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A strategic opportunity
in copper
Annual Report 2023
SolGold is an emerging multi-asset
major and leading exploration
company focused on the discovery,
definition, and development of
world-class copper and gold deposits.
CHIEF EXECUTIVE'S REVIEW
BUSINESS MODEL
OUR STRATEGY
p.08 p.10 p.12
Contents
COMPANY OVERVIEW
02 About Us
2023 Highlights
03
04 The Story of SolGold
STRATEGIC REPORT
06 Chair’s Review
08 Chief Executive’s Review
10 Our Business Model
12 Our Strategy
Key Performance Indicators
14
16 Market Overview
18 Operations Overview
20 Financial Review
22 Risk Management
29 Viability Statement
30 Engaging with our Stakeholders
34 Sustainability Report and TCFD Disclosures
47 Non-financial Information Statement
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
48 Chair’s Introduction
49 Overview
50 Corporate Governance Statement
54 Board of Directors
56 Executive Management Team
57 Board Leadership and Company Purpose
Stakeholder Engagement
59
60 Division of Responsibilities
63 Audit, Risk and Internal Control
64 Nomination Committee Report
65 Audit and Risk Committee Report
68 Environmental, Social and Governance
Committee Report
69 Strategy Committee Report
70 Directors’ Remuneration Report
72 Annual Report on Remuneration
Remuneration-at-a-Glance
81
83 Directors’ Report
88 Directors’ Responsibility Statement
Independent Auditors’ Report
90
99 Consolidated Statement of Profit or Loss
and Other Comprehensive Income
100 Consolidated Statement of Financial Position
101 Company Statement of Financial Position
102 Consolidated Statement of Changes in Equity
104 Company Statement of Changes in Equity
106 Consolidated and Company Statements
of Cash Flows
107 Notes to the financial statements
ADDITIONAL INFORMATION
154 GRI Content Index
SOLGOLD PLC ANNUAL REPORT 2023
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Living and working in Ecuador has
been both a privilege and a pleasure.
Our vision remains clear: to consistently
deliver value to our stakeholders."
SCOTT CALDWELL
Managing Director and Chief Executive Officer
SOLGOLD pLC ANNUAL REPORT 2023
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A B O U T U S
Mineral exploration
and development
SolGold is a mineral exploration and
development company headquartered
in Brisbane, Australia.
The Company is a UK incorporated public limited company,
dual LSE and TSX-listed (SOLG on both exchanges) and has a
leading exploration and project team focused on copper-gold
exploration and mine development with assets in Ecuador, Chile
and Australia. SolGold is a large and active concession holder
in Ecuador exploring the length and breadth of this highly
prospective and gold-rich section of the Andean Copper Belt.
SolGold’s primary objective is to discover, define and develop
world-class copper-gold deposits.
SolGold main Corporate Structure
100%
100%
SolGold
Canada Inc.
SolGold
Finance AG
100%
100%
100%
100%
100%
85%
100%
Minera
Cornerstone
Chile Limited
Cornerstone
Exploraciones
Ecuador S.A.
Cornerstone
Ecuador S.A.
Exploraciones
Novomining S.A.
(Cascabel Project)
SolGold Ecuador
S.A.
83.9999%
0.0001%
Exploaurum S.A.
Ecuador Regional
Licences
Australian
Tenements
16%
Empresa Nacional
Minera ENAMI EP
100%
12.5%
Cornerstone
Licences
Bramaderos S.A.
87.5%
Sunstone Metals
Limited
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2 0 2 3 H I G H L I G H T S
2023
Highlights
Leadership
investors
royalty Financing
Appointed new Key
Executives including
Chief Executive Officer
and Chief Financial Officer.
Issue of shares to new
investor Jiangxi Copper
(Hong Kong) Investment
Company Limited.
New royalty financing
partnership with Osisko Gold
Royalties Ltd.
mergers and Acquisitions
Environmental incidents
ZERO incidents in 2023
(2022: zero).
Acquisition with Cornerstone
Capital Resources Inc. to
strengthen the ability of
the Group by consolidating
ownership of the Cascabel
Project, along with a robust
portfolio of other projects
primarily across Ecuador.
SOLGOLD pLC ANNUAL REPORT 2023
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T H E S T O R Y O F S O L G O L D
Ten years of
growth in Ecuador
2012
SolGold enters Ecuador and signs
earn-in agreement for ENSA
(Exploraciones Novomining S.A.)
which holds 100% of the Cascabel
concession
2014
SolGold gains unencumbered
85% ownership of ENSA
2016
SolGold approves
US$22.8 million share
deal with Newcrest /
Ecuador mining
cadastre opened
2013
Environmental licence received
from Ministry of Environment for
drilling at Cascabel concession /
Discovery hole at Alpala deposit
2015
Ecuador and Australia sign MOU on
cooperative ties in the mining sector
2017
SolGold moves from AIM to Main market on the London
Stock Exchange / SolGold commences trading on TSX /
Newcrest announce a further investment of US$40 million in
SolGold / SolGold awarded circa 60 concessions
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2022
Cascabel project PFS published
confirming world-class Tier 1 potential
/ 320,553 tree saplings grown for
1 Million Trees project
2018
BHP declared a major shareholder in
SolGold / Maiden Mineral Resource for
Alpala Deposit at Cascabel announced /
SolGold reaches a total of 76 concessions
in Ecuador / Cascabel bakery opened and
run by only women
2020
Completion of Franco-Nevada
US$100 million Royalty Financing /
Discovery of Cacharposa deposit at
Porvenir / Completion of MRE3 for
Alpala deposit SolGold becomes a UN
Global Compact signatory
2021
Guillermo Lasso elected President of
Ecuador / Maiden Mineral Resource
announced at Tandayama-America
deposit at Cascabel and Cacharposa
deposit at Porvenir / SolGold
reach US$4.5 million spend on
socio-economic development
2023
Completed merger with
Cornerstone Capital Resources,
consolidating ownership of the
Cascabel Project / Appointment of
Scott Caldwell as Group CEO / New
royalty financing partnership with
Osisko Gold Royalties Ltd
2019
Completion of PEA for the
Cascabel project / Start of
1 Million Trees Project
SOLGOLD pLC ANNUAL REPORT 2023
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C H A I R ’ S R E V I E W
Cascabel: A Testament
to Dedication and
Potential
DEAR SHAREHOLDERS AND MEMBERS
OF THE SOLGOLD COMMUNITY…
i'm both honoured and pleased to present to you SolGold's
Annual report. This document stands as a testament to
the numerous strides our company has taken this year and
symbolizes our steadfast dedication to realizing the immense
potential of Cascabel’s Alpala deposit, one of the world’s
most significant copper-gold discoveries in the past decade.
Our merger with Cornerstone Capital Resources Inc. this
year was a momentous milestone. This strategic move has
consolidated SolGold's ownership of our flagship project,
Cascabel, at 100%. This not only underscores our deep
commitment to advancing Cascabel but also grants us a
more definitive direction and alignment for all stakeholders
with our broader vision for its future.
Another significant achievement was the finalization of the
Exploitation Agreement term sheet with the Government of
Ecuador for the Cascabel Project. This document serves as a
blueprint for the mine's future development and operations.
Cascabel, with its vast mineral richness, is poised not only
to enhance SolGold's global stature but also to bolster the
economic landscape of the entire region.
The culmination of the term sheet was a result of our
commitment to responsible mining, and a laser focus
on maximizing stakeholder value. I extend my heartfelt
appreciation to our dedicated team, whose perseverance
ensured a deal aligned with SolGold’s vision and
strategic growth.
The leadership dynamics at SolGold has seen a refresh with
the entry of Mr. Scott Caldwell, our new CEO and Director,
who also presides over SolGold Ecuador as its President and
has also relocated to Quito. Scott's profound mining expertise
is a valuable asset, poised to shape SolGold's trajectory.
Furthermore, we have bolstered our leadership team, with the
addition of Mr. Chris Stackhouse, our Chief Financial Officer.
Chris's financial foresight and acumen, combined with a deep-
rooted understanding of the sector, promises to enhance our
financial planning and execution.
While we acknowledge and thank Mrs. Elodie Grant Goodey
and Mr. Kevin O'Kane for their invaluable contributions to
the Board, we are pleased to welcome Dan Vujcic, whose
expertise in capital markets and mergers and acquisitions
is set to enrich our strategic direction.
Reflecting upon the past, it's clear we've faced our share of
challenges, particularly in areas of corporate governance and
financial responsibility. Addressing and rectifying these issues
has been a focal point, and I can assure our stakeholders that
we are on a continuous journey of improvement.
Significant financial undertakings, like the financing from
Jiangxi Copper (Hong Kong) Investment Company Limited
and the Osisko Gold Royalties Ltd. royalty agreement, have
strengthened our foundation this year. Such partnerships echo
the trust our associates have in SolGold's vision and offer us
the financial resilience to further our ambitions.
This year, SolGold also embarked on a comprehensive
strategic review. Its findings and insights will be pivotal in
steering our strategies, ensuring that every move aligns with
our long-term goals and the quest to consistently enhance
stakeholder value while also engaging with potential partners
and exploring innovative funding arrangements to further
cement our path to success. As we look ahead, a key priority
and challenge we acknowledge is securing adequate funding
to realize Cascabel's true potential.
With the Cornerstone merger, we’ve expanded our property
portfolio. We are currently in the process of evaluating these
assets to discern and prioritize the most promising ventures.
As SolGold refines our approach, the prospect of strategic
collaborations is also on the horizon.
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Cascabel: A Testament
to Dedication and
Potential
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Today we find ourselves at a significant juncture. As the global
momentum shifts towards a greener, carbon-neutral economy,
the demand for copper escalates. SolGold, equipped with
assets like Cascabel, and our highly prospective exploration
portfolio, is uniquely positioned to play a central role in
this transformation.
I must emphasize, SolGold's commitment to the creation
of value for all stakeholders, maintaining good corporate
governance, and looking after the communities where we
operate and focus on responsible and sustainable mining.
In closing, I extend my deepest gratitude to you, our
shareholders. Your unyielding support and trust serve as
our beacon. With the current strategic alignments – from
full ownership of Cascabel, astute financial partnerships,
to a reinvigorated leadership – SolGold stands on the
cusp of a promising future.
Warm regards,
LiAm TWiGGEr
Chairman, SolGold Plc.
28 September 2023
SOLGOLD pLC ANNUAL REPORT 2023
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C H I E F E X E C U T I V E ’ S R E V I E W
Committed to
the community
DEAR SHAREHOLDERS AND VALUED MEMBERS
OF THE SOLGOLD COMMUNITY…
Building on the Chairman's remarks which eloquently
highlighted our achievements, i wish to delve further into
the year's progress, giving you a granular understanding of
our operations, strategies, and vision for the future. Joining
SolGold has not just been a professional commitment but
a personal journey, and living and working in Ecuador has
been both a privilege and a pleasure.
Firstly, I am pleased to share that our robust financial
management has borne fruit. Our current cash balance is
projected to support our operations through to the end of
our fiscal year 2024 without necessitating further immediate
external financing. This financial stability allows us the luxury
of foresight and the ability to strategically plan our next steps.
This year was about evolution, transformation, and focus. As
we embarked on a transformative restructuring journey, it
was clear to us that in order to maximize the potential of the
Cascabel Project, we needed to hone our operational efficacy
and streamline our processes. Our team took bold decisions
to cut non-essential costs, ensuring that every resource is
allocated judiciously, making SolGold leaner yet more resilient.
Our immediate focus is the acquisition of permits for
Cascabel. Our team is working diligently with the relevant
authorities to ensure that all the necessary requisites are met,
and we are optimistic about obtaining these permits within
the coming year. The cooperative and supportive regulatory
environment in Ecuador is evidenced by the recent 33-year
renewal of the Cascabel tenements and the Exploitation
Agreement Term Sheet negotiations and agreement.
Another significant development is the initiation of a revision
of the Preliminary Feasibility Study (PFS) for Cascabel,
targeted to be complete by first calendar quarter of 2024.
Following an internal study, reviewing feedback, evolving
mining methodologies, and taking the dynamic global market
into consideration, we are examining a staged approach to
developing the mine. This revised approach prioritizes mining
high-grade ore initially at a lower tonnage, thereby reducing
initial capital requirements. The subsequent expansions,
envisioned to further harness the mine's potential, will be
funded out of operational cash flows. If successful, this strategy
would significantly reduce the initial capital requirements and
the development risk, which we believe increases the ability for
the Company to finance the development itself, and increases
the number of interested parties capable of developing a lower
capital-intensive project.
The synergy between living in Ecuador and overseeing our
projects here has given me unmatched insight. Ecuador,
with its rich mineral deposits and a supportive governmental
framework, offers an unparalleled opportunity for growth in
the mining sector. We are deeply committed to ensuring that
our operations not only contribute positively to Ecuador’s
economy but also set the benchmark for responsible and
sustainable mining practices.
Our prime focus is to ensure that our projects, while
promising, are fundamentally sound and de-risked for the
future. It's not just about recognizing potential, but about
meticulously preparing our assets for future development.
The actions undertaken this year, from a comprehensive
review of our operations to decisive financial partnerships,
have been geared towards this goal.
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Our vision remains clear:
to be at the forefront of
the mining industry, to
operate with integrity,
and consistently deliver
value to all stakeholders."
To our shareholders – your steadfast support during this
transformative phase has been invaluable. Restructuring and
cost-cutting measures, while essential, require fortitude and
vision. Your trust has emboldened us to take the necessary
steps to ensure SolGold's sustainable success.
As we stride into the future, our collective vision is clearer
than ever. While our Chairman focused on the larger
milestones and the promising path ahead, my commitment
to you is that behind these milestones is a team relentlessly
working on the minutiae, ensuring that every aspect of
SolGold operates at its optimum.
In conclusion, as we steer SolGold through these
transformational times, our vision remains clear: to be at the
forefront of the mining industry in Ecuador, to operate with
integrity, and to consistently deliver value to all stakeholders.
Your belief in our vision fuels our ambitions, and with the
strategic undertakings in place – from an improved cash
balance, anticipated permits, to a more cost-effective mining
strategy – we are poised for an even more promising future.
Thank you for your continued trust and support. Here's to
forging ahead, together.
Warm regards,
SCOTT CALDWELL
Chief Executive Officer
28 September 2023
SOLGOLD pLC ANNUAL REPORT 2023
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O U R B U S I N E S S M O D E L
Delivering copper at a time when
supplies are declining and the world
is demanding more copper for a
transition to a net zero future
OUr CApiTAL inpUTS
HOW WE CrEATE vALUE
NATURAL
Mineral Resource. We use energy, fuel and
water to operate our activities. We use these
resources as efficiently as possible to minimise
our environmental footprint.
HUMAN
We invest in our workforce, ensuring they
have the right skills, capabilities and career
prospects to match our growth ambitions.
SOCIAL
We have established a strong social licence
to operate in our host countries and local
communities which supports our current
operations and exploration activities.
MANUFACTURED
We rely on drill rigs, plant and site infrastructure.
FINANCIAL
Disciplined capital allocation to
enable us to invest in our business and
deliver strong shareholder returns.
We generate value by discovering,
defining and developing world-class
minerals deposits. We prioritize capital
using an established systematic and
disciplined approach to exploration,
targeting grassroots opportunities to
ensure low-cost entry into projects.
COST
CONTROL
ECONOMIC
DISCOVERIES
PROJECT
ADVANCEMENT
SHARE PRICE
PERFORMANCE
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SHArinG THE vALUE WE CrEATE
LOCAL EMPLOYMENT
• 99% Ecuadorian employees
HOST COMMUNITIES
• US$764,365 invested in socioeconomic projects
delivered in partnership with Local Authorities of
the communities where we operate (FY2023)
• 16.4% of procurement budget spent locally in the
communities where we operate (FY2023)
TRUSTED PARTNER
• US$900,000 investment in partnership with Franco-
Nevada to deliver a waste and recycling infrastructure
for the local parishes of Lita and La Carolina in the
Imbabura province of Northern Ecuador
SOLGOLD pLC ANNUAL REPORT 2023
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O U R S T R A T E G Y
The exploration for copper
and gold is core to our
business model
SolGold continues to
pursue its strategy of
unlocking value from
its extensive portfolio
of mineral assets."
We generate value by discovering, defining and developing
world-class mineral deposits. We maximise funds using
an established systematic and disciplined approach to
exploration, targeting grass roots opportunities to ensure
low-cost entry into projects. Our vision is to become
a leading copper and gold miner underpinned by our
exceptional portfolio of project options.
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OUr STrATEGiC ApprOACH
Corporate
Development
e
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p
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m
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a
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ple th
at’s p
orie
nte
at re
ssible
e
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Supporting
Ecuador to be
the next copper
frontier when
the world needs
it most
Net positive impact
and carbon neutral
ext Tier 1
g
pin
evelo
Asset
e N
D
th
portfolio
Development
Sustainable
Development
Key Strategic Themes
Team orientated people that
redefine what’s possible
Developing the capabilities and culture that enables
the development of a copper mine
Global leaders in copper discovery
Leveraging our first mover country advantage
to identify pipeline of economic projects
Developing the next tier 1 asset
Advancing a commercially attractive copper
development
Zero harm
Commitment to eliminating all forms of harm, including
injuries, illnesses, and environmental impacts, through
proactive safety measures and sustainable practices
Secure competitive funding
Securing funding to continue to develop Cascabel
and unlock value from our exploration portfolio
SOLGOLD pLC ANNUAL REPORT 2023
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K E Y P E R F O R M A N C E I N D I C A T O R S
During this phase of SolGold’s growth, the Directors diligently track
key performance indicators related to funding risk, primarily focusing
on the projected cash flows for general administrative expenses and
those on a project-by-project basis.
This year, the Company has successfully secured the necessary financing for its activities, as outlined in the Financial
Statements section of our Annual Report. Each mineral exploration project’s performance is evaluated using measures
unique to that project.
Mid-year, the Company underwent a strategic shift with the successful merger of Cornerstone Capital Resources Inc.
(now known as SolGold Canada Inc.), accompanied by a reconstitution of management. Following the strategic shift,
the Board has identified the following KPIs to be used to track Company performance in 2024:
1
ZErO HArm
Prioritizing the health, safety,
and well-being of our employees,
contractors, communities, and
the environment. Actively work
to minimize our environmental
footprint and integrate sustainable
practices throughout all operations,
while ensuring the safety and
wellness of all stakeholders.
Consistently monitor and report
on both safety performance and
environmental compliance to uphold
the highest standards in every
aspect of our work.
4
ADvAnCE pErmiTTinG
rEQUirED FOr CASCABEL
2
STrEnGTHEn
BALAnCE SHEET
3
DELivEr rESULTS OF THE
UpDATED prE-FEASiBiLiTy
STUDy
Aim to enhance our financial
position by exploring diverse
sources of liquidity, optimizing
resource allocation, and managing
expenditures effectively.
Focus on completing and presenting
the results of the Preliminary
Feasibility Study (PFS) for the
phased approach development
of Cascabel.
5
mAXimiZE vALUE OF EXTEnSivE
pOrTFOLiO OF minErAL
EXpLOrATiOn ASSETS
6
EnGAGEmEnT WiTH
STAKEHOLDErS
Prioritize the progression of all
necessary permitting for Cascabel,
working diligently with the relevant
authorities to meet regulatory
requirements and facilitate the
project’s advancement.
Leverage our diverse portfolio
of mineral exploration assets to
maximize value, by strategically
advancing promising ventures and
exploring potential collaborations
and partnerships.
Prioritize robust engagement
with stakeholders, including
shareholders, partners,
communities, governments, and
other relevant entities, to foster
transparent communication, mutual
understanding, and collaborative
relationships. Develop and
implement strategies to actively
involve stakeholders in decision-
making processes, address their
concerns, and create shared value.
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M A R K E T O V E R V I E W
COppEr mArKET OUTLOOK
FUnDAmEnTAL DrivErS:
Global copper demand in 2022 grew to just over 22MT,
just under 3% from 2021. The foundational drivers
of copper demand over the past two decades have
been electrification, urbanization, digitization, and
industrialization, particularly in emerging economies.
China has been at the forefront of this demand, with its
refined copper consumption growing from 5Mt in 2000
to over 13Mt in 2022, accounting for more than half of
global consumption. However, the Chinese economy has
recently experienced a slowdown, leading to moderate
growth in copper consumption.
rEnEWABLE EnErGy TrAnSiTiOn:
As part of the Paris Agreement, a global initiative to
fight climate change, signatories have agreed a need
to limit the increase in global temperatures to no more
than 2 degrees Celsius compared to pre-industrial levels.
Achieving this target requires a rapid shift in our energy
systems, known as the Accelerated Energy Transition
(AET). This shift involves moving away from fossil fuels
and embracing renewable energy sources like wind,
solar, and electric vehicles.
The global transition towards renewable energy is
emerging as a significant driver for copper demand.
Copper's excellent conductivity and durability make
it indispensable in renewable energy systems like
solar panels, wind turbines, and electric vehicles. This
transition is not only sustaining but is also expected to
accelerate copper demand in the years to come.
CUrrEnT mACrOECOnOmiC
FACTOrS:
Rising interest rates have been a recent development
affecting the global economy and, by extension, the
copper market. This has led to a slowdown in economic
growth, although recovery is still expected. The long-
term outlook for copper remains positive despite these
challenges, particularly due to recent supply deficits
coming out of Latin America as a result of disruptions
at various operations in the region.
mArKET vOLATiLiTy:
The copper market has seen significant fluctuations,
influenced by geopolitical tensions, such as the Russia-
Ukraine war, and the ongoing Covid-19 restrictions in
China. Despite these challenges, low visible inventories
and ongoing copper mine supply disruptions are
expected to offer some support to prices.
SUppLy SiDE:
McKinsey forecasts a copper supply gap of 6.5 million
tonnes by 2031. These projections suggest that without
new mining projects, there could be a substantial
shortfall in copper supply, jeopardizing the transition
to renewable energy and other green technologies.
FUTUrE OUTLOOK:
Global refined copper consumption is projected to grow
by 2.2% in 2023. Over the medium to long term, copper
is expected to benefit from an economic recovery
increasingly focused on green end-use sectors. This is
anticipated to support an above-average annual global
refined consumption growth of 30% from 2023 to 2031,
and continuing to grow reaching an estimated demand
of 53Mt of refined copper by 2050.
CASCABEL STrATEGiC
pOSiTiOninG:
The Alpala deposit at Cascabel, with 9.9Mt million
tonnes of copper in the Measured plus Indicated
resource category, is strategically positioned to benefit
from this structural shift and the long-term demand for
copper, particularly in the renewable energy sector.
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GOLD mArKET OUTLOOK
ECUADOr’S UnTAppED minErAL WEALTH
In today's complex economic landscape, gold continues
to be a resilient asset, offering a hedge against
various risks including geopolitical tensions and
economic uncertainties. While rising interest rates have
traditionally put pressure on gold prices, the current
softening of U.S. economic data suggests that the
Federal Reserve may pause its rate hikes. This scenario
is bolstering gold's role as a safe haven, attracting both
individual and institutional investors through ETFs.
For those invested in gold development projects like
SolGold, this is particularly good news.
SolGold's Alpala deposit boasts a substantial 21.7
million ounces of gold in the Measured plus Indicated
resource category, making it a promising source of gold
production for years to come. In summary, the multi-
faceted drivers of the gold market make it a compelling
investment, especially for those looking to diversify their
portfolio and hedge against future uncertainties.
Ecuador is emerging as a global hotspot for copper
exploration, underscored by the groundbreaking
discoveries made in recent years. Located at the
northern end of the prolific Andean Copper Belt, which
is home to some of the world's largest copper mines,
Ecuador offers untapped geological potential. SolGold,
a leader in the field, has been at the forefront of these
developments with its experienced team of Ecuadorian
geologists who have discovered significant mineral
wealth. The Company's flagship project, Cascabel, is
home to the Alpala deposit, one of the most significant
copper and gold discoveries of the past decade. While
Ecuador's mining sector is still in its nascent stages, with
only a few large-scale mines currently in operation, the
landscape is rapidly changing. High-profile development
projects are advancing through feasibility studies, and
with continued investment, the number of operational
mines is expected to grow. Importantly, SolGold's
operations are situated in regions that are not impacted
by the recent environmental concerns, allowing the
Company to maintain strong relationships with the
government and local communities. This positions
SolGold and its Alpala deposit as a cornerstone for
Ecuador's burgeoning mining industry.
SOLGOLD pLC ANNUAL REPORT 2023
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O P E R A T I O N S O V E R V I E W
The Alpala deposit is the main
target in the Cascabel concession,
SolGold’s flagship project
Ecuador
Cascabel project
Location: Imbabura province, Northern Ecuador
Ownership: 100%
Tenement Area: 50km2
primary Targets: Copper-gold porphyry
Over the reporting period, SolGold underwent significant
organizational changes, including the completion of a merger
with Cornerstone Resources Inc, restructuring of the executive
management team, and the right-sizing of operations around
the globe. With significantly reduced overheads, the Company
is focused on managing capital and heavily focused on
continuing to de-risk the Cascabel Project.
The Cascabel project will continue to move forward efficiently
and cost-effectively. The following activities will focus on
continuing to advance and “de-risk” the project:
• Updated pre-feasibility study incorporating a staged
development mine plan.
• Securing the property required for essential infrastructure
such as the tails deposition site, the concentrate and tails
pipeline route, etc.
• Securing the critical path permits required for
development.
Exploration programme – Ecuador
The Company is currently prioritizing capital to advance the
Cascabel Project. Due to capital constraints, all technical
and field work was suspended during the period. Given
the extensive and highly prospective land package held by
SolGold, it continues to keep all concessions in good standing.
Australia
SolGold holds tenements across central and southeast
Queensland, through its wholly owned subsidiaries, Central
Minerals Pty. Ltd. and Acapulco Mining Pty. Ltd. Exploration
programmes were reduced to a minimum in order to focus on
Ecuador based opportunities.
Outlook Fy2024
Corporate
1. Corporate restructuring and Liquidity
In the latter half of FY2023, SolGold embarked on a corporate
reorganization initiative aimed at optimizing costs, reducing
headcount, and refining capital allocation strategies. This
transformation is underpinned by our commitment to financial
sustainability and de-risking the pivotal Cascabel Project. With
restructuring largely concluded at both corporate and local
levels, our current financial assessments project that our cash
reserves will support operations into mid 2024. As we usher
the Cascabel project further into the technical evaluation
and permitting stages, we remain optimistic about continued
robust investment interest, reminiscent of past trends.
2. Strategic review and its potential: Charting a
Sustainable Future
In our commitment to upholding transparency and forward-
thinking, the ongoing strategic review represents not just
an internal reflection but also a comprehensive examination
of external opportunities and partnerships. Here's what this
review aims to achieve for SolGold:
• Optimization and Alignment: At its core, the strategic
review is an exercise in refining our direction. We're
delving into each facet of our operations to ensure optimal
resource allocation and that every venture resonates with
our overarching vision.
• Unlocking value & Funding potential: Beyond internal
appraisal, the review encompasses a broad outlook on
potential partnerships, funding arrangements, and other
strategic alliances. We believe SolGold harbours untapped
avenues of value and growth potential. By considering
potential collaborations or even divestments, we aim to
realize and amplify this inherent value for our shareholders.
• risk management: Identifying and addressing potential
risks allows us to chart a course that’s both ambitious and
grounded. Our objective remains to ensure that SolGold's
growth is resilient, sustainable, and in the best interests of
all stakeholders.
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Exploration
SolGold's exploration endeavors outside of Cascabel are
currently undergoing a review, in line with our corporate
restructuring measures. In tandem, efforts to identify potential
JV/earn-in collaborators are in motion. Beyond essential
expenditures required to maintain property compliance, we
do not currently anticipate significant work agendas for these
explorations in FY2024.
Summary
The previous year was foundational for SolGold; it was a
period of introspection, re-evaluation, and restructuring.
We took the time to refine our vision, reassess our assets,
and realign our strategies to better position ourselves in the
evolving landscape of the mining industry. As we pivot to the
current year, our focus shifts from restructuring to strategic
progression. We are poised to harness the opportunities that
lie ahead, with the advancement of Cascabel at the centre of
our endeavors. Drawing from our strengthened foundation,
we anticipate a year of dynamic growth, collaboration, and
tangible progress ahead.
Qualified person:
Information in this report relating to the exploration results is
based on data reviewed by Mr. Santiago Vaca (M.Sc.P.Geo.).
Santiago joined SolGold in 2014 as Chief Geologist for the
Cascabel project and is an Ecuadorian geologist with over
18 years of experience in mineral exploration and research.
Mr. Vaca holds a Professional Geoscientist Certification (P.Geo)
granted by the Association of Professional Engineers and
Geoscientists of Alberta (APEGA) in Canada and is a Qualified
Person for the purposes of the relevant LSE and TSX Rules.
