Energizer Holdings, Inc. Annual Report 2022

FY2022 Annual Report · Energizer Holdings, Inc.
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E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Table of Contents

01. Letter from the Chairman & Managing Director

02. Exploration Review

03. Summary of Tenements

04. Directors’ Report

Auditor’s Independence Declaration

Consolidated Financial Statements 

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 Financial Statements

Directors’ Declaration

Independent Audit Report

ASX Additional Information

Corporate Directory

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2 0 2 2   A N N U A L   R E P O R T

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01.

Letter from the Chairman and Managing Director

01. 
Letter from 
the Chairman 
& Managing Director

Dear Fellow Shareholder,

We are pleased to present the 2022 Annual Report for 
Encounter Resources Ltd (“Encounter”). Encounter is 
one of Australia’s leading mineral exploration companies. 
Encounter’s primary focus is on discovering major copper 
deposits in Australia. 

Copper is one of the most crucial commodities required 
in the 21st century with vehicle electriﬁcation and 
the decarbonisation of global energy infrastructure 
supercharging its importance.  

As the world moves more rapidly in this direction, global 
copper supply is constrained and average mine grades 
across the sector continue to decline. The major copper 
mines producing today were discovered many decades 
ago and are becoming more costly to develop. Importantly, 
copper is also one of the least substitutable metals required in 
modern economies.  

This makes the challenge to ﬁnd the next generation of major 
new sources of copper irresistible. These discoveries are 
essential and likely to occur in new areas by implementing 
new technologies and methods. This drives the construction 
of Encounter’s project portfolio and our approach to 
exploration.  

Encounter is one of Australia’s leading ASX-listed project 
generation and copper exploration companies. Our project 
generator business model facilitates exploration of an 
expansive project pipeline through a mix of alliances, earn-ins 
and joint ventures as well as sole funded exploration. This 
allows Encounter to pursue multiple large scale opportunities 
in parallel.

Encounter controls a large portfolio of exciting copper 
projects in Western Australia and the Northern Territory.  

The Greater McArthur Superbasin in the Northern Territory 
is fast emerging as one of the most signiﬁcant global 
opportunities for the discovery of new, large sediment-hosted 
copper and zinc deposits under shallow cover.

Encounter is advancing this vast opportunity via a 
combination of farm-in agreements with some of Australia’s 
largest mining companies (South32 and BHP) and an 
extensive portfolio of 100% owned projects.

Identifying opportunities, completing early-stage exploration 
and then accelerating work through joint ventures is a 
core objective. To date Encounter has completed farm-in 
agreements in the Northern Territory that can provide up to 
$50 million in initial exploration funding from its partners.  

The search for Tier-1 copper and zinc deposits in the Northern 
Territory continues to gather pace and we are delighted to 
be working with high quality partners with accomplished 
exploration teams to capture this opportunity.

At our 100% owned Sandover project, the evidence of the 
processes that produce high grade copper mineralisation 
continue to mount.  Sandover is located 170km north of Alice 
Springs and covers a major structural corridor on the southern 
margin of the Georgina Basin. Sandover has mapped copper 
mineralisation over 20km of strike in a stratiform position and 
has a number of the major elements of the classic sediment-
hosted copper system. Furthermore, the project covers a 
large portion of the North Arunta pegmatite province and its 
prospectivity for lithium mineralisation will be assessed in 
tandem with the copper potential.

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E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Letter from the Chairman and Managing Director

01.

In Western Australia, the stars are beginning to align at the 
100% owned Aileron project in the West Arunta where a 
recent study by the Geological Survey of Western Australia 
has identiﬁed a new suite of granites in the northern part of 
the West Arunta at a similar age to Olympic Dam.  

Encounter remains one of the most dedicated and active 
mineral exploration companies listed on the ASX. We are 
focused on generating signiﬁcant, long-term value for our 
shareholders through leading edge exploration for major 
copper deposits in Australia. 

Aileron has a comparable age host sequence and 
hydrothermal event as well as similar geochemical signature 
to the world-class IOCG deposits of South Australia. 
Favourably, the prospective geology at Aileron is under thin 
cover, not hundreds of metres of cover like the Gawler Craton, 
and surface geochemical methods have a good chance of 
identifying near surface mineralisation.

Encounter is disciplined in its approach to capital 
management and we are steadfast in our commitment to 
systematic exploration that can create enduring value for our 
shareholders. Our exploration plans remain well funded and, 
importantly, we have an extremely capable and experienced 
team that is dedicated to realising the potential of our 
portfolio.  

In the Paterson Province of Western Australia, we are pleased 
to be partnering with IGO towards unlocking the considerable 
copper potential of the region, demonstrated by the recent 
discoveries in the region at Winu and Havieron. IGO has 
implemented a number of new and innovative exploration 
techniques in recent years to generate high priority drill 
targets.  

Also, in the Paterson Province of Western Australia, Encounter 
has the 100% owned Lamil project located 25km northwest 
of the major gold-copper mine at Telfer. Diamond drilling at 
Lamil has intersected a thick prospective package containing 
multiple, stacked copper-gold reefs that are open on section 
and down plunge.  

In summary, Encounter is advancing a suite of 100% owned 
copper projects in the Paterson Province and the West Arunta 
in Western Australia and at Sandover in the Northern Territory.  
Complementing this, Encounter has numerous large scale 
copper projects being advanced in partnership with world 
leading resources companies: BHP, South32 and IGO.  

In closing, we would like to thank our local communities, 
employees, joint venture partners and suppliers. We also 
would take this opportunity to thank our fellow shareholders 
for your ongoing support. 

Yours sincerely

Paul Chapman
Chairman

Will Robinson
Managing Director

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02.
Exploration
Review

2022 Highlights:

100% owned projects in Australia’s most 
exciting new copper districts: 

Sandover Copper-Lithium Project NT (100% ENR)

• Additional surface sampling conﬁrmed further areas of 
surface copper oxide mineralisation at Sandover

• Nodules of copper sulphide minerals, including bornite, 

identiﬁed in historical drill core providing evidence of high 
grade mineralisation processes

• Sandover covers a signiﬁcant part of the North Arunta 
Pegmatite Province identiﬁed by Northern Territory 
Geological Survey (“NTGS”)

• NTGS interpret that the pegmatites in the region are 

Lithium-Caesium-Tantalum (“LCT”) pegmatites similar 
to the host pegmatites of the lithium deposits at 
Greenbushes in WA and at the Finnis deposit in the Pine 
Creek pegmatite province in the NT

• Encounter awarded a $100,000 grant by the Northern 

Territory Geological Survey (“NTGS”) to complete a gravity 
survey at Sandover. Gravity survey has commenced and 
will aid the development of a basin wide stratigraphic 
model

Aileron Copper-Rare Earths Project West Arunta WA 
(100% ENR)

• Geochronology completed by the GSWA classiﬁes 
the host sequence and mineralisation events at 
Aileron are a similar age to the events at Olympic Dam.               

Indications of a potential new IOGC belt include:

• Conﬁrmation of important isotopic ages; 
• Copper–gold anomalism associated with hematite 

alteration; and

• Highly anomalous rare earth elements (“REE”) in drill 

core

•

Importantly, the prospective geology is under shallow 
cover (5m of cover in EAL001) in contrast to +500m of 
cover in much of the Gawler Craton

• A full assay suite of REE analysis has been completed for 
EAL001 drill core with assays grading up to 0.8% TREO 
(including 0.14% of high value neodymium-praseodymium) 

• Airborne magnetic and radiometric survey commencing in 

October 2022 to reﬁne targets for drilling in 2023

Lamil Copper-Gold Project – Paterson Province WA 
(100% ENR)

• Gravity survey completed in May 2022 
• Exploration Incentive Scheme (“EIS”) co funded diamond 
drilling completed at the Dune Prospect (“Dune”) in 
September 2022

• Drilling to test for lateral and down plunge extensions of the 
prospective package that contains stacked, copper-gold 
reefs. Initial observations:

• Conﬁrms the geological model with the prospective 

package intersected in both holes

2022 Highlights:

Exploration Review 02.

• A new steep set of structures striking sub-parallel to 

Elliott Copper Project NT (BHP $25m farm-in)

drilling may represent a new untested target

• Drill holes have been cased for downhole EM to 
test for off-hole conductive features that could be 
concentrations of sulphide associated with Cu-Au 
mineralisation

•

Initial assay results are expected in November/December 
2022

Major copper exploration drive funded 
through farm-ins with world leading resources 
companies

Yeneena Copper Project – Paterson Province WA 
(IGO $15m farm-in)

• Substantial 2022 exploration program at the Yeneena 

Copper-Cobalt Project (“Yeneena”) in the Paterson Province 
of WA operated and funded by IGO Limited (“IGO”, ASX:IGO) 

• The 2022 exploration program at Yeneena designed to 

test high-priority targets identiﬁed by IGO after two years of 
target reﬁnement and is currently planned to include:  

• 4,500m of diamond drilling 
• 1,900m of aircore drilling 
• 1,200 line km of Heli TEM surveying covering two 

target areas

• Exploration at the Elliott Copper Project is operated and 
funded by BHP (ASX:BHP) under a $25M exploration 
earn-in agreement and includes planned deep diamond 
drilling and seismic surveys

• The 2022 diamond drilling program at the Elliott Copper 

Project is designed to advance the understanding of basin 
architecture and prospective deposition locations for 
sediment-hosted copper deposits

• The drilling component of the program includes an 

estimated 2,000m of diamond drilling. The drill program is 
scheduled to be completed by November 2022

Jessica and Carrara Copper-Zinc Projects NT 
(South32 $15m & $10m farm-ins)

• Two new Farm-in Agreements completed with South32 
(ASX:S32) in June 2022 covering the Jessica Copper 
Project and the Carrara Copper-Zinc Project in the Northern 
Territory

• South32 to wholly fund initial exploration on each project 
and Encounter carried to the completion of a Scoping 
Study

• Exploration has commenced with reprocessing of seismic 
lines at Carrara, which is part of the ﬁrst year budget of 
$1.3 million exploration expenditure across both projects

02.

Exploration Review

Sandover Copper-Lithium Project – NT (100% ENR)

Background

Sandover is located 170km north of Alice Springs and covers a major structural corridor on the southern margin of the Georgina 
Basin. Access is excellent with the Stuart Highway and Alice Springs-Darwin railway extending through the western margin of the 
project.  

Sampling in October 2021 was conducted in four ﬁeld areas located up to 6km apart (Figure 1). Each area conﬁrmed the 
presence of an outcropping red-bed sandstone sequence with multiple narrow but strike extensive grey shale units containing 
copper oxide mineralisation (malachite).  Sampling of copper mineralisation at surface returned assays up to 20.9% Cu and a 
suite of highly anomalous pathﬁnder elements (Zn, Ag, As, Bi, Mo and Pb) (refer ASX announcement 16 December 2021).  

Copper Exploration 

Additional surface sampling and ﬁeld reconnaissance was completed in April 2022. This program  conﬁrmed additional mapped 
areas containing surface copper oxide mineralisation (see Figure 1, Area 5). The surface mapping also identiﬁed small bornite 
nodules, interpreted to be zones of increased ﬂuid ﬂow after replacement of anhydrite, within the grey shale unit (Photo 1). 

Surface samples were also collected from various outcropping stratigraphic horizons for chemical analysis and stratigraphic 
correlation.  

Inspection of historical drill core from Sandover in the Alice Springs core library was completed in April 2022. A number of 
historical drill holes (drilled in 1968, 1971 and 1994) were reviewed and conﬁrmed key geological units and processes to enable 
the formation of sediment hosted copper deposits are present. Signiﬁcantly, narrow zones of copper sulphide minerals, including 
bornite, were identiﬁed in historical drill core (Photo 2). 

It is interpreted that the copper rich nodules identiﬁed at the surface represent the weathered form of the bornite nodules 
observed in historical drill core. This provides encouraging evidence that processes capable of forming high grade copper 
mineralisation are present in the basin. 

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E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Exploration Review 02.

Photo 1 (left) – weathered copper rich nodules collected from surface at Area 1 (refer Figure 1) – containing malachite (interpreted after bornite-
chalcopyrite), visual estimate 10% malachite in 2.5cm diameter nodule

Photo 2 (right) – primary copper rich nodule from historical drillhole (Mt Skinner DDH3 203.3m) located adjacent to Area 4 (refer Figure 1) containing 
bornite-chalcopyrite, visual estimate 30% bornite-chalcopyrite over ~1cm width

Furthermore, shale units containing the outcropping copper mineralisation at Sandover are considered moderate reductants yet 
have precipitated considerable copper. This suggests that a highly copper charged ﬂuid has been active at the project.  

Accordingly, exploration activities at Sandover are focused on identifying more reduced units within the basin. There will be a 
particular emphasis on where these units intersect long-lived basin forming structures which are areas with the potential to host 
major mineral deposits. 

NTGS Funding

All available geophysical datasets have been compiled, integrated and evaluated by Encounter’s geophysical consultant Terra 
Resources. As a result of this exercise, 1x1km spaced gravity data has been identiﬁed as a key dataset to be collected. Encounter 
has been awarded a $100,000 grant to complete this gravity survey at Sandover under the NTGS Geophysics and Drilling 
Collaborations Program. The gravity survey has commenced.  

Cautionary statement on visual estimates of mineralisation 

References to visual results are from historical diamond drilling from Sandover stored at the Alice Springs Core Library. Photos 1 & 2 provide 
information supporting the geological context of observations of mineral processes reported in this announcement.  

Visual estimates of mineral percentages are based on preliminary visual observations of the drill core surface as presented in the core trays and may 
not be representative of potential mineralisation at Sandover. Visual estimates of mineral abundance are not considered to be a proxy or substitute for 
laboratory analyses where metal concentrations or grades are the factor of principal economic interest.

The Company does not intend to complete laboratory assays of the samples in Photos 1 and 2.

2 0 2 2   A N N U A L   R E P O R T

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Sandover Copper-Lithium Project – NT (100% ENR) 

(Continued)

Figure 1 – Geological map showing cupiferous outcrop, drillhole locations and surface sampling (compiled from company reports and Haines 2004) 
Source: NTGS Geology and Mineral Resources of the Northern Territory. Special Publication 5. Compiled by Ahmad, M. and Munson, T.J., June 2013. 
Areas 1-4 sampled by Encounter in October 2021, Area 5, 6, 7 sampled in April 2022.

8

ENCOUNTER RESOURCES LIMITED  Exploration Review02. Location of Areas 1-7 
(see Figure 1)

Figure 2 – Location of ﬁeld mapping and sampling

Exploration Review 02.

2 0 2 2   A N N U A L   R E P O R T

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02.

Exploration Review

Sandover Copper-Lithium Project – NT (100% ENR) 

(Continued)

Figure 3 – Northern Arunta Pegmatite Province – LCT pegmatite occurrences sourced from NTGS Report 16 Tin-tantalum pegmatite mineralisation of 
the Northern Territory (Frater 2005)

Lithium Exploration

Sandover sits within the Northern Arunta Pegmatite Province which was ﬁrst identiﬁed in a report by the NTGS in 2005. The NTGS 
interpret that the pegmatites in the region are Lithium-Caesium-Tantalum (“LCT”) pegmatites similar to the host pegmatites of the 
lithium deposits at Greenbushes in WA and the Finnis deposit in the Pine Creek pegmatite province in the NT*. 

The region’s lithium potential was also highlighted by rock chip sampling of the Anningie Tin Field (located 30km west of 
Sandover) completed in 2017 which returned 15 rock chip samples above 1% Li2O including a maximum lithium grade of 4.63% 
Li2O (see ASX:TRT release 17 December 2017).  

The presence of LCT type pegmatites is further supported at Sandover by two tin-tantalum occurrences in the south-east of the 
project area. 

The region’s lithium prospectivity has been recognised by a number of companies including Core Lithium Ltd (ASX:CXO) which 
holds the Anningie and Barrow Creek Lithium Projects in the North Arunta district (Figure 3).

Encounter is completing a technical assessment of the potential for lithium and other critical minerals at Sandover as part of a 
strategic review to determine how best to optimise and advance the LCT opportunity.

Commencement of an NTGS co-funded gravity survey to aid the development of a basin wide stratigraphic model. The gravity 
survey will also aid lithium exploration by deﬁning potential key hosting structures.

* NTGS Report 16: Tin-tantalum pegmatite mineralisation of the Northern Territory (Frater, 2005)

10 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Exploration Review 02.

Aileron Copper – Rare Earths Project – West Arunta – WA (100% ENR)

Background

Aileron is located in the West Arunta region of WA ~600km west of Alice Springs. The project contains several structural and 
geophysical targets identiﬁed through aerial magnetic and gravity surveys. 

To date, one diamond hole, EAL001, has been drilled targeting a discrete magnetic anomaly (Worsley prospect). EAL001 was 
partially completed to a depth of 158m in October 2020 and drilled through 5m of shallow cover followed by a brecciated 
hydrothermal hematite-chlorite-altered granite with narrow maﬁc intrusions. Within these units, zones of increased brecciation 
and alteration correlate with increased REE anomalism with a distinctive IOCG geochemical signature. The hole ended prior to 
designed depth due to a mechanical failure. 

Assays from EAL001 include zones of anomalism in copper (up to 0.1% Cu), gold (up to 48ppb Au), molybdenum (up to 155ppm 
Mo) and highly elevated rare earth elements (up to 0.8% TREO) consistent with the targeted IOCG deposit model (refer ASX 
announcement 28 January 2021).

The metal anomalism in the hole is associated with the most intensely brecciated and chlorite-hematite altered zones (up to 15% 
Fe). IOCG mineralisation often has a strong density contrast to background and may be identiﬁable through the application of 
gravity surveys.

In November 2021, a ground gravity survey and geological reconnaissance activities, including a successful surface sampling 
trial, were completed at Aileron.

Geochronology

The North West Arunta inlier at Aileron has historically been mapped as Carrington suite granites (1805-1770 Ma). Recent zircon 
dating undertaken by the GSWA* has shown that, while there are older rocks of the Carrington Suite and Lander Rock Formation 
in the district, EAL001 has intersected a new suite of intrusions, previously unknown in the region, with an age of c.1608 Ma. 

The GSWA has also found a population of zircons which suggest that brecciation and hydrothermal alteration of this younger 
intrusion occurred shortly after its emplacement at c.1577 Ma*. Importantly, this age is similar to the ages of known IOCG 
mineralisation events recorded in the Gawler craton at Olympic Dam* and other deposits (Figure 4).

This new information as well as the established REE anomalism, the presence of cross-cutting maﬁc dykes and anomalous copper 
and gold values in EAL001 are compelling evidence of the region’s IOCG mineral system potential.

In summary, age dating by the GSWA completed on samples collected from drillhole EAL001 at Aileron has conﬁrmed:

•

•

a previously unknown granitic intrusion event at Aileron of similar age to the Hiltaba Suite granites in the Gawler Craton in 
South Australia; and

an age of hydrothermal alteration similar to the published mineralising events at Olympic Dam

Conﬁrmation of these important dates, coupled with the presence of REE, copper and gold anomalism associated with hematite 
and chlorite alteration, support the IOGC target model.  

Importantly, the prospective geology is under shallow cover (5m of cover in EAL001) in contrast to +500m of cover in much of the 
Gawler Craton. Accordingly, surface geochemical methods can be applied in this region and the trials completed by Encounter 
demonstrate this.

* GSWA Geochronology Record 1897: 203749: altered granitic rock, Aileron prospect (Aileron Province, North Australian Craton)

*

Jagodzinski, 2014. Australian Earth Sciences Convention (AESC), Newcastle).

Next Steps
• Airborne magnetic and radiometric survey to be completed in October 2022 to reﬁne targets for drilling in 2023.

2 0 2 2   A N N U A L   R E P O R T

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Aileron Copper – Rare Earths Project – West Arunta – WA (100% ENR) 

(Continued)

Figure 4 – IOCG Gawler Craton Schematic Model – modified from Skirrow et al 2018

Figure 5 – Aileron IOCG project – August-November 2021 gravity survey location plan on TMI background 

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ENCOUNTER RESOURCES LIMITED  Exploration Review02. Exploration Review 02.

