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www.silvermines.com.au
2023
ANNUAL REPORT
CONTENTS
Review of Operations ....................................................... 1
Competent Persons Statements .......................................21
Directors’ Report .............................................................22
Auditor’s Independence Declaration ............................... 32
Financial Report ..............................................................33
Consolidated Statement of Profi t or Loss and
Other Comprehensive Income ................................. 33
Consolidated Statement of Financial Position .......... 34
Consolidated Statement of Changes in Equity ......... 35
Consolidated Statement of Cash Flows ................... 36
Notes to the Financial Statements ........................... 37
Directors’ Declaration ............................................. 66
Independent Auditor’s Report ......................................... 67
Additional Securities Exchange Information .................... 72
Corporate Governance Statement .................................. 75
Corporate Directory......................................................... 85
Directors
Keith Perrett - Non-Executive Chairman
Anthony McClure - Managing Director
Jonathan Battershill - Non-Executive Director
Kristen Podagiel - Non-Executive Director
Company Secretary
Trent Franklin
Australian Company Number
107 452 942
Registered Offi ce
Silver Mines Limited
Level 28
88 Phillip Street
Sydney NSW 2000
Australia
Tel:
Fax:
+61 2 8316 3997
+61 2 8316 3999
E-mail:
info@silvermines.com.au
Website: www.silvermines.com.au
Share Registry
Automic Pty Ltd
Level 5, 126 Phillip Street
Sydney NSW 2000
Australia
Tel:
+61 2 8072 1400
E-mail: hello@automic.com.au
Auditors
Crowe Sydney
Level 24
1 O’Connell Street
Sydney NSW 2000
Tel: +61 2 9262 2155
Fax: +61 2 9262 2190
5095 Designed and Produced by RDA Creative www.rda.com.au
REVIEW OF OPERATIONS
During the 2023 Financial Year, Silver Mines Limited (‘Silver Mines’, the ‘Company’
or the ‘Group’) continued pre‑development works and ongoing mineral exploration at
the Bowdens Silver Project (‘Project’) located near Mudgee in New South Wales.
In March 2023, the Company updated its Mineral Resource Estimate reporting a substantial increase across all categories
adding significant value and demonstrating confidence for further Project longevity. In April 2023, the Company received
approvals from the Independent Planning Commission of New South Wales allowing the Project to proceed to development
and production subject to conditions of consent. The Company also continued to undertake substantial exploration works
across its tenement holdings.
PROJECTS
During the 2023 Financial Year, the Group controlled the following projects, all of which are located in New South Wales, Australia:
• Bowdens Silver Project (silver/polymetallic)
• Barabolar Project (copper/gold/silver)
• Tuena Project (gold/silver)
Figure 1.
Group Project
Locations.
1
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Bowdens Silver Project
Introduction
The Bowdens Silver Project is located near Mudgee in the Central Tablelands
Region of New South Wales, Australia.
The Project comprises 2,115 km2 (521,000 acres) of titles
covering approximately 80 kilometres of strike of the highly
mineralised Carboniferous Rylstone Volcanics overlying
Ordovician and Silurian formations. This area also hosts
the Company’s Barabolar Project.
In December 2022, the New South Wales Department
of Planning and Environment (‘DPE’) advised that
subsequent to their assessments of the Bowdens Silver
Project they had concluded that the Project was in the
public interest and approvable subject to conditions
of consent and referred it to the Independent Planning
Commission of New South Wales (‘IPC’). In April 2023,
the IPC approved Bowdens Silver Pty Limited’s application
to develop an open‑cut silver, zinc and lead mine.
During the 2023 Financial Year, the Company continued
both pre‑development works and ongoing mineral
exploration at the Bowdens Silver Project.
The Group holds 100% of Exploration Licence EL5920
which contains the Bowdens Silver Deposit. In addition,
the Group holds exploration licences EL6354, EL8159,
EL8160, EL8168, EL8268, EL8403, EL8405, EL8480 and
EL8682. During the 2023 Financial Year, the Company
submitted an application for vacant exploration ground.
EL9580 was granted in July 2023. (Refer to Figure 2).
22
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Description
The Bowdens Silver Project is the largest known
undeveloped silver Mineral Resource in Australia.
The tenement portfolio is situated on the eastern margin
of the Lachlan Orocline/Macquarie Arc. The Project
comprises the highly‑mineralised Rylstone Volcanics
and the on‑lapping later Permian, sedimentary units of
the Shoalhaven Group within the Sydney Basin. The
Rylstone Volcanics unconformably overlie the Ordovician
Coomber Formation and Silurian Dungeree Volcanics
(Refer to Figure 3). Several intrusions cross‑cut Ordovician,
Silurian and Carboniferous units.
Figure 2. Silver Mines Limited
Tenement and Project locations
in the Mudgee district.
3
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Figure 3. Silver Mines Limited
prospect locations in the
Mudgee district.
44
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Mineral Resource and Ore Reserve Statement
Mineral Resources
During the 2023 Financial Year, the Company provided an updated Mineral Resource for the Bowdens Silver Project. The
Bowdens Mineral Resource Estimate has been updated by H&S Consultants using both Multiple Indicator Kriging, Ordinary
Kriging and the reporting is compliant with the 2012 JORC Code and Guidelines. Please refer to Tables 1, 2 and 3, for
further details.
With the updated Mineral Resource as of March 2023, the Ore Reserve will be updated during the 2024 Financial Year.
Table 1 ‑ Bowdens Silver Deposit Mineral Resource Estimate as at March 2023 (at a 30 g/t Ag Eq cut‑off)
Category
Measured
Indicated
M & I
Inferred
Total
Tonnes
(Mt)
Silver Eq.
(g/t)
Silver
(g/t)
107
50
157
43
200
68
55
64
54
62
40
20
33
14
29
Zinc
(%)
0.36
0.38
0.36
0.39
0.37
Lead
(%)
0.25
0.26
0.25
0.29
0.26
Gold
(g/t)
0.03
0.09
0.05
0.13
0.07
Million
Ounces
Silver
Million
Ounces
Silver Eq.
137
33
169
19
189
235
88
323
73
396
Table 2 ‑ Bowdens Silver Deposit Mineral Resource Estimate for Gold as at March 2023 (at a 0.2 g/t Au cut‑off)
Tonnes
(Mt)
Silver Eq.
(g/t)
Silver
(g/t)
3.5
6.0
9.5
19.0
76
71
75
74
18
12
11
13
Zinc
(%)
0.46
0.46
0.50
0.48
Lead
(%)
0.30
0.31
0.41
0.36
Gold
(g/t)
0.31
0.31
0.31
0.31
Thousand
Ounces
Gold
Million
Ounces
Silver Eq.
35
61
96
190
9
14
23
45
Category
Measured
Indicated
Inferred
Total
Notes:
1. Bowdens silver equivalent: Ag Eq (g/t) = Ag (g/t) + 33.48*Pb (%) + 49.61*Zn (%) + 80*Au (g/t) calculated from prices of US$20/oz silver,
US$1.50/lb zinc, US$1.00/lb lead, US$1600/oz gold and metallurgical recoveries of 85% silver, 82% zinc and 83% lead, 85% gold estimated
from test work commissioned by Silver Mines Limited.
2. Bowdens Silver Mineral Resource Estimate reported to a 30g/t Ag Eq cut off extends from surface and is trimmed to above 300 metres RL,
approximately 320 metres below surface, representing a potential target volume for future open‑pit mining and expansion.
3.
In the Company’s opinion, the silver, zinc, gold and lead included in the metal equivalent calculations have a reasonable potential to be
recovered and sold.
4. Stated Mineral Resources are partially inclusive of areas of the total Underground Mineral Resource Estimate at 150 g/t Silver Equivalent (Ag Eq)
Cut‑off Grade above 300mRL. See ASX announcement dated 5th September 2022.
5. Variability of summation may occur due to rounding.
5
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Table 3 ‑ Bowdens Silver Deposit Grade‑Tonnage Data for Estimation Results as at March 2023
Cut off
g/t Ag Eq.
Tonnes
(Mt)
Silver Eq.
(g/t)
Silver
(g/t)
0
10
20
30
35
40
50
60
70
80
90
100
120
150
200
663
403
287
200
167
140
100
71
51
37
27
21
13
7
3
26
40
50
62
68
73
85
97
110
123
136
150
175
210
265
12
19
24
29
32
36
43
51
61
72
84
96
119
153
200
Zinc
(%)
0.16
0.24
0.30
0.37
0.40
0.43
0.49
0.53
0.57
0.59
0.61
0.63
0.66
0.70
0.80
Lead
(%)
Gold
(g/t)
Million
Ounces
Silver
Million
Ounces
Silver Eq.
0.11
0.17
0.22
0.26
0.29
0.31
0.35
0.38
0.42
0.45
0.47
0.49
0.52
0.57
0.66
0.03
0.05
0.06
0.07
0.07
0.07
0.08
0.08
0.08
0.08
0.08
0.08
0.06
0.05
0.04
258
243
218
189
174
161
137
117
100
85
74
64
49
34
19
555
521
466
396
362
330
272
222
180
146
120
100
72
47
25
The updated Mineral Resource is the result of additional drilling conducted by Silver Mines (132 drill holes for 53,190 metres)
over the past five and a half years. This additional information comprises 123 diamond core holes for 49,150 metres, 8 reverse
circulation drill holes with diamond tails for 3,867 metres and one reverse circulation drill hole for 173 metres.
Comparison with Previous estimates
In comparison to the 2017 Mineral Resource estimate, the updated Mineral Resource estimate is a 56% increase in tonnes,
a 16% increase in silver ounces and a 44% increase in silver equivalent ounces, with an 8% decrease in silver equivalent
grade. This decrease in silver equivalent grade is a result of significant tonnages that contain lower grade silver but include
gold, and increases in base metals (zinc and lead) in the Deposit below the existing proposed pit design.
Table 4 ‑ Bowdens Silver Deposit Mineral Resource Comparison March 2023 compared with
previous September 2017 Estimates (at a 30 g/t Ag Eq cut‑off)
Category
Measured 2017
Measured 2023
Indicated 2017
Indicated 2023
Inferred 2017
Inferred 2023
Total 2017
Total 2023
Tonnes
(Mt)
Silver Eq.
(g/t)
Silver
(g/t)
76
107
29
50
23
43
128
200
72
68.2
58.8
54.7
59.9
53.5
66.8
61.7
45.5
39.6
31.4
20.4
30.6
14.1
39.6
29.4
Zinc
(%)
0.37
0.36
0.38
0.38
0.40
0.39
0.38
0.37
Lead
(%)
0.25
0.25
0.25
0.26
0.28
0.29
0.26
0.26
Million
Ounces
Silver
Million
Ounces
Silver Eq.
Gold (g/t)
111
137
29
33
23
19
163
189
175
235
55
88
45
73
275
396
0.03
0.09
0.13
0.07
66
Silver Mines Limited Annual Report 2023
REVIEW OF OPERATIONS
Reported at a 30 g/t silver equivalent cut off, the Bowdens Silver Mineral Resource extends from surface and is trimmed to
approximately 320 metres below surface. It is the opinion of the Company that this represents a potential target volume for
future open‑pit mining.
Much of the increase in Mineral Resource is in the shallower, southern portion of the Deposit and within the basement
Coomber Formation below, in addition to areas peripheral to the north and northwest of the currently proposed open‑cut
pit (to be updated with optimisation studies).
Ore Reserve
The Bowdens Silver Ore Reserve is estimated at 29.9 million tonnes at 69.0 g/t silver, 0.44% zinc and 0.32% lead
containing 66.32 million ounces of silver, 130.8 kilotonnes of zinc and 95.3 kilotonnes of lead.
The Ore Reserve Estimate was prepared by mining engineering consultancy firm AMC Consultants Pty Ltd (AMC
Consultants) and is based on the September 2017 Mineral Resource Estimate generated for Silver Mines by H & S
Consultants Pty Ltd (H & S Consultants) (see ASX announcement 19 September 2017).
Measured and Indicated Mineral Resources were converted to Proved and Probable Ore Reserves respectively and are
subject to mine designs, modifying factors and economic evaluation. The Ore Reserve Estimate for the Bowdens Silver
Project as of May 2018 is outlined in Table 1 below.
Table 5. Bowdens Silver Deposit Ore Reserve
Reserve Grades
Contained Metal
Tonnes
(Mt)
28.6
1.3
29.9
Ag
(g/t)
69.75
53.15
69.01
Zn
(%)
0.44
0.43
0.44
Pb
(%)
0.32
0.29
0.32
Ag Metal
Moz
64.05
2.27
66.32
Zn
(kt)
125.11
5.74
130.84
Pb
(kt)
91.43
3.91
95.33
Reserve
Category
Proved
Probable
Total
Notes:
1. Refer to ASX announcement 30 May 2018 for further details.
2. Calculations have been rounded to the nearest 100,000 t, 0.1 g/t silver and 0.01% zinc and lead grades respectively. The Ore Reserve is
reported by economic cut‑off grade with appropriate consideration of modifying factors including costs, geotechnical considerations, mining
and process recoveries and metal pricing.
The Ore Reserve estimate was based on the Bowdens Silver Project Mineral Resource as of September 2017 (see ASX
announcement of 19 September 2017).
With the updated Mineral Resource as of March 2023, the Ore Reserve will be updated during the 2024 Financial Year.
Governance and Quality Control
The Company ensures all resources calculations are undertaken and reviewed by independent, internationally recognised
industry consultants.
All drill hole data is stored in‑house within a commercially available purpose designed database management system and
subjected to industry standard validation procedures. Quality control on resource drill programs have been undertaken
to industry standards with implementation of appropriate drilling type, survey data collection, assay standards, sample
duplicates and repeat analyses.
7
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Development Approval and Environmental
Impact Statement
In May 2020, the Company completed and submitted the
Bowdens Silver Development Application and associated
Environmental Impact Statement (EIS) to the New South
Wales Department of Planning and Environment (‘DPE’)
(see ASX announcement 25 May 2020).