Mr. Santiago consents to the inclusion of the information in
the form and context in which it appears.
• Futureproofing with partnerships: The mining industry,
shaped by global events, technological shifts, and market
dynamics, is ever-evolving. Our strategic review isn't just
about adapting to change but leading it. By identifying
and fostering relationships with potential partners, we
aim to ensure SolGold remains at the forefront of industry
innovation and growth.
• Funding Flexibility: As part of the review, we are exploring
a diverse range of funding arrangements. Whether it's
equity, debt, partnerships, or other innovative financial
solutions, our goal is to secure the best arrangements that
provide us with the liquidity and financial flexibility to drive
our ambitious plans.
In conclusion, the strategic review is a holistic endeavour,
one that combines introspection with a keen eye on
external opportunities. It's about ensuring SolGold is
poised for sustainable success, and we remain excited to
share its outcomes with our stakeholders as we solidify
our path forward.
Cascabel project
1. phased Development Study
SolGold is actively engaged in devising a phased development
plan for the Cascabel Project's mine and concentrator
components. The results of this initiative will be encapsulated
in a revised pre-feasibility study technical report. The
overarching aim of this study is to establish the technical
and financial viability of a phased Cascabel development.
Should the findings be favourable, it would notably mitigate
development risk, streamline timelines, and reduce initial
capital expenditures. Decisions concerning Cascabel's
progression will be tethered to this study's insights.
2. permitting
• Exploration permit ("Early Works"): The permit
application has been submitted, and its approval will
catalyze the inauguration of initial site undertakings,
predominately the development drifts leading to the ore
body. Anticipations are set on acquiring the Exploration
Permit before 2023 concludes.
• Other Key permits: Further pivotal permit milestones and
developments will be communicated as they crystallize in
the upcoming months.
SOLGOLD pLC ANNUAL REPORT 2023
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F I N A N C I A L R E V I E W
Highlights
The Group achieved several milestones during the financial
year ended 30 June 2023. These have helped to progress the
development of SolGold, in particular the development of the
Cascabel project and have included:
• Successful placing of 180,000,000 ordinary shares to
new investors, generating aggregate gross proceeds of
US$36,000,000;
• The receipt of US$50,000,000 net smelter returns ("NSR")
royalty financing from Osisko Gold Royalties Ltd (“Osisko”)
from the Cascabel licence area;
• The merger with Cornerstone Capital Resources Inc.
(now renamed to SolGold Canada Inc.) to consolidate
100% ownership of the Cascabel project along with a
robust portfolio of other Ecuadorian projects;
• Exploration and evaluation expenditure of US$43,420,485
for the year (2022: US$66,066,237) (refer Note 13);
• Continued acquisition of US$1,904,767 (2022:
US$3,836,561) in landholdings in the Cascabel project area
in anticipation of infrastructure requirements for project
development;
• Operating loss after tax of US$50,439,745
(2022: US$1,701,565); and
• Cash balance of US$32,481,606 (2022: US$26,102,133)
at 30 June 2023.
results
The Group incurred a loss after tax of US$50,439,745
(2022: US$1,701,565). The increase in the loss after tax is
due to US$16,054,495 in acquisition costs related to the
Cornerstone merger and remeasurement gain of the NSR
financial liability of US$35,003,704, which occurred in
the prior financial year. Overall administrative expenses
remained consistent from 2022, although there are some
noteworthy costs.
Employment expenses increased by US$5,188,037 as a result
of one-time redundancies for staff terminated in the Brisbane
and London offices. Additionally, legal fees increased by
US$1,362,099.
The Group recognised a total other comprehensive profit
of US$820,283 (2022: loss of $1,742,845) for the financial
year ended 30 June 2023. A loss of US$69,627 (2022:
US$1,205,636) was recognised representing the mark-
to-market adjustment on the Company’s investment in
Cornerstone Capital Resources Inc. prior to acquisition. For
the financial year ended 30 June 2023 the Group recognised
a loss of US$283,344 (2022: US$702,938) on translation of
foreign operations. The Group also recognised a decrease in
Ecuadorian post-employment benefits of US$1,173,254.
Statement of financial position
Total assets at 30 June 2023 were US$478,339,250 compared
to US$429,162,612 at 30 June 2022 representing an increase
of US$49,176,639.
Current assets overall increased by US$7,103,845, which was
mainly due to an increase in cash and cash equivalents.
Non-current assets increased by US$42,072,794 mainly
due to increases in exploration and evaluation assets,
classified as intangible assets. Exploration assets increased
predominantly due to the exploration expenditure incurred at
Cascabel (US$30,542,275) and the various regional projects
US$18,043,530, net of impairments and impairment reversals.
Property, plant and equipment increased by US$1,584,890
primarily due to strategic land purchases.
Total liabilities at 30 June 2023 were US$165,413,461
compared to US$97,914,105 at 30 June 2022 representing
an increase of US$67,499,356, including the effect of receipt
of NSR royalty financing from Osisko.
Current liabilities at 30 June 2023 were US$13,784,848
compared to US$6,924,210 at 30 June 2022, representing
an increase of US$6,860,638. Trade and other payables
increased by US$6,180,361 due to the timing of payments
post 30 June 2023.
Non-current liabilities increased by US$60,638,718, due to
the receipt of US$50,000,000 royalty financing from Osisko
and interest of US$13,148,231 accrued on NSR arrangements.
This was offset by a decrease of $2,147,000 in the value of the
derivative liability associated with the BHP options issued in
December 2019.
Given that the Company will need to secure further funding
to meet the Group’s future exploration and working
capital commitments, the situation gives rise to a material
uncertainty as there can be no assurance the Company
will be able to raise the required financing in the future.
Notwithstanding this material uncertainty, the Directors
consider it appropriate to adopt the going concern basis of
accounting in the preparation of the financial statements
and prepare the financial statements on a going concern
basis given the Company’s proven ability to raise
necessary funding.
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Cash flow
Cash expenditure (before financing activities) for the
year ended 30 June 2023 was US$77,585,941 (2022:
US$82,658,324). Most of this cash spend relates to cash
expenditure on the Group’s exploration expenditure
overwhelmingly in Ecuador (US$43,297,918) and property,
plant and equipment and strategic land purchases
(US$1,670,405).
During the financial year ended 30 June 2023,
US$36,000,000 cash was received from the issue of shares
via private placements (2022: US$nil) and US$50,000,000
cash was received from royalty financing (2022: US$nil).
Accordingly, the net cash inflow of the Group for the year
ended 30 June 2023 was US$6,528,739 (2022: outflow of
US$83,143,710).
Cost management and performance
against budget
To ensure the business’s continued success, SolGold must be
adequately funded at all times in order to retain employees,
meet expenditure requirements and keep operations running
across all projects. As part of the Group’s cost management
strategy the Group has implemented several cost reduction
initiatives to preserve cash. These include, but are not limited
to, ongoing reviews of budgets and regular forecasts to
ensure effective use of cash in core activities, reductions
of corporate overheads where possible and active working
capital management.
Financial controls and risk management
The Board regularly reviews the risks to which the Group is
exposed and ensures through Board Committees and regular
reporting that these risks are managed across all sectors of
the Company. The Audit and Risk Committee is responsible
for the overview of the Group’s internal financial controls and
financial risk management systems.
Equity
Since the date of the last Annual Report, the Company has
issued the following equities:
On 5 July 2022, the Company issued 1,336,182 new ordinary
shares to Mr. Darryl Cuzzubbo, former Chief Executive Officer
and Managing Director in relation to his sign-on bonus.
These shares had restrictions placed on their tradability in
accordance with the vesting schedule for the shares.
On 12 December 2022, the Company successfully placed
180,000,000 ordinary shares to investors including Jiangxi
Copper (Hong Kong) Investment Company Limited, Maxit
Capital LP, Mr. Scott Caldwell, Chief Executive Officer and
Mr. James Clare, Non-Executive Director.
On 24 February 2023, the Company completed its merger
with Cornerstone Capital Resources Inc., resulting in the issue
of 525,954,360 shares to former shareholders of Cornerstone
Capital Resources Inc. As part of the acquisition, 33,778,125
replacement options were granted to former option holders
of Cornerstone Capital Resources Inc.
On 17 March 2023, the Company issued a total of 30,000,000
share options over ordinary shares of the Company to Mr.
Scott Caldwell, Chief Executive Officer.
On 18 April 2023, the Company issued a total of 6,000,000
share options over ordinary shares of the Company to Mr.
Chris Stackhouse, Chief Financial Officer.
A total of 7,000,000 share options expired during the
financial year ended 30 June 2023.
At year end the Company had a total of 3,001,106,975 fully paid
ordinary shares and 95,028,125 options in issue. At the date of
this report the Company had a total of 3,001,106,975 fully paid
ordinary shares and 95,225,000 options on issue, the difference
from year end being 10,500,000 share options over ordinary
shares of the Company being issued to employees.
SOLGOLD pLC ANNUAL REPORT 2023
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R I S K M A N A G E M E N T
We recognise that risks can have
a safety, environmental, financial,
operational or reputational impact
Our approach
SolGold recognises that effective risk management is key to
how we do business and forms a key part of our strategy to
safely deliver sustainable value to all our stakeholders.
We recognise that risks can have a safety, environmental,
financial, operational or reputational impact. An
understanding of risk guides our requirements to anticipate,
design, plan and adequately respond to internal and
external events. This ensures that proper incident response
and effective monitoring can be implemented to minimise
anticipated risks and reduce harm and disruption to people,
the environment and the viability of the SolGold business
model.
Enterprise risk management
The Company continues to invest time and resources to
continuously improve the Company’s risk management
systems.
project risk management
The PFS for our Cascabel project was published in April
2022 including consideration of environmental, social and
economic impacts. Work on a revised PFS is underway
evaluating further upsides and optimisations. As part of the
PFS, the study team conducted an integrated risk workshop
to identify, record and discuss known and anticipated risks,
which has considered and will be included in future phases of
the project and formed the basis of the creation of the project
risk register. A further review of these risks will be conducted
prior to completion of upcoming studies – closing those that
have been effectively treated or managed and communicating
recommended actions for enduring high-rated risks.
risk appetite of the Group
Resource exploration, evaluation and development is a high-
risk industry. There is no certainty that the investments made
by the Group in the exploration of properties will result in
discoveries of commercial quantities of minerals. Exploration
for mineral deposits involves risks which even a combination
of professional evaluation and management experience may
not eliminate. Significant expenditures are required to locate
and estimate ore reserves, and further the development of
a property with commercial potential. There is no assurance
the Group has, or will have, further commercially viable
ore bodies. Capital expenditures to bring a property to a
commercial production stage are significant and require
special skills and long-term planning. There is no assurance
that the Group will be able to arrange sufficient financing to
bring ore bodies into production. Permitting is seen by the
Group to have the highest risk as obtaining the necessary
permits for exploration and development can be a complex
and time-consuming process, and the duration and success
of the Group’s efforts to obtain permits are contingent upon
many variables not within its control.
Risk appetite reflects the nature and extent of risk that
is acceptable to SolGold whilst still able to achieve goals
and objectives. This appetite is considered based on the
consequences of these risks materialising and takes into
account all internal and external factors. SolGold will take
strong strategic corporate action if any risk exceeds its
established appetite. The following are principal risks to which
the Group and Company may be exposed from time to time:
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Kpis:
1
2
3
Zero harm
Strengthen balance sheet
Deliver results of the updated Pre-Feasibility Study
4
5
6
Advance permitting required for Cascabel
Maximize value of Extensive Portfolio of Mineral Exploration Assets
Engagement with Stakeholders
Trend:
Increased
Constant
Reduced
risk: Health & Safety
DESCripTiOn
Safety risks are inherent in exploration and mining activities and include both
internal and external factors requiring consideration to reduce the likelihood
of negative impacts. The current highest risk, due to the geographical spread
of exploration activities, is associated with transportation of people to and
from the project areas. This includes transit vehicle accidents with a potential
for fatalities due to vehicle impacts or rollovers. In addition, the remote
locations of drilling activities increase the risk of delays in gaining access to
effective emergency medical assistance resulting in delayed treatment in
the event of incident or accident. The expansion of the Group’s footprint in
Ecuador also potentially increases safety risk.
Health and safety reviews, inspections, audits and hazard assessments are
completed on a regular basis to ensure effective procedures and controls
are in place. Any incident resulting in serious injury or death may result in
litigation and/or regulatory action (including, but not limited to suspension
of development activities and/or fines and penalties), or otherwise adversely
affect the Group’s reputation and ability to meet its objectives.
The Group’s exploration and business activities were impacted by the
COVID-19 pandemic in previous years. The Group has adapted the way it
conducts its business in response to the pandemic and follows mandates
of various and relevant government bodies as well as responding to the
concerns of local communities in Ecuador.
Kpis: 1
KEy miTiGATOrS
Trend:
The executive management team and onsite
managers adhere to the highest safety protocols and
place priority on ensuring all employees, contractors
and suppliers are always safe.
The Transport Plan that incorporates safe travel for
people and a site safety system that incorporates
hazard recognition, training, monitoring and
continuous improvement will alleviate proposed
safety risks and limit unnecessary accidents.
This risk remained constant during the current year.
risk: Social Licence to Operate
DESCripTiOn
Kpis:
6431
KEy miTiGATOrS
Trend:
Strong community relations are fundamental to creating safe, sustainable
and successful operations. Losing the support from any individual
community would be a risk for activities in that area and to the Company’s
broader reputation.
The Group´s concessions are near and, in limited areas, overlap with local
communities, and local approvals are often needed in order to access and
operate in these areas.
SolGold has ongoing community engagement and
socialisation programmes in place in order to best
understand the needs of local communities. The
possible risks associated with the relocation of
communities during the development stage will
be managed with the community members’ best
interests at the core of all decisions.
The Group often enters into agreements with local communities,
groups or individuals that address surface access, road or trail usage,
local employment, social investment and other key issues. Every local
stakeholder relationship, however, requires ongoing dialogue and
relationship management.
Events do not always unfold as intended or according to plan, however, and
the status of relations can deteriorate for any number of reasons, including,
but not limited to:
•
Influences of local or external political or social representatives or
organisations.
• Shifts in the agendas or interests of individuals or the community as
a whole.
• The Group´s inability to deliver on community expectations or its
commitments.
• Concerns stemming from communities’ historic or recent experiences
with legal and/or illegal miners.
However, if under extreme circumstances the Group were to lose its social
licence with one or more communities and be unable to regain it, this could
impact the viability of the project. By the same token, if the Group is unable
to obtain social licences from some communities, initial exploration could
be prevented.
• The development of a relocation and resettlement
plan will be developed with close consultation
and involvement with the community, government
bodies and other stakeholders.
• The development of a transport plan in
conjunction with government, community and
other stakeholders.
• Employment, training and development plan that
continues to give preference to local communities.
• Maintaining a robust grievance and obligations
register that promotes transparency and trust.
• Maintain independent community monitoring
of water and continue water recycling and
minimisation of river water extraction.
• Work closely with the community to identify
safe and acceptable alternative access.
This risk has increased during the current year.
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CONTINUED
risk: people and Leadership risk
DESCripTiOn
Kpis:
32
KEy miTiGATOrS
Trend:
Establishing an effective composition of the Board, succession processes
and evaluation methods is critical to the success of the Group. The Group
is dependent on recruiting and retaining high performing leaders focused
on managing the Group’s interests, requiring a large number of persons
skilled in the project development, engineering, financing, operations
and management of mining properties.
Competition for such persons is high in the current commodity price
environment. The inability of the Group to successfully attract and retain
highly skilled and experienced executives and personnel could have
a material adverse effect on SolGold’s business, its ability to attract
financing and the results of operations. In-country industrial relations
risk, and the potential increase in politicisation of the country, places
a risk on the Group and the country’s focus on the development of a
mining industry.
The Company continues to develop its governance across the
business to ensure best practices and transparency.
SolGold actively minimises this risk by ensuring there is
a proper feedback and grievance process in place across
the Group for all staff, supporting and growing employees’
careers and ensuring they are properly equipped and
receive support at all times.
Building and maintaining an Industrial Relations
Strategy for Ecuador through in-country specialist
expertise, designing recruitment plans to include local
and indigenous people and engaging skilled front-line
workers will help mitigate this risk. SolGold has during the
Financial Year increased the members of its Community
Engagement team and invested in training.
The Company has a number of committees in place
(Nomination, Remuneration and Audit and Risk
Committee) to develop and implement the most
appropriate criteria and succession tools to hire and
retain the right people in the workforce.
This risk increased during the current year.
risk: Geopolitical, regulatory and Sovereign
DESCripTiOn
Kpis:
3
4 6
KEy miTiGATOrS
Trend:
SolGold has a successful track record of operating in
Ecuador, Australia and Chile and the Group actively
monitors political developments on an ongoing basis.
The management team aims to maintain open working
relationships with local authorities in the countries where
the Group operates.
Ensuring the Company maintains strong relationships with
regional and national government agencies, as well as
community members from our area of influence, is a key
mitigator for minimising disruptions.
The Company to date has not had any security threats, due
to the implementation of our extensive safety management
and security protocols in place. SolGold will continue to
work closely with government agencies to support regional
security efforts as well as continuously advance and update
security measures as operations and activities increase. The
current security plan in place is highly effective and tailored
to the Company’s needs and is reviewed regularly and in
light of changing circumstances.
This risk has increased during the current year.
SolGold’s exploration tenements are located in Ecuador, Australia and
Chile and are subject to the risks associated with operating both in
domestic and foreign jurisdictions.
Operating in any country involves some risk of political and regulatory
instability, which may include changes in government, negative policy
shifts, changes to the tax and royalty regime and civil unrest. In addition,
there is a risk that due to the deterioration of the macroeconomic
situation, governments may consider imposing currency controls and
limitations on capital flows. Specifically, under Ecuadorean law, citizens
have a constitutional right pursuant to a judicial process, to apply to
the Constitutional Court for approval for a public referendum on any
subject matter. In 2019, an application was made to the Ecuadorean
Constitutional Court to request to have a referendum held, the effect of
which was to seek to stop mining activities at the Cascabel concession.
The Constitutional Court unanimously rejected the application. However,
despite the Constitutional Court ruling on that particular occasion, no
assurance can be given that at some future time a similar application
designed to seek to stop mining at Cascabel or in any other location of
interest to the Group, will not be made. Anti-mining activism involving
protests or blockage of access is a risk for operational areas.
The availability and rights to explore and mine, as well as industry
profitability generally, can be affected by changes in government
policy that are beyond the control of SolGold. These factors may have a
negative impact on the ability of the Group to secure external financing
and an adverse effect on the Group’s market value and the going
concern of the business as whole.
The 2023 elections in Ecuador have heightened geopolitical risk due
to uncertainties around regime changes potential impacts on policy
and regulatory environment. Despite these challenges, the Company
remains optimistic, believing that regardless of the election outcome,
investor confidence in Ecuador will endure.
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risk: Concession Title
DESCripTiOn
Kpis:
43
KEy miTiGATOrS
Trend:
SolGold’s concessions and interest in concessions are subject to the
various conditions, obligations and regulations which apply in the
relevant jurisdictions including Ecuador, Australia (Queensland) and
Chile. If applications for title or renewal are required, this can be at the
discretion of the relevant government minister or officials. If approval
is refused, SolGold will suffer a loss of the opportunity to undertake
further exploration, or development, of the tenement.
Successful relationships with governments, senior in-
country officials and other key external stakeholders are
built and maintained. This includes delivering on and
adhering to the conditions attached to the tenement
grant documents. SolGold currently knows of no reason
to believe that current applications will not be approved,
granted or renewed.
Some of the properties may be subject to prior unregistered
agreements or transfers of native or indigenous peoples’ land claims
and title may be affected by undetected defects or governmental
actions. No assurance can be given that title defects do not exist. If
a title defect does exist, it is possible that SolGold may lose all or a
portion of the property to which the title defects relate.
risk: Environmental
DESCripTiOn
The Group’s exploration activities are required to adhere to both
international best practice and local environmental laws and
regulations. Any failure to adhere to globally recognised environmental
regulations could adversely affect the Group’s ability to explore under
its exploration rights. Significant liability could be imposed on SolGold
for damages, clean-up costs, or penalties in the event of certain
discharges into the environment, environmental damage caused by
previous owners of property acquired by SolGold or its subsidiaries, or
non-compliance with environmental laws or regulations.
SolGold proposes to minimise these risks by conducting its activities in
an environmentally responsible manner, in accordance with applicable
laws and regulations. Nevertheless, residual risks inherent in SolGold’s
activities could lead to financial liabilities.
During 2020, the Ecuadorian government clarified the
timing surrounding the four-year investment period
which resulted in extensions for a number of licences.
The Company continues to assess its ability to meet
the investment criteria on its Ecuadorian licences and is
working closely with the Government in communicating
the needs of the industry.
This risk has reduced during the current year.
Kpis: 1
KEy miTiGATOrS
Trend:
In line with all Ecuadorian mining companies, the
management of this risk is based on compliance with the
Environmental Management Plan.
SolGold will maintain effective environmental compliance
registers and reporting protocols and ensure effective
emergency preparedness planning, and resources to
contain and manage spills.
In order to ensure compliance, the Group provides
adequate resources to this area including the
employment of personnel and the utilisation of
third-party consultants to audit compliance with the
Environmental Management Plan. To date, the Group has
been fully compliant.
This risk remained constant during the current year.
Kpis:
1
2
3
Zero harm
Strengthen balance sheet
Deliver results of the updated Pre-Feasibility Study
4
5
6
Advance permitting required for Cascabel
Maximize value of Extensive Portfolio of Mineral Exploration Assets
Engagement with Stakeholders
Trend:
Increased
Constant
Reduced
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CONTINUED
risk: Land Access, permitting and Surface rights
Kpis:
3
4 6
Trend:
DESCripTiOn
KEy miTiGATOrS
The Group is required to obtain governmental permits to conduct
different phases of exploration and evaluation on its concessions.
Obtaining the necessary permits can be a complex and time-
consuming process, which at times may involve several different
government agencies. The duration and success of the Group’s efforts
to obtain permits are contingent upon many variables not within
its control, including the interpretation of applicable requirements
implemented by permitting authorities, the expertise and diligence of
civil servants, and the timeframes for agency decisions.
The Group may not be able to obtain permits in a timeframe that
might be reasonably expected. Any unexpected delays associated with
the permitting processes could slow exploration and development
activities and could adversely impact the Group’s operations.
Attention is focused on maintaining sound relations with
local communities and working with these groups to
enhance these relationships. The Group’s social team,
under the supervision of the country manager, continues
to address any such issues. Furthermore, there is regular
dialogue with the affected communities by senior
executives.
The possible risks associated with the relocation of
communities during the development stage will be
managed with the community members’ best interests
at the core of all decisions. The development of a
relocation and resettlement plan will be developed with
close consultation and involvement with the community,
government bodies and other stakeholders.
There is a risk of permits that are needed for ongoing operations being
denied regarding tenure and other development related infrastructure.
Land access is critical for exploration and evaluation to succeed. In
all cases the acquisition of prospective concessions is a competitive
business, in which proprietary knowledge or information is critical and
the ability to negotiate satisfactory commercial arrangements with
other parties is often essential. Access to land for exploration purposes
can be affected by land ownership, including private (freehold) land,
pastoral lease and native title land or indigenous claims.
SolGold ensures it follows protocols put in place by local
and national government bodies in a timely manner
when applying for permits. The Company regularly meets
with government officials to discuss ongoing permitting
applications in a transparent and professional manner
and is compliant with a stakeholder engagement plan for
land access.
This risk remained constant during the current year.
Immediate access to land in the areas of activities cannot in all cases
be guaranteed. SolGold may be required to seek consent of land
holders or other persons or groups with an interest in real property
encompassed by, or adjacent to, SolGold’s tenements. Compensation
may be required to be paid by SolGold to land holders so that SolGold
may carry out exploration and/or mining activities.
Where applicable, agreements with indigenous groups must be in
place before a mineral tenement can be granted. In the long run
SolGold will be required to acquire large areas of land for its surface
operations, posing a risk of delays and increasing prices the longer
the process takes.
risk: project Development
DESCripTiOn
Where the Group discovers a potential economic resource or reserve,
there is no assurance that the Group will be able to develop a mine
thereon, or otherwise commercially exploit such resource or reserve.
Any failure to manage effectively the Group’s growth and development
could have a material adverse effect on the Group’s business, financial
condition and results of operations. There is no certainty that all or,
indeed, any of the elements of the Group’s current strategy will develop
as anticipated.
Kpis:
3
4 5 6
KEy miTiGATOrS
Trend:
The Company is following sound project management
processes for taking a discovery into mineral resource
and reserve by using established methods of evaluation
including economic analysis. This is carried out using
several different levels of studies to evaluate various
options and assess the best option for SolGold to take
into development and production. This is carried out
by using a dedicated team and recognised consultants
including subject matter experts.
This risk remained constant during the current year.
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risk: Funding
DESCripTiOn
The exploration, evaluation and development of the Group’s projects
will require substantial additional financing above and beyond
the Group’s current liquid funds. Current global capital market
conditions have been subject to significant volatility, and access to
equity and debt financing, particularly for resource companies, has
been negatively impacted in recent years. The war in Ukraine, the
increasingly hawkish tilt of Western central banks and the arrival of
inflation more generally have injected additional risk into the global
capital markets, with most indices lower for the year.
These factors may impact the Group’s ability to obtain equity or debt
financing in the future. Additional financing may not be available, or if
available, the terms of such financing may be unfavourable compared
to earlier capital raises. Failure to obtain sufficient financing may result
in the delay or indefinite postponement of exploration activities and
the development of the Group’s projects.
Kpis:
3
5 6
KEy miTiGATOrS
Trend:
The management team regularly meets with
shareholders, financiers and other capital market
stakeholders to discuss the availability and costs of
various types of financing with the aim of gauging
their support. It is management’s view that high quality
exploration projects should always be capable of
being financed.
This risk increased during the current year. Please refer to
Note 1 of the Financial Statements.
risk: Financial reporting and Control
DESCripTiOn
Kpis:
65
KEy miTiGATOrS
Trend:
SolGold’s aspiration is to have a corporate culture that is designed
to encourage transparency and professionalism, protect our
shareholders’ funds and inspire confidence in our workforce. It is
crucial that the Group maintains high ethical standards and there is
no tolerance of fraud, bribery, any form of corruption or unethical
activity. Internal control over financial reporting may not always
prevent or detect misstatements.
SolGold continues to strengthen its internal financial capabilities and
internal controls addressing numerous deficiencies that have been
identified in prior years.
SolGold will continue to take steps to improve its control,
governance and risk management environment and
processes. These steps include increasing the resources
and improving the capabilities of senior management and
the Finance function. Ongoing actions include:
• Restructuring the Corporate and Local Finance
organisations and hiring several roles locally that
will help strengthen our processes and improve our
control culture.
•
Improvement and tightening of payment controls,
enhancing controls and improving procure-to-pay
processes.
• Annual sign-off of key governance policies by Board
and Management, including:
– Code of Conduct
– Whistleblower Policy
– Anti-Bribery and Corruption Policy
– Code of Conduct
– Securities Dealing Policy
As found on the Company's website under:
https://solgold.com.au/about-us/corporate-governance/
This risk has reduced during the current period reflecting
the Group’s strengthened internal financial capabilities
and internal control framework.
Kpis:
1
2
3
Zero harm
Strengthen balance sheet
Deliver results of the updated Pre-Feasibility Study
4
5
6
Advance permitting required for Cascabel
Maximize value of Extensive Portfolio of Mineral Exploration Assets
Engagement with Stakeholders
Trend:
Increased
Constant
Reduced
SOLGOLD pLC ANNUAL REPORT 2023
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R I S K M A N A G E M E N T
CONTINUED
risk: mineral reserve and resource Estimates
Kpis:
53
Trend:
DESCripTiOn
KEy miTiGATOrS
Mineral Reserve and Mineral Resource figures are estimates, and there
is a risk that the estimated Mineral Resources and Mineral Reserves will
not be realised. The quantity of Mineral Resources and Mineral Reserves
may vary depending on, among other things, metal prices. Any material
changes in the quantity of Mineral Resources, Mineral Reserves or the
amount of the Mineral Reserves that are mined, and metal recoveries
achieved in production may affect the economic viability of any project.
Mineral Resources that are not Mineral Reserves have not demonstrated
economic viability, and there is a risk that they will never be mined
or processed profitably. Further, there is a risk that Inferred Mineral
Resources will not be upgraded to proven and probable Mineral
Reserves as a result of continued exploration.
Fluctuations in gold prices, results of drilling, metallurgical testing
and preparation and the evaluation of studies, reports and plans
subsequent to the date of any estimate may require revision of such
estimate. Any material reductions in estimates of Mineral Reserves
could have a material adverse effect on SolGold’s results of operations
and financial condition.
