
640
230
1,090
45
140
38
223
4.2
4.2
45
140
42
227
32
76
20
127
3.0
3.0
32
76
23
130
8.9
6.6
6.3
6.9
3.3
3.3
8.9
6.6
5.8
6.8
14.5
11.8
10.8
12.2
5.9
5.9
14.5
11.8
9.7
11.9
8.0
8.4
8.4
8.3
14
14
8.0
8.4
8.9
8.4
7.4
7.6
8.0
7.6
14
14
7.4
7.6
8.8
7.8
2.3
2.7
2.6
2.6
5.4
5.4
2.3
2.7
2.9
2.7
2.1
2.4
2.5
2.3
5.6
5.6
2.1
2.4
2.9
2.4
2.2
3.1
3.2
2.9
46
46
2.2
3.1
7.5
3.7
1.9
2.1
2.4
2.1
49
49
1.9
2.1
8.6
3.2
27
28
28
28
22
22
27
28
27
28
27
28
28
27
18
18
27
28
27
27
18
16
15
16
8.7
8.7
18
16
13
15
16
14
13
15
10.2
10.2
16
14
12
14
12
9
8
9
2.2
2.2
12
9
7.2
8.7
15
11
9
11
2.2
2.2
15
11
7.2
11
1) Night Train: The Mineral Resources estimate was prepared by Optiro Pty Ltd and first disclosed under the JORC Code (2012) refer to ASX
announcement 31 January 2019 for further details including Table 1. The Mineral Resource reported above 1.2% HM cut-off is inclusive of (not
additional to) the Mineral Resource reported above 2.0% HM cut-off. Thunderbird: The Mineral Resource estimate was prepared by Optiro Pty Ltd
and first disclosed under the JORC Code (2012) refer to ASX announcement5 July 2016 fur further details including Table 1. The Dampier Project
Mineral Resources are reported inclusive of (not additional to) Ore Reserves. Thunderbird: The Mineral Resource reported above 3.0% HM cut-off is
inclusive of (not additional to) the Mineral Resource reported above 7.5% HM cut-off.
2) HM is within the 38µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -38µm fraction and oversize is the
+1mm fraction.
3) Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns may not equal.
4) Thunderbird: Estimates of Mineral Assemblage are presented as percentages of the Heavy Mineral (HM) component of the deposit, as determined
by magnetic separation, QEMSCANTM and XRF. Magnetic fractions were analysed by QEMSCANTM for mineral determination as follows: Ilmenite: 40-
70% TiO2 >90% Liberation; Leucoxene: 70-94% TiO2 >90% Liberation; High Titanium Leucoxene (HiTi Leucoxene): >94% TiO2 >90% Liberation; and
Zircon: 66.7% ZrO2+HfO2 >90% Liberation. The non-magnetic fraction was submitted for XRF analysis and minerals determined as follows: Zircon:
ZrO2+HfO2/0.667 and High Titanium Leucoxene (HiTi Leucoxene): TiO2/0.94.
5) Night Train: Estimates of Mineral Assemblage are presented as percentages of the Heavy Mineral (HM) component of the deposit, as determined
by magnetic separation, QEMSCANTM and XRF for one of 12 composite samples. Magnetic fractions were analysed by QEMSCANTM for mineral
determination as follows: Ilmenite: 40-70% TiO2 >90% Liberation; Leucoxene: 70-90% TiO2 >90% Liberation; High Titanium Leucoxene (HiTi
Leucoxene) and Rutile 90% TiO2 >90% Liberation, and Zircon: 66.7% ZrO2+HfO2 >90% Liberation. The non-magnetic fraction was submitted for XRF
analysis and minerals determined as follows: Zircon: ZrO2+HfO2/0.667 and High Titanium Leucoxene (HiTi Leucoxene): TiO2/0.94. HM assemblage
determination- was by the QEMSCANTM process for 11 of 12 composite samples which uses observed mass and chemistry to classify particles
according to their average chemistry, and then report mineral abundance by dominant % mass in particle. For the TiO2 minerals the following
breakpoints were used to distinguish between Ilmenite 40% to 70% TiO2, Leucoxene 70% to 90% TiO2, High Titanium Leucoxene and Rutile > 90%,
Screening of the heavy mineral was not required.
6) HiTi Leucoxene and Rutile (%) combined for Night Train at a >90% TiO2 (as one assemblage sample utilised=> 90% rutile and HiTi Leucoxene), HiTi
Leucoxene for Thunderbird > 94% TiO2
7) The contained in-situ tonnes for the valuable heavy minerals were derived from information from the Mineral Resource tables. The in-situ
assemblage grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral
assemblage at the Resource block model scale.
11
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Mineral Resources for Eneabba Project at 30 June 2020
Eneabba Project Mineral Resources 1,2
Deposit
(cut-off)
Mineral
Resource
Category
Cut-off
(THM%)
Material
Tonnes
(millions)
In-situ HM
Tonnes11
(thousands)
HM
Grade
(%)
Mineral Assemblage
Zircon
(%)
Rutile
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Yandanooka4,6,8
Durack4,6,7,8
Drummond
Crossing3,4,6,8
Robbs Cross5,6,8
Thomson5,8
West Mine
North3,4,6,9
Ellengail3,4,9,10
All Eneabba
Project
(various)
Measured
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
2.0
2.0
2.0
2.0
2.0
2.0
1.4
Various
Various
Various
2.6
57.7
0.4
60.8
20.7
5.6
26.3
35.5
3.3
38.8
14.0
3.8
17.8
26
26
10.2
1.8
12.0
6.5
5.3
11.8
2.6
144.6
46.0
193.3
112
1,726
7
1,845
600
148
748
838
77
915
261
77
338
516
516
748
48
796
346
218
565
112
4,519
1,091
5,723
4.3
3.0
1.5
3.0
2.9
2.6
2.8
2.4
2.3
2.4
1.9
2.0
1.9
2.0
2.0
7.3
2.7
6.6
5.3
4.1
4.8
4.3
3.1
2.4
3.0
10
12
11
12
14
14
14
14
11
14
15
14
15
19
19
6
9
6
10
10
10
10
12
15
12
2.1
3.6
3.0
3.5
2.9
2.6
2.9
10.3
9.0
10.2
12.7
10.9
12.3
13.8
13.8
6.5
8.6
6.6
8.0
8.2
8.1
2.1
6.1
10.3
6.8
2.3
3.7
4.4
3.6
3.7
7.4
4.4
3.4
2.7
3.4
5.0
4.1
4.8
5.4
5.4
1.8
2.1
1.8
10.4
8.4
9.6
2.3
3.9
5.8
4.2
72
69
68
70
71
64
70
53
56
54
47
50
48
42
42
48
50
48
66
62
64
72
62
51
60
15
15
20
15
14
16
14
14
12
14
6
6
6
18
18
11
17
12
15
15
15
15
14
16
14
Over
size
(%)
11.3
11.4
21.9
11.5
14.7
18.3
15.5
7.7
7.2
7.7
6.2
8.1
6.6
6.9
6.9
2.3
3.0
2.4
3.2
2.5
2.9
11
9
8
9
1) The Mineral Resource estimates were prepared by Optiro Pty Ltd and first disclosed under the JORC Code (2012). Refer to ASX announcement 03
October 2018 for Yandanooka, Durack, Drummond Crossing, West Mine North, Ellengail for further details and table 1. Refer to December 2017
Quarterly Activities Report for Robbs Cross and Thomson deposits for further details and table 1.
2) All tonnages and grades have been rounded to reflect the relative uncertainty of the estimate, thus the sums of columns may not equal.
3) HM %: Samples from 1989 and 1996 (Drummond Crossing, Ellengail and West Mine North) were analysed using a -75 µm slimes / +2 mm oversize
screen. Separation of HM% was by heavy liquid TBE (density 2.84 g/ml) from the -710µm+75µm fraction.
4) HM %: RGC samples from 1998 and Iluka samples (Drummond Crossing, Durack, Ellengail, West Mine North and Yandanooka) were analysed using
a -53 µm slimes / +2 mm oversize screen. Separation of total HM% was by heavy liquid TBE (density 2.90 g/ml) from the -710µm+53µm fraction.
5) HM %: Samples from Robbs Cross and Thomson analysed by Diamantina Laboratories in Perth using a -45 µm slimes / +1 mm oversize screen
(method DIA_HLS_45µm_1mm). Separation of total HM% was by heavy liquid TBE (density 2.96g/ml) from the -45 µm+1mm fraction.
6) HM %: Samples from Drummond Crossing, Durack, West Mine North and Yandanooka were analysed by Western Geolabs in Perth using a -53 µm
slimes / +1 mm oversize screen. Separation of total HM% was by heavy liquid TBE (density 2.96 g/ml) from the +53µm-1mm fraction.
7) Reported below an upper cut-off grade of 35% slimes.
8) Estimates of mineral assemblage are presented as percentages of the total heavy mineral (THM) component of the deposit, as determined by
QEMSCAN analysis. For the TiO2 minerals specific breakpoints are used to distinguish between rutile (>95% TiO2), leucoxene (85-95% TiO2) and
ilmenite (<55-85% TiO2).
9) At West Mine North and Ellengail mineral assemblage data determined by Iluka using Method 4 (HMC is separated into magnetics and non-
magnetics) was used with the Sheffield QEMSCANTM data.
10) At Ellengail mineral assemblage data determined by Iluka using Method 3 (magnetic separation and XRF analysis) was used with the Sheffield
QEMSCANTM data and Iluka Method 4 data.
11) The contained in-situ tonnes for the valuable heavy minerals were derived from information from the Mineral Resource tables. The in-situ
assemblage grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral
assemblage at the Resource block model scale.
12
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Mineral Resources for McCalls Project at 30 June 2020
McCalls Project Mineral Resources 1,2,3,4,7
Deposit
(cut-off)
Mineral
Resource
Category
Cut-off
(THM%)
Material
Tonnes
(millions)
In-situ
HM
Tonnes6
(millions)
HM
Grade
(%)
Zircon
(%)
Rutile
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
Mineral Assemblage5
McCalls
Mindarra
Springs
All
McCalls
Project
Indicated
Inferred
Total
Inferred
Total
Indicated
Inferred
Total
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1,630
1,980
3,600
2,200
2,200
1,630
4,180
5,800
23.3
24.4
47.7
36.3
36.3
2.3
60.7
84.0
1.4
1.2
1.3
1.6
1.6
1.4
1.5
1.4
5.2
5.0
5.1
4.2
4.2
5.2
4.5
4.7
3.3
3.8
3.6
0.9
0.9
3.3
2.1
2.4
2.8
3.2
3.0
3.1
3.1
2.8
3.2
3.1
77
81
79
80
80
77
81
79
21
26
24
20
20
21
23
22
1.1
1.1
1.1
5.1
5.1
1.1
3.2
2.6
1) The Mineral Resource estimates were prepared by Optiro Pty Ltd and first disclosed under the JORC Code (2012) refer to ASX announcement 03
October 2018 for McCalls and Mindarra Spring details and table 1.
2) All tonnages and grades have been rounded to reflect the relative uncertainty of the estimate, thus the sums of columns may not equal.
3) HM is within the 45µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -45µm fraction and oversize is the
+1mm fraction.
4) Reported below an upper cut-off grade of 35% slimes.
5) Estimates of mineral assemblage (Sheffield) are presented as percentages of the total heavy mineral (HM) component of the deposit, as determined
by QEMSCAN analysis. For the TiO2 minerals specific breakpoints are used to distinguish between rutile (>95% TiO2), leucoxene (85-95% TiO2) and
ilmenite (<55-85% TiO2). Estimates of mineral assemblage (BHP) HM assemblage determination was by magnetic separation and observation (grain-
counting)
6) The contained in-situ tonnes for the valuable heavy minerals were derived from information from the Mineral Resource tables. The in-situ
assemblage grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral
assemblage at the Resource block model scale.
7) Excludes Mineral Resources within the Mogumber Nature Reserve
GOVERNANCE AND INTERNAL CONTROLS
Mineral Resource and Ore Reserve are compiled by qualified Sheffield personnel and / or independent consultants
following industry standard methodology and techniques. The underlying data, methodology, techniques and
assumptions on which estimates are prepared are subject to internal peer review by senior Company personnel, as is
JORC compliance. Where deemed necessary or appropriate, estimates are reviewed by independent consultants.
Competent Persons named by the Company are members of the Australasian Institute of Mining and Metallurgy and /
or the Australian Institute of Geoscientists and qualify as Competent Persons as defined in the JORC Code 2012.
COMPETENT PERSONS AND COMPLIANCE STATEMENTS
The information in this report that relates to Exploration Results is based on information compiled by Mr Seb Gray, a
Competent Person who is a Member of Australian Institute of Geoscientists (AIG). Mr Gray is a full-time employee of
Sheffield Resources Ltd and has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition
of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Gray consents
to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The Company’s Ore Reserves and Mineral Resources Statement is based on information first reported in previous ASX
announcements by the Company. These announcements are listed below and are available to view on Sheffield’s website
www.sheffieldresources.com.au. Mineral Resources and Ore Reserves reported for the Dampier Project and Mineral
Resources reported for the Eneabba and McCalls Projects, are prepared and disclosed under the JORC Code 2012. The
Company confirms that it is not aware of any new information or data that materially affects the information included in
the relevant original market announcements and that all material assumptions and technical parameters underpinning
the estimates in the relevant original market announcement continue to apply and have not materially changed.
13
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
The information in this report that relates to the estimation of the Ore Reserve is based on information compiled by Mr
Per Scrimshaw, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr
Scrimshaw is employed by Entech Pty Ltd and has sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Mr Scrimshaw consents to the inclusion in the report of the matters based on his information in the form and context in
which it appears.
The information in this report that relates to the estimation of the Mineral Resources is based on information compiled
by Mrs Christine Standing, a Competent Person who is a Member of the Australian Institute of Geoscientists (AIG) and
the Australasian Institute of Mining and Metallurgy (AusIMM). Mrs Standing is a full-time employee of Optiro Pty Ltd and
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
the activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mrs Standing consents to the inclusion
in this report of the matters based on her information in the form and context in which it appears.