In March 2021, the Company announced the submission
of its Mining Lease Application (‘MLA 601’) (see ASX
announcement 24 March 2021).
In March 2022, the Company submitted a Water Supply
Amendment Report. The key detail of this report was
for the removal of a proposed water supply pipeline with
water self‑sufficiency confirmed for the Bowdens Silver
Project.
In December 2022, the DPE assessed the Project as in
the public interest and approvable with conditions and
referred it to the Independent Planning Commission (‘IPC’)
for final determination.
In April 2023, the IPC approved the Bowdens Silver
Project allowing the Project to proceed to development
and production subject to conditions of consent.
Summary points of the EIS and other documentation include:
• Considerable local economic benefits with substantial
local job creation;
• Minimal impacts on surface water and groundwater
during and after operations;
• No physical human health risk issues of
concern identified;
• A commitment to a progressive rehabilitation plan with
rehabilitation to occur throughout the life of the mine;
• No significant impacts upon migratory or threatened
species and a significant area of land to be conserved
in perpetuity as part of the Project’s biodiversity offset
program;
• Relocation of a local road around the mine site
resulting in the majority of traffic avoiding the local
township of Lue;
• Aboriginal Cultural Heritage assessment concluded in
conjunction with the local Aboriginal communities, with
agreement for ongoing management; and
• The potential for amenity‑related impacts managed
over the life of the mine through a range of
management commitments, monitoring and reporting.
From the exhibition process of the EIS, the Company
received no objections to the Project from any of the
Government agencies and received resounding public
support with 79% of all public organisation and general
public submissions in favour of the Project.
The full Bowdens Silver EIS and other documentation
can be accessed at the New South Wales Department of
Planning and Environment website.
The proposed development comprises an open‑cut
mine feeding a new processing plant with a conventional
milling circuit and differential flotation to produce two
concentrates that will be sold for smelting off site. Plant
capacity is designed for 2.0 million tonnes per annum with
a mine life of 16.5 years.
Silver Mines continues an extensive program of
consultation with relevant Government departments,
local communities, and other interested stakeholders.
Consultation processes focus on the current mine
development area and the wider area where the Company
is commencing or undertaking exploration programs.
88
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Figure 4: Bowdens Silver Mine Site Layout
9
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Bowdens Silver Exploration
Exploration at the Bowdens Silver Project during the
2023 Financial Year concentrated on a substantial drilling
program to target zones of high‑grade silver mineralisation
and massive and semi‑massive sulphide zones at depth
situated below the bulk‑tonnage open‑pit Ore Reserve
of the Bowdens Silver Deposit. . From the beginning of
the 2023 Financial Year, exploration shifted to testing
extensions of mineralisation outside of the current planned
open cut‑pit design and testing for higher grades within
the open‑cut pit design. Multiple areas have been targeted
for extensions including in the north at Main, Aegean and
Northwest Zones and in and to the south of the planned
open‑cut pit where anomalous gold has been identified.
For the first time at the Project, the maiden underground
Mineral Resource estimate included gold.
Previously, gold had been predominantly identified within
the Bundarra Zone which is directly underneath the
planned open‑cut pit. Gold—along with high grades of
silver mineralisation—was also recognised in 2021 at
shallow depths in the south and adjoining the Bowdens
Silver Deposit. This area became an additional target for
gold and silver exploration drilling during 2022 and 2023
and is named the Southern Gold Zone.
During the year, the Company announced ongoing
success in its exploration activities that yielded exceptional
high‑grade silver intercepts (see ASX announcements
14 July 2022, 12 September 2022, 30 January 2023, 29
March 2023 and 15 May 2023). These results followed
drilling success during the 2022 Financial Year.
1010
Figure 5. Drilling into high‑grade silver
targets at the Bowdens Silver Project.
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Drilling of mineralised zones is ongoing and is intended
to convert higher‑grade portions of the Deposit, extend
existing resources and discover new deposits near
proposed operations.
During the 2023 Financial Year, the Company also
completed a 2D seismic reflection surveying program
across the Bowdens Silver Deposit and local geological
area. The survey consisted of 12.44 line kilometres and
was conducted to determine the seismic response of
the Bowdens Deposit, identifying potential extensions to
the system both down plunge and dip at depth, and to
highlight possible “analogue” responses.
The Company is advanced in an optimisation program for the
updating of the Bowdens Silver Feasibility Study completed
in 2018. The update program is examining all aspects of
the development including Ore Reserves, mine design,
metallurgy, process design and economic and market
considerations. The optimisation program is scheduled for
completion in early 2024.
The Company has also been undertaking a Scoping
Study for potential underground mining scenarios. The
study considers potential underground mining scenarios
beneath the planned approved open‑pit development.
This underground study has been placed on hold given
the prioritised Feasibility Study optimisation program.
“During the year, the Company
announced ongoing success
in its exploration activities that
yielded exceptional high‑grade
silver intercepts.”
11
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Barabolar Project
During the 2023 Financial Year, the Company completed drilling activities at
the Barabolar Project located approximately 26 kilometres east of Mudgee and
10 kilometres northwest of the Company’s Bowdens Silver Project.
The Barabolar Project is a high‑quality exploration project
located within the highly prospective Macquarie Arc
that also hosts world‑class mineral systems such as the
Cadia‑Ridgeway porphyry copper‑gold deposit. Barabolar
consists of an extensive corridor of gold, copper, silver, zinc
and lead soil and rock chip anomalies.
The initial diamond program at Barabolar (Mt Laut and
Crossroads prospects) was completed with seven holes
drilled for 3,341 metres and with fewer than 1,000 assays still
pending. Across the area from Crossroad to Mt Laut, drilling
encountered moderately to intensely altered rhyolitic to dacitic
composition tuffs and some rhyolite lavas. Alteration consists
of initial illite and muscovite which is overprinted by chlorite
and carbonate. The primary sulphide mineral observed is
pyrite which occurs as an alteration mineral and within veins.
Other sulphides observed within frequent veins include
sphalerite, chalcopyrite, galena and pyrrhotite.
1212
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Figure 6. Prospect locations within the Barabolar Project area.
Alteration and mineralisation is indicative of a broad
hydrothermal system with exploration to continue to
focus on areas of most intense veining and base metal
sulphide development.
The Company has new high‑priority drill targets from
multiple exploration datasets around the Mt Laut
pyrophyllite quarry and Crossroad Prospect areas (refer
to Figure 6). Immediately within this area are silica‑sericite
flooded volcaniclastics and volcanics of andesitic to
dacitic composition with pyrite and gossanous quartz
veins. Major west dipping faults (interpreted from digital
elevation models and surface measurements) are likely the
fluid pathways to exposed zones such as the pyrophyllite
quarry and other prospects further to the east.
The Crossroad target represents a potential intrusive
source to alteration and mineralisation as the gravity
data has identified numerous “low” responses with the
standout target being coincident with a magnetic high
and potassium anomaly (radiometric data). The magnetic
high is potentially a result of high temperature potassic
alteration (biotiteorthoclase‑magnetite) within an intrusion.
This represents a priority target for deep drilling.
Machine Learning (ML) algorithms, applied to the
Company’s extensive surface sample database and
geophysical/remotely sensed datasets, have also identified
areas within the Barabolar Project as being outliers
geochemically within the Company’s broader tenement
holding. These areas are Cringle and Mt Laut through
to Crossroad, highlighted in both predictive models
and in sampled data. Significantly, when multivariate
outlier analysis is performed using alkalic and acidic
zone elemental enrichment around porphyry systems
as previously defined, the outliers are situated around
significant geophysical responses (magnetic high and
gravity low).
Silver Mines Limited Annual Report 2022
13
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Tuena Project
The Tuena Gold Project is located 80 kilometres south of
the city of Orange in New South Wales (refer to Figure 7).
The Tuena area was the scene of a historic gold rush,
with gold extracted from several narrow high‑grade
gold reefs over a regional trend with greater than five
kilometres of strike length. The Company has completed
reconnaissance mapping, rock sampling and soil
geochemistry as well as flown a detailed magnetic survey.
During the 2021 Financial Year, the Company completed
a 20‑hole 4,000 metre drill program designed to test
beneath several of the historic hard‑rock gold workings
and associated geochemistry anomalies along an
extensive 5.4 kilometre by 1.5‑kilometre shear complex
within EL8526. In addition, two targets were identified
with both gold and base‑metal pathfinder signatures.
Both prospects adjoin historic workings at Lucky Hit and
Markham’s Hill respectively and are defined
by soil chemistry and modelling using the
Company’s propriety R&D methodology
with anomalism of silver, bismuth, lead,
tellurium, and gold. These targets are
being tested for bulk‑tonnage gold mineral
systems and have a comparable signature
and scale to the McPhillamy’s Gold Project
located north of the Tuena Gold Project.
Drilling encountered multiple mineralised
structures beneath historic workings
comprising quartz and carbonate veins with
or without pyrite (iron sulphide).
This program represented the first modern drilling to be
completed in the Tuena Project area. However, in recent
years there have been substantial gold discoveries made
along the strike of the Copperhannia Fault including the
McPhillamy’s Deposit to the north of Tuena.
The Company is planning further work in follow up to the
Tuena Gold Project drilling program and is also planning
an expanded regional exploration program extending from
immediately south of the McPhillamy’s Project and across
EL8973, EL8974, EL8526 and EL8975.
During the 2023 Financial Year, the Company submitted an
application for vacant exploration ground at Tuena covering
the historic Elsinora Prospect. The Elsinora Prospect was
held by Alkane Resources (ASX:ALK) until May 2023
and is considered prospective for orogenic‑style gold
mineralisation and volcanic‑hosted gold and base metal
mineralisation. EL9588 licence was granted in July 2023.
Figure 7: Map showing
the Tuena Gold Project.
1414
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Research and Development
The Company has continued its commitment to research and development (‘R&D’) programs to better map and understand
the Carboniferous Rylstone Volcanics and basement Palaeozoic (Ordovician and Silurian) rocks of the Company’s exploration
licences. These include technologies which are now being rolled out to the Company’s wider projects to enable better
targeting for regional exploration as well as on a local scale within the Bowdens Deposit.
R&D programs over the past few years, have involved collaboration between Silver Mines’ researchers and researchers
from the University of Technology Sydney, the University of New South Wales and Macquarie University. Several industry
consultants and data collection contractors have also assisted in analysing and providing base datasets for the R&D program.
The Company has commenced a new R&D project seeking to develop a framework using the technologies developed in the first
R&D project. Of particular focus is the transition of predictive geochemistry machine‑learning algorithms into 3D. In this project
the Company aims to develop technologies whereby bulk‑property models of chemical and physical attributes can be used, in
machine‑learning algorithms, to predict volumes where there is an increased prospectivity or other metallurgical factors.
During the 2023 Financial Year, the Company’s R&D work continued work on the new R&D project engaging with several
research providers, as well as internal staff, to provide cutting edge technologies and processes that may have a positive
impact on future economic development and discovery.
Tenement Information as at 30 June 2023
Tenement
EL 5920
EL 6354
EL 8159
EL 8160
EL 8168
EL 8268
EL 8403
EL 8405
EL 8480
EL 8682
ELA66101
EL 8526
EL 8973
EL 8974
EL 8975
ELA66192
Project Name
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Bowdens Silver
Tuena
Tuena
Tuena
Tuena
Tuena
1. Subsequent to the end of the year granted as EL9580.
2. Subsequent to the end of the year granted as EL9588.
Location
Silver Mines Ownership
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
NSW
100%
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100%
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application
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15
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
CORPORATE
Placement
On 10 February 2023, the Company announced that
it had successfully completed a capital raising of A$18
million (before costs) (‘Placement’) to institutional,
professional and sophisticated investors resulting in the
issue of 112,500,000 fully paid ordinary shares at an issue
price of $0.16 per share. Details of the shares issued are
as below:
(a) 112,187,500 shares were issued using the Company’s
capacity under ASX Listing Rule 7.1; and
(b) 312,500 shares issued to directors of the Company or
their nominees, approval of which was obtained at an
extraordinary general meeting of shareholders held on
17 April 2023.
Canaccord Genuity acted as the Sole Lead Manager to
the Placement.
After capital raising costs, the funds raised will be
used primarily for progression of and pre‑development
expenses including exploration associated with the
Company’s flagship Bowdens Silver Project. Funding will
also be made available for exploration activities at the
Company’s other projects and for corporate and general
working capital purposes.
Appointment of General Manager
During the reporting period the Company announced the
appointment of Mr Joel Ray as General Manager of its
wholly owned Bowdens Silver Project.
Mr Ray is a highly experienced metalliferous mine and
minerals processing manager with a successful track
record in precious and base metals mines in Australia
and overseas.
Waiver
On 9 November 2022, shareholders approved at the
Annual General Meeting of the Company (‘Approval’)
a waiver granted by ASX Listing Compliance on 23
September 2022 (‘Waiver’). The Waiver relates to the
issue of 10,000,000 fully paid ordinary shares (‘Deferred
Consideration Shares’) in the Company to be issued
to a Director of the Company in accordance with the
provisions of the share sale and purchase deed dated 3rd
May 2016 (‘Deed’), which effectuated the purchase of the
Bowdens Silver Project. In accordance with the Deed the
Deferred Consideration Shares are to be issued upon:
• achievement of the mining lease granted by the NSW
Department of Planning, Industry and Environment
pursuant to the Mining Act 1992 (NSW) in connection
with the Bowdens Silver Project (‘Mining Lease
Milestone’); or
• an occurrence of a change of control such as a
takeover bid pursuant to section 9 of the Corporations
Act 2001 (Cth), (‘Takeover Condition’).
1616
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
The Company confirms the Deferred Consideration
Shares have not been issued in the 2023 Financial Year.
The Deferred Consideration Shares may only be issued
if either the Mining Lease Milestone is achieved or the
Takeover Condition occurs in the period that is 24 months
from the date that Approval was obtained.
RESULTS AND DIVIDENDS
The loss of the Group for the Financial Year after providing
for income tax amounted to $4,111,001 compared to a
loss of $13,299,954 for the previous year.