Key elements that mitigate the impact to the Company
and investors are experienced and qualified personnel
and advisors, applying industry standards, conducting
independent review and continuous disclosure (including
sensitivity analysis of key factors).
SolGold employs experienced and qualified personnel
to manage exploration programmes using practices and
techniques that are accepted in industry or substantiated
with appropriate analyses to validate new techniques.
Quality checks and validation of results occur across the
data collection, interpretation, modelling, estimation and
classification process.
Results are reported progressively in-line with continuous
disclosure obligations to ensure the market is informed
of how projects advance. Further, qualified persons
(independent qualified persons in the case of NI 43-101
Technical Reports) validate the information, processes
and conclusions as part of the reporting process.
This risk remained constant during the current year.
risk: General Exploration and Extraction
DESCripTiOn
Kpis: 5
KEy miTiGATOrS
Trend:
Exploration activities are speculative, time-consuming and can be
unproductive. In addition, these activities often require substantial
expenditure to establish Reserves and Resources through drilling
and metallurgical and other testing, determine appropriate recovery
processes to extract copper and gold from the ore and construct
mining and processing facilities. Once deposits are discovered it can
take several years to determine whether Reserves and Resources exist.
During this time, the economic viability of production may change. As a
result of these uncertainties, the exploration programmes in which the
Group is engaged may not result in new Reserves.
risk: Climate
DESCripTiOn
Climate risks for the business is an emerging risk as our current
operations do not have a significant impact on the climate and vice
versa. As the Company develops the Cascabel Project, considerations
will need to be given to potential climate change on the business,
particularly in respect to hydroelectric power and flooding events.
The Group uses modern geophysical and geochemical
exploration and surveying techniques. The Group
employs a world-class team of geologists with
considerable regional expertise and experience. They are
supported by a network of fully accredited laboratories
capable of performing a range of assay work to high
standards. Group Mineral Resource and Ore Reserve
estimates are prepared by a team of qualified specialists
following guidelines of NI 43-101, which is one of the
most recognised reporting codes for Latin America and
TSX-listed companies. Mineral Resource and Ore Reserve
estimates are prepared by independent consultants.
This risk remained constant during the current year.
Kpis: 1
KEy miTiGATOrS
Trend:
No specific mitigation activities have been undertaken in
respect to this risk during the year.
This risk remained constant during the current year.
Kpis:
1
2
3
Zero harm
Strengthen balance sheet
Deliver results of the updated Pre-Feasibility Study
4
5
6
Advance permitting required for Cascabel
Maximize value of Extensive Portfolio of Mineral Exploration Assets
Engagement with Stakeholders
Trend:
Increased
Constant
Reduced
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V I A B I L I T Y S T A T E M E N T
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To address the requirements of provision 31 of the 2018 UK
Corporate Governance Code, the Directors have assessed the
prospects of the Group over a minimum of two years. This
period aligns with the Group’s expected timeline for a final
investment decision, completing project early works, securing
project funding, execution of an Investment Protection
Agreement and the gaining of all necessary licences and
permits associated with the Cascabel project, as further
outlined below.
The Group will consider extending the assessment period
as the Cascabel project advances towards its construction
decision, to cover the full construction and ramp-up period,
considering specific challenges arising from long-lead projects.
As outlined in Note 1 to the financial statements, in assessing
going concern, management has prepared a base case and
a severe but plausible scenario based on future cash flow
forecasts. Under the base case scenario, the Group would
have sufficient funds through mid 2024 without applying
any mitigating actions. Additional mitigating actions would
include further reductions to headcount and overhead costs.
Additionally, the Company continues to explore various
traditional and non-traditional sources of finance and liquidity.
Given the Company’s significant recent restructuring, and the
Group’s successful history of raising significant amounts from
the sale of net smelter return royalties, there is reasonable
basis to believe Cascabel will continue to generate investment
interest at prevailing market terms.
Mining is a long-term business and timescales can run into
decades as demonstrated by the Cascabel PFS initial life
of mine estimated at 26 years. When taking account of
the impact of the Group’s current position on this viability
assessment, the Board considers:
• material political events globally, particularly in Ecuador
• the Group’s financial forecast and resulting cash positions
• the potential state of equity and debt capital markets in
light of available sources of funding and scenarios that
impact these funding solutions
• macro-economic developments and possible impacts on
relevant commodity prices
• a prolonged downturn in the price of copper and gold
• the labour market relevant for a successful project
execution, in particular factors that could prevent
the Group from attracting and/or retaining executive
leadership talent
• actions at the Group’s disposal to mitigate the adverse
impacts of any of the above
The Group’s viability assessment is focused on SolGold’s
existing asset base and factors in the most likely development
projects. This is considered appropriate for an assessment
of SolGold’s ability to fund its activities and manage the
potential impact of the factors above. As a result of given
uncertainties, the Group regularly assesses its strategy,
updates its financial rolling forecasts, monitors the state of
relevant capital markets and runs various financial scenarios
for the period over which the Group assesses its prospects
and viability. Management reviews cash flow forecasts on a
monthly basis and updates from time to time to account for
changes in plan, as required.
The Group had cash on hand of US$32.5 million and net
current assets of US$27.7 million as at 30 June 2023 (2022:
US$21.0 million, US$23.4 million). The Group continuously
monitors capital markets, and the Board regularly considers
various forms of financing available to SolGold as the Group
will need to secure further funding to meet its exploration
and working capital commitments. The Group has a proven
ability to successfully execute equity and other financings as
demonstrated by the equity placings and royalty agreement
completed in the 2023 financial year totalling approximately
US$86 million in gross proceeds. Accordingly, the Directors
have a reasonable expectation that the Group will be able to
raise funds when necessary.
As SolGold progresses through the transition from explorer to
developer with the advancement of the Cascabel project, the
Directors will consider appropriate funding options available
to the Group through the phases of development. Namely: (1)
funding through to project execution and early works in 2024;
and (2) project execution from 2025. The progress towards
delivery of key project milestones including the Investment
Protection Agreement and permitting will de-risk the Cascabel
project and expand SolGold’s potential funding options across
the three phases of development. These could include copper
concentrate offtakes, potential opportunities with strategic
partners, project finance and Export Credit Agencies (“ECA”),
streaming, and equity raises, among other options.
The Group has no debt due in the coming two years and has
strongly focused its viability assessment on potential sources
of funding and on-going cost savings to support the Group’s
strategy to progress the development of the Cascabel project
and advance its exploration programme towards additional
potential mineral discoveries. Based on their assessment of
the Group’s prospects and viability, the Directors confirm
that they have a reasonable expectation that the Group will
be able to continue in operation over the two-year period of
their assessment.
SOLGOLD pLC ANNUAL REPORT 2023
29
E N G A G I N G W I T H O U R S T A K E H O L D E R S
Section 172 statement
In accordance with the provisions outlined in Section 172 of the Companies Act 2006 (referred to as the "Act"), the Board of
Directors at SolGold is committed to considering the interests of all our stakeholders when formulating strategic decisions and
charting the course of the Group's strategy and objectives. This deliberate approach, rooted in a comprehensive understanding
of our stakeholders, empowers the Board to meticulously evaluate the potential enduring implications of strategic choices on
our diverse stakeholder groups.
The Board of Directors of SolGold plc upholds an unwavering commitment to act with the utmost integrity and to drive the
prosperity of the Company, benefiting not only our esteemed shareholders but also embracing the broader welfare of our
stakeholders.
We hold a deep appreciation for the enduring ramifications of our choices and are cognizant of the imperative to nurture
robust affiliations with every stakeholder, including our dedicated employees, invaluable community partners, and the
environment we inhabit. An integral aspect of our mission revolves around minimizing our ecological impact, signifying a
pivotal cornerstone of our operations.
Contained within the Strategic Report of this Annual Report, the Company elaborates on its near to long-term strategic
priorities, accompanied by a delineation of the strategies in place to ensure their realization. Throughout the expanse of this
Annual Report, we have thoughtfully demonstrated how the tenets of section 172 have been diligently integrated into our
activities over the past year, elucidating our concerted engagement with pivotal stakeholder segments.
Integral to the Company's decision-making protocol, the Board and its Committees systematically evaluate the potential
reverberations of decisions on pertinent stakeholders. SolGold plc sustains an ongoing rapport with a spectrum of stakeholders
that significantly underpin our achievements. This spectrum encompasses equity investors, debt and alternative finance
providers, the dedicated workforce, governmental entities, the local community, and our valued suppliers. Our steadfast
endeavor is to attain an optimal equilibrium between interactive engagement and efficacious communication. In addition, we
judiciously navigate the parameters governing the disclosure of information, ensuring that we strike a balance between fostering
transparency and safeguarding the confidentiality of market-sensitive or commercially classified data. We present a delineation of
our principal stakeholder groups and elaborate on the measures through which we have fostered connections with them.
invESTOrS
WHy THEy mATTEr TO US
HOW WE HAvE EnGAGED WiTH THEm
•
In this phase, our attention remains keenly focused on
acknowledging the pivotal role that our shareholders play in
driving our ongoing growth trajectory.
• Our engagement initiatives consistently revolve around
discussions pertaining to strategy, governance, project
advancements, and performance.
• As we navigate the dynamic landscape, we are acutely aware
of the crucial support and collaboration stemming from our
investor community.
• Positioned in the investment phase, actively unlocking the
potential of our projects, our shareholders stand as linchpins
in advancing the strategic aspirations of our Company.
• Notably, during the financial year concluded on 30 June
2023, the CEO, CFO, and other members of the senior
management team engaged with a tally of over 600 investors
(primarily through web forums). This marks a substantial
increase from the preceding year's interactions, which
numbered over 350.
• Anchored by our resolute commitment to establishing a
robust foundation for sustainable mining operations, we
are resolutely building and nurturing an investor base that
seamlessly aligns with our future-forward vision.
• This symbiotic partnership, established even before the
dawn of revenue generation, continues to underscore our
unwavering dedication to enduring success.
• Throughout the year, our paramount focus has centered on
propelling the Alpala project into its development phase
including de-risking the project, all while fostering deep
engagement with both existing stakeholders and new
potential investors.
• To extend our reach and inclusivity, the CEO conducted
live presentations through digital platforms such as
InvestorMeetCompany and 6ix.com. These insightful
presentations were open to all investors and interested
parties, fostering an environment of accessibility. Attendees
also enjoyed the privilege of engaging in interactive question
and answer sessions during these web-based presentations.
• The aftermath of these meetings spurs passionate
conversations at our Board meetings, where active feedback
garnered from stakeholders plays a pivotal role in shaping
our strategies.
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invESTOrS CONTINUED
WHy THEy mATTEr TO US
HOW WE HAvE EnGAGED WiTH THEm
•
In concert with our abiding commitment to generating
sustainable long-term value, we have diligently curated a
portfolio of significant projects, including a pipeline of 90
concessions in Ecuador—a nation brimming with untapped
mining opportunities.
• The expectations of our shareholders, driving us toward
continuous value creation, necessitate the upholding
of rigorous governance standards, comprehensive risk
management, and unwavering operational excellence.
• This multifaceted approach reflects our dedication to
not only meeting their aspirations but also catalyzing the
momentum of our ongoing growth narrative.
• Throughout the year, the Board actively consulted with an
array of corporate and institutional shareholders, delving
into an expansive gamut of pertinent matters. This inclusive
approach not only informs decision-making but also propels
our unwavering commitment to attaining compliance with
the UK Corporate Governance Code.
• A vivid illustration of our engagement impact can be found
within our Strategic Report, where we underscore the pivotal
role of copper in the energy transition, coupled with the
enduring allure of gold as a store of wealth. In our one-
on-one interactions with investors, we diligently educate
them on the attractiveness of our forthcoming copper-gold
concentrate.
• To enhance the interactive aspect of our Annual General
Meeting, we are diligently incorporating investor feedback to
elevate this crucial event to new levels of engagement.
• Demonstrating our dedication to transparency, we frequently
update both our Company presentation and website,
ensuring investors remain abreast of the latest developments.
• Our commitment to seamless communication is further
bolstered by the regular dissemination of news and project
updates, in addition to the dissemination of valuable material
through prominent social media channels, including LinkedIn,
X (@SolGold), and YouTube. Views of SolGold’s presentations
over various platforms totalled more than 6,000 in 2023.
EmpLOyEES
WHy THEy mATTEr TO US
HOW WE HAvE EnGAGED WiTH THEm
• Our employees are our most important asset and are critical
to our long-term success. We believe that their involvement
depends on ensuring a positive and rewarding environment
where they feel respected and safe.
•
In the financial year ended 30 June 2023 the Group
employed 371 people across Ecuador, Canada, the United
States of America and the United Kingdom. 99% of our
employees are based in Ecuador and the Directors consider
workforce issues holistically for the Group as a whole.
• We have an open line of communication between employees,
senior management and the Board of Directors.
• We hold weekly meetings with staff to provide updates on
the projects and ongoing business objectives.
• Most employees are covered by yearly performance reviews
and, where relevant, have KPIs linked to their short-term
incentive scheme.
• The physical and mental health of our employees is a key
focus for us. We provide psychological support to our
employees with a professional available at our camps. We
have a dedicated Ecuador HR function and in the last year
have ensured that there is a feedback and grievance process
in place across Ecuador for our staff, supported by various
Group policies.
• Supporting our growing employee development programme,
we hold monthly induction courses for all new staff.
• We provide support through grievance mechanisms and
a whistleblowing policy which provides our employees,
suppliers and contractors the opportunity to anonymously
report any incidents that they feel have violated the Code of
Conduct, internal policies or the law.
• We are working towards a more diverse workforce. As at
30 June 2023, 17% of the workforce in Ecuador was female.
Equally, at a leadership level we are also working towards
improving diversity with 17% of Board members being
women as at 30 June 2023.
SOLGOLD pLC ANNUAL REPORT 2023
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CONTINUED
GOvErnmEnT
WHy THEy mATTEr TO US
HOW WE HAvE EnGAGED WiTH THEm
• Central to our ethos is the aspiration to establish a
• SolGold has maintained robust government engagement,
sustainable mining enterprise that resonates positively
with all Ecuadorians and fosters an enduring, inclusive
mining industry, thereby reaping mutual benefits for
every stakeholder.
• The trajectory of our operations within Ecuador entails close
management of our licence to operate, with unwavering
dedication to our key projects. This involves a comprehensive
consideration of the project lifecycle, spanning from discovery
and permitting through development and operations to the
far-reaching implications of closure and rehabilitation.
• The evolving landscape of Ecuador's socio-economic
progress and the pursuit of enhanced governance over
natural resources, including engagement with initiatives
like the Extractive Industries Transparency Initiative (EITI),
underscore the significance of our role. We are acutely aware
of our potential to contribute international expertise that
substantially bolsters the nation's aspirations for heightened
accountability and transparency in the domain of resource
development. Our collaboration stands as a testament to our
commitment to shared ambitions and the responsible growth
of the industry.
reflecting the Company's proactive stance in navigating the
evolving landscape of Ecuador's mining sector.
• Our efforts continue to foster productive relations with
various government bodies, reflecting our commitment to
open dialogue and cooperative progress.
• SolGold was engaged in pivotal negotiations with the
government of Ecuador for a comprehensive term sheet
agreement for the Cascabel project.
• Upholding our non-partisan stance, we continue to actively
engage with government stakeholders regardless of political
affiliations, fostering an environment of collaboration and
shared goals.
• Our interactions extend to various levels of government in
Quito and encompass agencies across provinces, including
Imbabura, demonstrating our commitment to fostering local
cooperation and understanding.
• We are deeply engaged in discussions with the Ecuadorian
government, particularly concerning matters tied to
the Cascabel project and the infrastructure outlined in
the Preliminary Feasibility Study (PFS) necessary for its
advancement. Notably, these high-level dialogues have
garnered government cooperation, underscoring the
significance of our collaboration.
COmmUniTiES
WHy THEy mATTEr TO US
HOW WE HAvE EnGAGED WiTH THEm
• Central to our core values is the establishment of robust trust
and meaningful partnerships with the communities we work
alongside, underpinning both our operational approach and
local impact. Our dedicated team of professionals is wholly
committed to facilitating face-to-face community interactions
across all our projects.
• Recognizing the intrinsic value of community engagement,
we understand that such interactions significantly enrich
our decision-making processes and uphold the collective
interests of SolGold and its diverse stakeholders. Cementing
the community's trust serves as a cornerstone that enhances
our ability to address potential concerns and navigate them
effectively. It also contributes to a harmonious alignment of
our strategies with the community's expectations.
• Our developmental focus has been directed towards Ecuador,
driven by our unwavering commitment to fostering a national
mining industry. This commitment reflects our eagerness to
play a pivotal role in nurturing an emerging sector that holds
transformative potential for the entire nation.
• Our commitment to community engagement is exemplified
through our consistent interactions, occurring at least weekly,
aimed at nurturing sustainable initiatives that resonate
with the communities we operate within. Particularly
for the Cascabel project, we maintain an open dialogue
encompassing the Provincial Government, the Municipal
Government of Ibarra, the parish governments of Lita and La
Carolina, and influential community leaders. These dialogues
focus on fostering holistic project development.
•
Information sessions, conducted as an ongoing initiative,
serve as a crucial platform for communities within the
immediate influence area. These sessions foster coordination
of local activities, while significantly enhancing our social
presence. They also serve as a conduit for identifying
evolving concerns, thereby nurturing a culture of trust. A
meticulous mapping effort covers communities within both
our direct and indirect zones of influence, along with external
interest groups.
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COmmUniTiES CONTINUED
WHy THEy mATTEr TO US
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•
In the vicinity of our flagship Cascabel Project, the
communities within its sphere of influence actively contribute
as employees and integral participants in our supply chain.
This symbiotic relationship is pivotal to the project's vitality
and success.
• As Ecuador's enduring partner, our engagement spans
across local and indigenous communities enveloping all
areas impacted by our projects. We steadfastly adhere to
international treaties and Ecuadorian law, ensuring that
our discussions pertaining to permitting and developments
resonate harmoniously with the legal framework and the
aspirations of the communities we serve.
• Our collaborations extend to partnerships with local
and national universities across Ecuador, amplifying our
commitment to education and regional development. These
partnerships extend to initiatives fostering environmental
stewardship and responsible mining practices, thereby
nurturing a culture of shared progress.
• Throughout the year, we have prioritized engagement with
local communities through direct involvement with local
businesses, such as bakeries, coffee plantations, chicken
farms, plant nurseries, hardware stores, and more. This active
participation helps us gain insights into the aspirations for
heightened local economic activity, thereby fostering mutual
growth. A well-defined local grievance mechanism ensures
that we are responsive to community claims and complaints.
This mechanism maintains a transparent process where all
claims and complaints are logged, and formal resolutions are
provided in writing, adhering to a process respected by both
parties involved.
SUppLiErS
WHy THEy mATTEr TO US
HOW WE HAvE EnGAGED WiTH THEm
• At the core of our operational framework lies the
establishment of enduring partnerships that seamlessly
augment our in-house proficiency. We remain acutely
aware of the benefit that steams from fostering steadfast
relationships with our trusted suppliers.
• Our evolution from being solely an exploration enterprise
to one engaged in project development underscores the
pivotal significance of our supplier partners. They stand as
linchpins that ensure we cultivate a business of the highest
standards, underpinned by sustainability. The journey towards
project construction and operations necessitates critical
new resources that our supplier alliances play a key role in
providing. This symbiotic collaboration is instrumental in
propelling our ventures towards success.
• Our steadfast commitment to community growth is evident
through our endeavors to engage local vendors on smaller
scales, empowering them to oversee essential Company
initiatives and requisite services.
• The close collaboration between our management team
and consultants remains an integral facet of our operations.
This partnership is instrumental in fulfilling the deliverables
associated with the comprehensive Cascabel project studies,
marking a crucial step in our journey.
• Our pledge towards responsible resource management
is evident in the meticulous procedures and practices we
implement. This spans the judicious use of water, energy,
and other vital resources. In our pursuit of excellence, we
consistently conduct training sessions that ensure our
Company standards are upheld across the board and seek
out suppliers with similar values and standards.
• Upholding our commitment to integrity, we have established
an Anti-Bribery policy, which is currently undergoing a review
process. Once finalized, this policy will be made available to
the public on our Company's website. This principled stance
against bribery and corruption is thoroughly addressed
during employee induction and training sessions, ensuring
that all staff members and site visitors are well-versed in our
expectations. Going forward, SolGold remains dedicated to
fostering the significance of this policy across our supplier
network, thereby bolstering a culture of ethical conduct.
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S U S T A I N A B I L I T Y R E P O R T A N D T C F D D I S C L O S U R E S
Sustainability is
embedded in our
operations
This Sustainability report aims to highlight how
sustainability is embedded within our operations and to
provide details of our sustainability performance over
the period 1 July 2022 to 30 June 2023. The report also
contains our climate-related financial disclosures consistent
with the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations and recommended Disclosures.
Through our exploration, discovery and development of copper
and gold deposits in Ecuador, we work in close proximity to
local communities and in some of the world’s most significant
natural environments. Our sustainability approach is rooted
in a deep understanding of the potential environmental and
socio-economic impacts of our activities, and our commitment
to respecting and protecting our natural resources and
communities. The core pillars of this approach are:
Our core pillars:
THE EnvirOnmEnT
OUr pEOpLE
HEALTH & SAFETy
OUr COmmUniTiES
We demonstrate our commitment to operating sustainably through our set of UN-aligned goals which we have developed with
reference to ten fundamental principles across the areas of human rights, labour, environment and anti-corruption that we
have committed to as a signatory of the UN Global Compact. These goals are integrated through our operations, strategy and
culture enabling us to drive sustainable innovations and adapt to evolving global sustainability challenges.
Our commitments:
inJUry AnD inCiDEnT
FrEE WOrKpLACE
EQUAL OppOrTUniTiES FOr
ALL EmpLOyEES
prOACTivE COnTriBUTiOn
TO LOCAL COmmUniTiES
prOACTivE COnTriBUTiOn
TO LOCAL COmmUniTiES
rEHABiLiTATiOn AnD
rEFOrESTATiOn OF LAnD
rESpOnSiBLE USE OF EnErGy,
WATEr AnD WASTE
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Our climate related financial disclosures
As a mineral exploration and development company, we
understand the critical role we will play in the world’s
transition to a lower carbon economy and are aware of
the opportunities that arise for us in this position. We also
understand the impacts and risks that are present in this
transition, as well as the potential and actual impacts that our
operations and climate change have on our environment, our
people and our communities.
To ensure that we are transparently reporting the impacts
of climate change on our operations and how we are
responding, we have applied the recommendations of the
Task Force on Climate-Related Financial Disclosures as is
required for all UK listed companies. This is the first time we
have prepared specific TCFD disclosures, and this section of
the report provides an overview of the existing governance
of climate-related risks and opportunities at SolGold and
the impacts of those on our business. We also outline our
existing and planned processes for the management and
mitigation of risks and opportunities, the strategies, and the
metrics and targets for the ongoing management of climate-
related risks and opportunities.
With further international requirements having been released
for sustainability and climate-related disclosures in 2023,
we are striving to continuously improve our systems and
processes related to the ongoing management of climate-
related risks and opportunities to in turn improve our climate-
related disclosures in future years. We expect our strategies
for the management of climate-related risks and opportunities
to evolve and adapt based on differences in our operations in
the years to come.
Governance
Governance of climate-related risks and
opportunities
As a result of the major impacts of climate change on the
mining industry and our core business, climate-related risks
and opportunities are overseen at Board-level and managed
by our Management team.
The Board's Oversight
The Board of Directors are ultimately responsible for the
oversight of climate-related risks and opportunities impacting
SolGold, however, the Board delegates the management of
climate-related risks and opportunities to the ESG Committee
(formerly the Health, Safety, Environment and Community
(HSEC) Committee).
The ESG Committee at SolGold plays an important role in
incorporating climate considerations into SolGold’s strategic
and operational decisions. Its primary function is to provide
oversight on the policies and initiatives related to the
environment, health, safety, community engagement, and
governance, including those related to climate change. The
specific responsibilities assigned to the ESG Committee on
climate-related matters include identifying and assessing
climate-related risks that could impact SolGold's operations
or financial performance. This involves monitoring emerging
risks associated with climate change and advising the Board
on appropriate risk management strategies. The Committee
also monitors progress in achieving its climate-related goals,
providing quarterly reports to the Board on climate-related
and other ESG matters. In the event that major operational
changes or incidents occur the ESG Committee develops
strategies for climate change mitigation and provides
guidance on the transition to low-carbon technologies, ways
to improve energy efficiency, and investigates renewable
energy opportunities.
management’s role
To assist the Board and ESG Committee in the ongoing
management of climate-related risks and opportunities,
SolGold has considered ESG more broadly in terms of the
assessment of our CEO’s performance. These programmes
are designed to improve overarching ESG and sustainability
performance with climate-related considerations in mind.
Management will also have a vital role with respect to
the comprehensive climate risk assessment process that
is planned to be conducted in the future. They will be
responsible for identifying, evaluating and developing
management strategies for risks, and the ongoing
management and monitoring of risks and the implementation
of response/management strategies to the extent of its
strategic exploration activities.
Our next Steps
Efforts and actions to be implemented to enhance the
governance of climate-related risks and opportunities within
our business include:
• Making improvements to the framework for the
management of climate-related risks and opportunities
including amending the roles and responsibilities for the
Committee and their reporting processes; and
• Building capacity and capability of the ESG Committee
through additional training and support surrounding the
assessment of climate-related risks and opportunities and
requirements under international and national reporting
climate and sustainability-related reporting frameworks
as they are released.
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CONTINUED
Strategy
Climate-related risks and Opportunities
SolGold recognises that as a copper-gold mining company, we are exposed to various climate-related risks which have
the potential to impact our operations, assets, and business model. Whilst our current strategy focuses on the preliminary
exploration of copper and gold, we have lesser impacts to our surrounding environments and are exposed to different risks
than if we were conducting full mining operations; however we recognise that there are future implications that climate-related
risks and opportunities may have on our strategy and operations.
Based on the nature of the industry, our current business activities and our locations, in addition to regulatory and policy
landscapes globally as they relate to climate change, we have considered that there are key physical and transition risks to
which we will be exposed over the short, medium and long-term, but also that there are opportunities that arise out of the
transition to a low-carbon world. As such, we have identified the following climate-related risks and opportunities which we
foresee may become material to SolGold in the future.
Climate-related risks
Climate-related Opportunities
Short-term
(1 – 3 years)
• Risks associated with extreme weather events
and natural disasters
• Risks arising out of regulatory changes &
• Energy efficiency improvements
• Use of renewable energy
• Market opportunities associated with
requirements
changing customer demands and regulatory
changes
medium-term
(3 – 10 years)
• Risks arising from future climate policy
• Utilisation and investment in lower-carbon
changes
technologies
• Risks associated with investor expectations
• Risks arising from longer term and chronic
climate change impacts (water stress, rising
sea levels, sustained higher temperatures)
• Continued changes in customer preferences
in a shift to renewable energy, adoption
of electric vehicles, and demand on
manufactures for sustainably sourced raw
materials
Long-term
(10+ years)
• Risks associated with investor expectations
• Risks arising from long term chronic climate
change impacts (water stress, rising sea levels,
sustained higher temperatures)
• Development of strategic partnerships and
innovating projects in sustainable mining
practices
impacts on our Business, Strategy & Financial planning (including consideration of transition scenarios)
To meet the needs of our investors, the market and other stakeholders, we intend to disclose more detailed information on
the climate-related risks and opportunities that are material to our business in future periods. We understand the need for
us to fully consider and assess the impacts of our material risks on our strategy, operations, and financial planning. To build
on the higher-level risks and opportunities noted and provide more in-depth descriptions and impacts, we plan to conduct a
comprehensive climate-risk identification process. In doing so, we are seeking to establish a process that will be embedded
as part of our broader risk management framework to ensure the ongoing identification, assessment and management of
climate-related risks and opportunities.
To date, we have considered the impacts of risks associated with changing regulatory requirements and policy changes to
assist with the transition to a low carbon economy on our business. Examples being:
• Failure to comply with environmental regulations could impact SolGold’s ability to exercise its exploration rights and
continue its operations, including receiving damages for non-compliance, clean-up costs or penalties for environmental
discharges.
• Based on an Accelerated Energy Transition (AET), the demand for copper will increase due to the economic recovery
focused on green end-use sectors, and SolGold is well-positioned to capitalise on the projected increase in demand.
• Leveraging new technological innovations, SolGold can use low-cost hydropower, low energy intensive block cave mining
technology and fully electric mining fleets to deliver low carbon footprint projects.