The information in this report that relates to the Thunderbird Mineral Resource is based on information compiled under
the guidance of Mr Mark Teakle, a Competent Person who is a Member of the Australian Institute of Geoscientists (AIG)
and the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Teakle is an employee of Sheffield Resources and
has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to
the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Teakle consents to the inclusion in the
report of the matters based on his information in the form and context in which it appears.
The Competent Persons for reporting of Mineral Resources and Ore Reserves in the relevant original market
announcements are listed below. The Company confirms that the form and context in which the Competent Persons’
findings are presented have not been materially modified from the relevant original market announcement.
Ore Reserves and Mineral Resources prepared and first disclosed under the JORC Code 2012:
Item
Report title
Thunderbird Ore Reserve
Thunderbird Mineral Resource
Night Train Mineral Resource
Robbs Cross Mineral Resource
Thomson Mineral Resource
Yandanooka Mineral Resource
Durack Mineral Resource
Doubles Measured
Thunderbird 10% Ore Reserve
Increase
Sheffield
Mineral Resource at Thunderbird
High Grade Maiden Mineral
Resource at Night Train
Quarterly Activities Report for The
Period Ended 31 December 2017
Quarterly Activities Report for the
Period Ended 31 December 2017
Mineral Resource and Ore Reserve
Statement
Mineral Resource and Ore Reserve
Statement
Mineral Resource and Ore Reserve
Statement
Crossing Mineral
Drummond
Resource
West Mine North Mineral Resource Mineral Resource and Ore Reserve
Ellengail Mineral Resource
McCalls Mineral Resource
Statement
Mineral Resource and Ore Reserve
Statement
Mineral Resource and Ore Reserve
Statement
Report date
31 July 2019
05 July 2016
31 January 2019
Competent
person(s)
P. Scrimshaw
M. Teakle
C. Standing
C. Standing
30 January 2018
C. Standing
30 January 2018
C. Standing
03 October 2018
C. Standing
03 October 2018
C. Standing
03 October 2018
C. Standing
03 October 2018
C. Standing
03 October 2018
C. Standing
03 October 2018
C. Standing
Mindarra Springs Mineral Resource Mineral Resource and Ore Reserve
03 October 2018
C. Standing
Statement
14
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Item
Name
Company
Exploration Results
Mineral Resource Reporting
Mineral Resource Estimation
Ore Reserve
Mr Seb Gray
Mr Mark Teakle
Mrs Christine Standing
Mr Per Scrimshaw
Sheffield Resources
Sheffield Resources
Optiro
Entech
Professional
Affiliation
MAIG
MAIG, MAusIMM
MIAG, MAusIMM
MAusIMM
SUPPORTING INFORMATION REQUIRED UNDER ASX LISTING RULES, CHAPTER 5
The supporting information below is required, under Chapter 5 of the ASX Listing Rules, to be included in market
announcements reporting estimates of Mineral Resources and Ore Reserves.
PREVIOUSLY REPORTED INFORMATION
This report includes information that relates to Exploration Results, Mineral Resources and Ore Reserves prepared and
first disclosed under the JORC Code (2012) and a Bankable Feasibility Study. The information was extracted from the
Company’s previous ASX announcements as follows:
• Mineral Resource and Ore Reserve Statement: “MINERAL RESOURCE AND ORE RESERVE STATEMENT” 24
September, 2019
Thunderbird Ore Reserve: “THUNDERBIRD ORE RESERVE UPDATE” 31 July 2019
Thunderbird BFS Update: “BFS UPDATE MATERIALLY REDUCES CAPITAL”, 31 July 2019
•
•
• Quarterly activities “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2020” 07 July, 2020
• Quarterly activities “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 MARCH 2019” 08 April, 2020
• Quarterly activities “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 DECEMBER 2019” 31
January, 2020
• Quarterly activities “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 SEPTEMBER 2019” 28
October, 2019
• Night Train Inferred Resource and Mineral Assemblage results “HIGH GRADE MAIDEN MINERAL RESOURCE AT
•
•
•
NIGHT TRAIN” 31 January 2019
Yandanooka, Durack, Drummond Crossing, West Mine North, Ellengail, McCalls and Mindarra Springs Resource
Estimates and including Mineral Resource and Ore Statement “MINERAL RESOURCE AND RESERVE
STATEMENT” 03 October, 2018
Thomson and Robbs Cross Mineral Resources: “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31
DECEMBER 2017” 30 January, 2018
Thunderbird Mineral Resource: “SHEFFIELD DOUBLES MEASURED MINERAL RESOURCE AT THUNDERBIRD” 5
July, 2016
These announcements are available to view on Sheffield’s website www.sheffieldresources.com.au
15
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
The Company confirms that it is not aware of any new information or data that materially affects the information included
in the relevant market announcements and, in the case of estimates of Mineral Resources, Ore Reserves and the
Bankable Feasibility Study, that all material assumptions and technical parameters underpinning the estimates in the
relevant market announcement continue to apply and have not materially changed. The Company confirms that the form
and context in which the Competent Person’s findings are presented have not been materially modified from the relevant
original market announcements.
FORWARD LOOKING, CAUTIONARY STATEMENTS AND RISK FACTORS
The contents of this report reflect various technical and economic conditions at the time of writing. Given the nature of
the resources industry, these conditions can change significantly over relatively short periods of time. Consequently,
actual results may vary from those contained in this report.
Some statements in this report regarding estimates or future events are forward-looking statements. They include
indications of, and guidance on, future earnings, cash flow, costs and financial performance. Forward-looking statements
include, but are not limited to, statements preceded by words such as “planned”, “expected”, “projected”, “estimated”,
“may”, “scheduled”, “intends”, “anticipates”, “believes”, “potential”, "predict", "foresee", "proposed", "aim", "target",
"opportunity", “could”, “nominal”, “conceptual” and similar expressions. Forward-looking statements, opinions and
estimates included in this report are based on assumptions and contingencies which are subject to change without
notice, as are statements about market and industry trends, which are based on interpretations of current market
conditions. Forward-looking statements are provided as a general guide only and should not be relied on as a guarantee
of future performance. Forward-looking statements may be affected by a range of variables that could cause actual
results to differ from estimated results and may cause the Company’s actual performance and financial results in future
periods to materially differ from any projections of future performance or results expressed or implied by such forward-
looking statements. So there can be no assurance that actual outcomes will not materially differ from these forward-
looking statements.
16
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The Directors present their report together with the financial statements of the consolidated entity consisting of Sheffield
Resources Limited and the entities it controlled for the year ended 30 June 2020. Sheffield Resources Limited
(‘Sheffield’ or ‘parent entity’ or ‘Company’) and its controlled entities (collectively known as the ‘Group’ or ‘consolidated
entity’) are domiciled in Australia.
DIRECTORS
The names of the directors in office at any time during or since the end of year are:
Mr David Archer
Mr Will Burbury
Mr Bruce Griffin (appointed 10 June 2020)
Mr Ian Macliver (appointed 1 August 2019)
Mr Bruce McFadzean
Mr Bruce McQuitty (retired 19 November 2019)
Mr John Richards (appointed 1 August 2019)
Other than as denoted above, all Directors have been in office since the start of the financial year to the date of this
report.
COMPANY SECRETARY
Mr Mark Di Silvio held the position of Company Secretary at the end of the financial year.
PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN NATURE OF ACTIVITIES
The principal activities of the Group during the course of the financial year were mineral sands exploration and
development within Australia. There have been no significant changes to the state of affairs of the Group to the date of
this report.
DIVIDENDS
No dividends have been paid or declared during the financial year ended 30 June 2020 and the Directors do not
recommend the payment of a dividend in respect of the financial year.
REVIEW OF OPERATIONS
Refer to pages 5-9 for the Review of Operations and pages 10-16 for Ore Reserves and Mineral Resources.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Disclosure of information regarding likely developments in the operations of the Company in future financial years and
the expected results of those operations is likely to result in unreasonable prejudice to the Company. Therefore, this
information has not been presented in this report.
CORPORATE GOVERNANCE STATEMENT
The Board of Sheffield Resources has adopted the spirit and intent of the 3rd Edition of the Corporate Governance
Principles and Recommendations of the ASX Corporate Governance Council.
The Company’s Corporate Governance Statement may be accessed from the Governance section of the Company’s
website, www.sheffieldresources.com.au. This document is regularly reviewed to address any changes in governance
practices and the law.
ENVIRONMENTAL REGULATION
The Group’s exploration activities are governed by environmental regulation. To the best of the Directors’ knowledge the
Group believes it has adequate systems in place to ensure the compliance with the requirements of applicable
environmental legislation and is not aware of any material breach of those requirements during the financial year and
up to the date of the Directors’ Report.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify all the Directors and key management personnel of the Company for any liabilities
to another person (other than the company or related body corporate) that may arise from their designated position of
the Company, except where the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the Directors and Officers of the
Company against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
17
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has
not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.
NON-AUDIT SERVICES
During the year the Company has not used its auditors, HLB Mann Judd, to complete any non-audit related work (2019:
nil).
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.
AFTER BALANCE DATE EVENTS
On 11 August 2020, the Company announced that it had entered into a Non-Binding Term Sheet with Yangang (Hong
Kong) Co., Ltd’s wholly owned subsidiary YGH Australian Investment Pty Ltd (Yansteel) to form a joint venture to develop
the Thunderbird Mineral Sands Project. Yansteel will invest A$130.1m in equity to acquire a 50% interest in the Project.
Formation of the Yansteel and Sheffield Joint Venture is subject to final negotiation, agreement, and execution of formal
agreements, Foreign Investment Review Board process completion and, where required, any other applicable regulatory
or shareholder approval.
The Company also welcomed Yansteel as a significant shareholder after the Board approved the issue of 34,259,421
fully paid ordinary shares (comprising 9.9% of the post-issue share capital) in Sheffield to Yansteel for a total
consideration of approximately A$12.9m (Share Placement). The Share Placement occurred on August 11, 2020.
Yansteel and Sheffield have also executed a take-or-pay offtake agreement for 100% of the ilmenite produced from
Stage 1 of the Project.
SHARES ISSUED SINCE THE END OF THE FINANCIAL YEAR
On 11 August 2020, the Company issued 34,259,421 fully paid ordinary shares to YGH Australia Investment Pty Ltd
(Yansteel) for a total consideration of approximately A$12.9m.
ROUNDING
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated)
pursuant to the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which
the class order applies.
18
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
INFORMATION ON DIRECTORS
Mr John Richards
Non-Executive Chair
Qualifications:
B. Econ (Hons)
Appointed:
Experience:
1 August 2019 (Appointed as Non-Executive Chair on 19 March 2020)
Mr Richards is an economist with more than 35 years’ experience in the resources
industry. During this time, he has held strategy and business development
positions within mining companies as well as in investment banks and private
equity groups. He has been involved in a wide range of mining M&A transactions
in multiple jurisdictions.
Previous positions include Group Executive – Strategy and Business Development
at Normandy Mining Ltd, Head of Mining and Metals Advisory (Australia) at
Standard Bank, Managing Director at Buka Minerals Ltd and Operating Partner at
GNRI.
Special responsibilities:
Non-Executive Chair, Chair of the Audit and Risk Committee, Member of the
Remuneration and Nomination Committee
Interest in shares, options and
rights at the date of this report:
480,000 Options
Other current public company
directorships:
Past pubic company
directorships held over the last
three years:
Saracen Mineral Holdings Ltd (appointed May 2019)
Adriatic Metals PLC (resigned 8 July 2020)
Mr Bruce McFadzean
Managing Director
Qualifications:
Dip. Mining, FAusIMM
Appointed:
Experience:
November 2015
A qualified mining engineer with more than 40 years’ experience in the global
resources industry. Mr McFadzean has led the financing, development and
operation of several new mines around the world. Mr McFadzean’s technical,
operating and corporate experience includes gold, silver, nickel, diamonds, iron
ore and mineral sands.
Mr McFadzean’s professional career includes 15 years with BHP Billiton and Rio
Tinto in a variety of positions and four years as Managing Director of successful
ASX gold miner Catalpa Resources Limited. Under his management, Catalpa’s
market capitalisation grew from $10 million to $1.2 billion following the merger
to create Evolution Mining Limited.
Special responsibilities:
Managing Director
Interest in shares, options and
rights at the date of this report:
1,716,445 Ordinary Shares
2,060,701 Performance Rights
Other current public company
directorships:
None
Past public company
directorships held over the last
three years:
Indiana Resources Limited (resigned January 2019)
19
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Mr Bruce Griffin
Commercial Director
Qualifications:
B.Ch.Eng, B.A.Econ, MBA
Appointed:
Experience:
10 June 2020
Mr Griffin most recently held the position of Senior Vice President Strategic
Development of Lomon Billions Group, the world’s third largest producer of high-
quality titanium dioxide pigments. Bruce previously held executive management
positions in several resource companies, including acting as the Chief Executive
Officer and a director of TZ Minerals International Pty. Ltd. (TZMI), the leading
independent consultant on the global mineral sands industry, Chief Executive
Officer and a director of World Titanium Resources Ltd, a development stage
titanium project in Africa and as Vice President Titanium for BHP Billiton.
Special responsibilities:
Commercial Director
Interest in shares, options and
rights at the date of this report:
Other current public company
directorships:
3,000,000 Performance Rights (issued subject to Shareholder approval)
Titanium Corporation Inc. (since 2019)
Past public company
directorships held over the last
three years:
None
Mr David Archer
Non-Executive Director
Qualifications:
B.Sc (Hons)
Appointed:
Experience:
December 2009 (Previously Technical Director until 19 March 2020)
Mr Archer is a geologist with over 30 years’ experience in exploration and mining
in Australia. He has held senior positions with major Australian mining
companies, including Renison Goldfields Consolidated Ltd and ten years as a
Director of Archer Geological Consulting specialising in project generation,
geological mapping and project evaluation.
Mr Archer was a consultant to ASX listed Atlas Iron Limited and Warwick
Resources Limited and was responsible for significant iron ore discoveries for
both companies in the Pilbara. Other major West Australian discoveries include
the Raleigh and Paradigm gold mines and the Magellan lead mine.