The Group incurred exploration and development
expenditure of $13,704,582 during the year (2022:
$12,471,702). The total net assets of the Group stands at
$125,924,789 (2022: $112,681,000) of which investment
in exploration expenditure accounts for $82,513,669
(2022: $68,809,087).
The Group is a mineral exploration and development
company and as such does not earn income from the
sale of product. No dividends have been declared or paid
during the year.
ENVIRONMENTAL REGULATIONS
The Group’s operations are subject to various
environmental controls under State regulations.
The directors are not aware of any material breaches
during the Financial Year.
SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS DURING THE FINANCIAL YEAR
The Group did not have any significant changes in the
state of its affairs during the Financial Year and after the
end of the reporting period.
MATERIAL BUSINESS RISKS
This section outlines the key risks and uncertainties that
could impact the Company and its ability to achieve its
operating and financial objectives.
Development
By its very nature, the development of a mining facility
contains significant risks with no guarantee of success.
The ultimate economic development of a mineral deposit
is dependent on many factors, including the ability
to access adequate capital for project development,
obtaining regulatory consents and approvals necessary
for the conduct of development and production, securing
access to equipment, materials and infrastructure,
securing access to competent operation management and
prudent financial administration, including the availability
and reliability of appropriately skilled and experienced
employees, contractors and consultants.
Further, once established, mining operations can be
impacted by a number of factors, including geological
and weather conditions causing delays and interference
to operations, access to necessary funding, metallurgical
issues, mechanical failure of plant and equipment,
shortages or increases in price of consumables and plant
and equipment, environmental hazards, fires, explosions
and other accidents.
Similarly, all production costs, particularly labour, fuel and
power, are a key risk and have the potential to adversely
affect the Company’s profitability. If the Company develops
mining operations and these are subject to cost over‑runs
and/or higher than anticipated operating costs, this would
adversely affect the Company’s profitability, the value of the
Company’s projects and in turn, the value of its Shares.
The Company’s financial performance will substantially
depend on the accuracy of the cost estimates for the
proposed development, other current and future expansion,
development, and infrastructure plans, working capital
requirements, the duration of relevant works program,
government approvals, heritage approvals and clearances
and personnel and equipment availability. The cost and time
forecast estimates are based on assumptions including
those in relation to study costs, scope and duration, the
approvals process and timeline estimated, and operational
issues, which are subject to uncertainty.
Exploration
The mineral tenements of the Company are at various
stages of exploration, and potential investors should
understand that mineral exploration and development are
high‑risk undertakings.
There can be no assurance that exploration of these
tenements, or any other tenements that may be acquired
in the future, will result in the discovery of an economic ore
deposit. Even if an apparently viable deposit is identified,
there is no guarantee that it can be economically
exploited.
Exploration and drilling programs are designed to discover
new exploration targets for development, as well as
improve confidence in existing targets throughout the
development stages of exploration projects to feasibility
study level.
Exploration results that include drill results on wide
spacings may not be indicative of the occurrence of a
mineral deposit. Such results do not provide assurance
that further work will establish sufficient grade, continuity,
metallurgical characteristics, and economic potential to be
classed as a category of mineral resource. The potential
quantities and grades of drilling targets are conceptual
in nature and, there has been insufficient exploration to
define a mineral resource, and it is uncertain if further
exploration will result in the targets being delineated as
mineral resources.
17
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Mineral Resources and Ore Reserve Estimates
The estimation of Mineral Resources and Ore Reserves
are expressions of judgement based on knowledge,
experience and industry practice. The reported estimates,
which were valid when originally estimated, may alter
significantly when new information or techniques become
available. As new information is obtained through
additional drilling and analysis, Mineral Resources and Ore
Reserve estimates are likely to change. This may result in
alterations to exploration, development and production
plans which may, in turn, positively or negatively affect the
Company’s operations and financial position. In addition,
by their very nature, Mineral Resources and Ore Reserves
estimates are imprecise and depend to some extent
on interpretations, which may prove to be inaccurate.
Mineral Resource and Ore Reserve estimates may also be
impacted by material changes in the silver, zinc, lead and
other commodity prices.
Community Relations
A failure to adequately manage community and social
expectations within the communities in which the
Silver Mines operates may lead to local dissatisfaction
which, in turn, could lead to interruptions to production,
permitting and exploration operations. The Company
has an established stakeholder engagement framework
to guide the management of the Group’s community
relations efforts. The Company has dedicated community
relations teams to work closely with the local communities
and government.
Regulatory
The Company’s exploration and development activities
are subject to extensive laws and regulations relating to
numerous matters including resource licence consent,
conditions including environmental compliance and
rehabilitation, taxation, employee relations, health
1818
and worker safety, waste disposal, protection of the
environment, native title and heritage matters, protection
of endangered and protected species and other matters.
The Company requires permits from regulatory authorities
to authorise the Company’s operations. These permits
relate to exploration, development, production, and
rehabilitation activities.
Obtaining necessary permits can be a time consuming
process and there is a risk that the Company will not
obtain these permits on acceptable terms, in a timely
manner or at all. The costs and delays associated with
obtaining necessary permits and complying with these
permits and applicable laws and regulations could
materially delay or restrict the Company from proceeding
with the development of a project or the operation
or development of a mine. Any failure to comply with
applicable laws and regulations or permits, even if
inadvertent, could result in material fines, penalties, or
other liabilities. In extreme cases, failure could result in
suspension of the Company’s activities or forfeiture of one
or more of the Company’s tenements.
Native Title and Aboriginal Heritage
In areas where native title exists or may exist, the ability of
the Company to acquire a valid mining lease may also be
subject to compliance with the ‘right to negotiate’ process
under the Native Title Act. Compliance with this process
can cause delays in obtaining the grant of a mining lease
and does not ultimately guarantee that a mining lease
will be granted. Attaining a negotiated agreement with
native title claimants or holders to facilitate the grant of a
valid mining lease can add significantly to the costs of any
development or mining operation.
The ability of the Company to conduct activities on
exploration or mining tenements is subject to compliance
with laws protecting Aboriginal heritage. Conducting site
surveys to ensure compliance can be expensive and
subject to delays. If any Aboriginal sites are located within
areas of proposed exploration, mining or other activities,
the Company’s ability to conduct those activities may be
dependent on obtaining further regulatory consents or
approvals.
Tenement obligations
Tenements in New South Wales are governed by the
Mining Act 1992 (NSW). Each licence or lease is for a
specific term and carries with it annual expenditure and
reporting commitments, as well as other conditions
requiring compliance. Failure to meet these expenditure,
work and reporting commitments may render the
tenements subject to forfeiture or result in the tenement
holders being liable for penalties or fees. Further, if any
contractual obligations are not complied with when due,
in addition to any other remedies that may be available
to other parties, this could result in dilution or forfeiture of
Silver Mines’ interest in the projects.
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Climate Change and risks
There are a number of climate‑related factors that may affect
the Company’s operations and proposed activities, including:
•
the emergence of new or expanded regulations
associated with the transitioning to a lower‑carbon
economy and market changes related to climate
change mitigation. The Company may be impacted
by changes to local or international compliance
regulations related to climate change mitigation
efforts, or by specific taxation or penalties for
carbon emissions or environmental damage. These
examples sit amongst an array of possible restraints
on industry that may further impact the Company
and its profitability. While Silver Mines will endeavour
to manage these risks and limit any consequential
impacts, there can be no guarantee that the Company
will not be impacted by these occurrences; and
• climate change may cause certain physical and
environmental risks that cannot be predicted, including
events such as increased severity of weather patterns
and incidence of extreme weather events and
longer‑term physical risks such as shifting climate
patterns. All these risks associated with climate
change may significantly change the industry in which
the Company operates.
Establishment of strong relationships with the
community and other stakeholders is fundamental to
the long term success of the business. Although the
Company endeavours to conduct its business in a
manner which respects those communities and ensures
mutually beneficial outcomes, its activities may have
or be perceived to have an adverse impact on local
communities, cultural heritage, the environment, or other
matters which may result in community concern, adverse
publicity, activism, litigation or other adverse actions taken
by community, environmental or other action groups.
Failure to maintain and build strong relationships and such
adverse actions could affect the Company’s social licence
to operate, its reputation and lead to delays and increase
costs which may adversely impact on operations, financial
position and/or performance and the market price of Silver
Mines’ shares.
Land access and third party interests
The Company may be required to obtain the consent from
the holders of third‑party interests which overlay areas
within its tenements, prior to accessing or commencing
any exploration or mining activities on the affected areas.
No assurance can be given that necessary access will be
obtained when required or on acceptable terms.
Work Health and Safety risk and
environmental liabilities
The Company’s activities are subject to potential risks
and liabilities associated with the potential pollution of the
environment and the necessary disposal of mining waste
products resulting from mineral exploration and mining.
Insurance against environmental risk (including potential
liability for pollution or other hazards as a result of the
disposal of waste products occurring from exploration)
is not generally available to Silver Mines (or to other
companies in the minerals industry) at a reasonable
price. To the extent that the Company becomes subject
to environmental liabilities, the satisfaction of any such
liabilities would reduce funds otherwise available and could
have a material adverse effect on the Company. Laws
and regulations intended to ensure the protection of the
environment are constantly changing and are generally
becoming more restrictive.
The mining industry has become subject to increasing
occupational health and safety responsibility and
liability. The potential for liability is a constant risk.
If the Company fails to comply with necessary WH&S
legislative requirements, it could result in fines, penalties
and compensation for damages as well as reputational
damage. Safety legislation may also change in a manner
that may include requirements, in addition to those now
in effect, and a heightened degree of responsibility for
companies and their directors and employees.
Commodity and currency price risk
It is anticipated that any future revenues derived from
mining will primarily be derived from the sale of silver
and other metals. Consequently, any future earnings are
likely to be closely related to the price of silver and other
mined commodities.
Commodity prices fluctuate and are affected by
numerous factors beyond the control of the Company.
These factors include world demand for metals, forward
selling by producers and production cost levels in major
metal‑ producing regions.
Commodity prices are also affected by macroeconomic
factors such as expectations regarding inflation, interest
rates and global and regional demand for, and supply
of, the commodity as well as general global economic
conditions. These factors may have an adverse effect on
the Company’s exploration, development, and production
activities, as well as on its ability to fund those activities.
Furthermore, international prices of various commodities
are denominated in United States dollars, whereas
the income and expenditure of the Company are and
will be taken into account in Australian currency. As a
result, the Company is exposed to the fluctuations and
volatility of the rate of exchange between the United
States dollar and the Australian dollar as determined in
international markets, which could have a material effect
on the Company’s operations, financial position (including
revenue and profitability) and performance. The Company
may undertake measures, where deemed necessary by
the Board, to mitigate such risks.
19
Silver Mines Limited Annual Report 2023 REVIEW OF OPERATIONS
Economic risks
The operating and financial performance of the Company
will be influenced by a variety of general economic and
business conditions, including levels of consumer spending,
commodity prices inflation, interest rates and exchange
rates, supply and demand, industrial disruption, access to
debt and capital markets and government fiscal, monetary
and regulatory policies. More generally, changes in general
economic conditions may result from many factors including
government policy, international economic conditions,
significant acts of terrorism, hostilities, war, pandemics
or natural disasters. A prolonged deterioration in general
economic conditions, including an increase in interest rates
or a decrease in consumer and business demand, could
be expected to have an adverse impact on the Company’s
operating and financial performance and financial position.
Cyber risks
As with all organisations, the Company is reliant on
information technology for the effective operation of its
business. Any failure, unauthorised or erroneous use of
the Company’s information and/or information systems
may result in financial loss, disruption or damage to its
reputation.
Litigation risk
The Company is exposed to possible litigation risks
including, without limitation, intellectual property claims,
contractual disputes, occupational health and safety claims
and employee claims. Further, the Company may be
involved in disputes with other parties in the future which
may result in litigation. Any such claim or dispute if proven,
may impact adversely on the Company’s operations,
financial performance, and financial position.
Insurance risks
Insurance against all risks associated with the Company’s
business is not always available or affordable. The
Company maintains insurance where it is considered
appropriate for its needs however it will not be insured
against all risks either because appropriate cover is not
available or because the Directors consider the required
premiums to be excessive having regard to the benefits that
would accrue.
RISK MANAGEMENT
The Group manages the risks listed above, and
other day to day risks through an established risk
management framework. The Group’s risk reporting and
control mechanisms are designed to ensure strategic,
safety, environment, operational, legal, financial, tax,
reputational and other risks are identified, assessed, and
appropriately managed.
The financial reporting and control mechanisms are
reviewed during the year by management, the Board,
the internal audit function and the external auditor.
Senior management and the Board regularly review the
risk portfolio of the business and the effectiveness of the
Group’s management of those risks.
FUTURE DEVELOPMENTS, PROSPECTS AND
BUSINESS STRATEGIES
The directors believe, on reasonable grounds, that it would
unreasonably prejudice the interests of the Group if any
further information on likely developments, future prospects
and business strategies in the operations of the Group and
the expected results of these operations, were included in
this report.
FORWARD LOOKING STATEMENTS
This Annual Report may contain forward‑looking
information and statements that are subject to risk factors
associated with mineral exploration, mining, processing and
production businesses.
It is believed that the expectations reflected in these
statements are reasonable however such information
is not a guarantee of future performance and involve
unknown risks and uncertainties, as well as other factors,
many of which are beyond the control of the Company.
Actual results and developments may differ materially
from those expressed or implied by these forward‑looking
statements depending on a variety of factors including
but not limited to price fluctuations, commodity demand,
currency fluctuations, drilling and production results,
Mineral Resource and Ore Reserve estimations, loss of
market, competition, environmental risks, physical risks,
legislative, fiscal and regulatory changes, economic and
financial market conditions, political risks, project delay or
advancement, approvals and cost estimates.
Forward‑looking information and statements, including
projections, forecasts and estimates, are provided as
a general guide only and should not be relied on as
an indication or guarantee of future performance. No
representation or warranty, expressed or implied, is
made or given by or on behalf of the Company, any of
the Company’s directors, or any other person as to the
accuracy or completeness or fairness of the information
or opinions contained in this announcement and no
responsibility or liability is accepted by any of them for
such information or opinions or for any errors, omissions,
misstatements, negligent or otherwise, or for any
communication written or otherwise, contained or referred
to in this announcement.