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We are yet to extend our analysis to consider other climate scenarios or to assess the resilience of our strategy against the
different scenarios. However, we intend to conduct scenario analyses to evaluate the potential impacts of climate-related risks
on our business and financial performance, as we look to shift our business model from exploration to mine planning and
development. Climate scenario analysis will be used to assess the impacts across various climate scenarios and develop plans
accordingly. Further, SolGold intends to integrate scenario analysis (to assess the impacts of climate-related risks) into the
Climate-Related Risk Management Framework, and overall strategic and financial planning processes.
Our next Steps
Efforts and actions to be implemented to improve how we assess the impacts of climate change and the associated risks and
opportunities on our strategy and financial performance include:
•
Integration of the impacts of climate-related risks and opportunities into our strategic planning processes and using other
accepted climate scenarios to assess the resilience of our strategy.
risk management
Our Climate-related risk management Framework
SolGold has developed a Climate-Related Risk Management Framework to help identify, assess, manage and report on climate
risks and opportunities that have the potential to impact our operations, financial performance, and reputation. The framework
creates a process to guide management in making informed decisions, evaluating and responding to risks and taking
advantage of opportunities that may arise as we transition to a low-carbon economy.
Step 1: Climate risk
identification
Step 2: integration with
Corporate Strategy
Step 3: mitigation &
Adaption Strategies
Step 4: implementation
& Execution
Identification of potential climate-
related risks and opportunities.
This will include both physical and
transition risks arising from societal
and economic shifts toward a low-
carbon economy. A risk evaluation
is undertaken to understand the
potential impact and likelihood of
each identified
risk and opportunity.
Integration of climate-related
risks and opportunities into
SolGold’s overall corporate
strategy. Strategic decisions at the
corporate level will be made with
an understanding of their potential
climate-related implications.
Development of mitigation
strategies to reduce the
likelihood and/or consequences
of the risk event. For identified
opportunities, design systems to
utilise opportunities e.g., investing
in renewable energy sources
or developing more resilient
infrastructure.
Implementation of the mitigation
and adaption strategies across
the organisation, including
changes to operational processes,
engagement with suppliers
and partners, or investments
in new technologies.
Step 5: monitoring & reporting
Ongoing: review & Update
Monitoring and reporting progress
of implementation of strategies,
with results reported to internal
and external stakeholders.
Given the evolving nature
of climate-related risks and
opportunities, the risk management
framework is regularly reviewed
and updated to ensure that it
remains aligned with SolGold’s
commitments, current best
practices, emerging trends and to
respond to changes in the external
environment, regulatory landscape
and stakeholder expectations.
Ongoing: Continuous
improvement
The risk management process will
be continuously improved based
on performance monitoring and
stakeholder feedback. This cycle
ensures that the process remains
effective and relevant in changing
climatic conditions and societal
expectations.
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CONTINUED
risk management continued
Our Climate-Related Risk Management Framework covers exposures from both physical and transition climate-related risks
and their respective opportunities and financial impacts. In addition, an evaluation will be carried out to understand the
potential impact and likelihood of each identified risk and opportunity. Although this framework has been developed, we have
yet to identify and assess our climate-related risks and opportunities. Following the initial climate risk identification process,
SolGold will conduct a more extensive climate-related risk and opportunity assessment and strategy development process.
Our next Steps
Efforts and actions to be implemented to enhance the processes for identifying, assessing and managing of climate-related
risks and opportunities within our business include:
• Embedding this climate-related risk identification, assessment and management process across our business through our
existing Enterprise Risk Management processes, once the initial climate risk identification process has been completed.
metrics and targets
Current metrics & Targets to Assess Climate-related risks and Opportunities
We currently have overarching metrics in place for key ESG and sustainability data including climate change, environmental
stewardship, responsible consumption, human capital, zero harm and social opportunities in line with the UN Sustainable
Development Goals specific to our exploration activities. However, SolGold understands the need for detailed metrics and
targets to be developed to assess and manage our material climate-related risks and opportunities. As such, SolGold will look
to develop specific metrics and targets related to the material climate-related risks and opportunities identified as part of our
comprehensive climate risk identification process.
Our Emissions profile
SolGold currently monitors its Scope 1 and Scope 2 emissions, as well as the total energy consumed and the intensity of our
consumption. We have yet to establish specific metrics and targets related to emissions reduction, however, once we have
conducted a detailed risk identification and assessment of climate-related risks and opportunities, forward-looking metrics
and targets will be developed to address our contribution to the global transition to a low-carbon economy.
methodology
SolGold measures and calculates our GHG emissions in line with the GHG Protocol methodology to allow for aggregation
and comparability across organisations and jurisdictions, as recommended by the TCFD.
EmiSSiOnS SOUrCES
Scope 1 Emissions (tCO2-e): Cascabel
Scope 2 Emissions (tCO2-e): Cascabel
Scope 1 Emissions (tCO2-e): Regional
Scope 2 Emissions (tCO2-e): Regional
2023
807
199
93
18
2022
2,128
52
824
10
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Environment
Our exploration operations are located in some of the most naturally diverse and ecologically rich environments, and our
environmental management approach reflects this context.
GHG Emissions and Energy
As per our climate-related disclosures, SolGold has measured and calculated Scope 1 and 2 emissions based on the GHG
Protocol methodology. In 2023, energy consumption from our operations totaled 16,861.87 GJ, and our total emissions were
1,116.7 tCO2-e. The primary source of energy consumption and our Scope 1 emissions was from diesel used in our exploration
plant, machinery and vehicles.
With respect to our Scope 1 and 2 emissions, we have seen a decrease of 46% when compared to last year’s total emissions
which is attributable to our reduction of exploration drilling.
EnErGy SOUrCE
Diesel
LPG
Electricity
Gasoline
Total
EmiSSiOnS SOUrCE
Scope 1 Emissions (tCO2-e): Cascabel
Scope 1 Emissions (tCO2-e): Regional
Total Scope 1 Emissions (tCO2-e)
Scope 2 Emissions (tCO2-e): Cascabel
Scope 2 Emissions (tCO2-e): Regional
Total Scope 2 Emissions (tCO2-e)
EmiSSiOnS inTEnSiTy
GHG Emissions Intensity: Cascabel
GHG Emissions Intensity: Regional
GHG Emissions Intensity Unit
AnnUAL EnErGy
COnSUmpTiOn (GJ)
12,458
1,238
2,641
525
16,862
2022
1,304
824
2,128
42
10
52
2022
0.06
0.17
2023
807
93
900
199
18
217
2023
0.11
n/a*
tCO2-e per metre drilled
* No drilling occurred at our Regional sites in the reporting period, therefore these sites don’t have a reported emissions intensity.
As we look to respond to climate change through planned efforts to conduct a detailed climate-risk identification and
assessment, we will in turn develop strategies to manage those risks and opportunities. This aligns with our commitment to
transition towards a low-carbon economy by joining the Zero Carbon Ecuador Program ("PECC"), an initiative promoted by
the Ministry of the Environment, Water and Ecological Transition, which aims to promote active participation of the industry
to achieve the climate goals and objectives and encourage projects that conserve, restore and generate the reduction of GHG
emissions in Ecuador.
Water and Waste management
As an exploration and development mining operation, responsible water and waste management are paramount. We are
dedicated to minimising water usage and implementing waste reduction strategies to minimise our environmental footprint
and contribute to a sustainable future.
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Environment continued
Water management
Our approach to water management is outlined in our Environmental Policy and is guided by national environmental
regulations applicable in the countries of our operations. We aim to use water as efficiently as possible to reduce usage
of this critical natural resource in our exploration operations.
To achieve these aims and comply with requirements relating to water quality, we have established specific guidelines
which are centred around treatment of drilling fluids and wastewater, water quality monitoring, suitability of products for
preparation of drilling fluids and cleaning activities at camps, water flow control at collection points and water training
programmes for our communities.
In 2023, the total water withdrawn for our activities was 29,159m3, and water discharge amounted to 14,716m3. This represents
a decrease from our water discharge and withdrawal levels when compared to 2022. Surface water was the primary source of
water withdrawal and discharge.
WATEr WiTHDrAWn (m³)
Surface Water
Groundwater
Seawater
Produced Water
Third-party Water (bottled
water for human consumption)
Total Water Withdrawn (m³)
WATEr DiSCHArGE (m³)
Surface Water
Groundwater
Seawater
Produced Water (water reused as part of the recirculation process)
Third-party Water
Total Water Discharge (m³)
Waste management
2023
29,032
2022
30,690
0
0
0
127
29,159
2023
14,716
0
0
6
0
0
0
0
150
30,840
2022
17,420
0
0
0
0
14,722
17,420
We prioritise responsible waste management, through recycling, waste reduction and responsible disposal practices.
Distinguishing between hazardous and non-hazardous waste ensures our waste is appropriately managed throughout its entire
lifecycle, with the aim of bringing zero hazardous waste to landfill. Our overall commitment to responsible waste management
is outlined within our Waste Minimisation Plan.
In our efforts to reduce waste in our managed operations, in 2023 we recycled and reused a total of 15,475kg of hazardous
waste and diverted a total of 6,457kg of non-hazardous waste from landfill. All hazardous and non-hazardous waste that is
recycled is done so by a third party accredited by the Ministry of the Environment of Ecuador. Organic waste generated is
processed on-site for transformation into compost.
WASTE CATEGOry
Non-Hazardous Waste
Hazardous Waste
Process Waste
WASTE CATEGOry
Non-Hazardous Waste
Hazardous Waste
Process Waste
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AmOUnT OF WASTE GEnErATED AnD SEnT TO LAnDFiLL
2023
16,615
0
N/A
2022
50,540
0
N/A
UniT
kg
kg
N/A
AmOUnT OF WASTE GEnErATED AnD rECyCLED/rEUSED
2023
6,457
15,475
13,786
2022
50,540
4,800
N/A
UniT
kg
kg
N/A
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Biodiversity and Landscape restoration
Our exploration activities are located in Ecuador, in some of the world’s most biologically rich and ecologically significant
regions in the world. We understand the importance of protecting and enhancing the ecosystems and landscapes in which we
operate. Through responsible mining practices, we have a unique opportunity to drive the restoration and rehabilitation of the
ecosystems in these areas, to ensure we leave a positive legacy for our environment and community.
restoration
Our environmental surveys are conducted to identify and understand the ecological makeup of the regions where we conduct
our activities. We use the International Union for Nature Conservation (IUCN) to identify Red List species of flora and fauna
present in these areas. We conduct surveys on new and existing exploration projects, to actively monitor and mitigate impacts
to ecosystems and threatened species.
iUCn rED LiST SpECiES nAmE
nUmBEr OF SpECiES rEGiSTErED in
BiOTiC STUDiES AnD mOniTOrinG
nUmBEr OF SpECiES in iUCn rED LiST
SpECiES vULnErABiLiTy CATEGOriES
Flora
mammals
Birds
Amphibian
reptiles
18
2
5
13
6
Almost threatened
Vulnerable
Endangered
Critically endangered
Almost threatened
Vulnerable
Endangered
Critically endangered
Almost threatened
Vulnerable
Endangered
Critically endangered
Almost threatened
Vulnerable
Endangered
Critically endangered
Almost threatened
Vulnerable
Endangered
Critically endangered
0
8
8
2
0
1
1
0
0
4
1
0
0
6
7
0
0
2
4
0
rehabilitation
Our rehabilitation efforts are focused on restoring and rehabilitating landscapes disturbed by mining to a functional state.
Our commitment and approach to rehabilitation is founded upon mitigating the long-term environmental impacts of our
exploration and drilling activities. In 2023, we rehabilitated a total of 0.51 hectares of land.
TOTAL LAnD rEHABiLiTATED
Area Rehabilitated (ha)
2023
0.51
2022
0.34
Further to our rehabilitation activities, through SolGold’s One Million Trees Programme designed to address deforestation
through the rehabilitation and reforestation of areas that have been impacted by historical agricultural activities, we planted a
total of 25,549 native plants, covering a total area of 23.01 hectares in 2023. The total number of plantings since the beginning
of the program until 30 June 2023, is now 224,520 plants, with a total area of 170.50 hectares.
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CONTINUED
Our people
At SolGold, our commitment to sustainability extends beyond environmental considerations; it encompasses the well-being
of our employees and communities. Our approach to looking after people is underpinned by our rigorous health and safety
framework, engagement with, and support of our local communities, and providing educational, health, and socioeconomic
opportunities within these communities.
Our Workforce
We understand the importance of supporting our employees and fostering a local, inclusive and diverse workplace,
empowering a range of people to contribute their unique skills and perspectives in the participation of our workforce.
To achieve this, we have been focusing on actively working towards increasing female participation in our workforce and
promoting employment for women in the broader community. At the end of the 2023 reporting period, 16.99% of our workforce
was female. Our employees also represent all age groups, to reflect the diverse communities that make up our workforce.
EmpLOymEnT TypE
Permanent Employees
Temporary Employees
Non-guaranteed hours employees
Total
EmpLOymEnT TypE
Permanent Employees
Temporary Employees
Non-guaranteed hours employees
Total
Health and Safety
mALE
280
2
11
293
FEmALE
OTHEr
55
0
5
60
0
0
0
0
UnDEr 30
30–50 yEArS OLD OvEr 50 yEArS OLD
67
0
10
77
220
0
5
225
48
2
0
50
TOTAL
335
2
16
353
TOTAL
335
2
15
352
Safeguarding the health, safety and wellbeing of our workforce and our communities is an integral component of our
sustainability framework. A sustainable future relies not only on responsible environmental stewardship, but also on protecting
and improving human health and fostering a culture of safety. Health and safety commitments and building a skilled workforce
through targeted training and development are embedded in our core values and are a driving force behind our operations and
a key factor in our overall success.
In 2023, we are proud to announce that we had zero fatalities, and our TRIFR was 4.19 for the reporting period. This represents
a slight decrease from our 2022 TRIFR of 4.33. We are committed to continuously reviewing, revising, and implementing new
health and safety procedures to strengthen this performance, to achieve our goal of an injury and incident free workplace.
inCiDEnTS
Number of Fatalities
Lost Time Injury (“LTI”)
Restricted Work Injury (“RWI”)
Medical Treatment Injury (“MTI”)
First Aid Injury
Hours Worked
Total Recordable Injury Frequency Rate* (“TRIFR”)
* TRIFR is the number of fatalities, lost time injuries, alternate work and other injuries requiring medical treatment.
2023
2022
0
2
2
1
3
0
4
–
3
–
1,191,195
1,615,430
4.19
4.33
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Our Communities
We believe that building strong relationships with our communities is fundamental to creating safe, sustainable and successful
operations. An important aspect of our business is to strive to invest in and create opportunities that positively impact the
communities in which we operate. The relations we develop with our host communities are guided by our Community Relations
Policy, which focuses on understanding local communities and acknowledging and respecting their culture. In doing so, we
seek to generate mutual trust which we build upon through continuous dialogue with our communities.
SolGold invests in its local communities through various socioeconomic development initiatives and partnerships with the
aim of promoting social, economic, and environmental wellbeing of the communities. The primary areas of focus for our
investment include:
Education and training
Health care
Socioeconomic investment
Social, cultural and sporting activities in partnership with local governments of our communities
Local procurement & Community Employment and Training Opportunities
Efforts to create positive economic impacts include procuring goods and services locally and offering or creating employment
opportunities. Where possible, we preference local businesses and the main goods and services we procure include:
• Goods: Food and beverages, hardware supplies, agricultural and livestock supplies, bedding and linens.
• Services: Transportation of personnel, transportation of parcels and waste, rental of vans, construction contractors and
construction finishes (welding, carpentry, masonry), maintenance of gardens and nurseries, community dining rooms and
bakery, accommodation, community promoters and for the lease of land for pits and platforms, roads, or facilities necessary
for the operation.
In the 2023 reporting period, we spent US$2,786,967 in our local communities which represents 16.4% of our total expenditure.
We know that providing our local community with the skills and knowledge to obtain meaningful employment either within
our own operations, within the community or more broadly is an important factor in sustainable development. Throughout
2023, we continued to provide opportunities to community members through direct job opportunities within our business as
technicians or employment at local community organisations.
Community Workers
Technicians
COmmUniTy invESTmEnT ACTiviTy
Community Grants and Sponsorship
Community Infrastructure and Services Investment
(including payment of mining easements and permits)
2022-2023
2021-2022
229
31
395
56
2023 (US$)
2022 (US$)
764,365
820,265
1,708,373
809,301
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S U S T A I N A B I L I T Y R E P O R T A N D T C F D D I S C L O S U R E S
CONTINUED
Our people continued
Key training and employment opportunities continued during 2023, within our local communities in Ecuador and included:
• Generation of employment through the establishment of an organisation to provide garden maintenance services at the
ENSA camp;
• Generation of employment through the establishment of an organisation that provides plot maintenance services for ENSA’s
1M reforestation project;
• Ongoing employment and training of women from the communities of Santa Cecilia and Nuevo Rocafuerte through the
Cascabel Community Bakery and the Rocafuerte Community Dining Room; and
• Training of families from the communities of Getzemaní, Cachaco, Santa Cecilia, Rocafuerte and San Pedro in beekeeping
and the maintenance of apiaries and hives.
In planning for our future workforce to continue activities associated with our Cascabel Project, we are also investing in
the next generation through the provision of university scholarships through our Mi future en Cascabel Programme. This
Programme has provided 28 students with access to higher education, whereby courses have included areas across science,
technology and humanities, since commencement.
Community Engagement
We strive to promote the participation and engagement of the local community in all of our activities. We consider it of vital
importance that the community is adequately informed, consulted and involved in our business activities, and any potential
impacts they might have. Across our operations, we held 383 community meetings and events in the 2023 reporting period,
involving 6,092 members of the community. The outcomes of this consultation are to be incorporated into our environmental
and social planning and programs.
To minimise the negative impacts of our operations on our local communities, we also provide ongoing formal and informal
communication channels for members of the community to raise complaints and provide feedback. We consider it a priority
to address and resolve any grievances, to build trust, establish long-term relationships and minimise our negative impacts. Our
formal grievance mechanism for complaints, claims and requests for information is accessible to local community members
and other concerned stakeholders. During June 2022 to July 2023, we had a total of 25 registered grievances, of which 21 were
resolved in a timely manner, and four that are currently in the process of reaching a resolution.
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TCFD index
The following Index provides an overview of SolGold’s climate-related risks and opportunities disclosures, as recommended by
the Taskforce on Climate-related Financial Disclosures (TCFD), for the reporting period 1 July 2022 to 30 June 2023.
TCFD rECOmmEnDED DiSCLOSUrES
SUmmAry OF DiSCLOSUrE
DiSCLOSUrE
rELEvAnT SECTiOn
OF AnnUAL rEpOrT
GOvErnAnCE
a) Describe the board’s
oversight of climate-
related risks and
opportunities
b) Describe management’s
role in assessing and
managing climate-related
risks and opportunities
STrATEGy
a) Describe the climate-
related risks and
opportunities the
organisation has identified
over the short, medium
and long term
b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial
planning
The Board of Directors are ultimately
responsible for the oversight of climate-
related risks and opportunities impacting
SolGold, however, the board delegates
management of climate-related risks and
opportunities to the ESG Committee.
SolGold’s CEO’s performance is assessed
against a scorecard with an ESG element,
which is designed to improve overarching
ESG and sustainability performance
accounting for climate-related considerations.
Management will also play a key role during
the climate risk assessment process.
Whilst SolGold’s current business activities
(exploration) have limited exposure to
climate-related risks, we have considered
examples of key physical and transition risks
to which we will be exposed to over short,
medium and long-term. However, we are yet
to conduct a full climate-risk identification
and assessment process.
SolGold is yet to assess the impact of
climate-related risks and opportunities
on our businesses, strategy, and financial
planning. However, a Climate-Related
Risk Framework has been developed, and
the impacts of climate-related risks and
opportunities will be determined as part of a
comprehensive climate-risk identification and
assessment process.
Full
Our Climate Related Financial
Disclosures – Governance
Refer to page 35
Partial
Our Climate Related Financial
Disclosures – Governance
Refer to page 35
Partial
Our Climate Related Financial
Disclosures – Strategy
Refer to page 36
Partial
Our Climate Related Financial
Disclosures – Strategy
Refer to page 36
c) Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related scenarios,
including a 2°C or lower
scenario
SolGold is yet to assess the resilience of our
strategy against various climate scenarios.
However, we intend to conduct scenario
analysis to evaluate the potential impacts
of climate-related risks on our business and
financial performance and to assess the
resilience of our strategy.
Omitted
N/A
SOLGOLD pLC ANNUAL REPORT 2023
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S U S T A I N A B I L I T Y R E P O R T A N D T C F D D I S C L O S U R E S
CONTINUED
TCFD index continued
TCFD rECOmmEnDED DiSCLOSUrES
SUmmAry OF DiSCLOSUrE
DiSCLOSUrE
rELEvAnT SECTiOn
OF AnnUAL rEpOrT
riSK mAnAGEmEnT
a) Describe the
organisation’s processes
for identifying and
assessing climate-
related risks
b) Describe the
organisation’s processes
for managing climate-
related risks
c) Describe the processes for
identifying, assessing and
managing climate-related
risks are integrated into
the organisation’s overall
risk management
SolGold has developed a Climate-Related
Risk Management Framework to help identify,
assess, manage and report on climate risks
and opportunities.
Full
Our Climate Related Financial
Disclosures – Risk Management
Refer to page 37
Partial
Our Climate Related Financial
Disclosures – Risk Management
Refer to page 37
Omitted
N/A
A Climate-Related Risk Management
Framework has been developed, however, we
have yet to identify and assess the specific
climate-related risks and opportunities that
are relevant to our business and operations.
SolGold plans to conduct a comprehensive
climate risk identification and assessment
process, which will guide and determine the
processes that we will employ for managing
climate-related risks.
SolGold has yet to embed its climate-
related risk identification, assessment
and management process within our
overall enterprise risk management. Once
the initial climate risk identification and
assessment process has been completed,
we aim to integrate the Climate-Related
Risk Management Framework we have
developed into our existing Enterprise Risk
Management processes.
mETriCS AnD DATA
a) Disclose the metrics used
by the organisation to
assess climate-related
risks and opportunities in
line with its strategy and
risk management process
SolGold has yet to establish metrics to assess
climate-related risks and opportunities,
specific metrics will be developed once we
have conducted a comprehensive climate-
related risk identification and assessment
process.
Omitted
Our Climate Related Financial
Disclosures – Metrics and
Targets
Refer to page 38
b) Disclose Scope 1, Scope
2 and, if appropriate,
Scope 3 greenhouse
gas emissions and the
related risks
Scope 1 and Scope 2 emissions are currently
measured and reported. However, Scope
3 emissions have yet to be quantified,
and relevant assessments have not
been conducted.
Partial
Environment
Refer to page 38
c) Describe the targets used
by the organisation to
manage climate-related
risks and opportunities
and performance
against targets
SolGold has yet to establish targets to
assess and manage climate-related risks
and opportunities, specific targets will
be developed once we have conducted
a comprehensive climate-related risk
identification and assessment process.
Omitted
N/A
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This section constitutes the Company’s Non-Financial Information Statement, which was produced in compliance with Sections
414CA (1) and 414CB (1) of the Companies Act 2006. Information incorporated by cross reference.
rEQUirEmEnT
rELEvAnT pOLiCiES
AnD STAnDArDS
OUTCOmES AnD ADDiTiOnAL inFOrmATiOn
Environmental Matters
Environmental Policy
Protecting our natural environment
Employees
Code of Conduct
Bullying, Harassment
& Discrimination Policy
Equity, Diversity &
Inclusion Policy
This policy outlines the governance of the conduct of our
employees, contractors and suppliers
This policy highlights our commitment to maintaining a work
environment which ensures the respect for all individuals,
regardless of their age, race, gender or religion
This policy recognises that a diverse and talented workforce
is a competitive advantage and to consider highly qualified
individuals at all stages of employment, while considering
criteria to promote diversity including race, sex, religion,
ethnic origin, and disability
pAGE
Page 40
Page 58
Grievance, Complaints
& Disputes
Procedure for dealing with complaints, claims and requests
for information by employees and host communities
Social Matters
Procurement Policy
To be developed
Human Rights
Code of Conduct
This policy outlines the governance of the conduct of our
employees, contractors and suppliers
Page 58
Grievance, Complaints
& Disputes
Procedure for dealing with complaints, claims and requests
for information by employees and host communities
Human Rights Policy
To be developed
Modern Slavery Statement
To be developed
Supplier Code of Conduct
To be developed
Anti-Bribery and Anti-
Corruption
Anti-Bribery and Anti-
Corruption Policy
This policy highlights our zero-tolerance approach to bribery
and corruption
Whistle-blower Policy
Code of Conduct
This policy emphasises our commitment to compliance with laws,
regulations, and the Company's own business and ethics policies
Supplier Code of Conduct
(currently in draft)
This policy outlines the governance of the conduct of our
employees, contractors and suppliers
Description of principal risks
relating to matters above
Risk management
Description of business model
Business model
Page 58
Page 58
Page 58
Page 22
Page 10
We are committed to introducing a comprehensive list of policies to protect our environment, our people and our communities,
as evident in the list of policies above. We are also developing policies that focus on Human Rights, Indigenous People, and
Procurement and look forward to implementing these across our business in 2024.
The Strategic Report was authorised for issue and signed on behalf of the Directors by:
LiAm TWiGGEr
Chair
28 September 2023
SOLGOLD pLC ANNUAL REPORT 2023
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C H A I R ’ S I N T R O D U C T I O N
Leadership and Focus on
Corporate Governance
Dear Shareholders, I am pleased to present
the Corporate Governance Report for the
financial year ending 30 June 2023.
Overseeing governance at SolGold is my responsibility as
Chair and I continue to work towards the Company becoming
compliant with the U.K. Corporate Governance Code (the
“Code”). The year under review saw difficulties for the Board
to progress compliance due to the loss of Independent Non-
Executives, significant turnover in the executive management
team and ensuing restructuring of the corporate function
across the organization. However, with the new executive
management team in place and our intention to appoint
new Independent Non-Executive Directors, I am sure we will
continue to progress on this front in the upcoming year.
U.K. Corporate Governance Code
Since my last review in the 2022 Annual Report, SolGold
continues to work towards compliance with the provisions of
the Code. I note that we are still on our road to compliance as
noted on pages 50 to 51.
We have comprehensively reviewed, updated, and
implemented several policies and procedures in identified
areas, in addition to our sub-committee terms of reference, on
our pathway to voluntary compliance with the Code.
It is also important to note that the Company is also subject
to various corporate laws and regulations in Canada and
Australia due to being an issuer on the TSX, and a registered
foreign corporation and tax resident in Australia.
Board membership
During the period under review, there has been a reset
at the Board level with the resignation of Non-Executive
Directors Keith Marshall, Elodie Grant Goodey and Kevin
O’Kane from the Company and we wish them well in their
future endeavours. Following the successful acquisition
of Cornerstone Capital Resources Inc., Scott Caldwell and
Dan Vujcic joined the Board. Scott and Dan bring extensive
geological, operations, corporate and financial experience
between them.
In November 2022, Darryl Cuzzubbo departed as CEO and
as a Director. Upon Darryl’s departure Scott Caldwell took
the reigns as Interim CEO and in March 2023 was appointed
permanent CEO. Scott’s experience in South America in
developing mining companies has proven to be invaluable and
the Board is thankful that Scott is taking the lead in taking
SolGold forward.
Committees
The Board Committees have provided great input to the
Board over the course of the year and the current composition
of the Board has meant that the vast majority of the workload
is being undertaken by the Board as a whole. As we move
forward, with the addition of Scott Caldwell and Dan Vujcic to
the Board, our committees will once again be in a position to
drive forward the progress of the Company.
Conclusion
I thank all our shareholders for their ongoing support and the
members of the Board for their continued commitment to
SolGold and ensuring the future success of the Company for
the benefit of all our stakeholders and shareholders.
LiAm TWiGGEr
Chair
28 September 2023
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Board of Directors
Audit & risk
Committee
remuneration
Committee
nomination
Committee
Strategy
Committee
Environment,
Social and
Governance
Committee
EXECUTivE mAnAGEmEnT
The Board of Directors
The Board is responsible for ensuring SolGold’s long-term
success and making critical decisions.
• Monitoring investor sentiment regularly and engaging
frequently with the Group’s major shareholders
• Approval of treasury policy and significant financing
The matters reserved for the Board are available on the
Company’s website, in the Corporate Governance Charter
https://solgold.com.au/about-us/corporate-governance/.
The Board has a schedule of matters and responsibilities
specifically reserved to itself, the main items of which include:
• CEO appointment and determination of the terms of the
appointment
• Strategy, annual budget, balance sheet management and
funding strategy
• Approval of the published financial results and other
external and regulatory reporting
• Performance assessment of Executive Directors against
its strategic goals and financial plans
• Establishment / approval / maintenance of corporate
arrangements
• Approval of the allotment of equities and other financial
instruments.