Figure 6 – Aileron IOCG project – Left – Detailed residual gravity image with regional residual gravity image in background with interpreted structures 
and identiﬁed targets. Right – regional TMI magnetics image with interpreted structures and identiﬁed targets.

2 0 2 2   A N N U A L   R E P O R T

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02.

Exploration Review

Lamil Copper-Gold Project - Paterson Province – WA (100% ENR)

Background

Lamil covers an area of ~61km2 and is located 25km northwest of the major copper-gold mine at Telfer, owned by Newcrest 
Mining Ltd (ASX:NCM). Lamil is adjacent to a major regional gravity lineament which marks the location of an interpreted 
signiﬁcant crustal scale structure that would have acted as a pathway for mineralising ﬂuids during the formation of the 
Proterozoic aged deposits.

The Dune prospect is located in the northwest of the Lamil project and consists of a laterally extensive copper-gold system, 
outlined by broad spaced RC drilling over 1km of strike (Figure 7). 

The mineralisation at Dune is hosted in metasedimentary rocks of the Proterozoic Lamil group which also host the Telfer, 
Havieron and Winu copper-gold deposits. Dune is situated close to the intersection of the prospective Upper Malu formation and 
the interpreted fold axis in the north western part of the Lamil Dome. 

Diamond Drilling at Dune Prospect

Prior drilling at Dune intersected multiple, stacked, copper-gold reefs in drill hole ETG0243 within a thick prospective package of 
interbedded siltstones analogous to Telfer’s Upper Malu formation (see ASX release 16 November 2021). 

The two holes (ETG0244 & ETG0245) were completed in September 2022 designed to test for lateral and down plunge 
extensions of the prospective package intersected in ETG0243. Initial observations conﬁrm the geological model with both 
holes intersecting the target package.

Drillhole ETG0244 intersected the prospective package of altered interbedded siltstones and sandstones from 355m to 474m 
downhole. In addition, a new steep set of structures striking sub-parallel to drilling was observed in the hole which may represent 
a new untested target.

ETG0245 conﬁrmed the dip of the north eastern ﬂank of the Lamil Dome and intersected the prospective package at 159m. 

The diamond drill program at Lamil is co-funded, up to $220,000, under the WA Government’s Exploration Incentive Scheme 
(“EIS”).  

Next Steps

ETG0244 and ETG0245 have been cased for downhole EM to assess the proximal area for conductive features that could 
represent sulphide accumulations often associated with copper-gold mineralisation at Dune.

Assay results from this program are expected in November/December 2022.

14 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Exploration Review 02.

Figure 7 – Dune prospect plan showing the three previous holes that intersected stacked reef mineralisation in the Telfer analogous stratigraphic 
package. The locations of the two recent diamond drill holes (ETG0244 & ETG0245) down dip (cross section A-A’, ETG0244) and down plunge (long 
section B-B’ (ETG0245) 1

2 0 2 2   A N N U A L   R E P O R T

15

Lamil Copper-Gold Project - Paterson Province – WA (100% ENR) 

(Continued)

Figure 8 – Schematic Dune cross section with completed drill hole ETG0245. The Telfer analogous stratigraphy including upper and lower reef 
horizons intersected in ETG0243 contain multiple Cu-Au reefs which are generally sub-parallel to stratigraphy. ETG0245 was completed to test for 
lateral continuity and increased widths of the upper reefs down dip 1

16

ENCOUNTER RESOURCES LIMITED  Exploration Review02. Exploration Review 02.

Figure 9 – Schematic long section of Dune showing the interbedded siltstone unit dipping below previous drilling and recently completed drill holes, 
ETG0244 and ETG0245 1

1   For further details regarding the exploration results at the Lamil Copper-Gold Project, please refer to the following ASX 

announcements:  

ASX release 26 April 2017

ASX release 19 January 2017

ASX release 18 December 2020

ASX release 21 April 2021

ASX release 6 September 2021

ASX release 16 November 2021

2 0 2 2   A N N U A L   R E P O R T

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02.

Exploration Review

East Thomson’s Dome Project – WA (100% ENR)

East Thomson’s Dome is located 5km from Telfer in the Paterson Province of WA. The domal structure at East Thomson’s Dome 
has a core of Malu Formation with the fold axis trending WNW. The majority of surface gold and reef style mineralisation at East 
Thomson’s Dome has been discovered in the overlying Telfer Formation sediments. This geological setting is similar to that of 
the high-grade reefs at Telfer.  

Broad spaced RC drilling completed at the 45 Reef at East Thomson’s Dome intersected:

• 6m @ 9.0g/t Au from 178m including 

• 2m @ 26.0g/t Au from 178m in ETG0045

• 16m @ 0.6g/t Au from 154m in ETG0044

(refer ASX release 16 August 2017)

The next drilling program at East Thomson’s Dome will target the south west extension of the high-grade reef intersected in 
ETG0045. Additional drilling is also planned on section and along strike of ETG0045. 

18 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Exploration Review 02.

Dunmarra, Maryﬁeld and Broadmere Copper Projects – NT (100% ENR)

The Dunmarra, Maryﬁeld and Broadmere projects encompass key targets identiﬁed on the margin of the Beetaloo Basin that 
were generated through ﬂuid ﬂow modelling of previous oil and gas drilling and seismic surveys. The targets were generated 
utilising oil and gas developed methodology that was reﬁned to target the sediment hosted copper model.

Exploration activity has commenced with compilation of historical exploration, and will include additional sampling of oil and gas 
wells in the basin adjacent to the targets and ﬁeld reconnaissance.  

Figure 10 – Encounter copper projects in the Northern Territory – Project Location Plan

2 0 2 2   A N N U A L   R E P O R T

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02.

Exploration Review

Elliott Copper Project – NT (BHP $25m Farm-in)

Elliott was the ﬁrst project secured by Encounter in the NT and now comprises  more than 7,200km2. The project is readily 
accessible being located 200km north of Tennant Creek on the Stuart Highway which runs along the western margin of Elliott.  

The project is being explored together with BHP where BHP has the right to earn up to a 75% interest in Elliott by sole funding up 
to $25 million of expenditure within 10 years.

Elliott is located at a major structural intersection on the southwestern margin of the Beetaloo Basin which is part of the Greater 
McArthur Superbasin that hosts the giant sediment-hosted base metal deposit at McArthur River.  

The Superbasin contains thick, petroleum bearing, reduced sediments which are an ideal trap sequence and the major 
structures bounding the Superbasin are considered ideal structural ﬂuid pathways for major sediment-hosted copper deposits. 
The project encompasses key conceptual criteria for the formation of sediment-hosted copper and the target sequence is 
undercover and untested.

New sampling datasets released in 2019 and 2020 have supported the conceptual and structural targeting model at Elliott. The 
standout, copper-in-groundwater anomaly (an order of magnitude above background) in the extensive dataset is located at 
Elliott.

Diamond Drill Program

The approved 2022 diamond drilling program at the Elliott Project is designed to advance the understanding of basin 
architecture and prospective deposition locations for sediment-hosted copper deposits.  

The drilling component of the program includes an estimated 2,000m of diamond drilling. The drill program is scheduled to be 
completed before the end of the dry season in November 2022.

Figure 11 – Elliott Copper Project location plan 

20 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Exploration Review 02.

Jessica Copper Project – NT (South32 $15m Farm-in)

In June 2022, South32 entered into a Farm-in Agreement covering the Jessica Copper Project in the Northern Territory. South32 
may earn a 60% initial interest in a project by spending $15 million in exploration expenditure over a period of 10 years. South32 
may then earn an additional 15% interest in Jessica upon completion of a Scoping Study (refer ASX announcement 23 June 
2022).  

Jessica covers ~6,300km2 along key structural corridors east of Tennant Creek and is prospective for sediment-hosted copper 
and IOCG style deposits. Access to the project is via the sealed Tablelands Highway that traverses the western side of Jessica.  

Jessica captures compelling structural targets along the Brunette Downs Rift Corridor that was identiﬁed in the Geoscience 
Australia Exploring for the Future Program. Jessica was targeted along the northern ﬂanks of the East Tennant gravity ridge and 
the intersection with a major NNW structural corridor. Jessica has potential for both basement IOCG style mineralisation and 
sediment-hosted copper deposits. 

Systematic assessment of drill chips from water bores at Jessica has been conducted by Encounter and a previous explorer 
utilising handheld XRF machines. Areas of copper anomalism were selected for chemical analysis and for the sample interval 
0-3m in RN28419 (No. 39 water bore) which returned 1.5% copper (refer ASX announcement 19 August 2020). 

2022 Exploration Activity
• Reprocessing of Geoscience Australia seismic lines that extend through Jessica to provide greater detail of the geology and 

structure in the upper 1,000m along the western margin of the sub-basin.

•

Inﬁll gravity surveys completed covering a series of high priority magnetic targets in conjunction with an extensive regional 
gravity survey by the NTGS.

Figure 12 – Jessica and Carrara – Project location plan over gravity 

2 0 2 2   A N N U A L   R E P O R T

21

02.

Exploration Review

Carrara Copper-Zinc Project – NT (South32 $10m Farm-in)

In June 2022, South32 also entered into a Farm-in Agreement covering the Carrara Copper-Zinc Project in the Northern Territory. 
South32 may earn a 60% initial interest in a project by spending $10 million in exploration expenditure over a period of 10 years. 
South32 may then earn an additional 15% interest in Carrara upon completion of a Scoping Study.

Carrara was secured following the release of the South Nicholson Seismic Survey, a foundational dataset acquired as part of the 
Geoscience Australia Exploring for the Future Program. A key ﬁnding of this study is the correlation of prospective stratigraphic 
units from the Isa Superbasin into the Carrara Sub-basin that extend the Mount Isa Province to the west. 

Carrara is located at an interpreted structural offset of the western margin of the Carrara Sub-basin where the prospective Isa 
Superbasin units are modelled closer to surface.  

The giant Century Zinc Mine is located on the eastern margin of the Carrara Sub-basin, and there is a clear correlation of the 
Century mine stratigraphy across the basin in GA seismic data (Figures 12 and 13).

Late in 2020 a 1,751m deep stratigraphic drill hole (NDI Carrara-1) was completed as part of the National Drilling Initiative funded 
by the Minex CRC. This hole was designed to validate the interpretation of the South Nicholson Seismic Survey and was located 
within the Carrara tenement.   

The results of the NDI Carrara-1 stratigraphic drill hole support the interpretation that the geology of the Isa Superbasin extends 
throughout the Carrara Sub-basin. The presence of copper and zinc sulphide mineralisation (Figure 13) demonstrates that 
sediment hosted copper and zinc mineralising processes occur within the prospective host unit (refer ASX announcement 28 
April 2021).  

2022 Exploration Activity
• Reprocessing of seismic lines that extend through Carrara to provide greater detail of the geology and structure in the upper 

1,000m along the western margin of the sub-basin.

• A 2km x 2km gravity survey over Carrara by the NTGS was completed and is being integrated and interpretated in 

conjunction with other datasets.  

Figure 13 – Carrara Project – South Nicholson Seismic Survey and approx. Location of NDI Carrara-1 stratigraphic hole (yellow)

22 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Exploration Review 02.

Yeneena Copper Project – Paterson Province WA (IGO $15m Farm-in)

Yeneena comprises a major land position covering >1,450km2 in the highly prospective Paterson Province, targeting copper-
cobalt mineralisation. IGO can sole fund $15 million in exploration expenditure over a maximum of seven years to earn a 70% 
interest in Yeneena.

Exploration at Yeneena is focused on discovering high-value sediment-hosted copper deposits. The strategy implemented by 
IGO involves the collection of belt-scale high-quality primary datasets, with cutting-edge techniques used to acquire geological, 
geochemical and geophysical data. 

Regional target areas have been identiﬁed from the model, deﬁning sub-basins that could contain similar rocks to those found at 
Nifty copper mine. Diamond drill testing of these targets is to be completed during the 2022 ﬁeld season.

2022 Exploration Program

The Yeneena 2022 exploration program, to be operated and funded by IGO, is currently planned to comprise the following 
activities:

• 1,900m aircore drill program to test high-priority targets
• 4,500m diamond core drill program to test high-priority targets
• 1,200 line km of Heli TEM surveying covering two target areas
• Detailed geological mapping of the Lookout Rocks and Aria prospects
• Hydro-geochemistry orientation program on cased 2021 aircore drillholes

Diamond Drilling

Diamond drilling commenced in July 2022 and is focused on two high priority regional targets (see Figure 14):

• EB01a: Regional 3D modelling has identiﬁed an area of high prospectivity to focus copper bearing ﬂuid. High permeability 
ﬂuid pathways and their intersection with favourable stratigraphy forms the basis of the primary targets in this area. Three 
diamond drill holes are planned to test the targets.  

• ET01c: A new regional 3D model, as well as ﬁeld mapping, has led to a better understanding of the BM1-BM7 prospect and 
of the paleo-basin architecture. Several opportunities for favourable traps for copper bearing brines have been identiﬁed. 
These targets will be tested by three planned diamond drill holes.  

Aircore Drilling

ET01: Regional aircore drilling is being utilised to gain end of hole and litho-geochemical data in areas that are higher priority 
and will be used to facilitate the 3D model in data poor areas (see Figure 14). Collars will be cased with PVC to allow for 
hydrogeochemical testing. 

Further aircore drilling may be added following the hydrogeochemical orientation program.

2 0 2 2   A N N U A L   R E P O R T

23

02.

Exploration Review

Figure 14 – Yeneena 2022 proposed drilling programs

The information in this report that relates to Exploration Results is based on information compiled by Mrs Sarah James who is a Member 
of the Australasian Institute of Mining and Metallurgy. Mrs James holds shares and options in and is a full time employee of Encounter 
Resources Ltd and has sufﬁcient experience which is relevant to the style of mineralisation under consideration to qualify as a Competent 
Person as deﬁned in the 2012 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mrs 
James consents to the inclusion in the report of the matters based on the information compiled by them, in the form and context in which it 
appears.

The Company conﬁrms that it is not aware of any new information or data that materially affects the information in the relevant ASX releases 
and the form and context of the announcement has not materially changed. This report has been authorised for release by the Board of 
Encounter Resources Limited.

24 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Summary of Tenements 03.

03.
Summary 
of Tenements

Lease

E45/2500

E45/2501

E45/2502

E45/2561

E45/2657

E45/2658

E45/3768

E45/2805

E45/2806

E45/5379

E45/5333

E45/5334

E45/5686

E45/4861

E45/4613

Lease 
Name

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Yeneena

Lamil

Project 
Name

Area 
km2

Paterson 

107.3

Paterson

Paterson

Paterson

Paterson

Paterson

19.12

117.8

50.95

156

95.4

Paterson

149.7

Paterson

Paterson

Paterson

Paterson

Paterson

Paterson

Paterson

Paterson 
Cu/Au

85.8

35

235.3

127.2

102.1

108.4

328

60.7

Managing 
Company

IGO Limited

Encounter 
Interest

75%* and 100% IGO earning 
up to 70%

Encounter Operations Pty Ltd

75%*

IGO Limited

100% IGO earning up to 70%

Encounter Operations Pty Ltd

75%*

IGO Limited

IGO Limited

IGO Limited

IGO Limited

IGO Limited

IGO Limited

IGO Limited

IGO Limited

IGO Limited

IGO Limited

100% IGO earning up to 70%

100% IGO earning up to 70%

100% IGO earning up to 70%

100% IGO earning up to 70%

100% IGO earning up to 70%

0% ** Option to Purchase

100% IGO earning up to 70%

100% IGO earning up to 70%

100% IGO earning up to 70%

100% IGO earning up to 70%

Encounter Paterson Pty Ltd

100%

E45/3446

East Thomson’s Dome

Paterson

6

Encounter Paterson Pty Ltd

P45/2750

East Thomson’s Dome

Paterson

198 HA

Encounter Paterson Pty Ltd

P45/2751

East Thomson’s Dome

Paterson

177 HA

Encounter Paterson Pty Ltd

P45/2752

East Thomson’s Dome

Paterson

199 HA

Encounter Paterson Pty Ltd

P45/3032

East Thomson’s Dome

Paterson

113.80 HA

Encounter Paterson Pty Ltd

100%

100% ***

100% ***

100% ***

100% ***

2 0 2 2   A N N U A L   R E P O R T

25

EL32696

Sandover

Northern Territory

763.6

Baudin Resources Pty Ltd

03.

Summary of Tenements

Lease

E80/5169

E80/5469

E80/5470

Lease 
Name

Aileron

Aileron

Aileron

Project Name

West Arunta

West Arunta

West Arunta

E80/5522

Aileron 

West Arunta

Area 
km2

187.6

534.3

613.9

429.2

208.8

813.56

136.99

601.11

493.6

795.4

792.67

792.71

787.39

740.11

665.33

750.46

738.6

783.5

791.42

814.55

814.94

813.76

811.55

805.42

805.21

801.69

E30/517

E30/527

EL32156

EL32157

EL32158

EL32159

EL32226

EL32329

EL32437

EL32581

Rani

Rani

Elliott

Elliott

Elliott

Elliott

Elliott

Elliott

Elliott

Yilgarn

Yilgarn

Northern Territory

Northern Territory

Northern Territory

807.26

696.31

793.71

Northern Territory

723.9

Northern Territory

Northern Territory

Northern Territory

Elliott 

Northern Territory

EL32374

Sandover

Northern Territory

EL32421

Sandover

Northern Territory

EL32694

Sandover

Northern Territory

EL32695

Sandover 

Northern Territory

EL33060

Sandover

Northern Territory

EL33065

Sandover

Northern Territory

EL32273

EL32317

EL32338

EL32339

EL32386

EL32387

EL32388

EL32493

Jessica

Jessica

Jessica

Jessica

Jessica

Jessica

Jessica

Jessica

Northern Territory

Northern Territory

Northern Territory

Northern Territory

Northern Territory

Northern Territory

Northern Territory

Northern Territory

EL32476

Carrara 

Northern Territory

EL32477

Carrara 

Northern Territory

Managing 
Company

Encounter 
Interest

Encounter Aileron Pty Ltd

Encounter Aileron Pty Ltd

Encounter Aileron Pty Ltd

Encounter Aileron Pty Ltd

Baudin Resources Pty Ltd

6

Baudin Resources Pty Ltd

BHP

BHP

BHP

BHP

BHP

BHP

BHP

BHP

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

South32

South32

South32

South32

South32

South32

South32

South32

South32

South32

South32

South32

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

100% South32 earning up to 75%

EL32701

EL32813

Carrara

Carrara

Northern Territory

Northern Territory

22.72

EL32478

Brunchilly

Northern Territory

EL32721

Broadmere Northern Territory

EL32723

Dunmarra

Northern Territory

EL32727

Maryﬁeld

Northern Territory

EL32728

Maryﬁeld

Northern Territory

ELA32703

ELA32729

ELA32730

Elliott 

Elliott

Elliott

Northern Territory

Northern Territory

Northern Territory

ELA32937

Broadmere Northern Territory

ELA32938

Broadmere Northern Territory

ELA32724

Dunmarra

Northern Territory

798.52

816.73

823.05

795.65

826.95

756.11

672.64

757.92

825.11

744.04

821.54

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

100%

100%

100%

100%

100%

BHP

BHP

BHP

100% BHP earning up to 75%

100% BHP earning up to 75%

100% BHP earning up to 75%

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

Baudin Resources Pty Ltd

100%

100%

100%

26 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Summary of Tenements 03.

Lease

Lease 
Name

Project Name

Area 
km2

Managing 
Company

Encounter 
Interest

ELA33048

Sandover 

Northern Territory

789.2

Baudin Resources Pty Ltd

ELA33330

ELA33331

ELA33332

ELA33334

Jessica

Jessica

Jessica

Jessica

Northern Territory

805.77

Baudin Resources Pty Ltd

Northern Territory

802.06

Baudin Resources Pty Ltd

Northern Territory

812.77

Baudin Resources Pty Ltd

Northern Territory

814.13

Baudin Resources Pty Ltd

100%

100%

100%

100%

100%

Summary of tenements as of 30th September 2022.