Special responsibilities:
Non-Executive Director
Interest in shares, options and
rights at the date of this report:
8,411,549 Ordinary Shares
1,066,189 Performance Rights
550,000 Options
Other current public company
directorships:
Carawine Resources Limited (since 2017)
Past public company
directorships held over the last
three years:
None
20
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Mr Will Burbury
Non-Executive Director
Qualifications:
Appointed:
Experience:
B.Comm, LLB
June 2007
Mr Burbury practised as a corporate lawyer with a leading Australian law firm prior
to entering the mining and exploration industry in 2003. During this time, he has
been actively involved in the identification and financing of many resources’
projects in Australia and overseas and has held senior management positions and
served on boards of several private and publicly listed companies.
Special responsibilities:
Non-Executive Director, member of the Audit and Risk Committee, member of the
Remuneration and Nomination Committee
Interest in shares, options and
rights at the date of this report:
8,255,483 Ordinary Shares
Other current public company
directorships:
Carawine Resources Limited (since 2017)
Past public company
directorships held over the last
three years:
None
Mr Ian Macliver
Non-Executive Director
Qualifications:
BCom, FCA, SF Fin, FAICD
Appointed:
Experience:
1 August 2019
Mr Macliver is a highly experienced listed company director and Chartered
Accountant with significant experience as a senior executive and director of both
resource and industrial companies, with particular responsibility for company
strategy development, capital raising and all other forms of corporate
development initiatives. Mr Macliver is Executive Chairman of Grange Consulting
Group Pty Ltd which provides specialist corporate advisory services to both listed
and unlisted companies.
Special responsibilities:
Non-Executive Director, Chair of the Remuneration and Nomination Committee,
member of the Audit and Risk Committee
Interest in shares, options and
rights at the date of this report:
100,000 Ordinary Shares
480,000 Options
Other current public company
directorships:
Western Areas Limited – Chairman (since October 2011)
MMA Offshore Limited (appointed January 2020)
Past pubic company
directorships held over the last
three years:
Otto Energy Limited (resigned November 2019)
21
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Mr Bruce McQuitty
Non-Executive Director
Qualifications:
B.Sc, MEconGeol
Appointed:
Experience:
December 2009 (retired 19 November 2019)
Mr McQuitty has more than 35 years’ experience in the mining and civil
construction industries and was previously Managing Director of Warwick
Resources Limited prior to its merger with Atlas Iron Limited in 2009. Prior to that
he held senior positions with Consolidated Minerals Limited, Renison Goldfields
Consolidated Limited and Gympie Gold Limited. Mr McQuitty has significant
technical expertise in exploration, project generation, feasibility, underground
mining and engineering geology and has managed exploration teams in Australia
and overseas.
Interest in shares, options and
rights at the date of this report:
Not applicable as no longer a director
Other current public company
directorships:
None
Past public company
directorships held over the last
three years:
Carawine Resources Limited (retired November 2019)
Mr Mark Di Silvio
Company Secretary
Qualifications:
B.Bus, CPA, MBA
Appointed
Experience:
15 February 2016
Mr. Di Silvio is a CPA qualified accountant with experience in the resources sector
spanning three decades. Mr Di Silvio held a variety of finance-based roles within
the gold mining sector early in his career, before gaining oilfield experience with
Woodside Energy Limited through the financial management of joint ventures and
the financial management of Woodside’s Mauritanian oilfield assets. Mr Di Silvio
has held executive positions including Central Petroleum Limited, Centamin Plc,
Ausgold Limited and Mawson West Limited.
22
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
DIRECTOR’S MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the
number of meetings attended by each Director is shown in the table below:
Directors’ Meetings
Audit & Risk Committee
Meetings held
while a director
Meetings
attended
Meetings held
while a
committee
member
Meetings
attended
Remuneration & Nomination
Committee
Meetings held
while a
committee
member
Meetings
attended
Mr W Burbury
Mr B McFadzean
Mr B McQuitty
Mr Ian Macliver
Mr John Richards
Mr Bruce Griffin
Mr D Archer
OPTIONS
13
13
7
11
11
1
13
13
13
7
11
11
1
13
1
-
-
1
1
-
-
1
-
-
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At the date of this report, the unissued ordinary shares of Sheffield Resources Limited under option are as follows:
Date of expiry
Exercise price A$
Series
Number under option
19 March 2021
24 November 2020
24 November 2020
24 November 2020
30 November 2023
RIGHTS
1.16
0.001
0.001
0.84
0.65
4
8,9
10
11
13
1,358,998
1,300,000
663,039
235,000
960,000
4,517,037
At the date of this report, the unissued ordinary shares of Sheffield Resources Limited under right are as follows:
Date of expiry
Exercise price A$
Number under right
30 November 2021
1 March 2022
26 October 2025
1 December 2025
31 December 20211
Nil
Nil
Nil
Nil
Nil
1Issued subject to shareholder approval
1,700,000
267,438
792,960
5,430,920
3,000,000
11,191,318
23
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report sets out the remuneration strategy and arrangements for Key Management Personnel (KMP) of Sheffield
Resources Limited for year ended 30 June 2020. This report forms part of the Directors’ Report and has been audited
in accordance with the requirements of the Corporations Act 2001 and its regulations.
KEY MANAGEMENT PERSONNEL
For the purposes of this report KMP of the Group 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 Company and are detailed in the table below:
Name
Position
Non-Executive Directors
J Richards
D Archer
W Burbury
I Macliver
Senior Executives
Chairman
Director
Director
Director
B McFadzean
Managing Director
B Griffin
M Di Silvio
S Pether
Commercial Director
Chief Financial Officer and Company Secretary
Chief Operating Officer
BOARD POLICY ON KEY MANAGEMENT PERSONNEL REMUNERATION
The Board is responsible for the nomination and appointment of Directors and the remuneration of its Directors,
Managing Director and Senior Executives. To assist the Board in meeting its obligations and to address all matters
pertaining to Board nomination and executive remuneration, the Board has set in place a Nomination & Remuneration
Committee during the reporting period, operating through the previously adopted Nomination and Remuneration
Committee Charter.
NON-EXECUTIVE DIRECTOR REMUNERATION
In accordance with best practice corporate governance, the structure of Non-Executive Director and Senior Executive
remuneration is separate and distinct. Shareholders approve the aggregate or total fees payable to Non-Executive
Directors, with the current approved limit being $600,000 (excluding share-based payments). The fees paid to Non-
Executive Directors are set at levels that reflect both the responsibilities of, and the time commitments required from,
each Non-Executive Director to discharge their duties and are not linked to the performance of the Company.
Shareholders approved the issue of options to Non-Executive Directors and share-based payments were made to Mr
John Richards and Mr Ian Macliver during the reporting period.
All Non-Executive Directors have their indemnity insurance paid by the Group.
24
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Non-Executive Directors receive a fixed fee remuneration consisting of a base fee and statutory superannuation
contributions made by the Group as set out below:
Base fees1
Non- Executive Chairman
Other Non-Executive Directors
2020
A$
100,000
80,000
2019
A$
75,000
50,000
1All Non-Executive Directors agreed to a reduction in base fees of 25 - 50% commencing on 1 April 2020 until further notice.
Share Options
Grants Made in 2020
During the year the Company granted 960,000 share options to Non-Executives as approved at the Company Annual
General Meeting held on 19 November 2019. The options were issued for nil consideration and have an exercise price
of $0.65 per option. The options expire on 30 November 2023.
Measurement of Share Options
Options have been valued using the Black-Scholes option valuation method. The following table lists the inputs to the
model for options outstanding to Non-Executives during the period:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of options (years)
Exercise price ($)
Grant date share price ($)
Fair value at grant date ($)
Grant date
Expiry date
Number issued
Number outstanding
Series 13
-
70
0.75
4.03
0.65
0.34
0.128
19 Nov 2019
30 Nov 2023
960,000
960,000
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to participate
in new issues of capital offered to shareholders during the currency of the options. All shares allotted upon the exercise
of options will rank pari passu in respect with other shares.
SENIOR EXECUTIVE REMUNERATION
External and independent executive remuneration advice may be sought by the Board in determining remuneration
strategy.
In determining the level and composition of Senior Executive remuneration year on year, the Board takes into
consideration the operational and economic circumstances the Company is facing and likely to face in the medium term
together with the complexity and responsibility associated with each role.
25
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The Policy of the Board in determining Senior Executive remuneration levels is to:
•
•
•
•
•
•
•
•
provide total remuneration and employment conditions which will enable the Company to attract and retain high
quality senior executives to the business;
align remuneration with the creation and maximisation of shareholder value and the achievement of Company
strategy, business objectives and core values;
ensure the structure and quantum of remuneration is competitive and reflective of the external market in which the
Company operates;
target positioning of total remuneration against market at generally between the 50th and 75th percentile;
provide a mix of fixed and variable, performance-based remuneration to drive superior performance;
reward the achievement of individual and Company objectives thus promoting a balance of individual performance
and teamwork across the executive management team;
provide a fair, equitable and scalable system that allows for sustainable business growth and is regularly reviewed
for relevance and reliability; and
is transparent, easily understood and is acceptable to Shareholders.
The Board’s specific remuneration aims for the year ending 30 June 2020 were to:
•
•
retain a core group of Senior Executives at the early stage in the Company’s development;
ensure cash preservation measures were set in place across the Company. This included a reduction in the number
of Senior Executives employed by the Company and agreed targeted base salary reductions for Senior Executives
retained by the Company;
• maintain a Long Term Incentive (LTI) scheme measured over a four-year period and designed to create alignment
with the Thunderbird project objectives, sustainability aims and maximise overall shareholder value;
•
•
ensure effective benchmarking of fixed and variable remuneration for Senior Executives for a clearly defined peer
group of similar companies to ensure remuneration is fair and competitive; and
retain total remuneration at or around the 50th percentile of market.
Use of External Remuneration Consultants in year ending 30 June 2020
No External Remuneration Consultants were engaged during the financial year.
Remuneration Mix
Senior Executive remuneration consists of the following key elements:
•
•
fixed annual remuneration (FAR); and
variable remuneration (LTI).
Fixed Annual Remuneration
The level of FAR is set to provide a base level of remuneration which is both appropriate to the position and is competitive
in the market. FAR includes a base salary, inclusive of superannuation. Allowances and other benefits may be provided,
including leased motor vehicles and additional superannuation, provided that no extra cost is incurred by the Group.
FAR is reviewed annually. Any adjustments to FAR for Senior Executives must be approved by the Board. The Managing
Director determines the FAR of other Senior Executives within specific guidelines approved by the Board
Consistent with a Company-wide strategy review in early 2020, Senior Executive remuneration was reviewed. As a result
of this review and in conjunction with the previous remuneration strategy, the cash component of the Senior Executive’s
FAR was reduced up to 25% as a contribution to the Company’s strategy of cash preservation.
26
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Long Term Incentive Plan
The LTI program comprises of the Employee Share Option Plan (ESOP) and Performance Rights Plan (PRP). Each plan
contains performance hurdles that need to be achieved prior to award.
The objective of the LTI program is to:
•
•
•
align the interest of Senior Executives more closely with the interests of Shareholders by providing an opportunity to
earn shares in the Company;
provide Senior Executives with the opportunity to share in any future growth in value of the Company; and
provide greater incentive for Senior Executives to focus on the Company’s longer-term goals.
Employee Share Option Plan
The ESOP is an equity component of at-risk remuneration. The Board determined the quantum of options to be issued
to the relevant Senior Executive dependent on FAR and seniority of position in the Company.
Share options have certain non-market-based performance conditions. These non-market-based performance
conditions have previously included performance measures such as:
• Completion of feasibility study
•
•
• Milestone construction and production measures
Project financing completion
Securing offtake agreements
Change of Control Measures
In the event of a change of control event occurring, options that are not exercisable will become exercisable on and from
the date of the change of control event occurring.
Grants Made in 2020
There were no share options granted during 2020.
Share Options Vested in 2020
No share options vested during 2020.
Share Options Expired
During the year 2,500,000 share options issued under the Employee Share Option Plan expired without meeting the
non-market-based performance vesting conditions.
Measurement of Share Options
Under the terms and conditions of the options issued to employees, each option gives the holder the right to subscribe
to one fully paid ordinary share. Any option not exercised before the expiry date will lapse on the expiry date.
27
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Options have been valued using the Black-Scholes option valuation method. The following table lists the inputs to the
model for options outstanding to Senior Executives during the period:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of options (years)
Exercise price ($)
Grant date share price ($)
Fair value at grant date ($)
Grant date
Expiry date
Number issued
Number outstanding
Series 9
-
87
2.00
3.02
0.001
0.53
0.529
17 Nov 2016
24 Nov 2020
2,100,000
1,300,000
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to participate
in new issues of capital offered to shareholders during the currency of the options. All shares allotted upon the exercise
of options will rank pari passu in respect with other shares.
Performance Rights Plan
The PRP is a long term (4 year), performance centred, at risk scheme based on the issue of performance rights. An
amount calculated as a percentage of the Senior Executive’s FAR is used to calculate the number of performance rights
to be granted. The percentage can range from 50% to 100% of FAR based on the seniority of position in the Company.
A performance right is a right which, upon the satisfaction or waiver of the relevant vesting conditions entitles its holder
to receive fully paid ordinary shares for nil consideration.
Performance Hurdles
The Group uses two performance hurdle measures to determine the proportion of performance rights which vest, if at
all, as follows:
• 80% of the performance rights are subject to an Absolute Total Shareholder Return (ATSR); and
• 20% of the performance rights are subject to a Sustainability Performance hurdle.
Absolute TSR Performance Hurdle
The Board considers that ATSR is an appropriate performance hurdle because it ensures that a proportion of each
participant’s remuneration is explicitly linked to shareholder value and ensures that participants only receive a benefit
where there is a corresponding direct benefit to shareholders.
TSR measures the return received by shareholders from holding shares in the Company over a particular period. TSR is
calculated by taking into account the growth in a Company’s share price over the period as well as the capital returns
and dividends received during that period.
ATSR refers to the setting of threshold, target and stretch levels of TSR for the Company at the beginning of the
performance period. Thus, they are determined in advance having regard to expectations of the Company’s
performance. The ATSR performance rights are separated into two tranches, each with equal weighting of 50%.