Outside the formal schedule of matters reserved for
the Board, the Chair and Non-Executive Directors make
themselves available for consultation with the executive
team as often as necessary.
major Board Decisions
• Acquisition of Cornerstone Capital Resources Inc.
• Entering into of a Net Smelter Royalty with Osisko
Gold Royalties Ltd
• Capital Raise with a new strategic investor – Jiangxi
Copper (Hong Kong) Investment Company Limited
• Termination of CEO and appointment of new CEO
policies, including Corporate Governance
• Change of Company Secretary
• A lead role in the function of various Board Committees
• Determination of commitments, acquisitions, and
divestments within specified limits
• Overview of risk management initiatives and reporting
protocols
• Consideration of material contracts and transactions not
in the ordinary course of business
• Health and safety of our employees through quarterly
reporting of KPIs to the Environmental, Social, and
Governance Committee
• Restructuring of management across the business to
focus key employees in time zones aligned with the
Cascabel Project
SOLGOLD pLC ANNUAL REPORT 2023
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C O R P O R A T E G O V E R N A N C E S T A T E M E N T
SolGold is subject to the Canadian national policy 58-201 – Corporate Governance Guidelines as a requirement of listing
on the Toronto Stock Exchange (“TSX”) and the Disclosure Guidance and Transparency rules sourcebook of the United
Kingdom’s Financial Conduct Authority as a requirement of listing on the London Stock Exchange (“LSE”). We voluntarily
make a commitment to meet the standards required under the UK Corporate Governance Code 2018 ("Code").
As SolGold has a standard listing on the LSE, we are not required to comply with the Code, as per the Financial Conduct
Authority’s (“FCA”) Listing Rules. The Board has made a commitment to voluntarily meet the principles of the Code expected
of a premium listing to continue SolGold’s corporate governance and strategic goals. The Code is available to view on the
Financial Reporting Council’s website (www.frc.org.uk).
The Code gives SolGold a chance to report against a list of principles and provisions to our stakeholders to illustrate our
improvements and compliance within our governance structures and implementation. SolGold is eligible for exemption from
the FCA’s requirements relating to corporate governance disclosures, however the Directors have decided to provide such
disclosures which are set out below.
COmpLiAnCE WiTH THE UK COrpOrATE GOvErnAnCE CODE 2018
As a Company with a standard listing on the London Stock Exchange, SolGold plc is not required under the FCA Listing Rules
to apply the Principles and comply with the provisions of the Code. However, the Company decided to voluntarily adopt the
Code in FY21 to adhere to the highest standards of corporate governance. Prior to reporting according to the Code, SolGold
plc reported according to the Quoted Company Alliance Corporate Governance Code (“QCA Code”) which is recognised as
being suitable for growth companies. The Company is also subject to Canadian National Policy 58-201 – Corporate Governance
Guidelines through the financial period to 30 June 2023 by virtue of its listing on the TSX and is in compliance with the
guidelines. For the period up to 30 June 2023, the Company was compliant with the Code with the following exceptions:
prOviSiOn OF THE CODE
(inCLUDinG rEFErEnCE nUmBEr)
nOn-COmpLiAnCE
rEASOn FOr nOn-COmpLiAnCE
Provision 5: Engagement with workforce
using one of the prescribed methods.
The Board has currently
not specified one of
the three methods of
engagement with the
workforce set out in
the Code.
The Board has currently not
specified one of the three
methods of engagement
with the workforce set out
in the Code. The Board
engages with the workforce
in a number of ways, in
particular by having the
CEO based in Ecuador and
regularly spending time with
employees at the worksites.
Key stakeholder interests
and matters set out in s172
of the Companies Act 2006
are considered in Board
discussions and decision
making.
COmpLiAnCE Or prOGrESS
TOWArDS COmpLiAnCE
Relationship dynamics
between the Board
and workforce are
considered during
decision-making
at Board and
Committee levels.
Provision 11: At least half the Board,
excluding the chair, should be Non-
Executive Directors whom the Board
considers to be independent.
The Board composition
does not currently
comply with this
requirement.
Following the resignation of
Independent Non-Executive
Directors, the Board make
up does not comply.
The Board will look
to bring on additional
Independent Non-
Executive Directors.
Provision 12: The Board should appoint
one of the independent Non-Executive
Directors to be the senior independent
Director to provide a sounding Board for
the chair and serve as an intermediary
for the other Directors and shareholders.
Led by the senior independent Director,
the Non-Executive Directors should meet
without the chair present at least annually
to appraise the chair’s performance, and
on other occasions as necessary.
The Board does not
currently have a
designated Senior
Independent Director.
Following the resignation
of the previous Senior
Independent Director, the
role has not been replaced.
As further Independent
Non-Executive Directors
are added to the Board,
this position will be
revisited.
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(inCLUDinG rEFErEnCE nUmBEr)
nOn-COmpLiAnCE
rEASOn FOr nOn-COmpLiAnCE
Provision 17: A majority of members
of the Nomination Committee should be
independent Non-Executive Directors.
The Chair of the Board should not chair
the committee when it is dealing with the
appointment of their successor.
Provision 20: Open advertising and/or
an external search consultancy should
generally be used for the appointment of
the Chair and Non-Executive Directors. If
an external search consultancy is engaged,
it should be identified in the annual report
alongside a statement about any other
connection it has with the company or
individual Directors.
During the year, a majority
of the members were
not Independent Non-
Executive Directors.
During the recruitment
of recent Non-Executive
Directors, the positions
were not filled via open
advertising or the use
of an external search
consultancy.
The current Board
composition does not
lend to having a majority
of Independent Non-
Executive Director members
(excluding the Chair).
The Board determined
that there were sufficient
prospective candidates with
the requisite knowledge and
experience from the Board’s
wider networks.
COmpLiAnCE Or prOGrESS
TOWArDS COmpLiAnCE
The Board will review
the balance of the
Nomination Committee
in FY2024.
Upon the appointment
of further Non-Executive
Directors or the Chair,
the Board will consider
the use of open
advertising or external
search consultancies.
Provision 23: The process used in
relation to appointments, its approach to
succession planning and how both support
developing a diverse pipeline.
The Company does
not currently have a
succession planning
process for the Board.
Consideration around Board
succession planning is
underway.
The Company will review
a succession planning
process for the Board in
FY2024.
The current composition
of the Audit and Risk
Committee does not have
the requisite numbers
of independent Non-
Executive Directors.
The current composition
of the Board does not
have sufficient numbers of
Independent Non-Executive
Directors to meet this
requirement.
The Board intends to
appoint additional
Independent Non-
Executive Directors
in order to fulfil this
requirement.
Provision 24: The Board should establish
an audit committee of independent Non-
Executive Directors, with a minimum
membership of three, or in the case of
smaller companies, two. The chair of
the Board should not be a member. The
Board should satisfy itself that at least one
member has recent and relevant financial
experience. The committee as a whole
shall have competence relevant to the
sector in which the company operates.
Provision 29: The Board should monitor
the company’s risk management and
internal control systems and, at least
annually, carry out a review of their
effectiveness and report on that review
in the annual report. The monitoring and
review should cover all material controls,
including financial, operational and
compliance controls.
The Board has not been
involved in a review
of operational and
compliance controls
but has been involved
in a review of financial
controls.
Provision 32: Before appointment as
chair of the Remuneration Committee,
the appointee should have served on
a remuneration committee for at least
12 months.
Dan Vujcic is the Chair
of the Remuneration
Committee but did not
serve at least 12 months
prior to his appointment
on a Remuneration
Committee.
The current composition
of the Board does
not provide for a chair
of the Remuneration
Committee that has
the requisite experience.
Provision 41: There should be a description
of the work of the Remuneration Committee
in the annual report, including: reasons
why the remuneration is appropriate using
internal and external measures, including
pay ratios and pay gaps.
SolGold currently does
not have pay ratios nor
grading completed.
The number of employees
in management positions is
limited and analysis of pay
ratios and pay gaps would
not yield meaningful results.
The Company will
undertake a review of
the effectiveness of
all material controls in
FY2024 and monitor
these as well as the risk
management framework
on an ongoing basis.
The Company will report
on this monitoring and
review in the 2024
Annual Report.
The Company will
review the structure
of the Remuneration
Committee in
FY2024 following
the appointment of
additional Non-Executive
Directors.
The Board will provide
an update on its actions
to address this Provision
in FY2024.
SOLGOLD pLC ANNUAL REPORT 2023
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C O R P O R A T E G O V E R N A N C E S T A T E M E N T
CONTINUED
Diversity and inclusion Targets
In accordance with the disclosure requirements under FCA Listing Rules 14.3.33, as at 30 June 2023, 17% of the individuals on
the Board are women, being below the recommended 40%. Currently a woman does not hold any of the senior positions of
Chair, Senior Independent Director, CEO, or CFO. There is one member of the Board who is from a minority ethnic background.
The Company has not met the identified targets of women representation on the Board and women holding senior positions
due to the resignation of Non-Executive Directors, the vacancies of which have not yet been filled. The Board is looking to
bring further women onto the Board.
Women 17%
Board Gender Split
men 83%
Gender identity reporting (at 30 June 2023)
nUmBEr OF
BOArD mEmBErS
pErCEnTAGE
OF THE BOArD
nUmBEr OF
SEniOr pOSiTiOnS
On THE BOArD
(CEO, SiD AnD
CHAir)
nUmBEr in
EXECUTivE
mAnAGEmEnT
pErCEnTAGE
OF EXECUTivE
mAnAGEmEnT
Men
Women
5
1
83%
17%
2
0
2
0
80%
0%
Ethnic background reporting (at 30 June 2023)
nUmBEr OF
BOArD mEmBErS
pErCEnTAGE
OF THE BOArD
nUmBEr OF
SEniOr pOSiTiOnS
On THE BOArD
(CEO, SiD AnD
CHAir)
nUmBEr in
EXECUTivE
mAnAGEmEnT
pErCEnTAGE
OF EXECUTivE
mAnAGEmEnT
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic groups, including Arab
Not specified/ prefer not to say
5
1
–
–
–
–
83%
17%
–
–
–
–
2
–
–
–
–
–
2
–
–
–
–
–
100%
–
–
–
–
–
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Further details of the way the Code has been applied can be found in the following pages;
Board Leadership and Company purpose
• Promoting the long-term sustainable success of the Company
• Purpose, values, strategy and culture – we have conducted an
extensive analysis of the Company in FY2022/23
• Resource availability to meet Company objectives and measure performance,
including the assessment and management of risk
• Responsibilities to shareholders and stakeholders
• Policies and procedures are consistent with Company values, demonstrate the right to speak up
pages 57 and 58
Division of responsibilities
• Leadership responsibilities from the Chair and effectiveness
• Board Composition – the Board notes that further appointments to the Board are needed to have the
appropriate balance of Executive and Non-Executives and to demonstrate diversity amongst skills,
experience and abilities
pages 60 to 62
• Time management for Non-Executives to ensure the Board is offered analysis, expert
opinion, strategic guidance and to hold management to account
• Board is provided with sufficient resources to manage the Company effectively and efficiently
• Board has a sufficient combination of skills, experience and knowledge
• Evaluation of the Board to ensure strategic objectives met
Audit, risk and internal Control
Internal and external audit functions are independent and effective
•
• Ability to present a fair, balanced and understandable assessment of the Company’s position
page 63
and prospects
• Efficient procedures to mitigate risk, manage internal control framework and determine the
extent of the Company’s risk appetite
remuneration
• Remuneration of the Board was last reviewed on 1 January 2021 and the remuneration of the CEO is
pages 72 to 80
designed to support the strategy and promote long-term sustainable success that is aligned with the
Company’s purpose and values
• Formal and transparent remuneration procedures, to ensure no Director decided their own
remuneration outcome
• Directors apply independent judgement and discretion when considering performance
objectives and remuneration outcomes
The Company operates an Equity, Diversity and Inclusion Policy emphasising the commitment to developing a workplace
culture which embraces workforce Equity, Diversity and Inclusion across the organisation. Due to the policy being in its initial
stages of development, it is not appropriate to apply for the purposes of reporting under the FCA Disclosure and Transparency
Rules 7.8.2AR.
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B O A R D O F D I R E C T O R S
The Board of SolGold leads the strategic objectives of
the Group and is responsible for its long-term growth.
The members of the Board have extensive and diverse experience in Corporate Governance, geology, mining,
strategic planning, accounting, finance and diplomatic relations. The Board currently consists of six (6) Directors,
two (2) of whom are considered independent, excluding the Chair, and five (5) of whom are non-Executive
under the Code.
LiAm TWiGGEr
Grad Dip Bus, BEc, CPA
SCOTT CALDWELL
BSc (Mine Engineering)
niCHOLAS mATHEr
BSc (Geology)(Hons)
Chair
Executive Director CEO/mD
non-Executive Director
Appointment: June 2019
nationality: Australian
Age: 60
Appointment: November 2022
nationality: Canadian
Age: 66
Appointment: May 2005
nationality: Australian
Age: 66
Career
Career
Career
Mr Twigger has over 30 years of experience in
the fields of investment banking and corporate
finance. He has extensive experience in
providing strategic corporate advice and in
the execution of M&A across the resource
sector.
Mr Twigger is Deputy Chairperson and an
Executive Director of Argonaut Limited, a
licensed and independent, Australian based
investment banking, funds management and
stockbroking firm.
Skills and Expertise
Strategy & Leadership, Capital Raising,
Corporate Strategy, Corporate Finance.
External Appointments
• Lunnon Metals Ltd
• Argonaut Ltd
• Australia-Ecuador Business Council
Mr. Caldwell is a mining engineer with over 40
years’ experience in the global mining industry
having held a number of senior executive
roles including Chief Executive Officer at both
Guyana Goldfields Inc and Allied Nevada Gold
Corp., as well as Chief Operating Officer at
Kinross Gold Corp.
Prior to those roles, Mr. Caldwell held a number
of senior operating roles and has experience
building and operating gold and base metal
mines worldwide, including in the USA, Canada,
Russia, Zimbabwe, Chile, and Indonesia. Mr.
Caldwell was previously a Non-Executive
Director of SolGold between 2016–17.
Skills and Expertise
Strategy and Leadership, Corporate Strategy.
Mr Mather has 35 years’ experience
in exploration and resource company
management in a variety of countries. His
career has taken him to numerous countries
exploring for precious and base metals
and fossil fuels. Mr Mather has focused
his attention on the identification of and
investment in large resource exploration
projects. He has, during his career, been
instrumental in capital raisings of over A$500
million and the return of A$5.7 billion to
shareholders via takeovers.
Skills and Expertise
Strategy & Leadership, Minerals Exploration,
Capital Raising, Corporate Strategy, Financial
and Contract Management, International
Business.
External Appointments
• Stella Minerals Canada ULC
External Appointments
• DGR Limited (ASX)
• Armour Energy Limited (ASX)
• New Peak Metals Limited (ASX)
• Clara Resources Limited (ASX)
• First Tin plc (LSE-AIM)
• Lakes Blue Energy NL (ASX)
• Conjugate Energy Limited
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COmmiTTEE mEmBErSHip
Audit and Risk Committee
Remuneration Committee
ESG Committee
Strategy Committee
Nomination Committee
Chair of Committee
mArÍA AmpArO ALBÁn
JD, MEcLaw, SIPA, Cert. Business Excellence
JAmES CLArE
BA (Hons), LLB
SLOBODAn (DAn) vUJCiC
B. Bus (Hons), CA
independent non-Executive
Director
Appointment: October 2020
nationality: Ecuadorian
Age: 54
non-Executive Director
Appointment: May 2018
nationality: Canadian
Age: 47
independent non-Executive
Director
Appointment: October 2022
nationality: Australian
Age: 44
Career
Career
Career
Mrs Albán was appointed Non-Executive
Director on 21 October 2020 and has more
than 25 years’ experience in international trade
and sustainable development, particularly
environmental compliance. María has worked
in a number of countries and was instrumental
in the Free Trade Agreement negotiation
between Ecuador and the United States on
environmental matters.
Mr Clare is a partner at Bennett Jones LLP,
one of Canada’s leading corporate law firms.
He is a corporate and securities lawyer with
extensive experience in the mining sector
both domestically and internationally. Mr
Clare is recognised by Lexpert as a leading
mining lawyer in Canada, and repeatedly
recommended for his experience in mining,
corporate finance and securities law by the
Canadian Legal Lexpert Directory.
Skills and Expertise
Strategy & Leadership, Financial Management,
Contract Management, Sustainability/ESG,
Legal, Risk, Corporate Governance.
Skills and Expertise
Legal, Capital Raising, Strategy & Leadership,
Corporate Strategy, Contract Management,
Corporate M&A.
External Appointments
• ACD Consulting Cia. Ltda
External Appointments
• PJX Resources Inc
• Riverside Resources Inc
• Canstar Resources Inc
Mr. Vujcic is currently the Chief Development
Officer of Metals Acquisition Limited, an
NYSE listed Special Purpose Acquisition
Vehicle which acquired the CSA Copper Mine
from Glencore AG. Prior to this he was an
investment banker with almost two decades
of experience in global capital markets. Over
his career, Mr. Vujcic has advised clients of
several investment banks in a diverse range of
commodities across numerous jurisdictions,
including raising capital in both equity and
debt markets globally, supporting the growth
ambitions of emerging miners, and attaining a
significant presence in the industry.
Skills and Expertise
Client Coverage, Business Development
Acquisitions, APAC, Investment Banking.
External Appointments
• Metals Acquisition Limited
Board changes during Fy2023
• Mr. Keith Marshall resigned from the Board on 12 August 2022.
• Mr. Scott Caldwell was appointed to the Board as an Independent Non-Executive Director on 24 October 2022,
then Interim CEO on 10 November 2022 and permanent CEO on 17 March 2023.
• Mr. Dan Vujcic was appointed to the Board as an Independent Non-Executive Director on 24 October 2022.
• Mr. Darryl Cuzzubbo was terminated from his role as Managing Director and CEO on 10 November 2022.
• Mr. Kevin O’Kane and Mrs Elodie Grant Goodey resigned on 22 December 2022.
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E X E C U T I V E M A N A G E M E N T T E A M
SCOTT CALDWELL
BSc (Mine Engineering)
CHriS STACKHOUSE
BBA (Hons), CPA, CA
Executive Director CEO/mD
Group Chief Financial Officer
Career
Career
Mr. Caldwell is a mining engineer with over 40
years’ experience in the global mining industry
having held a number of senior executive
roles including Chief Executive Officer at both
Guyana Goldfields Inc and Allied Nevada Gold
Corp., as well as Chief Operating Officer at
Kinross Gold Corp.
Prior to those roles, Mr. Caldwell held a number
of senior operating roles and has experience
building and operating gold and base metal
mines worldwide, including in the USA, Canada,
Russia, Zimbabwe, Chile, and Indonesia. Mr.
Caldwell was previously a Non-Executive
Director of SolGold between 2016–17.
Mr. Stackhouse is an accomplished
finance professional with over 15 years
of experience successfully managing
development stage assets through operations
with extensive experience living and working
in South America.
Mr. Stackhouse spent seven years with
Guyana Goldfields Inc. (acquired by Zijin
Mining Group), holding various senior
finance roles, including interim CFO.
He was instrumental in the development and
operation of the Aurora Gold Mine, including
the finalization of the feasibility study and
project financing.
Mr. Stackhouse obtained his CPA, CA, as an
Audit Manager with PricewaterhouseCoopers,
where he worked and lived for three years in
Chile, South America.
More recently, Mr. Stackhouse has served as
CFO of Rockcliff Metals (CSE: RCLF) and VP
Finance for Generation Mining (TSX: GENM).
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Board's role
The Board’s role is to provide the necessary oversight of
the Company’s purpose, values, direction and strategic
plans through acts of leadership that support the senior
management team to promote and achieve long-term
sustainable added value for shareholders and stakeholders.
The Board recognises that to achieve its obligations, it
requires sound and continuously improved Corporate
Governance practices.
The Directors’ diverse range of skills, experience and
industry knowledge, and the ability to exercise objective
and independent judgement, are the driving factors behind
bolstering the future success of the Company. SolGold’s
business model and strategy are set out on pages 10 to 13 in
the Strategic Report and outline the basis upon which the
Company intends to generate and preserve value over the
long-term.
purpose, culture and strategy
The Board has the goal, through improved corporate
governance responsibility, to foster and continue a culture of
integrity to ensure that SolGold provides a sustainable and
enduring economic, social and environmental benefit over
the long-term to generate value for shareholders and benefit
the wider society. The Board regularly receives feedback
and assurance from the CEO and Executive Management
that corrective action is taken as required to align with the
Company’s purpose.
The Board is responsible for setting the tone from the top,
encompassing the Company’s purpose and values as a factor
during any decision making. The CEO is the agent, delegated
by the Board, to communicate this message throughout the
Company.
During the year, the Board along with the support of
management and the assistance of an external consultant
assessed the culture of the Company.
Board activity during the year
SolGold over the past year witnessed substantial change to the business, from the significant changes in Board composition
and the Executive Management to the acquisition of Cornerstone Capital Resources Inc., to consolidate ownership of the
Cascabel Project. Those changes are reflected in the intensity of Board activity.
The Board has been heavily focused on the demands of integrating Cornerstone Capital Resources Inc. into the Group and the
restructure of our management team. Performance in some areas, such as the further development of Governance Policies has
been impacted whilst the Board focuses on resetting the Group to ensure a great foundation upon which future progress is
based. A summary of the Board’s activities is available in the below table.
BOArD rESpOnSiBiLiTiES
ACTiviTiES
Strategic
Approve the Group’s strategy and objectives,
setting the purpose and values of the Group,
reviewing and approving material agreements,
exploration tenements and overseeing
the Group’s operations and risk appetite
statements.
• Acquisition of Cornerstone Capital Resources Inc. to consolidate
ownership of the Cascabel project to demonstrate SolGold’s position
to supporting Ecuador becoming the next copper frontier
• Reviewed and approved the key strategic priorities for the Group for
the current Financial Year
• Received presentations from the CEO at Board Meetings, updating the
Board on progress against the Group’s strategic goals
Governance
Supervising the Group’s corporate policies
and procedures, including receiving regular
reports and updates from Board Committees,
reviewing and approving the organisational
structure and monitoring compliance with the
Code and Canadian National Policy 58-201 –
Corporate Governance Guidelines.
Financial
Scrutiny and overall responsibility for the
financial affairs and controls of the Company.
• Termination of Darryl Cuzzubbo's position of CEO in November 2022
• Appointment of Scott Caldwell as permanent CEO in March 2023
•
• Voluntary compliance with the UK Corporate Governance Code
• Reviews of Directors’ conflicts of interest and independence of Non-
Implementation of the Directors' Remuneration Policy
Executive Directors
• Considered recommendations from the Audit and Risk Committee to
adopt the 2022 Annual Report and Accounts, the 2023 Half-Yearly
Report and quarterly MD&A as required for the Company’s listings on
the LSE and TSX
• Review of the Group’s ongoing financial position
• Review and approval of planned capital expenditure
• Review and approval of the 2023-24 budget
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B O A R D L E A D E R S H I P A N D C O M P A N Y P U R P O S E
CONTINUED
BOArD rESpOnSiBiLiTiES
ACTiviTiES
Employee and Stakeholder Engagement
Engagement with both our workforce and
local communities.
• Received updates from the ESG Committee regarding the work
•
carried out for local communities and environments
Invited members of the executive team and their direct reports to
attend and present at Board meetings
risk
To ensure the Group acts within the boundaries
set by the Risk Appetite Statement.
• Continued development and review of risk management processes
• Review of updates from the Audit and Risk Committee on internal
control and assurance functions
resources and controls
The Board ensures that the necessary resources and controls
are in place to ensure the Company is in the best position
to meet its objectives.
The Group has a comprehensive range of policies and
procedures, including a full Corporate Governance
Charter and a Whistle-blower Policy, both available on
the Company’s website.
The Group’s Corporate Governance Charter contains
specific clauses dealing with the Company’s:
• Code of Conduct
• Board and Management commitment to the Code
of Conduct
• Responsibilities to shareholders and the broader
financial community
• Responsibilities to clients, customers, consumers and
the broader community
• Environmental practices
• Employment practices
• Obligations relative to fair trading
In addition, the Group has a range of policies throughout
its global operations including, but not limited to:
• Corporate & Social Responsibility
• Anti-Bribery & Corruption Policy
• Environmental Management
• Bullying, Harassment & Discrimination Policy
• Grievances, Complaints & Disputes Policy
• Equity, Diversity & Inclusion Policy
• Whistle-blower Policy
• Worksite Health & Safety
• Alcohol & Drugs Policy
Workforce policies and practices
All Directors have access to the advice and support of
the Company Secretary and have the right to raise any
concerns without prejudice at Board meetings, and
additionally have these concerns appropriately recorded
in the meeting minutes. The Board has adopted the
procedure in accordance with the UK FRC’s Guidance on
Board Effectiveness, which permits Directors, in appropriate
circumstances, to obtain independent professional advice at
the Company’s expense. Any firms associated with Directors
that provide professional services will only assist where
those firms have the requisite experience or expertise, and
all fees are charged on an arm’s length basis. Alternatively,
the Company may engage other professional services firms
to act for it where greater expertise or expedience may be
garnered from elsewhere within the industry.
Where a particular transaction or matter to be resolved by
the Board may involve a potential conflict of interest of one or
more of the Directors, those parties recuse themselves from
deliberation and voting on the matter. In some instances, the
disinterested Directors may consent to the attendance of the
interested Director(s), and their participation in any discussion
of the matter to be resolved, in order to have all views
considered ahead of the matter being separately resolved
by the disinterested Directors.
Please click here for SolGold’s
Whistle-blower Policy.
Please click here for SolGold’s
Anti-bribery & Corruption Policy.
Please click here for SolGold’s
Code of Conduct.
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Enabling a fluid channel of communication with shareholders
and stakeholders stands as a paramount objective for the
Board. We are dedicated to comprehending and incorporating
their perspectives into our decision-making processes.
Workforce Engagement:
Empowering Through Collaboration
• Recognizing that employee engagement is a collective
responsibility, the Board aims to enhance our approach
in 2024. Presently, the Board engages with employees
through on-site visits and extends invitations to key
personnel for Board meetings. Moreover, under the purview
of the ESG mandate, the Board is attuned to prevailing
social dynamics that impact the Company. Our vigilance
over the Group's culture and its workforce is fostered
through ongoing engagement, encompassing site visits
and participation in quarterly townhalls with Senior
Management. To gauge sentiments and workplace culture,
the Board periodically reviews the outcomes of employee
surveys. In 2022, a comprehensive culture review was
executed by an external third party to further develop and
sustain the Company's values and affirmative ethos.
Stakeholder Engagement:
Fostering Strong Connections
• SolGold maintains consistent dialogue with major corporate
and institutional shareholders, actively participating in
resource conventions and pertinent industry events.
Insights garnered from these interactions hold pivotal
significance and are deliberated at both Executive and
Board levels to ensure sustained alignment with investor
expectations. Investor events and webinars are part of
our outreach, offering direct avenues for engagement
and query resolution. The management team remains
accessible to all investors, diligently addressing inquiries.
• Our commitment to transparency is evident through the
dissemination of contact points in our market releases. Our
online platform encompasses conference presentations,
investor materials, and videos, available on our website.
Social media channels, including LinkedIn and X facilitate
real-time updates and engagement with interested parties.
Accessibility and Disclosure:
Empowering Stakeholder participation
• Our website serves as an inclusive repository of
information, catering to shareholders, potential investors,
and interested stakeholders. A comprehensive array of
resources, including Key Securityholder Information,
Constitutional documents, Corporate Policies, and Meeting
Materials from the Company's last five Annual General
Meetings, are readily accessible. The outcomes of each
shareholder meeting are promptly released to the market,
underscoring our commitment to transparency.
Annual General meeting:
A platform for interaction
• The AGM serves as an annual engagement for shareholders
and Directors, enabling dialogue about the Company's
strategy and business trajectory. Ahead of the AGM,
shareholders can pose questions via email or telephone.
• For 2023, a hybrid AGM is anticipated, embracing both
physical and digital participation. The notice of AGM,
dispatched at least 21 working days prior, encompasses
distinct resolutions on substantial matters, and voting
is conducted through a poll mechanism, reflecting our
commitment to democratic representation. Results of votes
cast are disclosed on the London Stock Exchange and
prominently displayed on our website.
Stakeholder Feedback and responsiveness:
A Commitment to Growth
• The 2022 AGM revealed shareholder concerns.
Acknowledging this input, CEO Scott Caldwell engaged
with corporate and institutional shareholders to
comprehend their concerns. The Board continues to
progress towards compliance with the Code, including
the transition to half the Board, excluding the Chair,
being Non-Executive Directors deemed independent.
