ACN 122 995 073
Annual Repor t
‘22
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2022
CORPORATE DIRECTORY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
CORPORATE GOVERNANCE STATEMENT
ASX ADDITIONAL INFORMATION
CONTENTS
2
3
16
17
18
19
20
21
42
43
46
46
1
CONTENTS
CORPORATE DIRECTORY
Directors:
Mr David Sanders
Mr Steven Groves
Mr Joshua Letcher
Company Secretary:
Mr Mauro Piccini
Registered Office:
Suite 11, Level 2
23 Railway Road
Subiaco WA 6008
Share Registry:
Automic Group
Level 2/267 St Georges Terrace
Perth WA 6000
Telephone 1300 288 664
Banker:
Westpac Banking Corporation
Level 13, 109 St Georges Terrace
Perth WA 6000
Auditor:
BDO Audit (WA) Pty Ltd
Level 9 Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Securities Exchange:
Listed on the Australian Securities Exchange, ASX Code: Si6
2
DIRECTORS’ REPORT
Dear Shareholders,
Welcome to the 2022 Annual Report for Si6 Metals (ASX: Si6), following a year of strong progress at our projects in Australia
and Botswana.
This is my first letter to shareholders as the Independent Non-Executive Chairman of Si6 Metals, having been appointed to
the position following the end of the 2022 financial year. It was a pleasure to accept this role and I have joined the Company
at an exciting time, with the Monument Gold Project in Western Australia and our Botswana Projects well placed to progress
further in their exploration programs.
At the Monument Gold Project, Si6 is growing in confidence about the potential of the project, which is located in the world-
class Laverton Gold District. Earlier in the year, a resource estimate was released to the market. Subsequently, Phase One
aircore (AC) drilling tested 26 out of approximately 60 intrusive targets with 18 of these confirmed as fractionated, felsic
intrusives prospective for bulk tonnage gold mineralisation. The Company finished the period by completing the Phase Two
AC drilling program which comprised approximately 6,000m from 130 holes targeting five key prospect areas and Phase
Three AC drilling program is now on the verge of commencing.
With a 154koz gold resource established at the Monument Project, Si6 is optimistic of expansion and the potential elsewhere
from intrusion hosted targets. Geochemical analysis has so far already provided indications of the existence of fractionated,
felsic intrusives belonging to the sanukitoid suite of evolved intrusive rocks. Such prospects are significant when taking into
consideration the similarities with other gold-bearing sanukitoid intrusions such as Hemi (~11Moz) or Tropicana (~5Moz) and
other nearby projects such as Wallaby (~7Moz) and Jupiter (~1.5Moz).
In Botswana, Si6 has reported compelling drill targets from the significant amount of work undertaken particularly in relation
to the geophysical programs of 2021, and this has substantially increased the chances of drilling success. Following the end of
the period, Si6 received consent from the liquidators of Joint Venture (JV) partner, BCL Limited, to undertake exploration
activities on the JV tenements. Encouragingly, the consent puts Si6 in a position to finalise discussions with authorities to
commence a drilling campaign that has been planned since 2021 pending necessary approvals.
Over the past year, as Si6 awaited approvals, the Company has focussed on its 100%-owned ground in Botswana, with
activities including soil and rock sampling, trenching and mapping. The field work covered the Maibele East, Mashambe and
Gobjango prospects, targeting base and precious metals, whilst also investigating pegmatite-hosted mineralisation such as
lithium, caesium and tantalum. Promising results were received with further work required which will be undertaken in
tandem with drilling of the JV ground.
I would like to take this opportunity to thank our management team and employees as well as our various contractors and
consultants for their efforts in helping Si6 successfully undertake these activities over the past year. Whilst this year was
probably slightly better in terms of COVID issues it was far more difficult in relation to supply side constraints and we
acknowledge these challenges.
I would also like to thank our shareholders for the confidence you have placed in the Company. With a busy period ahead for
Si6 Metals, I look forward to keeping you updated on the latest progress at our projects.
Yours sincerely,
Mr David Sanders
Independent Non-Executive Chairman
3
DIRECTORS’ REPORT
The Directors present their report on the consolidated entity consisting of Si6 Metals Limited and its controlled entities (“the
Group”) for the year ended 30 June 2022. Directors held office for this entire period unless otherwise stated.
DIRECTORS
The following persons were Directors of the Company during the whole of the financial year and up to the date of this Report
unless otherwise stated:
Mr David Sanders (appointed 12 August 2022)
Mr Patrick Holywell (appointed 25 November 2019, resigned 12 August 2022)
Mr Steven Groves (appointed 22 February 2017)
Mr Joshua Letcher (appointed 21 August 2017)
COMPANY SECRETARY
Mr Mauro Piccini
Mr Piccini is a Chartered Accountant (CA) and a member of the Governance Institute of Australia (GIA). He specialises in
corporate advisory, company secretarial and financial management services. Mauro spent 7 years at the ASX and possesses
core competencies in publicly listed and unlisted company secretarial, administration and governance disciplines.
PRINCIPAL ACTIVITIES
The Group’s principal activities during the year are unchanged from prior years being exploration for various commodities in
various jurisdictions. To date, that focus has been in the Limpopo belt on the eastern side of Botswana focused on base metals
and precious metals targets and in particular nickel, copper and platinum group elements. Earlier in the year, the Group
completed the acquisition of the Monument Gold Project in Western Australia which lies in the Laverton Tectonic Zone. The
Group has also assessed a number of other potential acquisition or investment opportunities.
OPERATING RESULTS
The consolidated loss for the year attributable to the members of the Company was:
Operating loss after income tax
Net consolidated loss attributable to members of the Company
DIVIDENDS
2022
$
2021
$
(2,829,722)
(2,887,552)
(2,829,722)
(2,887,552)
As the Group’s principal activities are minerals exploration it has not as yet paid any dividends and does not see any short–
term return to shareholders via dividend payments.
4
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Maibele Base Metal Project, Botswana
Si6 is primarily exploring for base and precious metals in the Limpopo Mobile Belt in Botswana, a district known for hosting
major nickel and copper producing operations. The Company’s portfolio contains an advanced Ni-Cu-Co-PGE resource at
Maibele North and drilled high-grade Cu-Ag discoveries at Airstrip and Dibete all existing on licences in joint venture with the
liquidator of BCL Limited (Si6’s Joint Venture partner) (JV Licences).
The JV Licences are controlled 60% by Si6 and 40% by BCL. The project contains nickel sulphide mineralisation related to
ultramafic intrusions within mobile belt rocks and is broadly similar in style to other ultramafic intrusion-related mobile belt
nickel discoveries such as IGO’s Nova-Bollinger (ASX:IGO), Chalice Mining’s Julimar (ASX:CHN) and the globally significant
Thompson Belt in Canada. It currently hosts a resource of 2.4Mt @ 0.72% Ni and 0.21% Cu + PGMs + Co + Au.
During the 2021 field programs, Si6 undertook a successful multi-faceted exploration campaign on those JV Licences employing
a variety of ground geophysical techniques designed to target additional prospects for follow-up drill testing. The Company
has been progressing its drilling plans for those JV Licences which includes obtaining necessary approvals including joint
venture partner approvals and regulatory approvals. Following the period end, BCL provided approval to undertake exploration
and drilling.
The JV Licences only cover ~10% of Si6’s ~2,000km2 tenement package in Botswana. Whilst awaiting approvals to commence
drilling on the JV Licences, Si6 has been conducting geological reviews on Non-JV Licences and is committed to generating
further targets where numerous high quality, early stage base and precious metal exploration targets exist.
The Non-JV Licences are also prospective for pegmatite-hosted mineralisation such as lithium, tin and tantalum as well as rare
earth element mineralisation. The relevant areas contain Archean cratonic rocks as well as re-worked Archean rocks and has
been shown to contain evidence of pegmatite dykes throughout. The Company’s portfolio abuts the Zimbabwe border where
the same belt of Archean geology hosts one of the world’s largest lithium pegmatite mines at Bikita.
5
DIRECTORS’ REPORT
Monument Gold Project, Western Australia
Si6 is exploring in the world-class Laverton Gold District of Western Australia with the Monument Gold Project comprising of
more than 300km2 of tenure located approximately 40km west of Laverton. The project lies along strike of Dacian Gold Ltd’s
(ASX:DCN, Dacian) ~2Moz Au Mt Morgans Project. Dacian recently received a takeover offer from Genesis Minerals Ltd
(ASX:GMD) as it seeks to consolidate Western Australia’s northern goldfields.