*

Tenement subject to Hampton Hill JV (only includes 4 eastern blocks on E45/2500) see ASX announcement April 23, 2015 

**  Shumwari Option IGO JV 

***  Mining Lease application – M45/1304 (687.41 hectares)

2 0 2 2   A N N U A L   R E P O R T

27

04.

Directors’ Report

04.
Directors’ 
Report

The Directors present their report on Encounter Resources Limited (the Company) and the 
entities it controlled (the Group) at the end of, and during the year ended 30 June 2022.

Directors

The names and details of the Directors of Encounter Resources Limited during the ﬁnancial year and until the date of this report are:

Paul Chapman – B.Comm, ACA, Grad. Dip. Tax,  MAICD, MAusIMM

Non-Executive Chairman appointed 7 October 2005

Mr Chapman is a chartered accountant with over 30 years’ experience in the resources sector gained in Australia and the United 
States. Mr Chapman has experience across a range of commodity businesses including gold, nickel, uranium, manganese, 
bauxite/alumina and oil/gas and has held managing director and other senior management roles in public companies. Mr 
Chapman was a founding shareholder/director of the following ASX listed companies: Reliance Mining; Encounter Resources; 
Rex Minerals; Paringa Resources; Silver Lake Resources and Black Cat Syndicate. 

Mr Chapman is currently a director of Western Australia based explorers, including Black Cat Syndicate Limited (ASX:BC8), 
Dreadnought Resources Limited (ASX:DRE), Meeka Metals Limited (ASX:MEK) as Non-Executive Chairman, and Queensland 
focussed explorer Sunshine Gold Limited (ASX:SHN) as a Non-Executive Director. 

Will Robinson – B.Comm, MAusIMM

Managing Director (Executive) appointed 30 June 2004

Mr Robinson has worked in the resources industry in Australia and Canada for over twenty-ﬁve years.  Mr Robinson’s experience 
includes senior management roles at a large international resources company and executive roles in the junior mining and 
exploration sector.   Mr Robinson is former president of the resources industry advocacy body, the Association of Mining and 
Exploration Companies (AMEC) a member of the Strategic Advisory Board at the Centre for Exploration Targeting University 
of Western Australia and was a member of the Australian Government’s Resources 2030 Taskforce.   Mr Robinson is a Non-
Executive Director of Hampton Hill Mining NL (delisted from ASX effective 21 March 2022) and Non-Executive Chairman of 
Hamelin Gold Limited (ASX:HMG).

28 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Directors’ Report 04.

Peter Bewick – B.Eng (Hons), MAusIMM

Non-Executive Director appointed 7 October 2005 (Executive Director to 1 November 2021)

Mr Bewick is an experienced geologist and has held a number of senior mine and exploration geological roles during a fourteen 
year career with WMC. These roles include Exploration Manager and Geology Manager of the Kambalda Nickel Operations, 
Exploration Manager for St Ives Gold Operation, Exploration Manager for WMC’s Nickel Business Unit and Exploration Manager 
for North America based in Denver, Colorado. Whilst at WMC, Mr Bewick gained extensive experience in project generation 
for a range of commodities including nickel, gold and bauxite. Mr Bewick has been associated with a number of brownﬁelds 
exploration successes at Kambalda and with the greenﬁeld Collurabbie Ni-Cu-PGE discovery.  Mr Bewick is currently a Non-
Executive Director of Mincor Resources Limited (ASX:MCR) and Managing Director of Hamelin Gold Limited (ASX:HMG).

Jonathan Hronsky OAM - BAppSci, PhD, MAusIMM, FSEG

Non-executive director appointed 10 May 2007

Dr. Hronsky has more than thirty ﬁve years of experience in the mineral exploration industry, primarily focused on project 
generation, technical innovation and exploration strategy development. Dr. Hronsky has particular expertise in targeting 
for nickel sulﬁde deposits, but has worked across a diverse range of commodities. His work led to the discovery of the West 
Musgrave nickel sulﬁde province in Western Australia. Dr. Hronsky was most recently Manager-Strategy & Generative Services 
for BHP Billiton Mineral Exploration. Prior to that, he was Global Geoscience Leader for WMC Resources Ltd. He is currently a 
Director of exploration consulting group Western Mining Services and former Chairman of the board of management of the 
Centre for Exploration Targeting at the University of Western Australia.

During the last 3 years Dr Hronsky has been a director of Cassini Resources Limited until its acquisition by Oz Minerals Limited 
in 2020 and a Non-Executive Director of Azumah Resources Limited between 7 November 2019 to its delisting on 19 February 
2020. Dr Hronsky is currently a Non-Executive Director of Caspin Resources Limited (ASX:CPN) and Azumah Resources Limited 
(delisted from ASX 19 February 2020).

Philip Crutchﬁeld – B. Comm, LL.B (Hons), LL.M LSE

Non-executive director appointed 9 October 2019

Mr Crutchﬁeld is a prominent and highly respected barrister specialising in commercial law. Philip was Non-Executive Chairman 
of Zip Co Limited (ASX:Z1P) (resigned 2nd March 2021) and is Non-Executive Director of Applyﬂow Limited (ASX:AFW), 
Dreadnought Resources Limited (ASX:DRE), and Western Australian gold focused companies Black Cat Syndicate Limited 
(ASX:BC8) and Hamelin Gold Limited (ASX:HMG).

Mr Crutchﬁeld is a board member of the Bell Shakespeare Theatre Company and the Victorian Bar Foundation Limited. Philip is 
also a former partner of Mallesons Stephen Jaques (now King & Wood Mallesons). 

Company Secretaries

Kevin Hart – B.Comm, FCA

Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 4 November 2005.  Mr Hart 
has over 30 years experience in accounting and the management and administration of public listed entities in the mining and 
exploration industry.

Mr Hart is currently a director of an advisory ﬁrm, Endeavour Corporate, which specialises in the provision of company secretarial 
and accounting services to ASX listed entities.

Dan Travers – BSc (Hons), FCCA

Mr Travers is a Fellow of the Association of Chartered Certiﬁed Accountants and was appointed to the position of Joint Company 
Secretary on 20 November 2008. Mr Travers is an employee of Endeavour Corporate, which specialises in the provision of 
company secretarial and accounting services to ASX listed entities in the mining and exploration industry.

2 0 2 2   A N N U A L   R E P O R T

29

04.

Directors’ Report

Directors’ Interests

As at the date of this report the Directors’ interests in shares and unlisted options of the Company are as follows:

Director

P Chapman

W Robinson

P Bewick

J Hronsky

P Crutchﬁeld

Directors’ Interests in 
Ordinary Shares

Directors’ Interests in 
Unlisted Options

Options vested at the 
reporting date

9,948,816

26,452,556

8,010,303

475,714

3,371,448

2,200,000

1,550,000

4,280,000

1,650,000

2,900,000

2,200,000

1,550,000

4,280,000

1,650,000

2,900,000

Included in the Directors’ Interests in Unlisted Options are 12,580,000 options that are vested and exercisable as at the date of 
signing this report.

Principal Activities

The principal activity of the Company during the ﬁnancial year was project generation, mineral exploration and project 
development in Western Australia and the Northern Territory.

There were no signiﬁcant changes in these activities during the ﬁnancial year.

Directors’ Meetings

The number of meetings of the Company’s Directors held during the year ended 30 June 2022, and the number of meetings 
attended by each Director are as follows:

Director

P Chapman 

W Robinson 

P Bewick

J Hronsky 

P Crutchﬁeld

Results of Operations

Board of Directors’ Meetings

Audit Committee Meetings

Held

Attended

Held

Attended

8

8

8

8

8

8

8

8

8

8

2

-

-

2

2

2

-

-

2

2

The consolidated net proﬁt after income tax for the ﬁnancial year was $4,428,194 (2021: loss $1,533,150).

Included in the consolidated loss for the current year is a write-off of deferred and uncapitalised exploration and joint venture 
expenditure totalling $4,204,574 (2021: $296,128).

Included in the result for the ﬁnancial year is a gain of $10,104,846 recognised on the demerger of Hamelin Gold Limited from 
the Group.    

30 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Directors’ Report 04.

Review of Activities

Exploration

Encounter’s primary focus is on discovering major copper dominant deposits in Australia.  Encounter’s exploration activities 
during the year were directed towards:

• A series of camp scale, ﬁrst mover copper opportunities in the Northern Territory.  This includes the Elliott copper project 

which is being advanced in partnership with BHP via a $25m earn-in and joint venture and farm-in agreements with South32 
Limited at the Jessica and Carrara projects; 

• A large project portfolio in the Paterson Province of WA where it is exploring for copper-gold deposits at its 100% owned 

Lamil Project and for copper-cobalt deposits at the Yeneena project with IGO Limited (ASX:IGO);

• The Aileron IOCG - Rare Earths project in the West Arunta in WA.

Financial Position

At the end of the ﬁnancial year the Group had $2,165,945 (2021: $5,686,505) in cash and term deposits. Capitalised mineral 
exploration and evaluation expenditure is $13,891,414 (2021: $15,212,300).  

Matters Subsequent to the End of the Financial Year

On 29 September 2022 the Company completed the placement of 33,333,334 shares at $0.12 per share pursuant to a share 
placement raising $4 million before costs. A total of 2 million unlisted options were issued to the Joint Lead Managers.

Other than as already stated in this report, 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 substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent 
ﬁnancial years.

Signiﬁcant Changes in the State of Affairs

Other than stated below, there have been no signiﬁcant changes in the state of affairs of the Company and Group during or since 
the end of the ﬁnancial year.

• During the year the Group entered into farm-in and joint venture agreements with South32 Limited. South32 may earn a 60% 

initial interest in a project by spending:

• $15 million in exploration expenditure over a period of 10 years at Jessica; and/or 
• $10 million in exploration expenditure over a period of 10 years at Carrara

South32 may earn an additional 15% interest in Jessica and/or Carrara upon completion of a Scoping Study for the relevant 
project   

• During the reporting period the Company completed the demerger of its wholly owned subsidiary Hamelin Gold Limited, 
which subsequently was admitted to the Ofﬁcial List of the Australian Securities Exchange. The demerger, approved by 
shareholders on 22 October 2021, was completed with a reduction of capital in the form of an in-specie distribution of 
60,000,000 shares in Hamelin Gold Limited to eligible shareholders of the Company on a pro rata basis. The total reduction of 
capital of $10,489,813 was allocated to issued capital ($8,415,115) and accumulated losses ($2,074,698).

Prior to the demerger the Company undertook an internal restructure within the Group such that Hamelin Resources Pty Ltd, 
holding solely the West Tanami Gold Project assets, was acquired by Hamelin Gold Limited in preparation for the proposed 
demerger.

2 0 2 2   A N N U A L   R E P O R T

31

04.

Directors’ Report

Options over Unissued Capital

Unlisted Options

As at the date of this report 20,180,000 unissued ordinary shares of the Company are under option as follows:

Number of Options Granted

Exercise Price

2,900,000

1,500,000

5,050,000

650,000

2,450,000

800,000

3,630,000

1,200,000

1,000,000

1,000,000

5.2 cents1

8.2 cents1

16.2 cents1

18.2 cents1

22.2 cents1

21.2 cents1

22.5 cents

19.0 cents

20.0 cents

30.0 cents

Expiry Date

30 November 2022

30 November 2023

31 October 2023

30 June 2024

26 November 2024

30 April 2025

28 November 2025

28 June 2026

29 September 2025

29 September 2025

1  Option exercise price reduced by 3.8 cents per share following the capital reduction on the in-specie distribution of Hamelin Gold Limited securities on demerger from 

the Encounter Resources Limited group.

All options on issue at the date of this report are vested and exercisable. No options on issue are listed.

During the ﬁnancial year: 

• 5,030,000 options (2021: 5,850,000) were granted over unissued shares of the Company;
• 400,000 options (2021: 500,000) were cancelled on the cessation of employment;
• 1,500,000 options (2021: nil) were cancelled on expiry of the exercise period; and
• 1,650,000 (2021: 2,600,000) options were exercised. Included in options exercised is an amount of 89,697 options foregone 

in consideration given on exercise (2021: 326,323).

Since the end of the ﬁnancial year: 

• nil (2021: nil) options have been issued by the Company to employees pursuant to the Company’s Employee Option Plan;
• no options have been exercised; and
• no options have been cancelled due to the lapse of the exercise period.

Options do not entitle the holder to participate in any share issue of the Company or any other body corporate. The holders of 
unlisted options are not entitled to any voting rights until the options are exercised into ordinary shares. 

Issued Capital

Number of Shares on Issue

Ordinary fully paid shares

2021

316,256,523

2022

317,216,826

32 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Directors’ Report 04.

Likely Developments and Expected Results of Operations

The Group expects to maintain exploration programs at its 100% owned Paterson copper-gold project, Northern Territory copper 
and lithium projects and West Arunta IOCG-Rare Earths project. In addition, the Group will continue to collaborate with its 
partners at the Yeneena copper-cobalt project (with IGO Limited) and in the Northern Territory at the Elliott copper project (BHP) 
and Jessica and Carrara base metals projects (South32) pursuant to earn-in and joint venture arrangements.   

Disclosure of any further information has not been included in this report because, in the reasonable opinion of the Directors to 
do so would be likely to prejudice the business activities of the Group and is dependent upon the results of the future exploration 
and evaluation.

Dividends

No dividend has been paid since the end of the previous ﬁnancial year and no dividend is recommended for the current year.

Environmental Regulation and Performance

The Group holds various exploration licences to regulate its exploration activities in Australia.  These licences include conditions 
and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration activities. So far as the 
Directors are aware, all current exploration activities  are in compliance with relevant environmental regulations.

Remuneration Report (Audited)

Remuneration paid to Directors and Ofﬁcers of the Company is set by reference to such payments made by other ASX listed 
companies of a similar size and operating in the mineral exploration industry. In addition, reference is made to the ﬁnancial 
position of the Company and the speciﬁc skills and experience of the Directors and Ofﬁcers.

Details of the nature and amount of remuneration of each Director, and other Key Management Personnel if applicable, are 
disclosed annually in the Company’s Annual Report.

Remuneration Committee

The Board has adopted a formal Remuneration Committee Charter which provides a framework for the consideration of 
remuneration matters.

The Company does not have a separate remuneration committee and as such all remuneration matters are considered by the 
Board as a whole, with no Member deliberating or considering such matter in respect of their own remuneration.

In the absence of a separate Remuneration Committee, the Board is responsible for:

1. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key Management Personnel; and

2.

Implementing employee incentive and equity-based plans and making awards pursuant to those plans.

Non-Executive Remuneration

The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX listed companies in the same 
industry, for their time, commitment and responsibilities.

Non-Executive Remuneration is not linked to the performance of the Company, however to align Directors’ interests with 
shareholders’ interests, remuneration may be provided to Non-Executive Directors in the form of equity based long term 
incentives.

1. Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the Company’s 

Annual General Meeting;

2 0 2 2   A N N U A L   R E P O R T

33

04.

Directors’ Report

2. Non-Executive Directors’ fees are payable in the form of cash and superannuation beneﬁts;

3. Non-Executive superannuation beneﬁts are limited to statutory superannuation entitlements; and

4. Non-executive directors are offered an annual election to receive cash remuneration or an equivalent amount in unlisted 

options. The annual election relates to the remuneration period from 1 December to 30 November of the relevant year and is 
subject to approval by the Company’s shareholders.

5. Participation in equity-based remuneration schemes by Non-Executive Directors is subject to consideration and approval by 

the Company’s shareholders.

The maximum Non-Executive Directors fees, payable in aggregate are currently set at $300,000 per annum.

Executive Director and Other Key Management Personnel Remuneration

Executive remuneration consists of base salary, plus other performance incentives to ensure that:

1. Remuneration packages incorporate a balance between ﬁxed and incentive pay, reﬂecting short and long-term performance 

objectives appropriate to the Company’s circumstances and objectives; and

2. A proportion of remuneration is structured in a manner to link reward to corporate and individual performances.

Executives are offered a competitive level of base salary at market rates (based on comparable ASX listed companies) and are 
reviewed regularly to ensure market competitiveness. To date, the Company has not engaged external remuneration consultants 
to advise the Board on remuneration matters.

Incentive Plans

The Company provides long term incentives to Directors and Employees pursuant to the Encounter Resources Employee Share 
Option Plan, which was last approved by shareholders at the Annual General Meeting held on 26 November 2021.

The Board, acting in remuneration matters:

1. Ensures that incentive plans are designed around appropriate and realistic performance targets and provide rewards when 

those targets are achieved;

2. Reviews and approves existing incentive plans established for employees; and

3. Approves the administration of the incentive plans, including receiving recommendations for, and the consideration and 

approval of grants pursuant to such incentive plans.

Engagement of Non-Executive Directors

Non-Executive Directors conduct their duties under the following terms:

1. A Non-Executive Director may resign from their position and thus terminate their contract on written notice to the Company; 

and

2. A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the expiration of their 
period of ofﬁce (if applicable). Payment is made in lieu of any notice period if termination is initiated by the Company, except 
where termination is initiated for serious misconduct.

In consideration of the services provided by Non-Executive Directors, the Company pay them $50,000 plus statutory 
superannuation per annum.

Non-Executive Directors are also entitled to fees for other amounts as the Board determines where they perform special duties or 
otherwise perform extra services or make special exertions on behalf of the Company. During the year the Group incurred costs 
of $17,842 (2021: $13,800), for geological consulting services from Western Mining services, an entity associated with Dr Jon 
Hronsky.

For the period 1 December 2021 to 30 November 2022, Non-Executive Directors Mr Paul Chapman and Mr Philip Crutchﬁeld 
elected to receive options in lieu of directors’ fees paid in cash. A total of 900,000 options were issued in respect of this election 
following shareholder approval at the Company’s 2021 annual general meeting (for further details refer to the notice of meeting 
lodged with ASX on 27 October 2021).

34 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Directors’ Report 04.

Engagement of Executive Directors

The Company has entered into executive service agreements with Mr Will Robinson and Mr Peter Bewick on the following 
material terms and conditions:

Mr Robinson’s current service agreement with the Company, in respect of his engagement as Managing Director, is effective 
from 1 October 2019. Mr Robinson will receive a base salary of $270,000 per annum plus statutory superannuation. 

Mr Bewick’s service agreement with the Company, in respect of his engagement as Exploration Director, was effective from 1 
October 2019 until his cessation as an Executive Director on 1 November 2021. Whilst an executive director Mr Bewick received 
a base salary of $270,000 per annum plus statutory superannuation. 

Executive directors may also receive an annual short-term performance-based bonus which may be calculated as a percentage 
of their current base salary, the performance criteria, assessment and timing of which is negotiated annually with the Non-
Executive Directors. Either party may give the other six months notice in writing to terminate the Services Agreement or with 
payment or forfeiture in lieu. The Company may terminate the respective services agreements without notice for serious 
misconduct by an executive director.

Executive directors may, subject to shareholder approval, participate in the Encounter Resources Employee Share Option Plan 
and other long term incentive plans adopted by the Board.

Short Term Incentive Payments

Each year, the Non-Executive Directors set the Key Performance Indicators (KPI’s) for the Executive Directors. The KPI’s are 
chosen to align the reward of the individual Executives to the strategy and performance of the Company.

Performance objectives, which may be ﬁnancial or non-ﬁnancial, or a combination of both, are weighted when calculating the 
maximum short-term incentives payable to Executives. At the end of the year, the Non-Executive Directors will assess the actual 
performance of the Executives against the set Performance Objectives. The maximum amount of the short-term incentive, or a 
lesser amount depending on actual performance achieved is paid to the Executives as a cash payment.

Shareholding Qualiﬁcations

The Directors are not required to hold any shares in Encounter Resources under the terms of the Company’s constitution. 
However, Directors have made their own investment decisions to hold shares in Encounter Resources which are shown in this 
report.