2020
Silver Mines Limited Annual Report 2023 COMPETENT PERSONS STATEMENTS
Bowdens Silver Project
The information in this report that relates to Mineral Resources is based on work compiled by Mr Arnold van der Heyden
who is a Director of H & S Consultants Pty Ltd. Mr van der Heyden is a Member and Chartered Professional (Geology) of
The Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation
and type of deposit under consideration, and to the activity being undertaken, to qualify as a Competent Person as defined
in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’
(JORC code). Mr van der Heyden consents to the inclusion in this report of the matters based on the information in the
form and context in which it appears.
The information in this report that relates to Ore Reserves within the Bowdens Silver Project is based on information
compiled or reviewed by Mr Adrian Jones of AMC Consultants Pty Ltd who is a consultant to the Company. Mr Jones is
a member of The Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration, and to the activity being undertaken, to qualify as a Competent
Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’ (JORC code). Mr Jones consents to the inclusion in this report of the matters based on the information
in the form and context in which it appears.
Mr Jones visited the Bowdens mine site during April 2017 and August 2018 to review the operations, consider the
conditions of the site, and assess the data collection methods and techniques used by site personnel.
The Ore Reserve has been prepared by Mr Adrian Jones, AMC Consultants Pty Ltd, after peer review of the mining section
of the Feasibility Study. Other experts relied upon include H & S Consultants Pty Ltd, GR Engineering Services Limited,
ATC Williams Pty Limited. and Jacobs Australia Pty Limited, for Mineral Resources, Metallurgy & Process Design and Tailing
Storage Facility design. Work on environmental, marketing and logistics and the financial modelling were undertaken by
other consultants on behalf of the Company and certified by representatives of Silver Mines.
The Company’s Mineral Resources Statement has been compiled in accordance with the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012 Edition), Chapter 5 of the ASX Listing Rules
and ASX Guidance Note 31.
The Mineral Resources Statement is based on, and fairly represents, information and supporting documentation prepared
by the respective competent person named above.
Exploration and Drill Results
The information in this report that relates to mineral exploration from Bowdens Silver and extensions, the Barabolar Project
and the Tuena Gold Project is based on information compiled or reviewed by Dr Darren Holden who is an advisor to the
company. Dr Holden is a Fellow of The Australasian Institute of Mining and Metallurgy and has sufficient experience that
is relevant to the style of mineralisation and type of deposit under consideration, and to the activity being undertaken,
to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’ (JORC code). Dr Holden consents to the inclusion in this report of the
matters based on the information in the form and context in which it appears.
21
Silver Mines Limited Annual Report 2023 DIRECTORS’ REPORT
DIRECTORS
The Directors of Silver Mines Limited during the financial year and until the date of this report are:
Keith Perrett
Non‑Executive Chairman
Anthony McClure
Managing Director
Jonathan Battershill
Non‑Executive Director
Kristen Podagiel
Non‑Executive Director
Mr Keith Perrett
Non‑Executive Chairman
Mr Jonathan Battershill
Non‑Executive Director
Mr Perrett has had a long involvement in agriculture as
a producer and industry leader at local, state, national
and international levels. He was formerly Chairman of the
Grains Research and Development Corporation (GRDC),
the National Rural Advisory Council (NRAC), the Wheat
Research Foundation, and President of the Grains Council
of Australia. Mr Perrett is Chairman of Acumentis Group
Limited (ASX:ACU) (director since February 2018).
Mr Anthony McClure
Managing Director
Mr McClure graduated with a Bachelor of Science
(Geology) degree from Macquarie University in 1986. He
has had 35 years technical, management and financial
experience in the resource sector worldwide in project
management and executive development roles. He has
also worked in the financial services sector within the
mineral and energy sectors.
Mr McClure is currently a director of listed company
Strickland Metals Limited (since April 2021). He is also
a past director of Bolnisi Gold NL, Nickel Mines Limited,
Santana Minerals Limited and European Gas Limited.
Mr Battershill graduated with a Bachelor of Engineering
(Geology) degree (Hons) from the Camborne School of
Mines, United Kingdom in 1995. His career spans over 25
years in mining, business development and finance both
in Australia and internationally. His industry experience
includes senior operational and business development
roles with WMC Resources Limited as well as significant
stockbroking experience at Hartleys, Citigroup and UBS
both in Sydney and London. Mr Battershill was consistently
voted one of the leading mining analysts in Australia
between 2009 and 2015 by institutional investors.
Ms Kristen Podagiel
Non‑Executive Director
Ms Podagiel has a distinguished legal background and
over the past 20 years has worked as a commercial lawyer
on major projects and developments including those in
the mineral resources, technology, agriculture, energy and
defence industries.
Ms Podagiel has extensive senior executive‑level experience
including her prior role as Chief Executive Officer and
Managing Partner of McCullough Robertson, a leading
Australian independent law firm. Ms Podagiel is a current
director of ADG Capital Pty Ltd, a company involved in a
range of engineering disciplines across various industry
sectors including mining. She is a founding director of UNIQ
You Ltd, a charity supporting women in mining and STEM
related areas, and has recently completed her term as the
Interim Chief Executive Officer of Women’s Legal Service
Queensland which provides free legal and social work
services to over 5,000 women every year.
2222
Silver Mines Limited Annual Report 2023
DIRECTORS’ REPORT
COMPANY SECRETARY
Mr Trent Franklin
Company Secretary
Mr Franklin holds qualifications in Finance, Financial Planning and Insurance Broking. He has a Bachelor of Science
(Geology/Geophysics) from the University of Sydney and is a Graduate of the Australia Institute of Company Directors.
Mr Franklin is currently the Managing Director of Enrizen Financial Group, Non‑Executive Director of Gateway Mining
Limited (since February 2013) and Director of Strickland Metals Limited (since April 2021). Mr Franklin is formerly a director
of the Australian Olympic Committee Inc and Australian Water Polo Inc. He is also a Fellow of the Australian Institute of
Company Directors.
MEETINGS OF DIRECTORS
A McClure
K Perrett
J Battershill
K Podagiel
Meetings eligible to attend
Meetings attended
5
5
5
5
5
5
4
5
23
Silver Mines Limited Annual Report 2023 DIRECTORS’ REPORT
REMUNERATION REPORT (Audited)
Performance based remuneration
Remuneration policy
The remuneration policy of the Group has been designed
to align director and executive objectives with shareholder
and business objectives by providing a fixed remuneration
component and offering specific long‑term incentives
based on key performance indicators affecting the Group’s
financial results. The Board of Silver Mines believes the
remuneration policy to be appropriate and effective in
its ability to attract and retain the best executives and
directors to run and manage the Group.
The Group currently has no performance‑based
remuneration component built into the Managing
Director’s executive remuneration package, however,
during the 2023 Financial Year the Board approved a
cash bonus of $300,000 to be provided to the Managing
Director, for recognising his contribution including in
achieving IPC approval for the Bowdens Silver Project.
The Managing Director has not received any Long Term
Incentive or Short Term Incentive bonuses since his
commencement as Managing Director, other than the
bonus summarised above.
The Board’s policy for determining the nature and amount
of remuneration for board members and senior executives
of the Group is as follows:
Group performance, shareholder wealth and
directors’ and executives’ remuneration
The remuneration policy has been tailored to increase
goal congruence between shareholders and directors
and executives. This was facilitated through the issue
of options to the majority of directors and executives to
encourage the alignment of personal and shareholder
interests. The Group believes this policy will be effective in
increasing shareholder wealth. At commencement of mine
production, performance‑based bonuses based on key
performance indicators are expected to be introduced.
The Group has not employed any executive officers, other
than directors, who were involved in, concerned in, or who
took part in the management of the Group’s affairs.
The Group does not have any schemes for retirement
benefits for non‑executive directors.
The remuneration policy, setting the terms and conditions
for the executive directors and other senior executives,
was developed by the Board. All executives receive a
base salary (which is based on factors such as length of
service and experience) and superannuation. The Board
reviews executive packages annually by reference to
the Group’s performance, executive performance and
comparable information from industry sectors and other
listed companies in similar industries.
The Board may exercise discretion in relation to approving
incentives, bonuses and options. The policy is designed
to attract the highest calibre of executives and reward
them for performance that results in long‑term growth in
shareholder wealth.
Executives are also entitled to participate in the employee
share and option arrangements. The executive directors
and executives receive a superannuation guarantee
contribution required by the government, which is currently
10.5%, and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued
at the cost to the Group and expensed. Options are
valued using the Black & Scholes methodology.
The Board’s policy is to remunerate non‑executive
directors at market rates for comparable companies
for time, commitment and responsibilities. The Board
determines payments to the non‑executive directors and
reviews their remuneration annually, based on market
practice, duties and accountability. Independent external
advice is sought when required. The maximum aggregate
amount of fees that can be paid to non‑executive directors
is subject to approval by shareholders at a general
meeting of shareholders (currently $500,000). Fees for
non‑executive directors are not linked to the performance
of the Group. However, to align directors’ interests with
shareholder interests, the directors are encouraged to
hold shares in the Group and are able to participate in
employee incentive plans.
2424
Silver Mines Limited Annual Report 2023 DIRECTORS’ REPORT
Key Service Agreements
Mr Keith Perrett The service agreement with Lehavo Pty Ltd provides non‑executive chairman services to the Group for
non‑executive chairman’s fees of $100,000 per annum (increased to $120,000 per annum from 1 July 2023). Mr Perrett
provides services to the Group on behalf of Lehavo Pty Ltd. The agreement is ongoing on a month‑to‑month basis and
Mr Perrett is required to provide 90 days’ written notice if he wishes to resign from the Group.
Mr Anthony McClure has entered into an arrangement with the Group in which he receives total remuneration of $450,000
per annum (inclusive of superannuation). The agreement provides a notice period of three months in the event of termination.
Mr Jonathan Battershill has entered into a non‑executive director service agreement with the Group whereby he receives
non‑executive director fees of $75,000 per annum (increased to $95,000 per annum from 1 July 2023). The agreement
between Mr Battershill and the Group is ongoing on a month‑to‑month basis. Mr Battershill is required to provide 90 days’
written notice if he wishes to resign from the Group.
Ms Kristen Podagiel has entered into a non‑executive director service agreement with the Group whereby she receives
non‑executive director fees of $75,000 per annum (increased to $95,000 per annum from 1 July 2023). The agreement
between Ms Podagiel and the Group is ongoing on a month‑to‑month basis. Ms Podagiel is required to provide 90 days’
written notice if she wishes to resign from the Group.
Mr Trent Franklin The service agreement with Enrizen Accounting Pty Ltd provides company secretarial and accounting
services to the Group for a fee of $10,000 per month, which was increased to $12,000 per month from 1 June 2023.
Mr Franklin acts as Company Secretary to the Group on behalf of Enrizen Accounting Pty Ltd.
Voting and comments made at the Group’s 2022 Annual General Meeting (AGM).
At the 2022 AGM, 97.20% of the votes received supported the adoption of the remuneration report for the year ended
30 June 2022. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration:
Short‑term benefits
Post‑
employment
benefits
Cash
bonus
Non‑
monetary
Super‑
annuation
Long‑
term
benefits
Long
service
leave
Share‑based
payments
Equity‑
settled
shares
Equity‑
settled
options
Cash
salary
and fees
$
100,000
75,000
75,000
$
‑
‑
‑
409,092
300,000
2023
Non‑Executive
Directors:
K.Perrett
(Chairman)
J Battershill
K Podagiel
Executive
Directors:
A McClure
Other Key
Management
Personnel:
T Franklin1
124,070
‑
783,162
300,000
$
‑
‑
‑
‑
‑
‑
$
‑
‑
‑
42,955
‑
42,955
$
$
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
Total
$
100,000
75,000
75,000
$
‑
‑
‑
‑
752,046
29,388
153,458
29,388 1,155,505
1. Fees payable to Mr Franklin are paid to Enrizen Accounting Pty Ltd and encompass Company Secretarial as well as accounting services to the Group.
25
Silver Mines Limited Annual Report 2023 DIRECTORS’ REPORT
Short‑term benefits
Post‑
employment
benefits
Long‑
term
benefits
Share‑based
payments
Cash
salary
and fees
Cash
bonus
Non‑
monetary
Super‑
annuation
Long
service
leave
Equity‑
settled
shares
Equity‑
settled
options
2022
$
$
$
Non‑Executive
Directors:
K.Perrett
(Chairman)
J Battershill
K Podagiel
Executive
Directors:
A McClure
Other Key
Management
Personnel:
T Franklin1
80,000
60,000
15,000
409,092
125,800
689,892
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
$
‑
‑
‑
40,909
‑
40,909
$
$
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
Total
$
80,000
60,000
15,000
$
‑
‑
‑
‑
450,001
32,260
158,060
32,260
763,061
1. Fees payable to Mr Franklin are paid to Enrizen Accounting Pty Ltd and encompass Company Secretarial as well as accounting services to the Group.
Additional disclosures relating to key management personnel.
Share‑based compensation
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this Financial Year or future reporting years are as follows:
Number of
options
granted
Grant date
Vesting date
and
exercisable
date
Expiry date
Exercise
price
Fair value per
option
at grant date
Name
Trent Franklin
750,000
21/12/2021
21/12/2022
21/12/2024
$0.30
$0.0822
Jonathan
Battershill
5,000,000
13/12/2017
expiry 3 years from the date
of achievement of financing
milestones (Milestone Options)
$0.20
$Nil (Note)
Note: Due to the uncertainty in timing of milestone achievement and thus the life of option, the fair value was estimated based on the intrinsic value
at grant date which is $Nil.
Options granted carry no dividend or voting rights.
