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20
21
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2021
DIRECTORS
DAVID QUINLIVAN
Non-executive Chairman
LUKE TONKIN
Managing Director
PETER ALEXANDER
Non-executive Director – resigned 17 August 2021
KELVIN FLYNN
Non-executive Director
REBECCA PRAIN
Non-executive Director – appointed 17 August 2021
COMPANY SECRETARIES
David Berg
Liz Hough – resigned 4 September 2020
PRINCIPAL OFFICE
Suite 4, Level 3, South Shore Centre
85 South Perth Esplanade
South Perth WA 6151
Tel:
Fax:
Email:
+61 8 6313 3800
+61 8 6313 3888
contact@slrltd.com.au
REGISTERED OFFICE
Suite 4, Level 3, South Shore Centre
85 South Perth Esplanade
South Perth WA 6151
SHARE REGISTER
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Tel: (03) 9415 4000
AUDITORS
KPMG
235 St Georges Terrace
Perth WA 6000
INTERNET ADDRESS
www.slrltd.com.au
ABN
38 108 779 782
ASX CODE
SLR
CONTENTS
Chairman & Managing Director’s Report
Resources & Reserves Report
Directors’ Report
Directors’ Declaration
Auditor’s Independence Declaration
Independent Audit Report
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
ASX Additional Information
2
3
8
30
31
32
37
38
39
40
41
70
CHAIRMAN & MANAGING DIRECTOR'S REPORT
DEAR FELLOW SHAREHOLDER,
It is our pleasure to present the 2021 Annual Report. In what was a challenging year
on many fronts, our performance across key operational and financial metrics has
consolidated Silver Lake’s position as a solid mid-tier gold mining company that has
once again delivered on market guidance.
Notwithstanding the challenging operational conditions
prevalent in Western Australia throughout FY21, Silver Lake was
able to build on its established track record of meeting sales
guidance. In addition, Silver Lake commenced production at
Rothsay, commenced the Deflector South West decline and
completed the Deflector processing facility upgrade in what was
a transformational year for the Deflector region.
In FY21 Silver Lake delivered gold sales of 248,781 ounces and copper
sales of 1,724 tonnes at an AISC of A$1,484 per ounce. The FY21
sales result consolidates the step change in production and sales
following the successful acquisition and integration of Doray Minerals
Limited. FY21 marks the seventh straight year in which Silver Lake has
met or exceeded market guidance with FY21 particularly challenging
given the adverse consequences of the COVID-19 pandemic.
Silver Lake made a significant investment in growth projects
throughout the Group in FY21. Our investment will increase the
value of the business through a combination of growth, increased
margins and risk mitigation. Growth projects in the Deflector
region included an upgrade of the processing facility at Deflector
with the addition of a CIP circuit to the existing gravity and float
circuits, the commencement of a new decline to access the higher
tenor Deflector South West lodes and establishment of the high
grade Rothsay mine, which will provide a secondary high grade
feed source to the Deflector processing facility.
The Deflector processing facility upgrade was completed and
commissioned on schedule and within the $36 million budget,
with Rothsay ore introduced to the Deflector processing facility
in June 2021 with planned higher gold recoveries being achieved.
The Resources Industry in WA, given its status of an essential
industry, has continued to operate under established frameworks
allowing the industry to make a significant contribution to keeping
WA and the Country strong. However, COVID-19 restrictions
have had a profound adverse effect on access to interstate
and overseas labour resources on which the industry relies. The
consequence of this have been higher turnover, lower productivity
and higher costs across the industry.
Given restricted access to appropriately trained and competent
labour, Silver Lake needs to structurally change the way it
operates in FY22 to mitigate higher turnover, lower productivity
and higher costs. Silver Lake is well placed to achieve this given
it has invested heavily in ore stockpiles, particularly at Mount
Monger. Mount Monger’s ore stockpiles increased 43,000 ounces
to 115,500 ounces of gold in FY21 which improves operational
flexibility and reduces Silver Lake’s exposure to the prevailing
operating challenges in Western Australia.
Silver Lake continued to build on its enviable record of cash
generation, following significant capital and exploration investment,
with cash and bullion increasing $61 million to $330 million, whilst
operating cash flow increased 7% to $268 million. Silver Lake also
continued to maintain its debt free balance sheet.
Silver Lake’s $20 million investment in exploration in FY21 delivered
an 18% increase in Ore Reserves of 1.36 million ounces, an increase
of 61% when accounting for FY21 mine depletion. Ore Reserve
growth continues to be accretive for shareholders on a Reserves
per share basis and reinforces Silver Lake’s exploration strategy
of focusing exploration within our proven mineralised corridors to
leverage from our extensive installed infrastructure.
Silver Lake’s exploration success has allowed it to target sales
growth in FY23 and FY24 to 255,000 - 275,000 ounces of gold
in FY23 and FY24 following FY22 guidance of 235,000 - 255,000
ounces. Silver Lake continues to invest in exploration with
$25 million, the largest exploration investment in its history,
budgeted for FY22. Exploration will target growth and extension
opportunities proximal to established mine, services and
processing infrastructure within proven mineralised corridors.
Silver Lake regularly assesses its asset base and tenement
package, and throughout FY21 divested its interest in the Andy
Well and Gnaweeda Projects, the Fingals and Lake Rowe
tenement packages and the Horse Well Project.
FY20 sales guidance is 215,000 to 230,000 ounces with the AISC expected to average A$1,375-A$1,450 per ounce
for the full year. The company will continue to invest in exploration with $18 million budgeted across the group
Silver Lake enters FY22 with two cash generative assets in Western
and will focus on advancing high priority targets at Mount Monger through to an investment decision and
Australia with organic growth and significant Mineral Resource
defining Resource extensions and additional near mine Resources at Deflector.
inventory that provide a foundation to extend mine life, whilst its
strong balance sheet and forecast free cash flow generation allows
Silver Lake to internally fund development and exploration projects.
Our strong balance sheet and cash flow generation positions the Company to rapidly progress the pipeline of
Silver Lake’s financial position enables us to continue to approach
advanced exploration targets and continue to refresh the pipeline of opportunities to compete for capital at
future capital deployment from a position of strength, as we seek to
Mount Monger, Deflector and externally as we continue to build on the success and momentum generated in
refresh opportunities, both internally and externally, building on the
FY19.
success and momentum generated over multiple years.
FY20 sales guidance is 215,000 to 230,000 ounces with the AISC expected to average A$1,375-A$1,450 per ounce
for the full year. The company will continue to invest in exploration with $18 million budgeted across the group
and will focus on advancing high priority targets at Mount Monger through to an investment decision and
defining Resource extensions and additional near mine Resources at Deflector.
Our strong balance sheet and cash flow generation positions the Company to rapidly progress the pipeline of
advanced exploration targets and continue to refresh the pipeline of opportunities to compete for capital at
Mount Monger, Deflector and externally as we continue to build on the success and momentum generated in
FY19.
On behalf of the Board we would like to thank the Company’s employees for their hard work and commitment
over the past 12 months, and without whom, the achievements of the past year would not have been possible.
On behalf of the Board, I would like to thank our employees for
On behalf of the Board we would like to thank the Company’s employees for their hard work and commitment
their contribution to Silver Lake throughout a challenging year
over the past 12 months, and without whom, the achievements of the past year would not have been possible.
and encourage them to continue applying their skills diligently to
We would also like to acknowledge our suppliers, contractors and shareholders who continue to support our
achieving our objectives for FY22.
strategy of delivering today, developing for tomorrow and discovering for the future.
We would also like to acknowledge our suppliers, contractors and
shareholders who continue to support our strategy of delivering
today, developing for tomorrow and discovering for the future.
We would also like to acknowledge our suppliers, contractors and shareholders who continue to support our
strategy of delivering today, developing for tomorrow and discovering for the future.
Silver Lake has reported a statutory NPAT of $98 million for FY21,
which includes a non-cash tax expense of $43 million. Profit before
tax was $141 million, a 6% increase on FY20 ($133 million).
David Quinlivan
David Quinlivan
Non-Executive Chairman
Non-Executive Chairman
David Quinlivan
Non-Executive Chairman
Luke Tonkin
Luke Tonkin
Managing Director
Managing Director
Luke Tonkin
Managing Director
2 Silver Lake Resources Limited Annual Report 2021
RESOURCES & RESERVES REPORT
MINERAL RESOURCE STATEMENT AS AT 30 JUNE 2021
The Company’s total Measured, Indicated and Inferred Mineral Resources at 30 June 2021 are 37.8 million tonnes (Mt) @ 4.4
grams per tonne of gold (g/t Au) containing 5.41 million ounces of gold (Moz Au), including 3.0 Mt @ 0.8 percent copper (% Cu)
containing 23,000 tonnes of copper (CuT). The Mineral Resources as at 30 June 2021 are estimated after allowing for depletion
during FY2021.
Measured
Mineral Resources
Indicated
Mineral Resources
Inferred
Mineral Resources
Total
Mineral Resources
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
June 2021
Mount Monger
Daisy Mining Centre
375
28.9
349
1,438
14.0
648
1,888
17.8
1,079
Daisy Complex
75
34.4
Mirror/Magic
507
2.6
83
42
-
-
-
-
-
-
549
1,501
-
2.5
2.0
-
45
98
-
663
785
131
582
6.7
125
2,425
6.3
492
3,017
Lorna Doone
Costello
Sub Total
Mount Belches Mining Centre
270
411
-
-
-
6.7
5.5
-
-
-
58
1,619
73
964
-
-
-
7,097
888
232
4.3
4.1
2.6
1.9
1.9
223
1,160
128
481
591
1,414
55
14
538
44
3.6
2.0
3.3
8.1
3.9
3.6
3.0
1.9
1.4
77
1,719
51
2,286
14
131
3.0
2.0
3.3
164
149
14
790
6,024
7.3
1,406
144
3,049
56
1,856
137
8,511
32
1,426
2
276
4.3
4.3
2.7
1.9
1.8
425
257
728
87
16
681
6.0
131
10,800
2.9
1,011
3,637
3.2
371
15,118
3.1
1,513
-
-
-
-
-
-
-
-
13
-
13
2,691
2,691
3,967
-
-
-
-
-
-
-
-
4.6
-
4.6
1.3
1.3
2.9
-
-
-
-
-
-
-
-
2
-
2
115
115
2,771
1,758
1,112
479
531
136
112
1.9
2.3
2.2
2.2
1.6
1.6
1.7
172
1,150
132
80
34
27
7
6
235
189
415
19
296
139
1.6
1.6
2.0
2.4
1.6
1.4
1.6
60
3,921
12
1,993
12
1,301
32
1
13
7
894
550
432
251
1.8
2.2
2.2
2.3
1.6
1.4
1.6
232
144
92
66
28
20
13
6,899
2.1
458
2,443
1.7
137
9,342
2.0
595
34
112
146
-
-
4.8
2.4
3.0
-
-
5
9
8
9
14
16
-
-
-
-
7.2
1.4
4.2
-
-
2
0
2
-
-
55
121
176
2,691
2,691
5.1
2.3
3.2
1.3
1.3
9
9
18
115
115
373
20,271
3.0
1,975
9,114
4.4
1,300
33,351
3.4
3,648
761
17.4
425
1,334
13.5
577
917
9.6
282
3,012
13.3
1,284
Maxwells
Cock-eyed Bob
Santa
Rumbles
Anomaly A
Sub Total
Aldiss Mining Centre
Karonie
Tank/Atriedes
French Kiss
Harrys Hill
Italia/Argonaut
Spice
Aspen
Sub Total
Randalls Mining Centre
Lucky Bay
Randalls Dam
Sub Total
Mount Monger
Stockpile
Sub Total
Mount Monger Total
Deflector
Deflector
Stockpile
Sub Total
27
3.5
3
-
-
788
16.9
428
1,334
13.5
Deflector Total
788
16.9
428
1,334
13.5
-
577
577
-
917
917
-
9.6
9.6
-
27
3.5
3
282
3,038
13.2
1,287
282
3,038
13.2
1,287
3
RESOURCES & RESERVES REPORT
Measured
Mineral Resources
Indicated
Mineral Resources
Inferred
Mineral Resources
Total
Mineral Resources
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
-
42
42
42
-
3.3
3.3
3.3
-
5
5
5
787
10.2
259
576
11.1
206
1,363
10.6
465
-
-
787
10.2
787
10.2
-
259
259
-
-
-
42
3.3
576
11.1
206
1,405
10.4
576
11.1
206
1,405
10.4
5
470
470
4,797
5.2
806
22,392
3.9
2,811
10,607
5.2
1,788
37,795
4.4
5,405
Measured
Mineral Resources
Indicated
Mineral Resources
Inferred
Mineral Resources
Total
Mineral Resources
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
761
1.4% 10,600
1,334
0.7%
9,000
917
0.3%
3,100
3,012
0.8% 22,700
27
0.9%
200
-
-
-
-
27
0.9%
200
788
1.4% 10,900
1,334
0.7%
9,000
917
0.3%
3,100
3,038
0.8% 23,000
June 2021
Rothsay
Rothsay
Stockpile
Sub Total
Rothsay Total
Total Gold Mineral
Resources
June 2021
Deflector
Deflector
Stockpile
Total Copper
Mineral Resources
4 Silver Lake Resources Limited Annual Report 2021
RESOURCES & RESERVES REPORT
ORE RESERVE STATEMENT AS AT 30 JUNE 2021
The total Proved and Probable Gold Ore Reserves at 30 June 2021 are 14.5 Mt @ 2.9 g/t Au containing 1.36 Moz Au, including
2.8 Mt @ 0.2 % Cu containing 5,300 CuT. The Ore Reserves at 30 June 2021 are estimated after allowing for depletion over
FY2021. Ore Reserves were estimated using a gold price of A$2,100/oz, except for Santa Open Pit and Tank Underground
which used A$2,200/oz.
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
Tonnes
(‘000s)
Grade
(g/t Au)
Ounces
(Au ‘000s)
June 2021
Mount Monger
Aldiss Mining Centre
French Kiss
Karonie
Tank
Atreides
Sub Total
Daisy Mining Centre
Daisy Complex
Sub Total
Mount Belches Mining Centre
Cock-eyed Bob
Maxwells
Santa
Sub Total
Stockpile
Total Mount Monger
Deflector
Deflector OP
Deflector UG
Stockpile
Total Deflector
Rothsay
Rothsay
Stockpile
Total Rothsay
-
-
-
-
-
94
94
151
97
50
298
2,691
3,083
-
806
27
833
-
42
42
-
-
-
-
-
8.1
8.1
4.9
6.4
2.0
4.9
1.3
1.9
-
5.9
3.5
5.8
-
3.3
3.3
2.7
-
-
-
-
-
25
25
24
20
3
47
115
187
489
309
769
271
1,838
344
344
216
202
5,132
5,551
-
7,732
-
140
152
1,824
3
-
155
1,964
-
5
5
868
-
868
346
10,565
1.9
2.0
2.7
1.6
2.2
8.8
8.8
4.3
5.0
1.6
1.8
-
2.2
3.1
5.0
-
4.9
5.6
-
5.6
3.0
30
20
67
14
489
309
769
271
131
1,838
98
98
30
33
258
320
438
438
367
300
5,182
5,849
-
2,691
549
10,816
14
140
293
2,630
-
27
307
2,797
157
-
157
868
42
910
1,013
14,523
1.9
2.0
2.7
1.6
2.2
8.7
8.7
4.6
5.5
1.6
2.0
1.3
2.1
3.1
5.3
3.5
5.1
5.6
3.3
5.5
2.9
30
20
67
14
131
122
122
54
53
261
367
115
736
14
445
3
462
157
5
161
1,359
Total Gold Ore Reserves
3,958
June 2021
Deflector
Deflector OP
Deflector UG
Stockpile
Total Deflector
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
Tonnes
(‘000s)
Grade
(% Cu)
Copper
(Tonnes)
-
806
27
833
-
0.1%
0.9%
0.2%
-
140
1,100
1,824
200
-
0.3%
0.2%
-
400
140
3,500
2,630
-
27
1,300
1,964
0.2%
4,000
2,797
0.3%
0.2%
0.9%
0.2%
400
4,600
200
5,300
5
RESOURCES & RESERVES REPORT
NOTES TO TABLES MINERAL RESOURCE AND ORE RESERVE TABLES:
1. Mineral Resources are reported inclusive of Ore Reserves.
2. Data is rounded to thousands of tonnes, thousands of ounces gold, and hundreds of tonnes copper. Discrepancies in totals
may occur due to rounding.
3. All Mineral Resource and Ore Reserve estimates are produced in accordance with the 2012 Edition of the Australian Code
for Reporting of Mineral Resources and Ore Reserves (the 2012 JORC Code) apart from Costello and Randalls Dam Mineral
Resource estimates. The Costello and Randalls Dam Mineral Resource estimates were first prepared and disclosed under the
2004 edition of the JORC Code and have not been updated since to comply with the 2012 JORC Code on the basis that the
information has not materially changed since it was last reported.
MINERAL RESOURCE AND ORE RESERVE GOVERNANCE AND INTERNAL CONTROLS
Silver Lake ensures that the Mineral Resource and Ore Reserve estimates quoted are subject to governance arrangements
and internal controls activated at a site level and at the corporate level. Internal reviews of Mineral Resource and Ore Reserve
estimation procedures and results are carried out through a technical review team which is comprised of highly competent
and qualified professionals. These reviews have not identified any material issues. The Company has finalised its governance
framework in relation to the Mineral Resource and Ore Reserve estimates in line with the conduct of its business.
Silver Lake reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code) 2012 Edition (except where
stated). Mineral Resources are quoted inclusive of Ore Reserves. Competent Persons named by Silver Lake are Members or
Fellows of the Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and qualify as
Competent Persons as defined in the JORC Code. The Mineral Resources and Ore Reserves statements are based upon, and
fairly represent, information and supporting documentation prepared by the Competent Persons named below. The Mineral
Resources statement as a whole, as presented in this Annual Report, has been approved by Antony Shepherd a Competent
Person who is a member of The Australasian Institute of Mining and Metallurgy. The Ore Reserves statement as a whole, as
presented in this Annual Report, has been approved by Sam Larritt a Competent Person who is a member of The Australasian
Institute of Mining and Metallurgy.
COMPETENT PERSON’S STATEMENT
The information in the ASX announcement to which this statement is attached that relates to the Mineral Resources for the
Harrys Hill, Santa, Cock-eyed Bob, Maxwells, Anomaly A, Mirror/Magic, Tank/Atreides, Spice, Aspen, French Kiss, Italia/Argonaut,
Lorna Doone, Rumbles, and Karonie deposits is based upon information compiled by Aslam Awan, a Competent Person who is
a member of The Australasian Institute of Mining and Metallurgy. Mr Awan is a full-time employee of the Company. Mr Awan has
sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Awan consents to the inclusion in the report of matters based on
his information in the form and context in which it appears.