Compliance with Provision 18, mandating annual re-election
for all Directors from the 2023 AGM, underscores our
commitment to robust governance. We also embrace the
principles of pre-emption to protect shareholders' rights.
• A comprehensive engagement extends to wider
stakeholder groups, including the workforce, where Section
172 on page 35 delves into further details of our inclusive
decision-making approach.
The Board aims to ensure an avenue of communication is
available and maintained with shareholders and stakeholders,
to ensure that their views are understood and considered.
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D I V I S I O N O F R E S P O N S I B I L I T I E S
Chair
Liam Twigger, our Non-Executive Chair, is responsible for
leadership of the Board, for efficient organisation and conduct
of the Board’s function and the briefing of all Directors in
the case that they were not present at a Board meeting. Mr.
Twigger leads the Board ensuring its effectiveness, and his
role and responsibilities are clearly delineated from the Chief
Executive Officer. Mr. Twigger was first elected to the Board
on 17 June 2019 and was considered to be independent on his
appointment as Chair in August 2020.
At the AGM of the Company held on 22 December 2022,
Elodie Grant Goodey and Kevin O’Kane did not stand for
re-election and subsequently stepped down as Directors.
Following the departure of Ms. Grant Goodey and Mr. O’Kane,
the Board composition did not fulfil Provision 10 of the Code
– that being at least half of the Board were considered by the
Board to be Independent Non-Executive Directors. Further
information regarding the division of responsibilities can be
found on the SolGold website in Matters for the Board at
https://solgold.com.au/documents/matters-reserved-for-the-
board-of-directors/.
Chief Executive Officer
Scott Caldwell, our Executive Director and CEO, who took on
the responsibilities as CEO on 10 November 2022, reports to
the Chair and to the Board directly and is responsible for all
Executive Management matters of the Group. Mr. Caldwell is
also responsible for the Company’s operational performance
and resource management, incorporating its operational,
financial, health & safety, and environmental conduct and
performance, as well as the maintenance of relationships with
the Company’s broad range of stakeholders and shareholders.
Mr. Caldwell is tasked with ensuring that the Company’s
organisational structure and processes can implement the
strategic and cultural aims established by the Board.
As CEO, Mr. Caldwell is responsible for the daily running of
the affairs of the Company under delegated authority from
the Board and to implement the policies and strategies set by
the Board. In carrying out his responsibilities, he must report
to the Board in a timely manner and ensure all reports to the
Board present a true and fair view of the Company’s financial
position and operating results.
Board composition, independence,
and division of responsibilities
The composition of the Board is set out on pages 54 and
55. The Board composition is currently comprised of six
(6) Directors, of whom two (2), excluding the Chair, are
considered, by the Board, to be of independent judgement
and character. The Board considers that the joining of
additional Independent Non-Executive Directors will be
required to ensure that there is a combination of Executive
and Non-Executive Directors to advocate shareholder
interests and oversee Executive Management practices.
On 12 August 2022 Mr. Keith Marshall stepped down from
the Board. On 10 November 2022, the Board terminated the
services of Mr. Darryl Cuzzubbo and Scott Caldwell assumed
the role as Interim CEO and Executive Director.
Director independence
The Board currently comprises of two (2) Independent
Non-Executive Directors, excluding the Chair, (2) two non-
independent Non-Executive Directors and (1) one Executive
Director. The Board has determined that the Non-Executive
Directors previously declared as independent remain
independent, in line with the definition set out in the Code.
inDEpEnDEnT DirECTOrS
nOn-inDEpEnDEnT
Maria Alban Amparo
Liam Twigger (Chair)*
Dan Vujcic
Scott Caldwell
Nicholas Mather
James Clare
The Board reviews the independence of its Non-Executive
Directors on an ongoing basis and determine the independent
Non-Executive Directors (currently Mrs. Amparo and Mr.
Vujcic) continue to demonstrate ongoing objectivity of
Board matters. The Board has also concluded that the Chair
continues to demonstrate objective judgement and to provide
constructive challenge, notwithstanding under the Code
Mr. Twigger as Chair holds a position that could impair a
Director’s independence.
The Board notes that the behaviours and characteristics that
Mr. Twigger, and the Independent Non-Executive Directors
illustrate, have the requisite integrity to hold the Executive
Management to account for managing the delivery of the
business in addition to a breadth of experience that allows
them to provide advice on a range of commercial issues
pertinent to SolGold. As a result, the Board has determined
that Mr. Twigger and the Independent Non-Executive
Directors are capable of acting in the best interests of the
Company and shareholders and are capable of exercising
independent judgement.
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Mr. Nicholas Mather is not considered independent for the
purposes of the Code having served as the CEO of SolGold
from 2005 until March 2021 as well as having a personal
shareholding in SolGold of 2.99% and a shareholding of
6.8% through DGR Global Limited where Mr. Mather is the
Founder and Managing Director. Mr. James Clare is not
considered independent as he is a partner in the Canadian
law firm Bennett Jones LLP that provides legal services to
the Company. These professional services are provided on
standard arms-length commercial terms and conditions.
According to the Code, at least half the Board, excluding
the Chair, should be Non-Executive Directors whom the
Board consider to be independent. Following the departure
of Ms. Grant Goodey and Mr. O’Kane, the Company was
not in compliance with this requirement. Whilst the Board
considered the Chair to be independent on appointment in
compliance with the Code, due to the Chair’s responsibilities
the FRC do not consider the Chair’s role as independent in
any other circumstance.
Conflicts of interest
The Company’s Directors are bound by the Articles of
Association and subject to a statutory duty to avoid a
situation where they have, or can have, a direct or indirect
interest that conflicts, or may conflict, with the Company. The
Directors are required to notify the Company of any conflict or
potential conflict of interest before every Board Meeting. Any
conflicts or potential conflicts are retained in the Company’s
conflict register, maintained by the Company Secretary.
Board committees
The Company’s Board has Committees established in the
following areas:
• Audit and Risk
• Remuneration
• Nomination
• Environment, Social, and Governance
• Strategy
The Terms of Reference for each of these Committees are set out within the Company’s Corporate Governance Charter and
are all available on the Company’s website. During the period 1 July 2022 to 30 June 2023, there were 20 Board meetings.
Directors’ attendance at Board and Committee meetings which they were eligible to attend during this period was as follows:
AUDiT AnD
riSK COmmiTTEE
(5)
rEmUnErATiOn
COmmiTTEE
(4)
nOminATiOn
COmmiTTEE
(3)
ESG
COmmiTTEE
(3)
STrATEGy
COmmiTTEE
(1)
Liam Twigger
Darryl Cuzzubbo1
Keith Marshall2
Scott Caldwell3
Nicholas Mather
James Clare
María Amparo Albán
Dan Vujcic4
Elodie Grant Goodey5
Kevin O’Kane6
BOArD
(20)
20/20
9/9
2/2
13/13
20/20
18/20
19/20
13/13
10/12
10/12
4/4
3/3
1/2
4/5
3/3
3/3
3/3
1/1
1/1
2/3
3/3
3/3
2/3
3/3
3/3
3/3
1/2
1/1
1/1
1 Darryl Cuzzubbo's position as director ceased on 10 November 2022.
2 Keith Marshall resigned from the Board on 12 August 2022. Kevin O’Kane is an Interim member of the ARC since Keith Marshall’s resignation.
3 Scott Caldwell joined the Board on 24 October 2022.
4 Dan Vujcic joined the Board on 24 October 2022.
5 Elodie Grant Goodey did not stand for re-election at the AGM held on 22 December 2022.
6 Kevin O’Kane did not stand for re-election at the AGM held on 22 December 2022.
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1/1
1/1
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CONTINUED
non-Executive Directors’ role
and time commitment
The Company’s Non-Executive Directors hold, or have held,
senior positions within the corporate and/or resources
sector. The Non-Executive Directors must exercise objective
judgement when decision making and hold management
to account. Responsible Corporate Governance requires
the Board to critically review and monitor the activities of
Executive Management. The Non-Executive Directors of the
Company consistently demonstrate the attributes of sufficient
time, knowledge and skill to undertake the responsibilities
expected of a Non-Executive Director. Non-Executive Director
performance is assessed annually as part of the Board’s
performance evaluation.
When making new appointments of Non-Executive
and Executive Directors, significant commitments are
disclosed with an indication of the time involved. Where
a Non-Executive Director contemplates taking up another
appointment, they must consult with the Chair and seek
approval from the Board to ensure there is no detrimental
impact on their time commitment to SolGold. Subject to
Board approval, Directors may accept external appointments
as Directors of other companies and retain any related
fees paid to them. Full-time Executive Directors do not
take on more than one Non-Executive Directorship in a
FTSE 100 company or other significant appointment. As
the appointment of Scott Caldwell and Dan Vujcic to the
Board were nominees of the shareholders of Cornerstone
Capital Resources Inc., in accordance with the acquisition
of that Company, no public advertisements were made, or
external third-party recruitment agents were engaged to
seek potential candidates.
Senior independent Director
Upon the resignation of Elodie Grant Goodey on 22 December
2022, the Board has not had a formal Senior Independent
Director.
Company secretary
During the year under review, the Company had three
Company Secretaries. Rufus Gandhi joined the Company
on 1 August 2022 as both General Counsel and Company
Secretary, replacing Dennis Wilkins as Company Secretary.
As part of the management restructure undertaken in early
2023, Ryan Wilson took over the role as Company Secretary
from Mr. Gandhi. Mr. Wilson in his career has experience in
Company Secretarial matters. The Company Secretary is
available as a resource to all Directors, but particularly the
Chair, and is responsible for all matters to do with the proper
functioning of the Board, and the maintenance of its materials
and records and certain regulatory filings. Each Director is
entitled to access the advice and services of the Company
Secretary as required. The Company Secretary is responsible
for the recording of the minutes of a Board or Committee
Meeting and ensures any unresolved concerns at a meeting
are sufficiently recorded in the Minutes. The Board considers
that it has the relevant information, resources and time it
needs to function effectively and efficiently. In August 2023,
post year end, Mr. Wilson resigned as Company Secretary and
Steven Wood and James Doyle were appointed as Joint (and
several) Company Secretaries. This change allows Mr. Wilson
to focus on other aspects of his role within the Company.
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internal and external audit
While still maintaining overall responsibility, the Board
delegates oversight of the internal and external audit
functions to the Audit and Risk Committee. The Audit and
Risk Committee is responsible for reviewing the relationship
and independence of our appointed external Auditors,
PricewaterhouseCoopers LLP (“PwC”), and additionally
is responsible for scrutinising the integrity of the financial
statements prepared by Executive Management to ensure
the assessment of SolGold’s position is accurately reflected.
The Company’s Audit and Risk Committee meets with the
Company’s external auditors, PwC, and during the year
under review met three times. In addition, the Company
had an independent internal auditor for some of the year
under review who provided regular reports to the Audit and
Risk Committee.
Fair, balanced and understandable assessment
The Board and Audit and Risk Committee are responsible
for carefully reviewing the Company’s quarterly financial,
half year and annual results and consider that the Annual
Report and accounts, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Company’s position, performance,
business model and strategy.
risk management
The Board is responsible for the Company’s risk management
system and internal controls, and their effectiveness. The
Board delegates some responsibilities for risk management
oversight to the Audit and Risk Committee, where risk is
monitored continually and formally reviewed annually. This
enables Executive Management to review the risks, mitigate
them and implement controls to ensure the boundaries of the
Company’s risk appetite are maintained.
Key internal control procedures, which form part of the
review of the effectiveness of risk management and internal
control, include:
• The Code of Conduct supported by Company policies
and procedures, including delegations of authority and
divisions of responsibility
• Training of staff on current policies and procedures relevant
to their position, in both Spanish and English
• Constant monitoring of business performance, including
Key Performance Indicators
• A formal whistleblowing policy, with an external third-party
whistleblowing hotline and web submission, the results of
which are reported to the Board
• Defined controls and quality assurance over, but not limited
to, financial reporting, and health and safety procedures
The Audit and Risk Committee carried out an assessment
of the Company’s principal and emerging risks and this
comprehensive report of the principal and emerging risks and
how these are managed and/or mitigated can be found on
pages 23 to 28.
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N O M I N A T I O N C O M M I T T E E R E P O R T
nomination Committee membership*
The members of the Nomination Committee
are set out below:
mEmBEr
Liam Twigger: Chair
Nicholas Mather
María Amparo Albán
Kevin O’Kane (until 22 December 2022)
ATTEnDAnCE
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* Please refer to pages 50 and 51 on compliance with the Code.
A statement to shareholders from the
Chair of the nomination Committee
Dear Shareholders,
i am pleased to present the nomination Committee
report for 2023.
The primary function of the Nomination Committee is
to evaluate the Board with reference to composition,
competencies, and diversity and to recommend succession
planning, appointment, re-elections, and terminations of
Directors. The Committee is also responsible for assisting
the Board in relation to the appointment of members
of Management (including, without limitation, the Chief
Executive Officer and Chief Financial Officer) to the extent
that the Company has or requires such positions. The
Committee Terms of Reference were updated in 2022,
and a copy is available on the Company’s website.
Objectives and achievements in 2023
An improved skills matrix was developed to reflect the present
and future needs of the Board more adequately in preparation
for the challenges during the next 5 years. For example, ESG
competencies are now more specifically identified, and cyber
security has been added as an important skills requirement for
the Board.
Board changes
Effective 12 August 2022, Mr. Keith Marshall tended his
resignation to the Board. As part of the acquisition of
Cornerstone Capital Resources Inc. the shareholders
of Cornerstone Capital Resources Inc. had the right to
nominate two Directors to the Board of the Company. The
nominations of Scott Caldwell and Dan Vujcic were reviewed
by the Committee and a recommendation was given to the
Board to accept these nominations. As discussed below,
Darryl Cuzzubbo's position on the Board was terminated
in November 2022. Elodie Grant Goodey and Kevin O’Kane
tendered their resignations to the Board and communicated
that they did not wish to be put up for re-election at the AGM
held in 2022. Following the departure of Ms. Grant Goodey
and Mr. O’Kane, the current membership of the Board stands
at six Directors.
Post year end the Committee met to consider the appointment
of additional Independent Non-Executive Directors.
Leadership succession – CEO and senior
executive search
During the 2022 Financial Year, the Committee led the
recruitment process for the role of the Chief Executive
Officer resulting in the appointment of Mr. Darryl Cuzzubbo
on 1 December 2021. As has been notified, the Board
determined to terminate Mr. Cuzzubbo’s appointment as
CEO in November 2022. The Company was fortunate in
that Scott Caldwell, recently appointed as a Director, has a
significant amount of experience in running mining companies
and stepped up to hold the role of Interim CEO. Following
discussion with the Directors and reviewing the plans that
Mr. Caldwell had for the Company, the Board formalised Mr.
Caldwell’s appointment as permanent CEO on 17 March 2023.
Compliance with the code
According to the Code, a majority of members of the
Nomination Committee should be independent Non-
Executive Directors. The Chair of the Board should not chair
the committee when it is dealing with the appointment of
their successor. During the year one third of the Nomination
Committee were independent Non-Executive Directors,
excluding the Chair.
Key objectives for 2024
Following the changes to the Board and Executive
Management over the past 12 months, the Committee will
look to reassess the current skills matrix and identify gaps
against future needs. As the Company de-risks the Cascabel
Project and moves closer to project development, it is clear
that future changes, whether that be through addition of
further Directors or education of the current membership,
will be needed. Consideration of increasing gender and other
diversity considerations will be a key part of this process.
LiAm TWiGGEr
Chair – Nomination Committee
28 September 2023
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Audit and risk Committee membership
The members of the ARC committee are set out below:
mEmBEr
Dan Vujcic: Chair
María Amparo Albán
James Clare
Kevin O’Kane (until 22 December 2022)
Elodie Grant Goodey (until 22 December 2022)
Keith Marshall (until 12 August 2022)
ATTEnDAnCE
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A statement to shareholders from the
Chair of the Audit and risk Committee
Dear Shareholders,
i am pleased to present the Audit and risk Committee
(“ArC”) report for 2023.
The ARC is responsible for ensuring that the financial
performance, position and prospects of the Group are
properly monitored as well as liaising with the Company’s
auditors to discuss the audit of the financial statements and
the Group’s internal controls.
In the year under review, management was specifically
challenged on finalising the misappropriation investigation
and then on reducing costs across the Group.
The CEO, CFO, General Counsel & Company Secretary,
independent internal auditor and external auditor also
participate in meetings of the Committee by invitation from
the Chair of the ARC. The Committee’s Terms of Reference
were updated in 2022 and are available to view on the
Company’s website, which includes a list of responsibilities.
With the resignation of Keith Marshall from the Board in
August 2022, Mr. Kevin O’Kane was appointed as an interim
member of the Audit and Risk Committee until his own
resignation in December 2022. James Clare took the position
of Mr. O’Kane and I took the place of Elodie Grant Goodey on
her resignation.
role and responsibilities
The ARC’s primary function is to assist the Board in
discharging its responsibility to exercise due care, diligence
and skill in relation to the Company by:
Audit related:
• Monitoring the integrity of the financial statements of the
Company and any formal announcements relating to the
Company’s financial performance and reviewing significant
financial reporting judgements contained in them prior to
their approval by the Board
• Assessing the Company’s internal financial controls
• Reviewing the appointment, scope and performance results
of both external and internal audits
• Monitoring corporate conduct and business ethics and
ongoing compliance with laws and regulations
• Maintaining open lines of communication between the
Board, Management and the external auditors, thus
enabling information and points of view to be freely
exchanged
• Ensuring that systems of accounting and reporting of
financial information to shareholders, regulators and the
general public are adequate
• Considering the appointment, reappointment, removal,
remuneration and terms of engagement of the external
auditors and making recommendations to the Board in
respect of the same
• Monitoring and reviewing the external auditors'
independence, objectivity and the effectiveness of
the audit process, taking into consideration relevant
professional and regulatory requirements
Risk related:
• Ensuring the development of an appropriate risk
management policy framework that will provide
guidance to Management in implementing appropriate
risk management practices throughout the Company’s
operations, practices and systems
• Determining the amount and nature of risk that the
Company wishes to take in pursuit of its strategy
• Reviewing methods of identifying broad areas of risk in line
with the principal risks outlined in this document
• Setting parameters or guidelines for business risk reviews
• Reviewing and assessing the effectiveness of the
Company’s internal control and risk management systems
and making informed decisions in respect of the same
•
Implementing and reviewing arrangements by which
Directors, Management, employees and contractors may, in
confidence, raise concerns about possible improprieties in
matters of financial reporting or other matters
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CONTINUED
Committee discussions in 2023
The Committee met five times during the year ended 30 June 2023. The ARC paid particular attention to internal controls,
fraud and bribery prevention, financial planning, reporting and controls and the Group’s liquidity position. Over the second
half of the financial year, the ARC reverted to key decisions being made by the Board as the small Board was better suited
to ensuring timely management and discussion of key issues as a whole. In addition, there were in-depth discussions on ad
hoc topics as requested by the ARC. The key topics discussed by the Committee are set out on the following pages. We have
complied with Provision 25 of the UK Corporate Governance Code.
System of internal control
review of internal controls
Reviewing the Company’s
internal financial controls
The Committee oversaw a forensic investigation into money misappropriation during
2022 and finalised the investigation. The investigation revealed that during the years
2017 to 2021 US$4.6 million was misappropriated. A programme of corrective actions is
underway, the implementation of which is being monitored by the Committee. Primarily,
control of funds is being closely monitored by the CFO who has increased his presence
in Ecuador over previous CFOs. This is part of the increased focus on developing and
strengthening the overall control environment across the Group, which is an area of
specific focus for the Committee.
risk assurance
risk management
Assessing the Group’s risk
profile and the process by which
risks are identified and assessed
The Committee assessed the Group’s risk management policy and standard. The
Committee discussed the key risks, the mitigation plans in place and the appropriate
executive management responsibilities. The Committee also considered the process
by which the risk profile is generated, the changes in risk definitions and how the risks
aligned with the Group’s risk appetite.
internal audit work
Reviewing the results of internal
audit work and the 2023 plan
The ARC agreed on an annual audit plan focusing on enterprise risks. The Chair of
the Committee held regular meetings with the internal auditor, which enabled further
evaluation of the work performed.
External audit
Reviewing the results of the
external audit work, evaluating the
quality of the external audit and
consideration of management
letter recommendations
The Committee reviewed and approved the 2023 Audit Plan.
PwC has been the Group's Auditors since its appointment on 11 November 2021
following a competitive tender process. The period of total uninterrupted engagement
is two years.
Significant accounting issues considered by the Audit and risk Committee in relation to the
Group’s financial statements
Financial statements
Monitoring the integrity of
the financial statements of
the Company
The Committee reviewed the presentation of the Group’s audited results for the year
ended 30 June 2023 and the unaudited results for the six months ended 31 December
2022 as well as the quarterly financial statements (Q1 and Q3) to ensure they were
fair, balanced and understandable, when taken as a whole. The results were assessed
to ensure they provide sufficient information for shareholders and other users of the
accounts to assess the Group’s position and performance, business model and strategy.
In conducting this review, particular focus was given to the disclosures included in the
basis of preparation in Note 1 in the Notes to the Group Financial Statements in relation
to the Group’s funding position and the suitability of the going concern assumption.
The ARC reviewed the significant judgments associated with the fiscal 2023 financial
statements, including “key audit matters”, and also reviewed the supporting evidence for
the Group being a going concern. The ARC is comfortable that the overall disclosures in
the Annual Report are fair, balanced and understandable, when taken as a whole.
The ARC reviewed papers prepared by the finance team and the findings from the
external auditors in relation to the above matters.
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Going concern basis of
accounting in preparing
the financial statements
Determining the ability of
the Company to continue as a
going concern depends upon
continued access to sufficient
financing facilities
The ARC assessed the proposed budget and cash flow forecast for this financial year
and coming periods and worked with the Finance team on scenario planning and the
long-term strategic plan. The Committee notes that the ability of the Group to continue
as a going concern depends on its ability to secure additional financing and that this
situation gives rise to a material uncertainty. However, the Committee has considered
the various funding options being explored by management, as well as the Group’s
historical ability to raise necessary funding, and considers it appropriate that the
financial statements are prepared on a going concern basis.
What we will do moving forward
While SolGold management has taken appropriate steps to strengthen its risk, governance and controls environment we
recognise this is ongoing. We will seek to continuously improve our internal controls and policies and procedures, ensuring
these are reviewed and updated accordingly and that they are applicable and relevant to our business and ensuring we
comply with best practice corporate governance. With the restructuring of the management of the business, this has
presented an opportunity to review past practices and to assess those areas which need further development. This is a key
control item for 2024.
External auditor independence
A key factor that may impair an auditor’s independence is a lack of control over non-audit services provided by the external
auditor. Non-audit work is only undertaken where there is commercial sense in using the auditor without jeopardising auditor
independence; for example, where the service is related to the assurance provided by the auditor or benefits from the
knowledge the auditor has of the business. The External Auditor provided services as part of the acquisition of Cornerstone
Capital Resources Inc. Those services included providing assurance over the pro forma statements for the combined Group for
the Prospectus issued by the Company in February 2023 and the Business Acquisition Report filed in May 2023. The ARC has
satisfied itself that the external auditors’ independence was not impaired with the provision of these services.
The ARC held meetings with the external auditor and the Chair of the ARC held regular meetings with the lead audit
engagement partner during the year.
DAn vUJCiC
Chair – Audit and Risk Committee
28 September 2023
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E N V I R O N M E N T A L , S O C I A L A N D G O V E R N A N C E C O M M I T T E E R E P O R T
Environment, Social and Governance
Committee membership
The members of the ESG Committee are set out below:
mEmBEr
ATTEnDAnCE
María Amparo Albán: Chair
Scott Caldwell
Dan Vujcic
Elodie Grant Goodey (resigned 22 December 2022)
Kevin O’Kane (resigned 22 December 2022)
Darryl Cuzzubbo (terminated 11 November 2022)
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A statement to shareholders from the
Chair of the Environment, Social
and Governance Committee
Dear Shareholders,
I am pleased to present the Environmental, Social and
Governance Committee (“ESG”) Report for 2023. The ESG
Committee is responsible for shaping the Company’s policies,
objectives, and guidelines on environmental, health, safety,
and community relations matters and for analysing and
reporting to the Board of Directors on the expectations of the
Company’s various stakeholders. On 20 June 2023, the Board
resolved to rename the committee the ESG Committee.
The ESG Committee’s Terms of Reference were reviewed
and updated in 2022 and are available to view on the
Company’s website.
Committee discussions in 2023
The Committee met three times during the year ended
30 June 2023. The following matters were discussed:
• Safety, Environment, Community Relations, Security
• Land acquisition and potential resettlement
• Establishment of a Biodiversity Fund
• Climate change risks
The ESG Committee encourages employees and stakeholders
to speak up on all matters, especially concerning matters
of safety.
mArÍA AmpArO ALBÁn
Chair – ESG Committee
28 September 2023
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Strategy Committee membership
The members of the Strategy Committee are set out below:
• Consider the strategic development opportunities for the
Company, including by way of acquisitions, disposals, joint
ventures, commercial co-operations or otherwise
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mEmBEr
Liam Twigger: Chair
Nicholas Mather
James Clare
Dan Vujcic
Kevin O’Kane (resigned 22 December 2022)
Darryl Cuzzubbo (terminated 10 November 2022)
Dear Shareholders,
I pleased to present the Strategy Committee Report. The
primary function of the Strategy Committee is to assist
the Board to fulfil its overall responsibilities relating to the
strategic direction and development of the Company. As a
Committee, we have met once this year to discuss potential
corporate transactions that would benefit the Company as
a whole and the short to medium-term funding structure
and strategic direction, necessary to ensure the growth
and continued success of the Group. The acquisition of
Cornerstone Capital Resources Inc. was the major item for
discussion during the year.
role and responsibilities
The Committee is responsible for assessing the corporate and
strategic performance of the Company in its broadest sense
and form a wide view on the adequacy of progress made
in achieving strategic objectives and outcomes, and of the
systems to measure, monitor and deliver on them. In addition,
the Committee shall:
• Make recommendations to the Board for proposed M&A
transactions, including the strategic rationale for such
proposals and proposed financing structures
• Consider whether existing and/or proposed funding is
adequate and properly and effectively allocated across
the Group’s operations
• Make recommendations to the Board as to financing or
refinancing proposals for the Group, whether by way of
equity, debt or otherwise
• Make recommendations to the Chair of the Board as to
whether any shareholder-nominated Director may have
an actual or potential conflict of interest
recommendations and outcomes
The Committee met on a number of occasions during the
2022 financial year and once during the current financial
year with the sole purpose of reviewing and considering the
terms of the acquisition of Cornerstone Capital Resources Inc.
I was pleased following months of negotiations, that we were
able to recommend the acquisition to the Board which was
approved and completed in February 2023.
LiAm TWiGGEr
Chair – Strategy Committee
• Support the Board and Senior Management in formulating
28 September 2023
the overall strategy for the Company, with particular
emphasis on horizon scanning, priorities, activities
and outcomes
• Make recommendations to the Board to optimise
the allocation and adequacy of the Company’s
reserves and resources, as well as its exploration and
development assets
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D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
remuneration Committee membership
The members of the Remuneration Committee are set out
below:
mEmBEr
Dan Vujcic: Chair
Liam Twigger
María Amparo Albán
Kevin O’Kane (resigned 22 December 2022)
Elodie Grant Goodey
(resigned 22 December 2022)
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A statement to shareholders from the Chair
of the remuneration Committee
Dear Shareholders,
I am pleased to present the Annual Remuneration Report for
the financial year ending 30 June 2023.
The Report has been prepared by the Remuneration
Committee on behalf of the Board in accordance with the
requirements of the Listing Rules of the FCA, Schedule 8
of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (as amended in
2013, 2018 and 2019) and the UK Corporate Governance Code.
The elements subject to audit are highlighted throughout.
Application of the remuneration policy
The Committee operated under its terms of reference without
conflicts of interest and was pleased that shareholders
approved the Directors' Remuneration Policy put forward for
consideration at the EGM held on 30 June 2022. However,
the Committee recognised that a meaningful proportion
of shareholders did not support one of the resolutions on
the Directors’ Remuneration Policy that received 69.2%
of votes in favour. Together with the Chair, Liam Twigger,
and the previous CEO, Mr. Darryl Cuzzubbo, we sought
shareholders’ feedback.
In accordance with Provision 4 of the 2018 UK Corporate
Governance Code, the Board is providing an update in
response to the Directors’ Remuneration Policy resolution
put to the EGM that received less than 80% of votes in favour.
Feedback was received that the votes received against the
resolution were influenced by certain investors objecting
to the CEO remuneration framework in comparison to peer
companies. The Remuneration Committee conducted a
thorough benchmarking exercise against peer companies to
set a CEO remuneration package that would be competitive
and attract a high calibre individual to lead the Company
through the challenging transition from explorer to developer
and ultimately producer. This benchmarking was shared with
certain investors that voted against the resolution. Against
votes were also influenced by certain investors who had a
preference for the CEO remuneration framework to be more
closely tied to the sale of the Company.