The Tranche 1 ATSR performance rights were calculated by reference to the 30-day VWAP for the period ended 31 August
2018. The Tranche 2 ATSR performance rights will be calculated by reference to the 30-day VWAP for the period ending
30 November 2020. The Board may, in its absolute discretion, set a different reference price for the Tranche 2 ATSR
performance rights where it could potentially be unfair or unjust to the Senior Executive or the Group.
To the extent that the performance hurdles are not satisfied by the applicable testing dates, the performance rights will
automatically lapse.
28
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The proportion of the Tranche 1 ATSR performance rights and Tranche 2 ATSR performance rights that will vest will be
determined on the basis of the following scale.
Weighting
Measure
ATSR (%)
Performance
vested (%)
Rights
Performance Period
Tranche 1:
Tranche 1:
Less than 16%
50%
Increase
in Sheffield
share price between 31
Aug 2018 and 30 Nov
2020
16%
(lower threshold)
0%
25%
Tranche 2:
Tranche 2:
50%
Increase
share price between
in Sheffield
Between 16% to 26%
(being
upper
the
threshold)
Pro rata between 25%
and 50%
Between 26% to 40%
(being the target)
Pro rata between 50%
and 75%
Tranche 1:
31 Aug 2018 to
30 Nov 2020
Tranche 2:
30 Nov 2020 to
30 Nov 2022
30 Nov 2020 and 30
Nov 2022
Between 40% to 50%
(being the stretch)
Pro rata between 75%
and 100%
50% or above
100%
Sustainability Performance Hurdles
The Company aims to optimise shared value and develop long term trusting relationships with the communities in which
we operate.
The Board therefore considers that sustainability measures are important inclusions as performance hurdles due to the
Thunderbird projects success being central to an effective Social Licence to Operate in the Kimberley region, particularly
in relation to local and Aboriginal economic, social and cultural advancement.
The Sustainability Performance Rights are subject to up to three separate hurdles, allocated and weighted to the Senior
Executive by the Board, according to the individual’s role. These hurdles are as follows;
• Meet Aboriginal Employment Targets
• Meet Local Content Employment Targets
• Develop and Implement Succession Planning system
The Aboriginal and Local Employment targets relate to the make-up of the Company’s employee base for the Thunderbird
Project (Employment Hurdle), particularly in relation to developing a locally based workforce, employed on a Drive in and
Drive out (DIDO) basis rather than a Fly in and Fly out (FIFO) basis, with high rates of Aboriginal employment.
Specifically, the Employment Hurdles are as follows:
Aboriginal Employment
Threshold: a minimum of 3% Aboriginal employment by end calendar Year 1 of Thunderbird operations (in production)
and a minimum of 8% by end Year 2 of operations.
Target: a minimum of 5% Aboriginal employment by end calendar Year 2 of Thunderbird operations (in production) and
a minimum of 10% by end Year 2 of operations.
Local Content Employment
Threshold: ensure 40% Thunderbird employees (excluding EPC contractor) are employed on a DIDO basis by end
calendar Year 1 of Thunderbird operations (in production) and 60% by end Year 2 of operations.
Target: ensure 60% Thunderbird employees (excluding EPC contractor) are employed on a DIDO basis by end calendar
Year 1 of Thunderbird operations (in production) and 75% by end Year 2 of operations.
29
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
For the performance rights subject to the Employment Hurdles:
(a) 50% of those performance rights will vest if relevant Threshold is achieved;
(b) 100% of those performance rights will vest if relevant Target is achieved;
(c) pro rata vesting of those performance rights will occur for achievements between the relevant Threshold and Target
and;
(d) none of those performance rights will vest if the relevant Threshold is not achieved.
Succession Plan
The Board considers an effective Succession Plan as an important tool in both talent management and risk management
for the Company. The hurdle involves the development and implementation of the Succession Plan for specified Senior
Executive roles across the four-year measurement period until 30 November 2022 (Succession Plan Hurdle).
For the performance rights subject to the Succession Plan Hurdle:
(e) 100% of those performance rights will vest if the Succession Plan Hurdle is achieved; and
(f) None of those performance rights will best if the Succession Plan Hurdle is not achieved.
The performance period for both the Employment Hurdles and the Succession Plan Hurdle is 30 November 2022, but it
is noted that the Thresholds and Target for the Employment Hurdles will be measured as at the end of calendar years 1
and 2 after the Thunderbird Project is in operation.
Performance Rights Grants Made in 2020
Performance rights were granted to eligible participants in June 2020 and are subject to Shareholder approval.
Performance Rights on Cessation of Employment
Employment cessation on or before 30 November 2020
Unless performance rights held by a Senior Executive who ceases to hold a position of employment, office, or
engagement with the Company on or before 30 November 2020 have vested and become capable of exercise before
the Senior Executive leaves or vested and become capable or exercise as a result of the Senior Executive leaving, those
performance rights will not be exercisable by the Senior Executive and will lapse, unless otherwise determined at the
Board’s discretion.
Employment cessation after 30 November 2020 but prior to 1 January 2023
Vested performance rights held by a Senior Executive who ceases to, or has ceased to, hold a position of employment,
office, or engagement with the Company after 30 November 2020 but before 1 January 2023 will be exercisable by the
Senior Executive unless the Board has determined that the Senior Executive’s position of employment, office or
engagement was terminated for cause.
Performance Rights on Change of Control
All vesting conditions attached to performance rights will be deemed to be automatically waived on a change of control
event occurring. Accordingly, in the case of a change of control event occurring, all performance rights will be deemed
to have vested and will be eligible for exercise.
Commercial Director Performance Rights
Performance Hurdles
Performance Rights issued to the Commercial Director upon receipt of Shareholder approval are subject to the following
performance hurdles:
•
Announcement to the ASX that the Company has made a Final Investment Decision for the development of the
Company’s Thunderbird Mineral Sands Project.
The performance period for these rights is 31 December 2021.
Performance Rights on Cessation of Agreement
All unvested Performance Rights will lapse in accordance with the Company’s Performance Rights Plan.
Hedging of At-Risk Remuneration
A participant in the PRP must not enter into an arrangement if the arrangement would have the effect of limiting the
exposure of the participant to risk relating to performance rights that have not vested.
Performance Rights Vested in 2020
No performance rights have vested during 2020.
30
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
During the year ending 30 June 2020, the Group revised the target vesting date relating to rights with performance
measures. The following table describes the change in vesting date:
Measure
Original vesting date
Revised vesting date Grant date
Condition vesting date related
to
1
2
30 Jun 2019
30 Nov 2021
22 Nov 2017
Construction complete
31 Dec 2019
30 Nov 2021
22 Nov 2017
Commercial production
31
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The table below shows the fixed and variable remuneration for key management personnel.
Short-term employee benefits
Post -employment
benefits
Long term employee
benefits
Share based
payments
Salary & fees
Cash bonus
Non-monetary2
Superannuation
Long service leave
Options & rights1
Total
2020
$
$
$
$
$
$
$
Non-Executive Directors
J Richards
D Archer3
W Burbury4
I Macliver
B McQuitty5
Senior Executives
B McFadzean6
B Griffin7
M Di Silvio8
S Pether9
72,083
199,148
49,063
68,334
24,375
379,616
20,000
321,091
321,455
1,455,165
-
-
-
-
-
-
-
-
-
-
8,327
10,536
9,184
8,327
3,428
12,395
770
12,001
12,001
76,969
6,966
13,320
4,661
6,492
2,316
21,986
-
21,096
21,003
97,840
-
-
-
-
-
-
-
-
-
-
61,288
148,664
317,355
540,359
-
62,908
61,288
144,441
-
30,119
556,282
970,279
15,290
36,060
322,912
677,100
62,228
416,687
1,396,643
3,026,617
Note 1: The fair value of the options is calculated at the date of grant using a Black-Scholes valuation model and allocated to each reporting period starting from grant date to vesting date.
Note 2: Non-monetary benefits include, where applicable, the cost to the Company of providing fringe benefits and the fringe benefits and the fringe benefits tax on those benefits and the attributable non-
cash benefit applied by virtue of the Company’s Directors and Officer Liability policy.
Note 3: Mr Archer resigned as Technical Director on 29 February 2020. $58,940 of salary and fees described above relates to the payment of accrued annual and long service leave entitlements. In the
prior financial year, Mr Archer entered into an agreement with the Company to defer a portion of his salary and superannuation. Mr Archer has waived his right to repayment of all amounts deferred under the
agreement.
32
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Note 4: In the prior financial year, Mr Burbury entered into an agreement with the Company to defer a portion of his salary and superannuation. Mr Burbury has waived his right to repayment of all amounts
deferred under the agreement.
Note 5: Mr McQuitty retired as Non-Executive Director on 19 November 2019. In the prior financial year, Mr McQuitty entered into an agreement with the Company to defer a portion of his salary and
superannuation. $10,950 of Mr McQuitty’s salary and superannuation described above relates to the repayment of deferred salary and superannuation under this agreement.
Note 6: During the prior financial year, Mr McFadzean entered into an agreement with the Company to defer a portion of his salary and superannuation. $95,813 of Mr McFadzean’s salary and superannuation
described above relates to the repayment of deferred salary and superannuation under this agreement.
Note 7: Mr Griffin commenced as Commercial Director on 10 June 2020.
Note 8: During the prior financial year, Mr Di Silvio entered into an agreement with the Company to defer a portion of his salary and superannuation. $82,125 of Mr Di Silvio’s salary and superannuation
described above relates to the repayment of deferred salary and superannuation under this agreement.
Note 9: During the prior financial year, Mr Pether entered into an agreement with the Company to defer a portion of his salary and superannuation. $82,125 of Mr Pether’s salary and superannuation
described above relates to the repayment of deferred salary and superannuation under this agreement.
33
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Short-term employee benefits
Post -employment
benefits
Long term employee
benefits
Share based
payments
Salary & fees
Cash bonus
Non-monetary
Superannuation
Long service leave
Options & rights
Total
2019
$
$
$
$
$
$
$
Non-Executive Directors
W Burbury
B McQuitty
Senior Executives
B McFadzean
D Archer
M Di Silvio
S Pether
75,000
50,000
292,768
242,830
312,494
290,541
1,263,633
-
-
-
-
-
-
-
9,196
12,873
13,541
15,101
14,433
13,207
78,351
7,125
4,750
24,850
21,431
24,159
24,373
-
-
-
-
-
91,321
67,623
523,029
854,188
37,523
211,060
527,945
-
-
210,072
561,158
704,957
1,033,078
106,688
37,523
1,649,118
3,135,313
34
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The relative proportions of those elements of remuneration of key management personnel that are linked to
performance:
Fixed remuneration
Remuneration linked to performance
2020
2019
2020
2019
Non-Executive Directors
J Richards
D Archer
W Burbury
I Macliver
B McQuitty
Senior Executives
B McFadzean
B Griffin
M Di Silvio
S Pether
59%
41%
100%
58%
100%
43%
58%
52%
85%
-
60%
100%
-
100%
39%
-
63%
32%
41%
59%
-
42%
-
57%
42%
48%
15%
-
40%
-
-
-
61%
-
37%
68%
35
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
EQUITY INSTRUMENTS
Options
The table below outlines the movement of the options held by Non-Executive Directors and Senior Executives during the year:
2020
Grant date
Opening
balance vested
& exercisable
Opening
balance
unvested
Granted as
compensation
Vested
Vested %
Exercised
Forfeited
Closing
balance vested
and
exercisable
Closing
balance
unvested
J Richards
Performance
n/a
Remuneration
19 Nov 2019
I Macliver
Performance
n/a
Remuneration
19 Nov 2019
B McFadzean
Performance
2 Nov 2015
Remuneration
n/a
D Archer
Performance
1 May 2016
Remuneration
n/a
M Di Silvio
Performance
15 Feb 2016
Remuneration
n/a
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,500,000
-
550,000
-
500,000
-
-
-
-
480,000
480,000
100%
-
-
-
480,000
480,000
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
480,000
-
480,000
(2,500,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
550,000
-
500,000
-
36
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Exercised
No options granted as compensation were exercised during the current year.
EQUITY INSTRUMENTS
Rights
3,000,000 performance rights were issued to eligible participants of the Performance Rights plan subject to shareholder approval. The table below outlines the movement of the rights
held by Senior Executives during the year:
Grant date
Opening
balance
unvested
B Griffin1
Granted
Issue Price $
Vested
Vested %
Exercised
Forfeited
2020
10 Jun 20
-
3,000,000
$0.145
B McFadzean
2020
29 Nov 18
2,060,701
D Archer
2020
29 Nov 18
1,066,189
M Di Silvio
2020
29 Nov 18
1,097,547
S Pether
2020
22 Nov 17
1,700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1Rights issued to Mr B Griffin are subject to shareholder approval
Exercised
No performance rights granted as compensation in the current and/or prior year were exercised.
Closing
balance
unvested
Fair value $
3,000,000
$435,000
2,060,701
$1,586,740
1,066,189
$820,966
1,097,547
$845,111
1,700,000
$1,256,300
37
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
KEY MANAGEMENT PERSONNEL SHAREHOLDINGS
The relevant interest of each key management personnel in the share capital (held directly or indirectly of the Company
at 30 June 2020 were:
2020
Balance at 1 July
2019
Granted as
remuneration
Received on
exercise of options
Other changes
Balance at 30 June
2020
Non-Executive Directors
J Richards
D Archer
W Burbury
I Macliver
-
8,373,117
8,205,483
-
Senior Executives
B McFadzean
1,666,445
B Griffin
M Di Silvio
S Pether
-
591,854
302,009
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
38,462
8,411,579
50,000
8,255,483
100,000
100,000
50,000
1,716,445
-
-
50,000
641,854
128,206
430,215
SENIOR EXECUTIVE EMPLOYMENT AGREEMENTS
Remuneration and other terms of employment for the following key management personnel are formalised in
employment agreements. All contracts with Senior Executives may be terminated early by either party with notice, per
individual agreement, and subject to the termination payments as detailed below:
Name
Position
Commencement date
Base salary (including
superannuation)
Termination benefit
B McFadzean
Managing Director
2 Nov 2015
$287,438
3 months’ notice
B Griffin
Commercial Director
10 June 2020
$240,000
1 months’ notice
M Di Silvio
CFO & Company
Secretary
15 Feb 2016
$246,375
4 months’ notice
S Pether
Chief Operating Officer
1 Apr 2017
$246,375
4 months’ notice
OTHER TRANSACTIONS WITH KMP AND THEIR RELATED PARTIES
There were no other transactions with KMP or their related parties.