Group Performance

In considering the Company’s performance, the Board provides the following indices in respect of the current ﬁnancial year and 
previous ﬁnancial years:

Proﬁt/(Loss) for the year 
attributable to shareholders

2022

2021

2020

2019

2018

$4,428,194

$(1,533,150)

$(1,126,275)

$(1,064,491)

$(10,129,591)

Closing share price at 30 June

$0.12

$0.155

$0.15

$0.07

$0.053

As an exploration company, the Board does not consider the proﬁt/(loss) attributable to shareholders as one of the performance 
indicators when implementing Short Term Incentive Payments. In addition to economic and technical exploration success, the 
Board considers more appropriate indicators of management performance for the 2022 ﬁnancial period to include:

corporate management and business development (including the identiﬁcation and acquisition of high quality projects);

•
• project and operational performance (including safety and environmental management);
• management of the Company’s farm-in and alliance arrangements; and
•

cash ﬂow and funding management. 

2 0 2 2   A N N U A L   R E P O R T

35

04.

Directors’ Report

Remuneration Disclosures

The Key Management Personnel of the Company have been identiﬁed as:

Mr Paul Chapman

Mr Will Robinson

Mr Peter Bewick

Dr Jon Hronsky

Non-Executive Chairman

Managing Director

Non-Executive Director (Executive Director to 1 November 2021)

Non-Executive Director

Mr Philip Crutchﬁeld

Non-Executive Director

The details of the remuneration of each Director and member of Key Management Personnel of the Company is as follows:

30 June 2022

Base Salary

Short Term 
Incentive

Superannuation 
Contributions

Value of Options

Short Term

Post Employment Other Long Term

Paul Chapman 

Will Robinson 

Peter Bewick 

Jon Hronsky 

$

-

270,000

123,333

50,000

Philip Crutchﬁeld

-

Total

443,333

$

-

-

-

-

-

-

$

-

27,000

12,333

5,000

-

$

49,688

35,491

14,196

14,196

49,688

Total

$

49,688

332,491

149,862

69,196

49,688

Value of Options 
as Proportion of 
Remuneration

100.0%

10.7%

9.5%

20.5%

100.0%

44,333

163,259

650,925

30 June 2021

Base Salary

Short Term 
Incentive

Superannuation 
Contributions

Value of Options

Total

Short Term

Post Employment Other Long Term

$

$

$

$

Value of Options 
as Proportion of 
Remuneration

$

Paul Chapman 

Will Robinson 

Peter Bewick 

Jon Hronsky 

-

270,000

264,288

50,000

Philip Crutchﬁeld

-

-

47,250

47,250

-

-

-

25,650

25,107

4,750

-

66,297

46,524

46,524

19,773

66,297

66,297

389,424

383,169

74,523

66,297

100.0%

11.9%

12.1%

26.5%

100.0%

Total

584,288

94,500

55,507

245,415

979,710

Details of Performance Related Remuneration

During the period, short term incentive payments were paid to the executive directors as follows:

Will Robinson

Peter Bewick

Short term incentive payments - cash bonuses paid

 2021/22 ﬁnancial year

 2020/21 ﬁnancial year

Nil

Nil

$47,250

$47,250

36 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Directors’ Report 04.

Equity instrument disclosures relating to key management personnel

Options Granted as Remuneration

During the ﬁnancial year ended 30 June 2022 2,070,000 options (2021: 2,110,000) were granted to Directors or Key 
Management Personnel of the Company, as follows:

Options issued in lieu of payment of director fees:

Paul Chapman

Philip Crutchﬁeld

Incentive options:

Paul Chapman

Will Robinson

Peter Bewick

Jon Hronsky

Philip Crutchﬁeld

450,000

450,000

180,000

450,000

180,000

180,000

180,000

The fair value of options issued as remuneration is allocated to the relevant vesting period of the options. Options are provided at 
no cost to the recipients. 

Exercise of Options Granted as Remuneration

During the year, 60,303 (2021: 1,025,714) ordinary shares were issued in respect of the exercise of options previously granted as 
remuneration to Directors or Key Management Personnel of the Company, as follows:

KMP

Peter Bewick

Number of shares issued 
on exercise of options

60,303

Option details

Options exercisable at $0.137 
expiring 24 November 2021

1  60,303 ordinary fully paid shares issued on the exercise of 750,000 options pursuant to the cash less exercise provisions of the options.

Option holdings

Key Management Personnel have the following interests in unlisted options over unissued shares of the Company:

2022

Name

P. Chapman

W. Robinson

P. Bewick

J. Hronsky

P. Crutchﬁeld

Balance at 
start of the year

Received during the 
year as remuneration

Other changes 
during the year1

Balance at 
the end of the year

Vested and exercisable 
at the end of the year

1,570,000

1,100,000

4,850,000

1,470,000

2,270,000

630,000

450,000

180,000

180,000

630,000

-

-

(750,000)

-

-

2,200,000

1,550,000

4,280,000

1,650,000

2,900,000

2,200,000

1,550,000

4,280,000

1,650,000

2,900,000

1  Options exercised during the ﬁnancial year.

2 0 2 2   A N N U A L   R E P O R T

37

04.

Directors’ Report

Share holdings

The number of shares in the Company held during the ﬁnancial year by key management personnel of the Company, including 
their related parties are set out below. There were no shares granted during the reporting period as compensation.

2022

Name

P. Chapman

W. Robinson

P. Bewick

J. Hronsky

P. Crutchﬁeld

Balance at 
start of the year

Received during the 
year as remuneration

Other changes 
during the year

Balance at 
the end of the year

Vested and exercisable 
at the end of the year

9,948,816

25,695,414

7,950,000

475,714

3,040,557

-

-

60,303

-

-

-

757,142

-

-

330,891

9,948,816

26,452,556

8,010,303

475,714

3,371,448

9,948,816

26,452,556

8,010,303

475,714

3,371,448

Loans made to key management personnel

No loans were made to key personnel, including personally related entities during the reporting period.

Other transactions with key management personnel

During the year the Group incurred costs of $17,842 (2021: $13,800), for geological consulting services from Western Mining 
Services, an entity associated with Dr Jon Hronsky.

There were no other transactions with key management personnel.

End of Remuneration Report

38 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Directors’ Report 04.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of 
the Company or Group, or to intervene in any proceedings to which the Company or Group is a party, for the purpose of taking 
responsibility on behalf of the Company for all or part of those proceedings.

Ofﬁcers’ Indemnities and Insurance

During the year the Company paid an insurance premium to insure certain ofﬁcers of the Company.  The ofﬁcers of the Company 
covered by the insurance policy include the Directors named in this report. 

The Directors and Ofﬁcers Liability insurance provides cover against all costs and expenses that may be incurred in defending 
civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the ofﬁcers in 
their capacity as ofﬁcers of the Company.  The insurance policy does not contain details of the premium paid in respect of 
individual ofﬁcers of the Company.  Disclosure of the nature of the liability cover and the amount of the premium is subject to a 
conﬁdentiality clause under the insurance policy.

The Company has not provided any insurance for an auditor of the Company.

Non-audit Services

During the year Crowe Perth the Company’s auditor, has not performed any other services in addition to their statutory duties. 

The total remuneration paid to Crowe Perth for 2021 includes audits of the subsidiary companies Hamelin Gold Limited for the 
period ended 30 June 2021 and Hamelin Resources Pty Ltd for the three ﬁnancial years ended 30 June 2019, 2020 and 2021, 
undertaken as part of the demerger of Hamelin Gold Limited as described in note 33.

Total remuneration paid to auditors during the ﬁnancial year:

2022

$

2021

$

Audit and review of the Company’s ﬁnancial statements

33,050

54,750

The board considers any non-audit services provided during the year by the auditor and satisﬁes itself that the provision of any 
non-audit services during the year by the auditor is compatible with, and does not compromise, the auditor independence 
requirements of the Corporations Act 2001 for the following reasons:

•

•

all non-audit services are reviewed by the board to ensure they do not impact the impartiality and objectivity of the auditor; 
and

the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 
110 Code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the auditor’s own work, acting 
in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing 
risks and rewards.

2 0 2 2   A N N U A L   R E P O R T

39

Directors’ Declaration

Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on the 
following page.

This report is made in accordance with a resolution of the Directors.

Dated at Perth this 30th day of September 2022.

W Robinson

Managing Director

40 E N C O U N T E R   R E S O U R C E S   L I M I T E D   
40 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Auditor’s Independence Declaration

Auditor’s Independence 
Declaration

E CL AR AT
N CO

 I

 O
E SO

 R

E PE
R CE S L

N CE

 B

 SU

W AR

I  ASM

 T

 D

E CT

R S O

As lead auditor for the audit of E ncounter Resources L
declare that, to the best of my k nowledge and belief, there hav e been:

imited for the year ended 30 J une 2022, I  

( a) no contrav entions of the auditor independence req uirements of the Corporations Act 2001 in 

relation to the audit;  and

( b) no contrav entions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of E ncounter Resources L
year.

imited and the entities it controlled during the 

Crowe Perth
Crowe Perth

Suwarti Asmono
Suwarti Asmono
Partner

Dated at Perth this 30th day of September 2022

Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a 
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe 
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or 
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Perth, an affiliate of Findex (Aust) Pty Ltd. Liability limited by a 
scheme approved under Professional Standards Legislation. Liability limited other than for acts or omissions of financial services licensees. 
© 2022 Findex (Aust) Pty Ltd

2 0 2 2   A N N U A L   R E P O R T

41

D
I
O
N
F
N
D
N
D
E
Y
T
O
N
O
T
O
H
E
I
R
O
F
 
E
U
N
T
E
R
U
I
M
I
T
E
D
Consolidated Financial Statements

Consolidated
Financial 
Statements 
For the Year Ended 
30 June 2022

42 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Consolidated Financial Statements

Consolidated Statement of Proﬁt or Loss and 
other Comprehensive Income For the ﬁnancial year ended 30 June 2022

Interest income

Gain on demerger

Other income 

Total income

Employee expenses

Employee expenses recharged to exploration

Equity based remuneration expense

Non-executive Directors’ fees

(Loss)/Gain in fair value of ﬁnancial assets

Depreciation and amortisation expense

Corporate expenses

Administration and other expenses 

Exploration costs written off and expensed

Proﬁt/(Loss) before income tax

Income tax beneﬁt

Proﬁt/(Loss) after tax

Other comprehensive income

Total comprehensive income/(loss) for the year

Earnings per share for loss attributable to the ordinary equity holders of 
the Company

Basic earnings/(loss) per share

Diluted earnings/(loss) per share

Consolidated

2022

$

10,349

10,104,846

179,303

10,294,498

(1,114,583)

907,847

(379,845)

(83,333)

(447,700)

(68,642)

(75,973)

(399,501)

(4,204,574)

4,428,194

-

2021

$

17,660

-

215,555

233,215

(1,345,583)

1,121,452

(466,124)

(50,000)

(202,162)

(24,678)

(78,520)

(424,622)

(296,128)

(1,553,150)

-

4,428,194

(1,533,150)

-

-

4,428,194

(1,533,150)

1.4

1.4

(0.5)

(0.5)

Note

33

5

20

6,11

6

6,14

7

21

31

31

The above consolidated statement of proﬁt or loss and other comprehensive income should be read in conjunction 
with the accompanying notes.

2 0 2 2   A N N U A L   R E P O R T

43

Consolidated Financial Statements

Consolidated Statement of Financial Position As at 30 June 2022

Current assets

Cash and cash equivalents

Trade and other receivables

Other current assets

Assets reclassiﬁed as held for sale

Total current assets

Non-current assets

Security bonds and deposits

Financial assets

Property, plant and equipment

Capitalised mineral exploration and evaluation expenditure

Right of use assets - leases

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Employee beneﬁts

Lease Liabilities

Total current liabilities

Total non-current liabilities

Lease Liabilities

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Accumulated losses

Equity remuneration reserve

Total equity

Note

8

9(a)

9(b)

8(c)

11

12

14

13

16

17

18

18

19

21

21

Consolidated

2022

$

2021

$

2,165,945

5,686,505

244,355

13,479

-

330,291

72,787

135,636

2,423,779

6,225,219

75,695

118,861

44,210

75,652

566,561

64,238

13,891,414

15,212,300

109,057

14,239,237

16,663,016

174,493

16,093,244

22,318,463

128,115

225,024

67,713

420,852

49,241

49,241

470,093

322,703

310,971

60,469

694,143

116,954

116,954

811,097

16,192,923

21,507,366

41,666,888

50,000,566

(26,698,304)

(29,535,096)

1,224,339

16,192,923

1,041,896

21,507,366

The above consolidated statement of ﬁnancial position should be read in conjunction with the accompanying notes.

44 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Consolidated Financial Statements

Consolidated Statement of Changes in Equity For the ﬁnancial year ended 30 June 2022

2021

Consolidated

Accumulated 
\losses

Equity 
remuneration 
reserve

$

$

Issued 
capital

$

Balance at the start of the ﬁnancial year

43,828,235

(28,069,977)

576,644

Total

$

16,334,902

(1,533,150)

582,398

-

-

(1,533,150)

-

-

582,398

49,115

68,031

(117,146)

-

Comprehensive income for the ﬁnancial year

Movement in equity remuneration reserve in 
respect of options vested

Transfer to accumulated losses on cancellation 
of vested options

Transactions with equity holders in their 
capacity as equity holders:

Shares issued (net of costs)

6,123,216

-

-

6,123,216

Balance at the end of the ﬁnancial year

50,000,566

(29,535,096)

1,041,896

21,507,366

2022

Consolidated

Accumulated 
losses

Equity 
remuneration 
reserve

$

$

Issued 
capital

$

Total

$

Balance at the start of the ﬁnancial year

50,000,566

(29,535,096)

1,041,896

21,507,366

Comprehensive income for the ﬁnancial year

Movement in equity remuneration reserve in 
respect of options vested

Transfer on exercise and/or cancellation of 
vested options

Derecognition of accumulated losses on 
demerger of subsidiary

-

-

4,428,194

-

4,428,194

-

379,845

379,845

8,262

189,140

(197,402)

-

-

294,156

-

-

-

294,156

(10,489,813)

73,175

Capital return on in-specie distribution (note 33)

(8,415,115)

(2,074,698)

Transactions with equity holders in their 
capacity as equity holders:
Shares issued (net of costs)

73,175

-

Balance at the end of the ﬁnancial year

41,666,888

(26,698,304)

1,224,339

16,192,923

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

2 0 2 2   A N N U A L   R E P O R T

45

Consolidated Financial Statements

Consolidated Statement of Cash Flows For the ﬁnancial year ended 30 June 2022

Cash ﬂows from operating activities

Receipts from tenement option fee income

Receipts from other income

Interest received

Payments to suppliers and employees

Net cash used in operating activities

Cash ﬂows from investing activities

Funds received – subsidiary initial public offer

Cash assets transferred on demerger of subsidiary

Payments for amounts incurred on behalf of related party

Proceeds on repayment of related party loans

Payments for security bonds and deposits

Contributions received from project generation alliance and farm-in partners

Payments for exploration and evaluation

State Government funded drilling rebate

R&D tax concession for exploration activities

Payments for plant and equipment

Net cash used in investing activities

Cash ﬂows from ﬁnancing activities

Proceeds from loans received

Payments for loans repaid

Proceeds from the issue of shares

Payments for share issue costs

Repayment of Lease Liability 

Net cash from ﬁnancing activities

Net (decrease)/increase in cash held

Cash at the beginning of the ﬁnancial year

Cash at the end of the ﬁnancial year

Consolidated

2022

$

25,000

25,646

10,306

(776,274)

(715,322)

7,478,125

(7,478,304)

(420,101)

335,175

-

170,248

2021

$

-

71,069

17,660

(800,669)

(711,940)

-

-

-

-

(75,652)

2,466,184

(3,055,354)

(4,420,473)

152,295

13,749

(1,750)

239,715

117,377

(9,768)

(2,805,917)

(1,682,617)

32,849

(32,849)

76,925

(3,749)

(72,497)

679

(3,520,560)

5,686,505

2,165,945

-

-

6,524,997

(285,508)

(23,929)

6,215,560

3,821,003

1,865,502

5,686,505

Note

30

8(a)

The above consolidated statement of cash ﬂows should be read in conjunction with the accompanying notes.

46 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Notes to 
the Financial
Statements

Note 1 Summary of signiﬁcant accounting policies

Note 2 Financial risk management  

Note 3 Critical accounting estimates and judgements

Note 4 Segment information 

Note 5 Other income 

Note 6 Loss for the year 

Note 7 Income tax 

Note 8 Current assets – Cash and cash equivalents

Note 9 Current assets – Receivables  

49

55

55

56

56

57

57

59

60

Note 17 Current liabilities - Employee beneﬁts

Note 18 Current liabilities – Lease liabilities

Note 19 Issued capital

Note 20 Options and share based payments

Note 21 Reserves and accumulated losses

Note 22 Financial instruments

Note 23 Dividends

Note 24 Key management personnel disclosures

Note 25 Remuneration of auditors

Note 10 Non-current assets – Investment in controlled 

Note 26 Contingencies

entities    

         61

Note 27 Commitments

Note 11 Financial assets – Investments Designated at         

Fair Value through Proﬁt or Loss 

        62

Note 28 Related party transactions

Note 12 Non-current assets – Property, plant and 

equipment

                                                                 63

Note 29 Events occurring after the balance sheet date

Note 30 Reconciliation of loss after tax to net cash inﬂow  

Note 13 Non-current assets – Right of use assets - leases     64

from operating activities

Note 14 Non-current assets – Capitalised mineral 

exploration and evaluation expenditure

        64

Note 31 Earnings per share

Note 32 Parent entity information

Note 15 Interest in joint ventures and farm-in       

arrangements 

         65

Note 33 Demerger of Hamelin Gold Limited

Note 16 Current liabilities – Trade and other payables

66

66

66

67

68

69

70

71

72

72

73

73

74

74

74

75

76

76

2 0 2 2   A N N U A L   R E P O R T

47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

Note 1 Summary of signiﬁcant 
accounting policies

Reporting basis and conventions

These ﬁnancial statements have been prepared under the 
historical cost convention, and on an accrual basis.

The principal accounting policies adopted in the preparation 
of the ﬁnancial report are set out below. These policies have 
been consistently applied to all the years presented, unless 
otherwise stated. The ﬁnancial report includes ﬁnancial 
statements for the consolidated entity consisting of Encounter 
Resources Limited and its subsidiaries (“Group”).

Basis of preparation

This general-purpose ﬁnancial report has been prepared 
in accordance with Australian Equivalents to International 
Financial Reporting Standards (“AIFRS”), other authoritative 
pronouncements of the Australian Accounting Standards 
Board and the Corporations Act 2001. The Group is a for-
proﬁt entity for ﬁnancial reporting purposes under Australian 
Accounting Standards.

The ﬁnancial report is presented in Australian dollars and all 
values are rounded to the nearest dollar.

The separate ﬁnancial statements of the parent entity have 
not been presented within this ﬁnancial report as permitted by 
the Corporations Act 2001.

The ﬁnancial report of the Group was authorised for issue in 
accordance with a resolution of Directors on 30th September 
2022.

Statement of Compliance

The consolidated ﬁnancial report of Encounter Resources 
Limited complies with Australian Accounting Standards, 
which include AIFRS, in their entirety. Compliance with 
AIFRS ensures that the ﬁnancial report also complies with 
International Financial Reporting Standards (“IFRS”) in their 
entirety.

Adoption of new and revised Accounting Standards

The Group has adopted all of the new, revised or amending 
Accounting Standards and Interpretations issued by the 
Australian Accounting Standards Board (“AASB”) that are 
mandatory for the current reporting period. The adoption 
of these Accounting Standards and Interpretations did not 
have any signiﬁcant impact on the ﬁnancial performance or 
position of the Group during the ﬁnancial year.

New standards and interpretations not yet adopted 

The AASB has issued new and amended Accounting 
Standards and Interpretations that have mandatory 
application date for future reporting periods and which the 
Group has decided not to early adopt.

Critical accounting estimates

The preparation of ﬁnancial statements in conformity with 
AIFRS 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 3.