2626
Silver Mines Limited Annual Report 2023 DIRECTORS’ REPORT
All options were granted over unissued fully paid ordinary shares in the Company. The number of options granted was
determined having regard to the satisfaction of the vesting conditions attaching to the options. Options vest based on the
provision of service over the vesting period whereby the executive becomes beneficially entitled to the option on vesting
date. Options are exercisable by the holder as from the vesting date. There has not been any alteration to the terms
or conditions of the grant since the grant date. There are no amounts paid or payable by the recipient in relation to the
granting of such options other than on their potential exercise.
Shareholding
The number of shares in the Company held during the Financial Year by each director and other members of key management
personnel of the consolidated entity, directly and indirectly, including their personally related parties, is set out below:
Granted
during the
year as
compensation
Balance
30 June 2022
Net change
Received
during the
year on the
exercise of an
option
Ordinary shares
Directors
A McClure
K Perrett
K Podagiel
J Battershill
49,078,128
4,568,410
‑
1,687,500
Specified executives
T Franklin
3,051,819
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
Other
changes
Balance
30 June 2023
‑
49,078,128
62,024
4,630,434
312,500
312,500
‑
1,687,500
539,606
3,591,425
27
Silver Mines Limited Annual Report 2023
DIRECTORS’ REPORT
The number of options over ordinary shares in the Company held during the Financial Year by each director and other
members of key management personnel of the consolidated entity, including related parties, is set out below:
Option holding
Options
Directors
A McClure
K Podagiel
K Perrett
‑
‑
‑
J Battershill
5,000,000
Specified
executives
T Franklin
750,000
Net change
Granted
during
the
year as
compen‑
sation
Balance
30 June
2022
Exercise
during
the year
Other
changes
Balance
30 June
2023
Options
vested at
the end
of the
reporting
period
Options
vested and
exercisable
at the end
of the
reporting
period
Options
vested
and not
exercisable
at the end
of the
reporting
period
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
5,000,000
‑
‑
‑
‑
‑
‑
‑
‑
‑
750,000
750,000
750,000
‑
‑
‑
‑
‑
Other transactions with key management personnel and their related parties
During the year, the Company entered into the following trading transactions with related parties of Trent Franklin, the
Company Secretary, as follows: Enrizen Capital Pty Ltd received $52,975 (2022:Nil) in relation to corporate advisory,
capital raising and underwriting services; Enrizen Pty Ltd received $5,857 (2022: $4,850) in relation to insurance services;
Enrizen Lawyers Pty Ltd received $89,430 (2022: $94,570) in relation to legal services; Enrizen Accounting Pty Ltd received
$124,070 (2022:$ 125,800) in relation to accounting services, and the Company invested a further $1,300,000 and
redeemed $1,000,000 in Redeemable Preference Shares in Enable Investments Pty Ltd with the invested balance receiving
a 3‑4% p.a. rate of return. During the period, the Company earned distribution income of $165,992 (2022: $121,394)
which was reinvested.
Further to these transactions the Company also employed a family member of a key management person with a total
remuneration package of $145,659 (2022: $145,000).
This concludes the remuneration report, which has been audited.
2828
Silver Mines Limited Annual Report 2023
DIRECTORS’ REPORT
Corporate Governance
The Company’s Corporate Governance Statement is attached to this report and located on the Company’s website. The
Company has mostly complied with the applicable principles of corporate governance, and if it has not, it has explained
why that is so.
Additionally, During the 2023 Financial Year, Silver Mines signed to the Digbee ESG Platform (‘Digbee’), an industry leading
environmental, social and governance (‘ESG’) disclosure framework to report Silver Mines’ ESG performance across all
operational and corporate activities. Digbee offers standardised disclosure for mining companies at all stages of maturity.
Their independent, third‑party assessments of ESG performance enables benchmarking against peers and other mining
companies which produces scores ranging from A (maximum) to CCC (minimum). Silver Mines’ approach to ESG shapes
its values and underpins its operating philosophy. Silver Mines is committed to the highest level of integrity and ethical
standards in all its business practices.
Subsequent to the 2023 Financial Year, Silver Mines will report its maiden ESG report from Digbee which it expects to
receive in 2024.
Proceedings on behalf of the Group
During the 2023 Financial Year, the Company announced that a local environmental group commenced judicial review
proceedings in the Land and Environment Court of New South Wales against the IPC and Bowdens Silver Pty Ltd
challenging the development consent for the Project.
The Company notes the following:
• A thorough assessment process was undertaken involving 14 NSW Government departments and agencies, including the
DPE, rigorous independent peer reviews along with extensive consultation with the community and key stakeholders.
• The Project was approved by the IPC.
• These proceedings do not challenge any of the environmental impacts or other impacts of the operations associated with
the Project. The proceedings are judicial review proceedings and only challenge whether the IPC adequately considered
matters relating to the location and construction of a powerline which may be required to power the mine site.
• Given the Project is a State Significant Development in New South Wales and as the IPC approved the Project following a
public hearing process as part of its assessment of the Project, third parties have limited rights of appeal in relation to the
development consent.
The Company is currently working with its legal advisers assessing and responding to these proceedings, and is in the
process of defending these proceedings.
Non‑audit services
There were no non‑audit services performed by the external auditor during the Financial Year.
Directors’ and officers’ indemnification
The Group has paid a premium to insure the directors and officers of the Group. The insurance agreement limits disclosure
of premium details. The insurance premiums relate to:
•
Costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever
their outcome; and
• Other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or
improper use of information or position to gain a personal advantage.
29
Silver Mines Limited Annual Report 2023 DIRECTORS’ REPORT
Shares under option
Unissued ordinary shares of Silver Mines Limited under option at the date of this report as follows:
Grant date
Expiry date
Exercise price
Number under option
28 November 2017
3 years from milestone achievement1
21 December 2021
21 December 2024
01 March 2023
01 March 2023
Total
01 March 2026
01 March 2028
$0.20
$0.30
$0.30
$0.50
5,000,000
9,000,000
2,500,000
2,500,000
19,000,000
1. Expiry which is three years from the date of achievement of Project Financing, which must achieve a minimum of $150 million. This was set out in
the Company’s Notice of Annual General Meeting dated 30 October 2017.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Silver Mines Limited issued during the year ended 30 June 2023 on the exercise of options.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
Indemnity and insurance of auditor
The Company has not, during or since the end of the Financial Year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the Financial Year, the Company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
AUDITORS INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is
enclosed and forms part of this annual report.
3030
Silver Mines Limited Annual Report 2023
DIRECTORS’ REPORT
EVENTS SUBSEQUENT TO REPORTING DATE
Native Title Agreement
Subsequent to the 2023 Financial Year, on 4 September 2023, the Company announced its wholly owned subsidiary,
Bowdens Silver Pty Ltd, had completed a native title agreement with the Warrabinga‑Wiradjuri #7 native title claim, in
regards to a parcel of Crown land within the area of Mining Lease Application 601 (“MLA 601”) being the Bowden Silver
Project. The native title agreement was signed in June 2023 and the capital commitment has been disclosed in the financial
statements for the year ended 30 June 2023.
In addition, the related Section 31 Deed has subsequently been executed by the Minister for Natural Resources on behalf
of the State of New South Wales on 30 August 2023.
This now completes the “Right to Negotiate” process in accordance with Section 31 of the Native Title Act 1993 (Cth).
The completion of this process enables the continued processing of MLA 601 covering the Bowdens Silver Project.
Redemption of Redeemable Preference Shares
In August 2023, the Company fully redeemed all redeemable preference shares in Enable Investments Pty Ltd of $5,349,356.
No other matter or circumstance has arisen since the reporting date that has significantly affected or may significantly affect
the consolidated entity’s operations, the results of those operations or the consolidated entity’s state of affairs in future
financial years.
This report is made in accordance with a resolution of the Directors.
Keith Perrett
Chairman
29 September 2023
Anthony McClure
Managing Director
31
Silver Mines Limited Annual Report 2023
3232
Silver Mines Limited Annual Report 2023 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2023
Revenue
Cost of sales
Gross profit from continuing operations
Other income
Fair value measurement of livestock
Notes
3
3
2023
$
172,214
(163,098)
9,116
95,890
(295,499)
2022
$
170,479
(89,599)
80,880
83,898
26,550
Fair value movement of financial assets at fair value through profit and loss
(705,860)
(9,850,201)
Net loss on derecognition of financial assets at fair value through profit and loss
Share registry and exchange fees
Auditors remuneration
Marketing expenses
Office expenses
IT and communication expenses
Depreciation expenses
Accounting services fees
Professional and technical advisors expenses
Exploration expenditure written off
Employee benefits expenses
Travel and accommodation expenses
Share based payment
Farm operations
Other expenses
‑
(245,300)
(53,726)
(149,654)
(49,483)
(23,114)
(277,903)
(115,000)
(675,261)
‑
(906,694)
(31,836)
(434,791)
(137,161)
(269,816)
(614,481)
(179,750)
(72,599)
(147,594)
(31,608)
(15,332)
(253,932)
(125,800)
(491,801)
(202,839)
(846,610)
(9,585)
(387,117)
(86,317)
(237,896)
Loss from continuing operations before interest and income tax
(4,266,092)
(13,362,134)
Interest income
Finance costs
Loss from continuing operations before income tax
249,232
(94,141)
165,905
(103,725)
(4,111,001)
(13,299,954)
Income tax
Loss from continuing operations after income tax
4
‑
‑
(4,111,001)
(13,299,954)
Other comprehensive income
‑
‑
Total comprehensive loss (attributable to owners of the company)
(4,111,001)
(13,299,954)
Earnings per share (cents per share)
Basic earnings per share
Diluted earnings per share
21
21
(0.30)
(0.30)
(1.04)
(1.04)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to
the financial statements.
33
Silver Mines Limited Annual Report 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Current assets
Cash and cash equivalent
Trade and other receivables
Inventory ‑ livestock
Financial assets
Other assets
Total current assets
Non‑current assets
Prepayment
Financial assets
Deferred exploration and development expenditures
Intangible assets
Land and buildings
Property, plant and equipment
Total non‑current assets
Total assets
Current liabilities
Trade and other payables
Employee benefits provisions
Total current liabilities
Non‑Current liabilities
Lease liability
Total non‑current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
Notes
2023
$
2022
$
5
6
7
8
8
9
10
11
12
13
14
8,051,445
16,890,242
442,115
333,831
535,708
563,360
5,592,011
5,831,879
1,705
4,815
14,421,107
23,826,004
‑
381,867
369,691
363,867
82,513,669
68,809,087
415,663
1,183,947
29,549,339
19,460,574
3,475,998
3,520,225
116,336,536
93,707,391
130,757,643
117,533,395
827,081
431,656
976,582
389,851
1,258,737
1,366,433
15
3,574,117
3,485,962
3,574,117
3,485,962
4,832,854
4,852,395
125,924,789
112,681,000
16
16
165,667,656
148,747,656
2,821,907
2,387,117
(42,564,774)
(38,453,773)
125,924,789
112,681,000
The consolidated statement of financial position is to be read in conjunction with the notes to the financial statements.
3434
Silver Mines Limited Annual Report 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Ordinary
Shares
$
Share
capital
reserve
$
Share based
payment
reserve
Accumulated
losses
$
Total
$
Balance at 1 July 2021
142,477,202
2,000,000
418,070
(25,153,819)
119,741,453
Transactions with owners, in their
capacity as owners
Equity funds received, issue of shares
5,852,384
Fair value of options exercised
Costs of funds raised
418,070
‑
Total transactions with owners, in their
capacity as owners
6,270,454
Comprehensive income for period
Loss attributable to owners of
the company
Total comprehensive income for
the period
‑
‑
‑
‑
‑
‑
‑
‑
387,117
(418,070)
‑
(30,953)
‑
‑
‑
‑
6,239,501
‑
‑
6,239,501
‑
‑
(13,299,954)
(13,299,954)
(13,299,954)
(13,299,954)
Balance at 30 June 2022
148,747,656
2,000,000
387,117
(38,453,773)
112,681,000
Balance at 1 July 2022
148,747,656
2,000,000
387,117
(38,453,773)
112,681,000
Transactions with owners, in their
capacity as owners
Equity funds received, issue of shares
18,000,000
Cost of funds raised
(1,080,000)
Total transactions with owners, in their
capacity as owners
16,920,000
Comprehensive income for period
Loss attributable to owners of
the company
Total comprehensive income for
the period
‑
‑
‑
‑
‑
‑
‑
434,790
‑
‑
‑
18,434,790
(1,080,000)
434,790
‑
17,354,790
‑
‑
(4,111,001)
(4,111,001)
(4,111,001)
(4,111,001)
Balance at 30 June 2023
165,667,656
2,000,000
821,907
(42,564,774)
125,924,789
The consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements.
35
Silver Mines Limited Annual Report 2023 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers & employees
Payments to farm operational expenses
Interest received
Finance costs
Notes
2023
$
2022
$
267,194
253,480
(2,475,469)
(2,381,088)
(366,228)
‑
83,241
165,905
‑
(11)
Net cash outflows from operating activities
19
(2,491,262)
(1,961,714)
Cash flows from investing activities
Payments for deferred exploration
Payments to acquire financial assets
Grant received
Payment to acquire intangible assets
Payment for property, plant and equipment
Investment on preference shares
Redemption of preference shares investment
Proceeds from sale of financial assets
Proceeds from sale of property, plant and equipment
(13,783,977)
(12,726,318)
‑
‑
(80,000)
1,822,983
(290,455)
(330,000)
(8,894,012)
(2,355,083)
(1,300,000)
1,000,000
‑
‑
‑
909
501,519
14,545
Net cash outflows from investing activities
(23,267,535)
(13,152,354)
Cash flows from financing activities
Proceeds from issues of shares
Option conversion
Payments for capital raising costs
18,000,000
‑
‑
5,444,837
(1,080,000)
‑
Net cash inflows from financing activities
16,920,000
5,444,837
Net (decrease)/increase in cash and cash equivalent
Reclassification
Cash and cash equivalent at the beginning of the financial year
Cash and cash equivalent at the end of the financial year
(8,838,797)
(9,669,231)
‑
(4,861,487)
16,890,242
31,420,960
8,051,445
16,890,242
5
5
The consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements.