SolGold’s primary objective is to discover, define and develop
world-class copper-gold deposits and the Company is
building the capability to advance this strategy, through which
it is expected to maximise shareholder value and the potential
attractiveness of the Company.
In line with its commitment to good corporate governance,
the Committee will continue to receive shareholder feedback
and monitor developments in best practices and market
trends on executive remuneration. The Board is committed to
long-term, sustainable value creation for our shareholders.
SolGold’s remuneration approach is focused on ensuring
we can continue to attract, motivate and retain exceptional
people across the global markets in which we operate.
SolGold’s remuneration framework aims to:
• Attract, retain and motivate the right calibre of talent
for the Company
• Facilitate the achievement of the Company’s short- and
long-term objectives without rewarding conduct that is
contrary to the Company’s values or risk appetite
• Provide appropriate incentives for delivery against agreed-
upon measurable objectives
• Reflect good corporate governance and creates value
for shareholders
• Be robust, transparent and simple to understand and
administer
Members of the Remuneration Committee are independent
Non-Executive Directors: Myself (as Chair) and Ms. Maria
Amparo Alban; along with SolGold Group Chair Mr. Liam
Twigger. The Remuneration Committee’s composition
provides a proper balance with different views, both from
a geographical and historical perspective.
The Committee has a mandate in the area of remuneration to
analyse, formulate and periodically review the remuneration
framework applicable to Directors and Senior Executives
and of designing new remuneration plans that enable the
Company to attract, retain and motivate the most outstanding
professionals, bringing their interests into line with the
strategic objectives of the Company. For this purpose, the
Remuneration Committee meets periodically, as convened by
its Chair. The Committee has been assisted by independent
remuneration advisers who provide advice, market trends
and benchmark data where appropriate. Internal departments
or independent third parties can also assist the Committee
to measure the level of achievement of the targets set in the
Annual Bonuses or Long-Term Incentives. The Committee has
had input into remuneration of other senior management to
ensure it aligns with the Executive Director’s remuneration.
As noted in the Remuneration Report, general pay across the
Group has increased relative to the Executive.
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Conclusion
Shareholders will be asked to approve the Annual
Remuneration Report as an ordinary resolution at the AGM
in December 2023. The resolution of the general meeting
on the Remuneration report is advisory. I hope that you find
this Report to be informative and our shareholders remain
supportive of our approach to executive and Director pay at
SolGold and vote in favour of the resolution.
The Committee welcomes all input on remuneration matters,
and if you have any comments or questions on any element of
the Remuneration Report, please do not hesitate to contact
me at info@solgold.com.au.
DAn vUJCiC
Chair – Remuneration Committee
28 September 2023
Key activities of the committee
The Committee’s overall objective this year has been to ensure
that the remuneration structure supports the delivery of the
Company’s long-term strategy, alignment with the interests of
shareholders while delivering market competitive remuneration
to employees, enabling SolGold to attract, incentivise and
retain the best talents. Specific activities have included:
• Providing background to the Board regarding the new
CEO’s remuneration
• Review and alignment of remuneration for newly appointed
Executive Committee members
• Review SolGold’s Directors’ Remuneration Policy, as
approved by Shareholders at the EGM on 30 June 2022
• Provide input to the Board on Share Incentives for
Employees
• Review and update SolGold’s employee incentive schemes
• Ongoing monitoring of market developments to ensure
our remuneration structure allows us to compete globally
for talent, and that our offering is compelling, fair and
responsible
Appointment of new CEO
Mr. Scott Caldwell was appointed interim CEO (following
the termination of Mr. Darryl Cuzzubbo), followed by his
permanent appointment on 17 March 2023. The Committee
carefully considered the terms of our new CEO’s remuneration
arrangements and exercised their discretion to advise the
Board on awarding Mr. Caldwell's remuneration package.
In designing a competitive remuneration package, the
Committee focused on current market benchmarks, and
took into account long-term incentive and performance
bonus opportunities subject to performance objectives to
ensure that it was appropriate to motivate and incentivise
Mr. Caldwell in line with the Company’s purpose and values
as well as the interests of the shareholders. It is noted
that the base remuneration for Mr. Caldwell is below what
would be considered ‘market’ for his role, and the incentive
plan developed for Mr. Caldwell aligns with his lower
base remuneration.
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A N N U A L R E P O R T O N R E M U N E R A T I O N
This report outlines how the SolGold Remuneration Policy will be implemented over the next financial year and provides details
regarding remuneration paid to the Executive Director during FY23. A copy of the Directors' Remuneration Policy can be found
on the Company’s website.
The current Directors' Remuneration Policy was part of the meeting materials at the EGM held on 30 June 2022. This policy
was approved with 69.2% support. A Remuneration policy shall be presented to the general meeting every three years unless
a revised policy is presented to the general meeting before that. The Board’s Remuneration Committee shall review the
appropriateness of the Policy at least annually.
The Remuneration Committee met 5 times during the year with all required Directors attending.
remuneration policy alignment with the UK code
When determining executive remuneration policy, the Committee includes the following principles during their decision-
making process:
UK CODE prinCipLE
AppLiCATiOn
Clarity
Simplicity
Targets for incentives that are aligned with the implementation of the strategy are monitored through
corporate and individual scorecards, which include a list of KPIs specific to each participant. This
provides clarity to stakeholders and shareholders on the association between the successful delivery of
the Company’s strategy and remuneration paid.
The structure of incentive is clear to both participants and shareholders through simple and
straightforward language, so all stakeholders are clear on the underlying award principles and the way
award outcomes are determined.
risk
Malus and clawback provisions apply to all awards to ensure that inappropriate risk-taking is not
encouraged and will not be rewarded through employee incentives.
predictability
Employee incentive plans are subject to performance objectives as listed in the participants’ individual
and corporate scorecard. All Executive Management and Executive Directors are invited to participate
in the incentive plans at the beginning of each financial year with their scorecard KPIs.
proportionality
The Committee takes care to exercise its discretion to ensure that remuneration outcomes are aligned
with Company performance.
Alignment to
Culture
The Committee reviews overall pay and conditions for employees across the Company when
determining performance objectives and award outcomes. The individual and corporate scorecards will
include non-financial KPIs linked to the Company’s overall culture.
Directors’ remuneration
Single Total Figure of remuneration – Audited
The detailed emoluments received by the Executive and Non-Executive Directors during the financial years ended 30 June
2023 and 30 June 2022 are detailed below:
TOTAL SALAry
AnD FEES
US$
TAXABLE
BEnEFiTS
US$
pEnSiOnS
US$
TOTAL FiXED
rEmUnErATiOn
US$
LOnG TErm
inCEnTivE
AWArDS
US$
TOTAL
vAriABLE
rEmUnErATiOn
US$
BOnUS
US$
TOTAL
US$
Chair
Liam Twigger
2023
2022
Executive Director
Jason Ward1
2023
2022
72
114,697
118,931
–
334,653
–
–
–
–
12,029
126,726
11,893
130,824
–
–
–
334,653
–
–
–
–
–
–
–
–
–
–
126,726
130,824
–
–
–
334,653
SOLGOLD pLC ANNUAL REPORT 2023
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TOTAL SALAry
AnD FEES
US$
TAXABLE
BEnEFiTS
US$
pEnSiOnS
US$
TOTAL FiXED
rEmUnErATiOn
US$
LOnG TErm
inCEnTivE
AWArDS
US$
TOTAL
vAriABLE
rEmUnErATiOn
US$
BOnUS
US$
TOTAL
US$
non-Executive Directors
Keith marshall2
2023
2022
nicholas mather
2023
2022
Brian moller3
2023
2022
James Clare
2023
2022
Elodie Grant-Goodey4
2023
2022
Kevin O’Kane5
2023
2022
maría Amparo Albán
2023
2022
Dan vujcic
2023
2022
Total
2023
2022
9,636
46,617
67,049
72,205
–
33,255
67,057
72,305
38,538
85,965
34,909
79,331
70,508
72,423
46,664
–
449,058
915,685
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,636
46,617
67,049
72,205
–
33,255
67,057
72,305
38,538
85,965
34,909
79,331
70,508
72,423
4,262
50,926
–
–
16,291
11,893
465,349
927,578
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,636
46,617
67,049
72,205
–
33,255
67,057
72,305
38,538
85,965
34,909
79,331
70,508
72,423
50,926
–
– 465,349
–
927,578
SOLGOLD pLC ANNUAL REPORT 2023
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CONTINUED
Directors’ remuneration continued
TOTAL SALAry
AnD FEES
US$
TAXABLE
BEnEFiTS
US$
pEnSiOnS
US$
TOTAL FiXED
rEmUnErATiOn
US$
LOnG TErm
inCEnTivE
AWArDS
US$
TOTAL
vAriABLE
rEmUnErATiOn
US$
BOnUS
US$
TOTAL
US$
Chief Executive Officer
Scott Caldwell
2023
2022
Darryl Cuzzubbo
2023
2022
Keith marshall1
2023
2022
Grand Total
2023
2022
125,000
–
544,136
514,261
–
211,932
1,118,194
1,641,878
–
–
–
–
–
–
–
–
–
–
8,323
10,951
125,000
106,250
263,012
369,262
494,262
–
–
–
–
–
552,459
–
399,417
399,417
951,876
525,212
638,528
–
–
–
–
211,932
117,982
–
–
–
638,528
1,163,740
–
–
117,982
329,914
24,614
1,142,808
106,250
662,429
768,679
1,911,487
22,844
1,664,722
756,510
756,510 2,421,232
1
Jason Ward resigned as Executive Director on 13 May 2022 and salary and fees includes total remuneration paid for the year ended 30 June 2022 as an
employee and Director.
2 Keith Marshall salary and fees includes total remuneration paid as interim CEO and Director.
3 Brian Moller was not re-elected to the board on 15 December 2021.
4 Elodie Grant Goodey resigned as a Non-Executive Director on 23 December 2022.
5 Kevin O’Kane resigned as a Non-Executive Director on 23 December 2022.
Share option schemes – Audited
On 30 June 2022, the shareholders approved two incentive plans for Directors, being the Long-Term Incentive Plan (LTIP) and
the Performance Bonus Plan (PBP). Under the terms of the LTIP, the following options have granted and their status as at 30
June 2023 is as follows:
BALAnCE AT
30 JUnE 2022
GrAnTED AS
rEmUnErATiOn
EXErCiSED
FOrFEiTED /
LApSED
BALAnCE AT
30 JUnE 2023
EXErCiSE
priCE
Darryl Cuzzubbo
Scott Caldwell
Total
–
10,000,000
– 30,000,000
– 40,000,000
–
–
–
10,000,000
–
– 30,000,000
10,000,000 30,000,000
37p
17p
–
EXErCiSE pEriOD
01/07/22-1/12/27
17/03/26-17/03/33
–
payments to past Directors – Audited
Payments of US$336,612 where made to Jason Ward, previously an Executive Director of the Company in the year ended 30
June 2023. Payments of US$44,473 were made to Darryl Cuzzubbo, previously the Chief Executive Officer of the Company in
the year ended 30 June 2023.
payments for loss of office – Audited
No payments were made for loss of office in the year ended 30 June 2023.
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Statement of Directors' shareholding and share interest – Audited
Directors’ interests
The interests of the Directors in the shares of the Company, including family and trustee holdings where appropriate,
at 30 June 2023 were as follows:
Chair
Liam Twigger
non-Executive Directors
Nicholas Mather*
María Amparo Albán
James Clare
Dan Vujcic
Former Directors
Keith Marshall
Elodie Grant Goodey
Kevin O’Kane
Jason Ward
Brian Moller
Darryl Cuzzubbo
Total
Chief Executive Officer
Scott Caldwell
GrAnD TOTAL
BEnEFiCiAL
nOn-BEnEFiCiAL
30 JUnE 2023
30 JUnE 2022
30 JUnE 2023
30 JUnE 2022
392,156
392,156
–
–
84,266,052
84,266,052
5,480,658
6,060,658
51,676
1,143,137
–
–
–
–
–
–
51,676
143,137
–
98,039
19,607
392,156
10,094,860
5,267,552
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
85,853,021
100,725,235
5,480,658
6,060,658
18,617,244
–
–
–
104,470,265
100,725,235
5,480,658
6,060,658
* The Non-Beneficial holding of Nicholas Mather are the shares held in the “Mather Foundation” a trust established for the purpose of providing donations to
charitable organisations.
The Mather Foundation, an organisation associated with Nicholas Mather, sold 600,000 shares in the 2023 financial year.
There are no requirements or restrictions on Directors to hold shares in the Company. The Directors’ Remuneration Policy does
outline guidelines that each Executive Director is to maintain a shareholding in the Company equivalent to 200% of base salary
to drive a long-term focus and alignment with shareholders.
relationship between remuneration and Company performance (Unaudited)
During the financial year, the Company has generated losses as its principal activity was mineral exploration and project
development.
The following table show the share price at the end of the financial year for the Company for the past five years:
Share price at year end
£0.3200
£0.2100
£0.2850
£0.2920
£0.1590
Loss per share (US cents)
(1.8)
(0.7)
(1.1)
(1.4)
(2.8)
30 JUnE 2019
30 JUnE 2020
30 JUnE 2021
30 JUnE 2022
30 JUnE 2023
There were no dividends paid during the year ended 30 June 2023, and the previous five years.
SOLGOLD pLC ANNUAL REPORT 2023
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CONTINUED
Directors’ remuneration continued
10-year Total Shareholder return (TSr)
The graph below shows SolGold’s TSR against the performance of the FTSE All Share Industrial Metals and Mining Index
(FAMETL) over the same 10-year period. The indices shown in the graph were chosen as they include companies within the
mining sector.
value of £100 invested over the 10-year period to 30 June 2023
£1,200
£1,000
£800
£600
£400
£200
£0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
SOLG
FAMETL
years ended 30 June
remuneration of the Executive Director
The Company aims to reward the CEO with a level and mix of remuneration commensurate with their position and
responsibilities within the Company, and to:
• Demonstrate a clear relationship between individual performance and remuneration.
• Link rewards to the creation of value to shareholders.
• Comply with all relevant local, legal requirements.
Recruitment Inducement (Sign-on Bonus): Sign-on bonuses are payable based on Remuneration Committee discretion and
recommendations to the Board to a maximum of 100% of base salary.
More information can be found in the Directors’ Remuneration Policy.
remuneration structure for the current CEO
Fixed Salary: The CEO receives an annual base salary of US$200,000, payable monthly, for the performance of executive
duties at the Company.
Short-Term incentive: 50/100/150% (Threshold/Target/Stretch respectively of base salary US$200,000). Payable in 50% cash
and 50% shares in Company.
Long-Term incentive: The maximum long-term incentive is up to 200% of base salary (currently US$200,000) in each financial
year (starting with the financial year beginning 1 July 2024).
76
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recruitment inducement (Sign-on Bonus): A Sign-on Bonus of US$200,000 payable over the first 12 months of employment.
In addition, to secure his appointment and for retention purposes, Mr. Caldwell has been granted (on 17 March 2023) an
exceptional award of 30,000,000 options over ordinary shares in the Company, with an exercise price of £0.17 which will
vest and be exercisable subject to the below performance conditions:
AvErAGE SHArE priCE
pErCEnTAGE OF mAXimUm nUmBEr OF
SHArES SUBJECT TO OpTiOn THAT vEST
Below Threshold – Average daily price per Share is less than £0.25 pence
over three years from grant date
Threshold – Average daily price per Share is equal to £0.25 pence over
three years from grant date
Target – Average daily price per Share is equal to or higher than £0.35 pence
over three years from grant date
0%
50%
100%
CEO performance and outcomes
The performance assessment of the CEO considers overall Company performance against a scorecard with a further
qualitative and quantitative assessment of his individual contribution including consideration of risk management and
behavioural outcomes. Criteria against which the CEO will be assessed include, ESG targets, cost reductions, share price
performance and business development. The first period for consideration is 1 January 2023 until 1 January 2024 and as
such no determination has yet been made.
CEO total remuneration
EXECUTivE OFFiCEr
FinAnCiAL yEAr
SinGLE TOTAL FiGUrE OF
rEmUnErATiOn, US$
AnnUAL BOnUS (STi)
(% OF mAXimUm)
LTip
(% OF mAXimUm)
Scott Caldwell
Darryl Cuzzubbo
Keith Marshall
Nicholas Mather
Alan Martin
Malcom Norris
2023
2023
2022
2022
2021
2021
2020
2019
2018
2017
2016
2015
2015
2014
2013
2013
234,005
951,876
1,163,740
376,531
212,145
827,381*
400,162
539,422
307,480
314,382
109,252
15,716
268,756
312,370
37,168
338,090
0%
–2
–
90%
–
–
–
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100%1
100%1
–
–
–
–
–
–
–
* This figure includes an AU$600,000 loss of office payment.
1 Options granted at an exercise price of £0.60, which subsequently expired and were not converted.
2 Considering the terms of the termination of Darryl Cuzzubbo, the Board has determined that his bonus payment for the year ended 30 June 2023 is not payable.
SOLGOLD pLC ANNUAL REPORT 2023
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CONTINUED
Changes in Directors’ remuneration
The table below sets out the percentage change in remuneration for the CEOs and Non-Executive Directors.
2023
2022
2021
2020
BASE SALAry/
FEES % CHAnGE
BEnEFiTS %
CHAnGE
STi % CHAnGE
BASE SALAry/
FEES % CHAnGE
BEnEFiTS %
CHAnGE
STi % CHAnGE
BASE SALAry/
BEnEFiTS %
BASE SALAry/
BEnEFiTS %
FEES % CHAnGE
CHAnGE
STi % CHAnGE
FEES % CHAnGE
CHAnGE
STi % CHAnGE
102%
(6%)
(100%)
(100%)
117%
(100%)
–
–
–
–
–
–
–
–
32%
(12%)
(6%)
(50%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(6%)
(100%)
24%
(100%)
(6%)
(100%)
–
–
–
–
–
–
–
–
–
–
–
–
–
CEO
Scott Caldwell
Darryl Cuzzubbo
Keith Marshall3
Nicholas Mather4
non-Executive Directors
Liam Twigger
Keith Marshall
Nicholas Mather
Elodie Grant Goodey5
María Amparo Albán
James Clare
Kevin O’Kane6
Brian Moller1
Jason Ward2
Robert Weinberg
–
14%
–
–
(21%)
(79%)
(22%)
(53%)
(20%)
(22%)
(56%)
(100%)
(100%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
68%
(91%)
28%
190%
276%
20%
53%
17%
55%
(49%)
10%
(100%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100%
–
–
–
–
–
–
–
–
–
–
–
1 Brian Moller was not re-elected to the Board on 15 December 2021.
2 Jason Ward resigned as an Executive Director on 13 May 2022.
3 Keith Marshall resigned as a Non-Executive Director on 12 August 2022.
4 Nicholas Mather resigned as CEO in 2021.
5 Elodie Grant Goodey resigned as a Non-Executive Director on 22 December 2022.
6 Kevin O’Kane resigned as a Non-Executive Director on 22 December 2022.
non-Executive Director fees
The Remuneration Committee conducts a regular benchmarking exercise to ascertain whether the fees for Non-Executive
Directors (NEDs) are competitive, fair and reasonable. The committee is informed by the external market when reviewing the
fee structure and levels for our Non-Executive Directors.
The Articles of Association state at clause 21 that Directors are entitled to receive a fee for their services. This aggregate
of fees cannot exceed £600,000 per annum unless the shareholders pass a resolution at the Annual General Meeting to
amend this. An individual Director may not be involved in determining their own remuneration but may, in their capacity as
a member of the Remuneration Committee, be involved in setting as a ‘benchmark’ the appropriate level of remuneration for
Directors generally.
Effective 1 January 2021, the Directors’ fee was modified to AU$100,000 (from AU$70,000), in line with similar companies. The
Chair receives an additional fee of AU$80,000 for the additional time commitment needed. Annual fees of AU$10,000 are also
paid to Directors who Chair the following committees:
• Audit & Risk Committee
• Environmental, Social and Governance (ESG) Committee
• Remuneration Committee
Other payments may include (and as outlined in the Articles of Association):
• Travel expenses in accordance with the Company’s travel policy
• Reimbursement of any taxable or other expenses incurred in performing their role as well as any related tax cost on
such reimbursement
78
SOLGOLD pLC ANNUAL REPORT 2023
Changes in Directors’ remuneration
The table below sets out the percentage change in remuneration for the CEOs and Non-Executive Directors.
non-Executive Directors
CEO
Scott Caldwell
Darryl Cuzzubbo
Keith Marshall3
Nicholas Mather4
Liam Twigger
Keith Marshall
Nicholas Mather
Elodie Grant Goodey5
María Amparo Albán
James Clare
Kevin O’Kane6
Brian Moller1
Jason Ward2
Robert Weinberg
14%
–
–
–
(21%)
(79%)
(22%)
(53%)
(20%)
(22%)
(56%)
(100%)
(100%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
68%
(91%)
28%
190%
276%
20%
53%
17%
55%
(49%)
10%
(100%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Brian Moller was not re-elected to the Board on 15 December 2021.
2 Jason Ward resigned as an Executive Director on 13 May 2022.
3 Keith Marshall resigned as a Non-Executive Director on 12 August 2022.
4 Nicholas Mather resigned as CEO in 2021.
5 Elodie Grant Goodey resigned as a Non-Executive Director on 22 December 2022.
6 Kevin O’Kane resigned as a Non-Executive Director on 22 December 2022.
2023
2022
2021
2020
BASE SALAry/
BEnEFiTS %
BASE SALAry/
BEnEFiTS %
FEES % CHAnGE
CHAnGE
STi % CHAnGE
FEES % CHAnGE
CHAnGE
STi % CHAnGE
BASE SALAry/
FEES % CHAnGE
BEnEFiTS %
CHAnGE
STi % CHAnGE
BASE SALAry/
FEES % CHAnGE
BEnEFiTS %
CHAnGE
STi % CHAnGE
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–
–
–
102%
–
–
–
–
117%
(100%)
–
–
–
–
32%
–
(12%)
(6%)
(50%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(6%)
(100%)
(100%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(6%)
(100%)
24%
(100%)
(6%)
(100%)
–
–
–
–
–
–
–
–
–
–
The Company will reimburse the Director for all reasonable expenses properly, wholly, and necessarily incurred in the
performance of their duties on production of all relevant receipts.
Non-Executive Directors are not eligible to participate in the Company’s incentive program(s).
pay ratios Table
We have not included a CEO pay ratio in this report, as the Company has only one employee based in the UK, and any resulting
ratios would not be meaningful.
relative importance of spend on pay
The table below shows the remuneration paid to all employees in the Group, including the Executive Director. The figures
have been calculated in accordance with the Group Accounting Policies and drawn from Note 5 and Note 13 in the Group's
Consolidated Annual Financial Statements.
2023
US$
2022
US$
DiFFErEnCE in SpEnD
BETWEEn yEArS
DiFFErEnCE in SpEnD
BETWEEn yEArS (%)
Total Employee Remuneration
22,882,467
27,161,319
-4,278,852
Expenditure of exploration and evaluation
43,420,485
66,294,083
-22,873,598
SOLGOLD pLC ANNUAL REPORT 2023
-16%
-35%
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CONTINUED
Shareholder support for the remuneration policy and 2021 Directors’ remuneration Committee report
The Company received shareholder approval of its Remuneration Policy at the 2022 EGM on 30 June 2022 to cover a period of
three years. The policy applied from the date of approval. The Directors’ annual Remuneration Committee Report was put to an
advisory shareholder vote at the 2022 AGM of the Company on 22 December 2023. The table below shows full details of the
voting outcomes.
Remuneration Policy (at the 2022 EGM)
1,122,761,146 (69.24%)
498,769,699 (30.76%)
1,924,635
Remuneration report for the year ended
30 June 2022 (at the 2022 AGM)
1,703,343,678 (90.07%)
187,721,574 (9.93%)
878,024
vOTES FOr
vOTES AGAinST
ABSTAin
The Board notes that the Remuneration Policy Resolution at the 2022 EGM received more than 20% of the vote against
the policy and has engaged with shareholders to address their concerns that resulted in this outcome. See above in the
Remuneration Report on pages 70 and 71 for details regarding shareholder feedback and responses.
Summary of Directors’ terms
nOn-EXECUTivE DirECTOr
AppOinTmEnT DATE
Liam Twigger
Nicholas Mather
Elodie Grant Goodey
Kevin O’Kane
Keith Marshall
María Amparo Albán
James Clare
Dan Vujcic
17 June 2019 (Chair from 5 August 2020)
11 May 2005
17 July 2020
21 October 2020
21 October 2020
21 October 2020
1 May 2018
24 October 2022
EXECUTivE DirECTOr
AppOinTmEnT DATE
Scott Caldwell
10 November 2022 (Non-Executive from
24 October 2022 until appointment as CEO)
Notice periods in a Director’s contract may be paid out in lieu of notice.
nOTiCE pEriOD
3 months’ notice
3 months’ notice
3 months’ notice
3 months’ notice
3 months’ notice
3 months’ notice
3 months’ notice
3 months’ notice
nOTiCE pEriOD
12 months’ notice
Copies of the Director’s service contract are available for inspection at the Company’s Registered Office.
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Directors' remuneration policy
Statement of implementation of remuneration policy
The 2022 Remuneration Policy is designed to enable SolGold to attract, motivate and retain qualified industry professionals
in order to define and achieve our strategic goals. The policy acknowledges the internal and external context as well as our
business needs and long-term strategy. The policy encourages behaviour that is focused on long-term value creation and the
long-term interests and sustainability of SolGold, while adopting the highest standards of good corporate governance.
The Remuneration Committee notes that changes are planned to be made to the 2022 Remuneration Policy in order to
improve the ability to attract, motivate and retain qualified industry professionals with incentives consistent with industry
standards, reflect the Company's performance, and aim to drive success for all stakeholders. In particular, it is intended that
changes will be sought at the upcoming AGM in order to amend the policy so that any equity-based remuneration will vest
automatically on a change of control of the Company.
Executive remuneration policy table
The 2022 Remuneration Policy for the Executive Director is based on the following key principles:
• A significant proportion of remuneration should be tied to the achievement of specific performance conditions that align
remuneration with the creation of shareholder value and the delivery of the Company’s strategic plans
• There should be a focus on sustained long-term performance, with performance measured over clearly specified timescales,
encouraging executives to take action in line with the Company’s strategic plan, using good business management
principles and taking well considered risks
• Executive remuneration should support the values and culture of the Group. Pay should be simple and easy to understand,
with all aspects clear and openly communicated to stakeholders and with alignment with pay philosophies across the Group
The Remuneration Policy table below is an extract of the Group’s 2022 Remuneration Policy and sets out the principles for
the Executive Director’s remuneration. The 2022 Remuneration Policy is also used as a guideline for the remuneration of the
Executive Management.
Further detail on the variable remuneration elements - Short and Long-Term Incentive can be found below the table.
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Base Salary
To attract, retain and motivate the Company’s
Executive Director(s), and reward the position-
holder’s ability to carry out the responsibilities
of the role.
Benefits
Benefits are offered to complement base
salary to attract and retain Executive Directors.
Annual Bonus
/ Short-Term
Incentive (‘STI’)
To incentivise participants to focus on
outcomes that are a strategic target for
the Company in the financial year and
commitment to operating responsibly.
The STI reflects performance during the
financial year, the STI measures outcomes are
within Director’s control.
Base salary and statutory required superannuation/
pension obligations.
Paid in cash or a portion of base salary in shares of
the Company. The share price value is determined
by the average of the closing prices for a number of
dealing days within a period not exceeding 30 days
immediately before that date, as determined by the
Remuneration Committee.
There is no supplementary pension or retirement plan.
Certain allowances, which may include a lump sum
relocation allowance, medical insurance, the use of
a Company car, personal security, and legal fees
(subject to restrictions).
The amount of STI payable will be based upon the
percentage STI opportunity indicated in the
employee’s contract of employment (and not
exceeding the percentage stated in this table). STI
will be paid as a lump sum, in cash, or as an allocation
of shares at the discretion of the Remuneration
Committee (shares immediately vest).
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CONTINUED
Executive remuneration policy table continued
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Long-Term
Incentive Plan
(‘LTIP’)
To directly incentivise sustained shareholder
value through delivery of long-term
performance objectives and to retain high
calibre executive Directors by providing an
attractive equity-based incentive that builds
an ownership mindset.
Offers to join a LTIP are made annually, in the form
of shares, options, or in exceptional circumstances,
cash. LTIP payments have a performance and vesting
period of at least 3 years, subject to the meeting of
objective performance conditions and continued
employment.