Principles of consolidation

The ﬁnancial statements of subsidiary companies are 
included in the consolidated ﬁnancial statements from the 
date control commences until the date control ceases. The 
ﬁnancial statements of subsidiary companies are prepared 
for the same reporting period as the parent company, using 
consistent accounting policies.

Inter-entity balances resulting from transactions with 
or between controlled entities are eliminated in full on 
consolidation. Investments in subsidiary companies are 
accounted for at cost in the individual ﬁnancial statements of 
the Company.

(a)Segment reporting

Operating segments are identiﬁed and segment information 
disclosed, where appropriate, on the basis of internal reports 
reviewed by the Company’s board of directors, being the 
Group’s Chief Operating Decision Maker, as deﬁned by AASB 8.

(b) Other income

Interest income

Interest income is recognised on a time proportion basis and 
is recognised as it accrues.

Option fee income

Recognised for option fee income at such time that the option 
fee becoming receivable by the Company occurs. 

Management fee income

Recognised for management fees from farm-in and alliance 
partners during the period in which the Company provided 
the relevant service. 

48 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Note 1 Summary of signiﬁcant 
accounting policies (Continued)

(c)Income tax

The income tax expense or revenue for the period is the tax 
payable on the current period’s taxable income based on 
the national income tax rate for each jurisdiction adjusted by 
changes in deferred tax assets and liabilities attributable to 
the temporary differences between the tax bases of assets 
and liabilities and their carrying amounts in the ﬁnancial 
statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary 
timing differences at the tax rates expected to apply when 
the assets are recovered or liabilities are settled, based on 
those tax rates which are enacted or substantially enacted 
for each jurisdiction. The relevant tax rates are applied to the 
cumulative amounts of deductible and taxable temporary 
differences to measure the deferred tax asset or liability. An 
exception is made for certain temporary differences arising 
from the initial recognition of an asset or a liability. No deferred 
tax asset or liability is recognised in relation to those timing 
differences if they arose in a transaction, other than a business 
combination, that at the time of the transaction did not affect 
either accounting proﬁt or taxable proﬁt or loss.

Deferred tax assets are recognised for deductible temporary 
differences and unused tax losses only if it is probable that 
future taxable amounts will be available to utilise those 
temporary differences and losses.

Deferred tax liabilities and assets are not recognised for 
temporary differences between the carrying amount and tax 
bases of investments in controlled entities where the parent 
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 liabilities are 
offset where the entity has a legally enforceable right to offset 
and intends either to settle on a net basis, or to realise the 
asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts 
recognised directly in equity are also recognised directly in 
equity.

(d) Lease Liabilities

A lease liability is recognised at the commencement date 
of a lease. The lease liability is initially recognised at the 
present value of the lease payments to be made over the 
term of the lease, discounted using the interest rate implicit 
in the lease or, if that rate cannot be readily determined, the 
consolidated entity’s incremental borrowing rate. Lease 

Notes to the Financial Statements

payments comprise of ﬁxed payments less any lease incentives 
receivable, variable lease payments that depend on an index 
or a rate, amounts expected to be paid under residual value 
guarantees, exercise price of a purchase option when the 
exercise of the option is reasonably certain to occur, and any 
anticipated termination penalties. The variable lease payments 
that do not depend on an index or a rate are expensed in the 
period in which they are incurred.

Lease liabilities are measured at amortised cost using 
the effective interest method. The carrying amounts are 
remeasured if there is a change in the following: future lease 
payments arising from a change in an index or a rate used; 
residual guarantee; lease term; certainty of a purchase option 
and termination penalties. When a lease liability is remeasured, 
an adjustment is made to the corresponding right-of use asset, 
or to proﬁt or loss if the carrying amount of the right-of-use asset 
is fully written down.

(e)Right of use assets

A right-of-use asset is recognised at the commencement date 
of a lease. The right-of-use asset is measured at cost, which 
comprises the initial amount of the lease liability, adjusted 
for, as applicable, any lease payments made at or before the 
commencement date net of any lease incentives received, 
any initial direct costs incurred, and, except where included 
in the cost of inventories, an estimate of costs expected to be 
incurred for dismantling and removing the underlying asset, 
and restoring the site or asset. 

Right-of-use assets are depreciated on a straight-line basis over 
the unexpired period of the lease or the estimated useful life 
of the asset, whichever is the shorter. Where the consolidated 
entity expects to obtain ownership of the leased asset at the 
end of the lease term, the depreciation is over its estimated 
useful life. Right-of use assets are subject to impairment or 
adjusted for any remeasurement of lease liabilities. 

The Group has elected not to recognise a right-of-use asset and 
corresponding lease liability for short-term leases with terms 
of 12 months or less and leases of low-value assets. Lease 
payments on these assets are expensed to proﬁt or loss as 
incurred.

(f) Impairment of assets

Assets 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 
inﬂows which are largely independent of the cash inﬂows from 
other assets or groups of assets (cash generating units). Non-
ﬁnancial assets, other than goodwill, that suffered impairment 
are reviewed for possible reversal of the impairment at each 
reporting date.

2 0 2 2   A N N U A L   R E P O R T

49

Notes to the Financial Statements

(g) Cash and cash equivalents

For cash ﬂow statement presentation purposes, cash and 
cash equivalents includes cash on hand, deposits held at 
call with ﬁnancial institutions, other short term, highly liquid 
investments with original maturities of three months or less 
that are readily convertible to known amounts of cash and 
which are subject to an insigniﬁcant risk of changes in value.

(h)Government grants

Government grants are recognised at fair value where there 
is reasonable assurance that the grant will be received and 
all grant conditions will be met. Grants relating to expense 
items are recognised as income over the periods necessary 
to match the grant to the costs they are compensating. Grants 
relating to assets are deducted from the carrying value of the 
relevant asset.

Amounts receivable from the Australian Tax Ofﬁce in respect 
of research and development tax concession claims are 
recognised in the year in which the claim is lodged with the 
Australian Tax Ofﬁce. Amounts receivable are allocated in 
the ﬁnancial statements against the corresponding expense 
or asset in respect of which the research and development 
concession claim has arisen.

(i) Fair value estimation

The nominal value less estimated credit adjustments of trade 
receivables and payables are assumed to approximate their 
fair values. The fair value of ﬁnancial liabilities for disclosure 
purposes is estimated by discounting the future contractual 
cash ﬂows at the current market interest rate that is available 
to the Group for similar ﬁnancial instruments.

(j) Property, plant and equipment

Property, plant and equipment is stated at historical cost 
less depreciation. Historical cost includes expenditure 
that is directly attributable to the acquisition of the assets. 
Subsequent costs are included in the asset’s carrying amount 
or recognised as a separate asset, as appropriate, only when 
it is probable that future economic beneﬁts associated with 
the item will ﬂow to the Group and the cost of the item can 
be measured reliably. All other repairs and maintenance are 
charged to the income statement during the ﬁnancial period 
in which they are incurred.

Depreciation of property, plant and equipment is calculated 
using the straight line and diminishing value methods to 
allocate their cost, net of residual values, over their estimated 
useful lives, as follows:

Asset Class

Depreciation Rate

Field equipment and vehicles

Ofﬁce equipment

33%

33%

Leasehold improvements

Over the term of the lease

The asset’s residual values and useful lives are reviewed, and 
adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its 
recoverable amount if the asset’s carrying amount is greater 
than its estimated recoverable amount (note 1(f)). Gains and 
losses on disposal are determined by comparing proceeds 
with the carrying amount. These gains and losses are 
included in the income statement.

(k)Non-Current Assets Classiﬁed as Held for 

Sale 

Non-current assets that are expected to be recovered 
primarily through sale rather than through continuing use, 
are classiﬁed as held for sale. They are measured at the lower 
of their carrying amount and fair value less cost to sell.  For 
assets to be classiﬁed as held for sale, they must be available 
for immediate sale in their present condition and their sale 
must be highly probable.

Non-current assets are not depreciated or amortised while 
they are classiﬁed as held for sale.  Interest and other 
expenses attributable to the liabilities of assets held for sale 
continue to be recognised.

Assets classiﬁed as held for sale are presented separately 
on the face of the statement of ﬁnancial position, in current 
assets.

(l) Mineral exploration and evaluation 

expenditure

Mineral exploration and evaluation expenditure is written off 
as incurred or accumulated in respect of each identiﬁable 
area of interest and capitalised.  These costs are carried 
forward only if they relate to an area of interest for which rights 
of tenure are current and in respect of which:

•

•

such costs are expected to be recouped through the 
successful development and exploitation of the area of 
interest, or alternatively by its sale; or

exploration and/or evaluation activities in the area 
have not reached a stage which permits a reasonable 
assessment of the existence or otherwise of economically 
recoverable reserves and active or signiﬁcant operations 
in, or in relation to, the area of interest are continuing.

In the event that an area of interest is abandoned or if the 
Directors consider the expenditure to be of reduced value, 
accumulated costs carried forward are written off in the 
year in which that assessment is made. A regular review 
is undertaken of each area of interest to determine the 
appropriateness of continuing to carry forward costs in 
relation to that area of interest.

Immediate restoration, rehabilitation and environmental 
costs necessitated by exploration and evaluation activities 
are expensed as incurred and treated as exploration and 
evaluation expenditure. 

50 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 1 Summary of signiﬁcant 
accounting policies (Continued)

jointly held assets, liabilities, revenues and expenses of joint 
operations. These have been incorporated in the ﬁnancial 
statements under the appropriate classiﬁcations.

Exploration activities resulting in future obligations in 
respect of restoration costs result in a provision to be made 
by capitalising the estimated costs, on a discounted cash 
basis, of restoration and depreciating over the useful life of 
the asset. The unwinding of the effect of the discounting 
on the provision is recorded as a ﬁnance cost in the income 
statement.

Details of these interests are shown in Note 15.

(n)Trade and other payables

These amounts represent liabilities for goods and services 
provided to the Group prior to the end of the ﬁnancial year 
which are unpaid. The amounts are unsecured and usually 
paid within 30 days of recognition.

Farm-in arrangements (in the exploration and 
evaluation phase)

(o)Employee beneﬁts

For exploration and evaluation asset acquisitions (farm-in 
arrangements) in which the Group has made arrangements 
to fund a portion of the selling partner’s (farmor’s) exploration 
and/or future development expenditures (carried interests), 
these expenditures are reﬂected in the ﬁnancial statements as 
and when the exploration and development work progresses. 

Wages, salaries and annual leave

Liabilities for wages and salaries, including non-monetary 
beneﬁts, and annual leave expected to be settled within 12 
months of the reporting date are recognised in other payables 
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.

Farm-out arrangements (in the exploration and 
evaluation phase)

Long service leave

The Group does not record any expenditure made by the 
farmee on its account. It also does not recognise any gain or 
loss on its exploration and evaluation farm-out arrangements 
but designates any costs previously capitalised in relation to 
the whole interest as relating to the partial interest retained. 
Monies received pursuant to farm-in agreements are treated 
as a liability on receipt and until such time as the relevant 
expenditure is incurred. 

(m) Joint ventures and joint operations

The liability for long service leave is recognised in the 
provision for employee beneﬁts and measured as the present 
value of expected future payments to be made in respect 
of services provided by employees up to the reporting date 
using the projected unit credit method. Consideration is 
given to expected future salaries, experience of employee 
departures and periods of service. Expected future payments 
are discounted at the corporate bond rate with terms to 
maturity and currency that match, as closely as possible, the 
estimated future cash outﬂows.

Joint ventures

Share based payments

A joint venture is a joint arrangement whereby the parties 
that have joint control of the arrangement have rights to the 
net assets of the arrangement. Investments in joint ventures 
are accounted for using the equity method. Under the equity 
method, the share of the proﬁts or losses of the joint venture 
is recognised in proﬁt or loss and the share of the movements 
in equity is recognised in other comprehensive income. 
Investments in joint ventures are carried in the statement of 
ﬁnancial position at cost plus post-acquisition changes in 
the Group’s share of net assets of the joint venture. Goodwill 
relating to the joint venture is included in the carrying amount 
of the investment and is neither amortised nor individually 
tested for impairment. Income earned from joint venture 
entities reduces the carrying amount of the investment.

Joint operations

A joint operation is a joint arrangement whereby the parties 
that have joint control of the arrangement have rights to 
the assets, and obligations for the liabilities, relating to 
the arrangement. The Group has recognised its share of 

Share based compensation payments are made available to 
Directors and employees. 

The fair value of options granted is recognised as an 
employee beneﬁt expense with a corresponding increase 
in equity. The fair value is measured at grant date and 
recognised over the period during which the employees 
become unconditionally entitled to the options. 

The fair value at grant date is independently determined 
using a Black-Scholes option pricing 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 rate for the term of the option. A discount is 
applied, where appropriate, to reﬂect the non-marketability 
and non-transferability of unlisted options, as the Black-
Scholes option pricing model does not incorporate these 
factors into its valuation.

2 0 2 2   A N N U A L   R E P O R T

51

Notes to the Financial Statements

The fair value of the options granted is adjusted to reﬂect 
market vesting conditions. Non-market vesting conditions are 
included in assumptions about the number of options that are 
expected to become exercisable. At each balance sheet date, 
the entity revises its estimate of the number of options that 
are expected to become exercisable. The employee beneﬁt 
expense recognised each period takes into account the most 
recent estimate.

Upon the exercise of options, the balance of the share based 
payments reserve relating to those options is transferred to 
share capital and the proceeds received, net of any directly 
attributable transaction costs, are credited to share capital.

Upon the cancellation of options on expiry of the exercise 
period, or lapsing of vesting conditions, the balance of the 
share based payments reserve relating to those options is 
transferred to accumulated losses.

(p) Issued capital

Ordinary shares are classiﬁed as equity.

Incremental costs directly attributable to the issue of new 
shares or options are shown in equity as a deduction, net of 
tax, from the proceeds.

(q) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the 
earnings attributable to equity holders 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.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the ﬁgures used in the 
determination of basic earnings per share to take into account 
the after income tax effect of interest and other ﬁnancing 
costs associated with dilutive potential ordinary shares 
and the weighted average number of shares assumed to 
have been issued for no consideration in relation to dilutive 
potential ordinary shares.

(r) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the 
amount of associated GST, unless the GST incurred is not 
recoverable from the taxation authority. In this case it is 
recognised as part of the cost of acquisition of the asset or as 
a part of the expense.

Receivables and payables are stated inclusive of the amount 
of GST receivable or payable. The net amount of GST 
recoverable from, or payable to, the taxation authority is 
included with other receivables or payables in the balance 
sheet. 

52 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Cash ﬂows are presented on a gross basis. The GST 
components of cash ﬂows arising from investing or ﬁnancing 
activities which are recoverable from, or payable to, the 
taxation authority, are presented as operating cash ﬂow.

(s) Comparative ﬁgures

When required by Accounting Standards, comparative ﬁgures 
have been adjusted to conform to changes in presentation for 
the current ﬁnancial year.

(t) 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

Financial assets not measured at amortised cost or at fair 
value through other comprehensive income are classiﬁed as 
ﬁnancial assets at fair value through proﬁt or loss. Typically, 
such ﬁnancial assets will be either:

(i) held for trading, where they are acquired for the purpose 
of selling in the short-term with an intention of making a 
proﬁt, or a derivative; or

(ii) designated as such upon initial recognition where 

permitted. Fair value movements are recognised in 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.

Note 1 Summary of signiﬁcant 
accounting policies (Continued)

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 through other 
comprehensive income, the loss allowance is recognised 
within other comprehensive income. In all other cases, the 
loss allowance is recognised in proﬁt or loss.

(u)Fair value estimation

A number of the Group’s accounting policies and disclosures 
require the determination of fair value, for both ﬁnancial and 
non-ﬁnancial assets and liabilities. Fair values have been 
determined for measurement and/or disclosure purposes 
based on the following methods:

Investments in equity securities

The fair value of ﬁnancial assets at fair value through proﬁt 
or loss, is determined by reference to their quoted bid 
price at the reporting date. For investments with no active 
market, fair value is determined using valuation techniques.  
Such techniques include using recent arm’s length market 
transactions, reference to the current market value of another 
instrument that is substantially the same, discounted cash 
ﬂow analysis and option pricing models.

Trade and other receivables

The fair value of trade and other receivables is estimated 
as the present value of future cash ﬂows, discounted at the 
market rate of interest at the reporting date.

Fair value measurement

When an asset or liability, ﬁnancial or non-ﬁnancial, is 
measured at fair value for recognition or disclosure purposes, 
the fair value is based on the price that would be received 
to sell an asset or paid to transfer a liability in an orderly 
transaction between market participants at the measurement 
date; and assumes that the transaction will take place either: 
in the principal market; or in the absence of a principal market, 
in the most advantageous market.

Notes to the Financial Statements

Fair value is measured using the assumptions that market 
participants would use when pricing the asset or liability, 
assuming they act in their economic best interests. For 
non-ﬁnancial assets, the fair value measurement is based 
on its highest and best use. Valuation techniques that are 
appropriate in the circumstances and for which sufﬁcient data 
are available to measure fair value, are used, maximising the 
use of relevant observable inputs and minimising the use of 
unobservable inputs.

Assets and liabilities measured at fair value are classiﬁed, 
into three levels, using a fair value hierarchy that reﬂects the 
signiﬁcance of the inputs used in making the measurements. 
Classiﬁcations are reviewed at each reporting date and 
transfers between levels are determined based on a 
reassessment of the lowest level of input that is signiﬁcant to 
the fair value measurement.

For recurring and non-recurring fair value measurements, 
external valuers may be used when internal expertise is 
either not available or when the valuation is deemed to be 
signiﬁcant. External valuers are selected based on market 
knowledge and reputation. Where there is a signiﬁcant 
change in fair value of an asset or liability from one period 
to another, an analysis is undertaken, which includes a 
veriﬁcation of the major inputs applied in the latest valuation 
and a comparison, where applicable, with external sources of 
data.

(v)Current versus non-current classiﬁcation

The Group presents assets and liabilities in the statement 
of ﬁnancial position based on a current or non-current 
classiﬁcation.

An asset is current when it is:

• Expected to be realised, or intended to be sold or 
consumed in the Group’s normal operating cycle;

• Expected to be realised within twelve months after the 

reporting period; or

• Cash or a cash equivalents (unless restricted for at least 

twelve months after the reporting period.

A liability is current when it is:

• Expected to be settled in the Group’s normal operating 

cycle;

•

It is due to be settled within twelve months after the 
reporting date; or

• There is no unconditional right to defer the settlement of 
the liability for at least twelve months after the reporting 
period.

All other assets and liabilities are classed as non-current.

2 0 2 2   A N N U A L   R E P O R T

53

Notes to the Financial Statements

Note 2 Financial risk 
management

The Group has exposure to a variety of risks arising from its use 
of ﬁnancial instruments. This note presents information about 
the Company’s exposure to the speciﬁc risks, and the policies 
and processes for measuring and managing those risks. The 
Board of Directors has the overall responsibility for the risk 
management framework and has adopted a Risk Management 
Policy. 

(a)Credit risk

Credit risk is the risk of ﬁnancial loss to the Group if a customer 
or counterparty to a ﬁnancial instrument fails to meet its 
contractual obligations, and arises principally from 
transactions with customers and investments.

Trade and other receivables

The nature of the business activity of the Group does not result 
in trading receivables. The receivables that the Group does 
experience through its normal course of business are short 
term and the most signiﬁcant recurring by quantity is receivable 
from the Australian Taxation Ofﬁce, the risk of non-recovery of 
receivables from this source is considered to be negligible.

Cash deposits

The Directors believe any risk associated with the use of 
predominantly only one bank is addressed through the use of 
at least an A-rated bank as a primary banker and by the holding 
of a portion of funds on deposit with alternative A-rated 
institutions. Except for this matter the Group currently has no 
signiﬁcant concentrations of credit risk.

(b) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet 
its ﬁnancial obligations as they fall due. The Group’s approach 
to managing liquidity is to ensure, as far as possible, that it will 
always have sufﬁcient liquidity to meet its liabilities when due, 
under both normal and stressed conditions, without incurring 
unacceptable losses or risking damage to the 
Group’s reputation.  