A Mineral Resource Estimate of 154koz of gold was announced during the year in relation to the Korong and Waihi deposits,
which occur along ~30km of poorly tested banded iron formation, interpreted to be the same unit that hosts the 1.4Moz
Westralia gold deposit (Dacian’s Mt Morgan Project). To date, only 10% of the 30km strike has been drilled with detailed
reverse circulation drilling. There are currently six other priority targets identified along the banded iron formations (BIFs)
horizon remaining to be tested. The Monument Project contains multiple target styles of gold mineralisation including BIFs
and basalt hosted, however, significant potential exists in the intrusion hosted targets.
Si6 is currently focused on prospects where geochemical analysis provides indications of the existence of fractionated, felsic
intrusives belonging to the sanukitoid suite of evolved intrusive rocks. Such prospects are significant when taking into
consideration the similarities with other gold-bearing sanukitoid intrusions such as Hemi or Tropicana and other nearby
projects such as Wallaby (~7Moz) and Jupiter (~1.5Moz).
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group continues to assess new business opportunities that may complement the Company’s existing portfolio of direct
and indirect investments using the Company’s skills and experience.
6
DIRECTORS’ REPORT
CORPORATE ACTIVITY
FINANCIAL POSITION
The financial results of the Company for the year ended 30 June 2022 are:
Cash and cash equivalents
Net Assets
Other income
Net loss after tax
2022
2021
$
2,510,618
2,536,393
42,275
(2,829,722)
$
4,559,417
4,460,115
11,119
(2,887,552)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year were as follows:
Si6 completed its acquisition of a 100% interest in the Monument Gold Project by way of acquiring 100% of the issued capital
in Monument Exploration Pty Ltd. As announced on 26 July 2021, Si6 entered into a formal definitive agreement with DiscovEx
Resources Limited whereby DiscovEx granted Si6 an option to acquire a 100% interest in the Monument Project by way of
acquiring 100% of the issued capital in Monument Exploration Pty Ltd. The Company gave DiscovEx written notice to exercise
the Option. Si6 paid the final consideration amount of $400,000 in cash and shares ($100,000 cash and $300,000 worth of
shares were issued).
SHARE PLACEMENTS AND OPTIONS EXERCISED
On 23 August 2021, 34,883,721 fully paid ordinary shares were issued to complete the acquisition of the Monument Gold
Project.
On 30 June 2022, the Company issued 7,568,590 fully paid ordinary shares as part consideration for a drilling service rendered.
$419,809 was raised by Company through the exercise of options at various times throughout the year.
AFTER BALANCE DATE EVENTS
52,476,504 unquoted and quoted options expiring 01/07/2022 were recently exercised at $0.008 per option for $419,812.00.
27,687,500 unquoted options (exercisable at $0.008 and expiring on 01/07/2022) and 108,788,611 quoted options (exercisable
at $0.008 and expiring on 01/07/2022) expired unexercised on 1 July 2022.
Mr David Sanders was appointed as Non – Executive Chairman on 15 August 2022.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the
date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company to affect the operations of the Group, the results of these operations or the state of affairs of the Group in
subsequent years.
FUTURE DEVELOPMENTS
The Group continues to consider the acquisition and development of other investments, within the mining industry.
7
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
DAVID SANDERS – NON-EXECUTIVE CHAIRMAN (APPOINTED ON 15 AUGUST 2022)
Mr Sanders is a corporate lawyer with over 20 years’ experience and is currently corporate counsel at law firm Bennett. He
has advised numerous entities, including ASX-listed and private companies on capital raising, mergers and acquisitions,
commercial transactions and ASX and Corporations Act compliance, across a range of industries. In addition to his legal
qualifications, Mr Sanders has a Bachelor of Commerce and Graduate Diploma of Applied Finance and Investments.
During the past three years, Mr Sanders held the following directorship in other ASX listed companies:
(cid:120)
Javelin Resources Ltd (current)
(cid:120)
Caenus Minerals Ltd (resigned)
(cid:120) Hartshead Resources Ltd (resigned)
PATRICK HOLYWELL – FORMA EXECUTIVE CHAIRMAN (RESIGNED ON 15 AUGUST 2022)
Mr Holywell has over fifteen years of experience in accounting, finance and corporate governance, including employment at
Deloitte and Patersons. He is a Chartered Accountant and a Fellow of the Governance Institute of Australia with the last ten
years focused on Director/CFO/Company Secretarial roles. He has held roles with various companies particularly in the
resources and technology space. Mr Holywell has completed a Bachelor of Commerce at UWA, a Graduate Diploma of
Chartered Accounting with the Institute of Chartered Accountants and the Company Directors Course with the Australian
Institute of Company Directors.
During the past three years, Mr Holywell held the following directorship in other ASX listed companies:
(cid:120) Redcastle Resources Ltd (current)
(cid:120) Norfolk Metals Ltd (current)
STEVEN GROVES – NON-EXECUTIVE DIRECTOR
Mr Groves has a Bachelor of Applied Geology (Honours) and completed a Master’s of Economic Geology from CODES-SRC at
the University of Tasmania.
Mr Groves brings 25 years of geological experience in the mining industry including exploration and management roles with
BHP Billiton (ASX: BHP), Newmont Mining, Newcrest Mining (ASX: NCM), A-Cap Resources (ASX: ACB) and Botswana Metals.
During the past three years, Mr Groves held the following directorship in another ASX listed companies:
(cid:120) Non-Executive Director of Sultan Resources Ltd (current)
(cid:120) Managing Director of Resolution Minerals Ltd (current)
MR JOSHUA LETCHER – NON-EXECUTIVE DIRECTOR
Mr Letcher has experience working in various operational and technical roles within the African and Australian mining industry.
He was the founder of Allotropes Diamonds Pty Ltd and was responsible for its acquisition by Newfield Resources Ltd (ASX:
NWF) which provided the company with A$4M in working capital. As CEO of Allotropes, Mr Letcher was responsible for the
development of the project from exploration to trial mining. The roles in that capacity included project management, plant
construction and commissioning, exploration management and asset acquisition. Mr Letcher served in the Royal Australian
Navy and trained as a Mechanical Engineer.
During the past three years, Mr Letcher held the following directorships in other ASX listed companies:
(cid:120) Non-executive Director of Aldoro Resources Limited (current).
(cid:120) Non-executive Chairman of Aurum Resources Limited (current).
8
INTERESTS IN SHARES AND OPTIONS OF THE GROUP AND RELATED BODIES CORPORATE
The following table sets out persons who were directors at 30 June 2022 and that Director’s relevant interest in shares, options
and performance rights of the Group or a related body corporate as at 30 June 2022.
DIRECTORS’ REPORT
Director
Patrick Holywell
Steven Groves
Joshua Letcher
Total
DIRECTORS MEETINGS
Ordinary
Shares
15,000,000
1,013,492
958,334
16,971,826
Listed Share
Options
Unlisted Share
Options
1,000,000
-
-
1,000,000
-
5,625,000
2,375,000
8,000,000
The number of meetings of the Group’s Board of Directors held during the year ended 30 June 2022, and the numbers of
meetings attended by each director were:
Name
Patrick Holywell
Steven Groves
Joshua Letcher
Board of Directors
Number eligible to
attend
Number attended
4
4
4
4
4
4
In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other electronic means,
and where necessary, circular resolutions are executed to effect decisions.
Due to the size and scale of the Group, there is no Remuneration & Nomination Committee or Audit & Risk Committee at
present. Matters typically dealt with by these Committees are, for the time being, managed by the Board. For details of the
function of the Board, refer to the Corporate Governance Statement.
REMUNERATION REPORT (AUDITED)
REMUNERATION POLICY
Key Management Personnel (“KMP”) have authority and responsibility for planning, directing and controlling the activities of
the Group. KMP of the Group comprise of the Board of Directors.
The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and
responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.
No remuneration consultants were employed during the financial year.
Voting and comments made at the Company's Annual General Meeting
At the 2021 Annual General Meeting, the resolution to adopt the Remuneration Report for the year ended 30 June 2021 was
passed without amendment by 93.65% of the vote on the resolution to adopt the Remuneration Report.
The Company did not receive any specific feedback at the Annual General Meeting regarding its remuneration practices.
9
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) CONTINUED
Remuneration Governance, Structure and Approvals
Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate Remuneration
Committee at this point in the Group’s development, nor has the Board engaged the services of an external remuneration
consultant. It is considered that the size of the Board along with the level of activity of the Group renders this impractical. The
Board is primarily responsible for:
The over-arching executive remuneration framework;
(cid:120)
(cid:120) Operation of the incentive plans which apply to executive directors and senior executives, including key performance
indicators and performance hurdles;
(cid:120) Remuneration levels of executives; and
(cid:120) Non-Executive Director fees.
Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term
interests of the Company.
Non-Executive Remuneration Structure
The remuneration of Non-Executive Directors consists of Directors’ fees, payable in arrears. The total aggregate fixed sum per
annum to be paid to Non-Executive Directors in accordance with the Company’s Constitution shall be no more than A$250,000
and may be varied by ordinary resolution of the Shareholders in a General Meeting.
Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels to reflect
market conditions and encourage the continued services of the Directors. The chair’s fees are determined independently to
the fees of the Non-Executive Director’s based on comparative roles in the external market. In accordance with the Company’s
Constitution, the Directors may at any time, subject to the Listing Rules, adopt any scheme or plan which they consider to be
in the interests of the Company and which is designed to provide superannuation benefits for both present and future Non-
Executive Directors, and they may from time to time vary this scheme or plan.
The remuneration of Non-Executive Directors is detailed in KMP Remuneration table and their contractual arrangements are
disclosed below.
Remuneration may also include an invitation to participate in share-based incentive programmes in accordance with Company
policy.
The nature and amount of remuneration is collectively considered by the Board of Directors with reference to relevant
employment conditions and fees commensurate to a company of similar size and level of activity, with the overall objective of
ensuring maximum stakeholder benefit from the retention of high performing Directors.
Remuneration and Performance
The following table shows the gross revenue, losses, earnings per share (“EPS”) of the Company as at 30 June 2022.
Other income ($)
Net profit/(loss) after tax ($)
EPS (cents)
30-Jun-22
30-Jun-21
42,275
(2,829,722)
(0.14)
11,119
(2,887,552)
(0.24)
Relationship between Remuneration and Company Performance
Given the current phase of the Company’s development, the Board does not consider earnings during the current and previous
financial year when determining, and in relation to, the nature and amount of remuneration of KMP.
Executive Remuneration
The pay and reward framework for key management personnel may consist of the following areas:
a) Fixed Remuneration – base salary
b) Variable Short-Term Incentives
c) Variable Long-Term Incentives
10
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) CONTINUED
The combination of these would comprise the key management personnel’s total remuneration.
a)
Fixed Remuneration – Base Salary
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and
knowledge, skills and experience required for each position. Fixed remuneration provides a base level of remuneration
which is market competitive and comprises a base salary inclusive of statutory superannuation. It is structured as a total
employment cost package.
Key management personnel are offered a competitive base salary that comprises the fixed component of pay and
rewards. External remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the
market for a comparable role. No external advice was taken this year. Base salary for key management personnel is
reviewed annually to ensure the executives’ pay is competitive with the market. The pay of key management personnel
is also reviewed on promotion. There is no guaranteed pay increase included in any key management personnel’s
contract.
b)
c)
Variable Remuneration – Short -Term Incentives (STI)
Discretionary cash bonuses may be paid to senior executives annually, subject to the requisite Board and shareholder
approvals where applicable.
Variable Remuneration – Long-Term Incentives (LTI)
Options are issued at the Board’s discretion. Other than options disclosed in the Remuneration Report there have been
no options issued to employees at the date of this financial report.
KMP Remuneration for the year ended 30 June 2022
Details of the nature and amount of each major element of the remuneration of each KMP of Si6 Metals Limited for the year
ended 30 June 2022 are:
Short-term Benefits
Post-employment
Benefits
Share-Based
Payments
Total
$
Name
Mr P Holywell
Mr S R Groves
Mr J Letcher
Total
Cash Salary & Fees
$
105,600
84,000
48,000
237,600
Other*
$
25,000
-
-
25,000
Superannuation
$
-
-
-
-
$
-
-
-
-
130,600
84,000
48,000
262,600
* A discretionary cash bonus of $25,000 was approved by the Board for Mr Holywell’ services during the year for special exertions and
additional services provided.
KMP Remuneration for the year ended 30 June 2021
Short-term Benefits
Post-employment
Benefits
Share-Based
Payments***
Total
$
Name
Mr P Holywell*
Mr S R Groves
Mr J Letcher
Total
Cash Salary & Fees
$
98,112
78,000
46,400
222,512
Other**
$
-
30,000
15,000
45,000
Superannuation
$
-
-
-
-
$
147,501
59,001
29,500
236,002
245,613
167,001
90,900
503,514
* $28,908 of fees were payable at the end of the year.
** A bonus of $30,000 was approved by the Board for Mr Groves’ services during the year. A bonus of $15,000 was approved by the Board
for Mr Letcher’s services during the year. The Board spent considerable time assessing acquisitions before finally entering into the agreement
to acquire the Monument Gold Project. A payment was made for special exertions and additional services provided.
*** Options were granted on 21 September 2020 to the directors; 15,000,000 were granted to Patrick Holywell, 6,000,000 were granted to
Steve Groves and 3,000,000 were granted to Joshua Letcher. See Share-based compensation below for details on the valuation of these.
11
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) CONTINUED
The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed,
based on the amounts disclosed as statutory remuneration expense in the tables above.
Relative proportion of fixed vs variable remuneration expense
Name
Key Management Personnel
Mr P Holywell
Mr S R Groves
Mr J Letcher
Fixed Remuneration
Variable Remuneration
At Risk – STI (%)
At Risk – LTI (%)
2022
2021
2022
2021
2022
2021
2022
2021
81%
100%
100%
40%
47%
51%
19%
-
-
60% -
-
53%
-
49%
-
-
-
-
-
-
-
-
-
Number of Shares held directly or indirectly by Key Management Personnel
2022
Balance
1.7.2021
Received as
Compensation
Issued on
Exercise of
Options
Mr P Holywell
Mr S R Groves
Mr J Letcher
Total
14,200,000
1,013,492
958,334
16,171,826
*On market movement during the year.
-
-
-
-
-
-
-
-
Net Change
Other*
800,000
-
-
800,000
Balance
30.6.2022
15,000,000
1,013,492
958,334
16,971,826
Number of Listed Options Held directly or indirectly by Key Management Personnel
2022
Balance
1.7.2021
Granted as
Compensation
Exercised
Lapsed/
Expired
Net Change
Other*
Balance
30.6.2022
Vested and
exercisable
Mr P Holywell
1,500,000
Mr S R Groves
Mr J Letcher
Total
466,667
-
1,966,667
*On market movement during the year.
-
-
-
-
-
-
-
-
(500,000)
(466,667)
-
(966,667)
-
-
-
-
1,000,000
1,000,000
-
-
1,000,000
-
-
1,000,000
Number of Unlisted Options Held directly or indirectly by Key Management Personnel
2022
Balance
1.7.2021
Granted as
Compensation
Exercised
Lapsed/
Expired
Net Change
Other
Balance
30.6.2022
Vested and
exercisable
Mr P Holywell
-
Mr S R Groves
Mr J Letcher
Total
5,625,000
2,375,000
8,000,000
-
-
-
-
-
-
-
-
12
-
-
-
-
-
-
-
-
-
-
5,625,000
2,375,000
8,000,000
5,625,000
2,375,000
8,000,000
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) CONTINUED
Service Agreements
There are service agreement contracts between the Company and the directors.
Share-based compensation
During financial year 2021, The Company incentivised Directors for their commitment and efforts by issuing share options.
Share-based compensation is at the discretion of the Board and no individual has a contractual right to receive any guaranteed
benefits.
The following table summarises the model and assumptions used to estimate the value of the options granted during the
year. The value of the service related to each tranche granted cannot be estimated reliably, they have been valued using the
Black-Scholes model. All options vested immediately upon grant. Of the 24,000,000 options granted to Directors, 15,000,000
were granted to Patrick Holywell, 6,000,000 were granted to Steve Groves and 3,000,000 were granted to Joshua Letcher.
(cid:120)
Grant date share price
Exercise price
Expected volatility
Grant date
Expiry date
Dividend yield
Risk free rate
Black-Scholes Valuation
Total Fair Value of Options
Number of Options Issued
$0.014
$0.008
125%
21/09/2020
1/07/2022
0%
0.19%
$0.010
$255,669
24,000,000
There were no share-based payment during financial year 2022.
Equity Instruments Issued on Exercise of Remuneration Options
There were no remuneration options were exercised during the financial year (2021:16,000,000).