The information in the ASX announcement to which this statement is attached that relates to the Mineral Resources for the
Deflector and Rothsay deposits is based upon information compiled by Matthew Cobb, a Competent Person who is a member
of The Australian Institute of Geoscientists. Mr Cobb was a full-time employee of the Company at the reporting date of
30 June 2021. Mr Cobb has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Cobb consents to the
inclusion in the report of matters based on his information in the form and context in which it appears.
The information in the ASX announcement to which this statement is attached that relates to the Mineral Resources for the
Daisy Complex deposits is based upon information compiled by Darren Hurst, a Competent Person who is a member of The
Australian Institute of Geoscientists. Mr Hurst a full-time employee of the Company. Mr Hurst has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify
as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Hurst consents to the inclusion in the report of matters based on his information in the form
and context in which it appears.
The information in the ASX announcement to which this statement is attached that relates to Ore Reserves for Deflector, Daisy,
Maxwells, Cock-eyed Bob, Santa, Karonie, Tank, Atreides and French Kiss is based upon information compiled by Sam Larritt,
a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy. Mr Larritt is a full-time employee
6 Silver Lake Resources Limited Annual Report 2021
RESOURCES & RESERVES REPORT
of the Company. Mr Larritt has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Larritt consents to the inclusion
in the report of matters based on his information in the form and context in which it appears.
The information in the ASX announcement to which this statement is attached that relates to Ore Reserves for Rothsay is based
upon information compiled by Chris Davidson, a Competent Person who is a member of The Australasian Institute of Mining and
Metallurgy. Mr Davidson is a full-time employee of the Company. Mr Davidson has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mr Davidson consents to the inclusion in the report of matters based on his information in the form and context in
which it appears.
All other information in the ASX announcement to which this statement is attached relating to Mineral Resources is based on
information compiled by Antony Shepherd, a Competent Person who is a member of The Australasian Institute of Mining and
Metallurgy. Mr Shepherd is a full-time employee of the Company. Mr Shepherd has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mr Shepherd consents to the inclusion in the report of matters based on his information in the form and context in
which it appears.
FORWARD LOOKING STATEMENTS
This report may contain forward looking statements that are subject to risk factors associated with gold exploration, mining
and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may
be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to
differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production
results, Reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and
regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or
advancement, approvals and cost estimates.
Forward-looking 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 and involve known and unknown risks, uncertainties
and other factors, many of which are outside the control of Silver Lake. Past performance is not necessarily a guide to future
performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward-
looking statements or other forecast.
7
DIRECTORS' REPORT
The Directors submit their report, together with the
consolidated financial statements of the Group comprising
Silver Lake Resources Limited (the Company or Silver Lake)
and its subsidiaries for the year ended 30 June 2021.
PETER ALEXANDER
ASS APPL Geol
Non-executive Director
Appointed 5 April 2019
Mr Alexander is a geologist and has over 40 years’ experience
in mineral exploration and mining in Australia and overseas.
Mr Alexander was Managing Director and Chief Executive
Officer of Dominion Mining Limited from 1997 until his
retirement in January 2008, at which time he continued as
a Non-Executive Director until the takeover by Kingsgate
Consolidated in 2010. Mr Alexander managed the start-up
and operation of Dominion’s Challenger gold mine in South
Australia and, under Mr Alexander’s management, Dominion
won the Gold Mining Journal’s “Gold Miner of the Year” three
years in succession.
Mr Alexander was a Non-executive Director and former
Chairman of Doray Minerals Limited and was appointed to
the Silver Lake Board following the Company’s merger with
Doray Minerals Limited. He is currently a Non-executive
Director of Kingsgate Consolidated Limited and was
previously Non-executive Chairman of Caravel Minerals
Limited. Mr Alexander has held no other Directorships in public
listed companies in the last three years.
KELVIN FLYNN
B.Com, CA
Non-executive Director
Appointed 24 February 2016
Mr Flynn is a qualified Chartered Accountant with over
30 years’ experience in investment banking and corporate
advisory roles including private equity and special situations
investments in the mining and resources sector. He has held
various leadership positions in Australia and Asia, having
previously held the position of Executive Director/Vice
President with Goldman Sachs and Managing Director of
Alvarez & Marsal in Asia. He has worked in complex financial
workouts, turnaround advisory and interim management.
Mr Flynn was previously a director of privately held Global
Advanced Metals Pty Ltd. Mr Flynn is a Non-executive Director
of Mineral Resources Limited and is Managing Director of the
specialist alternative funds manager Harvis, which focuses on
investments and financing in the real estate and real assets
sectors.
Mr Flynn has held no other Directorships in public listed
companies in the last three years.
DIRECTORS
The directors of the Company at any time during or since the
end of the financial year were:
DAVID QUINLIVAN
BApp Sci, Min Eng, Grad Dip Fin Serv, FAusImm, FFINSA,
MMICA
Non-executive Chairman
Appointed Non-executive Director on 25 June 2015 and
Chairman on 30 September 2015
Mr Quinlivan is a Mining Engineer with significant mining and
executive leadership experience having 11 years of service
at WMC Resources Ltd, followed by a number of high-profile
mining development positions. Since 1989, Mr Quinlivan has
served as Principal of Borden Mining Services, a mining
consulting services firm, where he has worked on multiple
mining projects in various capacities. He has previously
served as Chief Executive Officer of Sons of Gwalia Ltd (post
appointment of administrators), as Chief Operating Officer
of Mount Gibson Iron Ltd and President and Chief Executive
Officer of Alacer Gold Corporation. More recently,
Mr Quinlivan served as Managing Director of Ora Banda
Mining Limited until 30 June 2021 before assuming the role
of non-executive director.
Mr Quinlivan has held no other Directorships in public listed
companies in the last three years.
LUKE TONKIN
BEng, Min Eng, MAusImm
Managing Director
Appointed 14 October 2013
Mr Tonkin is a Mining Engineering graduate of the Western
Australian School of Mines and his extensive operations and
management career spans over 35 years within the minerals
and mining industry. He is a past Chairman of the Western
Australian School of Mines Advisory Board. Mr Tonkin has held
senior management roles at WMC Resources Ltd, Sons of
Gwalia Ltd and was Managing Director of Mount Gibson Iron
Ltd for 7 years and Chief Executive Officer and Managing
Director of Reed Resources Ltd.
Mr Tonkin joined the Company in October 2013 as Director of
Operations and was appointed as Managing Director on 20
November 2014. Mr Tonkin has held no other Directorships in
public listed companies in the last three years.
8 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
COMPANY SECRETARIES
DAVID BERG
LLB BComm (General Management), FGIS, FCIS
Appointed 4 September 2014
Mr Berg has worked both in the resources industry and as a lawyer in private practice, advising on corporate governance, M&A,
capital raisings, commercial contracts and litigation. Mr Berg has previously held company secretarial and senior legal positions
with Mount Gibson Iron Limited and Ascot Resources Limited and legal roles with Atlas Iron Limited and the Griffin Group. Prior
to this Mr Berg worked in the corporate and resources groups of Herbert Smith Freehills and King & Wood Mallesons.
LIZ HOUGH
LLB, BA (Politics and International Studies), Grad Cert Chinese Law
Appointed 18 December 2019, Resigned 4 September 2020
Ms Hough is a corporate lawyer and was appointed as an additional Company Secretary in December 2019. Prior to joining
the Company, Ms Hough held a legal role at Resolute Mining Limited. Ms Hough has previously worked as a lawyer in private
practice specialising in energy and resources, mergers and acquisitions, capital raisings and general corporate and commercial
matters. Ms Hough resigned as Company Secretary on 4 September 2020.
COMMITTEE MEMBERSHIP
As at the date of this report, the Board has an Audit Committee and a Nomination & Remuneration Committee. Those members
acting on the committees of the Board during the year were:
Audit Committee
Kelvin Flynn (Chairman)
Peter Alexander
David Quinlivan
Term
Full Year
Full Year
Full Year
DIRECTORS’ MEETINGS
Nomination & Remuneration Committee (NRC)
Peter Alexander (Chairman)
Kelvin Flynn
David Quinlivan
Term
Full Year
Full Year
Full Year
The number of Directors’ meetings (including committee meetings) held during the year and the number of meetings attended
by each Director are as follows:
David Quinlivan
Luke Tonkin
Peter Alexander
Kelvin Flynn
Directors’ Meetings
Audit Committee
Nomination &
Remuneration Committee
Held
Attended
Held
Attended
Held
Attended
10
10
10
10
10
10
10
10
2
-
2
2
2
-
2
2
2
-
2
2
2
-
2
2
9
DIRECTORS' REPORT
DIRECTORS’ INTERESTS
The relevant interest of each Director in the share capital at the date of this report is as follows:
Name of Director
David Quinlivan
Luke Tonkin
Peter Alexander
Kelvin Flynn
PRINCIPAL ACTIVITIES
Fully Paid Ordinary Shares
Unlisted Performance Rights
-
528,016
18,165
-
-
2,353,318
-
-
The principal activities of the Group during the year were exploration, mine development, mine operations and the sale of gold
and gold/copper concentrate in Australia.
OPERATING OVERVIEW
Silver Lake is a multi-asset gold company operating in the Eastern Goldfields and Midwest regions of Western Australia.
The Group’s 2 operations, Deflector and Mount Monger, offer significant potential for organic growth from their portfolios of
highly endowed and prospective tenement holdings.
The Group’s operations over the last 12 months have been disrupted by COVID-19, however the Company has adapted and
mitigated, as far as practicable, the risks this infectious disease presents. Given the industry framework in which Silver Lake
operates and the Company’s strong debt free balance sheet, Silver Lake will continue to actively pursue exploration, production
and growth objectives, subject to the evolving and unforeseen impacts of COVID-19.
Tragically in June 2021 an underground contractor passed away at the Company’s Mount Monger Daisy Complex. Silver Lake
again expresses its deepest sympathy to the worker’s family, friends and colleagues.
GROUP FINANCIAL OVERVIEW
The Group recorded a net profit after tax for the year of $98.2 million (FY20: $256.9 million) and an EBITDA (before significant
items) of $290.8 million (FY20: $260.1 million). This resulted in an EBITDA margin for the year of 49% (FY20: 46%). The Board
considers that EBITDA is an important metric in assessing the underlying operating performance of the Group. A reconciliation
between the statutory profit after tax and the Group’s EBITDA is tabled on page 11.
Key movements in year-on-year profit after tax include:
· a $35 million increase in revenue as a result of stronger commodity prices in FY21;
· a $9 million increase in mining costs reflecting more open pit operating expenditure during the year and higher labour costs;
· a $7 million increase in amortisation reflecting different mine production profiles year-on-year;
· a $14 million increase in depreciation due to recognition of additional fixed assets on mining contracts under AASB 16 Leases;
· a $5.7 million increase in net finance costs reflecting the impairment of listed investments and the recognition of interest on
mining contracts now classified as leases under AASB 16 Leases; and
· a non-cash tax expense of $43 million has been recorded in FY21 compared with an income tax benefit of $123.7 million
in FY20. The prior year tax benefit was due to the initial recognition of carry forward tax losses. The current year taxable
expense will be offset against available tax losses and hence no tax is payable for FY21.
10 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
Revenue for the year totalled $598.3 million from the sale of 255,573 ounces of gold equivalent1 at an average realised gold sale
price of A$2,315/oz compared with revenue of $563.4 million from 263,362 ounces (at A$2,132/oz) in FY20. The increase in revenue
reflects improved commodity prices over the past year.
Cost of sales increased to $436.0 million in the year (FY20: $398.8 million) reflecting a $21.2 million increase in depreciation and
amortisation charge and a $9 million increase in mining and processing costs. The Group All-in Sustaining Cost (AISC) for the
year increased to A$1,484/oz (FY20: A$1,295/oz).
The reconciliation between the statutory profit after tax and the Group’s EBITDA (excluding significant items) is outlined in the
table below:
Reconciliation of Statutory Profit after Tax to EBITDA
(excluding significant items) - unaudited
Statutory profit after tax:
Adjustments for:
Depreciation and amortisation
Income tax expense/(benefit)
Net finance costs (includes change in value of listed investments)
Business combination adjustments
Other
EBITDA (excluding significant items)2
30 June 2021
30 June 2020
$’000
98,205
144,108
42,996
5,691
-
(180)
$’000
256,875
122,891
(123,742)
12
4,108
(56)
290,820
260,088
Operating cash flow for the period was $268.8 million resulting in a $60.8 million increase in cash and bullion for the year.
Key cash flow movements for FY21 included:
· Net cash inflow from operations of $268.8 million
· Acquisition of plant and equipment of $60.1 million, including $34.7 million on upgrading the Deflector mill and $7.1 million on
infrastructure spend at Rothsay
·
·
$87.9 million on mine development and $19.5 million on exploration
$6.8 million payment on stamp duty relating to the merger with Doray Minerals Limited
· Proceeds of $8.1 million from the sale of assets including the Andy Well and Gnaweeda Gold Projects
Cash and bullion at 30 June 2021 was $330.2 million (FY20: $269.4 million) with nil bank debt (FY20: Nil). In addition, the Group
had $11.1 million of gold in circuit and concentrate on hand, and listed investments of $11.4 million at year end.
During the year the Company added 1 million tonnes of ore to its inventory balance. Ore stocks at 30 June 2021 contain
125,000 oz of gold and are valued at a cost of $94.6 million on the Company’s Balance Sheet.
Property, plant and equipment increased by $50.7 million in FY21. The increase included asset acquisitions of $58.4 million and
the recognition of $44.1 million of right of use assets as leases under AASB16 Leases. The largest addition to the fixed asset
register related to the construction of a Carbon in Pulp (CIP) circuit at Deflector and associated infrastructure costing
$34.7 million.
During the year the Group divested the following non-core assets:
·
Fingals and Rowe’s Find Gold Project – sold to Black Cat Syndicate Limited (BC8) for cash consideration of $50,000 and
8,417,962 fully paid ordinary shares in BC8 valued at $0.88 per share as at 2 July 2020. The Group recognised a profit on sale
of the assets of $7.5 million
· Andy Well and Gnaweeda – sold to Latitude Consolidated Limited for cash consideration of $8 million. The Group
recognised a loss on sale of the assets of $3.7 million
Deferred tax assets reduced by $43.0 million to $80.7 million at 30 June 2021, with the reduction due to the utilisation of tax losses
and recognition of temporary differences between accounting and tax treatment of assets and liabilities. At 30 June 2021 the
Company has $323,335,000 (2020: $419,898,000) of tax losses remaining for offset against future taxable profits.
As at 30 June 2021, Silver Lake’s forward gold hedging program totalled 87,500 ounces, to be delivered over the next 12 months
at an average forward price of A$2,337/oz.
1 All gold equivalency calculations assume a gold price of A$2,450/oz, copper price of A$10,300/t and a 10% payability reduction for treatment and
refining charges
2 Non-IFRS measure
11
DIRECTORS' REPORT
Directors’ Report
Overview of the Mount Monger Operation
OVERVIEW OF THE MOUNT MONGER OPERATION
Figure 1: Location of Mount Monger Mining Centres and the Randalls Mill.
Figure 1: Location of Mount Monger Mining Centres and the Randalls Mill.
The Mount Monger Operation is located approximately 50km southeast of Kalgoorlie and is a highly endowed gold camp with
an established track record of gold production. Through exploration and development Mount Monger has transitioned to larger,
The Mount Monger Operation is located approximately 50km southeast of Kalgoorlie and is a highly endowed
longer life Mining Centres which have delivered multiple high-grade ore sources and increased production transparency. The
gold camp with an established track record of gold production. Through exploration and development Mount
three independent and self-sufficient Mining Centres at Mount Monger are the Daisy Complex, Mount Belches and Aldiss Mining
Monger has transitioned to larger, longer life Mining Centres which have delivered multiple high-grade ore
Centres. These Mining Centres feed the 1.3Mtpa Randalls mill.
sources and increased production transparency. The three independent and self-sufficient Mining Centres
at Mount Monger are the Daisy Complex, Mount Belches and Aldiss Mining Centres. These Mining Centres
feed the 1.3Mtpa Randalls mill.
MINING
Mining
Ore mined from the three Mount Monger Mining Centres totalled 2,298,725 tonnes at a grade of 2.6 g/t Au for 194,954 contained
ounces (FY20: totalled 1,755,539 tonnes at a grade of 3.5 g/t Au for 197,150 contained ounces).
Ore mined from the three Mount Monger Mining Centres totalled 2,298,725 tonnes at a grade of 2.6 g/t Au
for 194,954 contained ounces (FY20: totalled 1,755,539 tonnes at a grade of 3.5 g/t Au for 197,150 contained
Underground Mining
ounces).
Mount Monger underground mine production for the year totalled 901,293 tonnes at 4.3 g/t for 125,000 contained ounces
Underground Mining
(FY20: 668,039 tonnes at 5.5 g/t for 118,790 contained ounces).
Mount Monger underground mine production for the year totalled 901,293 tonnes at 4.3 g/t for 125,000
The Daisy Complex produced 256,638 tonnes at 5.7 g/t for 46,792 contained ounces, with production sourced from Haoma
contained ounces (FY20: 668,039 tonnes at 5.5 g/t for 118,790 contained ounces).
West, Lower Prospect, Easter Hollows and remnant mining areas. Access to the Easter Hollows zone (located ~350 metres to
the west of other production areas) was established in the first quarter of the year and provides a shallower mining front and
The Daisy Complex produced 256,638 tonnes at 5.7 g/t for 46,792 contained ounces, with production sourced
a significant exploration opportunity, with 1,000 metres of known plunge extent and improved drill access to target infill and
from Haoma West, Lower Prospect, Easter Hollows and remnant mining areas. Access to the Easter Hollows
extensional opportunities. In FY22, ore from the Daisy Mining Centre will continue to be sourced from Haoma West and Lower
zone (located ~350 metres to the west of other production areas) was established in the first quarter of the
Prospect lodes with an increasing proportion of ore sourced from Easter Hollows as more stoping fronts are progressively
year and provides a shallower mining front and a significant exploration opportunity, with 1,000 metres of
brought online.
known plunge extent and improved drill access to target infill and extensional opportunities. In FY22, ore
The Mount Belches underground mines (Maxwells, Cock-eyed Bob and Santa) produced 644,655 tonnes at 3.8 g/t for
from the Daisy Mining Centre will continue to be sourced from Haoma West and Lower Prospect lodes with
78,207 contained ounces, representing 72% of the underground mine production at Mount Monger.
an increasing proportion of ore sourced from Easter Hollows as more stoping fronts are progressively brought
online.