The Group manages its liquidity risk by monitoring its cash 
reserves and forecast spending. Management is cognisant of 
the future demands for liquid ﬁnance resources to ﬁnance the 
Company’s current and future operations, and consideration 
is given to the liquid assets available to the Company before 
commitment is made to future expenditure or investment.

(c)Market risk

Market risk is the risk that changes in market prices, such as 
foreign exchange rates, interest rates and equity prices will 
affect the Group’s income or the value of its holdings of 

54 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

ﬁnancial instruments. The objective of market risk 
management is to manage and control market risk exposures 
within acceptable parameters, while optimising any return.

Interest rate risk

The Group has signiﬁcant cash assets which may be 
susceptible to ﬂuctuations in changes in interest rates. Whilst 
the Group requires the cash assets to be sufﬁciently liquid to 
cover any planned or unforeseen future expenditure, which 
prevents the cash assets being committed to long term ﬁxed 
interest arrangements; the Group does mitigate potential 
interest rate risk by entering into short to medium term ﬁxed 
interest investments.

Equity risk

The Group has exposure to price risk in respect of its holding 
of ordinary securities in Hampton Hill NL, which has a carrying 
value at 30 June 2022 of $118,861 (2021: $566,561). The 
investment is classiﬁed at fair value through proﬁt or loss 
and as such any movement in the value of Hampton Hill NL 
shares will be recognised as a beneﬁt of expense in proﬁt or 
loss. No speciﬁc hedging activities are undertaken into this 
investment.

Foreign exchange risk

The Group enters into earn-in arrangements that may be 
denominated in currencies other than Australian Dollars. 

Whilst the Group does not recognise assets or liabilities 
in respect of these earn-in arrangements and accordingly 
ﬂuctuations in foreign exchange rates will have no direct 
impact on the Group’s net assets, movements in foreign 
exchange may favourably or adversely affect future amounts 
to be incurred by the Group or its earn-in partners pursuant to 
such agreements.

Other than the above, the Group does not have any direct 
contact with foreign exchange ﬂuctuations other than their 
effect on the general economy.

Note 3 Critical accounting  
estimates and judgements

Estimates and judgements are continually evaluated and are 
based on historical experience and other factors, including 
expectations of future events that may have a ﬁnancial 
impact on the Group and that are believed to be reasonable 
under the circumstances. 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:

 
Notes to the Financial Statements

Note 3 Critical accounting estimates and judgements (Continued)

Accounting for capitalised exploration and evaluation expenditure

The Group’s accounting policy is stated at 1(l). There is some subjectivity involved in the carrying forward as capitalised or 
writing off to the income statement exploration and evaluation expenditure. Key judgements applied include determining which 
expenditures relate directly to exploration and evaluation activities and allocating overheads between those that are expensed 
and capitalised. Management give due consideration to areas of interest on a regular basis and are conﬁdent that decisions to 
either write off or carry forward such expenditure reﬂect fairly the prevailing situation.

Accounting for share based payments

The Group’s accounting policy is stated at 1(l). There is some subjectivity involved in the carrying forward as capitalised or 
writing off to the income statement exploration and evaluation expenditure. Key judgements applied include determining which 
expenditures relate directly to exploration and evaluation activities and allocating overheads between those that are expensed 
and capitalised. Management give due consideration to areas of interest on a regular basis and are conﬁdent that decisions to 
either write off or carry forward such expenditure reﬂect fairly the prevailing situation.

Note 4 Segment information

The Group has identiﬁed its operating segments based on the internal reports that are reviewed and used by the board of 
directors in assessing performance and determining the allocation of resources.  Reportable segments disclosed are based 
on aggregating operating segments, where the segments have similar characteristics. The Group’s sole activity is mineral 
exploration and resource development wholly within Australia, therefore it has aggregated all operating segments into the one 
reportable segment being mineral exploration.

The reportable segment is represented by the primary statements forming these ﬁnancial statements.

Note 5 Other income

Operating activities

Tenement option fee income

Recharged costs

Cash ﬂow assistance grant

Management fees from farm-in and project generation alliance partners

Other income

Consolidated

2022

$

25,000

111,397

-

6,586

36,320

179,303

2021

$

-

-

67,500

144,486

3,569

215,555

2 0 2 2   A N N U A L   R E P O R T

55

Notes to the Financial Statements

Note 6 Loss for the year

Loss before income tax includes the following speciﬁc 
beneﬁts/(expenses):

Depreciation and amortisation:

Ofﬁce equipment

Right of use assets – leases

Total exploration and joint venture costs not capitalised and written off 

Superannuation expense – deﬁned contribution

(Loss)/Gain in fair value of ﬁnancial assets1

Note

12

13

14

Consolidated

2022

$

2021

$

(3,206)

(65,436)

(68,642)

(4,204,574)

(102,663)

(447,700)

(2,866)

(21,812)

(24,678)

(296,128)

(109,895)

(202,162)

1  Adjustment to carrying value of investment in Hampton Hill NL, based on the Company’s share of net assets as at 30 June 2022. The gain/(loss) on investment has 

been recognised in the Statement of Proﬁt or Loss. Refer note 11.

Note 7 Income tax

a)  Income tax expense
Current income tax:

Current income tax charge (beneﬁt)

Current income tax not recognised

Deferred income tax:

Relating to origination and reversal of timing differences

Deferred income tax beneﬁt/(liability) not recognised

Income tax expense/(beneﬁt) reported in the income statement

Consolidated

2022

$

2021

$

(1,000,415)

1,000,415

(552,721)

552,721

(742,209)

742,209

-

(6,022)

6,022

-

56 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Note 7 Income tax (Continued)

b)  Reconciliation of income tax expense to prima facie tax 

payable
Proﬁt/(Loss) from continuing operations before income tax expense

Tax at the Australian rate of 25% (2021 – 26%)

Tax effect of permanent differences:

Non-deductible share-based payment

Unrealised movement in fair value of ﬁnancial assets

Exploration costs written off

Capital raising costs claimed

Gain recognised on demerger

Net deferred tax asset beneﬁt not brought to account

Tax (beneﬁt)/expense

c) Deferred tax – Balance Sheet
Liabilities

Prepaid expenses

Exploration assets reclassiﬁed as held for sale

Capitalised exploration expenditure

Assets

Notes to the Financial Statements

Consolidated

2022

$

2021

$

4,428,194

1,107,049

(1,533,150)

(398,619)

94,961

111,925

1,051,144

(26,154)

(2,526,212)

187,288

-

121,192

52,562

2,077

(29,603)

-

252,391

-

(3,370)

-

(3,472,853)

(3,476,223)

(18,924)

(35,265)

(3,955,198)

(4,009,387)

Revenue losses available to offset against future taxable income

9,430,935

9,157,880

Employee provisions

Accrued expenses

Deductible equity raising costs

Net deferred tax asset not recognised

56,256

2,791

63,670

9,553,652

6,077,429

80,852

13,433

92,442

9,344,607

5,335,220

2 0 2 2   A N N U A L   R E P O R T

57

Notes to the Financial Statements

d)  Deferred tax – Income Statement
Liabilities

Prepaid expenses

Exploration assets reclassiﬁed as held for sale

Capitalised exploration expenditure

Assets

Deductible equity raising costs

Accruals

Increase/(decrease) in tax losses carried forward

Employee provisions

Deferred tax beneﬁt/(expense) movement for the period not recognised

Consolidated

2022

$

2021

$

15,554

35,265

482,345

(28,772)

(10,642)

273,055

(24,596)

742,209

21,774

(35,265)

(115,156)

73,846

3,620

50,430

(5,271)

(6,022)

The deferred tax beneﬁt of tax losses not brought to account will only be obtained if:

(i) The Company derives future assessable income of a nature and an amount sufﬁcient to enable the beneﬁt from the tax losses 

to be realised;

(ii) The Company continues to comply with the conditions for deductibility imposed by tax legislation; and

(iii) No changes in tax legislation adversely affect the Company realising the beneﬁt from the deduction of the losses.

All unused tax losses were incurred by Australian entities.

Note 8 Current assets - Cash and cash equivalents

Cash at bank and on hand

Term Deposits  

Consolidated

2022

$

665,945

1,500,000

2,165,945

2021

$

486,505

5,200,000

5,686,505

(a)Reconciliation to cash at the end of the year

The above ﬁgures are reconciled to cash at the end of the ﬁnancial year as shown in the statement of cash ﬂows as follows:

Cash and cash equivalents per statement of cash ﬂows

2,165,945

5,686,505

(b)Term Deposits 

Amounts classiﬁed as term deposits are short term deposits with maturity of three months or less, and earn interest at the 
respective short term interest rates.

58 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 8 Current assets – Cash and cash equivalents (Continued)

(c)Cash balances not available for use

Included in cash and cash equivalents above are amounts pledged as guarantees for the following:

Ofﬁce lease bond guarantee

Note

26

Consolidated

2022

2021

$

-

$

-

The security deposit in relation to the Group’s lease on its ofﬁce at 1 Alvan Street, Subiaco, Western Australia of $25,652 is 
included in non-current assets. An amount of $50,000 held on deposit in relation to the Group’s corporate credit card facility is 
included in non-current assets.

The Company recognises liabilities in the ﬁnancial statements for unspent farm-in contributions (Note 16).

Note 9 Current assets – Receivables

a)  Trade and other receivables
Funds due from project generation and farm-in partners

Trade and other receivables

GST recoverable

b)  Other current assets
Prepaid administration costs

Prepaid tenement costs

Details of fair value and exposure to interest risk are included at note 22.

Consolidated

2022

$

8,193

236,162

-

244,355

5,982

66,805

72,787

2021

$

100,824

227,346

2,121

2,121

-

147,994

147,994

2 0 2 2   A N N U A L   R E P O R T

59

Notes to the Financial Statements

Note 10 Non-current assets – Investment in controlled entities 

a) Investment in controlled entities

The following amounts represent the respective investments in the share capital of Encounter Resources Limited’s wholly 
owned subsidiary companies at 30 June 2022:

Encounter Operations Pty Ltd

Hamelin Resources Pty Ltd1

Encounter Yeneena Pty Ltd

Baudin Resources Pty Ltd

Encounter Paterson Pty Ltd

Encounter Aileron Pty Ltd

Hamelin Gold Limited1

Hamelin Tanami Pty Ltd1

Consolidated

2022

2021

$

2

-

2

10

1

1

-

-

$

2

2

2

10

-

-

1

1

1  Hamelin Gold Limited group exited the Encounter Resources Limited group during the ﬁnancial year.

Subsidiary Company

Encounter Operations Pty Ltd 

Hamelin Resources Pty Ltd

Encounter Yeneena Pty Ltd

Baudin Resources Pty Ltd

Encounter Paterson Pty Ltd

Encounter Aileron Pty Ltd

Hamelin Gold Limited

Hamelin Tanami Pty Ltd

Country of 
Incorporation

Ownership Interest

2022

2021

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

100%

-

100%

100%

100%

100%

-

-

100%

100%

100%

100%

-

-

100%

100%

• Encounter Operations Pty Ltd was incorporated in Western Australia on 27 November 2006.
• Hamelin Resources Pty Ltd was incorporated in Western Australia on 24 November 2009.
• Encounter Yeneena Pty Ltd was incorporated in Western Australia on 23 May 2013.
• Baudin Resources Pty Ltd was incorporated in Western Australia on 7 April 2017.
• Hamelin Gold Limited was incorporated in Western Australia on 24 May 2021.
• Hamelin Tanami Pty Ltd was incorporated in Western Australia on 26 May 2021.

The ultimate controlling party of the group is Encounter Resources Limited.

During the ﬁnancial year two further companies were formed as wholly owned subsidiaries of Encounter Resources Limited:

• Encounter Paterson Pty Ltd was incorporated in Western Australia on 9 July 2021.
• Encounter Aileron Pty Ltd was incorporated in Western Australia on 9 July 2021.

During the ﬁnancial year the Company completed the demerger of the Hamelin Gold Limited group which comprised Hamelin 
Gold Limited and its subsidiaries Hamelin Resources Pty Ltd and Hamelin Tanami Pty Ltd (note 33).

60 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 10 Non-current assets – Investment in controlled entities  (Continued)

b) Loans to controlled entities

The following amounts are payable to the parent company, Encounter Resources Limited at the reporting date:

Encounter Operations Pty Ltd

Hamelin Resources Pty Ltd

Encounter Yeneena Pty Ltd

Baudin Resources Pty Ltd

Encounter Paterson Pty Ltd

Encounter Aileron Pty Ltd

2022

$

2021

$

22,310,706

-

881,285

1,000,240

6,865,391

713,260

22,096,992

5,939,158

881,285

478,143

-

-

The loans to Encounter Operations Pty Ltd, Encounter Paterson Pty Ltd, Encounter Aileron Pty Ltd, Encounter Yeneena Pty 
Ltd and Baudin Resources Pty Ltd, to fund exploration activity are non-interest bearing. The Directors of Encounter Resources 
Limited do not intend to call for repayment within 12 months.

Note 11 Financial assets – Investments Designated at Fair Value 
through Proﬁt or Loss

Balance at the start of the ﬁnancial year1

Gain on investments recognised through proﬁt & loss2

Balance at the end of the ﬁnancial year

Consolidated

2022

$

566,561

(447,700)

118,861

2021

$

768,723

(202,162)

566,561

1  The investment relates to the shares received from Hampton Hill NL in relation to an option fee pursuant to an election made under an earn-in agreement in respect of 

the Company’s Millennium project. 

2  Adjustment to carrying value of investment in Hampton Hill NL, based on the Company’s share of net assets. The (loss)/gain on investment has been recognised in the 

Statement of Proﬁt or Loss. Refer note 6.

Investments designated at fair value through proﬁt or loss have been measured at level 3 in the fair value measurement 
hierarchy, refer accounting policy 1(u).

2 0 2 2   A N N U A L   R E P O R T

61

Notes to the Financial Statements

Note 12 Non-current assets – Property, plant and equipment

Field equipment

At cost

Accumulated depreciation

Ofﬁce equipment

At cost

Accumulated depreciation

Reconciliation
Field equipment

Net book value at start of the year

Cost of additions

Depreciation charged

Net book value at end of the year

Ofﬁce equipment

Net book value at start of the year

Cost of additions

Depreciation charged

Net book value at end of the year

Consolidated

2022

$

2021

$

805,219

(768,076)

37,143

52,076

(45,009)

7,067

44,210

805,219

(749,504)

55,715

112,170

(110,549)

1,621

64,238

Note

Consolidated

2022

$

2021

$

55,715

-

(18,572)

37,143

8,523

1,750

(3,206)

7,067

83,574

-

(27,859)

55,715

1,621

9,768

(2,866)

8,523

6

No items of property, plant and equipment have been pledged as security by the Group.

62 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 13 Non-current assets – Right of use assets - leases

Leases

Carrying value at start of the year

ROU assets recognised in the year

Amortisation charged

Carrying value at end of the year

Note

6

Consolidated

2022

$

174,493

-

(65,436)

109,057

2021

$

-

196,305

(21,812)

174,493

A right of use asset has been recognised in respect of the Group’s lease of its ofﬁce at Suite 2, 1 Alvan Street, Subiaco, Western 
Australia. The lease is for a term of three years commencing 1 March 2021 with an option to extend for three further years. 
Management have determined that based on all available information, it is not reasonably certain that they will exercise the 
option to renew the lease at the end of the initial three-year term.

Refer to Note 18 for details of the corresponding right of use liability arising from the abovementioned lease.

Note 14 Non-current assets – Capitalised mineral exploration and 
evaluation expenditure

Note

Consolidated

2022

$

2021

$

In the exploration and evaluation phase

Capitalised exploration costs at the start of the period

15,212,300

13,963,789

Total acquisition and exploration costs for the period (i)

Exploration costs funded by EIS grant

Research and development tax credits (ii)

3,049,732

(152,295)

(13,749)

Total exploration and joint venture costs written off and expensed for 
the period

6

(4,204,574)

1,902,054

(239,715)

(117,700)

(296,128)

Capitalised exploration costs at the end of the period

13,891,414

15,212,300

The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful development 
and commercial exploitation, or alternatively, sale of the respective areas of interest

The capitalised exploration expenditure written off includes expenditure written off on surrender of or intended surrender of 
tenements for both the group entities and the Group’s proportionate share of the exploration written off by the joint venture 
entities.

(i) Does not include costs incurred by farm-in partners in respect of spend incurred on assets the subject of farm-in arrangements.

(ii) Amounts receivable pursuant to research and development tax credit (R&D) claims lodged during the period. The activities the subject of the R&D claims are subject to 
review by AusIndustry prior to being submitted. R&D submissions may or may not be subject to future review or audit by AusIndustry or the Australian Taxation Ofﬁce.

2 0 2 2   A N N U A L   R E P O R T

63

Notes to the Financial Statements

Note 15 Interest in joint ventures 
and farm-in arrangements

Earn-in and Joint Venture Agreement – Elliott Copper 
Project (“Elliott”) – BHP Group Ltd (BHP)

The key terms for the farm-in and joint venture agreement are:

a) Joint Venture Agreements – Joint Operations

Joint venture agreements may be entered into with third 
parties. 

Assets employed by these joint ventures and the Group’s 
expenditure in respect of them is brought to account initially 
as capitalised exploration and evaluation expenditure until 
a formal joint venture agreement is entered into. Thereafter, 
investment in joint ventures is recorded distinctly from 
capitalised exploration costs incurred on the company’s 100% 
owned projects.

b) Joint Venture and Farm-in Arrangements

Millennium Zinc Project – Hampton Hill NL (HHM) 
Joint Venture

Encounter Resources Limited has a 75:25 contributing joint 
venture with HHM covering the Company’s Millennium 
zinc project, comprising exploration licences EL45/2501, 
EL45/2561 and four blocks of EL45/2500 in the Paterson 
Province of Western Australia. 

• HHM hold a 25% and Encounter holds a 75% interest in 

the joint venture. 

•

Industry standard expenditure contribution or dilution 
formulas would apply. If a party’s interest is diluted to less 
than 10%, that interest would convert to a 1% Net Proﬁt 
Royalty. 

• Encounter is the Operator. 

Earn-in and Joint Venture Agreement - Yeneena 
Copper-Cobalt Project (“Yeneena”) – IGO Limited NL 
(IGO)

• Staged farm-in where BHP has the right to earn up to a 

75% interest in Elliott by sole funding up to A$25 million of 
exploration expenditure within 10 years.

• Upon BHP completing the earn-in, a 75:25 joint venture will 
be formed and the parties must contribute funds based 
on their percentage interest to maintain their respective 
interests or dilute according to a standard dilution formula. 
Should a party’s interest dilute to below 10% it shall 
automatically convert to a net smelter royalty.

• During the farm-in phase, BHP has the right to be the 

Manager of the project.

Earn-in and Joint Venture Agreement – Jessica Copper 
Project (“Jessica”) and Carrara Copper-Zinc Project 
(“Carrara”) – South32 Ltd (South32)

The key terms for the farm-in and joint venture agreements are:

Jessica

• South32 has the right to earn a 60% interest in Jessica (the 
“Initial Interest”) by sole funding $15 million of exploration 
expenditure within 10 years.

• During the farm-in phase or joint venture period, South32 

may earn an additional 15% interest in Jessica (the “Further 
Interest”) by completing a Scoping Study.

• Upon South32 earning the Initial Interest or Further Interest 
in Jessica, a 60:40 or 75:25 joint venture will be formed 
and in the case of South32 earning the Further Interest, the 
parties must contribute funds based on their pro-rata interest 
or dilute according to a standard dilution formula. Should a 
party’s interest dilute to below 10%, that party’s interest shall 
automatically convert to a net smelter return royalty.

• During the farm-in phase, South32 will be the Manager of 

the project.

The key terms of the earn-in and joint venture agreement are 
as follows:

Carrara

•

IGO may earn a 70% interest in the project by sole funding 
$15 million of expenditure over 7 years;

• During the earn-in, IGO shall have the right to be the 

Manager of the project; 

• Upon IGO completing the earn-in a 70:30 joint venture will 
be formed, and the parties must contribute funds based 
on their percentage interest to maintain their respective 
interests; and

• Standard dilution clauses will apply to the parties’ 

interests. Should a party’s interest dilute to below 10% it 
shall automatically convert to a Net Smelter Royalty.