3636
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation
The financial statements are general purpose financial
statements that have been prepared in accordance
with Australian Accounting Standards (AASB) and the
requirements of Corporations Act 2001 and International
Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board as
applicable to a for‑profit entity. The Group is a for‑profit
entity for financial reporting purposes under Australian
Accounting Standards.
Except for the cash flow information, the financial
statements have been prepared on an accruals basis and
are based on historical costs, modified, where applicable,
by the measurement at fair value of selected non‑current
assets, financial assets and financial liabilities. The financial
statements are presented in Australian dollars which is the
Group’s functional currency.
b. Going Concern
The Directors believe that the going concern basis is
appropriate for the preparation and presentation of the
financial statements, notwithstanding continued operating
losses, negative operating cash flows, and no ongoing
revenue streams, as the directors believe that the Group
will raise sufficient cash and liquid assets.
The Group currently has sufficient cash reserves to
support this Going Concern position and is confident of
its ability to raise further funds, should this be required.
The Group has a strong fund‑raising track record.
c. Principles of consolidation
The consolidated financial statements incorporate
the assets and liabilities of all subsidiaries of Silver
Mines Limited as at 30 June 2023 and the results of
its subsidiaries for the year then ended. Silver Mines
Limited and its subsidiaries together are referred to in
these financial statements as the ‘consolidated entity’
or ‘the Group’.
Subsidiaries are all those entities over which the
consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity is exposed
to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns
through its power to direct the activities of the entity.
Intercompany transactions, balances and unrealised gains
on transactions between entities in the consolidated entity
are eliminated.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as
an equity transaction, where the difference between the
consideration transferred and the book value of the share
of the non‑controlling interest acquired is recognised
directly in equity attributable to the parent.
Non‑controlling interest in the results and equity of
subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income, statement of
financial position and statement of changes in equity of the
consolidated entity. Losses incurred by the consolidated
entity are attributed to the non‑controlling interest in full,
even if that results in a deficit balance.
Where the consolidated entity loses control over a
subsidiary, it derecognises the assets including goodwill,
liabilities and non‑controlling interest in the subsidiary
together with any cumulative translation differences
recognised in equity. The consolidated entity recognises
the fair value of the consideration received and the fair
value of any investment retained together with any gain or
loss in profit or loss.
d. New or amended Accounting Standards and
Interpretations adopted
The consolidated entity has adopted all of the new or
amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards
Board (‘AASB’) that are mandatory for the current
reporting period.
e. New Accounting Standards and Interpretations not
yet mandatory or early adopted
Any new or amended Accounting Standards or
interpretations that are not yet mandatory have not been
early adopted.
f. Operating segments
Operating segments are presented using the
‘management approach’, where the information presented
is on the same basis as the internal reports provided to the
Chief Operating Decision Makers (‘CODM’). The CODM
is responsible for the allocation of resources to operating
segments and assessing their performance.
37
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
In respect of impairment indicators, a high degree of
management judgement is required. This judgment includes
the Group’s plan and ability to renew the tenements and
continue the exploration activities, the Group’s capacity
to fund the exploration activities and the assessment on
the impact of factors such as changes in the industry,
geography of project, committed expenditure and tenement
expiry date.
Share‑based payments
The consolidated entity measures the cost of equity‑settled
transactions with employees by reference to the fair value
of the equity instruments at the date at which they are
granted. The fair value is determined by using either the
Binomial or Black‑Scholes model taking into account the
terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions
relating to equity‑settled share‑based payments would have
no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact
profit or loss and equity.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily
determined, an incremental borrowing rate is estimated
to discount future lease payments to measure the present
value of the lease liability at the lease commencement
date. Such a rate is based on what the consolidated entity
estimates it would have to pay a third party to borrow
the funds necessary to obtain an asset of a similar value
to the right‑of‑use asset, with similar terms, security and
economic environment.
Estimation of the rent‑free period
The Group enters into a lease which is rent‑free until
the construction commencement notice is served to
the landlord. The Group determines the estimated lease
payments to be made over the term of the lease based
on the expected date to serve such notice. The lease
liabilities and the corresponding right‑of‑use asset values
could change significantly as a result of the estimated
construction plan when reassessing the lease liabilities.
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES (cont.)
g. Critical accounting estimates and significant
judgments used in applying accounting policies
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. Management
bases its judgements, estimates and assumptions on
historical experience and on other various factors, including
expectations of future events, management believes to
be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates
and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
Impairment of non-financial assets other than
goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non‑
financial assets other than goodwill and other indefinite
life intangible assets at each reporting date by evaluating
conditions specific to the consolidated entity and to
the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the
asset is determined. This involves fair value less costs of
disposal or value‑in‑use calculations, which incorporate a
number of key estimates and assumptions.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised
on the basis that the consolidated entity will commence
commercial production in the future, from which time
the costs will be amortised in proportion to the depletion
of the mineral resources. Key judgements are applied
in considering costs to be capitalised which includes
determining expenditures directly related to these activities
and allocating overheads between those that are expensed
and capitalised. In addition, costs are only capitalised that
are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors
that could impact the future commercial production at the
mine include the level of reserves and resources, future
technology changes, which could impact the cost of
mining, future legal changes, and changes in commodity
prices. To the extent that capitalised costs are determined
not to be recoverable in the future, they will be written off in
the period in which this determination is made.
3838
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 2: OPERATING SEGMENTS
Identification of reportable operating segments
The consolidated entity is organised into 2 operating segments, being mining and exploration operations and agricultural
operations. These operating segments are based on the internal reports that are reviewed and used by the Board
of Directors (who are identified as the Chief Operating Decision Makers (‘CODM’)) in assessing performance and in
determining the allocation of resources.
Operating segments have been aggregated where the segments have similar economic characteristics in respect of the
nature of the products and services, the product processes, the type or class of customers, the distribution methods and,
if applicable, the nature of the regulatory environment.
(a) Segment performance continuing operations
For the year ended 30 June 2023
Revenue
Rental income
Total segment revenue and other income
Inter‑segment elimination
Total group revenue and other income
EBITDA
Unallocated expense
Depreciation
Interest income
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense
Mining and
Exploration
Operations
$
‑
‑
‑
Agricultural
Operations
$
172,214
94,981
267,195
Total
$
172,214
94,981
267,195
‑
267,195
(3,648,314)
(339,875)
(3,988,189)
(277,903)
249,232
(94,141)
(4,111,001)
‑
(4,111,001)
Material items include:
Fair value movement of financial assets at fair value through
profit and loss
(705,860)
‑
(705,860)
39
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 2: OPERATING SEGMENTS (cont.)
For the year ended 30 June 2022
Revenue
Government grants
Total segment revenue and other income
Inter‑segment elimination
Total group revenue and other income
EBITDA
Unallocated expense
Depreciation
Interest income
Finance costs
Loss before income tax
Income tax expense
Loss before income tax expense
(b) Segment assets
As at 30 June 2023
Segment assets
Inter‑segment eliminations
Unallocated assets
Cash and cash equivalent
Receivables
Other assets
Financial assets
Right of use assets
Intangible assets
Investment in listed shares
Investment in unlisted options
Land and buildings
Total assets
4040
Mining and
Exploration
Operations
$
‑
‑
‑
Agricultural
Operations
$
170,479
83,001
253,480
Total
$
170,479
83,001
253,480
‑
253,480
(13,212,316)
104,114
(13,108,202)
(253,932)
165,905
(103,725)
(13,299,954)
‑
(13,299,954)
Mining and
Exploration
Operations
$
Agricultural
Operations
$
Total
$
90,789,225
1,316,458
92,105,683
(8,666,235)
83,439,448
8,051,445
442,115
1,705
5,709,346
2,884,050
415,663
263,500
1,032
29,549,339
130,757,643
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 2: OPERATING SEGMENTS (cont.)
As at 30 June 2022
Segment assets
Inter‑segment eliminations
Unallocated assets
Cash and cash equivalent
Receivables
Other assets
Financial assets
Right of use assets
Intangible assets
Investment in listed shares
Investment in unlisted options
Prepayment
Land and buildings
Total assets
Mining and
Exploration
Operations
$
Agricultural
Operations
$
Total
$
71,925,677
1,485,827
73,411,504
(3,534,975)
69,876,529
16,890,242
535,708
4,815
5,225,354
3,016,143
1,183,947
954,800
15,592
369,691
19,460,574
117,533,395
41
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 2: OPERATING SEGMENTS (cont.)
(c) Segment liabilities
As at 30 June 2023
Segment liabilities
Inter‑segment eliminations
Unallocated liabilities
Employee benefits provisions
Lease liability
Total liabilities
For the year ended 30 June 2022
Segment liabilities
Inter‑segment eliminations
Unallocated liabilities
Employee benefits provisions
Lease liability
Total liabilities
Mining and
Exploration
Operations
$
Agricultural
Operations
$
Total
$
1,730,438
7,762,878
9,493,316
(8,666,235)
827,081
431,656
3,574,117
4,832,854
Mining and
Exploration
Operations
$
Agricultural
Operations
$
Total
$
1,825,030
2,686,527
4,511,557
(3,534,975)
976,582
389,851
3,485,962
4,852,395
4242
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 3: REVENUE AND OTHER INCOME
Revenue
Sales of Livestock
Sales of Wool
Others
Other Income
Gain on sales of property, plant and equipment
Rental income
Revenue Recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
2023
$
76,623
94,241
1,350
2022
$
66,607
103,872
‑
172,214
170,479
909
94,981
95,890
897
83,001
83,898
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer.
For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into account estimates of variable consideration
and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand‑alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each
performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events.
Such estimates are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of
variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is
highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Rent
Rent revenue from investment properties is recognised on a straight‑line basis over the lease term. Lease incentives granted
are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.
43
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 4: INCOME TAX
(a) Reconciliation of income tax expense to prima facie tax payable
Operating loss before income tax
2023
$
2022
$
(4,111,001)
(13,299,954)
Prima facie income tax expenses at 25% (2022: 25%) on operating loss
(1,027,750)
(3,324,989)
Add tax effect of:
Tax losses and temporary differences not recognised
1,027,750
3,324,989
Income tax attributable to operating (loss)/profit
Income tax attributable to operating (loss)/profit
‑
‑
‑
‑
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
4444
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 4: INCOME TAX (cont.)
Silver Mines Limited (the ‘head entity’) and its wholly owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to
account for their own current and deferred tax amounts. The tax consolidated group has applied the separate taxpayer within
group’ approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Directors are of the view that it is not probable that taxable profit will be available against which the unused tax losses or
unused tax credits can be utilised, the deferred tax asset is not recognised.
(b) Deferred tax assets and (liabilities) are attributable to the following:
Exploration expenditure
Tax losses
(c) Tax losses
2023
$
2022
$
(12,648,224)
(9,222,063)
12,648,224
9,222,063
‑
‑
Unused tax losses for which no tax loss has been booked as a deferred tax asset
adjusted for temporary differences (net)
42,400,902
43,291,549
Potential tax benefit at 25% (2022: 25%)
10,600,226
10,822,887
Potential effect on future tax expense
10,600,226
10,822,887
The Group’s ability to recover unrecognised tax losses depends on the Group’s earnings as well as the Group meeting the
Same Business Test or the Continuity of Ownership Test.
NOTE 5: CASH AND CASH EQUIVALENTS
Current
Cash and cash equivalent
2023
$
2022
$
8,051,445
16,890,242
As at 30 June 2021, cash and cash equivalents include investments in redeemable preference shares of $1,240,093 (refer
to Note 17(b)). This investment matured on 30 September 2021. As at 30 June 2022, such investment of $5,327,479,
was reclassified to financial assets measured at amortised cost (refer to Note 8). The investment is 50% redeemable within
30 business days and can be redeemed in whole within 60 calendar days of notice or at the end of the investment term
whichever is the earlier.
45
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
GST
Prepayment
Other receivables
NOTE 7: INVENTORY ‑ LIVESTOCK
Current
Livestock
2023
$
2022
$
215,619
157,979
68,517
442,115
289,458
145,418
100,832
535,708
2023
$
2022
$
333,831
563,360
Livestock is measured at fair value less cost to sell, with any change recognised in the income statement. Costs to sell
include all costs that would be necessary to sell the assets, including freight and direct selling costs.
The fair value of livestock is based on its present location and condition. If an active or other effective market exists for
livestock in its present location and condition, the quoted price in that market is the appropriate basis for determining
the fair value of that asset. Where the Group has access to different markets, then the most relevant market is used to
determine fair value. The relevant market is defined as the market “that access is available to the entity” to be used at the
time the fair value is established.
If an active market does not exist, then one of the following is used in determining fair value in the following order:
•
the most recent market transaction price, provided that there has not been a significant change in economic
circumstances between the date of that transaction and the end of the reporting period
• market prices, in markets accessible to us, for similar assets with adjustments to reflect differences
• sector benchmarks
In the event that market determined prices or values are not available for livestock in its present condition, the present value
of the expected net cash flows from the asset discounted at a current market determined rate may be used in determining
fair value.
At the end of each reporting period, the Group measures livestock at fair value. The fair value is determined through price
movements, natural increase and natural death.
The net increments or decrements in the market value of livestock are recognised as either revenue or expense in the
income statement, determined as:
• The difference between the total fair value of livestock recognised at the beginning of the financial year and the total fair
value of livestock recognised as at the reporting date; less
• Costs expected to be incurred in realising the market value (including freight and selling costs).
4646
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 8: FINANCIAL ASSETS
Current
Financial assets at fair value through profit or loss
Investment in Listed Shares
Investment in Unlisted Options
Financial assets measured at amortised cost
Redeemable preference shares (Note 17(b))
Total
Non‑current
Performance guarantee bonds
Total
2023
$
2022
$
263,500
1,032
954,800
15,592
5,327,479
4,861,487
5,592,011
5,831,879
381,867
381,867
363,867
363,867
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, its 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
instruments credit risk has increased significantly since initial recognition, based on reasonable and supportable information
that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12‑month expected
credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where
it is determined that credit risk has increased significantly, the loss allowance is based on the asset’s lifetime expected
credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
The total interest revenue for financial assets that are measured at amortised cost was $165,992 (2022: $121,394).