Mining activities were prioritised and focussed primarily at the higher-grade Cock-eyed Bob and Maxwells mines, which
combined accounted for 71% and 81% of Mount Belches mined tonnes and ounces respectively. The Santa underground
The Mount Belches underground mines (Maxwells, Cock-eyed Bob and Santa) produced 644,655 tonnes at
operation will be paused in Q1 FY22 following exploration success which identified a potential cut back to the historical Santa
3.8 g/t for 78,207 contained ounces, representing 72% of the underground mine production at Mount Monger.
open pits and provided further definition to Santa underground Mineral Resources at depth.
Open Pit Mining
Open pit mining at Aldiss (Karonie, Tank and Atreides) totalled 1,397,432 tonnes at 1.6 g/t for 69,955 contained ounces
8 | P a g e
(FY20: 1,087,500 tonnes at 2.2 g/t for 78,360 contained ounces).
12 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
Open pit mining activities focused on Karonie South where a total of 3,299,843 bcm was moved during the year for 1,378,275 tonnes
at 1.6 g/t for 69,162 ounces. Mining operations are expected to be completed at Karonie South during Q2 FY22.
Removal of overburden and top soil ramped up at the Atreides and Tank open pits during the last quarter of FY21. Atreides and
Tank open pit activity will continue until Q2 FY22. The Tank open pit is the first stage of an integrated open pit/underground
operation with portal access to the Tank South underground to be located within the Tank open pit.
PROCESSING
Gold ore from the Mount Monger Operation is treated at the Company’s Randalls Gold Processing Facility. Ore milled for the
period totalled 1,274,659 tonnes at a blended grade of 3.7 g/t Au for 141,602 recovered ounces. The high-grade underground
mines provided ~70% of the mill feed with the balance sourced from the lower grade open pit mines.
Exploration success has created a pipeline of projects at Mount Monger to further leverage established Mining Centre
infrastructure and enhance mine life visibility. Two near term projects have the potential to commence development throughout
FY22, namely Tank South underground mine and the Santa project area, which includes open pit and underground production
opportunities. Silver Lake has created ore source production flexibility through its investment in generating ore stockpiles
of approximately 2.7 million tonnes at 1.35 g/t for 115,000 contained ounces. Silver Lake will continue to critically review the
commencement of identified mine development opportunities based on easing COVID-19 restrictions, sustainable access to
appropriately trained and competent labour, and prevailing economic parameters, which will limit operating and financial risk
exposures that currently exist.
Directors’ Report
Mining and production statistics for the Mount Monger Operation for the year ended 30 June 2021 are detailed in Table 1 and
Table 2.
Overview of the Deflector Operation
OVERVIEW OF THE DEFLECTOR OPERATION
Figure 2: Location of the Deflector Mining Operation.
Figure 2: Location of the Deflector Mining Operation.
The Deflector Operation is in the midwest region of Western Australia and is a shallow, narrow vein, high-
grade gold and copper underground mine. FY21 was a transformational year for the Deflector Operation
with the successful construction and commissioning of the Deflector CIP circuit and associated
infrastructure, in parallel with the development and ramp up of a secondary high grade ore source at
Rothsay.
13
The investment to upgrade the plant is expected to deliver a 4-5% improvement in gold recoveries, in
addition to providing a viable processing route to treat a broader range of gold mineralisation, including
Rothsay, and creating additional exploration opportunities to target several historical mines, known gold
occurrences and prospects on Silver Lake’s wholly owned tenement package within a 5km radius of the
Deflector mine production for the period totalled 627,579 tonnes at 5.4 g/t gold and 0.3% copper for 108,249
contained ounces. Production was sourced from the Link, da Vinci, Central and Western Lodes, with ~67%
of mined ore tonnes sourced from stoping.
Development work to access the Deflector South West (DSW) lodes commenced in Q2 FY21, with the decline
advanced 900 metres by year end. The new DSW lode underpins a longer life, higher margin operation and
further enhances returns from the Deflector processing plant CIP upgrade. First development ore from the
upper levels of the DSW lodes is expected in Q2 FY22.
Deflector plant.
Mining
10 | P a g e
DIRECTORS' REPORT
The Deflector Operation is in the midwest region of Western Australia and is a shallow, narrow vein, high-grade gold and
copper underground mine. FY21 was a transformational year for the Deflector Operation with the successful construction and
commissioning of the Deflector CIP circuit and associated infrastructure, in parallel with the development and ramp up of a
secondary high grade ore source at Rothsay.
The investment to upgrade the plant is expected to deliver a 4-5% improvement in gold recoveries, in addition to providing a
viable processing route to treat a broader range of gold mineralisation, including Rothsay, and creating additional exploration
opportunities to target several historical mines, known gold occurrences and prospects on Silver Lake’s wholly owned tenement
package within a 5km radius of the Deflector plant.
MINING
Deflector mine production for the period totalled 627,579 tonnes at 5.4 g/t gold and 0.3% copper for 108,249 contained ounces.
Production was sourced from the Link, da Vinci, Central and Western Lodes, with ~67% of mined ore tonnes sourced from
stoping.
Development work to access the Deflector South West (DSW) lodes commenced in Q2 FY21, with the decline advanced 900 metres
by year end. The new DSW lode underpins a longer life, higher margin operation and further enhances returns from the Deflector
processing plant CIP upgrade. First development ore from the upper levels of the DSW lodes is expected in Q2 FY22.
PROCESSING
Deflector mill throughput was 660,994 tonnes at an average gold grade of 5.4 g/t and copper grade of 0.3%. Total gold
recovery was 87.7% with copper recovery of 89.4%. Production for the year totalled 100,875 ounces gold and 1,690 tonnes copper.
Concentrate production for FY21 totalled 10,145 tonnes at an average gold grade of 90 g/t gold and 17% copper.
Rothsay ore was introduced into the mill feed blend in late June 2021 with 6,680 tonnes processed during commissioning of the
new CIP circuit. To date the plant has performed to specification with the expected improvement in gold recovery evident.
Gold recoveries are expected to increase between 4% - 5% on recoveries achieved in FY21 driven by the addition of the CIP
circuit which was commissioned in June 2021.
ROTHSAY
The Rothsay mine is located 85 kilometres south-east of the Deflector mine. Underground development continued during FY21
with 3,644 metres of development completed and commercial production declared from July 2021.
Mine production for the year totalled 47,443 tonnes at 3.8 g/t for 5,739 ounces with ore development progressing across 5 levels
accessed from the South decline. The link drive to access the North decline position will continue to be advanced throughout
FY22.
The ramp up of Rothsay throughout FY22 is expected to drive a 10% increase in milled grade and combined with the benefit
of higher gold recoveries is expected to support a 10-20% increase in Deflector gold sales in FY22. Combined underground
development advance will increase approximately 38% from both sites in FY22 establishing access to multiple levels and
associated production areas, which underpin further production growth and increased free cashflow in FY23 based on the
prevailing gold price.
The ramp up of Rothsay as a secondary high grade ore source will result in a stockpile build for the first time in the history of
the Deflector operation through FY22. This will provide a level of feed flexibility that the Deflector operation has not previously
enjoyed and allow Silver Lake to maximise feed grade to the upgraded Deflector mill.
14 Silver Lake Resources Limited Annual Report 2021
GROUP MINING AND PRODUCTION STATISTICS
Mount Monger Mining
Underground
Ore mined
Mined grade
Contained gold
Open Pit
Ore mined
Mined grade
Contained gold
Deflector Mining
Underground
Ore mined
Mined grade
Contained gold
Copper grade
Contained copper
Rothsay Mining
Underground
Ore mined
Mined grade
Contained gold
Group Mining
Total ore mined
Mined grade
Contained gold
Copper grade
Contained copper
Table 1
DIRECTORS' REPORT
FY21
FY20
901,293
4.3
125,000
668,039
5.5
118,790
1,397,432
1,087,500
1.6
69,955
627,579
5.4
108,249
0.3%
1,752
47,443
3.8
5,739
2,973,747
3.2
308,943
0.3%
1,752
2.2
78,360
707,899
5.4
122,243
0.4%
2,596
-
-
-
2,463,438
4.0
319,393
0.4%
2,596
Units
Tonnes
g/t Au
Oz
Tonnes
g/t Au
Oz
Tonnes
g/t Au
Oz
%
Tonnes
Tonnes
g/t Au
Oz
Tonnes
g/t Au
Oz
%
Tonnes
15
DIRECTORS' REPORT
Mount Monger Processing
Ore milled
Head grade
Recovery
Gold produced
Gold sold
Deflector Processing
Ore milled
Gold grade
Copper grade
Gold recovery
Copper recovery
Gold produced
Gold sold
Copper recovered
Copper sold
Group Processing
Ore milled
Gold grade
Copper grade
Gold produced
Gold sold
Copper recovered
Copper sold
Table 2
EXPLORATION
Units
Tonnes
g/t Au
%
Oz
Oz
Tonnes
g/t Au
%
%
%
Oz
Oz
Tonnes
Tonnes
Tonnes
g/t Au
%
Oz
Oz
Tonnes
Tonnes
FY21
1,274,659
3.7
93%
141,602
145,623
FY20
1,233,922
4.4
92%
160,214
154,900
660,994
659,354
5.4
0.3%
87.7%
89.4%
100,875
103,158
1,690
1,724
5.5
0.4%
89.3%
92.6%
104,376
100,633
2,356
2,175
1,935,653
1,893,276
4.3
0.3%
242,478
248,781
1,690
1,724
4.8
0.4%
264,590
255,533
2,356
2,175
Silver Lake invested $19.5 million in exploration activities during the year to advance high-grade projects within established and
proven mineralised corridors proximal to established infrastructure.
Mount Monger
Drilling during the year focused on Mineral Resource definition and extensions at established underground mines targeting lode
infill and extensions proximal to current underground development.
Exploration at the Daisy Mining Centre focused on the newly accessed Easter Hollows zone with the combination of grade
control drilling and ore development increasing Silver Lake’s confidence in the Mineral Resource. Encouragingly, the drilling
intersected mineralisation immediately beyond the Mineral Resource limits and in new lode positions, demonstrating the
potential of the Easter Hollows area to become a high grade and shallower production front at the Daisy Complex.
Growth exploration activities during FY21 focused on infill drilling of the Santa Mineral Resource within a potential open pit shell
at the Mount Belches Mining Centre and target generation and refinement on the SATA trend at the Aldiss Mining Centre.
Exploration on the SATA trend builds on Silver Lake’s exploration success in validating and extending historical Mineral Resources
and the discovery of the broad, high-grade Tank South deposit. The SATA trend is characterised by areas of significant
transported cover which limit the effectiveness of traditional first pass exploration vectors, accordingly the historical discoveries
and focus of drilling are limited to areas with little or no transported cover. As a result, a large portion of the SATA trend remains
effectively untested.
Silver Lake commenced a program of broad spaced reconnaissance aircore drilling at the Harkonnen Fold target, with the
aim of defining areas of coherent gold anomalism to identify potential extensions and repeats of the SATA Trend deposits. The
Harkonnen Fold target is a SATA trend analogue/repeat target immediately to the east of the SATA Trend. Robust targeting
criteria have been developed, incorporating leading exploration technologies that have identified lithological and structural
features not defined in the historical exploration work across this area. The proximity of the SATA trend to existing infrastructure
significantly reduces the commercialisation threshold of potential discoveries.
16 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
Deflector
Since the acquisition of Doray Minerals in April 2019, Silver Lake has aggressively advanced exploration drilling, targeting
immediate strike extensions to the Deflector Mineral Resource within the broader Deflector corridor, which remains open in
multiple directions. Following successful exploration drilling throughout FY20 which delivered significant Mineral Resource and
Ore Reserve growth at Deflector through the higher gold and copper tenor South West lodes, in FY21 Silver Lake extended the
1033 exploration drive to 150m beyond the limits of Deflector mine development to facilitate further underground drilling. The
results supported the continuity of mineralisation and facilitated Silver Lake’s investment decision to commence development of
a dedicated decline to access the Deflector South West lodes during Q2 FY21.
Growth exploration programs in the Deflector region focused on delineation of new mineralisation within proven, prospective
and inadequately tested mineralised corridors, including Rocky Ridge to the north of the Woodleys Lode at Rothsay and to
west of the ultra-mafic contact at Deflector.
The successful completion of the CIP plant at the Deflector processing facility provides a viable processing route to treat a
broader range of gold mineralisation, thereby creating additional exploration opportunities to target several historical mines,
known gold occurrences and prospects on Silver Lake’s wholly owned tenement package within a 5km radius of the Deflector
plant.
In FY22 Silver Lake has budgeted a record $25 million of expenditure and demonstrates the Company’s confidence in continued
organic growth potential to leverage the significant installed infrastructure at both the Mount Monger and Deflector operations.
STRATEGY
The Group’s short to medium term strategy is to deliver superior returns for shareholders by positioning Silver Lake as a leading
gold stock on the ASX with a balanced portfolio of operations and growth projects. To achieve this strategic objective, the
Company must become larger, longer life and lower cost. This will be achieved by:
· Pursuing and unlocking the full potential of existing operations;
· Attracting and retaining an experienced team to enable Silver Lake to be an effective operator and developer of mining
assets;
· Developing a balanced growth profile through exploration and targeted M&A programs;
· Maintaining the appropriate balance sheet strength and scale to achieve long term growth through the cycle; and
· A returns driven capital management strategy.
Key risks associated with delivering on the Group’s strategy include:
· Gold price and FX currency: The Company is exposed to fluctuations in the Australian dollar gold price which can impact on
revenue streams from operations. To mitigate downside in the gold price, the Board has implemented a hedging program to
assist in offsetting variations in the Australian dollar gold price. Hedging is an agenda item at each Board meeting to ensure
it continues to fit within the Company’s hedging strategy and is deemed appropriate;
· Reserves and Resources: The Mineral Resources and Ore Reserves for the Group’s assets are estimates only and no assurance
can be given that they will be realised;
· Government charges: The gold mining industry is subject to a number of Government taxes, royalties and charges. Changes
to the rates of taxes, royalties and charges can impact on the profitability of the Company. The Company maintains
communications with relevant parties to mitigate potential increases;
· Operating risk: The Group’s gold mining operations are subject to operating risks that could result in decreased production,
increased costs & reduced revenues. To manage this risk the Company seeks to attract and retain high calibre employees
and implement suitable systems and processes to ensure production targets are achieved;
·
·
Exploration success: No assurance can be given that exploration expenditure will result in future profitable operating mines;
Environmental: The Company has environmental liabilities associated with its tenements which arise as a consequence of
mining operations, including waste management, tailings management, chemical management, water management and
energy efficiency. The Company monitors its ongoing environmental obligations and risks, and implements rehabilitation and
corrective actions as appropriate, through compliance with its environmental management system;
· People risks: The Company seeks to ensure that it provides a safe workplace to minimise risk of harm to its employees and
contractors. It achieves this through an appropriate safety culture, safety systems, training and emergency preparedness;
and
· COVID–19: COVID-19 restrictions have had an adverse effect on Silver Lake’s access to interstate and overseas labour
resources on which it relies. The consequence of this have been higher turnover, lower productivity, and higher costs. It
appears unlikely the mobility of skilled labour will improve significantly in FY22, however, Silver Lake’s historical stockpile build,
and mill constrained operating plan provides the Company with operating flexibility to deliver FY22 guidance.
17
DIRECTORS' REPORT
DIVIDENDS
No dividend has been paid or declared by the Company up to the date of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as disclosed elsewhere in this report, there have been no material events that have occurred between the reporting
date and the date of signing this report.
LIKELY DEVELOPMENTS
The Company will continue to pursue maximising free cashflow and increasing operating margins from its Mount Monger and
Deflector operations. This will include directing exploration expenditure to high priority, cash generative projects.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The Company’s operations hold licences issued by the relevant regulatory authorities. These licences specify limits and regulate
the management associated with the operations of the Company. At the date of this report the Company is not aware of any
significant breach of those environmental requirements.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify the current Directors and Officers against any liability that may arise from their position
as Directors and Officers of the Company except where the liability arises out of the improper use of position, or committing of
any criminal, dishonest, fraudulent or malicious act.
During the financial year the Company has paid Directors’ & Officers’ insurance premiums in respect of liability of any current
and future Officers, and senior executives of the Company. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
Silver Lake has not provided any insurance or indemnity to the auditor of the Company.
PROCEEDINGS ON BEHALF OF THE COMPANY
At the date of this report there are no leave applications or proceedings brought on behalf of the Group under section 237 of
the Corporations Act 2001.
CORPORATE GOVERNANCE
In recognising the need for appropriate standards of corporate behaviour and accountability, the Directors of Silver Lake have
adhered to the principles of good corporate governance. The Company’s corporate governance policies are located on the
Company’s website.
SUBSEQUENT EVENTS
No events have arisen in the interval between the end of the financial year and the date of this report of a material and
unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the
results of those operations, or the state of affairs of the Group, in future financial years.
18 Silver Lake Resources Limited Annual Report 2021
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements in place for both Executives and Non-executive Directors of Silver Lake
Resources Limited.
DIRECTORS' REPORT
Contents:
1. Basis of preparation
2. Key management personnel (KMP)
3. Remuneration snapshot
4. Remuneration governance
5. FY21 Executive remuneration
6. FY21 Non-executive director (NED) remuneration
7. KMP Shareholdings
BASIS OF PREPARATION
1.
This remuneration report has been prepared and audited in accordance with the requirements of the Corporations Act 2001
and the applicable accounting standards. All references to dollars in this remuneration report are to Australian Dollars unless
otherwise specified.
KEY MANAGEMENT PERSONNEL
2.
Key management personnel (KMP) comprise those persons with authority and responsibility for planning, directing and
controlling the activities of the Company. This includes the Executives and Non-executive directors (NEDs) of the Company. In
this report, ‘Executives’ refers to individuals identified as KMP, excluding NEDs.
A list of all NEDS and Executives for FY21 is set out below:
Name
Position
David Quinlivan
Non-executive Chairman
Luke Tonkin
Managing Director
Peter Alexander
Non-executive Director
Kelvin Flynn
David Berg
Diniz Cardoso
Steven Harvey
Non-executive Director
General Counsel & Company Secretary
Chief Financial Officer
General Manager Mount Monger Operations
Antony Shepherd
Exploration & Geology Manager
David Vemer
General Manager Deflector Operations
Term as KMP
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
19
DIRECTORS' REPORT
3.