Other transactions with Directors and related parties
During the 2022 financial year, director fees and bonus totalling of $130,600 were paid to PWT Corporate Pty Ltd, a Company
in which Patrick Holywell is a director (2021: $28,908). Director fees of $48,000 were paid to Upgrade Fund Pty Ltd a
Company in which Joshua Letcher is a director (2021: $nil).
The Company previously had a motor vehicle amount of $96,140 financed at an interest rate of 2.98%, expiring December
2026. During the period, that finance lease was paid out by a director, Patrick Holywell, and ownership of the vehicle was
subsequently transferred to the director.
Loans with KMP
There were no loans made to any KMP during the year ended 30 June 2022 (2021: nil).
This is the end of the audited remuneration report
13
DIRECTORS’ REPORT
ADDITIONAL INFORMATION
Other income
EBITDA
EBIT
Loss after income tax
Share Price
Basic EPS (cent)
2022
$
42,275
(2,823,482)
(2,829,024)
(2,829,722)
0.007
(0.14)
2021
$
11,119
(2,875,066)
(2,886,150)
(2,887,552)
0.012
(0.24)
2020
$
23,912
(686,375)
(686,375)
(686,375)
0.005
(0.11)
2019
$
18,547
(1,158,895)
(1,196,239)
(1,196,239)
0.005
(0.26)
2018
$
5,896
(1,865,883)
(1,871,186)
(1,871,186)
0.013
(0.61)
The Company has not yet set measurable objectives for achieving gender diversity. The Company is currently not of a size that
justifies the establishment of measurable diversity objectives. As the Company develops, the Board will seek to develop a
reporting framework in the future to report the Company’s progress against the objectives and strategies for achieving a
diverse workplace which can be used as a guide to be used by the Company to identify new Directors, senior executives and
employees. The Company intends to appoint additional female Directors and employees should a vacancy arise, and
appropriately qualified and experienced individuals are available.
Full details of the Company’s Diversity Policy can be found on the Corporate Governance page of the Company’s website.
SHARES UNDER OPTION
At the date of this report, the unissued ordinary shares of the Company under option are as follows:
(cid:120)
3,000,000 unlisted options expiring 13 October 2022, exercisable at $0.008 each.
SHARES ISSUED ON EXERCISE OF OPTIONS
52,476,504 ordinary shares of the Company were issued on the exercise of options during the year ended 30 June 2022 and
up to the date of this report.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as a Director
or Executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and Executives of the
Company against a liability 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.
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.
ENVIRONMENTAL REGULATIONS
The company is not currently subject to any specific environmental regulation. There have not been any known significant
breaches of any environmental regulations during the year under review and up until the date of this report.
14
DIRECTORS’ REPORT
AUDITOR
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF BDO AUDIT (WA) PTY LTD
There are no officers of the company who are former partners of BDO Audit (WA) Pty Ltd.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2022 has been received and included within these
financial statements.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the Company are important.
Refer to note 14 for details of the amounts paid or payable to the auditor for non-audit services provided during the year.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that
the provision of non-audit services by the auditors, as set out below, did not compromise the auditor independent
requirements of the Corporations Act 2001 for the following reasons:
(cid:120)
(cid:120)
all non-audit services have been reviewed by the Board of Directors to ensure they do not impact the impartiality and
objectivity of the auditor; and
None of the services undermine the general principles relating to the auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
This report is signed in accordance with a resolution of Board of Directors.
Mr David Sanders
Chairman
30 September 2022
15
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF SI6 METALS LIMITED
As lead auditor of Si6 Metals Limited for the year ended 30 June 2022, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Si6 Metals Limited and the entities it controlled during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth
30 September 2022
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022
Consolidated Group
Revenue and other income
Expenses
Administration and corporate expenses
Other expenses
Directors remuneration and fees
Professional fees
Marketing
Amortisation
Fair value loss
Interest expense
Share-based payments
Exploration expenses
Loss before Income Tax Expense
Income Tax Expense
Loss for the year attributable to owners of Si6 Metals Limited
Other Comprehensive Income for the year that may be subsequently
reclassified to the profit or loss
Exchange differences on translating foreign controlled operation
Total Comprehensive Loss attributable to owners of Si6 Metals
Limited
Notes
2022
2021
4
5a
13
5b
6
$
42,275
$
11,119
(290,209)
(104,617)
(262,600)
(288,960)
(123,776)
(5,542)
(103,208)
(698)
-
(1,692,387)
(2,829,722)
-
(2,829,722)
(275,852)
(59,423)
(246,076)
(227,920)
(71,684)
(11,084)
(5,691)
(1,402)
(279,300)
(1,720,239)
(2,887,552)
-
(2,887,552)
(7,296)
1,500
(2,837,018)
(2,886,052)
Basic Loss per Share (cents per share) & Diluted Loss per Share (cents
per share)
15
(0.14)
(0.24)
The accompanying notes form part of these financial statements.
17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2022
Consolidated Group
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Financial asset at fair value through
profit or loss
Total Current Assets
Non-Current Assets
Right of use asset
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Provisions
Lease liabilities
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
7
8
9
10
11
10
10
12
13
2022
$
2,510,618
120,371
26,000
2,656,989
-
-
2021
$
4,559,417
72,583
91,049
4,723,049
121,928
121,928
2,656,989
4,844,977
89,669
30,927
-
120,596
-
-
120,596
2,536,393
28,616,579
791,808
(26,871,994)
2,536,393
249,776
46,303
15,078
311,157
73,705
73,705
384,862
4,460,115
27,703,282
799,105
(24,042,272)
4,460,115
The accompanying notes form part of these financial statements.
18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For year ended 30 June 2022
Issued
Share
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
$
$
$
$
$
27,703,282
1,039,392
(240,287)
(24,042,272)
4,460,115
-)
-)
-)
493,488
-
419,809
-
-)
-)
-)
-)
-
-)
-
-)
(2,829,722)
(2,829,722)
(7,296)
(7,296)
-)
(7,296)
(2,829,722)
(2,837,018)
-)
-)
-)
-)
-)
-)
-)
-)
493,488
-
419,809
-
28,616,579
1,039,392
(247,583)
(26,871,994)
2,536,393
21,661,131
465,090
(241,787)
(21,154,720)
729,714
-)
-)
-)
-)
-)
-)
-)
(599,959)
295,002
2,192,110
-)
50,000
279,300
-)
(2,887,552)
(2,887,552)
1,500
1,500
-)
1,500
(2,887,552)
(2,886,052)
-)
-)
-)
-)
-)
-)
-)
-)
4,400,000
(304,957)
2,192,110
329,300
27,703,282
1,039,392
(240,287)
(24,042,272)
4,460,115
Balance at 1 July 2021
Loss after income tax for the year
Other Comprehensive income
Total comprehensive income/(loss)
Transactions with owners in their
capacity as owners
Shares issued during the year
Share issue costs
Exercise of options
Options issued during the year
Balance at 30 June 2022
Balance at 1 July 2020
Loss after income tax for the year
Other Comprehensive income
Total comprehensive income/(loss)
Transactions with owners in their
capacity as owners
Share issue costs
Exercise of options
Options issued during the year
Balance at 30 June 2021
Shares issued during the year
4,400,000
The accompanying notes form part of these financial statements.
19
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Payments for interest
Government cashflow boost
Exploration expenditure
Net Cash Used in Operating Activities
Cash Flows Used In Investing Activities
Payment for an investment in listed shares
Net Cash Used In Financing Activities
Cash Flows from Financing Activities
Payments for lease liabilities
Issue of share capital
Payments of share capital issue costs
Proceeds from the exercise of options
Net Cash Received From Financing Activities
Consolidated Group
Notes
2022
$
2021
$
(1,214,820)
714
(698)
-
(1,198,899)
(2,413,703)
(727,440)
1,119
(1,402)
10,000
(1,670,239)
(2,387,962)
7b
(38,087)
(38,087)
(96,740)
(96,740)
(9,449)
-
-
419,809
410,360
(44,229)
4,400,000
(304,957)
2,192,110
6,242,924
3,758,222
799,695
1,500
4,559,417
Net Increase/(Decrease) in Cash and cash equivalents held
Cash and cash equivalents at the Beginning of the Financial Year
Foreign currency effect on cash held
Cash and cash equivalents at the End of the Financial Year
(2,041,430)
4,559,417
(7,369)
2,510,618
7
The accompanying notes form part of these financial statements.