47
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 9: DEFERRED EXPLORATION AND DEVELOPMENT EXPENDITURES
Non‑current
Exploration expenditures
Costs carried forward in respect of areas of interest in:
Exploration and evaluation phase
Opening balance
Government grants
Written off of tenements
Expenditure in the year
Closing balance
2023
$
2022
$
68,809,087
58,363,389
‑
‑
(1,822,983)
(202,839)
13,704,582
12,471,520
82,513,669
68,809,087
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs
are only carried forward to the extent that they are expected to be recouped through the successful development of an
area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profits in the year in which the decision to
abandon the area 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.
Costs of site restoration are provided over the life of the facility from where exploration commences and are included in
the costs of that stage. Site restoration costs include the dismantling and removal of mining plant equipment and building
structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have
been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and
future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed within
one year of abandoning the site.
Exploration and evaluation assets are tested for impairment each year. When the facts and circumstances suggest that the
carrying amount exceeds the recoverable amount, the carrying amount is written down to its likely recoverable amount.
During the financial year, the Company announced that a local environmental group commenced judicial review
proceedings in the Land and Environment Court of New South Wales against the IPC and Bowdens Silver Pty Ltd
challenging the development consent for the Project. The Company is currently working with its legal advisers, and is in the
process of defending these proceedings.
4848
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 10: INTANGIBLE ASSETS
Non‑current
Opening balance
Additions
Utilisation
Closing balance
2023
$
2022
$
1,183,947
290,455
(1,058,739)
853,947
330,000
‑
415,663
1,183,947
The Group has entered into a number of option agreements to purchase properties attaching to the tenements.
As consideration for these agreements, the Group has paid total option fees of $290,455 (2022: $330,000) during the year.
NOTE 11: LAND AND BUILDINGS
Non‑current
Properties at cost
Accumulated Depreciation
Reconciliations
2023
$
2022
$
30,371,164
20,245,420
(821,825)
(784,846)
29,549,339
19,460,574
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Land
$
Buildings
$
Buildings
improvements
$
16,973,250
1,398,064
‑
596,336
486,982
(18,012)
18,371,314
1,065,307
10,096,902
‑
‑
(29,152)
12,606
18,937
(7,590)
23,953
28,842
(7,827)
Total
$
17,582,192
1,903,983
(25,601)
19,460,574
10,125,744
(36,979)
Balance at 30 June 2023
28,468,216
1,036,155
44,968
29,549,339
Land and buildings are shown at cost, less subsequent depreciation and impairment for buildings.
49
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 11: LAND AND BUILDINGS (cont.)
Depreciation is calculated on a straight‑line basis to write off the net cost of each item of buildings and building
improvements (excluding land) over their expected useful lives as follows:
Buildings
40 years
Building improvements
4‑8 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
Items of land and buildings are derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment ‑ at cost
Less: accumulated depreciation
Reconciliations
2023
$
2022
$
4,607,456
4,410,758
(1,131,458)
(890,533)
3,475,998
3,520,225
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Plant &
Mining
Equipment
$
Office &
Camp
Equipment
$
Motor
Vehicles
$
Other
Assets ‑
Farming
$
Right of
use Assets
$
Computer
Equipment
$
Total
$
Consolidated
Balance at
30 June 2021
Additions
Lease reassessment
Disposal
147,101
242
160,489
36,005
3,728,580
3,859
4,076,276
‑
‑
‑
‑
‑
‑
226,097
36,509
‑
3,665
266,271
‑
(13,648)
‑
‑
(580,343)
‑
‑
‑
(580,343)
(13,648)
Depreciation expense
(33,156)
(‑242)
(47,953)
(10,958)
(132,094)
(3,928)
(228,331)
Balance at
30 June 2022
Additions
113,945
‑
324,985
61,556
3,016,143
3,596
3,520,225
‑
24,115
143,208
22,982
‑
6,392
196,697
Depreciation expense
(27,083)
(4,451)
(62,794)
(11,083)
(132,093)
(3,420)
(240,924)
Balance at
30 June 2023
86,862
19,664
405,399
73,455
2,884,050
6,568
3,475,998
5050
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 12: PROPERTY, PLANT AND EQUIPMENT (cont.)
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 assets,
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 leasehold arrangement that commenced on 1 May 2020 for 25 years. As at 30 June 2022, the Group
reassessed that the commencement of work will start in July 2024 which by then the rent‑free period will end. The
right of use assets and lease liabilities have been remeasured to account for such reassessment. As at 30 June 2023,
management reassessed that the commencement of work will start in January 2025 and that there is no material change to
the right of use assets and lease liabilities as at 30 June 2023.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight‑line basis to write off the net cost of each item of property, plant and equipment
over their expected useful lives as follows:
Plant & Mining Equipment
Office & Camp Equipment
Motor Vehicles
Other Assets ‑ Farming
Computer Equipment
4‑20 years
3‑8 years
6‑8 years
5 years
2 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
NOTE 13: TRADE AND OTHER PAYABLES
Current
Trade creditors and accruals
2023
$
2022
$
827,081
976,582
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short‑term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
51
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 14: EMPLOYEE BENEFITS PROVISIONS
Current
Employee benefits provisions
Short‑term employee benefits
2023
$
2022
$
431,656
389,851
Liabilities for wages and salaries, including annual leave to be settled wholly within 12 months of the reporting date are
measured at the amounts expected to be paid when the liabilities are settled.
NOTE 15: LEASE LIABILITY
Current
Lease liabilities
Non‑current
Lease liabilities
Total
2023
$
‑
‑
2022
$
‑
‑
3,574,117
3,485,962
3,574,117
3,485,962
3,574,117
3,485,962
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 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. Refer to Note 12 for the details of the reassessment made at 30 June 2023.
The consolidated statement of profit or loss and other comprehensive income shows the following amounts relating to leases:
Interest expenses
Depreciation expenses
2023
$
88,155
132,094
220,249
2022
$
96,954
132,094
229,048
The tables below analyse the Group’s lease liabilities into relevant maturity groupings based on their contractual maturities
Less than 1
year
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Total
contractual
cash flows
$
Carrying
amount
$
Lease liabilities
‑
14,491
540,167
4,103,370
4,658,028
3,574,117
5252
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 16: CAPITAL AND RESERVES
(a) Movements in ordinary share capital
Date
Details
30‑Jun‑21
Options conversion
Options conversion
Options conversion
Options conversion
Options conversion
Options conversion
Options conversion
Jul‑21
Jul‑21
Jul‑21
Aug‑21
Aug‑21
Sep‑21
Nov‑21
Dec‑21
30‑Jun‑22
Feb‑23
Feb‑23
30‑Jun‑23
Number of
shares
1,196,692,406
Issue price
$
142,477,202
6,807,715
2,984,604
3,600,000
3,997,902
6,856,910
70,347,830
544,776
0.060
0.060
0.100
0.060
0.060
0.060
0.060
408,463
179,076
360,000
239,874
411,415
4,220,869
32,687
Realisation from share‑based payment reserve
‑
‑
418,070
Capital raising
Capital raising fee
1,291,832,143
148,747,656
112,500,000
0.160
18,000,000
‑
‑
(1,080,000)
1,404,332,143
165,667,656
(b) Issued and paid‑up capital
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to
the number of and amounts paid on the shares held. On a show of hands, every holder of fully paid 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.
(c) Share options
At 30 June 2023 details of Listed and Unlisted Options are as follows:
Details
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Total
Number Exercise price
Expiry date
9,000,000
$0.30
21‑Dec‑2024
3 years from
milestone
achievement
1‑Mar‑2026
1‑Mar‑2028
$0.20
$0.30
$0.50
5,000,000
2,500,000
2,500,000
19,000,000
53
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 16: CAPITAL AND RESERVES (cont.)
Movements in options
Balance at the beginning of the financial year
14,000,000
103,077,361
2023
Number
2022
Number
Options lapsed
Options exercised
Options issued
Balance at the end of the financial year
‑
‑
(2,937,624)
(95,139,737)
5,000,000
9,000,000
19,000,000
14,000,000
2023
Grant date
Expiry date
21‑Dec‑17
3 years from
milestone
achievement1
12‑Dec‑21
21‑Dec‑24
01‑Mar‑23
01‑Mar‑26
01‑Mar‑23
01‑Mar‑28
Exercise
price
Balance at
the start of
the year
$0.20
5,000,000
$0.30
$0.30
$0.50
9,000,000
‑
‑
2,500,000
2,500,000
14,000,000
5,000,000
Weighted average exercise price
0.264
0.400
Granted
Exercised
Lapsed
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
2022
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
14‑Feb‑20
01‑Aug‑21
$0.10
3,600,000
19‑Mar‑19
01‑Aug‑21
$0.06
94,477,361
21‑Dec‑17
3 years from
milestone
achievement1
$0.20
5,000,000
Granted
Exercised
Lapsed
(3,600,000)
‑
(91,539,737)
(2,937,624)
‑
‑
‑
‑
5,000,000
9,000,000
12‑Dec‑21
21‑Dec‑24
$0.30
‑
9,000,000
103,077,361
9,000,000 (95,139,737)
(2,937,624)
14,000,000
Weighted average exercise price
0.068
0.300
0.062
0.060
0.264
1. Expiry which is three years from the date of achievement of Project Financing, which must achieve a minimum of $150 million (Financing
Milestone). This was set out in the Company’s Notice of Annual General Meeting dated 30 October 2017.
The weighted average share price during the financial year was $0.19 (2022: $0.21).
The weighted average remaining contractual life of the options, except for the 5,000,000 options’ expiry date is 3 years
from the achievement of milestone, outstanding at the end of the financial year was 2.67 years (2022: 3.48 years).
5454
Balance at
the end of
the year
5,000,000
9,000,000
2,500,000
2,500,000
19,000,000
0.300
Balance at
the end of
the year
‑
‑
‑
‑
‑
‑
‑
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 16: CAPITAL AND RESERVES (cont.)
(d) Reserves
In June 2016, the Company completed the acquisition of Silver Investment Holdings Australia Ltd (SIHA) and Bowdens
Silver Pty Ltd. As part of the consideration for the purchase of SIHA, 40,000,000 ordinary shares in the capital of the Group
are to be issued as a deferred consideration.
In May 2016, the Company entered into a share sale and purchase deed (“Deed”) which effectuated the purchase of the
Bowdens Silver Project (“Project”) pursuant to which 40,000,000 fully paid ordinary shares in the Company was to be
issued as deferred consideration (“Deferred Consideration Shares”). The Company issued 20,000,000 of the Deferred
Consideration Shares to non‑related and related parties (following shareholder approval) of the Company after Silver Mines
lodged its Environmental Impact Statement and Development Application (announced 25 May 2020).
A further 20,000,000 of the Deferred Consideration Shares (“Remaining Deferred Consideration”) will be issued to non‑related
and related parties of the Company upon lodgment of a mining lease granted in respect of the Project in accordance with
a waiver granted by the ASX on 23 September 2022 and approved by shareholders of Silver Mines at the Annual General
Meeting of the Company on 9 November 2022. The Remaining Deferred Consideration is valued at $2,000,000.
Movements in reserves
Balance at the beginning of the financial year
Share based payment reserve movement
Balance at the end of the financial year
e) Capital risk management
2023
$
2022
$
2,387,117
2,418,070
434,790
(30,953)
2,821,907
2,387,117
The Group’s objectives when managing capital is to safeguard the ability to continue as a going concern, so that it can
continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. There have been no changes in the strategy adopted by
management to control the capital of the Group since the prior year.
(f) Share based payments
A share option plan has been established by the Group and approved by shareholders at a general meeting, whereby the
consolidated entity may, at the discretion of the Board of Directors, grant options over ordinary shares in the company
to certain key management personnel of the Group. The options are issued for nil consideration and are granted in
accordance with performance guidelines established by the Board of Directors.
For the options granted during the year ended 30 June 2023, the valuation model inputs used to determine the fair value at
the grant date, are as follows:
Grant Date Expiry Date
Number of
options
Share price
at grant
date
Exercise
price
Expected
volatility
Risk‑free
interest
rate
Fair value
at grant
date
1/03/2023
1/03/2026
2,500,000
1/03/2023
1/03/2028
2,500,000
$0.18
$0.18
0.30
0.50
125.55%
179.63%
3.81%
3.78%
$0.112
$0.165
55
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 17: RELATED PARTY TRANSACTIONS
(a) Key Management Personnel
The names and positions held of Group key personnel are:
Key Management Personnel
Keith Perrett
Anthony McClure
Kristen Podagiel
Jonathan Battershill
Trent Franklin
Compensation
Position
Non‑Executive Chairman
Managing Director
Non‑Executive Director
Non‑Executive Director
Company Secretary
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short‑term employee benefits
Post‑employment benefits
Share based payment
(b) Related party transactions
2023
$
2022
$
1,083,162
689,892
42,955
29,388
40,909
32,260
1,155,505
763,061
During the year, the Company entered into the following trading transactions with related parties of Trent Franklin, the
Company Secretary, as follows: Enrizen Capital Pty Ltd received $52,975 (2022:Nil) in relation to corporate advisory,
capital raising and underwriting services; Enrizen Pty Ltd received $5,857 (2022: $4,850) in relation to insurance services;
Enrizen Lawyers Pty Ltd received $89,430 (2022: $94,570) in relation to legal services; Enrizen Accounting Pty Ltd received
$124,070 (2022:$ 125,800) in relation to accounting services, and the Company invested a further $1,300,000 and
redeemed $1,000,000 in Redeemable Preference Shares in Enable Investments Pty Ltd with the invested balance receiving
a 3‑4% p.a. rate of return. During the period, the Company earned distribution income of $165,992 (2022: $121,394)
which was reinvested.
Further to these transactions the Company also employed a family member of a key management person with a total
remuneration package of $145,659 (2022: $145,000).