REMUNERATION SNAPSHOT
FY21 REMUNERATION IN REVIEW
During the year the Company continued its focus on delivering new ore sources that sustain and enhance margins to drive
shareholder returns. Highlights for the year from this strategy included:
·
·
·
·
sales of 248,781 ounces gold, at the top end of market guidance range;
cash & bullion increased 23% to $330.2 million at 30 June 2021 with no debt;
successfully completed the Deflector CIP project on schedule and within budget. This plant upgrade will enhance future
returns from the Deflector Operation by increasing gold recoveries and broaden potential ore sources;
commenced decline access to and development of Deflector South West, which will underpin a longer life, higher margin
operation;
· development and ramp up of Rothsay, a secondary high grade ore source for the Deflector mill;
·
created operating flexibility at Mount Monger through the generation of ore stockpiles of approximately 2.7 million tonnes at
1.35 g/t for 115,000 contained ounces;
· exploration success has created a pipeline of projects at Mount Monger to further leverage from the established
infrastructure and enhance mine life visibility. Two near term projects have the potential to commence development
throughout FY22, namely Tank South underground mine and the Santa project area, which includes open pit and
underground production opportunities; and
·
strong results from the FY21 exploration campaign with near term targets that have the potential to enhance the future
production and margin profile of the Group.
Further information on the link between company performance and KMP remuneration can be found in section 5(g).
The Board believes that the Company’s remuneration framework is aligned with market practice and that Executive
remuneration in FY21 was reasonable, having regard to the performance of the Company, the platform established for ongoing
performance improvement and the experience of the Executives.
Key remuneration outcomes for FY21 are summarised in the table below:
Remuneration element
Details
Fixed remuneration
No change to fixed remuneration structure.
Short-term incentive (STI)
Long-term incentive (LTI)
STI payments were made to Executives during the period in line with their
performance against set targets. Further information on STI payments is included
in Section 5(c) of this report.
In FY21, 423,621 performance rights were granted to the Managing Director on
the terms approved by shareholders at the 2018 AGM and a further 873,557
performance rights were granted to other Executives as described further in this
report.
4.
REMUNERATION GOVERNANCE
A. BOARD AND NOMINATION & REMUNERATION COMMITTEE RESPONSIBILITY
The Nomination & Remuneration Committee is a subcommittee of the Board. It assists the Board to ensure that the Company
develops and implements remuneration policies and practices that are appropriate for the nature, size and standing
of the Company.
The Nomination & Remuneration Committee is responsible for making recommendations to the Board on:
·
·
·
the remuneration arrangements (including base pay, performance targets, bonuses, equity awards, superannuation,
retirement rights, termination payments) for Executives;
the remuneration of Non-executive Directors; and
the establishment of employee incentive and equity-based plans and the number and terms of any incentives proposed to
be issued to Executives pursuant to those plans, including any vesting criteria.
20 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
B. REMUNERATION PRINCIPLES
The Company’s remuneration strategy and structure is reviewed by the Board and the Nomination & Remuneration Committee
for business appropriateness and market suitability on an ongoing basis.
KMP are remunerated and rewarded in accordance with the Company’s remuneration policies (outlined in further detail below).
C. ENGAGEMENT OF REMUNERATION CONSULTANTS
During the period, the Company did not engage remuneration consultants to provide a “remuneration recommendation” (as
that term is defined in the Corporations Act 2001). However, the Nomination & Remuneration Committee has benchmarked KMP
remuneration using external independent industry reports and data to ensure that remuneration levels are competitive and
meet the objectives of the Company.
D.
2020 AGM VOTING OUTCOME AND COMMENTS
The Company received more than 98% votes in favour of the adoption of its Remuneration Report for the 2020 financial year.
5.
FY21 EXECUTIVE REMUNERATION
A. EXECUTIVE REMUNERATION STRATEGY AND POLICY
In determining Executive remuneration, the Board aims to ensure that remuneration practices are:
·
competitive and reasonable, enabling the Company to attract and retain high calibre talent;
· aligned to the Company’s strategic and business objectives and the creation of shareholder value;
·
transparent and easily understood; and
· acceptable to shareholders.
The Company’s approach to remuneration ensures that remuneration is competitive, performance-focused, clearly
links appropriate reward with desired business performance, and is simple to administer and understand by Executives
and shareholders.
In line with the remuneration policy, remuneration levels are reviewed annually to ensure alignment to the market and the
Company’s stated objectives.
The Company’s reward structure provides for a combination of fixed and variable pay with the following components:
·
Fixed remuneration in the form of base salary, superannuation and benefits;
· Variable remuneration in the form of short-term incentives (STI) and long-term incentives (LTI).
The table below provides a summary of the structure of executive remuneration:
FIXED REMUNERATION
· Base salary
·
Superannuation
· Other benefits
VARIABLE REMUNERATION
·
·
STI (Cash Bonuses)
LTI (Performance Rights)
21
DIRECTORS' REPORT
In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company performance, a
portion of Executives’ remuneration is placed “at risk”. The relative proportion of target FY21 total remuneration packages split
between the fixed and variable remuneration is shown below:
Target LTI
1/3
Fixed
Remuneration
1/3
Target STI
1/3
Figure 3: FY21 Target remuneration mix
B.
FIXED REMUNERATION
Fixed remuneration is set at a level that is aligned to market benchmarks and reflective of Executives’ skills, experience,
responsibilities and performance.
When positioning base pay, the Company presently aims to position aggregate fixed remuneration at approximately the 62.5
percentile of the industry benchmark AON McDonald Report (an independent, industry recognised report on the gold and
mining industry). This is to ensure that the Company’s remuneration arrangements remain competitive against peer companies
to assist with the retention and attraction of key talent.
Executive remuneration is benchmarked annually to ASX-listed companies of similar size (by market capitalisation), revenue
base, employee numbers and complexity. Specific reference is also made to peer companies within the gold mining sector.
Executives’ base salaries for the 2021 financial year were:
Executive
Luke Tonkin
David Berg
Diniz Cardoso
Steven Harvey
Antony Shepherd
David Vemer
1 Base Salary as at 30 June of each respective year
C. SHORT-TERM INCENTIVE (STI) ARRANGEMENTS
Base Salary FY211
Base Salary
FY201
Movement
$750,000
$324,500
$349,600
$318,900
$276,300
$312,600
$695,000
$311,400
$326,700
$306,000
$268,250
$300,000
8%
4%
7%
4%
3%
4%
The purpose of the STI plan is to link the achievement of key short term Company targets with the remuneration received by
those Executives charged with meeting those targets.
The STI plan provides eligible employees with the opportunity to earn a cash bonus if certain financial and non-financial key
performance indicators (KPIs) are achieved. The Board has determined that the Company must be cash-flow positive from
normal operating and sustaining capital activities (excluding enhancement activities) for the applicable performance period,
for any STI to be paid.
All Executives are eligible to participate in the STI plan with awards capped at 100% of the target opportunity. The target
opportunity for KMP in FY21 was 100% of TFR.
22 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
Each year the Nomination & Remuneration Committee, in conjunction with the Board, sets KPI targets for Executives. For FY21
the KPIs included non-discretionary targets for safety and environment, production and processing and costs, each of which
was measured relative to budget, and a relative TSR target versus a comparator peer group of companies. The Nomination
& Remuneration Committee also considered and evaluated the Executives’ ongoing review, response and modification of
safety, environment, production and cost plans during the year, and the execution and success of the operating, business
development and growth strategies.
FY21 PERFORMANCE AGAINST STI MEASURES
A summary of the KPI targets set for FY21 and their respective weightings are as follows:
KPI *
Weighting Measure
1. Safety/Environment
2. Mine production & processing
3. Costs
4. Operating strategy & execution
5. Business development & growth
6. Company performance
9%
45%
18%
9%
9%
10%
·
·
·
Lagging EH&S indicators
Environmental management effectiveness
Safety management effectiveness
Production and processing from each operating site relative
to FY21 budget
Costs for each cost centre relative to FY21 budget
Execution and success of Operating Strategy
Implementation and execution of Corporate Strategy
TSR performance against comparator group
% of KPI
achieved
38%
64%
63%
100%
50%
40%
* Not all of the above KPIs were assigned to all Executives
In assessing discretionary components of the KPI, the Committee considered the following achievements against objectives set
at the start of the year:
· achieving OH&S objectives;
· achieving environmental objectives;
· achieving FY21 sales and AISC sales guidance;
· achieving production KPIs from each operating site versus FY21 stretch targets;
· achieving cost KPIs for each cost centre versus FY21 stretch targets;
· execution and success of operating strategy;
·
implementation and execution of the Company’s corporate strategy;
· exceeding the targeted end of year cash and bullion balance;
·
successful completion of the Deflector CIP project on schedule and within budget;
· development and ramp up of Rothsay mine; and
· delivery of positive exploration results from infill and extensional resource definition drilling to allow further mines to enter
production in future periods.
The Committee also discussed the recent passing of an underground contractor at the Daisy Complex for reasons unknown
and noted that, whilst tragic, his sudden and unexpected passing was not as a result of a workplace accident or other
workplace industrial event.
Based on the above assessment, STI payments for FY21 to Executives were as follows:
Executive
Luke Tonkin
David Berg
Diniz Cardoso
Steven Harvey
Antony Shepherd
David Vemer
Maximum STI
opportunity
100% of TFR
100% of TFR
100% of TFR
100% of TFR
100% of TFR
100% of TFR
% STI awarded
STI awarded
60%
60%
60%
50%
60%
60%
$504,000
$214,000
$230,000
$175,000
$182,000
$206,000
23
DIRECTORS' REPORT
D.
LONG-TERM INCENTIVE (LTI) ARRANGEMENTS
The Board has established the Employee Incentive Plan (Incentive Plan) as a means for motivating senior employees to
pursue the long term growth and success of the Company. The Incentive Plan provides the Company with the flexibility to
issue incentives in the form of either options or performance rights which may ultimately vest and be converted into shares on
exercise, subject to satisfaction of any relevant vesting conditions. The Incentive Plan was approved by shareholders at the
2018 AGM.
KEY FEATURES OF THE INCENTIVE PLAN
Under the terms of the Incentive Plan, the Board may determine which employees are eligible to participate. In FY21, all
Executives were eligible and were invited to participate. The number of Performance Rights awarded to each Executive was
determined by dividing the Executives’ maximum LTI opportunity by the 20 day VWAP of the Company shares as traded on the
ASX up to 30 June 2020. Performance Rights which were granted will not vest (and therefore will lapse) unless a hurdle, based
on relative total shareholder return (TSR), has been satisfied. TSR measures the growth for a financial year in the price of shares
plus dividends paid. The NRC believes that a single hurdle is appropriate as it is transparent, simple to administer and directly
links Executive remuneration to the Company’s share price relative to its peers.
Relative TSR will be measured by comparing the Company’s TSR with that of a comparator group of companies over the
respective 3 year vesting period. The TSR metric measures the share price movement and dividends over this period for both
the Company and the comparator group. The Performance Rights will vest based on the Company’s relative TSR ranking on the
relevant vesting date as follows:
Relative TSR Performance
Less than 50th percentile
Vesting Outcome
0% vesting
Between the 50th percentile and 75th percentile
Pro rata straight line from 50% to 100%
At or above the 75th percentile
100% vesting
Relative TSR performance is calculated at a single point in time and is not subject to re-testing. The comparator group of
companies for Performance Rights on issue is listed in the table on page 25.
At the discretion of the Board, the composition of the comparator group may change from time to time.
Performance rights granted under the Incentive Plan will have no exercise price.
Unless the Board in its absolute discretion determines otherwise, all unvested performance rights will lapse 30 days following the
cessation of employment. The Board will take into account the circumstances surrounding the cessation of employment before
deciding whether to make any such determination.
FY21 LTI OUTCOMES
During the year the Company issued 1,297,178 Performance Rights to Executives in respect of the LTI component of their FY21
remuneration. The quantum of Performance Rights issued was determined by reference to the 20 day VWAP to 30 June 2020 of
$1.98 per share.
Executive
Luke Tonkin
David Berg
Diniz Cardoso
Steven Harvey
Antony Shepherd
David Vemer
Maximum LTI
opportunity
20 Day VWAP
Number of
Performance Rights
granted during FY21
Fair value per
Performance Right *
100% of TFR
100% of TFR
100% of TFR
100% of TFR
100% of TFR
100% of TFR
$1.98
$1.98
$1.98
$1.98
$1.98
$1.98
423,621
179,196
193,056
176,103
152,578
172,624
$0.917
$0.917
$0.917
$0.917
$0.917
$0.917
* Independently valued using a hybrid share option pricing model
24 Silver Lake Resources Limited Annual Report 2021
DIRECTORS' REPORT
PERFORMANCE RIGHTS
During the year the Company issued 1,895,078 Performance Rights to employees (including 1,297,178 Performance Rights to
Executives) in respect of the LTI component of their FY21 remuneration.
Executive
Luke Tonkin
David Berg
Diniz Cardoso
Steven Harvey
Antony Shepherd
David Vemer
Total
Balance at 1
July 2020
Granted in
FY21 Converted
Lapsed
Balance at
30 June 2021
Vested &
exercisable at
30 June 2021
2,853,542
1,046,437
1,095,068
401,431
908,467
456,461
423,621
(923,845)
179,196
(179,091)
193,056
(187,203)
176,103
-
152,578
(156,002)
172,624
(67,081)
6,761,406
1,297,178
(1,513,222)
-
-
-
-
-
-
-
2,353,318
1,046,542
1,100,921
577,534
905,043
562,004
1,233,645
548,968
573,844
88,574
478,204
82,657
6,545,362
3,005,892
The total expense recognised in the Statement of Profit or Loss for all KMP Performance Rights for the period ended
30 June 2021 was $1,447,017.
Details of the performance rights currently on issue are summarised in the following table:
Number of performance rights
Exercise price
Grant date
Vesting period
ASX Comparator Group
FY19 Award
FY20 Award
3,820,978
$0.00
1 July 2018
1 July 2018 –
30 June 2021
3,053,776
$0.00
1 July 2019
1 July 2019 –
30 June 2022
FY21 Award
1,895,078
$0.00
1 July 2020
1 July 2020 –
30 June 2023
AQG; DCN; EVN; MML; MOY;
NCM; NST; OGC; PRU; RMS;
RRL; RSG; SBM; WGX
AQG; DCN; EVN; GOR; MML;
MOY; NCM; NST; OGC; PRU;
RMS; RRL; RSG; SBM; WGX
DCN; EVN; GOR; MML; NCM;
NST; OGC; PRU; RMS; RRL;
RSG; SBM; WGX
Valuation at grant date
Underlying 20 day VWAP
Volatility
Risk free rate
Expected dividends
FY19 Award
FY20 Award
FY21 Award
$0.439
$0.581
70%
2.07%
-
$0.817
$1.071
65%
0.98%
-
$0.917
$1.98
65%
0.13%
-
Note 1: On completion of the vesting period 100% of the FY19 Performance Rights had vested in accordance with the relative TSR hurdle attached to them.
This included 3,005,892 rights awarded to Executives
The fair value of the performance rights was measured using a hybrid employee share option pricing model (correlation
simulation and Monte Carlo model) and was calculated by independent consultants.
E. SERVICE AGREEMENTS
A summary of the key terms of service agreements for Executives in FY21 is set out below. There is no fixed term for Executive
service agreements and all Executives are entitled to participate in the Company’s STI and LTI plans. The Company may
terminate service agreements immediately for cause, in which case the Executive is not entitled to any payment other than the
value of fixed remuneration and accrued leave entitlements up to the termination date.
25
DIRECTORS' REPORT
Name
Luke Tonkin
David Berg
Diniz Cardoso
Steven Harvey
Antony Shepherd
David Vemer
Term of Agreement
Notice Period by
Executive
Notice Period by
Silver Lake
Termination Payment
Open
Open
Open
Open
Open
Open
6 months
6 months
6 months
9 weeks
6 months
9 weeks
6 months
6 months
6 months
9 weeks
6 months
9 weeks
12 months TFR
6 months TFR
6 months TFR
as per Legislation
6 months TFR
as per Legislation
F.
EXECUTIVE REMUNERATION PAID
Fixed Remuneration
Variable Remuneration
Salary
& Fees
$
Other
Benefits1
$
Superannuation
$
STI Cash
Payments
$
Rights2
$
Total
$
Performance
Related
Remuneration
%
Executive
Luke Tonkin
Diniz Cardoso
Year
2021
2020
2021
2020
815,000
753,400
357,812
332,737
Antony Shepherd
2021
277,549
David Berg
David Vemer
Steve Harvey
2020
2021
2020
2021
2020
2021
2020
268,734
330,328
315,983
317,297
303,500
324,196
310,070
89,766
80,990
26,892
25,131
21,254
20,635
24,962
23,954
24,046
23,077
24,531
23,538
25,000
25,000
25,000
25,000
25,000
25,000
25,000
25,000
25,000
25,000
25,000
25,000
504,000
499,568
1,933,334
364,000
449,224
1,672,614
230,000
233,948
168,000
190,975
182,000
191,306
138,000
158,032
214,000
221,812
160,000
182,379
206,000
148,392
148,000
95,626
175,000
151,992
159,000
98,163
873,652
741,842
697,108
610,400
816,101
707,316
720,735
595,203
700,718
615,771
Total
2021
2,422,181
211,451
150,000
1,511,000
1,447,018
5,741,649
2020
2,284,423
197,324
150,000
1,137,000
1,174,399
4,943,146
1 Represents contractual entitlements (including termination and retirement benefits), annual leave and long service leave entitlements, measured on an
accrual basis
2 These are valuations required under accounting standards and have not actually been paid during the year
G.
LINK BETWEEN COMPANY PERFORMANCE, SHAREHOLDER WEALTH GENERATION AND REMUNERATION
The Nomination & Remuneration Committee considers a number of criteria to assess the performance of the Company. Criteria
used in this assessment include maximising of cash flows, managing risk, using a stronger balance sheet to undertake cash
accretive investments in core assets, execution of development projects, exploration success as well as the following metrics in
respect of the current and previous financial years.
EBITDA
Profit after tax ($m)
Cash and bullion ($m)
Cash from operating activities ($m)
Closing share price at 30 June
2021
290.8
98.2
330.2
268.8
$1.66
2020
260.1
256.9
269.4
252.3
$2.13
2019
80.2
6.5
130.7
71.8
$1.26
2018
87.9
16.2
105.7
80.8
$0.60
2017
70.0
2.0
69.1
64.0
$0.47
The Company’s remuneration practices reflect the achievement of certain of the Company’s and Executive’s performance
objectives. The Company’s overall objective has been to maximise cash flow, increase operating margins and create new
opportunities that compete for capital.