• South32 has the right to earn a 60% interest in Carrara by 
sole funding $10 million of exploration expenditure within 
10 years.

• During the farm-in phase or joint venture period, South32 

may earn an additional 15% interest in Carrara by 
completing a Scoping Study.

• Upon South32 earning the Initial Interest or the Further 
Interest in Carrara, a 60:40 or 75:25 joint venture will be 
formed and the parties must contribute funds based on their 
pro-rata interest or dilute according to a standard dilution 
formula. Should a party’s interest dilute to below 10%, that 
party’s interest shall automatically convert to a net smelter 
return royalty.

• During the farm-in phase, South32 will be the Manager of 

the project.

64 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 15 Interest in joint ventures and farm-in arrangements (Continued)

During the farm-in phase for both projects, a technical committee comprising representatives from each of Encounter and 
South32 will review and approve annual exploration programs and budgets. All decisions of the technical committee will be 
decided by majority vote, with South32 having a casting vote.

Scoping Study means an order of magnitude technical and economic study of the potential viability of JORC Mineral 
Resources for the relevant project.

Note 16 Current liabilities – Trade and other payables

Trade payables and accruals

Unspent funds advanced by joint venture partner

Other payables

Consolidated

2022

$

98,017

-

30,098

128,115

2021

$

229,371

40,785

52,547

322,703

Liabilities are not secured over the assets of the Group. Details of fair value and exposure to interest risk are included at note 22.

Note 17 Current liabilities - Employee beneﬁts

Liability for annual leave

Liability for long service leave

Note 18 Current liabilities – Lease liabilities

Leases

Carrying value at start of the year

Lease liabilities recognised in the year

Lease payments made

Lease interest charged to proﬁt or loss

Carrying value at end of the year

Consolidated

2022

$

79,992

145,032

225,024

Consolidated

2022

$

177,423

-

(72,497)

12,028

116,954

2021

$

112,182

198,789

310,971

2021

$

-

196,305

(23,929)

5,047

177,423

2 0 2 2   A N N U A L   R E P O R T

65

Notes to the Financial Statements

Lease liabilities are split between current and non-current liabilities at the balance date as follows:

Lease liabilities due > 1 year

Total Lease liabilities

Consolidated

2022

$

49,241

116,954

2021

$

116,954

177,423

A lease liability has been recognised in respect of the Group’s lease of its ofﬁce at Suite 2, 1 Alvan Street, Subiaco, Western 
Australia.

Refer to Note 13 for details of the corresponding right of use asset arising from the abovementioned lease.

Note 19 Issued capital

a)  Ordinary shares

The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia. The 
Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares 
respectively held by them.

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to 
the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in 
person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.

Issue price

2022

No.

2021

No.

2022

$

2021

$

b) Share capital
Issued share capital

c)  Share movements during the year
Balance at the start of the ﬁnancial year

Share placement

Exercise of options1

Exercise of options1

Exercise of options1

Exercise of options1

Exercise of options1

Exercise of options1

Capital reduction – in-specie distribution 
(note 33)

Less share issue costs

$0.19

$0.13

$0.09

$0.10

$0.105

$0.137

$0.062

317,216,826

316,256,523

41,666,888

50,000,566

316,256,523

280,824,968

50,000,566

43,828,235

-

-

-

75,000

425,000

60,303

400,000

-

-

33,157,878

1,580,857

192,820

250,000

250,000

-

-

-

-

-

-

-

7,500

44,625

8,262

24,800

(8,415,115)

6,299,997

205,511

17,354

25,000

26,250

-

-

-

(3,750)

(401,781)

Balance at the end of the ﬁnancial year

317,216,826

316,256,523

41,666,888

50,000,566

1  Refer Note 20 for details of options exercised.

66 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 19 Issued capital (Continued)

Number of 
options 
exercised

Details of 
options exercised

Capital risk management

The Company’s objectives when managing capital is to 
safeguard its ability to continue as a going concern, so that 
it can provide returns for shareholders and beneﬁts for other 
stakeholders and to maintain an optimum capital structure to 
reduce the cost of capital.

425,000

Exercisable at $0.105 expiring 1 November 2021

75,000

Exercisable at $0.10 expiring 31 May 2022

750,0001

Exercisable at $0.137 expiring 24 November 2021

400,000

Exercisable at $0.062 expiring 31 May 2022

1 Included in options exercised above is an amount of 326,323 options 

foregone in consideration given on exercise (2020: Nil).

Capital is regarded as total equity, as recognised in the 
statement of ﬁnancial position, plus net debt (where 
applicable). Net debt is calculated as total borrowings less 
cash and cash equivalents. In order to maintain or adjust the 
capital structure, the company may adjust the amount of 
dividends paid to shareholders, return capital to shareholders, 
issue new shares or sell assets to reduce debt.

The Company may seek to raise capital to fund its exploration 
and evaluation programs, invest in project generation or 
acquisition and to fund the corporate and administrative costs 
that support such activities.

The capital risk management policy remains unchanged from 
the 30 June 2021 Annual Report.

Note 20 Options and share 
based payments

The establishment of the Encounter Resources Limited 
Employee Share Option Plan (“the Plan”) was last approved 
by a resolution at the Annual General Meeting of shareholders 
of the Company on 26 November 2021. All eligible Directors, 
executive ofﬁcers and employees of Encounter Resources 
Limited who have been continuously employed by the 
Company are eligible to participate in the Plan. The Plan 
allows the Company to issue free options to eligible persons. 
The options can be granted free of charge and are exercisable 
at a ﬁxed price in accordance with the Plan.

a) Options issued during the year

During the ﬁnancial year the Company granted 5,030,000 
options (2021: 5,850,000) over unissued shares.

c)  Options cancelled during the year

During the year 400,000 options (2021: 500,000) were 
cancelled upon termination of employment; and 1,500,000 
options (2021: nil) were cancelled on expiry of exercise 
period.

d) Options on issue at the balance date

The number of options outstanding over unissued ordinary 
shares at 30 June 2022 is 18,180,000 (2021: 16,700,000). The 
terms of these options are as follows:

Number 
of options 
outstanding

2,900,000

1,500,000

5,050,000

650,000

2,450,000

800,000

3,630,000

1,200,000

18,180,000

Exercise price

Expiry date

5.2 cents

8.2 cents

16.2 cents

18.2 cents

22.2 cents

21.2 cents

22.4 cents

19.0 cents

30 November 2022

30 November 2023

31 October 2023

30 June 2024

26 November 2024

30 April 2025

28 November 2025

28 June 2026

e)  Subsequent to the balance date

No (2021: nil) options have been granted subsequent to the 
balance date and to the date of signing this report. 

No options have been exercised subsequent to the balance 
date to the date of signing this report.

Subsequent to the balance date no options have been 
cancelled on expiry of the exercise period.

b) Options exercised during the year

Weighted average contractual life

During the ﬁnancial year the Company issued shares on the 
exercise of 1,650,000 (2021: 2,600,000) unlisted options, as 
follows:

The weighted average contractual life for un-exercised 
options is 24.3 months (2021: 22.1 months). 

Basis and assumptions used in the valuation of options.

The options issued during the year were valued using the 
Black-Scholes option valuation methodology. 

2 0 2 2   A N N U A L   R E P O R T

67

Notes to the Financial Statements

Date granted

29 Nov 2021

30 Jun 2022

Number 
of options 
granted

3,830,000

1,200,000

Exercise 
price
(cents)

22.4

19.0

Expiry date

28 Nov 2025

28 Jun 2026

Risk free 
interest rate 
used

1.48%

3.50%

Volatility 
applied1

84.0%

80.8%

Value of 
Options

$302,069

$77,776

$379,845

1 Historical volatility has been used as the basis for determining expected share price volatility.

Reconciliation of movement of options over unissued shares during the period including weighted 
average exercise price (WAEP)

2022

2021

No.

WAEP (cents).

$

WAEP (cents)

Options outstanding at the start of the year

Options granted during the year

Options exercised during the year1

Options cancelled and expired unexercised during 
the year

16,700,000

5,030,000

(1,650,000)

(1,900,000)

18.2

21.6

10.9

22.6

13,950,000

5,850,000

(2,600,000)

(500,000)

Options outstanding at the end of the year

18,180,000

16.3

16,700,000

1 Included in options exercised above is an amount of 689,697 options foregone in consideration given on exercise (2021: 326,323).

14.6

24.4

12.1

21.0

18.2

Note 21 Reserves and accumulated losses

Consolidated

2022

2021

Accumulated 
losses

Equity 
remuneration 
reserve1

Accumulated 
losses

Equity 
remuneration 
reserve (i)

$

$

$

$

Balance at the beginning of the year

(29,535,096)

1,041,896

(28,069,977)

576,644

Proﬁt/(Loss) for the period

Derecognition of reserves on demerger of subsidiary

Capital return on in-specie distribution

Movement in equity remuneration reserve in respect 
of options issued (note 20)

Transfer to accumulated losses on cancellation of 
options

4,428,194

294,156

(2,074,698)

-

-

-

-

379,845

(1,553,150)

-

-

-

-

-

-

582,398

189,140

(189,140)

68,031

(68,031)

Transfer to share capital on exercise of options2

-

(8,262)

-

(49,115)

Balance at the end of the year 

(26,698,304)

1,224,339

(29,535,096)

1,041,896

1 The equity remuneration reserve is used to recognise the fair value of options issued and vested but not exercised.

2 Transfer to issued capital in respect of the deemed exercise price receivable on the exercise of options pursuant to cash less exercise provisions.

68 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 22 Financial instruments

Credit risk

The Directors do not consider that the Group’s ﬁnancial assets are subject to anything more than a negligible level of credit risk, 
and as such no disclosures are made, note 2(a).

Impairment losses

The Directors do not consider that any of the Group’s ﬁnancial assets are subject to impairment at the reporting date. No 
impairment expense or reversal of impairment charge has occurred during the reporting period, other than the write off of 
deferred exploration assets at note 14.

Interest rate risk

At the reporting date the interest proﬁle of the Group’s interest-bearing ﬁnancial instruments was:

Fixed rate instruments

Financial assets

Variable rate instruments

Financial assets

Carrying amount ($)

2022

2021

$

-

$

-

2,165,945

5,686,505

Cash ﬂow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and proﬁt or loss by 
the amounts shown below. This analysis assumes that all other variables remain constant.

2022

Proﬁt or loss

Equity

1% increase

1% decrease

1% increase

1% decrease

$

$

$

$

Variable rate instruments

21,659

(21,659)

21,659

(21,659)

2021

Proﬁt or loss

Equity

1% increase

1% decrease

1% increase

1% decrease

$

$

$

$

Variable rate instruments

56,865

(56,865)

56,865

(56,865)

2 0 2 2   A N N U A L   R E P O R T

69

Notes to the Financial Statements

Liquidity risk

The following are the contractual maturities of ﬁnancial liabilities, including estimated interest payments and excluding the 
impact of netting agreements, note 2(b):

2022

Consolidated

Carrying 
amount 

Contractual 
cash ﬂows

 < 6 
months

6-12 
months

$

$

$

$

1-2 
years

$

2-5 
years

$

> 5 
years

$

Trade and other payables

128,115

128,115

128,115

-

-

Lease liabilities

116,954

116,954

32,822

34,891

49,241

245,069

245,069

160,937

34,891

49,241

-

-

-

2021

Consolidated

Carrying 
amount 

Contractual 
cash ﬂows

 < 6 
months

6-12 
months

$

$

$

$

1-2 
years

$

2-5 
years

$

> 5 
years

$

Trade and other payables

177,704

177,704

177,704

Lease liabilities

Fair values

Fair values versus carrying amounts

177,723

177,723

29,281

355,127

355,127

206,985

-

31,188

31,188

-

67,713

67,713

-

49,241

49,241

The fair values of ﬁnancial assets and liabilities, together with the carrying amounts shown in the balance sheet are as follows:

-

-

-

-

-

-

Consolidated

2022

2021

Carrying amount

Fair value

Carrying amount

Fair value

$

$

$

$

Cash and cash equivalents

Financial assets

Lease liabilities

Trade and other payables

2,165,945

118,861

(116,954)

(128,115)

2,0239,737

2,165,945

118,861

(116,954)

(128,115)

2,039,737

5,686,505

566,561

(177,723)

(177,704)

5,897,639

5,686,505

566,561

(177,723)

(177,704)

5,897,639

The Group’s policy for recognition of fair values is disclosed at note 1(u).

Note 23 Dividends

No dividends were paid or proposed during the ﬁnancial year ended 30 June 2022 or 30 June 2021.

The Company has no franking credits available as at 30 June 2022 or 30 June 2021.

70 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 24 Key management personnel disclosures

(a)Directors and key management personnel

The following persons were directors of Encounter Resources Limited during the ﬁnancial year:

(i) Chairman – non-executive

Paul Chapman 

(ii) Executive directors

Will Robinson, Managing Director

Peter Bewick, Exploration Director (to 1 November 2021)

(iii)Non-executive directors

Jonathan Hronsky, Director

Philip Crutchﬁeld, Director

Peter Bewick, Director (from 1 November 2021)

There were no other persons employed by or contracted to the Company during the ﬁnancial year, having responsibility for 
planning, directing and controlling the activities of the Company, either directly or indirectly.

(b)

Key management personnel compensation

A summary of total compensation paid to key management personnel during the year is as follows:

Total short-term employment beneﬁts

Total share-based payments

Total post-employment beneﬁts

2022

$

443,333

163,259

44,333

650,925

2021

$

678,788

245,415

55,507

979,610

During the year the Group incurred costs of $17,842 (2021: $13,800), for geological consulting services from Western Mining 
Services, an entity associated with Dr Jon Hronsky.

Note 25 Remuneration of auditors

Consolidated

2022

$

2021

$

Audit and review of the Company’s ﬁnancial statements

54,750

32,000

The total remuneration paid to Crowe Perth for 2021 includes audits of the subsidiary companies Hamelin Gold Limited for the 
period ended 30 June 2021 and Hamelin Resources Pty Ltd for the three ﬁnancial years ended 30 June 2019, 2020 and 2021, 
undertaken as part of the demerger of Hamelin Gold Limited as described in note 33.

2 0 2 2   A N N U A L   R E P O R T

71

 
 
Notes to the Financial Statements

Note 26 Contingencies

Bank guarantees

ANZ Bank has provided an unconditional bank guarantee 
amounting to $25,652 in relation to the lease over the 
Company’s ofﬁce premises at Suite 2, 1 Alvan Street, Subiaco, 
Western Australia. 

A bank guarantee exists, and a corresponding amount of 
$50,000 held on deposit, in relation to the Group’s corporate 
credit card facility.

These amounts are not reported as a cash asset in these 
ﬁnancial statements, and are classiﬁed within bonds in non-
current assets.

(ii) Contingent assets

There were no material contingent assets as at 30 June 2022 
or 30 June 2021.

Note 27 Commitments

(a)Exploration

The Group has certain obligations to perform minimum 
exploration work on mineral leases held.  These obligations 
may be varied as a result of renegotiations of the terms of the 
exploration licences or their relinquishment. The minimum 
exploration obligations are less than the normal level of 
exploration expected to be undertaken by the Group.  

As at balance date, total exploration expenditure 
commitments on tenements held by the Group have not been 
provided for in the ﬁnancial statements and which cover the 
following twelve-month period amount to $2,305,520 (2021: 
$2,888,687).  

The exploration expenditure obligations stated above 
include amounts (approximately $1.2m (2021: approximately 
$1.1m)) that are funded by third parties pursuant to various 
farm-in agreements (Note 15).  Hence current expenditure 
commitment on Encounter 100% owned projects is 
approximately $1.1m (2021: approximately $1.8m).

(c)Contractual Commitment

There are no material contractual commitments as at 30 
June 2022 or 30 June 2021 not otherwise disclosed in the 
Financial Statements.

(i) Contingent liabilities

There were no material contingent liabilities not provided for 
in the ﬁnancial statements of the Group as at 30 June 2022 or 
30 June 2021 other than:

Yeneena Project Gold Claw-back

Included in the agreement for the Group’s acquisition 
of the remaining 25% interest of certain licences in the 
Yeneena Project is a gold claw-back right in the event of a 
major discovery of a deposit of minerals dominant in gold, 
with gold revenue measured in a mining study equal to or 
exceeding 65% of total revenue and where a JORC compliant 
mineral resources exceeds 4,000,000 ounces of gold or 
gold equivalent, or is capable of producing at least 200,000 
ounces of gold or gold equivalent per year for 10 years. 

Under the agreement Barrick (Australia Paciﬁc) Limited retains 
the right to regain an interest of between 70 and 100% in the 
gold discovery at a price of between US$40-100 per ounce, 
with a 1.5% net smelter royalty to Encounter Resources.

The Yeneena Project Gold Claw-back relates to the following 
exploration licences: E45/2500, E45/2501, E45/2502, 
E45/2561, E45/2657, E45/2658, E45/2805 and E45/2806.

Lamil Production Royalty

The Group is subject to a production unit royalty of $1 per dry 
metric tonne of ore mined and sold from licence E45/4613 at 
its Lamil Copper-Gold Project.

Native Title and Aboriginal Heritage 

The Group has Land Access and Mineral Exploration 
Agreements with Western Desert Lands Aboriginal 
Corporation in relation to the tenements comprising the 
Yeneena Base Metals Project and the Paterson Gold Projects. 
Western Desert Lands Aboriginal Corporation ((Jamukurnu-
Yapalikunu/WDLAC) is the Prescribed Body Corporate for the 
Martu People of the Central Western Desert region in Western 
Australia.

The Company has entered into the Mineral Exploration and 
Land Access Deed of Agreement with the Parna Ngururrpa 
(Aboriginal Corporation) RNTBC in relation to the Aileron 
project in the West Arunta.  

Native title claims have been made with respect to areas 
which include tenements in which the Group has an interest.  
The Group is unable to determine the prospects for success 
or otherwise of the claims and, in any event, whether or 
not and to what extent the claims may signiﬁcantly affect 
the Group or its projects.  Agreement is being or has been 
reached with various native title claimants in relation to 
Aboriginal Heritage issues regarding certain areas in which 
the Group has an interest.

72 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 28 Related party transactions

Transactions with Directors during the year are disclosed at Note 24 – Key Management Personnel.

During the reporting period the Company completed a demerger of Hamelin Gold Limited.

During the period from 1 July 2021 to 29 October 2021, whilst Hamelin Gold Ltd was part of the Encounter Resources Limited 
(ENR) group the following transactions occurred:

• ENR incurred total costs of $416,274 on behalf of the Hamelin Gold group in respect of exploration, initial public offer and 

demerger costs;

• ENR forgave intercompany loans amounting to $294,171 due to it from the Hamelin Gold group;
• ENR acquired exploration assets at book value of $5,498,795 from the Hamelin Gold group, with the consideration offset 

against amounts due to the ENR group through intercompany loans; and

• ENR received a cash refund on behalf of the Hamelin Gold group amounting to $10,556.

There are no other related party transactions other than as stated in the ﬁnancial statements.

Note 29 Events occurring after the balance sheet date

On 29 September 2022 the Company completed the placement of 33,333,334 shares at $0.12 per share pursuant to a share 
placement raising $4 million before costs. A total of 2 million unlisted options were issued to the Joint Lead Managers.

Other than as already stated in this report, 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 substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent 
ﬁnancial years.