20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Reporting Entity
Si6 Metals Limited (referred to as “Company” or “parent entity”, formerly known as Six Sigma Metals Limited) is a
company domiciled in Australia. The address of the Company’s registered office and principal place of business is
disclosed in the Corporate Directory of the Financial Report. The consolidated financial statements of the Company as
at and for the year ended 30 June 2022 comprise the Company and its subsidiaries (together referred to as the
“Consolidated Entity” or the “Group”).
(b)
Basis of Preparation
Statement of compliance
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Basis of measurement
The consolidated financial statements have been prepared on a going concern basis in accordance with the historical
cost convention, unless otherwise stated.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in Note 21.
Basis of preparation and changes to the Group’s accounting policies
The consolidated entity has adopted all of the new or amended Accounting Standards and interpretations issued by
the Australian Accounting Standards Board (‘AASB”) that are mandatory for the current reporting period. No new
standards have had a significant impact on the company’s financial statements.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted by the consolidated entity.
Significant Judgements and Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 2.
21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Si6 Metals Limited
(‘Company’ or ‘parent entity’) as at 30 June 2022 and the results of all subsidiaries for the year then ended. Si6 Metals
Limited and its subsidiaries together are referred to in this financial report as the consolidated entity.
Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power to
govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered
when assessing whether the consolidated entity controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are
de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between consolidated entity companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
The acquisition method of accounting is used to account for business combinations by the consolidated entity.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board.
(e) Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the consolidated entity’s entities are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial
statements are presented in Australian dollars, which is Si6 Metals Limited’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Foreign Currency Translation (continued)
Consolidated entity companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency
as follows:
• Assets and liabilities for each statement of financial position account presented are translated at the closing rate at
•
the date of that statement of financial position;
Income and expenses for each statement of profit or loss and other comprehensive income account are translated
at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
• All resulting exchange differences are recognised in other comprehensive income and included in the foreign
currency translation reserve in the statement of financial position.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
(f) Revenue Recognition and other Income
The consolidated entity recognises revenue and other income as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the
consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time value of
money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone
selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events.
Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of
variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that
it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The
measurement constraint continues until the uncertainty associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred revenue in
the form of a separate refund liability.
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the Company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(h) Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the fixed lease payments discounted using the incremental borrowing rate in the lease. Right-of-
use assets are measured at cost comprising the amount of the initial measurement of the lease liability, depreciated
over the lease term on a straight-line basis. In December 2020, the Company purchased a motor vehicle for $133,012.
The motor vehicle has been financed at an interest rate of 2.98%, expiring December 2026.
Refer to note 10 for further details on the Group’s lease arrangements.
(i) Exploration and evaluation expenditure
The Group expenses exploration and evaluation expenditure as incurred in respect of each identifiable area of
interest until a time where an asset is in development.
Exploration and Evaluation expenditure
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained
legal rights to explore in a specific area as well as the determination of the technical feasibility and commercial
viability of extracting mineral resource. Exploration and evaluation expenditure are expensed to the profit or loss as
incurred except when existence of a commercially viable mineral reserves has been established and it is anticipated
that future economic are more likely than not to be generated as a result of the expenditure.
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Cash and Cash Equivalents
Cash on hand and in bank and short-term deposits are stated at nominal value. For the purpose of the statement of
cash flows, cash includes cash on hand and in bank, and bank securities readily convertible to cash, net of outstanding
bank overdrafts.
(k) Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period
are classified as current assets. All other receivables are classified as non-current assets.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses (ECL). The ECL is
based on either the 12-month or lifetime ECL. The 12-month ECL is the portion of lifetime ECLs that results from
default events on a financial instrument that are possible within 12 months after the reporting date. When there has
been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.
(l)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based on
both the business model within which such assets are held and the contractual cash flow characteristics of the financial
asset, unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Equity investments that are held for trading and for which the entity has not elected to recognise fair value gains and
losses through other comprehensive income are classified as financial assets at fair value through profit or loss.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance
depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial
instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is
attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit
impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's
lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the
probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the
original effective interest rate.
For financial assets measured at fair value, a fair value loss is recognised in profit or loss.
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Impairment of Assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows. Where an impairment loss subsequently reverses, the carrying amount of
the asset, other than goodwill, is increased to the revised estimate of its recoverable amount, but only to the extent
the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised in prior years. A reversal of an impairment loss is recognised immediately in profit or
loss.
(n) Trade and Other Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received whether or not billed to
the Group. Trade payables are usually settled within 30 days of recognition.
(o) Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up
to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability.
The liability is measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to the expected
future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
(p) Share-based Payments
Equity-settled share-based compensation benefits are provided to Key Management Personnel and employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using an appropriate valuation model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p)
Share-based Payments
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total
fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
(q)
Contributed equity
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.
If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those instruments are
deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and
the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly
in equity.
(r)
Earnings Per Share
Basic earnings per share
Basic earnings per share are calculated by dividing:
•
The profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
• By the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:
•
•
The after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares,
and
The weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s) Goods and Services Tax (“GST”)
Revenue, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included as a current asset or liability in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the taxation authority are presented as operating cash flows.
Commitments and contingencies are disclosed net of amount of GST recoverable from, or payable to, the tax
authorities.
(t) Current and Non-Current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as
non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period;
or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(u) Dividends
Dividends are recognised when declared during the financial year and are no longer at the discretion of the Company.
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Share based payments
The consolidated entity measures the cost of equity-settled transactions with service providers by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using an appropriate
valuation model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. The assumptions
and models used for estimating the fair value of share based payments transactions are disclosed in Note 13.
SEGMENT INFORMATION
NOTE 3
The consolidated entity operates within two geographical segments within mineral exploration being Australia and Botswana.
The segment information provided to the chief operating decision maker is as follows:
Year Ended 30 June 2022
Revenue and other income
Result (loss)
Total assets
Total liabilities
Year Ended 30 June 2021
Revenue and other income
Result (loss)
Total assets
Total liabilities
Australia
$
39,879
(2,491,074)
2,639,373
(95,194)
11,119
(2,393,897)
4,834,268
(358,220)
Botswana
$
2,396
(338,648)
17,616
(25,402)
-
(493,655)
10,709
(26,642)
Total
$
42,275
(2,829,722)
2,656,989
(120,596)
11,119
(2,887,552)
4,844,977
(384,862)
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4
REVENUE AND OTHER INCOME
Income from Ordinary Activities
Interest revenue
Sundry income
Government co-funded drilling
Government cashflow boost
NOTE 5
EXPENDITURE
5(a) Professional Fees
Legal Fees
Corporate advisory
Accounting and audit fees
Consulting fees
5(b) Exploration Expenditure
Exploration Expenditure
Consolidated Group
2022
$
2021
$
714
2,396
39,165
-
42,275
1,119
-
-
10,000
11,119
Consolidated Group
2022
$
89,315
99,608
52,593
47,444
288,960
2022
$
2021
$
43,852
99,983
43,619
40,466
227,920
2021
$
1,692,387
1,692,387
1,720,239
1,720,239
In July 2020, the Company entered into an exclusivity agreement and subsequently, in August 2020, a binding Heads of
Agreement with DiscovEx Resources Ltd with an option to acquire a 100% interest in the Monument Gold Project. As part of
the agreement, $50,000 was paid in cash and a further $50,000 was paid in shares. A further $100,000 cash consideration was
paid as part of the terms of the agreement. During the financial year, the Company exercised its option and acquired a 100%
interest in the Monument Gold Project. $100,000 in cash and $300,000 in shares was paid as the remaining consideration for
the acquisition. DiscovEx will retain a royalty of up to 1.5% of gross revenue. Due to the subjective nature of valuation with
respect to exploration projects with limited exploration results, management have recorded the transaction at the fair value
of equity instruments granted in accordance with the applicable accounting standards. The acquisition of tenements was
accounted for as an asset acquisition by the way of a share-based payment transaction whereby the exploration and evaluation
assets acquired were recognized as an expense in the profit or loss in accordance with the Group’s accounting policy.
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 INCOME TAX EXPENSE
Consolidated Group
2022
$
2021
$
The prima facie tax on loss from ordinary activities before income tax is reconciled
to income tax as follows:
(Loss) before income tax expense
(2,829,722)
(2,887,552)
Prima facie (tax benefit) on (loss) from ordinary activities before income tax at
30% (2021: 30%)
(848,917)
(866,266)
Add:
Tax effect of:
- Accrued expenses
- Non-deductible expenses
-Foreign tax rate differential
Less
Tax effect of:
- Other deductible items
- Prepayments
Tax losses for the year
Prior year tax losses not previously brought to account
The Directors estimate that the potential deferred income tax assets at 30 June in
respect of tax losses not brought to account is:
Tax benefits not recognised during the year
Income Tax Expense for the year
-
274,949
27,092
14,945
108,646
39,493
(47,875)
(12,553)
(33,371)
(2,464)
(607,304)
(739,017)
(3,480,573)
(3,125,074)
(4,087,877)
(3,864,091)
4,087,877
3,864,091
-
-
Tax benefits are not brought to account for the year ended 30 June 2022 (2021: nil) as the certainty of recovery cannot yet
be reliably determined at this stage of the Group’s development.