26 Silver Lake Resources Limited Annual Report 2021
52
49
53
48
54
48
53
48
49
41
47
42
52
47
DIRECTORS' REPORT
6.
FY21 NON-EXECUTIVE DIRECTOR (NED) REMUNERATION
A. NED REMUNERATION POLICY
The Company’s policy is to remunerate NEDs at market rates (for comparable ASX listed companies) for time, commitment and
responsibilities. Fees for NEDs are not linked to the performance of the Company.
It is ensured that:
·
fees paid to NEDs are within the aggregate amount approved by shareholders at the Company’s Annual General Meeting;
· NEDs are remunerated by way of fees (in the form of cash and superannuation benefits);
· NEDs are not provided with retirement benefits other than statutory superannuation entitlements; and
· NEDs are not entitled to participate in equity-based remuneration schemes designed for executives without due
consideration and appropriate disclosure to the Company’s shareholders.
Fees paid to NEDs cover all activities associated with their role on the Board and any sub-committees. No additional fees are
paid to NEDs for being a Chair or Member of a sub-committee. However, NEDs are entitled to fees or other amounts as the
Board determines where they perform special duties or otherwise perform extra services on behalf of the Company. They may
also be reimbursed for out of pocket expenses incurred as a result of their Directorships.
B. NED FEE POOL AND FEES
The Company’s Constitution provides that the NEDs may collectively be paid, as remuneration for their services, a fixed sum
not exceeding the aggregate maximum from time to time determined by the Company in a general meeting. Directors’ fees
payable in aggregate to the NEDs of the Company is currently capped at $1,000,000 per annum.
FY21 NED FEES
NED
David Quinlivan
Peter Alexander
Les Davis
Kelvin Flynn
Leigh Junk
1 Fees excluding superannuation as at 30 June of each respective year
2 Mr Davis resigned from the Board on 22 November 2019
3 Mr Junk resigned from the Board on 12 July 2019
Fees FY211
Fees FY201
Movement
$220,000
$120,000
-
$131,400
-
$200,000
$115,000
$48,654
$125,925
$4,423
10%
4%
Note 2
4%
Note 3
27
DIRECTORS' REPORT
C. NED FEES PAID
Details of the remuneration of each NED for the year ended 30 June 2021 is set out in the following table:
Non-executive Director
David Quinlivan
Peter Alexander
Kelvin Flynn
Les Davis
Leigh Junk
Total
Year
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
7.
KMP SHAREHOLDINGS
Key Management
Person
Balance at
1 July 2020
Acquired
David Quinlivan
Luke Tonkin
Peter Alexander
Kelvin Flynn
David Berg
Diniz Cardoso
Steven Harvey
Antony Shepherd
David Vemer
Total
-
528,016
18,165
-
205,475
183,299
-
146,640
31,500
1,113,095
-
-
-
-
-
-
-
-
-
-
Short Term
Base Fee
$
Superannuation
benefits
$
220,000
200,000
120,000
115,000
131,400
125,925
-
48,654
-
4,423
471,400
494,002
Conversion of
Performance
Rights
-
20,900
19,000
11,400
10,925
-
-
-
4,622
-
420
32,300
34,967
Sold
-
923,845
(923,845)
-
-
179,091
187,203
-
156,002
67,081
-
-
(384,566)
(183,299)
-
(302,642)
(18,954)
1,513,222
(1,813,306)
Total
$
240,900
219,000
131,400
125,925
131,400
125,925
-
53,276
-
4,843
503,700
528,969
Balance at
30 June 2021
-
528,016
18,165
-
-
187,203
-
-
79,627
813,011
28 Silver Lake Resources Limited Annual Report 2021
AUDITOR’S INDEPENDENCE
Directors’ Report
Section 307C of the Corporations Act 2001 requires Silver Lake’s auditors, KPMG, to provide the Directors with an Independence
Declaration in relation to the audit of the financial report for the year ended 30 June 2021. This Independence Declaration is
AUDITOR’S INDEPENDENCE
attached to the Directors’ Report and forms a part of the Directors’ Report.
DIRECTORS' REPORT
Section 307C of the Corporations Act 2001 requires Silver Lake’s auditors, KPMG, to provide the Directors
with an Independence Declaration in relation to the audit of the financial report for the year ended 30 June
NON-AUDIT SERVICES
2020. This Independence Declaration is attached to the Directors’ Report and forms a part of the Directors’
Report.
During the year KPMG, the Group’s auditor, has performed certain other services in addition to the audit and review of the
NON-AUDIT SERVICES
financial statements. The Board is satisfied that the provision of non-audit services is compatible with, and did not compromise
the general standard of independence for auditors imposed by the Corporations Act 2001 for the following reasons:
During the year KPMG, the Group’s auditor, has performed certain other services in addition to the audit
and review of the financial statements. The Board is satisfied that the provision of non-audit services is
· all non-audit services were subject to the corporate governance procedures adopted by the Group and have been
compatible with, and did not compromise the general standard of independence for auditors imposed by
the Corporations Act 2001 for the following reasons:
·
the non-audit services provided do not undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the auditor’s own work,
§
acting in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing
risk and rewards.
reviewed by the Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and
all non-audit services were subject to the corporate governance procedures adopted by the Group
and have been reviewed by the Audit Committee to ensure they do not impact the integrity and
objectivity of the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they do not
involve reviewing or auditing the auditor’s own work, acting in a management or decision making
capacity for the Group, acting as an advocate for the Group or jointly sharing risk and rewards.
Details of the amounts paid to the auditor of the Group, KPMG, for audit and non-audit services provided during the year are
set out below:
§
Details of the amounts paid to the auditor of the Group, KPMG, for audit and non-audit services provided
during the year are set out below:
Audit services
Audit and review of financial statements
Other audit services
Audit services
Audit and review of financial statements
Non-audit services
Other audit services
Taxation services
Non-audit services
Accounting advisory services
Taxation services
Total paid
Accounting advisory services
2020
$
246,370
-
52,430
-
2019
$
240,000
2,500
50,000
15,000
225,500
3,848
59,160
-
288,508
2021
$
2020
$
246,370
-
52,430
-
298,800
Total paid
298,800
307,500
ROUNDING OFF
ROUNDING OFF
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
in accordance with that Instrument, all financial information has been rounded off to the nearest thousand dollars, unless
Instrument 2016/191 and in accordance with that Instrument, all financial information has been rounded
otherwise stated.
off to the nearest thousand dollars, unless otherwise stated.
The Directors’ Report is signed in accordance with a resolution of the Directors.
The Directors’ Report is signed in accordance with a resolution of the Directors.
Luke Tonkin
Luke Tonkin
Managing Director
Managing Director
18 August 2020
18 August 2021
27 | P a g e
29
Directors’ Report
AUDITOR’S INDEPENDENCE
Report.
NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires Silver Lake’s auditors, KPMG, to provide the Directors
with an Independence Declaration in relation to the audit of the financial report for the year ended 30 June
2020. This Independence Declaration is attached to the Directors’ Report and forms a part of the Directors’
During the year KPMG, the Group’s auditor, has performed certain other services in addition to the audit
and review of the financial statements. The Board is satisfied that the provision of non-audit services is
compatible with, and did not compromise the general standard of independence for auditors imposed by
the Corporations Act 2001 for the following reasons:
§
DIRECTORS' DECLARATION
all non-audit services were subject to the corporate governance procedures adopted by the Group
and have been reviewed by the Audit Committee to ensure they do not impact the integrity and
objectivity of the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they do not
involve reviewing or auditing the auditor’s own work, acting in a management or decision making
capacity for the Group, acting as an advocate for the Group or jointly sharing risk and rewards.
In the opinion of the Directors:
1.
§
a. the consolidated financial statements and notes of the Group and the Remuneration Report in the Directors’ Report
Details of the amounts paid to the auditor of the Group, KPMG, for audit and non-audit services provided
during the year are set out below:
are in accordance with the Corporations Act 2001 including:
i. Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year
2019
$
2020
$
ii. Complying with Australian Accounting Standards and Corporations Regulations 2001;
then ended; and
Audit services
246,370
-
240,000
2,500
Audit and review of financial statements
b. the financial statements also comply with International Financial Reporting Standards as disclosed in Note 1;
Other audit services
c. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
Non-audit services
due and payable; and
Taxation services
Accounting advisory services
d. there are reasonable grounds to believe that the Company and the Group entity identified in Note 36 will be able
to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross
Guarantee between the Company and that Group entity pursuant to ASIC Corporations (wholly owned companies)
307,500
Instruments 2016/785.
298,800
50,000
15,000
52,430
-
Total paid
ROUNDING OFF
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
s295A of the Corporations Act 2001 from the Managing Director and Chief Financial Officer for the financial year ended
Instrument 2016/191 and in accordance with that Instrument, all financial information has been rounded
30 June 2021.
off to the nearest thousand dollars, unless otherwise stated.
The declaration is signed in accordance with a resolution of the Board of Directors.
The Directors’ Report is signed in accordance with a resolution of the Directors.
Luke Tonkin
Luke Tonkin
Managing Director
Managing Director
18 August 2020
18 August 2021
27 | P a g e
30 Silver Lake Resources Limited Annual Report 2021
AUDITOR'S INDEPENDENCE DECLARATION
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Silver Lake Resources Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Silver Lake Resources
Limited for the financial year ended 30 June 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Derek Meates
Partner
Perth
18 August 2021
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
31
INDEPENDENT AUDIT REPORT
Independent Auditor’s Report
To the shareholders of Silver Lake Resources Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Silver
Lake Resources Limited (the Company).
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2021 and of its
financial performance for the year ended on
that date; and
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
The Financial Report comprises:
• Consolidated balance sheet as at 30 June 2021
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statements of
cash flows for the year then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements
of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial
Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
The Key Audit Matters we identified are:
• Valuation of Goodwill; and
• Recoverability of Deferred Tax Assets.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
32 Silver Lake Resources Limited Annual Report 2021
INDEPENDENT AUDIT REPORT
Valuation of Goodwill ($90.7million)
Refer to Note 18 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group made a significant acquisition of Doray
Minerals Limited (Doray) on 5 April 2019 which
resulted in the recognition of $90.7 million of
goodwill.
A key audit matter for us was the Group’s
impairment testing of goodwill, given the size of the
balance. We focused on the significant and
judgemental forward-looking assumptions the Group
applied in their fair value less costs of disposal
models, including:
• Forecast sales, production output, production
costs and capital expenditure;
• Forecast gold prices;
• Discount rate;
• Life of mineral reserves and resources; and
• Resources multiples.
These assumptions require management to apply
significant estimates and judgments, which
contributes to our conclusion that the valuation of
goodwill is a key audit matter
We involved valuation specialists to supplement our
senior audit team members in assessing this key
audit matter.
Our procedures included:
• We examined the documentation prepared by
management including consideration of the
appropriateness of adopting fair value less cost of
disposal methodology.
• We assessed the integrity of the fair value less
costs of disposal model
• We evaluated the sensitivity of the valuation of
goodwill by considering reasonably possible
changes to the key assumptions
• We assessed the reasonableness of key
assumptions used in the model, using our
knowledge of the Group, their past performance,
and our industry experience.
• We compared the forecast cash flows and capital
expenditure in the model to Board approved
forecast
• We compared expected commodity prices and
foreign exchange rates to published views of the
market commentator on future trends
• We compared resource multiples to publicly
available market data for comparable entities
• We compared the life of mineral reserves and
resources in the model to the reserves and
resources statement commissioned by the Group
for consistency with the cash flow forecasts
• Working with our valuation specialists, we
independently developed a discount rate
considered comparable, using publicly available
market data for comparable entities
• We assessed the disclosures in the financial
report and against the requirements of the
accounting standards.
33
INDEPENDENT AUDIT REPORT
Recoverability of Deferred Tax Assets ($80.7 million)
Refer to Note 9 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group recognised deferred tax assets of $97
million during 30 June 2021 arising from tax losses
carried forward. The closing net deferred tax asset
carried forward as at 30 June 2021 is $80.7 million.
Accounting standards state that Deferred tax assets
are only recognised if certain conditions under
Australian tax law are satisfied and if it is probable
that sufficient taxable profits will be generated in
order for the benefits of the deferred tax assets to
be realised. These benefits are realised by reducing
tax payable on future taxable profits.
The recoverability of Deferred Tax Assets was a key
audit matter due to:
•
•
•
the significance of these assets recognised by
the Group;
the significant judgment required to assess the
probability that sufficient taxable profits can be
generated
the risk of the Group applying the requirements
of the accounting standards and Australian tax
law to recognise deferred tax assets for tax
losses incorrectly, which could result in a
substantial effect on the Group’s statement of
profit or loss and other comprehensive income
Working with our specialists, our procedures included:
• We examined the documentation prepared by the
Group supporting the availability of tax losses that
were recognised in accordance with Australian tax
law.
• We compared the forecasts included in the
Group’s estimate of future taxable profits used in
their deferred tax asset recoverability assessment
to those used in the Group’s assessment of the
value of goodwill. Our approach to testing these
forecasts was consistent with the approach
detailed in relation to the valuation of goodwill.
We challenged the differences between forecast
cash flows and taxable profits by evaluating the
adjustment of cash flows, for differences
between accounting profits, as presented in the
Group’s forecasts, to taxable profits, against
Australian tax law.
• Understanding the timing of future taxable profits
and considering the consistency of the
timeframes of expected recovery to our
knowledge of the business and its plans and
Australian tax law requirements. We placed
increased skepticism where there was a longer
timeframe of expected recovery.
• We assessed the Group’s disclosures in the
financial report using the results from our testing
and against the requirements of the accounting
standards.
• We involved tax specialists to supplement our
senior team members in assessing this key audit
matter
34 Silver Lake Resources Limited Annual Report 2021
INDEPENDENT AUDIT REPORT
Other Information
Other Information is financial and non-financial information in Silver Lake Resources Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible
for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report. The
Chairman and Managing Director’s Report, Project Report, Exploration Report, Reserves & Resources report
and ASX additional information are expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express
an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information, and
based on the work we have performed on the Other Information that we obtained prior to the date of this
Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
•
•
preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company’s ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate
the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our Auditor’s Report.
35
INDEPENDENT AUDIT REPORT
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of Silver
Lake Resources Limited for the year ended 30
June 2021, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 19 to 28 of the Directors’ report for the year
ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Derek Meates
Partner
Perth
18 August 2021
36 Silver Lake Resources Limited Annual Report 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Revenue
Cost of sales
Gross profit
Other income
Exploration expensed/impaired
Profit on sale of assets
Administration expenses
Results from operating activities
Finance income
Finance expenses
Net finance costs
Profit before income tax
Income tax (expense)/benefit
Profit for the year
Total comprehensive income for the year
Basic earnings per share
Diluted earnings per share
30 June
2021
$’000
598,293
(435,954)
162,339
252
(3,639)
3,818
(15,879)
146,891
978
(6,669)
(5,691)
141,200
(42,995)
98,205
30 June
2020
$’000
563,435
(398,764)
164,671
225
(10,306)
-
(21,445)
133,145
1,516
(1,528)
(12)
133,133
123,742
256,875
98,205
256,875
Cents Per Share Cents Per Share
11.14
11.06
31.09
30.77
Notes
4
5
33
6
8
9
10
10
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes to these consolidated financial statements.
37
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2021
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Inventories
Exploration, evaluation and development expenditure
Property, plant and equipment
Investments
Deferred tax assets
Goodwill
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Employee benefits
Rehabilitation and restoration provision
Total current liabilities
Non-current liabilities
Lease liabilities
Rehabilitation and restoration provision
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Notes
30 June
2021
$’000
30 June
2020
$’000
11
13
14
14
15
16
17
9
18
19
20
21
23
20
23
24
25
328,890
6,767
69,584
235
405,476
52,568
268,160
181,831
11,391
80,745
90,695
685,390
1,090,866
73,831
30,294
6,303
250
110,678
39,731
44,679
84,410
195,088
895,778
1,023,106
5,924
(133,252)
895,778
256,993
6,652
69,456
274
333,375
14,119
268,855
131,139
6,352
123,742
90,695
634,902
968,277
70,730
22,457
5,057
800
99,044
30,783
42,823
73,606
172,650
795,627
1,023,106
3,978
(231,457)
795,627
The Consolidated Balance Sheet should be read in conjunction with the accompanying notes to these consolidated financial
statements.
38 Silver Lake Resources Limited Annual Report 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Share
Capital
$’000
Option
Reserve
Accumulated
Losses
Non-
Controlling
interests
$’000
$’000
$’000
Balance at 1 July 2019
960,075
2,475
Total comprehensive income for the period
-
Transactions with owners, recorded directly
in equity
Issue of securities
Equity settled share based payment
Total contributions
Changes in ownership interests
Acquisition of subsidiary with NCI (Note 3)
Acquisition of non-controlling interest
Total transactions with owners of the Company
Balance at 30 June 2020
52,883
-
52,883
-
10,148
63,301
1,023,106
-
-
1,503
1,503
-
-
1,503
3,978
(488,332)
256,875
-
-
-
-
-
-
(231,457)
Balance at 1 July 2020
1,023,106
3,978
(231,457)
Total comprehensive income for the period
Transactions with owners, recorded directly
in equity
Equity settled share based payment
-
-
Balance at 30 June 2021
1,023,106
-
98,205
1,946
5,924
-
(133,252)
Total
Equity
$’000
474,218
256,875
52,883
1,503
54,386
-
-
-
-
-
10,308
10,308
(10,308)
-
-
-
-
-
-
(160)
64,534
795,627
795,627
98,205
1,946
895,778
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes to these
consolidated financial statements.
39
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Receipts from sales
Payments to suppliers and employees
Net cash from operating activities
Cash flow from investing activities
Interest received
Acquisition of plant and equipment
Proceeds from disposal of subsidiary
Cash from acquisition of subsidiary
Acquisition of investments
Proceeds from divestments
Payments for exploration, evaluation and development
Net cash used in investing activities
Cash flows from financing activities
Repayment of finance leases
Payment of stamp duty
Interest paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Notes
12
11
30 June
2021
$’000
589,650
(320,809)
268,841
976
(60,123)
8,098
-
(1,493)
-
(107,351)
(159,893)
(27,327)
(6,830)
(2,894)
(37,051)
71,897
256,993
328,890
30 June
2020
$’000
560,640
(308,333)
252,307
1,516
(24,877)
-
32
(503)
668
(82,748)
(105,912)
(12,998)
-
(1,477)
(14,475)
131,920
125,073
256,993
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes to the consolidated
financial statements.