END OF AUDITED REMUNERATION REPORT
38
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
AUDITOR INDEPENDENCE
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the
Company with an Independence Declaration in relation to the audit of the annual report.
This Independence Declaration is set out on page 40 and forms part of this Directors’ report for the year ended 30 June
2020.
Signed in accordance with a resolution of the Directors.
Bruce McFadzean
Managing Director
Perth, 26 August 2020
39
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Sheffield Resources Limited for
the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
26 August 2020
D I Buckley
Partner
40
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2020
BNotes
B5
B5
B5
B5
B5
B6
BContinuing operations
BOther income
BEmployee benefits expense
BCorporate expenses
BOther expenses
BResults from operating activities
BNet financing income/(cost)
BNet loss before income tax
BIncome tax benefit
BLoss for the year
BOther comprehensive income
BOther comprehensive income for the year, net of tax
BTotal comprehensive loss for the year
B2020
B$’000
B196
B(4,794)
B(2,957)
B(736)
B(8,291)
B(79)
B(8,370)
B2019
B$’000
B138
B(6,365)
B(4,051)
B(47)
B(10,325)
B75
B(10,250)
B-
B-
B(8,370)
B(10,250)
B-
B-
B(8,370)
B(10,250)
BBasic and diluted loss per share
B7
B(2.81)
B(4.18)
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes
41
0
1
2
3
4
5
6
7
8
9
1
0
1
1
1
2
1
3
1
4
1
5
1
6
1
7
1
8
1
9
2
0
2
1
2
2
2
3
2
4
2
5
2
6
2
7
2
8
2
9
3
0
3
1
3
2
3
3
3
4
3
5
3
6
3
7
3
8
3
9
4
0
4
1
4
2
4
3
4
4
4
5
4
6
4
7
4
8
4
9
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Financial Position
As at 30 June 2020
BCurrent assets
BCash and cash equivalents
BTrade and other receivables
BInventories
BTotal current assets
BNon-current assets
BOther non-current assets
BPlant and equipment
BRight of use asset
BMine development
BExploration and evaluation expenditure
BTotal non-current assets
BTotal assets
BCurrent liabilities
BTrade and other payables
BInterest bearing liabilities
BEmployee benefits
BTotal current liabilities
BNon-current liabilities
BInterest bearing liabilities
BProvisions
BTotal non-current liabilities
BTotal liabilities
BNet assets
BEquity
BIssued capital
BReserves
BAccumulated losses
BTotal equity
BNotes
B10
B11
B12
B13
B13
B13
B14
B15
B16
B8
B16
B17
B2020
B$’000
B7,083
B500
B-
B7,583
B3,364
B3,719
B1,393
B64,979
B10,137
B83,592
B2019
B$’000
B2,698
B324
B11
B3,033
B6,624
B4,232
B2,058
B53,952
B9,641
B76,507
B91,175
B79,540
B2,576
B19
B205
B2,800
B1,492
B63
B1,555
B4,355
B4,334
B164
B364
B4,862
B1,975
B63
B2,038
B6,900
B86,820
B72,640
B120,559
B11,123
B(44,862)
B86,820
B99,469
B9,663
B(36,492)
B72,640
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
42
5
0
5
1
5
2
5
3
5
4
5
5
5
6
5
7
5
8
5
9
6
0
6
1
6
2
6
3
6
4
6
5
6
6
6
7
6
8
6
9
7
0
7
1
7
2
7
3
7
4
7
5
7
6
7
7
7
8
7
9
8
0
8
1
8
2
8
3
8
4
8
5
8
6
8
7
8
8
8
9
9
0
9
1
9
2
9
3
9
4
9
5
9
6
9
7
9
8
9
9
1
0
0
1
0
1
1
0
2
1
0
3
1
0
4
1
0
5
1
0
6
1
0
7
1
0
8
1
0
9
1
1
0
1
1
1
1
1
2
1
1
3
1
1
4
1
1
5
1
1
6
1
1
7
1
1
8
1
1
9
1
2
0
1
2
1
1
2
2
1
2
3
1
2
4
1
2
5
1
2
6
1
2
7
1
2
8
1
2
9
1
3
0
1
3
1
1
3
2
1
3
3
1
3
4
1
3
5
1
3
6
1
3
7
1
3
8
1
3
9
1
4
0
1
4
1
1
4
2
1
4
3
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Changes in Equity
As at 30 June 2020
Notes
Issued capital
Accumulated
losses
$’000
$’000
80,602
-
-
19,843
(976)
-
(26,242)
(10,250)
(10,250)
-
-
-
Share-based
payment
reserve
$’000
7,325
-
-
-
-
2,338
Total
$’000
61,685
(10,250)
(10,250)
19,843
(976)
2,338
99,469
(36,492)
9,663
72,640
-
(8,370)
-
22,463
(1,373)
(8,370)
-
-
-
-
-
-
-
120,559
-
(44,862)
1,460
11,123
(8,370)
(8,370)
22,463
(1,373)
1,460
86,820
Balance at 1 July 2018
Loss for the year
Total comprehensive loss for the
year
Shares issued during the year
Share issue costs
Recognition of share-based
payments
Balance as at 30 June 2019
Loss for the year
Total comprehensive loss for the
year
Shares issued during the year
Share issue costs
Recognition of share-based
payments
Balance as at 30 June 2020
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
43
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2020
Notes
Cash flows from operating activities
Receipts from customer
Payments to supplier and employees
Interest received
Interest paid
Net cash (used in) operating activities
10
Cash flows from investing activities
Research and development tax refund
Payments for exploration and evaluation expenditure
Payments for plant and equipment
Proceeds from disposal assets
Payments for development expenditure
Payments for bank guarantees
Payments for financial liability
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Payments for lease liability
Net cash provided by financing activities
16
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
10
2020
$’000
7
(4,384)
74
(154)
(4,457)
670
(1,349)
-
1,755
(5,403)
(67)
(3,260)
(7,654)
18,000
(1,373)
(131)
16,496
4,385
2,698
7,083
2019
$’000
-
(6,265)
262
(157)
(6,160)
1,046
(2,453)
(102)
-
(24,503)
-
(4,580)
(30,592)
17,448
(1,127)
(13)
16,308
(20,444)
23,142
2,698
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
44
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
BASIS OF PREPARATION
Note 1: Corporate information
Note 2: Reporting entity
Note 3: Basis of preparation
PERFORMANCE FOR THE YEAR
Note 4: Segment reporting
Note 5: Revenue and expenses
Note 6: Income tax
Note 7: Loss per share
EMPLOYEE BENEFITS
Note 8: Employee benefits
Note 9: Share-based payments
ASSETS
Note 10: Cash and cash equivalents
Note 11: Trade and other receivables
Note 12: Other non-current assets
Note 13: Property, plant and equipment
Note 14: Exploration and evaluation expenditure
EQUITY AND LIABILITIES
Note 15: Trade and other payables
Note 16: Interest bearing liabilities
Note 17: Capital and reserves
Note 18: Capital management
FINANCIAL INSTRUMENTS
Note 19: Financial instruments – fair value and risk management
GROUP COMPOSITION
Note 20: List of subsidiaries
Note 21: Parent entity information
OTHER INFORMATION
Note 22: Contingent liabilities
Note 23: Remuneration of auditors
Note 24: Commitments
Note 25: Related party transactions
Note 26: Key management personnel disclosures
Note 27: Events occurring after the reporting period
ACCOUNTING POLICIES
Note 28: Critical accounting estimates and assumptions
Note 29: New and revised standards and interpretations
45
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
BASIS OF PREPARATION
This section of the financial report sets out the Group’s (being Sheffield Resources Limited and its controlled entities)
accounting policies that relate to the Financial Statements as a whole. Where an accounting policy is specific to one
Note, the policy is described in the Note to which it relates.
The Notes include information which is required to understand the Financial Statements and is material and relevant to
the operations and the financial position and performance of the Group. Information is considered relevant and material
if:
•
•
•
•
Accounting policies have been consistently applied to all of the years presented unless otherwise stated.
the amount is significant due to its size or nature
the amount is important in understanding the results of the Group
it helps to explain the impact of significant changes in the Group’s business
it relates to an aspect of the Group’s operations that is important to its future performance
NOTE 1: CORPORATE INFORMATION
The consolidated financial report of Sheffield Resources Limited for the year ended 30 June 2020 was authorised for
issue in accordance with a resolution of the Directors on 26 August 2020. The Board of Directors has the power to
amend the Consolidated Financial Statements after issue.
Sheffield Resources Limited (the Company or Sheffield) is a for-profit company limited by shares whose shares are
publicly traded on the Australian Securities Exchange. The Company and its subsidiaries were incorporated and
domiciled in Australia. The registered office and principal place of business of the Company is Level 2, 41-47 Colin
Street, West Perth, WA 6005.
The nature of the operations and principal activities of the Company are disclosed in the Directors’ Report.
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated)
pursuant to the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which
this class order applies.
NOTE 2: REPORTING ENTITY
The Financial Statements are for the Group consisting of Sheffield Resources Limited and its subsidiaries. A list of the
Group’s subsidiaries is provided in Note 20.
NOTE 3: BASIS OF PREPARATION
These general purpose Financial Statements have been prepared in accordance with Australia Accounting Standards
and Interpretations issued by the Australia Accounting Standards Board (AASB) and the Corporations Act 2001. The
Consolidated Financial Statements of Sheffield Resources Limited also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial statements have been
prepared on a going concern basis.
These Financial Statements have been prepared under the historical cost convention except for certain financial assets
and liabilities which are required to be measured at fair value.
Basis of consolidation
a)
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
b)
Foreign currency translation
Functional and Presentation Currency
Both the functional and presentation currency of Sheffield is Australian Dollars. Each entity in the Group determines its
own functional currency and items included in the Financial Statements of each entity are measured using that currency.
46
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange at balance date.
All translation differences relating to transactions and balances denominated in foreign currency are taken to the
Consolidated Statement of Comprehensive Income.
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 rate at the date when the fair value was determined.
Goods and services tax (‘GST’)
c)
Revenues, expenses and assets are recognised net of the amount of GST except:
• when 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
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as
operating cash flows. Commitments and contingencies are disclosed net of amount of GST recoverable from, or payable
to, the taxation authority.
d)
Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
PERFORMANCE FOR THE YEAR
The section provides additional information about those individual line items in the Statement of Comprehensive Income
that the Directors consider most relevant in the context on the operations of the entity.
NOTE 4: SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker (CODM). The CODM is responsible for allocating resources and assessing performance of the operating
segments and has been identified as the Board of Sheffield Resources Limited.
Description of Projects
i.
Thunderbird Project
This project consists of mineral sands tenements located in the Canning Basin that form part of the potential
Thunderbird mineral sand mining operation.
ii.
Sheffield Project
This project consists of mineral sand exploration tenements located in Western Australia.
iii.
Unallocated items
Part of the following items and associated assets and liabilities are not allocated to operating segments as they
are not considered part of the core operations of any segment:
•
•
corporate expenses; and
share-based payment expense
47
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 4: SEGMENT REPORTING (continued)
2020
Other income
Employees benefit expense
Corporate expenses
Depreciation - non-mine site assets
Depreciation – right of use assets
Other income/(expenses)
Impairment of deferred exploration and
evaluation
Share-based payments
Net financing income
Segment results
Sheffield
project
$’000
Thunderbird
project
$’000
-
-
-
-
-
-
(120)
-
-
-
-
-
(426)
(70)
-
(767)
-
(119)
Other
$’000
196
(3,334)
(2,236)
(86)
(139)
151
-
(1,460)
40
Tax benefit
Net loss after tax
Segment assets
Segment liabilities
Capital expenditure
2019
Other income
Employees benefit expense
Corporate expenses
Depreciation - non-mine site assets
Depreciation – right of use assets
Other income/(expenses)
Impairment of deferred exploration and
evaluation
Share-based payments
Net financing income
Segment results
Tax benefit
Net loss after tax
Segment assets
Segment liabilities
Capital expenditure
6,806
78,651
-
3,171
5,718
1,184
323
14,508
-
14,831
Sheffield
project
$’000
Thunderbird
project
$’000
-
-
-
-
-
-
(47)
-
-
(47)
-
-
-
(216)
(81)
-
-
-
(140)
(437)
6,604
69,132
Other
$’000
138
(4,027)
(3,501)
(102)
(151)
-
-
(2,338)
215
(9,766)
3,804
1,940
-
585
4,960
1,847
2,615
Total
$’000
196
(3,334)
(2,236)
(512)
(209)
151
(887)
(1,460)
(79)
-
(8,370)
91,175
4,355
Total
$’000
138
(4,027)
(3,501)
(318)
(232)
-
(47)
(2,338)
75
-
(10,250)
79,540
6,900
5,047
48
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 5: REVENUE AND EXPENSES
Other income
Other
2020
$’000
196
196
2019
$’000
138
138
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised to the
extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
Employee benefits expense
Wages and salary
Superannuation
Share-based payments – employee benefits
Other
Corporate expenses
Legal fees
Conferences and seminars
Operating lease variable outgoings
Consultancy fees
Depreciation – non-mine site assets
Depreciation – right of use assets
Other
Other expenses
Impairment of deferred exploration and evaluation expenditure
Profit on disposal of asset
2020
$’000
2,921
219
1,460
194
4,794
2020
$’000
48
18
127
2,309
475
209
(229)
2,957
2020
$’000
887
(151)
736
2019
$’000
3,198
280
2,338
549
6,365
2019
$’000
586
26
120
2,690
318
232
79
4,051
2019
$’000
47
-
47
49
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 5: REVENUE AND EXPENSES (continued)
Net financing income/(cost)
Interest income
Interest expense on lease liability
2020
$’000
75
(154)
(79)
2019
$’000
233
(158)
75
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
NOTE 6: INCOME TAX
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in
the financial statements as follows:
Accounting loss before income tax
Income tax benefit calculated at 27.5%
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income:
Share-based payments
Capital gain on Carawine demerger
Accounting gain on Carawine demerger
Accruals
Other non-deductible expenses
Other deductible items
Share issue costs
Immediate deduction for exploration
Unrecognised tax losses
Research & development tax offset
2020
$’000
(8,370)
(2,302)
687
-
-
(1)
759
(1,306)
(408)
(380)
2,951
-
-
2019
$’000
(10,250)
(2,819)
643
-
-
17
199
(557)
(333)
(669)
3,519
-
-
50
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 6: INCOME TAX (continued)
The tax rate used in the above reconciliation is the corporate tax rate of 27.5% payable by certain Australian corporate
entities on taxable profits under Australian tax law.