Note 30 Reconciliation of loss after tax to net cash inﬂow from 
operating activities

Consolidated

2022

$

2021

$

Proﬁt/(Loss) from ordinary activities after income tax

4,428,194

(1,533,150)

Gain on demerger

Depreciation and amortisation

Exploration cost written off and expensed

Share based payments expense

Unrealised (gain)/loss on investments

Contribution to overheads from farm-in and project alliance partners

Lease interest

Movement in assets and liabilities:

(Increase)/decrease in receivables

Increase/(decrease) in payables

Net cash outﬂow from operating activities

(10,104,846)

68,642

4,093,178

379,845

447,700

(6,586)

12,028

(3,921)

(29,556)

(715,322)

-

24,678

296,128

466,124

202,162

(144,486)

5,047

(53,075)

24,632

(711,940)

2 0 2 2   A N N U A L   R E P O R T

73

Notes to the Financial Statements

Note 31 Earnings per share

a) Basic earnings per share

Proﬁt/(Loss) attributable to ordinary equity holders of the Company

b) Diluted earnings per share

Proﬁt/(Loss) attributable to ordinary equity holders of the Company

Consolidated

2022

Cents

1.4

1.4

$

2021

Cents

(0.5)

(0.5)

$

c) Loss used in calculation of basic and diluted loss per share

Consolidated proﬁt/(loss) after tax from continuing operations

(1,533,150)

(1,126,275)

d) Weighted average number of shares used as the 

denominator
Weighted average number of shares used as the denominator in 
calculating basic earnings per share

No.

No.

303,846,344

280,192,048

Weighted average number of shares used as the denominator in 
calculating basic earnings per share

303,846,344

280,192,048

74 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes to the Financial Statements

Note 32 Parent entity information

Financial position
Assets

Current assets

Non-current assets

Total Assets

Liabilities

Current liabilities

Non-current liabilities

Total Liabilities

NET ASSETS

Issued capital

Equity remuneration reserve

Accumulated losses

TOTAL EQUITY

Financial performance
Proﬁt/(Loss) for the year

Other comprehensive income

Total comprehensive income

Company

2022

$

2021

$

2,423,579

14,260,399

16,683,978

441,814

49,241

491,055

16,192,923

41,666,888

1,224,339

6,086,957

16,231,508

22,318,465

694,145

116,954

811,099

21,507,366

50,000,566

1,041,896

(26,698,304)

(29,535,096)

16,192,923

21,507,366

8,555,175

(1,524,973)

-

-

8,555,175

(1,524,973)

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

No guarantees have been entered into by the parent entity in relation to the debts of its subsidiary companies.

Contingent liabilities

For full details of contingencies see Note 26.

Commitments

For full details of commitments see Note 27.

Note 33 Demerger of Hamelin Gold Limited

During the reporting period the Company completed the demerger of its wholly owned subsidiary Hamelin Gold Limited, which 
subsequently was admitted to the Ofﬁcial List of the Australian Securities Exchange. The demerger, approved by shareholders 
on 22 October 2021, was completed with a return of capital in the form of an in-specie distribution of 60,000,000 shares in 
Hamelin Gold Limited to eligible shareholders of the Company on a pro rata basis.

2 0 2 2   A N N U A L   R E P O R T

75

Notes to the Financial Statements

Notional value of shares received on demerger of Hamelin Gold Limited1

Less:

Difference to the fair value of in-specie distribution to Company shareholders2

Net assets of Hamelin Gold Limited at the demerger date

Adjust pre-demerger proﬁt attributable to Hamelin Resources

Costs attributable to the demerger

Gain recognised on Demerger

$

12,000,000

(1,510,187)

(2)

(294,154)

(90,811)

10,104,846

1  Being 60,000,000 ordinary fully paid shares in Hamelin Gold Limited at the Initial Public Offer issue price of $0.20 per share.

2  Notional value less capital reduction amount of $10,489,8133 per ATO Class Ruling 2021/93 published 8 December 2021.

3  The fair value of the in-specie distribution of shares to the Company’s shareholders has been allocated to issued capital and accumulated losses as follows:

Fair value of in-specie distribution attributed to issued capital (Note 19)

Fair value of in-specie distribution attributed to accumulated losses (Note 21)

Fair value of in-specie distribution to Company shareholders 

$

8,415,115

2,074,698

10,489,813

The capital reduction allocation has been determined with reference to the respective market values of the Company and 
Hamelin Gold Limited at the demerger date. The market value of the Company has been determined using the 5-day closing 
volume weighted average price preceding the date of demerger, and the market value of Hamelin Gold Limited determined 
using the 5-day closing volume weighted average price following commencement of trading on ASX.

Prior to the demerger the Company undertook an internal restructure within the Group such that Hamelin Resources Pty Ltd, 
holding solely the West Tanami Gold Project assets, was acquired by Hamelin Gold Limited in preparation for the proposed 
demerger.

As part of the restructure an intercompany loan amounting to $294,171 due from Hamelin Resources Pty Ltd to Encounter 
Resources Limited was forgiven.

As at the demerger date of 29 October 2021, the assets and liabilities of the Hamelin Gold Limited group were:

Cash assets

Other receivables

Prepaid Initial Public Offer (IPO) related costs

Capitalised exploration costs

Total Assets

Trade and other payables

Share subscription liability (IPO applications received)

Loan due to Encounter Resources Limited

Total Liabilities

Net Assets

76 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

$

7,478,304

30,889

716,155

135,636

8,360,984

(440,248)

(7,478,125)

(442,609)

(8,360,982)

2

Directors’ Declaration

Directors’ 
Declaration

(a) the ﬁnancial statements and notes set out on pages 43 o 76 are in accordance with the Corporations Act 2001, 

including:

(i) complying with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional 

reporting requirements; and

(ii) giving a true and fair view of the ﬁnancial position as at 30 June 2022 and of the performance for the year ended on that 

date of the Group.

(b) the remuneration disclosures that are contained in the Remuneration Report in the Directors Report comply with Australian 
Accounting Standard AASB 124 Related Party Disclosures, The Corporations Act 2001 and the Corporations Regulations 
2001.

(c)  there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and 

payable.

(d) the ﬁnancial statements comply with International Financial Reporting Standards as set out in Note 1.

The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive 
Ofﬁcer and Chief Financial Ofﬁcer for the ﬁnancial year ended 30 June 2022.

This declaration is made in accordance with a resolution of the Directors.

Signed at Perth this 30th day of September 2022.

W Robinson

Managing Director

2 0 2 2   A N N U A L   R E P O R T

77

Independent Audit Report

Independent Audit Report

E PE

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R S O

E PO

R S R
N CO

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 R

E SO

R CE S L

R ep ort on the Aud

it of  the F

inanc ial  R ep ort

O pinion 

roup) , which comprises the consolidated statement of financial position as at 30 

W e hav e audited the financial report of E ncounter Resources L
subsidiaries ( the G
J une 2022, the consolidated statement of profit or loss and other comprehensiv e income, the 
consolidated statement of changes in eq uity and the consolidated statement of cash flows for the year 
then ended, and notes to the financial statements, including a summary of significant accounting 
policies, and the directors’ declaration. 

imited ( the Company) and its 

I n our opinion, the accompanying financial report of the G
Act 2001, including:  

roup is in accordance with the Corporations 

( a) giv

ing a true and fair v

iew of the G

roup’s financial position as at 30 J une 2022 and of its financial 

performance for the year then ended;  and

( b) complying with Australian Accounting Standards and the Corporations Regulations 2001.

a sis f or  O pinion 

W e 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. W e are independent of the G
roup in accordance with the auditor 
independence req uirements of the Corporations Act 2001 and the ethical req uirements of the 
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional 
Accountants (including Independence Standards) ( the Code)  that are relev ant to our audit of the 
financial report in Australia. W e hav e also fulfilled our other ethical responsibilities in accordance with 
the Code. 

W e believ e that the audit ev
for our opinion. 

K ey

 A

it M

a tter s 

idence we hav e obtained is sufficient and appropriate to prov

ide a basis 

K ey audit matters are those matters that, in our professional j udgement, 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 prov
ide 
a separate opinion on these matters. F or each matter below, our description of how our audit 
addressed the matter is prov

ided in that context.

Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a 
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe 
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or 
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Perth, an affiliate of Findex (Aust) Pty Ltd. Liability limited by a 
scheme approved under Professional Standards Legislation. Liability limited other than for acts or omissions of financial services licensees. 
© 2022 Findex (Aust) Pty Ltd

78 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

I
N
D
N
D
E
N
T
D
I
T
O
R
T
 
T
O
H
E
E
M
B
E
F
U
N
T
E
R
U
I
M
I
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E
D
B
u
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Independent Audit Report

K ey  Aud

it M atter

H ow we ad

d ressed

 the K ey  Aud

it M atter

Consid eration of  imp airment of  c ap

ital ised

 mineral  ex

l oration and

 ev al uation ex

p end

iture

The consideration of impairment of the 
carrying value of the Group’s Capitalised 

ineral E xploration and E

v aluation 

E xpenditure assets was material to our audit 
and represented an area of significant 
estimate and j udgement within the financial 
report. 

This matter is considered a k ey audit matter 
due to the high degree of j udgement req uired 
by the directors to assess whether 
impairment indicators are present for 
specified tenements held and due to the 
significance of the capitalised amount of 
$ 13.9 m at 30 J une 2022.

The conditions and assessment undertak en 
in relation to impairment are disclosed in the 
Group’s accounting policy in N otes 1 and 14
of the financial report.

D emerg er of  H amel in G ol

 L

imited

During the reporting period the Company 
completed the demerger of its wholly owned 
subsidiary H amelin G old L
subseq uently was admitted to the Official L
of the Australian Securities E xchange.

imited, which 

ist 

This matter is considered a k ey audit matter 
due to the significance of the gain on 
demerger recognised of $ 10.1m, fair v alue of 
in- specie distribution attributed to issued 
capital of $
$ 2.1m

.4 m and accumulated losses of 

imited is 
The demerger of H amelin G old L
disclosed in notes N ote 19 and 33 of the 
financial report.

Our procedures included, but were not limited to:

• Rev

iewed management’s documented 
assessment of the existence or otherwise of 
impairment indicators from both internal and 
external sources;

• Corroborated representations made by 

management with av ailable external data 
and ev
course of our audit;  and

idence obtained by us during the 

• Considered the appropriateness of relev ant 
disclosures in the notes to the financial 
statements.

Our procedures included, but were not limited to:

• Considered management’s documented 

•

assessment of the reduction in share capital 
and the gain on demerger recognised;
Agreed inputs included within management’s 
calculation to external data and ev
obtained by us during the course of our 
audit;  and

idence 

• Considered the appropriateness of relev ant 
disclosures in the notes to the financial 
statements.

2

2 0 2 2   A N N U A L   R E P O R T

79

p
M
d
8
Independent Audit Report

Information Other than the Financial Report and the Audit’s Report Thereon

The directors are responsible for the other information. The other information comprises the 
information included in the Group’s 2022 Annual Report for the year ended 30 J une 2022 but does 
not include the financial report and our auditor’s report thereon. 

Our opinion on the financial report does not cov er the other information and we do not express any 
form of assurance conclusion thereon. 

I n connection with our audit of the financial report, our responsibility is to read the other information 
and, in doing so, consider whether the other information is materially inconsistent with the financial 
report or our k nowledge obtained in the audit or otherwise appears to be materially misstated. 

I f, based upon the work  we hav e performed, we conclude that there is material misstatement of this 
other information, we are req uired to report that fact. W e hav e nothing to report in this regard.

Responsibilities of  th e D

ir ec tor s f or  th e F

ina nc

ia l Repor t 

The directors of the Company are responsible for the preparation of the financial report that giv es a 
true and fair v
iew in accordance with Australian Accounting Standards, I nternational F
Reporting 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 giv es a true and fair v
and is free from material misstatement, whether due to fraud or error. 

inancial 

iew 

I n preparing the financial report, the directors are responsible for assessing the ability of the G
roup 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 liq uidate the G
roup or to cease 
operations, or hav e no realistic alternativ e but to do so. 

Auditor’s Responsibilities for the Audit of the Financial Report 

Our obj ectiv es 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 lev el of assurance, but is not a guarantee that 
an audit conducted in accordance with the Australian Auditing Standards will always detect a material 
isstatements can arise from fraud or error and are considered material 
misstatement when it exists. M
if, indiv
decisions of users tak en on the basis of this financial report. 

idually or in the aggregate, they could reasonably be expected to influence the economic 

As part of an audit in accordance with Australian Auditing Standards, we exercise professional 
j udgement and maintain professional scepticism throughout the audit. W e also:  

•

idence that is sufficient and appropriate to prov

I dentify and assess the risk s of material misstatement of the financial report, whether due to fraud 
or error, design and perform audit procedures responsiv e to those risk s, and obtain audit 
ev
detecting a material misstatement resulting from fraud is higher than for one resulting from error, 
as fraud may inv olv e collusion, forgery, intentional omissions, misrepresentations, or the ov erride 
of internal control. 

ide a basis for our opinion. The risk  of not 

80 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

3

Independent Audit Report

• Obtain an understanding of internal control relev ant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an
roup’s internal control.
opinion on the effectiv eness of the G

•

v aluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting in

roup’s ability to continue as a going concern. I f we conclude that a material

the preparation of the financial report. W e also conclude, based on the audit ev
idence obtained
whether a material uncertainty exists related to ev ents and conditions that may cast significant
doubt on the G
uncertainty exists, we are required to draw attention in the auditor’s report to the disclosures in
the financial report about the material uncertainty or, if such disclosures are inadeq uate, to modify
the opinion on the financial report. H owev er, future ev ents or conditions may cause the G
cease to continue as a going concern.

roup to

•

v aluate the ov erall presentation, structure and content of the financial report, including the
disclosures and whether the financial statements represent the underlying transactions and
ev ents in a manner that achiev es fair presentation.

• Obtain sufficient appropriate audit ev

idence regarding the financial information of the entities or

business activ
ities within the G
auditor is responsible for the direction, superv
auditor remains solely responsible for the audit opinion.

roup to express an opinion on the group financial report.  The
ision and performance of the group audit.  The

W e communicate with the directors regarding, among other matters, the planned scope and timing of 
the audit and significant audit findings, including any significant deficiencies in internal control that we 
identify during our audit.  

ide the directors with a statement that we hav e complied with relev ant ethical 

W e also prov
req uirements regarding independence, and to communicate with them all relationships and other 
matters that may be reasonably be thought to bear on our independence, and where applicable, 
actions tak en to eliminate threats or safeguards applied.

F rom the matters communicated to the directors, we determine those matters that were of most 
significance in the audit of the financial report of the current year and are therefore the k ey audit 
matters. We describe these matters in our auditor’s report unless law or regulation precludes public 
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter 
should be communicated in the auditor’s report because the adv erse conseq uences of doing so 
would reasonably be expected to outweigh the public interest benefits of such communication.  

R ep ort on the R emuneration R ep ort 

O pinion on th e Rem

u ner

a tion Repor t 

W e hav e audited the Remuneration Report included in pages 33 (cid:87)(cid:82) 38 of the directors’ report for the
year ended 30 J une 2022.

I n our opinion, the Remuneration Report of E ncounter Resources L
2022, complies with section 300A of the Corporations Act 2001.  

imited for the year ended 30 J une 

2 0 2 2   A N N U A L   R E P O R T

81

4
E
E
Independent Audit Report

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.

Crowe Perth

Suwarti Asmono
Partner

Dated at Perth this 30th day of September 2022

82 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

5

ASX Additional 
Information

Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was 
applicable as at 30 September 2022.

A. Distribution of Equity Securities

Analysis of numbers of ordinary fully paid shareholders by size of holding:

Distribution

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

More than 100,000

Totals

Number of shareholders

Securities held

% Securities

114

310

250

729

341

1,744

39,849

1,012,085

1,983,428

30,810,231

316,704,567

350,550,160

0.01%

0.29%

0.57%

8.79%

90.34%

100.00%

There are 343 shareholders holding less than a marketable parcel of ordinary shares.

B. Substantial Shareholders

An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below:

Shareholder Name

IGO Limited

William Michael Robinson

Silver Lake Resources Limited

Deutsche Balaton Aktiengesellschaft

Issued Ordinary Shares

Number of shares

% of shares

28,400,572

26,452,556

18,437,397

17,728,071

8.10%

7.55%

5.26%

5.06%

2 0 2 2   A N N U A L   R E P O R T

83

ASX Additional Information

C. Twenty Largest Shareholders

The names of the twenty largest holders of quoted shares are listed below:

Shareholder Name

Zero Nominees Pty Ltd

Deutsche Balaton Aktiengesellschaft

Silver Lake Resources Limited

Mr William Michael Bennett Robinson

HSBC Custody Nominees (Australia) Limited-GSCO ECA

UBS Nominees Pty Ltd

Citicorp Nominees Pty Limited

HSBC Custody Nominees (Australia) Limited

Stone Poneys Nominees Pty Ltd 

Superhero Securities Limited 

Precision Opportunities Fund Ltd 

Picton Cove Pty Ltd

Solvista Pty Ltd 

Sundin Pty Ltd 

Fifty Second Celebration Pty Ltd 

Wythenshawe Pty Ltd

Kiki Super Fund A/C

IGO Limited

Wythenshawe Pty Ltd 

Mr Peter Bewick & Mrs Stephanie Bewick 

Ordinary Shares - Quoted

Number of shares

% of Shares

25,700,000

17,728,071

16,684,210

16,216,900

15,848,600

15,140,527

14,647,839

12,560,553

8,998,816

7,247,705

6,333,334

6,039,074

5,750,000

5,580,000

4,843,063

4,000,000

3,000,000

2,700,572

2,200,000

2,200,000

7.33%

5.06%

4.76%

4.63%

4.52%

4.32%

4.18%

3.58%

2.57%

2.07%

1.81%

1.72%

1.64%

1.59%

1.38%

1.14%

0.86%

0.77%

0.63%

0.63%

Total

193,419,264

55.18%

84 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

ASX Additional Information

D. Unquoted Securities

Options over Unissued Shares

Number of Options

Exercise Price

Expiry Date

Number of Holders

2,900,000

5,050,000

1,500,000

650,000

2,450,000

800,000

3,630,000

1,200,000

1,000,000

1,000,000

20,180,000

5.2 cents

16.2 cents

8.2 cents

18.2 cents

22.2 cents

21.2 cents

22.4 cents

19.0 cents

20.0 cents

30.0 cents

30 November 2022

31 October 2023

30 November 2023

30 June 2024

26 November 2024

30 April 2025

28 November 2025

28 June 2026

29 September 2025

29 September 2025

5

8

1

3

7

3

10

3

61

61

1 

Issued to Cannacord Genuity (Australia) Pty Ltd and Chieftain Securities (WA) Pty Ltd for joint lead manager services to the share placement completed on 29 
September 2022. 

E. Voting Rights

In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each 
member present in person or by proxy shall have one vote and upon a poll, each share will have one vote.

There are no voting rights in respect of options over unissued shares.

F. Restricted Securities

There are no restricted securities.

2 0 2 2   A N N U A L   R E P O R T

85

Corporate 
Directory

Directors

Share Registry

Paul Chapman

Non-Executive Chairman

Automic Group

Will Robinson

Managing Director

Address

Peter Bewick

Non-Executive Director

Jonathan Hronsky

Non-Executive Director

Philip Crutchﬁeld

Non-Executive Director

Level 5, 191 St Georges Terrace
Perth, Western Australia 6000

Telephone

1300 288 664

Company Secretaries

Securities Exchange Listing

Kevin Hart

Dan Travers 

The Company’s shares are quoted on the Australian 
Securities Exchange. The home exchange is Perth, Western 
Australia.

Principal and Registered Ofﬁce

ASX Code

Encounter Resources Limited

ENR – Ordinary shares

Address

Suite 2, 1 Alvan Street
Subiaco, Western Australia 6008

Telephone

(08) 9486 9455

Web

www.enrl.com.au

Auditor

Crowe Perth

Address

Level 5, 45 St Georges Terrace 
Perth, Western Australia 6000

Company Information

The Company was incorporated and registered under the 
Corporations Act 2001 in Western Australia on 30 June 2004 
and became a public company on 26 May 2005.

The Company is domiciled in Australia.

86 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

Notes

2 0 2 2   A N N U A L   R E P O R T

87

Notes

88 E N C O U N T E R   R E S O U R C E S   L I M I T E D   

89

Suite 2/1 Alvan Street 
Subiaco WA 6008

+61 8 9486 9455

contact@enrl.com.au

www.enrl.com.au