40 Silver Lake Resources Limited Annual Report 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
BASIS OF PREPARATION
1.
Silver Lake Resources Limited (“Silver Lake” or “the Company”) is a for-profit entity domiciled in Australia. The consolidated
financial statements of the Company as at and for the year ended 30 June 2021 comprise the Company and its subsidiaries
(together referred to as “the Group” and individually as “Group Entities”).
The consolidated financial statements were approved by the Board of Directors on 18 August 2021. The financial report is a
general purpose financial report which:
·
·
·
has been prepared in accordance with Australian Accounting Standards (“AASBs”) (including Australian Accounting
interpretations) adopted by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001;
complies with International Financial Reporting Standards (“IFRSs”) and interpretations adopted by the International
Accounting Standards Board (“IASB”);
has been presented on the historical cost basis except for the following items in the balance sheet:
-
investments which have been measured at fair value.
- equity settled share-based payment arrangements have been measured at fair value.
-
inventories which have been measured at the lower of cost and net realisable value.
- exploration, evaluation and development assets which have been measured at recoverable value where impairments
have been recognised
Other than the adoption of new standards, there have been no material changes to accounting policies for the periods
presented in these consolidated financial statements. Significant accounting policies specific to one note are included in that
note. Accounting policies determined non-significant are not included in the financial statements.
The accounting policies have been applied consistently to all periods presented and by all Group entities. Certain comparative
disclosures have been reclassified to conform to the current year’s presentation.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and
in accordance with that Instrument, all financial information has been rounded off to the nearest thousand dollars, unless
otherwise stated.
A.
FUNCTIONAL AND PRESENTATION CURRENCY
These consolidated financial statements are prepared in Australian dollars, which is the functional currency of the Company
and its subsidiaries.
B. USE OF JUDGEMENTS AND ESTIMATES
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets and liabilities, income and expenses.
Judgements and estimates which are material to the financial report are found in the following notes:
· Note 3 Acquisition of Subsidiary – fair value of the consideration transferred, and fair value of the assets acquired and
liabilities assumed, measured on a provisional basis
· Note 9 Income Tax – recognition of deferred tax assets
· Note 15 Exploration, evaluation and development expenditure carried forward – consideration of impairment triggers and
recognition of impairment losses
· Note 15 Amortisation of development expenditure – estimation of future mineable inventory and future development
expenditure when calculating units of production amortisation
· Note 15 Reserves and Resources – estimating reserves and resources
· Note 18 Impairment testing of goodwill - key assumptions underlying recoverable amounts
· Note 23 Closure and rehabilitation – measurement of provision based on key assumptions
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C. BASIS FOR CONSOLIDATION
The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities (subsidiaries)
at year end is disclosed in Note 30.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
D. MEASUREMENT OF FAIR VALUE
A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial and
non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most
advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance
risk. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that
asset or liability.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
·
·
·
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data.
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the
fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of
the reporting period during which the change has occurred.
SIGNIFICANT ACCOUNTING POLICIES
2.
The accounting policies applied in these financial statements are the same as those applied in the Group’s consolidated
financial statements as at and for the year ended 30 June 2021.
Any new, revised or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted and are not expected to have a significant impact on the Group.
ACQUISITION OF EGAN STREET RESOURCES IN FY20
3.
On 21 November 2019 the Group obtained control of Egan Street Resources Limited (“EGA”) by acquiring 84.1% of the shares and
voting interests in that company. On 8 January 2020, the Group completed the compulsory acquisition process for EGA.
The following summarises the consideration transferred, and the fair value of assets and liabilities on acquisition:
CONSIDERATION TRANSFERRED
Equity Instruments Issued (50,481,300 fully paid ordinary shares)
$’000
52,883
The fair value of the fully paid ordinary shares issued was based on the share price of the Company at 21 November 2019 of
$1.05 per share, being the date of acquisition.
42 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED
Cash and cash equivalents
Trade and other receivables
Prepayments
Property, plant and equipment
Exploration and evaluation expenditure
Trade and other payables
Employee provisions
Total net identifiable assets
Total consideration on acquisition
Non-controlling interests, based on their proportionate interest in the recognised amounts of the assets and
liabilities of Egan Street
Fair value of identifiable net assets
$’000
32
205
19
201
64,527
(802)
(991)
63,191
$’000
52,883
10,308
63,191
ACQUISITION OF NON-CONTROLLING INTEREST
During the period from 21 November 2019 to 8 January 2020, the Group increased its interest in EGA from 84.1% ownership to
100%. This increase resulted in the issue of an additional $10.1 million of equity in Silver Lake.
Accounting Policies
Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment. Transaction costs are expensed as incurred, except if related to the issue
of debt or equity securities.
4.
REVENUE
Gold sales
Copper
Silver sales
Total
30 June
2021
$’000
575,997
21,297
999
598,293
30 June
2020
$’000
543,995
18,087
1,353
563,435
Included in current year gold sales is 68,068 ounces of gold sold (at an average price of A$1,903/ounce) under various hedge
programs. At 30 June 2021, the Company has a total of 87,500 ounces of gold left to be delivered under these programs over
the next 12 months at an average price of A$2,337/ounce (FY20: 155,568 ounces at A$2,147/ounce).
Accounting Policies
Gold bullion sales
Under AASB 15, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the
transfer of control requires judgement. With the sale of gold bullion, this occurs when physical bullion, from a contracted sale, is
transferred from the Company’s account into the account of the buyer.
43
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Concentrate Sales
Under AASB 15, revenue is recognised upon receipt of the bill of lading when the concentrate is delivered for shipment. Contract
terms for concentrate sales allow for a final price adjustment after the date of sale, based on average market prices and
final assays in the period after the concentrate is sold. Average market prices are derived from independently published data
with material adjustments between the provisional and final price separately disclosed as other revenue. This typically occurs
between 60-80 days after the initial date of sale.
Gold forward contracts
The Group uses derivative financial instruments such as gold forward contracts to manage the risks associated with commodity
price. The sale of gold under such hedge instruments is accounted for using the ‘own use exemption’ under AASB 9 Financial
Instruments and as such all hedge revenue is recognised in the Statement of Profit or Loss and no fair value adjustments are
subsequently made to sales yet to be delivered under the hedging program.
5.
COST OF SALES
Mining and processing costs
Amortisation
Depreciation
Salaries and on-costs
Royalties
Accounting Policies
Notes
15
16
30 June
2021
$’000
220,083
97,556
46,552
52,154
19,609
30 June
2020
$’000
210,800
90,425
32,467
44,904
20,168
435,954
398,764
Mining and processing costs
This includes all costs related to mining, milling and site administration, net of costs capitalised to mine development and
production stripping. This category also includes movements in the cost of inventory and any net realisable value write downs.
Amortisation
The Group applies the units of production method for amortisation of its mine properties, which results in an amortisation
charge proportional to the depletion of the anticipated remaining life of mine production. These calculations require the use of
estimates and assumptions in relation to reserves and resources, metallurgy and the complexity of future capital development
requirements. These estimates and assumptions are reviewed annually and changes to these estimates and assumptions may
impact the amortisation charge in the Statement of Profit or Loss and asset carrying values.
The Group uses ounces mined over mineable inventory as its basis for depletion of mine properties. In the absence of reserves,
the Group believes this is the best measure as evidenced by historical conversion of resources to reserves. The Group applies
applicable factoring rates when adopting the units of production method to reflect the risk of conversion from the inferred and
indicated categories to mineable inventory.
Depreciation
Depreciation is calculated on either a reducing balance basis or on a straight-line basis over the estimated useful life of each
part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their
useful life while processing plants are depreciated on the life of the mine basis. Capital work in progress is not depreciated until
it is ready for use. Depreciation methods, useful lives and residual values are reassessed at each reporting date.
The estimated useful lives for the current and comparative period are as follows:
Buildings
Haul roads
Plant and equipment
Office furniture and equipment
Motor vehicles
44 Silver Lake Resources Limited Annual Report 2021
Period
7-10 Years
3-5 Years
3-10 Years
3-15 Years
3-5 Years
For the year ended 30 june 2021 6.
ADMINISTRATION EXPENSES
Salaries and on-costs
Consultants and contractors
Rental expense
Business combination expense
Share based payments
Other corporate costs
Total
7.
GROUP PERSONNEL EXPENSES
Wages and salaries
Other associated personnel expenses
Superannuation contributions
Total
8.
FINANCE INCOME AND EXPENSES
Interest income
Finance income
Interest expense
Change in fair value of listed investments (Note 17)
Interest expense on lease liabilities
Finance costs
Net finance costs
Accounting Policies
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June
2021
$’000
9,103
1,562
241
128
1,946
2,899
15,879
30 June
2021
$’000
55,429
1,134
4,695
61,258
30 June
2020
$’000
10,562
1,409
546
4,108
1,503
3,317
21,445
30 June
2020
$’000
47,127
1,785
4,125
53,037
30 June
2021
$’000
30 June
2020
$’000
978
978
(16)
(3,914)
(2,739)
(6,669)
(5,691)
1,516
1,516
-
(52)
(1,476)
(1,528)
(12)
Interest income comprises bank interest on funds invested and is recognised as it accrues, using the effective interest method.
Finance expenses comprise interest expense on borrowings, leases, unwinding of the discount on provisions and change in the
value of investments measured at fair value through the profit and loss. All borrowing costs are recognised in the Statement
of Profit or Loss using the effective interest method in the period in which they are incurred except borrowing costs that are
directly attributable to the acquisition, construction and production of a qualifying asset that necessarily takes a substantial
period to get ready for its intended use or sale. In this case, borrowing costs are capitalised as part of the qualifying asset.
45
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9.
TAXES
A.
INCOME TAX
Current tax expense
Current income tax
Adjustment for prior years
Deferred income tax expense
Origination and reversal of temporary differences
Recognition of previously unrecognised tax losses
Movement in temporary differences
Income tax expense/(benefit) reported in profit or loss
Numerical reconciliation between tax expenses and pre-tax profit
Profit before tax
Income tax using the corporation tax rate of 30%
Adjustment for prior years
Movement due to non-deductible items
Recognition of tax effect of previously unrecognised tax losses
Other movements
Income tax expense/(benefit) reported in profit or loss
B. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities are attributable to the following:
Receivables
Inventories
Exploration, evaluation and mining assets
Property, plant and equipment
Accrued expenses
Provisions
Share issue costs
Tax losses
Net deferred tax assets
46 Silver Lake Resources Limited Annual Report 2021
30 June
2021
$’000
28,969
1,350
30,319
-
-
12,676
42,995
30 June
2021
$’000
141,200
42,360
1,350
700
-
(1,415)
42,995
30 June
2020
$’000
34,668
(248)
34,420
248
(161,987)
3,577
(123,742)
30 June
2020
$’000
133,133
39,940
-
1,882
(161,987)
(3,577)
(123,742)
30 June
2021
$’000
30 June
2020
$’000
2,017
(4,364)
(42,511)
13,250
1,518
13,835
-
97,000
80,745
2,017
(3,475)
(36,472)
19,703
1,299
13,349
2
127,319
123,742
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies
Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured
at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have
been enacted or substantively enacted by the reporting date.
Tax consolidation
The Company and its wholly owned entities are part of a tax-consolidated group. As a consequence, all members of the tax-
consolidated group are taxed as a single entity (Silver Lake Resources Limited is the head entity within the tax-consolidation
group).
Current tax expense/benefit, deferred tax liabilities and deferred tax assets arising from temporary differences of the members
of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated
group using the ‘separate taxpayer within the group’ approach by reference to the carrying amounts of assets and liabilities in
the separate financial statements of each entity and the tax values applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed by
the head entity in the tax-consolidated group and are recognised by the Company as amounts payable/(receivable) to/(from)
other entities in the tax-consolidated group. Any differences between these amounts are recognised by the Company as an
equity contribution or distribution.
The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that
it is probable that the future taxable profits of the tax-consolidated group will be available against which the asset can be
utilised.
Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of
the probability of recoverability is recognised by the head entity only.
Tax losses
The Group utilised $96,560,000 of tax losses during the current year by offsetting them against taxable income. At 30 June 2021
the Company has $323,335,000 (2020: $419,898,000) of tax losses remaining for offset against future taxable profits.
As a result of the strong gold price environment and ongoing cash flow generation from the Mount Monger and Deflector
Operations, management have considered it probable that future taxable profits would be available for offset against these
tax losses. As a result, the Company has recognised a deferred tax asset at 30 June 2021 of $80,745,000 (2020: $123,742,000).
The potential benefit of carried forward tax losses will only be obtained if taxable profits are derived of a nature, and of an
amount sufficient, to enable the benefit from the deductions to be realised or the benefit can be utilised by the Group provided
that:
i.
ii.
the provisions of deductibility imposed by law are complied with; and
no change in tax legislation adversely affects the realisation of the benefit from the deductions.
In accordance with the Group’s accounting policies for deferred taxes, a deferred tax asset is recognised for unrecognised
tax losses only if it is probable that future taxable profits will be available to utilise those losses. Determination of future
taxable profits requires estimates and assumptions as to future events and circumstances, in particular, whether successful
development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. This
includes estimates and judgments about commodity prices, ore resources, exchange rates, future capital requirements, future
operational performance and the timing of estimated cash flows. Changes in these estimates and assumptions could impact
on the amount and probability of estimated taxable profits and accordingly the recoverability of deferred tax assets.
47
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. EARNINGS PER SHARE
Profit used in calculating basic and diluted EPS
Weighted average number of ordinary shares used in calculating
basic earnings per share
Effect of dilution
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Accounting Policies
30 June
2021
$’000
98,205
30 June
2020
$’000
256,875
Number of
Shares
Number of
shares
881,285,990
826,101,988
6,874,745
8,660,139
888,160,735
834,762,127
Basic EPS is calculated as profit attributable to ordinary shareholders of the Company divided by the weighted average
number of ordinary shares.
Diluted EPS is determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding for the effects of all dilutive potential ordinary shares, including performance rights granted to
employees.
11. CASH AND CASH EQUIVALENTS
Cash at bank
Accounting Policies
30 June
2021
$’000
328,890
30 June
2020
$’000
256,993
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less. The Group
ensures that as far as possible it maintains excess cash and cash equivalents in short-term high interest bearing deposits. The
Group’s exposure to interest rate risk and a sensitivity analysis of financial assets and liabilities are disclosed in Note 26.
48 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 12. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cash flow from operating activities
Profit after tax
Adjustments for:
Depreciation
Amortisation
Exploration expenditure & impairment
Share based payments
Write off of investments
Net finance costs
Profit from the sale of non-current assets
Operating profit before changes in working capital and provisions
Change in trade and other receivables
Change in inventories
Change in prepayments and other assets
Change in deferred tax assets
Change in trade and other payables
Change in finance leases
Change in other liabilities
Total
13. TRADE AND OTHER RECEIVABLES
Current
Trade and other receivables
GST receivable
Provision for doubtful debts
Total
30 June
2021
$’000
30 June
2020
$’000
98,205
256,875
46,552
97,556
7,326
1,946
3,844
(961)
(8,374)
246,094
(115)
(38,577)
41
42,996
5,428
15,528
(2,554)
268,841
32,467
90,425
10,306
1,503
52
(39)
(58)
391,531
(2,155)
(32,046)
356
(123,742)
5,359
14,254
(1,250)
252,307
30 June
2021
$’000
30 June
2020
$’000
9,466
4,024
(6,723)
6,767
9,368
4,007
(6,723)
6,652
The Group’s exposure to interest rate risk and a sensitivity analysis of financial assets and liabilities are disclosed in Note 26.
Accounting Policies
Trade receivables are recognised initially at the value of the invoice sent to the counterparty and subsequently at the amounts
considered recoverable (amortised cost). Where there is evidence that the receivable is not recoverable, it is impaired with a
corresponding change to the profit or loss statement.
49
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14.
INVENTORIES
Current
Materials and supplies
Ore stocks
Gold in circuit
Concentrate on hand
Bullion on hand
Non-Current
Ore stocks
Total
30 June
2021
$’000
30 June
2020
$’000
15,171
42,019
9,648
1,438
1,308
69,584
52,568
122,152
12,492
34,546
6,764
3,256
12,398
69,456
14,119
83,575
During the year the Company added 1 million tonnes of ore to its inventory balance. Stockpiles that are not forecast to be
processed over the next 12 months are classified as non-current inventory. At the reporting date the Group carried out an
impairment review of inventory and assessed that all inventory was carried at the lower of cost and net realisable value and
that no impairment was required.
Accounting Policies
Inventory
Ore stockpiles, concentrate on hand, gold in circuit and gold bullion are physically measured or estimated and valued at the
lower of cost and net realisable value. The cost comprises direct materials, labour and transportation expenditure in bringing
such inventories to their existing location and condition, together with an appropriate portion of fixed and variable overhead
expenditure based on weighted cost incurred during the period in which such inventories were produced.
Net realisable value is the estimated selling price in the ordinary course of business less estimated cost of completion and the
estimated cost necessary to perform the sale. Inventories of consumable supplies and spare parts that are expected to be
used in production are valued at cost. Obsolete or damaged inventories of such items are valued at net realisable value.
Consumables and spare parts are valued at the lower of cost and net realisable value. Any provision for obsolescence is
determined by reference to specific stock items identified.
Bullion on Hand
Bullion on hand comprises gold that has been delivered to the Perth Mint prior to period end but which has not yet been
delivered into a sale contract.
50 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
During the year ended 30 June 2021 the Group incurred and capitalised the following on exploration, evaluation and
development expenditure:
30 June
2021
$’000
30 June
2020
$’000
Exploration and evaluation phase
Cost brought forward
Acquired in a business combination (Note 3)
Expenditure during the year
Divested during the year
Impaired during the year
Transferred to development phase
Expensed during year
Balance at 30 June
Development phase
Cost brought forward
Transfer from exploration and evaluation phase
Expenditure during the year
Expensed during the year
Rehabilitation provision adjustment
Transferred to production phase
Balance at 30 June
Production phase
Cost brought forward
Transfer from development phase
Divested during the year
Expenditure during the year
Rehabilitation provision adjustment
Amortisation expense
Balance at 30 June
Total
Accounting Policies
36,791
-
8,126
(11,862)
(593)
(18,380)
(2,310)
11,772
66,726
18,380
30,217
(1,329)
838
(18,380)
96,452
165,338
18,380
(5,529)
72,511
6,792
(97,556)
159,936
268,160
49,597
64,527
16,238
-
-
(83,265)
(10,306)
36,791
5,190
83,265
-
-
2,199
(23,928)
66,726
162,813
23,928
-
67,414
1,608
(90,425)
165,338
268,855
Exploration and evaluation expenditure
Exploration and evaluation expenditures are those expenditures incurred in connection with the exploration for and evaluation
of minerals resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all expenditure
incurred prior to securing legal rights to explore an area, is expensed as incurred.