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Term deposits held
NOTE 7A CASH FLOW INFORMATION
(a) Reconciliation of cash
For the purposes of the statement of cash flows, cash includes cash on hand and at
bank and short term deposits at call, net of outstanding bank overdrafts. Cash as at
the end of the financial year as shown in the statement of cash flows is reconciled to
the related items in the statement of financial position.
Cash at bank and on hand
(b) Reconciliation of cash
Operating Loss after income tax
Non–cash flows in loss:
- Depreciation
-
Share-based payment
- Disposal loss on ROU Assets
-
-
Exploration expenditure (non-cash)
Fair value loss on investment in listed shares
Working capital:
-
(Increase)/decrease in trade and other receivables
-
Increase/(decrease) in trade and other payables
-
Increase/(decrease) in provisions
Net cash (outflow) from operating activities
NOTE 8 TRADE AND OTHER RECEIVABLES
Current
Trade and other receivables
Prepayments
GST receivable
Consolidated Group
2021
2022
$
$
2,500,543
10,075
2,510,618
4,549,417
10,000
4,559,417
Consolidated Group
2022
$
2021
$
2,510,618
4,559,417
(2,829,722)
(2,887,552)
5,542
-
37,052
493,488
11,084
279,300
-
50,000
103,208
5,691
(47,788)
(160,107)
(15,376)
(2,413,703)
(41,612)
164,879
30,248
(2,387,962)
Consolidated Group
2021
2022
$
$
3,230
66,788
50,353
120,371
2,704
24,946
44,933
72,583
Receivables past due but not considered impaired are $nil (2021: $nil). Other receivables are non-interesting bearing and are
generally on terms of 30 days. Information about the Group’s exposure to credit risk is provided in note 20.
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
1,000,000 (2021: 569,057) fully paid ordinary shares held in Cobre Limited
2022
$
2021
$
26,000
26,000
91,049
91,049
During the year, the Company purchased 430,943 shares in Cobre Limited at various prices. The share price at year end was
$0.026 and an unrealised fair value loss of $103,136 was recognized (2021: $5,691).
NOTE 10 RIGHT OF USE ASSET AND LEASE LIABILITY
Right of Use asset
At 1 July
New leases entered
Disposal
Amortisation
At 30 June
2022
$
2021
$
121,928
-
(116,386)
(5,542)
-
-
133,012
-
(11,084)
121,928
In December 2020, the Company purchased a motor vehicle for $133,012. A deposit of $36,872 was paid and the remaining
balance of $96,140 has been financed at an interest rate of 2.98%, expiring December 2026.
During the year, the finance lease was paid out by a director, Patrick Holywell, and ownership of the vehicle was subsequently
transferred to the director. The amount of the finance lease paid out at the time of the transfer was $87,266. The Company
recognized $31,096 loss on disposal of the asset on the statement of profit or loss.
The amount of amortisation recognised in the consolidated statement of profit or loss was $5,542 (2021: $11,084).
Lease liability
Current
Non-current
At 1 July
New leases entered
Lease payments
Interest
At 30 June
The total cash outflow for the lease was $8,759 (2020: $nil).
2022
$
2021
$
-
-
-
15,078
73,705
88,783
88,783
-
(88,085)
(698)
-
-
96,140
(8,759)
1,402
88,783
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11 TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued remuneration owing to Directors
Accrued professional fees & operating expenses
Other payables
Information about the Group’s exposure to credit risk is provided in note 20.
NOTE 12 ISSUED CAPITAL
1,488,189,079 (2021: 1,393,260,264) fully paid ordinary shares
(a)
Ordinary Shares
Consolidated Group
2022
$
58,166
-
14,000
17,503
89,669
2021
$
129,807
28,908
65,600
25,461
249,776
Consolidated Group
2022
$
2021
$
28,616,579
27,703,282
Date
Issue price
No. of Shares
$
Movement in ordinary shares on issue
Balance at the beginning of the year
Share placement plan
Share placement plan
1 July 2020
14 July 2020
-
645,003,153
21,661,131
$0.004
160,000,000
960,000
18 August 2020
$0.004
240,000,000
1,440,000
Issue of shares to DiscovEx Limited
27 August 2020
$0.0086
Issue of shares
Conversion of options
Conversion of options
Conversion of options
Capital raising costs
Balance at the end of year
Balance at the beginning of the year
Issue of shares – Monument Acquisition
Conversion of options
Issue of shares
Balance at the end of year
16 December 2020
Various
Various
Various
-
30 June 2021
1 July 2021
23 August 2021
Various
30 June 2022
30 June 2022
$0.017
$0.008
$0.015
$0.022
-
-
$0.013
$0.008
$0.005
5,813,954
117,647,060
180,797,385
31,748,712
50,000
2,000,000
1,446,379
476,231
12,250,000
269,500
-
(599,959)
1,393,260,264
27,703,282
1,393,260,264
34,883,721
52,476,504
7,568,590
1,488,189,079
27,703,282
453,488
419,809
40,000
28,616,579
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13 RESERVES
Share-based payments reserve (a)(i)
Foreign currency translation reserve (b)
Movement reconciliation
Share-based payments reserve (a) (i)
Balance at the beginning of the year
Equity settled share-based payment
Balance at the end of the year
Movement reconciliation
Foreign currency translation reserve (b)
Balance at the beginning of the year
Other comprehensive income
Balance at the end of the year
2022
$
2021
$
1,039,392
(247,584)
791,808
1,039,392
-
1,039,392
1,039,392
(240,287)
799,105
465,090
574,302
1,039,392
(240,287)
(7,296)
(247,583)
(241,787)
1,500
(240,287)
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments provided to outside parties, and
share-based remuneration provided to employees and directors.
Recognised share-based payment transactions
(a)
Capital raising costs - Options to Lead managers (i)
Options to Directors & Company Secretary (ii)
Options to Exploration manager (iii)
2022
$
2021
$
-
-
-
-
295,002
255,669
23,631
574,302
In relation to the 2021 financial year, the following table summarises the model and assumptions used to estimate the
value of the options granted. The value of the service related to each tranche granted cannot be estimated reliably,
they have been valued using the Black-Scholes model. All options vested immediately upon grant. Of the 26,000,000
options granted to Directors and the Company Secretary, 15,000,000 were granted to Patrick Holywell, 6,000,000 were
granted to Steve Groves and 3,000,000 were granted to Joshua Letcher.
(cid:120)
Grant date share price
Exercise price
Expected volatility
Grant date
Expiry date
Dividend yield
Risk free rate
Black-Scholes Valuation
Total Fair Value of Options
Number of Options Issued
Directors &
Company
secretary (ii)
$0.014
$0.008
125%
21/09/2020
1/07/2022
0%
0.19%
$0.010
$255,669
26,000,000
Lead manager (i) Exploration
manager (iii)
$0.014
$0.008
125%
21/09/2020
1/07/2022
0%
0.19%
$0.010
$295,002
30,000,000
$0.013
$0.02
125%
13/10/2020
13/10/2022
0%
0.19%
$0.008
$23,631
3,000,000
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13 RESERVES CONTINUED
(b)
Grantee
Summary of options granted as share-based payments
Balance at
Date of
1 July 2021
Expiry
Exercise
Price
Issue Date
Exploration
manager
13/10/2020 13/10/2022
$0.02
3,000,000
3,000,000
NOTE 14 REMUNERATION OF AUDITORS
Granted
during the
year
Exercised/
Disposed during
the year
Expired
during the
year
Balance at
30 June 2022
-
-
-
3,000,000
-
-
3,000,000
3,000,000
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:
Audit or review of the financial statements
Other services - BDO Corporate Tax (WA) Pty Ltd
Tax compliance
NOTE 15 LOSS PER SHARE (“LPS”)
a) Reconciliation of losses to profit or loss
Loss used to calculate basic and diluted loss per share
Consolidated Group
2021
2022
$
$
32,804
26,487
19,789
52,593
12,770
39,257
Consolidated Group
2022
$
2021
$
(2,829,722)
(2,887,552)
b) Weighted average number of ordinary shares used in the calculation of basic
and diluted loss per share
1,983,259,676
1,204,446,682
Basic and diluted loss per share ($0.14) (2021: ($0.24)).