The Company has tax losses arising in Australia. The tax benefit of these losses of $18.392m (2019: $16.519m) is
available indefinitely for offset against future taxable profits of the companies in which the losses arose, subject to
ongoing conditions for deductibility being met.
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
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 by the balance date.
Unrecognised deferred tax assets and liabilities
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax losses
Exploration and evaluation
Development expenditure
2020
$’000
1,304
18,392
(6,801)
(2,636)
10,259
2019
$’000
(336)
16,519
(2,651)
(5,438)
8,094
The deductible temporary difference and tax losses do not expire under current tax legislation. Deferred tax assets have
not been recognised in respect of these items because it is not probable that future taxable profit will be available against
which the Company can utilise the benefits thereof. The tax rate used to express the temporary differences as deferred
tax balances is 26%, being the likely tax rate applicated to the Group for the 30 June 2021 financial year.
Deferred income tax is provided on all temporary differences at the balance 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 except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference 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 credits and unused tax losses can be utilised, except:
• when 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; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
51
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 6: INCOME TAX (continued)
The carrying amount of deferred income tax assets is reviewed at each balance 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. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
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 date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Tax consolidation legislation
Sheffield Resources Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of
these entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income, directly in equity or as a result of a business combination. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
NOTE 7: LOSS PER SHARE
Loss used in calculating basic and diluted loss per share
Loss used in calculating basic and diluted loss per share from
continuing operations
Weighted average number of ordinary shares used in the
calculation of basic and diluted loss per share
2020
$’000
(8,370)
(8,370)
2019
$’000
(10,250)
(10,250)
Number
Number
297,735,185
245,390,657
As the Group is in a loss position the conversion of options to shares is not considered dilutive because conversion would
cause the loss position to decrease.
Basic earnings per share is determined by dividing the operating loss after income tax by the weighted average number
of ordinary shares outstanding during the financial year.
Diluted earnings per share adjusted the figures used in the determination of basic earnings per share by taking into
account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the
exercise of partly paid shares or options outstanding during the financial year.
52
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
EMPLOYEE BENEFITS
This section of the Notes includes information that must be disclosed to comply with accounting standards and other
pronouncements relating to the remuneration of employees and consultants of the Group, but that is not immediately
related to individual line items in the Financial Statements.
NOTE 8: EMPLOYEE BENEFITS
Employee benefits
2020
$’000
205
2019
$’000
364
The provision for employee benefits represents annual leave and long service leave payable.
Provisions for legal claims are recognised when the Group has a legal or constructive obligation as a result of past events.
It is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of managements’ best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave
expected to be settled within 12 months of the balance date are recognised as current liabilities in respect of employees’
services up to the balance date. They are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulated sick leave are recognised when the leave is taken and are measured at the rates paid or
payable.
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave not
expected to be settled within 12 months of the balance date are recognised in non-current liabilities in respect of
employees’ services up to the balance date. They are measured as the present value of the estimated future outflows
to be made by the Group.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the balance date.
Consideration is given to expect future wage and salary levels, experience of employee departures, and period of service.
Expected future payments are discounted using market yields at the balance date on national government bonds with
terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
NOTE 9: SHARE-BASED PAYMENTS
The Company provides benefits to employees (including Directors) in the form of share-based payments whereby
employees render services in exchange for shares or rights over shares (‘share-based payments’).
The cost of these share-based payments with employees is measured by reference to the fair value at the date they are
granted. The value is determined using an appropriate valuation model. In valuing share-based payments, no account
is taken of any performance conditions, other than conditions linked to the price of the shares of Sheffield (‘market
conditions’) if applicable.
The cumulative expense is recognised for share-based payments at each reporting date until vesting date and reflects
the extent to which the vesting period has expired and the number of awards, that will ultimately vest.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of a share-based payment are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of
the modification as measured at the date of modification.
53
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 9: SHARE-BASED PAYMENTS (continued)
Where a share-based payment is cancelled (other than cancellation when a vesting condition has not been satisfied), it
is treated as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised
immediately. However, if a new award is submitted for the cancelled award and designated as a replacement award on
the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award,
as described in the previous paragraph.
The dilutive effect, if any, of the outstanding options is reflected as additional share dilution in the computation of
earnings per share.
Employee share option plan
Employees of the Group (including Directors) may be issued with options over ordinary shares of Sheffield. Options are
issued for nil consideration and are subject to performance criteria established by the Directors of Sheffield.
Employees do not possess any rights to participate in the Employee Share Options Plan as participation is determined
by the Directors of Sheffield. Options may be exercised at any time from the date of vesting to the date of expiry. The
exercise price for employee options granted under the Employee Share Option Plan will be fixed by the Directors prior to
the grant of the option. Each employee share option converts to one fully paid ordinary share of Sheffield. The options
do not provide any dividend or voting rights. The options are not quoted on the ASX.
The objective of the grant of options to employees is to assist in the recruitment, retention, reward and motivation of the
employees of the Group.
A total of 3,557,038 options over ordinary shares issued to employees were in place at the end of year. During the year
3,000,000 options lapsed on expiry and 277,962 options were cancelled on termination of employment. As at 30 June
2020, 1,593,998 options issued under the Employee Share Option Plan have vested and 1,963,040 options remain
unvested. During the year ended 30 June 2020, no options over ordinary shares were exercised (2019: 1,147,599).
Performance options
Certain performance options on issue during the year have non-market-based performance conditions. As at 30 June
2020, these performance options have not yet vested.
The non-market-based performance conditions include:
•
•
781,520 performance options on the completion of financing for the construction of the Thunderbird project; and
1,181,520 performance options on the delivery of the first shipment to market of mineral sands product from the
Thunderbird project.
Options issued in consideration for services
On 31 August 2016, the Company granted 4,000,000 options to consultants in consideration for ongoing market advisory
services (Series 7). The options had a 3-year term and expiry date of 31 August 2019. 333,333 options have been
exercised and 3,666,667 options have lapsed on expiry.
Options granted as remuneration
During the year 960,000 options were issued to Non-Executive Directors as part of their remuneration. The following
table lists the inputs to the model for remuneration options issued during the financial year.
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of options
Exercise price
Grant date share price
Number
Fair value at grant date
Grant date
Expiry date
Series 13
0%
70%
0.75%
3.42 years
$0.650
$0.340
960,000
$0.128
19 Nov 19
30 Nov 23
54
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 9: SHARE-BASED PAYMENTS (continued)
Movement in options
The table illustrates the number and weighted average exercise prices of and movements in unlisted options on issue
during the year:
2020
2019
Options
Number
Weighted
average
exercise price
Options
Number
Weighted
average
exercise price
10,501,667
0.465
13,382,599
0.470
Outstanding at the beginning of the
year
Granted during the year
960,000
0.650
-
Exercised during the year
-
-
(1,480,932)
Expired during the year
(6,666,667)
0.372
(1,400,000)
Cancelled during the year
(277,963)
1.006
-
Outstanding at the end of the year
4,517,037
0.572
10,501,667
Exercisable at the end of the year
2,553,998
0.939
1,717,500
-
0.375
0.660
-
0.465
1.139
The weighted average contractual remaining life of the share options outstanding as at 30 June 2020 is 1.89 years
(2019: 0.795 years).
The range of exercise prices for options outstanding as at 30 June 2020 is $0.001 - $1.16 (2019: $0.001 - $1.16).
The fair value of the options is measured at grant date using the Black-Scholes option valuation method taking into
account the terms and conditions upon which the instrument was granted. The services received and liabilities to pay
for those services are recognised over the vesting period.
The following table lists the inputs to the model for options outstanding during the financial year.
Dividend yield
Expected volatility
Risk-free interest rate
Series 4
Series 9
Series 10
Series 11
Series 13
0%
55%
3.4%
0%
75%
2.1%
0%
75%
2.1%
0%
71%
2.1%
0%
70%
0.75%
Expected life of options
0.72 years
0.40 years
0.40 years
0.40 years
3.42 years
Exercise price
Grant date share price
$1.16
$0.68
$0.01
$0.53
$0.01
$0.60
$0.84
$0.60
$0.65
$0.340
Number
1,358,998
1,300,000
663,039
235,000
960,000
Fair value at grant date
$0.224
$0.53
$0.60
$0.27
$0.128
Grant date
Expiry date
20 Mar 13
27 Nov 16
24 Nov 16
24 Nov 16
19 Nov 19
19 Mar 21
24 Nov 20
24 Nov 20
24 Nov 20
30 Nov 23
The expected life of an option is based on historical data and is not necessarily indicative of exercise payments that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also not necessarily be the actual outcome. No other features of the options granted were incorporated into the
measurement of fair value.
55
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 9: SHARE-BASED PAYMENTS (continued)
Employee Incentive Plan
The Employee Incentive Plan was established to enable employees of the Group to be issued with performance rights
entitling each participant to a fully paid ordinary share. The performance rights issued for nil consideration are issued in
accordance with the terms and conditions approved at a General Meeting by shareholders and in accordance with
performance criteria established by the Directors.
Employees do not possess any rights to participate in the Employee Incentive Plan as participation is solely determined
by the Directors. Performance rights convert to one fully paid ordinary share in Sheffield at an exercise price of nil upon
meeting certain non-market-based performance conditions. The performance rights do not provide any dividend or voting
rights. The performance rights are not quoted on the ASX. If an employee ceases to be employed by the Group within
the period, the unvested performance rights will be forfeited.
The objective of the Employee Incentive Plan is to assist in the recruitment, reward, retention and motivation of employees
of the Group.
During the year ended 30 June 2020, 3,000,000 performance rights were issued, subject to shareholder approval with
certain non-market-based performance conditions. As at 30 June 2020, these performance rights have not yet vested.
The following performance rights were issued during the year to employees and were subject to the Company
Performance Rights plan:
Number
3,000,0001
Grant date
10/06/2020
Expiry date
Share price at grant date
31/12/2021
0.145
1The Company granted 3,000,000 performance rights to a senior executive subject to shareholder approval and specific performance
conditions.
The following vesting conditions are attached to these rights:
I.
3,000,000 Rights: Upon the Company announcing to the ASX that a Final Investment Decision has been
made for the development of the Company’s Thunderbird Mineral Sands Project, on or before 31 December
2021.
The following performance rights were in place in the current period and were subject to the Company Performance Rights
plan:
Number
1,700,000
267,438
792,960
5,430,920
13,000,000
Grant date
22/11/2017
21/02/2018
06/11/2018
30/11/2018
10/06/2020
Expiry date
Share price at grant date
30/11/2021
01/03/2022
26/10/2025
01/12/2025
31/12/2021
0.74
0.71
0.89
0.78
0.145
13,000,000 performance rights have been issued subject to shareholder approval.
For details regarding the vesting conditions of the Performance Rights refer to Pages 28 to 30 of the remuneration report.
During the year ending 30 June 2020, the Group revised the target vesting date relating to rights with performance
measures. The following table describes the change in vesting date:
Measure
Original vesting
date
Revised vesting
date
Grant date
Number
Condition vesting date related
to
1
2
30 Jun 2019
30 Nov 2021
22 Nov 2017 850,000
Construction complete
31 Dec 2019
30 Nov 2021
22 Nov 2017 850,000
Commercial production
The change in accounting estimate has resulted in a reduction to the share-based payments expense of $0.12m.
56
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 9: SHARE-BASED PAYMENTS (continued)
Movement in performance rights
The table illustrates the number and weighted average grant prices of and movements in unlisted rights on issue during
the year:
2020
2019
Rights Number
Rights Number
Weighted
average grant
price
Weighted
average grant
price
Outstanding at the beginning of the year
9,338,359
Granted during the year
3,000,000
Vested during the year
Expired during the year
-
-
0.78
0.15
-
-
Cancelled on termination of employment
(1,147,041)
0.843
2,012,500
7,325,859
-
-
-
Outstanding at the end of the year
11,191,318
0.603
9,338,359
Exercisable at the end of the year
-
-
-
0.74
0.80
-
-
-
0.78
-
The fair value of the performance rights is measured at grant date was estimated by taking the market price of the
Company’s shares on that date less the present value of expected dividends that will not be received on the performance
rights during the vesting period.
The weighted average remaining contractual life of the performance rights as at 30 June 2020 is 3.67 years (2019: 5.56
years).
ASSETS
This section provides additional information about those individual line items in the Statement of Financial Position that
the Directors consider most relevant in the context of the operations of the entity.
NOTE 10: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
2020
$’000
3,083
4,000
7,083
2019
$’000
2,698
-
2,698
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months, depending on the immediate
cash requirements of the Group, and earn interest at the respective short-term deposit rates.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
57
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 10: CASH AND CASH EQUIVALENTS (continued)
Reconciliation of loss after tax for the year to net cash flows from operations is as follows:
Loss after tax for the year
1Share-based payments
Settlement of creditors in shares
Depreciation
Impairment of exploration and evaluation expenditure
Profit on sale of assets
Other
Movements in operating assets and liabilities
Decrease/(Increase) in receivables
Increase in trade and other payables
Increase/(Decrease) in provisions
Net cash used in operating activities
2020
$’000
(8,370)
2,923
-
684
887
(151)
(203)
17
34
(198)
(4,377)
2019
$’000
(10,250)
2,338
960
550
47
-
18
(2)
241
107
(5,991)
1On 9 April 2020, the Company issued 2,836,120 fully paid ordinary shares for $1.057 per share for consideration to Kimberley
Sustainable Development Pty Ltd pursuant to the Thunderbird Project Co-existence Agreement dated 31 October 2018.