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. An ‘area of
interest’ is an individual geological area which is considered to constitute a favourable environment for the presence of a
mineral deposit or has been proved to contain such a deposit. These costs are carried forward only if they relate to an area of
interest for which rights of tenure are current and in respect of which:
·
such costs are expected to be recouped through successful development and exploitation or from sale of the area; and
· exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable resources, and active and significant operations in, or
relating to, this area are continuing.
51
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs
in relation to the area of interest. If costs do not meet the criteria noted above, they are written off in full against the profit and
loss statement.
Exploration and evaluation assets are transferred to Development Phase assets once technical feasibility and commercial
viability of an area of interest is demonstrable. Exploration and evaluation assets are tested for impairment, and any
impairment loss is recognised, prior to being reclassified.
Impairment testing of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and
commercial viability, or facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist:
·
·
the term of exploration licence in the specific area of interest has expired during the reporting period or will expire in the
near future, and is not expected to be renewed;
substantive expenditure on further exploration and evaluation of mineral resources in the specific area are not budgeted or
planned;
· exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable
quantities of mineral resource and the decision was made to discontinue such activities in the specific area; or
·
sufficient data exists to indicate that, although development in the specific area of interest is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.
When a potential impairment is indicated, an assessment is performed for each cash generating unit which is no larger than
the area of interest.
Impairment testing of assets in the development or production phase
The carrying amounts of assets in the development or production phase are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of
disposal (FVLCD). In assessing FVLCD, the estimated future cash flows are discounted to their present value using a discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose
of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets
(the “cash-generating unit”).
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in the Statement of Profit or Loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill and then to reduce the carrying amount of the other
assets in the unit (group of units) on a pro-rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised. An impairment loss in respect of goodwill is not reversed.
Long term development and production phase assets that relate to unmined resources are assessed in light of current
economic conditions. Assumptions on the economic returns on and timing of specific production options may impact on the
timing of development of these assets. The carrying values of these assets are assessed where an indicator of impairment
exists using a fair value less cost to sell technique. This is done based on implied market values against their existing resource
and reserve base and an assessment on the likelihood of recoverability from the successful development or sale of the asset.
The implied market values are calculated based on recent comparable transactions within Australia converted to a value per
ounce. This is considered to be a Level 3 valuation technique.
Exploration expenditure commitments
Exploration expenditure commitments represent tenement rentals and minimum spend requirements that are required to be
met under the relevant legislation should the Group wish to retain tenure on all its current tenements.
52 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Mine properties and mining assets
Mine properties represent the acquisition cost and/or accumulated exploration, evaluation and development expenditure in
respect of areas of interest in which mining has commenced.
Mine development costs are deferred until commercial production commences. When commercial production is achieved, mine
development is transferred to mine properties, at which time it is amortised on a unit of production basis based on ounces
mined over the total estimated resources related to this area of interest.
Significant factors considered in determining the technical feasibility and commercial viability of the project are the completion
of a feasibility study, the existence of sufficient resources to proceed with development and approval by the board of Directors
to proceed with development of the project.
Underground development expenditure incurred in respect of mine development after the commencement of production is
carried forward as part of mine development only when substantial future economic benefits are expected, otherwise this
expenditure is expensed as incurred.
Deferred Stripping Costs
Stripping is the process of removing overburden and waste materials from surface mining operations to access the ore.
Stripping costs are capitalised during the development of a mine and are subsequently amortised over the life of mine on
a units of production basis, where the unit of account is ounces of gold mined. Stripping costs capitalised at year end are
included in the Production phase in Note 15.
Reserves and Resources
Resources are estimates of the amount of gold product that can be economically extracted from the Group’s mine properties.
In order to calculate resources, estimates and assumptions are required about a range of geological, technical and economic
factors, including quantities, grades, production techniques, recovery rates, production costs, future capital requirements, short
and long term commodity prices and exchange rates.
Estimating the quantity and/or grade of resources requires the size, shape and depth of ore bodies to be determined by
analysing geological data. This process may require complex and difficult geological judgments and calculations to interpret
the data.
The Group determines and reports ore resources under the Australian Code of Reporting for Mineral Resource and Ore Reserves
(2004 and 2012), known as the JORC Code. The JORC Code requires the use of reasonable assumptions to calculate resources.
Due to the fact that economic assumptions used to estimate resources change from period to period, and geological data
is generated during the course of operations, estimates of resources may change from period to period. Changes in reported
resources may affect the Group’s financial results and financial position in a number of ways, including:
· asset carrying values may be impacted due to changes in estimates of future cash flows
· amortisation charged in the Statement of Profit or Loss may change where such charges are calculated using the units of
production basis
· decommissioning, site restoration and environmental provisions may change due to changes in estimated resources after
expectations about the timing or costs of these activities change
·
recognition of deferred tax assets, including tax losses.
53
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. PROPERTY, PLANT AND EQUIPMENT
Land &
Buildings
$’000
Plant &
Equipment
$’000
Capital Work In
Progress
$’000
Note
11,593
594
-
-
(2,587)
-
9,600
59,832
415
10,125
65,657
(29,880)
(806)
105,343
Total
$’000
75,950
22,805
-
65,657
(32,467)
(806)
4,525
21,796
(10,125)
-
-
-
16,196
131,139
9,600
105,343
16,196
131,139
28
-
825
-
(2,963)
(81)
7,409
79
(783)
9,382
44,114
(43,589)
(106)
114,440
58,303
-
(14,517)
-
-
-
58,410
(783)
(4,310)
44,114
(46,552)
(187)
59,982
181,831
16(a)
5
Balance 1 July 2019
Additions
Transfers
Right-of-use lease assets
Depreciation expense
5
Disposals
Balance 30 June 2020
Balance 1 July 2020
Additions
Disposal of subsidiary
Transfers
Right-of-use lease assets
Depreciation expense
Disposals
At 30 June 2021
A. RIGHT-OF-USE ASSETS
The Group leases mining equipment for the purposes of production and exploration activities. These leases run for a period
of approximately 1-3 years, with an option to renew the lease after that date. Leases that contain extension options are
exercisable by the Group and not the lessor. Where practicable, the Group seeks to include extension options in new leases to
provide operational flexibility. The Group has estimated that exercising of the extension options would result in an increase in
lease liabilities and right-of-use assets of $3.6 million.
Some leases provide for additional rent payments that are based on changes in local price indices. These are factored into the
calculation of minimum lease payments in determining the value of the right-of-use assets only when these changes become
effective.
Information about leases for which the Group is a lessee is presented below:
Property, plant and equipment
Balance 1 July 2020
Additions to right-of-use assets
Depreciation charge for the year
Balance 30 June 2021
Accounting Policies
$’000
52,274
44,114
(28,110)
68,278
Items of plant and equipment are stated at their cost less accumulated depreciation and impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they
are located.
54 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment. The cost of replacing part of an item of property, plant and equipment
is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part
will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred.
17.
INVESTMENTS
Investments in listed entities – at fair value
Movements as follows:
Balance at 1 July
Acquisitions
Disposals
Change in fair value
Balance at 30 June
Accounting Policies
30 June
2021
$’000
11,391
30 June
2020
$’000
6,352
6,352
8,953
-
(3,914)
11,391
6,591
503
(690)
(52)
6,352
Financial assets at fair value through profit or loss
Financial assets designated at fair value through profit or loss comprise investments in equity securities.
A financial asset is classified at fair value through profit or loss if it is classified as held-for-trading or is designated as
such on initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such
investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk
management or investment strategy. Attributable transaction costs are recognised in profit or loss as incurred. Financial assets
are measured at fair value and changes are recognised in the profit or loss.
The fair values of investments in equity securities are determined with reference to their quoted ASX closing price at balance date.
18. GOODWILL
Goodwill of $90.695 million was recorded following the Company’s merger with Doray Minerals Limited on 5 April 2019. The
goodwill was attributable to both financial synergies (as a result of the creation of a mid-tier gold company with two
complementary gold camps increasing market presence and liquidity) and operating synergies (expected to be achieved from
integrating Doray into the Group’s existing mining operations).
IMPAIRMENT TESTING
As goodwill does not generate cash flows independently of other assets, its carrying value was apportioned to the Group’s
two operating CGUs as part of the 30 June impairment testing review. The allocation was made based on the relative market
values of the Silver Lake and Doray entities at the date of the merger as follows:
· Mount Monger Operation
67% ($60.8 million)
· Deflector Operation
33% ($29.9 million)
In assessing whether each CGU (including its share of goodwill) has been impaired, its carrying amount is compared with its
recoverable amount. In accordance with the Group’s accounting policy, recoverable amount is assessed as the higher of fair
value less costs of disposal (FVLCD) and value in use. The Group has adopted FVLCD in its assessment, using discounted cash
flows.
The key assumptions in addition to the life of mine plans used in the discounted cash flow valuation are the gold price, the
Australian dollar exchange rate against the US dollar and the discount rate.
55
For the year ended 30 june 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Gold price and AUD:USD exchange rate assumptions are estimated by management, with reference to external market
forecasts, and updated at least annually. For this review, the forecast gold price was estimated at US$1,700–US$1,800/oz. with
a forecast exchange rate of US$0.74 to US$0.78 per A$1.00, based on broker consensus forecasts over the life of the mines. A
discount rate of 8% was applied to the post tax cash flows expressed in nominal terms. The discount rate was derived from the
Group’s post tax weighted average cost of capital (WACC), with appropriate adjustments made to reflect the risks specific to
the CGU. The impairment testing carried out at 30 June 2021 using these assumptions resulted in a nil impairment charge.
Significant changes to either the forecast A$ gold price or future costs may have an impact on the carrying value of a CGU
in future periods. For example, a 5% increase in life of mine costs would result in a $6.7 million impairment to the Mount Monger
CGU. Similarly a 5% decrease in forecast gold prices would result in a $17 million impairment, assuming all other assumptions
remain constant. A 5% increase in costs or a 5% decrease in gold price would not result in any impairment to the Deflector CGU.
Accounting Policies
Goodwill arising on acquisition of subsidiaries is measured at cost less accumulated impairment losses. At each reporting date,
the Group tests goodwill for impairment. Where the asset does not generate cash inflows independent from other assets and its
value in use cannot be estimated to be close to its fair value, the asset is tested for impairment as part of the cash generating
unit (CGU) to which it belongs.
The Group considers each of its two segments (Mount Monger and Deflector) to be a separate CGU. If the carrying amount
of an asset or CGU exceeds its recoverable amount, the carrying amount is reduced to the recoverable amount and an
impairment loss recognised in the Statement of Profit or Loss. The recoverable amount of an asset or CGU is determined as the
higher of its fair value less costs of disposal or value in use.
19. TRADE AND OTHER PAYABLES
Trade payables
Stamp duty and other accruals
Total
30 June
2021
$’000
54,605
19,226
73,831
30 June
2020
$’000
48,846
21,884
70,730
The Group’s exposure to liquidity risk and a sensitivity analysis of financial assets and liabilities are disclosed in Note 26.
Accounting Policies
Trade payables are recognised at the value of the invoice received from a supplier. They represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and
generally paid between 30-45 days of recognition.
56 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 20. LEASE LIABILITIES
Current
Lease liabilities
Non-current
Lease liabilities
Total
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June
2021
$’000
30 June
2020
$’000
30,294
22,457
39,731
70,025
30,783
53,240
Payments made during the year under lease arrangements qualifying under AASB 16 but were variable by nature and therefore not
included in the minimum lease payments used to calculate lease liabilities, totalled $105.7 million (FY20: $32.3 million). These include
payments for services, including labour charges, under those contracts that contained payments for the right-of-use of assets.
For the period ended 30 June 2021, the Group recognised $27.3 million of lease liability repayments, $28.1 million of depreciation
charges and $2.7 million of interest costs in relation to these leases. Total cash outflows for leases recognised under AASB 16
totalled $29.8 million for the year.
Accounting Policies
The Group leases assets including properties and equipment. As a lessee, the Group previously classified leases as operating or
financial leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership.
Under AASB 16, the Group recognises right of use assets and lease liabilities for some of these leases – i.e. they are on-Balance
Sheet. The Group presents right-of-use assets in ‘Property, plant and equipment’ together with assets that it owns. The Group
presents lease liabilities separately in the Balance Sheet.
In accordance with AASB 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified
asset for a period in exchange for consideration. At inception or on reassessment of a contract that contains a lease
component, the Group has elected not to separate non-lease components and will instead account for the lease and non-
lease components as a single lease component.
The Group recognises right-of-use assets at the commencement date of the lease and is initially measured at cost, and
subsequently at cost less any accumulated depreciation and impairment losses and adjusted for any changes to lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date. The consolidated entity has elected not to recognise a right-of-
use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets.
Lease payments on these assets are expensed to profit or loss as incurred.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The lease liability is subsequently
increased by the interest cost on the lease liability and decreased by lease payments made. The carrying amount of lease
liabilities is remeasured if there is a modification to an index or rate, a change in the residual value guarantee, or changes in
the assessment of whether a purchase, extension or termination option will be exercised.
The lease payments include fixed monthly payments, variable lease payments and amounts expected to be paid under
residual value guarantees less any incentives received. Variable lease payments that do not depend on an index or rate are
recognised as an expense in the period it was incurred. The lease payment also includes the exercise price, or termination
price, of a purchase option in the event the lease is likely to be extended, or terminated, by the Group. The Group has applied
judgement to determine the lease term for some lease contracts in which it is a lessee that includes renewal options. The
assessment of these options will impact the lease term and therefore affects the amount of lease liabilities and right-of-use
assets recognised.
57
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. EMPLOYEE BENEFITS
Current
Liability for annual leave
Liability for long service leave
Total
Accounting Policies
i. Defined Contribution Superannuation Funds
30 June
2021
$’000
30 June
2020
$’000
4,750
1,553
6,303
3,957
1,100
5,057
Obligations for contributions to defined contribution superannuation funds are recognised as an expense in profit or loss when
they are incurred.
ii. Other Long-Term Employee Benefits
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have
earned in return for their service in the current and prior periods plus related on costs. The benefit is discounted to determine
its present value using a discount rate that equals the yield at the reporting date on Australian corporate bonds that have
maturity dates approximating the terms of the Group’s obligations.
iii. Short-Term Benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from
employees’ services provided to reporting date and are calculated at undiscounted amounts based on remuneration wage
and salary rates that the Group expects to pay as at reporting date including related on-costs.
22. SHARE BASED PAYMENTS
PERFORMANCE RIGHTS (EQUITY SETTLED)
Performance rights have been issued to the Managing Director and other eligible employees in accordance with long term
incentive plans approved by shareholders. Movements in Performance Rights are summarised as follows:
Balance at 1
July 2020
Granted in
FY21
Converted
Lapsed
Balance at
30 June
2021
Vested &
exercisable at
30 June 2021
Total
8,660,139
1,895,078
(1,731,206)
(54,188)
8,769,823
3,820,978
58 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Details of the performance rights currently on issue are summarised in the following table:
Number of performance rights
Exercise price
Grant date
Vesting period
ASX Comparator Group
Valuation at grant date
Underlying 20 day VWAP
Volatility
Risk free rate
Expected dividends
FY19 Award
FY20 Award
FY21 Award
3,820,978
$0.00
1 July 2018
1 July 2018 –
30 June 2021
3,053,767
$0.00
1 July 2019
1 July 2019 –
30 June 2022
1,895,078
$0.00
1 July 2020
1 July 2020 –
30 June 2023
AQG; DCN; EVN; MML;
MOY; NCM; NST; OGC;
PRU; RMS; RRL; RSG;
SBM; WGX
AQG; DCN; EVN; GOR;
MML; MOY; NCM; NST;
OGC; PRU; RMS; RRL;
RSG; SBM; WGX
DCN; EVN; GOR; MML;
NCM; NST; OGC; PRU;
RMS; RRL; RSG; SBM;
WGX
FY19 Award
FY20 Award
FY21 Award
$0.439
$0.581
70%
2.07%
-
$0.817
$1.071
65%
0.98%
-
$0.917
$1.98
65%
0.13%
-
Note 1: On completion of the vesting period 100% of the FY19 Performance Rights had vested in accordance with the relative TSR hurdle attached to them.
This included 3,005,892 rights awarded to KMP’s
The fair value of the performance rights was measured using a hybrid employee share option pricing model (correlation
simulation and Monte Carlo model) and was calculated by independent consultants.
The total expense recognised in the Statement of Profit or Loss for all performance rights for the period ended 30 June 2021
was $1,946,000 (2020: $1,503,000).
Accounting Policies
Share-Based Payment Transactions
The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognised as an
expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense
is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected
to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and
non-market performance conditions at the vesting date. For share based payment awards with non-vesting conditions,
the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
59
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. PROVISIONS
Closure and rehabilitation
Opening balance at 1 July
Divestment of asset
Adjustment to provisions during the year
Rehabilitation spend
Closing balance at 30 June
Current provision
Non-current provision
Closing balance at 30 June
30 June
2021
$’000
30 June
2020
$’000
43,623
(6,276)
7,630
(48)
44,929
250
44,679
44,929
40,260
-
3,807
(444)
43,623
800
42,823
43,623
At year end a review of the Group’s closure and rehabilitation provision was undertaken using updated cost assumptions and
life of mine plans. As a result of this review the provision was increased by $7,630,000 (2020: $3,807,000), with the increase
primarily related to the commencement of new open pits and construction of new tailings facilities.
Accounting Policies
Provisions
A provision is recognised in the Balance Sheet when the Group has a present legal or constructive obligation as a result of
a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect
is material, provisions are determined by discounting the expected future cash flows at a discount rate that reflects current
market assessments of the time value of money and, when appropriate, the risks specific to the liability.
Closure and Rehabilitation
The mining, extraction and processing activities of the Group normally give rise to obligations for site closure or rehabilitation.
The extent of work required, and the associated costs are dependent on the requirements of relevant authorities and the
Group’s environmental policies.
Provisions for the cost of each closure and rehabilitation program are recognised when the Group has a present obligation
and it is probable that rehabilitation/restoration costs will be incurred at a future date, which generally arises at the time that
environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is
increased accordingly.
Costs included in the provision encompass all closure and rehabilitation activity expected to occur progressively over the life of
the operation and at the time of closure, in connection with disturbances, as at the reporting date.
The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors such as the life and
nature of the asset, the operating licence conditions and the environment in which the mine operates. Expenditure may
occur before and after closure and can continue for an extended period of time dependent on closure and rehabilitation
requirements.