NOTE 16 CONTROLLED ENTITY
Country of
Incorporation
Principal Activity
African Metals (Pty) Ltd
Botswana
Mineral Exploration
Monument Exploration Pty Ltd
Australia
Mineral Exploration
Class of
Share
Ordinary
Ordinary
Equity Holding
2022
%
100
100
2021
%
100
-
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 17 COMMITMENTS
Planned Exploration Expenditure
Payable
- not later than 12 months
- between 12 months and 5 years
-
greater than 5 years
Consolidated Group
2022
$
2021
$
683,823
829,787
529,759
945,244
-
-
1,513,610
1,475,003
The commitments relate to the Prospecting licences issued to African Metals (Pty) Ltd by the Department of Mines in
Botswana and the licences issued to Monument Exploration Project Pty Ltd (an asset acquisition of the Company and its
licences occurred during the financial year). Expenditures are required to maintain the right of tenure to exploration until
the expiry of the licences. These obligations are subject to renegotiation upon expiry of the tenements and are not provided
for in the financial statements.
The Group anticipates future expenditure on its current rights of tenure to exploration and mining tenements up until their
expiry. In the event the Group does not meet the minimum exploration expenditure the licences may be cancelled or not
renewed.
NOTE 18 CONTINGENT LIABILITIES
Magogaphate Tenement
Although the Group acquired a 100% interest in the Magogaphate group of tenements in Botswana from A-Cap Resources
Limited in 2007, Mr Bruce Edds has retained a right to a 5% net profits share. The Group therefore, has a contingent liability
to Mr Edds should it establish a profitable mining operation on those tenements. The 5% net profits share interest is limited
to the three tenements subject to joint venture with BCL, namely PL 110/94, PL 111/94 and PL 54/98. A profitable mining
operation has not yet been established and accordingly there have been no payments to Mr Edds.
Si6 owns 100% Monument transactions now and no contingent liabilities exist. Si6 did owe shares/cash to DiscovEx Resources
Ltd but that’s all settled as part of the option exercised.
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 19 RELATED PARTY INFORMATION
Details relating to key management personnel, including remuneration paid, are below.
Key Management Personnel Compensation
Short-term benefits
Share-based payments
Total
Related Party Transactions
Director fees paid to Upgrade Fund Pty Ltd(i)
Director fees paid to PWT Corporate Pty Ltd(ii)
Total
(i) An entity in which Joshua Letcher is a Director.
(ii) An entity in which Patrick Holywell is a Director.
All amounts above are exclusive of GST.
2022
$
262,600
-
262,600
2022
$
48,000
130,600
178,600
2021
$
267,512
236,002
503,514
2021
$
-
28,908
28,908
Expenses paid by, or for, Directors and related entity were, or will be, reimbursed at cost.
The Company previously had a motor vehicle amount of $96,140 financed at an interest rate of 2.98%, expiring December
2026. During the period, that finance lease was paid out by a director, Patrick Holywell, and ownership of the vehicle was
subsequently transferred to the director.
The Company has provided at call interest free unsecured loans to its wholly owned subsidiary African Metals (Pty) Ltd and
Monument Exploration Pty Ltd to pay operational and exploration costs.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
NOTE 20 FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks, an investment in equity securities and accounts
receivable and payable.
Treasury Risk Management
The Board of Directors meets on a regular basis to analyse financial risk exposure and to evaluate treasury management
strategies in the context of the most recent economic conditions and forecasts. The Board’s overall risk management
strategy seeks to assist the Group in meeting its financial targets, whilst minimising potential adverse effects on financial
performance.
Financial Risk Exposures and Management
The main risk the group is exposed to through its financial instruments is liquidity risk.
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 20 FINANCIAL RISK MANAGEMENT CONTINUED
Liquidity Risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The group manages liquidity risk by monitoring forecast cash flows and only
investing surplus cash with major financial institutions.
Maturity analysis:
Consolidated
2022
Financial liabilities
Trade and other payables
Lease liabilities
<6 months
$
6-12 months
$
1-5 years
$
>5 years
$
Total
$
(89,669)
-
-
-
-)
-
-)
-
(89,669)
-
Consolidated
2021
<6 months
$
6-12 months
$
1-5 years
$
>5 years
$
Total
$
Financial liabilities
Trade and other payables
Lease liabilities
(249,776)
(7,357)
-
(7,357)
-)
(66,712)
-)
(7,357)
(249,776)
(88,783)
Interest rate risk
The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in the market interest rates on interest bearing financial instruments. The Group’s exposure to this risk relates
primarily to the Group’s cash and any cash on deposit. The Group does not use derivatives to mitigate these exposures.
The Group manages its exposure to interest rate risk by holding certain amounts of cash in fixed and floating interest rate
facilities. At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Cash and cash equivalents
2022
2021
Weighted
average
interest rate (i)
0.02%
Balance
$
2,510,618
Weighted
average interest
rate (i)
0.04%
Balance
$
4,531,781
(i) This interest rate represents the average interest rate for the period.
Sensitivity
Within the analysis, consideration is given to potential renewals of existing positions and the mix of fixed and variable
interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting
date. The 1% increase and 1% decrease in rates is based on reasonably expected possible changes over a financial year,
using the observed range of historical rates for the preceding five-year period.
At 30 June 2022, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post-tax losses and equity would have been affected as follows:
Judgements of reasonably possible
movements:
+ 1.0% (100 basis points)
- 1.0% (100 basis points)
Profit higher/(lower)
2021
2022
$
$
25,106
(25,106)
45,594
(45,594)
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 20 FINANCIAL RISK MANAGEMENT (CONTINUED)
Credit risk
Credit risk arises from the financial assets of the Company, which comprise cash and cash equivalents and trade and other
receivables. The Company’s exposure to credit risk arises from potential default of the counterparty, with maximum exposure
equal to the carrying amount of the financial assets.
The Company’s policy is to trade only with recognised, creditworthy third parties. It is the Company’s policy that all customers
who wish to trade on credit terms will be subject to credit verification procedures.
In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts
is not significant. There are no significant concentrations of credit risk within the Company except for cash and cash
equivalents. The Company’s cash accounts are held with Westpac, their credit rating is AA- by S&P Global and Moody’s.
Price risk
The group’s exposure to equity securities price risk arises from a publicly traded investment in the ASX. To manage price risk,
the group regularly monitors the price of the equity security to determine its investment position. The loss of the company
would
in the securities market were to
decrease/(increase) by 5%.
increase/(decrease) by $1300/($1300) (2021: $4,552/($4,552))
if prices
Foreign Currency Risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations. The Group also has exposure to foreign exchange risk due to the currency cash
reserves and other balances denominated in foreign currencies. The Group does not actively manage foreign currency risk
and does not make use of derivative financial instruments.
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date.
At 30 June 2022, had the Australian Dollar/Botswana Pula exchange rate moved, as illustrated in the table below with all
other variables held constant, post-tax profit would have been affected as shown.
Judgments of
reasonable
possible
movements
AUD/BWP +5%
AUD/BWP -5%
Post-tax Loss
Higher/(Lower)
Other Comprehensive
Income
Higher/(Lower)
Equity
Higher/(Lower)
2022
$
16,932
(16,932)
2021
$
24,683
2022
$
16,568
2021
$
24,758
2022
$
33,500
(24,683)
(16,568)
(24,758)
(33,500)
2021
$
49,441
(49,441)
Management believes the reporting date risk exposures are representative of the risk exposure inherent in the financial
instruments.
The net fair values of financial assets and liabilities approximate their carrying values due to their short-term nature.
Capital Risk Management
The Group manages its capital to ensure that Companies in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt to equity balance. The Group’s focus has been to
raise sufficient funds through equity to fund exploration and resource development activities.
The Group’s overall strategy remains unchanged from 2021. Risk management policies and procedures are established with
regular monitoring and reporting. The capital structure of the Group consists of cash and cash equivalents and equity
attributable to equity holders of the parent, comprising of issued capital, reserves and accumulated losses as disclosed in Notes
12 and 13 respectively.