NOTE 11: TRADE AND OTHER RECEIVABLES
Other receivables
Bank guarantees 1
2020
$’000
320
180
500
2019
$’000
212
112
324
1Bank guarantees include $0.0624m (2019: $0.0624m) held as security for the office lease and bears 0.67% per annum interest,
$0.067m held as security for the Derby Port lease and bears 0.67% per annum interest and $0.050m (2019: $0.050m) held as
security for the credit card facilities and bears 2.1% per annum interest.
There are no balances within trade and other receivables that contain amounts that are past due but not impaired. It is
expected the balances will be received when due as there is no recent history of default or expectation that they will
default. On this basis no expected credit loss has been provided for.
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables as
these items do not have a significant financing component.
In determining the recoverability of a trade receivable, the Company considers any changes in the credit quality of the
trade receivable from the date credit was initially granted up to the balance date. The directors believe that there is no
allowance for impairment required.
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for
settlement within periods ranging from 15 days to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectable are written off
by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Group
will not be able to collect all amounts due according to the original contractual terms.
58
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 11: TRADE AND OTHER RECEIVABLES (continued)
Factors considered by the Group in making this determination include known significant financial difficulties of the
debtor, review of financial information and significant delinquency in making contractual payments to the Group. The
impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value
of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term,
discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses.
When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are
credited against other expenses in the statement of comprehensive income.
NOTE 12: OTHER NON-CURRENT ASSETS
Transaction costs1
2020
$’000
3,364
3,364
2019
$’000
6,624
6,624
1The amount relates to transaction costs that are directly attributable to the establishment to the establishment of the funding facilities
negotiated for the Thunderbird Project. These amounts will be reclassified to borrowings upon drawdown of the facilities.
During the year the Group transferred $3.3m in relation to commitment fees paid on the undrawn US$175m Taurus
Mining Fund Facility. These fees are classified as borrowing costs and have been capitalised to Mine Property and
Development.
NOTE 13: PROPERTY, PLANT AND EQUIPMENT
Plant &
Equipment
Right of Use Assets
Mine Property &
Development
As at 30 June 2020
At cost
Accumulated depreciation
Closing carrying amount
Reconciliation of carrying
amounts:
$’000
4,891
(1,172)
3,719
$’000
1,544
(151)
1,393
Balance at 1 July 2019
4,232
2,058
Additions
1Transfers between asset
classes
2Derecognition of right of
use asset
Capitalisation of research
& development grant
Disposal of assets
Depreciation expense
Balance at 30 June 2020
-
-
-
-
(38)
(475)
3,719
-
-
(456)
-
-
(209)
1,393
$’000
64,979
-
64,979
53,952
9,971
3,331
-
(670)
(1,605)
-
64,979
Total
$’000
71,414
(1,323)
70,091
60,242
9,971
3,331
(456)
(670)
(1,643)
(684)
70,091
1During the year the Group transferred $3.3m in relation to commitment fees paid on the undrawn US$175m Taurus Mining Fund
Facility.
2During the year the lease for the corporate office lease reached the expiry date for the initial term. The Group elected not to renew
for the option term of a further 3 years. The Group has renegotiated the lease for a fixed term 6 months, then monthly by agreement
with the lessor.
59
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 13: PROPERTY, PLANT AND EQUIPMENT (continued)
Plant &
Equipment
Right of Use Assets
Mine Property &
Development
As at 30 June 2019
At cost
Accumulated depreciation
Closing carrying amount
Reconciliation of carrying
amounts:
Balance at 1 July 2018
Additions
Transfers from exploration
& evaluation
Capitalisation of research
& development grant
Additions
rehabilitation asset
to
mine
Depreciation expense
Balance at 30 June 2019
Plant and equipment
$’000
4,928
(696)
4,232
228
102
4,220
-
-
(318)
4,232
$’000
2,431
(373)
2,058
282
2,008
-
-
-
(232)
2,058
$’000
53,952
-
53,952
36,838
22,254
(4,220)
(983)
63
-
53,952
Total
$’000
61,311
(1,069)
60,242
37,348
24,364
-
(983)
63
(550)
60,242
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item
can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized
when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Motor vehicles
Plant and equipment
Buildings
Impairment
4 years
2-10 years
10 years
The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable amount
being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-
generating unit to which the asset belongs, unless the asset’s value in use can be estimated to approximate fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, the impairment losses are recognised in the statement of comprehensive income in the cost
of sales line item.
60
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 13: PROPERTY, PLANT AND EQUIPMENT (continued)
Revaluations
Fair value is determined by reference to market-based evidence, which is the amount for which the assets could be
exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as
at the valuation date.
Any revaluation increment is credited to the asset revaluation reserve included in the equity section of the statement of
financial position, except to the extent that its reverses a revaluation decrease of the same asset previously recognised
in profit or loss, in which case the increase is recognised in profit or loss.
Any revaluation decrease is recognised in profit or loss, except that a decrease offsetting a previous revaluation increase
for the same asset is debited directly to the asset revaluation reserve to the extent of the credit balance existing in the
revaluation reserve for that asset.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between
depreciation based on the revalued carrying amounts of the assets and depreciation based on the assets’ original costs.
Additionally, any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amounts
of the assets and the net amounts are restated to the revalued amounts of the assets.
Under disposal, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.
Independent valuations are performed with sufficient regularity to ensure that the carrying amounts do not differ
materially from the assets’ fair values at the balance date.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or 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 asset) is included in profit or loss in the year the asset is derecognised.
Right of use leased assets
Leased assets are capitalised at the commencement date of the lease and comprise the initial lease liability amount,
initial direct costs incurred when entering into the lease less any lease incentives received.
On initial adoption of AASB 16 the Group adjusted the right-of-use assets at the date of initial application by the amount
of any provision for onerous leases recognised immediately before the date of initial application. Following initial
application, an impairment review is undertaken for any right of use lease asset and shows indicators of impairment and
an impairment loss is recognised against any right of use lease assets that is impaired. The right of use asset is
depreciated over the lease term.
Mine properties and development
Mine development costs are accumulated when economically recoverable reserves have been identified and a decision
to develop has occurred. This expenditure includes all capitalised exploration and evaluation expenditure in respect of
the area of interest, direct costs of construction, overheads and where applicable borrowing costs capitalised during
construction. Once mining of the area can commence, the aggregated capitalised costs are classified under non-current
assets as an appropriate class of property, plant and equipment.
The Group assesses at each balance 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 Group 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 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).
61
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 13: PROPERTY, PLANT AND EQUIPMENT (continued)
An assessment is also made at each balance 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 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.
During the financial year the Company underwent a process to source a strategic partner for the funding and development
of the Thunderbird Project. It was anticipated that this process would be completed by January 2020. This process has
been ongoing but did not complete within the preferred timeframe and as such the Company announced measures to
reduce expenditure and preserve cash. As such Management has carried out an impairment test.
The recoverable amount which makes up these development costs was estimated on the present value of the future
cash flows expected to be derived from the Project, using a pre-tax discount rate of 10%. The recoverable amount of the
Thunderbird Mineral Sands Project was estimated to be higher than the carrying amount and no impairment was required.
NOTE 14: EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation phase – at cost
Balance as at 1 July 2019
Expenditure incurred
Impairment of exploration expenditure
Balance as at 30 June 2020
2020
$’000
9,641
1,383
(887)
10,137
2019
$’000
7,256
2,432
(47)
9,641
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is
dependent on the successful development and commercial exploitation or sale of the respective areas.
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration
and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
a)
b)
-
-
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the balance date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of
assets used in exploration and evaluation activities. General and administrative costs are only included in the
measurement of exploration and evaluation costs where they are related directly to operational activities in a particular
area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
62
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
EQUITY AND LIABILITIES
This section provides additional information about those individual line items in the Statement of Financial Position that
the Directors consider most relevant in the context of the operations of the entity.
NOTE 15: TRADE AND OTHER PAYABLES
Trade payables
Other payables
2020
$’000
1,584
992
2,576
2019
$’000
3,230
1,104
4,334
Trade payables are non-interest bearing and are normally settled on 30-day terms.
Trade and other payables represent liabilities for goods and services provided to the Group prior to the year end and
which are unpaid. These amounts are unsecured and have 30-60-day payment terms. They are recognised initially at
fair value and subsequently at amortised cost.
NOTE 16: INTEREST BEARING LIABILITIES
Current
Lease liability
Non-current
Lease liability
2020
$’000
2019
$’000
19
164
1,492
1,511
1,975
2,139
During the year the commercial lease to rent office space expired. The lease had an option to renew for a further 3
years. The Group decided not to renew the lease for the option period. The Group has recognised the Right of Use asset
and associated finance lease liability in relation to this lease.
In July 2018 the Group entered into a lease for the use of land and wharf facilities at the port in Derby. The lease has a
term of 20 years.
Leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item,
are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of
the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in short-term
and long-term payables. Lease payments are apportioned between the finance charges and reduction of the lease
liability to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly against Statement of Comprehensive Income.
Reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities:
Balance as at 1 July 2019
Derecognition of finance lease liability
Payments for lease liability
Balance as at 30 June 2020
2020
$’000
2,139
(497)
(131)
1,511
63
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 17: CAPITAL AND RESERVES
2020
$’000
2019
$’000
311,795,340 (2019: 260,555,374) fully paid ordinary shares
120,559
99,469
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.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
2020
2019
Number
$’000
Number
$’000
Balance as at 1 July
260,555,374
99,469 228,990,124
80,602
Issue of fully paid ordinary shares 1
46,153,846
18,000
25,986,945
16,891
Issued on exercise of share options
Issued in payment for services
-
-
-
-
1,480,932
1,565,570
556
960
Issued pursuant to a Facility Agreement2
2,250,000
1,463
2,531,803
1,436
Issued pursuant to an Agreement3
2,836,120
3,000
Share issue costs
-
(1,373)
-
(976)
Balance as at 30 June
311,795,340
120,559 260,555,374
99,469
1 On 16 September 2019, the Company issued 26,550,002 fully paid ordinary shares for $0.39 per share to sophisticated and
professional investors as part of a share placement to raise $18 million. On 30 October 2019, the Company completed the share
placement by issuing a further 19,603,844 fully paid ordinary shares for $0.39 per share.
2 On 1 August 2019, the Company issued 2,250,000 fully paid ordinary shares for $0.650 per share to Taurus Mining Finance and
Taurus Mining Finance Annex Fund L.P. in partial satisfaction of a front end fee associated with the bridge facility mandate dated 25
June 2019. The shares were valued using the closing share price on the day prior to issue, being 31 July 2019.
3On 9 April 2020, the Company issued 2,836,120 fully paid ordinary shares for $1.057 per share for consideration to Kimberley
Sustainable Development Pty Ltd pursuant to the Thunderbird Project Co-existence Agreement dated 31 October 2018. The shares
were valued using the 20-day VWAP up to and including 31 October 2018. These shares are held in escrow until 9 September 2020.
Nature and purpose of reserves
Share-based payment reserve
The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration. Refer to Note 9 for details.
NOTE 18: CAPITAL MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall
strategy remains unchanged from 2018.
The capital structure of the Group consists of cash and cash equivalents, debt and equity attributable to equity holders
of the Group, comprising issued capital, reserves and retained earnings. None of the Group’s entities are subject to
externally imposed capital requirements.
64
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 18: CAPITAL MANAGEMENT (continued)
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax,
dividends and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and
the risks associated with each class of 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.
FINANCIAL INSTRUMENTS
This section of the Notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s
financial position and performance.
FAIR VALUE AND RISK MANAGEMENT
The Group’s principal financial instruments comprise cash, receivables and payables.
The Group monitors and manages its exposure to key financial risks in accordance with the Group’s financial
management policy. The objective of the policy is to support the delivery of the Group’s financial targets whilst protecting
future financial security.
The main risks arising from the Group’s financial instruments are interest risk, credit risk and liquidity risk. The Group
does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Interest rate risk management
The Group is exposed to interest rate risk as the Group holds cash and interest-bearing liabilities at both fixed and
floating interest rates. The Group constantly analyses its interest rate exposure. Within this analysis consideration is
given to the potential renewals of existing positions, alternative financing, and the mix of fixed and variable interest rates.
The Group’s exposure to interest rate risk is limited to the amount of interest income it can potentially earn on surplus
cash deposits and the discount rate used to determine the present value of lease payments for the interest bearing
liabilities, and as such interest rate risk is considered immaterial.
2020
Floating
interest
rate
< 1 year
1 to 5
years
> 5
years
Non-
interest
bearing
Total Weighted average
interest rate
$’000
$’000
$’000
$’000
$’000
$’000 Fixed
%
Floating
%
Financial assets
Cash and cash equivalents
863
4,000
Trade and other receivables
-
180
Total financial assets
863
4,180
Financial liabilities
Trade and other payables
Interest bearing liabilities
Total financial liabilities
-
-
-
-
19
19
2,220
7,083
0.67
0.40
-
-
-
-
-
-
-
-
320
500
0.67
2,540
7,583
2,576
2,576
-
154
1,338
-
1,511
7.90
154
1,338
2,576
4,087
-
-
-
65
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 18: CAPITAL AND CAPITAL MANAGEMENT (continued)
2019
Floating
interest
rate
< 1 year
1 to 5
years
> 5
years
Non-
interest
bearing
Total Weighted average
interest rate
$’000
$’000
$’000
$’000
$’000
$’000 Fixed
%
Floating
%
Financial assets
Cash and cash equivalents
2,507
-
Trade and other receivables
-
112
Total financial assets
2,507
112
Financial liabilities
Trade and other payables
Interest bearing liabilities
Total financial liabilities
-
-
-
Interest rate risk sensitivity analysis
-
191
2,698
-
1.40
-
-
-
-
-
-
-
-
212
324
2.03
403
3,022
4,334
4,334
-
-
-
-
148
574
1,417
-
2,139
7.81
148
574
1,417
4,334
6,473
Exposure arises predominantly from assets and liabilities bearing variable interest rates as the Group intends to hold
fixed rate assets and liabilities to maturity. Interest rate risk is considered immaterial.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with
entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating
agencies where available and, if not available, the Group uses publicly available financial information and its own trading
record to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously
monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit
exposure is controlled by counterparty limits that are reviewed and approved by the Board of Directors periodically.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties
having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the
counterparties are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents
the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
66
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 19: FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
The following table details the Group’s expected contractual outflows and maturities of financial liabilities, including
estimated interest payments and excluding the impact of netting agreements:
2020
Current
Non-Current
Within 6 months
6 – 12 months
1 – 5 years
5+ years
$’000
$’000
$’000
$’000
Trade and other payables
Finance lease obligations
2,551
68
2,619
-
69
69
-
727
727
-
2,253
2,253
2019
Current
Non-Current
Within 6 months
6 – 12 months
1 – 5 years
5+ years
$’000
$’000
$’000
$’000
Trade and other payables
Finance lease obligations
3,334
156
3,490
1,000
172
1,172
-
1,080
1,080
-
2,556
2,556
Fair values
The fair values of financial assets and liabilities approximate the carrying amounts shown in the Consolidated Statement
of Financial Position.