Closure and rehabilitation provisions are measured at the expected value of future cash flows, discounted to their present
value. Significant judgements and estimates are involved in forming expectations of future activities and the amount and
timing of the associated cash flows.
When provisions for closure and rehabilitation are initially recognised, to the extent that it is probable that future economic
benefits associated with the rehabilitation, decommissioning and restoration expenditure will flow in the entity, the
corresponding cost is capitalised as an asset. The capitalised cost of closure and rehabilitation activities is recognised in
exploration evaluation and mine properties and is amortised accordingly. The value of the provision is progressively increased
over time as the effect of discounting unwinds, creating an expense recognised in finance expenses.
Closure and rehabilitation provisions are also adjusted for changes in estimates. Those adjustments are accounted for as
a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the unamortised
capitalised cost of the related assets, where it is probable that future economic benefits will flow to the entity, in which case
the capitalised cost is reduced to nil and the remaining adjustment is recognised in the Statement of Profit or Loss.
60 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light
of the significant judgements and estimates involved. Factors influencing those changes include:
·
·
·
revisions to estimated reserves, resources and lives of operations;
regulatory requirements and environmental management strategies;
changes in the estimated costs of anticipated activities, including the effects of inflation and movements in foreign
exchange rates;
· movements in interest rates affecting the discount rate applied; and
·
the timing of cash flows.
At each reporting date, the rehabilitation and restoration provision is remeasured to reflect any of these changes.
24. SHARE CAPITAL
Movements in issued capital
Balance as at 1 July 2019
Movement in the period *
Issue of share capital (Note 3)
Costs associated with issue of shares
Balance as at 30 June 2020
Movement in the period *
Balance as at 30 June 2021
Number
$’000
818,172,156
1,627,856
60,044,097
-
960,075
-
63,191
(160)
879,844,109
1,023,106
1,731,206
-
881,575,315
1,023,106
* Movement relates to the vesting of performance rights issued for nil consideration.
Accounting Policy
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs
arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
25. RESERVES
Movement in share-based payment reserve
Balance as at 1 July
Equity settled share-based payment expense
Balance as at 30 June
30 June
2021
$’000
3,978
1,946
5,924
30 June
2020
$’000
2,475
1,503
3,978
61
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. FINANCIAL RISK MANAGEMENT
A. OVERVIEW
This note presents information about the Group’s exposure to credit, liquidity and market risks, the objectives, policies and
processes for measuring and managing risk, and the management of capital.
The Board regularly reviews the use of derivatives and opportunities for their use within the Group. Exposure limits are reviewed
by management on a continuous basis. The Group does not enter into or trade financial instruments, including derivative
financial instruments, for speculative purposes.
The Board has overall responsibility for the establishment and oversight of the risk management framework. Management
monitors and manages the financial risks relating to the operations of the Group through regular reviews of the risks.
B. CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers.
Presently, the Group undertakes gold mining, exploration and evaluation activities exclusively in Australia. At the balance sheet
date, there were no significant concentrations of credit risk.
I.
CASH AND CASH EQUIVALENTS
The Group limits its exposure to credit risk by only investing in liquid securities and only with major Australian financial
institutions.
II.
TRADE AND OTHER RECEIVABLES
The Group’s trade and other receivables relate to gold and concentrate sales, GST refunds and rental income.
At 30 June 2021, a provision for doubtful debts of $6,723,000 (2020: $6,723,000) has been recorded against rental income
receivable as a result of a debtor being placed in liquidation in a prior year. This receivable is therefore not reflected in the
trade and other receivables balance in Note 26(c).
The Group has determined that its credit risk exposure on all other trade receivables is low, as customers are considered to be
reliable and have short contractual payment terms. Management does not expect any of these counterparties to fail to meet
their obligations.
III.
EXPOSURE TO CREDIT RISK
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to
credit risk at the reporting date was:
Trade and other receivables
Cash and cash equivalents
Total
C.
LIQUIDITY RISK
Carrying Amount
2021
$’000
6,767
328,890
335,657
2020
$’000
6,652
256,993
263,645
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from funds generated from operations and by
continuously monitoring forecast and actual cash flows.
62 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
To mitigate large fluctuations in the USD:AUD exchange rate as well as the USD denominated gold price, the Group has
entered into hedging programmes whereby future bullion sales are hedged at a predetermined AUD gold price. At 30 June
2021, the Company has a total of 87,500 ounces of gold left to be delivered under these programs over the next 12 months at
an average price of A$2,337/ounce. The sale of gold under these hedges is accounted for using the ‘own use exemption’ under
AASB 9 Financial Instruments and as such all hedge revenue is recognised in the Statement of Profit or Loss and no mark to
market valuation is performed on undelivered ounces.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements:
30 June 2021
Trade and other payables
Lease liabilities
Total
30 June 2020
Trade and other payables
Lease liabilities
Total
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
12 Months
or Less
$’000
1-2 years
$’000
2-5 years
$’000
73,831
70,025
143,856
73,831
74,245
73,831
32,076
148,076
105,907
-
21,528
21,528
-
20,641
20,641
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
12 Months
or Less
$’000
1-2 years
$’000
2-5 years
$’000
70,730
53,240
123,970
70,730
56,228
126,958
70,730
24,544
95,274
-
18,780
18,780
-
12,904
12,904
* The carrying value at balance date approximates fair value
D. MARKET RISK
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, whilst optimising the return.
I.
COMMODITY RISK
The Group’s exposure to commodity price risk arises largely from Australian dollar gold price fluctuations. The Group’s exposure
to movements in the gold price is managed through the use of Australian dollar gold forward contracts. The gold forward sale
contracts do not meet the criteria of financial instruments for accounting purposes on the basis that they meet the normal
purchase/sale exemption because physical gold will be delivered into the contract. Further information relating to these
forward sale contracts is included in Note 4. No sensitivity analysis is provided for these contracts as they are outside the
scope of AASB 9 Financial Instruments.
II.
INTEREST RATE RISK
The Group is exposed to interest rate risk (primarily on its cash and cash equivalents and its interest-bearing liabilities), which
is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on interest-bearing
financial instruments. The Group does not use derivatives to mitigate these exposures.
PROFILE
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Lease liabilities
Variable rate instruments
Cash and cash equivalents
2021
$’000
2020
$’000
70,025
53,240
328,890
256,993
63
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FAIR VALUE SENSITIVITY ANALYSIS FOR FIXED RATE INSTRUMENTS
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a
change in interest rates at the reporting date would not affect profit or loss.
CASH FLOW SENSITIVITY ANALYSIS FOR VARIABLE RATE INSTRUMENTS
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss
after tax by $3,289,000 (2020: $2,570,000). This analysis assumes that all other variables remain constant.
III.
EQUITY PRICE RISK
Equity investments are long-term investments that have been classified as financial assets at fair value through profit or loss.
E.
FAIR VALUES
The carrying value of cash and cash equivalents, trade and other receivables, trade and other payables and interest-bearing
liabilities is considered to be a fair approximation of their fair values. The carrying amounts of equity investments are valued at
year end at their quoted market price.
F.
CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business through future exploration and development of its projects. There were no changes
in the Group’s approach to capital management during the year. Risk management policies and procedures are established
with regular monitoring and reporting.
27. COMMITMENTS
The Group has $3,332,000 (2020: $5,545,000) of commitments relating to minimum exploration expenditure on its various
tenements and $338,000 (2020: $6,052,000) of capital commitments at 30 June 2021.
28. OPERATING LEASES
The Company leases assets for operations including plant and office premises. As at 1 July 2019, with the adoption of AASB 16,
operating leases as previously defined under AASB 117 have, for the most part, been recognised and included as lease liabilities
with future commitments disclosed in Note 26(c). Any leases that did not meet the definition of finance leases were either short-
term in nature or did not meet the recognition requirements (these totalled $123,000).
29. RELATED PARTIES
A. KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Total
64 Silver Lake Resources Limited Annual Report 2021
30 June
2021
$
4,616,031
182,300
1,447,018
6,245,349
30 June
2020
$
4,112,749
184,967
1,174,399
5,472,115
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
B.
INDIVIDUAL DIRECTORS AND EXECUTIVES’ COMPENSATION DISCLOSURES
Information regarding individual Directors and Executive’s compensation and some equity instruments disclosures as permitted
by Corporations Regulations 2M.3.03 is provided in the Remuneration Report section of the Directors’ Report.
During the current period 1,297,178 performance rights were awarded to key management personnel. See Note 22 and the
Remuneration Report for further details of these related party transactions.
30. GROUP ENTITIES
The Company controlled the following subsidiaries:
Subsidiaries
Silver Lake (Integra) Pty Ltd
Backlode Pty Ltd
Loded Pty Ltd
Paylode Pty Ltd
Cue Minerals Pty Ltd
Silver Lake (Doray) Pty Ltd
Doray Gold Operations Pty Ltd
Andy Well Mining Pty Ltd
Murchison Resources Pty Ltd
Meehan Minerals Pty Ltd
Silver Lake (Deflector) Pty Ltd
MYG Tenement Holdings SPV Pty Ltd
MYG Tenement Holdings Pty Ltd
Brandy Hill Iron SPV Pty Ltd
Brandy Hill Iron Pty Ltd
Central Infrastructure SPV Pty Ltd
Central Infrastructure Pty Ltd
Deflector Gold SPV Pty Ltd
Deflector Gold Pty Ltd
Gullewa Gold Project SPV Pty Ltd
Gullewa Gold Project Pty Ltd
Silver Lake (Egan Street) Pty Ltd
Silver Lake (Rothsay) Pty Ltd
Egan Street Victoria Bore Pty Ltd
Accounting Policies
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership Interest
2021
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it 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 over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
65
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JOINT OPERATIONS
31.
During the year the Group divested its 40% interest in the Horse Well Joint Venture. As at 30 June 2021, the Group had no
interest in any joint venture.
Accounting Policies
Joint Operation Arrangements
The Group has investments in joint operations, but they are not separate legal entities. They are contractual arrangements
between participants for the sharing of costs and outputs and do not in themselves generate revenue and profit. The joint
operations are of the type where initially one party contributes tenements with the other party earning a specified percentage
by funding exploration activities; thereafter the parties often share exploration and development costs and output in
proportion to their ownership of joint operation assets. The joint operations do not hold any assets and accordingly the Group’s
share of exploration evaluation and development expenditure is accounted for in accordance with the policy set out in Note 15.
32. AUDITOR’S REMUNERATION
Audit services
Audit and review of financial statements
Other audit services
Non-audit services
Taxation services
Total
30 June
2021
$
225,500
3,848
30 June
2020
$
246,370
-
59,160
288,508
52,430
298,800
33. DIVESTMENT OF ASSETS
During the year the Group divested non-core assets including:
·
Fingals and Rowe’s Find Gold Project – sold to Black Cat Syndicate Limited (BC8) for cash consideration of $50,000 and
8,417,962 fully paid ordinary shares in BC8 valued at $0.88 per share as at 2 July 2020. The Group recognised a profit on sale
of the assets of $7.5 million.
· Andy Well and Gnaweeda – sold to Latitude Consolidated Limited for cash consideration of $8 million. The Group
recognised a loss on the sale of $3.7 million.
66 Silver Lake Resources Limited Annual Report 2021
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34. PARENT ENTITY
As at, and throughout the financial year ended 30 June 2021, the parent company of the Group was Silver Lake Resources Limited.
Results of the parent entity
(Loss)/profit for the year
Total comprehensive (loss)/profit for the year
Balance Sheet of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Total equity
30 June
2021
$’000
30 June
2020
$’000
(45,560)
(45,560)
127,622
127,622
152,785
676,285
68,706
86,841
1,023,106
5,924
(439,586)
589,444
138,696
736,546
97,291
103,487
1,023,106
3,979
(394,026)
633,059
The parent entity has $1,738,000 (2020: $2,536,000) of commitments relating to minimum exploration expenditure on its various
tenements and nil (2020: $1,464,000) capital commitments at financial year end.
35. SEGMENT REPORTING
The accounting policies used by the Company in reporting segments are in accordance with the measurement principles of the
Australian Accounting Standards. The Group has the following reportable segments:
i. Mount Monger Operation
ii. Deflector Operation (including the Rothsay Project)
The Group’s segments are both located in Western Australia, with the Mount Monger Operation producing gold bullion and
Deflector producing gold bullion and gold-copper concentrate.
Financial information for the reportable segments for the years ended 30 June 2021 and 30 June 2020 is as follows:
30 June 2021
Revenues
EBITDA (excluding significant items)1
Capital expenditure3
30 June 2020
Revenues
EBITDA (excluding significant items)1
Capital expenditure
Mount Monger
$’000
Deflector
$’000
Unallocated2
$’000
322,488
135,049
63,380
275,805
172,472
153,113
-
(16,701)
-
Mount Monger
Deflector
Unallocated2
$’000
322,069
144,479
137,385
$’000
241,366
133,445
36,759
$’000
-
(17,836)
-
1 A reconciliation between the statutory profit after tax and the Group’s EBITDA (excluding significant items) is tabled on page 11
2 Unallocated items primarily comprise administration expenses
3 FY21 Capital expenditure includes $44 million of Right of Use asset additions as required under AASB 16 Leases
Total
$’000
598,293
290,820
216,493
Total
$’000
563,435
260,088
174,144
67
For the year ended 30 june 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
36. DEED OF CROSS GUARANTEE
The Company and its wholly owned subsidiary Silver Lake (Integra) Pty Ltd have entered into a Deed of Cross Guarantee under
which each company guarantees the debts of the other. By entering into the Deed of Cross Guarantee, Silver Lake (Integra) Pty
Ltd has been relieved from the Corporations Act 2001 requirement to prepare, audit and lodge a financial report and Directors’
report under ASIC Corporations (wholly owned companies) Instrument 2016/785. The Consolidated Balance Sheet at 30 June
2021 for the members of the Deed of Cross Guarantee is disclosed in the table below:
30 June
2021
$’000
30 June
2020
$’000
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Inventories
Exploration evaluation and development expenditure
Property, plant and equipment
Investments
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Employee benefits
Rehabilitation and restoration provision
Total current liabilities
Non-current liabilities
Lease liabilities
Rehabilitation and restoration provision
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
68 Silver Lake Resources Limited Annual Report 2021
154,215
5,444
52,879
234
212,772
52,568
79,971
59,517
333,267
80,746
606,069
818,841
55,268
17,747
4,073
250
77,338
11,939
20,683
32,622
109,960
708,881
134,160
3,258
46,044
274
183,736
14,119
96,206
86,006
328,349
123,742
648,422
832,158
44,014
22,457
3,210
800
70,481
28,055
18,837
46,892
117,373
714,785
1,023,106
5,924
(320,149)
708,881
1,023,106
3,979
(312,300)
714,785
For the year ended 30 june 2021 The Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2021 for the
members of the Deed of Cross Guarantee is disclosed in the table below:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Revenue
Cost of sales
Gross profit
Other income
Exploration expensed
Administration expenses
Results from operating activities
Finance income
Finance expenses
Net finance costs
Profit before income tax
Income tax (expense) / benefit
(Loss) / profit for the year
30 June
2021
$’000
322,488
(268,133)
54,355
7,918
(2,080)
(19,805)
40,388
467
(5,708)
(5,241)
35,147
(42,996)
(7,849)
30 June
2020
$’000
322,069
(233,977)
88,092
163
(8,893)
(23,867)
55,495
1,118
(1,463)
(345)
55,150
123,742
178,892
37. SUBSEQUENT EVENTS
No events have arisen in the interval between the end of the financial year and the date of this report of a material and
unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the
results of those operations, or the state of affairs of the Group, in future financial years.
69
For the year ended 30 june 2021 ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement can be located on its website www.silverlakeresources.com.au.
SECURITIES
At 28 September 2021 the Company had 885,325,509 fully paid ordinary shares and 4,924,507 performance rights on issue.
DISTRIBUTION OF HOLDERS
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001 -
over
Total Holders
Fully Paid
Ordinary Shares
Options
Performance
Rights
4,040
6,765
2,792
3,921
390
17,908
-
-
-
-
-
-
-
-
-
12
9
21
1318 holders held less than a marketable (<$500) of fully paid shares.
VOTING RIGHTS OF SECURITIES
Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there is only one
class of Shares), at meetings of Shareholders of Silver Lake:
a. each Shareholder entitled to vote in person or by proxy, attorney or representative;
b. on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder
has one vote; and
c. on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder, in respect
of each Share held by him or in respect of which he is appointed a proxy, attorney or representative, has one vote for
the Share, but in respect of partly paid Shares, shall have such number of votes as bears the same proportion which
the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited).
Options and performance rights do not carry any voting rights.
70 Silver Lake Resources Limited Annual Report 2021
SUBSTANTIAL SHAREHOLDERS
As at 28 September 2021 the substantial holders disclosed to the Company were:
Registered Holder
Beneficial Owner
Number of
Shares
Percentage of
Issued Shares
Bank of New York Mellon
VanEck Vectors Gold Miners ETF (GDX)
94,524,077
10.72%
Van Eck Vectors Junior Gold Miners ETF (GDXJ)
VanEck Vectors Global Mining UCITS ETF (UCTGDIG)
VanEck Vectors Gold Miners UCITS ETF (UCTGDX)
and
Van Eck Vectors Junior Gold Miners UCITS ETF (UCTGDXJ)
HSBC Nominees Aus Ltd;
Paradice Investment Management Pty Ltd
56,538,472
6.91%
Citicorp Nominees Ltd;
National Nominees Ltd;
JP Morgan Nominees Aust Ltd
TOP 20 HOLDERS OF QUOTED SECURITIES
Holder Name
Number Held
Percentage
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
MCCUSKER HOLDINGS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
BRIKEN NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
HATHOR INVESTMENTS PTY LTD
NETWEALTH INVESTMENTS LIMITED
WESTMINEX PTY LTD
BELL POTTER NOMINEES LTD
20.
VALBONNE II
288,949,499
103,651,992
75,429,546
39,718,792
27,785,058
24,526,940
14,188,784
13,771,051
9,000,000
8,974,698
6,528,664
4,309,281
4,000,000
2,242,409
1,790,673
1,500,000
1,481,394
1,400,000
1,273,885
1,269,910
32.64
11.71
8.52
4.49
3.14
2.77
1.60
1.56
1.02
1.01
0.74
0.49
0.45
0.25
0.20
0.17
0.17
0.16
0.14
0.14
631,792,576
71.36
71
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Suite 4, Level 3
South Shore Centre
85 South Perth Esplanade
South Perth WA 6151
www.silverlakeresources.com.au
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