(c) Consolidated Entities
The Group operates in the exploration industry in Australia only. The Group has the following 100% wholly owned
subsidiaries whose transactions have been consolidated into the Group accounts:
Silver Investment Holdings Australia Pty Limited
Bowdens Silver Pty Limited
Tuena Resources Pty Ltd
Bowdens Agriculture Pty Ltd
Asia Metals Holdings 3 Pty Ltd
5656
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 18: PARENT ENTITY INFORMATION
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income/(loss)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Parent
2023
$
2022
$
(2,879,687)
(12,484,047)
(2,879,687)
(12,484,047)
13,285,846
22,366,168
132,999,875
118,432,119
568,416
568,416
475,763
475,763
165,667,656
148,747,656
2,821,907
2,387,117
(36,058,104)
(33,178,417)
132,431,459
117,956,356
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
There are no such guarantees arrangements during the years ended 30 June 2023 and 30 June 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments ‑ Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for
the following:
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
57
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 19: RECONCILIATION OF OPERATING PROFIT/(LOSS) AFTER INCOME TAX TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Loss after income tax
Adjustment for:
Depreciation expenses
Fair value measurement of livestock
Borrowing cost amortisation
Interest expense on AASB 16 lease accounting
Gain on sales of non‑current assets
2023
$
2022
$
(4,111,001)
(13,299,954)
277,903
295,499
3,111
88,155
(909)
253,932
(26,550)
3,111
95,541
(897)
Fair value movement of financial assets at fair value through profit and loss
705,860
9,850,201
Net gain on derecognition of financial assets at fair value through profit and loss
Written off of tenements
Share based payment
Changes in operating assets and liabilities:
(Increase)/decrease in receivables and prepayments
(Increase)/decrease in inventory
Increase/(decrease) in payables and provision
Increase/(decrease) in employee provisions
‑
‑
434,791
614,481
202,902
387,117
(2,306,591)
(1,920,116)
52,086
(62,547)
(231,963)
(165,769)
(46,599)
41,805
103,052
83,666
Net cash outflows from operating activities
(2,491,262)
(1,961,714)
5858
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 20: FINANCIAL INSTRUMENT DISCLOSURES
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise adverse effects on the financial performance of the Group. The Group uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest
rates and other price risks and aging analysis for credit risk.
Risk management is carried out by the Company Secretary under policies approved by the Board of Silver Mines Limited.
The Company Secretary identifies and evaluates the risks in close cooperation with the Group’s management and Board.
(a) Market risk
(i) Foreign exchange risk
The Group does not have any significant exposure to foreign exchange risk.
(ii) Price risk
The Group in the current year did not have any significant exposure to commodity price risk. The Group will have exposure
to silver price risk if and when mining operations begin. Directors have not made any determination at this stage as to
whether they will consider commodity price hedge arrangements.
The Group’s investment in listed shares and unlisted options that listed on the ASX are exposed to price risk. The sensitivity
analysis of the Group’s exposure to price risk is as follows:
Average price increase
Average price decrease
% Change
Effect on
profit
Effect on
net assets % Change
Effect on
profit
Effect on
net assets
Consolidated ‑ 2023
Financial assets at fair value through
profit or loss
‑ Investment in listed shares
‑ Investment in unlisted options
10%
10%
26,350
26,350
103
103
(8%)
(8%)
(21,080)
(21,080)
(83)
(83)
59
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 20: FINANCIAL INSTRUMENT DISCLOSURES (cont.)
(iii) Cash flow and fair value interest rate risk
The Group has exposure to interest rate risk which is the risk that a financial instrument’s value will fluctuate as a result
of changes in market interest rates and the effective weighted average interest rates on those financial assets and the
financial liabilities.
The Group’s policy is to ensure that the best interest rate is received for the short‑term deposits. The Group uses a number
of banking institutions, with a mixture of fixed and variable interest rates. Interest rates are reviewed prior to deposits
maturing and the fund is re‑invested at the best rate.
Floating
interest rate
$
Fixed interest rate maturing
Within 1 year
$
Over 1 year
$
Non‑interest
bearing
$
Total
$
2023
FINANCIAL ASSETS
Cash assets
8,051,445
‑
‑
‑
5,327,479
‑
‑
‑
‑
‑
8,051,445
5,327,479
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
8,051,445
381,867
381,867
264,532
264,532
‑
5,327,479
442,115
442,115
1,088,514
14,467,438
(827,081)
(827,081)
(3,574,117)
‑
(3,574,117)
(3,574,117)
(827,081)
(4,401,198)
8,051,445
5,327,479
(3,574,117)
261,433
10,066,240
Performance guarantee
bonds
Financial assets at fair value
through Profit and Loss
Financial assets measured at
amortised cost
Other financial assets
FINANCIAL LIABILITIES
Payables (current)
Lease liabilities
NET FINANCIAL ASSETS/
(LIABILITIES)
6060
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 20: FINANCIAL INSTRUMENT DISCLOSURES (cont.)
Floating
interest rate
$
Fixed interest rate maturing
Within 1 year
$
Over 1 year
$
Non‑interest
bearing
$
Total
$
2022
FINANCIAL ASSETS
Cash assets
16,890,242
Performance guarantee bonds
Financial assets at fair value
through Profit and Loss
Financial assets measured
at amortised cost
Other financial assets
FINANCIAL LIABILITIES
Payables (current)
Lease liabilities
NET FINANCIAL ASSETS/
(LIABILITIES)
(b) Credit risk
‑
‑
‑
4,861,487
‑
‑
‑
‑
‑
16,890,242
4,861,487
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
16,890,242
363,867
363,867
970,392
970,392
‑
4,861,487
535,708
535,708
1,869,967
23,621,696
(976,582)
(976,582)
(3,485,962)
‑
(3,485,962)
(3,485,962)
(976,582)
(4,462,544)
16,890,242
4,861,487
(3,485,962)
893,385
19,159,152
The maximum exposure to credit risk, net of any provisions for impairment of those assets, is the carrying amount as
disclosed in the statements of financial position and notes to the financial statements, including cash and cash equivalents in
note 5 and the investment in redeemable preference shares in note 8. The Group does not hold any collateral. There are no
guarantees against these receivables and investments but management closely monitors the balances on a semi‑annually
basis and is in regular contact with the counterparties to mitigate risk.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through adequate amount
of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously
monitoring forecast and actual cash flows matching maturity profiles of financial assets and liabilities. Surplus funds are
generally only invested in instruments that are tradable in highly liquid markets.
The Group at trading date had deposits which mature within three months and cash at bank. Due to the cash available to
the Group there is no use of any credit facilities at balance date.
61
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 20: FINANCIAL INSTRUMENT DISCLOSURES (cont.)
(d) Net fair values
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes. The net fair values of the financial assets and financial liabilities approximate their carrying values.
Except for the investment in listed shares, no other financial assets and financial liabilities are readily traded on
organised markets.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statements
of financial position and in the notes to the financial statements.
(e) Sensitivity analysis
The Group has not performed a sensitivity analysis on interest rate risk and price risk and its impact on current year results
and equity which could result from a change in this risk as the likely impact is insignificant given the minimal revenue
generated from sales during the year, and minimal balances with interest.
(f) Fair value hierarchy
The following tables detail the group’s assets and liabilities, measured or disclosed at fair value, using a three‑level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
• Level 3: Unobservable inputs for the asset or liability
Level 1
$
Level 2
$
Level 3
$
Total
$
Consolidated ‑ 2023
Assets
Financial assets at fair value through profit or loss
‑ Investment in listed shares
‑ Investment in unlisted options
Total assets
263,500
‑
263,500
‑
1,032
1,032
Consolidated ‑ 2022
Assets
Financial assets at fair value through profit or loss
‑ Investment in listed shares
‑ Investment in unlisted options
Total assets
954,800
‑
954,800
‑
15,592
15,592
‑
‑
‑
‑
‑
‑
263,500
1,032
264,532
954,800
15,592
970,392
6262
Silver Mines Limited Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 21: EARNING PER SHARE
Basic earnings per share
Diluted earnings per share
30‑June‑2023
Cents
30‑June‑2022
Cents
(0.30)
(0.30)
(1.04)
(1.04)
Number
Number
Basic earnings per share
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares and potential ordinary shares used as
the denominator in calculating basic and diluted earnings per share and alternative
diluted earnings per share
1,335,599,266
1,275,109,819
Diluted earnings per share
The potential ordinary shares are anti‑dilutive as the conversion of them to ordinary shares would decrease the loss per
share. Therefore, they are not included in the calculation of diluted earnings per share.
Reconciliation of earnings used in calculating basic and
diluted earnings per share
Earnings used in calculating basic and diluted earnings per share
(4,111,001)
(13,299,954)
2023
$
2022
$
NOTE 22: REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by Crowe Sydney,
the auditor of the company:
Audit services ‑ Crowe Sydney
Audit or review of the financial statements
2023
$
2022
$
66,500
67,599
63
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 23: COMMITMENTS
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Intangible assets ‑ option purchases
Land Purchase
Proposed expenditure on tenements for a year
Proposed expenditure on native title
2023
$
2022
$
6,350,000
12,120,000
‑
2,250,000
6,350,000
14,370,000
3,985,000
3,204,376
350,000
‑
4,335,000
3,204,376
Capital commitments include contracted amounts for options agreement for the right to purchase properties at the
execution date. However, if the company chooses not to execute the agreements, the rights will be forfeited and the
amount paid, which are recognised as intangible assets in note 10, will be written off through the Profit and Loss statement.
Less than 1
year
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Total
contractual
cash flows
$
Carrying
amount
$
Capital Commitment
6,350,000
‑
‑
‑
6,350,000
6,350,000
Proposed expenditure on tenements for a year represented the average yearly expenditures expected to be spent on the
exploration, environmental management and rehabilitation and community consultation activities during the tenement period.
6464
Silver Mines Limited Annual Report 2023
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 24: EVENTS SUBSEQUENT TO REPORTING DATE
Native Title Agreement
Subsequent to the 2023 Financial Year, on 4 September 2023, the Company announced its wholly owned subsidiary,
Bowdens Silver Pty Ltd, had completed a native title agreement with the Warrabinga‑Wiradjuri #7 native title claim, in regards
to a parcel of Crown land within the area of Mining Lease Application 601 (“MLA 601”) being the Bowden Silver Project. The
native title agreement was signed in June 2023 and the capital commitment has been disclosed in the financial statements for
the year ended 30 June 2023.
In addition, the related Section 31 Deed has subsequently been executed by the Minister for Natural Resources on behalf of
the State of New South Wales on 30 August 2023.
This now completes the “Right to Negotiate” process in accordance with Section 31 of the Native Title Act 1993 (Cth). The
completion of this process enables the continued processing of MLA 601 covering the Bowdens Silver Project.
Redemption of Redeemable Preference Shares
In August 2023, the Company fully redeemed all redeemable preference shares in Enable Investments Pty Ltd of
$5,349,356.
No other matter or circumstance has arisen since the reporting date that has significantly affected or may significantly affect
the consolidated entity’s operations, the results of those operations or the consolidated entity’s state of affairs in future
financial years.
NOTE 25: COMPANY DETAILS
The registered office and principal place of business of the Group is:
Silver Mines Limited
Level 28
88 Phillip Street,
Sydney NSW 2000
Australia
Tel: +61 2 8316 3997
Fax: +61 2 8316 3999
65
Silver Mines Limited Annual Report 2023
DIRECTORS’ DECLARATION
The directors declare that:
1 The financial statements and notes, as set out on pages 33 to 65 are in accordance with the Corporations Act 2001 and:
(a) comply with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
(b) give a true and fair view of the financial position as at 30 June 2023 and of the performance for the year ended on
that date of the Group; and
(c) comply with International Financial Reporting Standards as issued by the International Accounting Standard Board
as described in note 1 to the financial statements;
2 The Managing Director and the Company Secretary, who perform the functions of Chief Executive Officer and Chief
Financial Officer respectively, have each declared that:
(a) the financial records of the Group for the financial year have been properly maintained in accordance with section
286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view.
3
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Keith Perrett
Chairman
29 September 2023
Anthony McClure
Managing Director
6666
Silver Mines Limited Annual Report 2023
67
Silver Mines Limited Annual Report 2023 6868
Silver Mines Limited Annual Report 2023 69
Silver Mines Limited Annual Report 2023 7070
Silver Mines Limited Annual Report 2023 71
Silver Mines Limited Annual Report 2023 ADDITIONAL SECURITIES EXCHANGE INFORMATION
At 25 September 2023 the issued capital in the Company was comprised of:
• 1,404,332,143 fully paid ordinary shares held by 12,375 holders;
• 9,000,000 unlisted options held by 26 holders, with an exercise price of $0.30 and an expiry date 21 December 2024;
• 5,000,000 unlisted options held by one holder, with an exercise price of $0.20 and an expiry date which is three years
from the date of achievement of certain milestones, set out in the Company’s Notice of Annual General Meeting dated
31 October 2017.
• 2,500,000 unlisted options held by 1 holder, with an exercise price of $0.30 and an expiry date 1 March 2026; and
• 2,500,000 unlisted options held by 1 holder, with an exercise price of $0.50 and an expiry date 1 March 2028.
Each fully paid ordinary share in the Company entitles the holder to one vote at a meeting of shareholders when a poll is called,
otherwise each member present at a meeting or by proxy has one vote on a show of hands. Options do not carry voting rights.
At 25 September 2023, the Company has 1,466 shareholders whose holdings are less than a marketable parcel of shares (total
value of A$500, assuming a share price of $0.18).
There is no on‑market buy back currently being undertaken.
There are currently no listed options on issue.
Substantial shareholders at 25 September 2023
Silver Mines Limited has the following substantial shareholders:
Holder
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Shares
196,398,537
%
13.99%
20 Largest Holders of Ordinary Shares and their holdings at 25 September 2023
Position Holder Name
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Holding
196,398,537
% IC
13.99%
CITICORP NOMINEES PTY LIMITED
MR ANTHONY MCCLURE
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BNP PARIBAS NOMINEES PTY LTD
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