67
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
GROUP COMPOSITION
This section of the Notes includes information that must be disclosed to comply with accounting standards and other
pronouncements relating to the structure of the Group, but that is not immediately related to individual line items in the
Financial Statements.
NOTE 20: LIST OF SUBSIDIARIES
Subsidiary Entities
The consolidated financial statements include the financial statements of Sheffield Resources Limited and the
subsidiaries listed in the followings table.
Name
Moora Talc Pty Ltd
Ironbridge Resources Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Finance Pty Ltd1
Country of
Incorporation
Australia
Australia
Australia
Australia
Thunderbird Infraco Holdings Pty Ltd1
Australia
Thunderbird Infraco Pty Ltd1
Sheffield Exploration (WA) Pty Ltd1
Australia
Australia
1The Company’s remain dormant.
Equity Interest %
Investment %
2020
2019
2020
2019
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
68
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 21: PARENT ENTITY INFORMATION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive income
2020
$’000
5,592
82,412
88,004
1,168
16
1,184
120,559
11,123
(44,862)
86,820
2019
$’000
2,868
71,564
74,432
1,329
463
1,792
99,469
9,662
(36,491)
72,640
(8,371)
(10,249)
-
-
(8,371)
(10,249)
The Company had no contingent liabilities or contractual commitments as at 30 June 2020 (2019: nil). The Company
has bank guarantees as noted in Note 11.
OTHER INFORMATION
This section of the Notes includes other information that must be disclosed to comply with accounting standards and
other pronouncements, but that is not immediately related to individual line items in the Financial Statements.
NOTE 22: CONTINGENT LIABILITIES
The Group has no contingent liabilities as at 30 June 2020 (2019: nil).
NOTE 23: REMUNERATION OF AUDITORS
The auditor of Sheffield Resources Limited is HLB Mann Judd.
Amounts received or due and receivable by HLB Mann Judd for the audit or
review of the financial report of the entity
2020
$
57,125
2019
$
62,370
69
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 24: COMMITMENTS
Exploration commitments
To maintain current rights of tenure to exploration tenements, the Group is required to meet the minimum expenditure
requirements specified by various State and Territory Governments. These obligations are subject to renegotiation when
application for a mining lease is made and at other times. These obligations are not provided for in this financial report.
The minimum amounts required to retain tenure in 2021 is $1.6m (2020: $2.08m). These obligations are expected to
be fulfilled in the normal course of operations. Commitments beyond 2020 are dependent upon whether existing rights
of tenure are renewed or new rights of tenure are acquired.
Capital commitments
The Group has the following capital commitments relating to the Thunderbird Co-existence Agreement:
$0.4m annual support payment; and
•
•
Facility commitments
$1.5m payable on a positive final investment decision for the Thunderbird Mineral Sands Project.
Under the Taurus Facility Agreement commitment fees of 2% p.a are payable on undrawn amounts quarterly in arrears.
The maximum commitment fee payable within one year is US$3.5m (2019: US$3.5m). Taurus and the Company have
agreed that the facility fees be suspended until the Company reaches a final investment decision.
NOTE 25: RELATED PARTIES TRANSACTIONS
Loans to subsidiaries
Loans made by Sheffield Resources Limited to wholly-owned subsidiaries are contributed to meet required expenditure
payable on demand and are not interest bearing.
Transactions with other Related Parties
There were no other transactions entered into with related parties for the financial year.
NOTE 26: KEY MANAGEMENT PERSONNEL DISCLOSURES
The following persons acted as Directors of the Company during the financial year:
• Mr John Richards (Non-Executive Chair)
• Mr Bruce McFadzean (Managing Director)
• Mr Bruce Griffin (Commercial Director)
• Mr David Archer (Non-Executive Director)
• Mr Will Burbury (Non-Executive Director)
• Mr Ian Macliver (Non-Executive Director)
• Mr Bruce McQuitty (Non-Executive Director)
The following persons are the key management personnel of the Company during the financial year:
• Mr Mark Di Silvio (Company Secretary & Chief Financial Officer)
• Mr Stuart Pether (Chief Operating Officer)
70
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 26: KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)
The aggregate compensation made to directors and other key management personnel of the Group is set out below:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2020
$
2019
$
1,532,134
1,341,984
-
97,840
37,523
106,688
1,393,643
1,649,118
3,026,617
3,135,313
NOTE 27: EVENTS OCCURRING AFTER THE REPORTING PERIOD
On 11 August 2020, the Company announced that it had entered into a Non-Binding Term Sheet with Yangang (Hong
Kong) Co., Ltd’s wholly owned subsidiary YGH Australian Investment Pty Ltd (Yansteel) to form a joint venture to develop
the Thunderbird Mineral Sands Project. Yansteel will invest A$130.1m in equity to acquire a 50% interest in the Project.
Formation of the Yansteel and Sheffield Joint Venture is subject to final negotiation, agreement, and execution of formal
agreements. Foreign Investment Review Board process completion and, where required, any other applicable regulatory
or shareholder approval.
Yansteel has also subscribed for 34,259,421 fully paid ordinary shares (comprising 9.9% of the post-issue share capital)
in Sheffield Resources Limited for consideration of approximately A$12.9m (Share Placement). The Share Placement
occurred on August 11 2020.
Yansteel and Sheffield have also executed a take or pay offtake agreement for 100% of the ilmenite produced from
Stage 1 of the Project.
OTHER INFORMATION
This section of the notes includes information that must be disclosed to comply with accounting standards and other
pronouncements, but that is not immediately related to individual line items in the Financial Statements.
NOTE 28: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates
and assumptions that affect the reporting amounts of assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and
assumptions are continuously evaluated and are based on management’s experience and other factors, including
expectations of future events, which are believed to be reasonable under the circumstances. However, actual outcomes
would differ from these estimates if different assumptions were used and different conditions existed.
The Group has identified the following areas where significant judgements, estimates and assumptions are required,
and where actual results were to differ, may materially affect the financial position or financial results reported in future
periods.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model, using the
assumptions detailed in Note 9.
As a performance incentive, senior employees were granted options and performance rights during the financial year
ended 30 June 2020 which contain assumptions of a real risk of forfeiture where performance targets are not achieved.
Management has ascribed various probabilities based upon stretch criteria and operations factors toward the
achievement of nominated performance targets. Accordingly, the said probability was taken into account when
calculating the share-based payment expense of the options and in the formulation of the resultant expense to profit or
loss.
During the year ended 30 June 2020, as a result of the changes in the timeline for the development of the Thunderbird
mineral sands project, the Group has revised vesting target dates relating to its share-based payments. This revision in
timeline has resulted in a change to share-based payments expense and corresponding reserve. The change in vesting
conditions is described in Note 9.
71
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2020
NOTE 28: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Impairment of Exploration and Evaluation Expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related area of interest itself or, if not, whether it successfully recovers
the related exploration and evaluation asset through sale.
Factors which could impact the future recoverability include the level or reserves and resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental obligations)
and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined
not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is
made.
In addition, exploration and evaluation expenditure is capitalised if rights to tenure of the area of interest are current
and activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves.
Impairment of Mine Development Expenditure
The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including
the level of proved and probable reserves and measured, indicated and inferred mineral resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental obligations)
and changes to commodity prices.
To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will
reduce profits and net assets in the period in which this determination is made.
Determination of Mineral Resources and Ore Reserves
The determination of reserves impacts the accounting asset carrying values, depreciation and amortisation rates, and
provision for decommissioning and restoration. The information in this report as it relates to ore reserves, mineral
resources or mineralisation is reported in accordance with the AusIMM “Australasian Code for Reporting of Identified
Mineral Resources and Ore Reserves 2012”. The information has been prepared by or under supervision of competent
persons as identified by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are
valid at the time of estimation may change significantly when new information becomes available. Changes in the
forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of
reserves and may ultimately result in the reserves being restated.
NOTE 29: NEW AND REVISED STANDARDS AND INTERPRETATIONS
In the year ended 30 June 2020, the directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Company and effective for the current annual reporting period. As a result
of this review, no new standards have been adopted.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The Group’s
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
Group, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the Group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the Group may need to review such policies under the revised framework. At
this time, the application of the Conceptual Framework is not expected to have a material impact on the Group’s financial
statements.
72
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Declaration
1.
In the opinion of the directors of Sheffield Resources Limited (the ‘Company’):
a.
the accompanying financial statements and notes 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 then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
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 ended 30 June 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
Mr Bruce McFadzean
Managing Director
26 August 2020
73
INDEPENDENT AUDITOR’S REPORT
To the members of Sheffield Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sheffield Resources Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position
as at 30 June 2020, the consolidated statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
b) 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated
in our report.
74
Key Audit Matter
How our audit addressed the key audit
matter
Carrying amount of mine property and development
Note 13 of the financial report
The carrying amount of the Thunderbird Mineral Sands
Project mine property and development assets as at 30
June 2020 was $64.979 million.
Our audit focussed on the Group’s assessment of the
carrying amount of the mine property and development
assets, as this is one of the most significant assets of
the Group.
We planned our work to address the audit risk that the
capitalised expenditure may no longer meet the
recognition criteria of the standards. In addition, we
considered it necessary to assess whether facts and
circumstances existed to suggest that the carrying
amount of the mine property and development assets
may exceed their recoverable amount.
Our audit procedures included but were
not limited to:
• Considered and assessed
the
Directors’
of
impairment under AASB 136
Impairment of Assets ;
assessment
• Assessed the reasonableness of
the
the
the
key
feasibility model
mathematical accuracy of
model;
assumptions within
and
• Substantiated
sample
a
expenditure
agreeing
by
supporting documentation; and
• Examined the disclosures made in
of
to
the financial report.
Carrying amount of exploration and evaluation expenditure
Note 14 of the financial report
The carrying amount of exploration and evaluation
expenditure as at 30 June 2020 was $10.137 million.
Our procedures included but were not
limited to the following:
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group capitalises
all exploration and evaluation expenditure, including
acquisition costs and subsequently applies the cost
model after recognition.
Our audit focussed on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation asset, as this is one of the most significant
assets of the Group.
We planned our work to address the audit risk that the
capitalised expenditure may no longer meet the
recognition criteria of the standard. In addition, we
considered it necessary to assess whether facts and
circumstances existed to suggest that the carrying
amount of an exploration and evaluation asset may
exceed its recoverable amount.
review of
• Obtained an understanding of the
key processes associated with
management’s
the
carrying values of each area of
interest;
• Considered
Directors’
the
assessment of potential indicators
of impairment;
• Obtained evidence that the Group
has current rights to tenure of its
areas of interest;
• Examined the exploration budget
for the year ended 30 June 2020
and discussed with management
the nature of planned ongoing
activities;
• Enquired
with management,
reviewed ASX announcements and
reviewed minutes of Directors’
meetings to ensure that the Group
had not resolved to discontinue
exploration and evaluation at any of
its areas of interest;
• Substantiated
sample
a
expenditure
agreeing
by
supporting documentation; and
• Examined the disclosures made in
of
to
the financial report.
75
Key Audit Matter
How our audit addressed the key audit matter
Going concern
Note 3 of the financial report
The Group recorded a consolidated loss of
$8.370 million and had cash outflows from
operating and investing activities of $4.377
million and $7.654 million respectively. As at 30
June 2019 the Group had cash and cash
equivalents of $7.083 million.
If the going concern basis of preparation of the
financial statements was inappropriate, the
carrying amount of certain assets and liabilities
may have significantly differed.
The going concern basis of accounting was a
key audit matter due to the significance to users
of the financial report and the significant
judgement
forecasting cash
flows.
involved with
Our procedures included but were not limited
to the following:
evaluating
• We considered the appropriateness of
the going concern basis of accounting
by
underlying
assumptions in cash flow projections
prepared by
including
sensitivity analysis and subsequent
events;
the Group
the
• Our responsibilities in respect of the
going concern basis of accounting are
under Auditor’s
included
responsibilities for the audit of the
financial report; and
below
• We examined the disclosures made in
the financial report.
Information other than the financial report and auditor’s report thereon
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.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
76
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
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.
77
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Sheffield Resources 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
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
26 August 2020
D I Buckley
Partner
78
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
As at 24 August 2020
The Company was admitted to the official list of ASX on 15 December 2010. Since listing, the Company has used its
cash (and assets in a form readily convertible to cash) in a manner consistent with its business objectives.
In accordance with the ASX Listing Rules, the Company is required to disclose the following information which was
prepared based on share registry information processed up to 24 August 2020.
Ordinary Share Capital
As at 24 August 2020, 343,218,641 fully paid ordinary shares are held by 2,582 individual shareholders.
Spread of Holdings
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number of Holders/Shares
Total Holders
Ordinary Shares
229
501
377
92,835
1,518,568
3,023,023
1,084
41,139,566
391
297,444,649
2,583
346,054,761
Unmarketable parcels as at 24 August 2020 amount to 207,075 shares held by 315 shareholders.
Substantial Shareholders
Ordinary Shareholders
Fully Paid Ordinary Shares
Number
Percentage
YGH Australia Investment Pty Ltd
34,259,421
Mr Walter Mick George Yovich & Mrs Jeanette Julia Yovich
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