40
The Group operates in Australia and Botswana. None of the Group’s companies are subject to externally imposed capital
requirements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 21 PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2022
$
2021
$
2,639,373
4,712,340
-
121,928
2,639,373
4,834,268
95,194
-
95,194
284,515
73,705
358,220
28,616,579
27,703,282
1,039,392
1,039,392
(27,111,792)
(24,266,626)
2,544,179
4,476,048
(2,845,166)
(2,890,038)
-
-
(2,845,166)
(2,890,038)
Guarantees, contingent liabilities and contractual commitments
The subsidiary company has expenditure commitments to maintain its current rights of tenure to exploration and mining
tenements up until the expiry of the leases including its joint venture commitments. These obligations are subject to
renegotiation upon expiry of the leases and are not provided for in the financial statements. The parent entity may provide
funds to ensure the subsidiary company can fulfil these commitments as well as any other operating commitments.
NOTE 22 EVENTS AFTER THE END OF THE REPORTING PERIOD
There has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction or
event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect the operations of the
Group, the results of these operations or the state of affairs of the Group in subsequent years.
41
DIRECTORS’ DECLARATION
In the Directors’ opinion:
a)
b)
c)
The financial statements and accompanying notes are in accordance with the Corporations Act 2001, including:
i)
complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance
for the year ended on that date.
The financial statements and notes comply with International Financial Reporting Standards as described in Note 1 to
the financial statements.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
Mr David Sanders
Chairman
30 September 2022
42
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Si6 Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Si6 Metals Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the con
solidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to
the financial report, including a summary of significant accounting policies and the directors’ declara
tion.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
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 not identified any key audit matters for Si6 Metals Limited.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the financial report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s
report, and the annual report, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom
our report is prepared
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
2
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 13 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Si6 Metals Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth
30 September 2022
3
CORPORATE GOVERNANCE STATEMENT
The Company has elected to publish its Corporate Governance Statement on its website in accordance with ASX Listing Rule
4.10.3.
A copy of the Corporate Governance Statement can be found at:
https://www.si6metals.com/about‐us/corporate‐governance/
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual Report is as
follows. The information is current as of 26 August 2022.
DISTRIBUTION OF EQUITY SECURITIES
Ordinary share capital
1,480,620,489 fully paid shares held by 4,125 individual shareholders. All issued ordinary shares carry one vote per
share and carry the rights to dividends.
The number of shareholders, by size of holding, is:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Holders
88
41
25
2,270
1,701
4,189
Units
14,344
120,852
194,964
108,492,341
1,371,797,988
1,480,620,489
Percentage
0.00%
0.01%
0.01%
7.33%
92.65%
100.00%
46
ASX ADDITIONAL INFORMATION
TWENTY LARGEST SHAREHOLDERS
Position
Holder Name
1 PATRICK VOLPE
2 DISCOVEX RESOURCES LIMITED
3 CITICORP NOMINEES PTY LIMITED
4 MICHAEL SCHLOMAN
5 MS JIALING LIU
6 MRS YIHONG WU
7 AUSTRALIAN LEISURE EQUITY PTY LTD
8 MR REUBEN MICHAEL CIAPPARA
9 CRAIG NASH
10 PATRICK HOLYWELL
11 MR ARTHUR IOANNOU &
MS OLIVIA KEENE
12 ROSS MORRIS
13
LIGHTSTORM PTY LTD
14 MR MOHD RAZALI BIN BAJURI
15 MR EDWIN EDWARD BULSECO &
MRS ALLISON BULSECO
16 MISS THI PHUONG DOAN
17 BAUHINIA (BH) PTY LTD
18 BNP PARIBAS NOMINEES PTY LTD
19 MR ALEX PO‐TSUN CHU
20 MR DAVID MALCOLM DADDOW
Total
Holding
152,000,001
40,697,675
35,156,622
31,000,000
27,105,330
25,189,689
23,522,806
19,500,000
19,015,402
15,000,000
14,900,000
12,000,000
10,731,707
10,500,313
10,027,984
10,000,000
8,736,831
8,121,032
7,734,348
7,627,688
488,567,428
% IC
10.27%
2.75%
2.37%
2.09%
1.83%
1.70%
1.59%
1.32%
1.28%
1.01%
1.01%
0.81%
0.72%
0.71%
0.68%
0.68%
0.59%
0.55%
0.52%
0.52%
33.00%
UNLISTED OPTIONS
3,000,000 unquoted options with an exercise price of $0.02 and an expiry date of 13/10/22.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are:
Patrick Volpe
Ordinary Shares
Number
Percentage
152,000,001
10.27%
47
ASX ADDITIONAL INFORMATION
VOTING RIGHTS
The voting rights attaching to each class of equity security are set out below:
Ordinary Shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Options
Options carry no voting rights.
UNMARKETABLE PARCELS
There were 1,952 holders of less than a marketable parcel of ordinary shares, which as at 26 August 2022 was 71,428.
RESTRICTED / UNQUOTED SECURITIES
There are no restricted or unquoted securities on issue.
ON‐MARKET BUY‐BACK
There is currently no on‐market buyback program for any of ‘SI6 Metals’ listed securities.
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange under the code SI6.
ACQUISITION OF VOTING SHARES
No issues of securities have been approved for the purposes of Item 7 of Section 611 of the Corporations Act 2001.
TAX STATUS
The Company is treated as a public company for taxation purposes.
FRANKING CREDITS
The Company has no franking credits.
48
SCHEDULE OF INTERESTS IN MINING TENEMENTS
EXPLORATION AREAS HELD IN BOTSWANA
The Company holds the following prospecting licences in Botswana (all held by African Metals (Pty) Ltd):
Tenement
Area sqkm
Renewal / Expiry
Date
Percentage
Holding
Comment
PL 110/1994
PL 111/1994
PL 54/1998
PL183/2021
PL 006/2021
PL 007/2021
PL 389/2018
PL186/2020
PL188/2020
PL136/2021
27
35
79
652
460
256
40
100
210
96
31/03/2018
31/03/2018
31/03/2018
31/12/2024
30/06/2024
30/06/2024
Pending renewal
31/12/2023
31/12/2023
30/09/2024
60
60
60
100
100
100
100
100
100
100
Farm‐in agreement with BCL Ltd,
currently in liquidation with
renewals suspended.
Farm‐in agreement with BCL Ltd,
currently in liquidation with
renewals suspended.
Farm‐in agreement with BCL Ltd,
currently in liquidation with
renewals suspended.
Active
Active
Active
Active
Active
Active
49
EXPLORATION AREAS HELD IN WESTERN AUSTRALIA
The Company holds the following licences in Western Australia (all held by Monument Exploration Pty Ltd):
Tenement
E39/1846
E39/1866
E39/2024
E39/2035
E39/2036
E39/2139
P39/5456
P39/5457
P39/5519
P39/5837
P39/5855
P39/5880
P39/5899
P39/5910
P39/6051
P39/6052
P39/6053
P39/6054
P39/6055
P39/6056
P39/6057
P39/6058
Renewal /
Expiry Date
16/06/2025
1/02/2027
2/07/2023
2/07/2023
2/07/2023
21/07/2025
7/04/2022
7/04/2022
15/06/2023
30/10/2022
3/07/2023
15/05/2023
1/10/2022
30/10/2022
6/04/2024
6/04/2024
6/04/2024
5/08/2024
1/12/2024
1/12/2024
2/12/2024
2/12/2024
Percentage
Holding
Comment
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Active
Active
Active
Active
Active
Active
Amalgamation pending
Amalgamation pending
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Competent Persons Statement (Maibele Base Metals Project, Botswana)
The information in this report that relates to Exploration Targets and Exploration Results is based on recent and historical
exploration information compiled by Mr Steven Groves, who is a Competent Person and a Member of the Australian Institute
of Geoscientists. Mr Groves is a Director of Si6 Metals Limited. Mr Groves 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 the reporting of Exploration Results, Mineral Resources
and Ore Reserves”. Mr Groves consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
Competent Persons Statement (Monument Gold Project, Western Australia)
The information in this report that relates to Exploration Targets and Exploration Results is based on recent and historical
exploration information compiled by Mr Michael Jackson, who is a Competent Person and a Member of the Australian Institute
of Geoscientists. Mr Jackson is a consultant to Si6 Metals Limited. Mr Jackson 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 the reporting of Exploration Results, Mineral Resources
and Ore Reserves”. Mr Jackson consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
50
Disclaimer
In relying on the above mentioned ASX announcements and pursuant to ASX Listing Rule 5.23.2, the Company confirms that it
is not aware of any new information or data that materially affects the information included in the above announcements. No
exploration data or results are included in this document that have not previously been released publicly. The source of all
data or results have been referenced.
51
s i 6 m e t a l s . c o m