Short-term incentive plan (STi) implementation
The Remuneration Committee believes that a simple and transparent scheme for the annual bonus/STI, with sufficiently
stretching targets, ensures that the Executive Directors and Executive Management are focused on the delivery of sustainable
business performance. The Performance Bonus Plan (“PBP”) was approved by Shareholders on 30 June 2022. The PBP is
a discretionary plan that provides for the grant of performance bonus awards to both Executive Directors and Executive
Management of the Group in order to retain and motivate them. Awards can be paid in the form of cash or shares, or a
combination of both where performance objectives in both the individual and corporate scorecards are reached.
The Corporate and Individual Scorecard (“Scorecard”), as recommended by management, endorsed by the Remuneration
Committee, and approved by the Board, determines the specific Key Performance Indicators (“KPI”) that the participant must
achieve over a period of 12 months to receive an award. The annual performance cycle is 1 July to 30 June. The Scorecards
include a balanced range of measures that consider both financial and non-financial KPIs within the Health & Safety, Value
Creation and ESG categories.
The Remuneration Committee ensures and has ensured that the incentive structure for senior management does not raise ESG
risks by inadvertently motivating irresponsible behaviour.
The Board is provided with the discretion to modify the STI outcomes in extenuating circumstances.
Achievement and performance against each participant's Scorecard is assessed annually as part of the Company’s broader
performance review process. As soon as practicable after the Company’s financial results becoming available following the end
of each Performance Period, the Board shall:
1) review the Group’s, and, if applicable, any relevant Group Company’s performance and the Participant’s performance during
the Performance Period and determine whether and to what extent the Performance Conditions have been satisfied;
2) determine the total value of the Bonus Award payable to each Participant;
3) if any proportion of the total value of the Bonus Award is to be paid in cash, determine the amount of the Cash Award; and
4) if any proportion of the total value of the Bonus Award is to be settled in Bonus Shares, determine the number of Bonus
Shares by reference to the Market Value on the date of determination.
Long-term incentive plan (LTip) implementation
The Remuneration Committee believes in setting demanding objectives, which reward progressive growth, in order to
incentivise and encourage long-term growth and enhance shareholder value.
The Long-Term Incentive Plan (LTIP) is operated in conjunction with the Long-Term Incentive Plan Rules (LTIP Rules) approved
by Shareholders on 30 June 2022. Performance conditions, including non-financial metrics, are relevant, stretching and
designed to promote the long-term success of the Company. The LTIP’s purpose is to encourage employee retention and to
incentivise the creation of long-term value for shareholders by the Executive Director and Executive Management.
The LTIP opportunity level reflects the capacity of the participant to influence long-term sustainable growth and performance.
The Directors' Remuneration Report has been approved by the Board and signed on behalf of the Board by:
DAn vUJCiC
Director
Remuneration Committee Chair
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D I R E C T O R S ’ R E P O R T
The Directors present the Annual Report of SolGold plc
together with the audited financial statements for the year
ended 30 June 2023.
In accordance with section 415 of the Companies Act 2006
(UK), the Directors present their report which incorporates the
management report required under the Disclosure Guidance
and Transparency Rules sourcebook (“DTRs”) of the United
Kingdom’s Financial Conduct Authority, for listed companies
and the audited accounts for the year ended 30 June 2023
as set out on pages 96 to 153.
principal activities
SolGold plc (“SolGold” or the “Company”) is a mineral
exploration and development company headquartered in
Brisbane, Australia. The Company is a UK incorporated public
limited company with the registration number 05449516
and registered address 1 King Street, London, EC2V 8AU.
SolGold is dual LSE and TSX-listed (SOLG on both exchanges)
and has a leading exploration and project team focused on
copper-gold exploration and mine development with assets
in Ecuador, Australia and Chile.
review of business
A review of the current and future development of the Group’s
business is given in the Strategic Report on pages 6 to 45
which forms part of, and by reference is incorporated in,
this Directors’ Report.
Financial risk management has been assessed within Note
24 to the financial statements which forms part of, and by
reference is incorporated in, this Directors’ Report.
results and dividends
The Directors do not recommend the payment of a
dividend (2022: nil). The results for the year are set out
in the consolidated financial statements for the year ended
30 June 2023.
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Share capital
Details of the issued share capital of the Company,
including details of ordinary shares issued during the year,
those acquired by the Company under Section 659 of the
Companies Act 2006 and cancelled under Section 662
of the Companies Act 2006 is set out in Note 18 of the
financial statements which forms part of, and by reference
is incorporated in, this Directors’ Report.
As at the date of this report, the Company’s issued share
capital consisted of 3,001,106,975 ordinary shares of £0.01
each. The Company does not hold any shares in Treasury.
The Company has one class of ordinary share, with the rights
set out in the Articles of Association. All issued shares are
fully paid, and each share has the right to one vote at the
Company’s general meeting. There are no specific restrictions
either on the size of a holding or on the transfer of shares,
which are both governed by our Articles of Association. There
are no special rights attached to the control of the Company
or special rights attached to shares under any employee
share scheme. A fully owned subsidiary of the Company
holds 157,141,000 shares in the Company. These shares were
acquired as part of the acquisition of Cornerstone Capital
Resources Inc. They are available to be sold by the Company
in its full discretion.
The Directors may only issue shares to the extent authorised
by the shareholders in a general meeting, unless an
exemption applies.
Details of the Company’s Employee Incentive Plans, including
the Incentive Plans recently approved by shareholders at the
General Meeting on 30 June 2022 and by the Directors on
17 March 2023, are set out in Note 23. No votes are cast in
respect of the options under the Incentive Plans until such
time the options are converted to shares. No person has any
special rights of control over the Company’s share capital and
all issued shares are fully paid. At 30 June 2023, there were
42,000,000 options outstanding for the issue of ordinary
shares under the current and superseded employee incentive
plans. In addition at 30 June 2023, there were 53,028,125
options outstanding for the issue of ordinary shares outside of
current and superseded employee incentive plans.
The current power to allot shares was granted by shareholder
resolution at the 2022 AGM and a new authority will be
sought at the 2023 AGM within the limits set out in the notice
of meeting for the 2023 AGM.
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Directors and Directors’ interests
The Directors of the Company who held office during the year were as follows:
Liam Twigger
AppOinTED
17 June 2019
rESiGnED
TErminATED
Darryl Cuzzubbo
16 November 2021
10 November 2022
Elodie Grant Goodey
17 July 2020
22 December 2022
María Alban Ampáro
21 October 2020
Kevin O’Kane
Keith Marshall
Nicholas Mather
James Clare
Scott Caldwell
21 October 2020
21 October 2020
11 May 2005
1 May 2018
24 October 2022
Slobodan (Dan) Vujcic
24 October 2022
Further details about the current Directors and their roles
within the Company are available in the Directors’ biographies
on pages 54 to 55. Details of the remuneration of the
Directors, and their interests in the shares of the Company are
contained in the Annual Report on Remuneration on pages
72 to 80.
The Board has the power at any time to elect any person to be
a Director, but the number of Directors must not exceed the
maximum number determined by the Articles of Association.
The Board will continue to regularly review and monitor its
composition and performance having regard to the evolving
complexity of the Company’s activities and operations and
make changes as appropriate. Under the Company’s Articles
of Association, each Director submits himself or herself for
re-election by shareholders at least every three (3) years.
However, all Directors intend to stand for re-election at the
2023 AGM to be held later this year in accordance with the
Board’s decision to voluntary comply with the Code.
Directors’ interests
Before each Board meeting, all Directors are to disclose
whether they hold any interests in any matters to be reviewed
at the Board meeting. The Company Secretary is notified
promptly of any changes to those reported interests.
Information on Directors’ interests in shares of the Company is
set out in the Annual Report on Remuneration on page 75.
22 December 2022
12 August 2022
Directors’ indemnity
The Company has maintained Directors’ and Officers’
insurance during the year. Such provisions remain in force at
the date of this report.
The Company has entered into deeds of indemnity with each
of the Directors and which were in force as at the date of this
Directors’ Report.
Substantial shareholding
At 30 June 2023, the Company has been notified or is aware
of the following interests in the Shares of the Company of 3%
or more of the Company’s total issued share capital.
Name
nUmBEr
BHP Billiton Holdings Limited
310,965,736
Newcrest International Pty Ltd
309,309,996
DGR Global Ltd
204,151,800
Jiangxi Copper (Hong Kong)
Investment Company Limited
SolGold Canada Inc.
Maxit Capital LP
Tenstar Trading Limited
Norges Bank Investment
Management
180,753,608
157,141,000
153,366,663
107,877,393
91,526,468
3.05
% OF
iSC
10.36
10.31
6.80
6.02
5.24
5.11
3.59
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Corporate governance
The Governance Report can be found on pages 49 to 53 for a
description of the Company’s Corporate Governance structure
and policies. The Board has made a concerted effort to ensure
the Company’s governance practices and policies are current
and implemented within the business of the Company. The
Governance Report forms part of this Directors’ Report and is
incorporated by cross reference.
Whistle-blower reports
The Company's Whistleblowing Policy is available on
the Company’s website and all reports are individually
investigated both internally and, in some instances,
completing an external third-party investigation. The
introduction of the whistle-blower hotline allows both
employees and stakeholders to raise concerns with a
guarantee that the matter will be investigated.
Equal opportunities/employees with disabilities
SolGold values diversity and aims to make the best use
of everyone’s skills and abilities. We have given full and
fair consideration to applications for employment by the
Company made by disabled persons, having regard to their
particular aptitudes and abilities.
If any employees of the Company become disabled while they
work for us, where possible, we will retrain employees who
become disabled and adjust their working environment, so
they can maximise their potential.
Employees
Employees receive regular briefings and updates via
internal communications concerning specific events, and
announcements and presentations by the CEO to inform
them of the performance of the business and issues affecting
the business. Communications are tailored to location and
delivered in the local language.
Branches
For purposes of Chapter 3 of the Companies Act 2006 (UK),
the Company is headquartered in Australia.
Financial instruments
The Company does not undertake financial instrument
transactions that are speculative or unrelated to the
Company’s or Group’s activities. The Group’s financial
instruments consist of deposits with banks, accounts payable,
other financial liabilities in the form of the Franco-Nevada NSR
Financing Agreement and Osisko NSR Financing Agreement,
and derivative liabilities associated with the option issued
to BHP in December 2019. The loans provided to employees
under the Company Funded Loan Plan (“CFLP”) will expire by
21 December 2023 if not repaid earlier, see Note 14. In addition
to the Group’s financial instruments, the Company’s financial
instruments also include its loans to subsidiaries. Further
details of financial risk management objectives and policies,
and exposure of the Company to financial risks are provided
in Note 24 in the financial statements.
political donations
No political donations (including to non-UK political parties)
were made during the year.
Going concern
Information on the business environment in which SolGold
operates is included in the Strategic Report. The financial
statements have been prepared on a going concern basis
which contemplates the continuity of normal business
activities and the realisation of assets and discharge of
liabilities in the ordinary course of business. The Company has
not generated revenues from operations, and in common with
many exploration companies, the Company raises capital for
its exploration and appraisal activities in discrete tranches. As
such, the ability of the Group to continue as a going concern
depends on its ability to secure additional financing. While
this situation gives rise to a material uncertainty and there can
be no assurance the Company will be able to raise required
financing in the future, the Directors consider it appropriate
to prepare the financial statements on a going concern basis
given the Group’s historical ability to raise necessary funding
(refer Note 1(b)(ii)).
Further details of the Company’s cash balances and
borrowings are included in Notes 17 and 21 in the Financial
Statements from pages 136 and 139.
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performance in relation to
environmental regulation
Carbon reporting
Streamlined Energy and Carbon Reporting (“SECR”)
regulations came into effect on 1 April 2019. The Company must
report energy consumption and resultant carbon emissions
as well as a suitable intensity ratio in its Directors’ Report. The
Company applies the practice of “reduce, reuse and recycle”
and is considerate of the resources used as well as the direct
and indirect impact our operations may have.
methodology
The methodology used for the calculation of emissions
was the Greenhouse Gas (“GHG”) Protocol Corporate
Accounting and Reporting Standard (revised edition to
2015). The standard covers the accounting and reporting
of seven greenhouse gases: carbon dioxide (CO2), methane
(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PCFs), sulphur hexafluoride (SF6) and
nitrogen trifluoride (NF3), and it covers the Company’s
operational boundaries.
Scope 1 emissions from direct activities of the operation,
included: 1) the use of vehicles owned by the Company for
transportation of machinery, material and personnel, operation
of machinery for perforation, the use of generators for
electricity in the camps, Liquefied Petroleum Gas (“LPG”) in
camps, composting activities and the treatment of wastewater
from the camps and water used for drilling operations.
Methane calculations were made separately for both
wastewater sources, and N2O generation was only calculated
for wastewater from camps. These calculations were made
using GHG Protocol for Cities (“GPC”) methodology.
Scope 2 emissions from activities of the operation associated
with the consumption and purchase of electricity from the
grid for the camps.
Reported annual emissions are presented in tons of carbon
dioxide equivalent CO2eq. Regarding the emissions factors,
for energy and fuel, the updated emissions factors provided
by the Government of Ecuador were used and the IPCC
emissions factors were used for the waste sector.
A third party consultant, Felipe Castillo, produced SolGold’s
emission reports. The Company reported on all of the
emission sources required under the Companies Act 2006.
intensity ratio
In order to express the GHG emissions in relation to a
quantifiable factor associated with the Company’s activities,
drilling metres were chosen as a normalisation factor. This will
allow comparison of the Company’s performance over time, as
well as with other companies in the sector.
For the year ended 30 June 2023, the intensity ratio for the
Cascabel and regional exploration operations was 0.11mtCO2
e/metre drilled (2022: 0.08mtCO2 e/metre drilled).
For further details on the Company’s emissions report and
details refer to page 39.
Currency
The functional currency of the subsidiaries in Australia is
considered to be Australian Dollars (AU$). The functional
currency of the subsidiaries in Solomon Islands is considered
to be Solomon Islands Dollars (SBD). The functional
currency of the subsidiaries in Ecuador is considered to be
United States Dollars (US$). The functional currency of the
subsidiaries in Canada is considered to be Canadian Dollars
(CAD). The functional currency of the subsidiaries in Chile
is considered to be Chilean Peso (CLP). The presentational
currency of the Company and the Group is United States
Dollars and all amounts presented in the Directors’ Report
and financial statements are presented in United States
Dollars unless otherwise indicated.
Takeover
There are no significant agreements that take effect, alter or
terminate on change of control of the Company following a
takeover. Certain employees may receive compensation on
a change of control of the Company following a takeover,
subject to the discretion of the Board regarding their
Employee Share Incentive Plans.
Furthermore, under the Directors' Remuneration Policy
approved on 30 June 2023, Directors are not provided with
compensation for loss of office or employment that occurs
because of a takeover bid.
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Disclosure of audit information
In the case of each person who is a Director of the Company
at the date when this report is approved confirms that, so
far as they are individually aware, there is no relevant audit
information of which the Company’s auditors are unaware,
and that each Director has taken all the steps that they ought
to have taken as a Director to make themselves aware of any
relevant audit information and to establish that the Company’s
auditors are aware of the information.
The Group’s Auditors, PricewaterhouseCoopers LLP,
have indicated their willingness to continue in office and,
on the recommendation of the Audit Committee and in
accordance with section 489 of the Act, a resolution for
their reappointment will be put to the 2023 AGM.
On behalf of the Board
STEvEn WOOD AnD JAmES DOyLE
Joint Company Secretaries
Level 27, 111 Eagle Street
Brisbane QLD 4000
Australia
28 September 2023
related party transactions
Details of related party transactions for the Group and
Company are given in Note 26. Key management personnel
remuneration disclosures are given in Note 5.
Subsequent events
Details of significant events since the balance sheet date are
contained in Note 5 to the financial statements. The Directors
are not aware of any other significant changes in the state
of affairs of the Group or events after the reporting date
that would have a material impact on the consolidated or
Company financial statements.
Section 172 statement
A statement of how the Board has performed in its duties
under section 172 of the Companies Act 2006 (UK) can be
found on pages 30 to 33 of the Strategic Report.
In accordance with the Companies Act 2006 (UK), other
section 172 considerations have been reported in other
sections of the Annual Report and are included in this
Directors’ Report by reference in the details of stakeholder
engagement (page 59).
A separate communication will be sent to shareholders and
published on the Company’s website regarding the Company’s
2023 AGM, which is likely to be held by December.
Website publication
The Directors are responsible for ensuring the Annual Report
and the financial statements are made available on the
Company’s website. Financial statements are published on
the Company’s website in accordance with legislation in the
United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Articles of association
The Company’s amended Articles of Association were
adopted by shareholders at the Company’s EGM held on
30 June 2022. Any amendment to the Articles requires the
approval of shareholders by a special resolution at a general
meeting of the Company.
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D I R E C T O R S ’ R E S P O N S I B I L I T Y S T A T E M E N T
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the Group and the Company financial
statements in accordance with UK-adopted international
accounting standards. In preparing the Group and Company
financial statements, the Directors have also elected to
comply with International Financial Reporting Standards
issued by the International Accounting Standards Board
(IFRSs as issued by IASB).
Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Company and
of the profit or loss of the Group for that period. In preparing
the financial statements, the Directors are required to:
Directors’ confirmations
Each of the Directors, whose names and functions are listed
in Annual Report and the financial statements confirm that, to
the best of their knowledge:
• the Group and Company financial statements, which
have been prepared in accordance with UK-adopted
international accounting standards and IFRSs issued by
IASB, give a true and fair view of the assets, liabilities and
financial position of the Group and Company, and of the
loss of the Group
• the Annual Report and the financial statements include
a fair review of the development and performance of the
business and the position of the Group and Company,
together with a description of the principal risks and
uncertainties that it faces
Board Approval 28 September 2023
• select suitable accounting policies and then apply them
By order of the Board,
consistently
• state whether applicable UK-adopted international
accounting standards and IFRSs issued by IASB have been
followed, subject to any material departures disclosed and
explained in the financial statements
• make judgements and accounting estimates that are
LiAm TWiGGEr
Chair
SolGold plc
28 September 2023
reasonable and prudent
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and Company will continue in business
The Directors are responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
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I N D E P E N D E N T A U D I T O R S ’ R E P O R T
T O T H E M E M B E R S O F S O L G O L D P L C
R E P O R T O N T H E A U D I T O F T H E F I N A N C I A L S T A T E M E N T S
OpiniOn
In our opinion, SolGold plc’s Group financial statements and Company financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 June 2023 and of the Group’s loss
and the Group’s and Company’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report 2023 (the “Annual Report”), which comprise: the
Consolidated and Company Statements of Financial Position as at 30 June 2023; the Consolidated Statement of Profit or Loss
and Other Comprehensive Income, the Consolidated and Company Statements of Changes in Equity and the Consolidated
and Company Statements of Cash Flows for the year then ended; and the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
SEpArATE OpiniOn in rELATiOn TO iFrSs AS iSSUED By THE iASB
As explained in note 1 to the financial statements, the Group and Company, in addition to applying UK-adopted international
accounting standards, have also applied international financial reporting standards (IFRSs) as issued by the International
Accounting Standards Board (IASB).
In our opinion, the Group and Company financial statements have been properly prepared in accordance with IFRSs as issued
by the IASB.
BASiS FOr OpiniOn
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
Other than those disclosed in Note 3, we have provided no non-audit services to the Company or its controlled undertakings in
the period under audit.
mATEriAL UnCErTAinTy rELATED TO GOinG COnCErn
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure
made in note 1 to the financial statements concerning the Group’s and the Company’s ability to continue as a going concern.
The Group has not generated revenues from operations and management’s cashflow forecasts show that the Group and
the Company need to secure additional funding to continue their exploration and development programme and in order to
continue to meet their obligations and liabilities as they fall due. Management is currently exploring options for obtaining
this additional funding, as outlined in note 1, but no firm commitments have been received at the date of approval of these
financial statements. These conditions, along with the other matters explained in note 1 to the financial statements, indicate the
existence of a material uncertainty which may cast significant doubt about the Group’s and the Company’s ability to continue
as a going concern. The financial statements do not include the adjustments that would result if the Group and the Company
were unable to continue as a going concern.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
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Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern
basis of accounting included:
• Obtaining and reviewing the Group’s board-approved cashflow forecasts for the going concern period covering 15
months to 31 December 2024, including both the base case and severe but plausible downside scenarios, challenging and
evaluating management’s assumptions used and verifying that these assumptions are consistent with our knowledge and
understanding of the business;
• Assessing the reasonableness of management’s assessment, evaluating the assumptions used, and assessing management’s
ability to take mitigating actions, including securing additional funding, delaying exploration expenditure, reducing costs
and verifying that the Group is able to meet its exploration and working capital commitments within the going concern
period under this scenario;
• Discussions with management around their plans for securing the additional funding;
• Testing the cashflow forecast model for mathematical accuracy; and
• Assessing the completeness and adequacy of management’s going concern disclosures provided in note 1 to the financial
statements.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, other than the material
uncertainty identified in note 1 to the financial statements, we have nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going
concern basis of accounting, or in respect of the Directors’ identification in the financial statements of any other material
uncertainties to the Group’s and the Company’s ability to continue to do so over a period of at least twelve months from the
date of approval of the financial statements.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
OUr AUDiT ApprOACH
Context
This is our second year as external auditors of the Group. We performed audit procedures in advance of the year-end,
together with our component audit teams, the objective of which was to enable early consideration of as many key accounting
judgements as possible and to identify any specific areas where additional audit attention might be required at the year-
end. Our response to management’s discovery of the misappropriation of funds in Ecuador, identified in the prior year, also
influenced the determination of our final 2023 Group audit scope.
Overview
Audit scope
• The Group’s assets and operations are primarily located in Ecuador. We conducted a full scope audit over three
components of the Group, namely Exploraciones Novomining S.A. (“ENSA”), SolGold Ecuador S.A. and the Company,
SolGold plc. In addition, we performed specified procedures over four other components: SolGold Finance AG, Green
Rock Resources GRR S.A., Carnegie Ridge Resources S.A. and Cruz del Sol CSSA S.A.
• Financial reporting is undertaken for the consolidated Group at the head office in Brisbane, Australia and in Toronto,
Canada. Our scope enabled us to obtain 97% coverage of the Group’s consolidated total assets and 92% coverage of the
Group’s consolidated loss before tax.
Key audit matters
• Material uncertainty related to going concern (Group) – refer to Material uncertainty related to Going Concern section above.
• Carrying value of intangible assets (Group).
• Acquisition of Cornerstone Capital Resources Inc (Group).
• Carrying value of Investments in Subsidiaries and Intercompany Loans with Subsidiaries (Company).
materiality
• Overall Group materiality: US$4.8 million (Prior year: US$4.3 million) based on 1% of Total Assets.
• Overall Company materiality: US$3.9 million (Prior year: US$3.7 million) based on 1% of Total Assets.
• Performance materiality: US$2.4 million (Prior year: US$2.1 million) (Group) and US$1.9 million
(Prior year: US$1.9 million) (Company).
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The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments
we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to going concern, described in the Material uncertainty related to Going Concern section above, we determined the
matters described below to be the key audit matters to be communicated in our report. This is not a complete list of all risks
identified by our audit.
Acquisition of Cornerstone Capital Resources Inc (Group) is a new key audit matter this year. Misappropriation of funds
(Group), which was a key audit matter last year, is no longer included because of the identified historical frauds no longer
being a focus area as no further fraudulent expenses were identified this year. Otherwise, the key audit matters below are
consistent with last year.
KEy AUDiT mATTEr
HOW OUr AUDiT ADDrESSED THE KEy AUDiT mATTEr
Carrying value of intangible assets (Group)
As at 30 June 2023, the Group has intangible assets of
US$411.4 million, relating to deferred exploration costs.
Under IAS 36, ‘Impairment of Assets’, management is
required to undertake an impairment assessment of the
carrying value of the Group’s intangible assets and other
non-financial assets where indicators of impairment are
identified. While IAS 36 applies to the accounting for the
impairment of Exploration and Evaluation assets (“E&E”),
IFRS 6 “Exploration for and Evaluation of Mineral Resources”
modifies the requirements in IAS 36 with respect to:
• the indications of impairment; and
• the level at which impairment is tested.
At 30 June 2023, management’s impairment trigger
assessment considered factors such as:
• whether the period for which the entity has the right
to explore in the specific area has expired during the
period or will expire in the near future and is not expected
to be renewed;
• whether substantive expenditure on further exploration
for, and evaluation of, mineral resources in the specific
area is neither budgeted nor planned;
• whether exploration for, and evaluation of, mineral
resources in the specific area have not led to the discovery
of commercially viable quantities of mineral resources and
the entity has decided to discontinue such activities in the
specific area; and whether sufficient data exists to indicate
that, although a development in the specific area is likely
to proceed, the carrying amount of the E&E asset is
unlikely to be recovered in full by successful development
or by sale.
We evaluated management’s assessment of potential
indicators of impairment and impairment reversal of the
intangible assets, being the deferred exploration costs.
We undertook the following procedures in our evaluation of
management’s impairment indicator assessment:
• Obtained management’s committed exploration spend,
the timing thereof and the legality implications of not
meeting the committed spend in the agreed term,
supporting their assessment of indicators of impairment,
along with their plans for future expenditure to meet
minimum licence requirements;
• Assessed whether the Group has retained the right of
tenure for all its exploration licence areas by obtaining
licence status records from relevant state government
online databases, verification of licence status to
supporting documentation and through discussion with
external lawyers, in order to confirm legal title;
• Obtained management’s assessment of the viability of the
future economic benefits of the concessions in each region.
As a result of our work, we determined that the impairment
charges recorded are appropriate, that no other indicators
of impairment were identified for the remaining intangible
assets and that adequate disclosures have been made in the
financial statements.
We evaluated management’s reversal of impairment
assessment and as a result of our work, we determined
that the impairment reversal recorded is appropriate and
that adequate disclosures have been made in the financial
statements.
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HOW OUr AUDiT ADDrESSED THE KEy AUDiT mATTEr
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Carrying value of intangible assets (Group)
As a result of their impairment assessment, management has
recognised an impairment of US$1.06 million which reflects
the Board’s decision to relinquish 3 concessions held in
the Solomon Islands. The impairment of these concessions
reflects the expiry of the underlying licences.
Management did not identify any other impairments relating
to the other intangible assets.
As part of the impairment trigger review, management
identified 10 concessions that had been impaired in the
prior year based on the Board’s strategy at that time.
However, under the Board’s current, revised strategy,
these concessions have been re-assessed and it has
been determined that these concessions have value to
the Company; and accordingly the licences have been
maintained. The reversal of the impairment of the nine
properties equated to US$3.78 million.
Impairment assessments require significant judgement and
there is a risk that the carrying value of the assets may not
be supported by their recoverable amount. As such this was
a key area of focus for our audit due to the material nature of
intangible assets, the significant judgement involved and the
fact that there were changes to the Board’s strategy during
the financial year.
Acquisition of Cornerstone Capital resources inc (Group)
As disclosed in Note 28 of the financial statements, during
the year the Group acquired all of the remaining issued share
capital of Cornerstone Capital Resources Inc (“Cornerstone”)
through an issue of 85 million new SolGold shares to the
shareholders of Cornerstone.
The transaction is considered to be a business combination
under IFRS 3. Accounting for business combinations is
complex and involves judgement in the determination of
the fair value of consideration paid and payable, and the
assessment of the fair value of assets and liabilities acquired
and the elements of consideration relating to pre-existing
relationships.
Management engaged external accounting experts to
assess the transaction and concluded that there were
multiple transactions taking place concurrently alongside
the acquisition that were required to be separated from
the IFRS 3 acquisition. These included the purchase of the
marketable securities held by Cornerstone in SolGold (the
own shares), the purchase of the long-term investment
held by Cornerstone (representative of 15% of the value of
ENSA), which was considered to be a purchase of the non-
controlling interest, and the step acquisition of the remaining
Cornerstone assets and liabilities.
Given the significance of the transaction and the complexity
around the associated judgements and estimates, this is a
key audit matter.
We obtained and read the assessment of the acquisition of
Cornerstone, and the accounting implications, performed by
management’s experts and considered the assessment to be
consistent with IFRS 3.
We obtained, read and understood the sale and purchase
agreements to gain an understanding of the assets acquired,
liabilities assumed and the overall nature of the transaction.
We obtained management’s calculations of the consideration
paid and the replacement option elements, and we assessed
the appropriateness of the calculations.
We evaluated management’s judgement on whether this
was a single transaction or whether it contained multiple
elements. We note that the purchase of the own shares and
of the non-controlling interest are not transactions which are
included in the scope of IFRS 3. On this basis, we consider
management’s conclusion that these transactions were not in
the scope of IFRS 3 to be reasonable.
For the assets and liabilities acquired, we reviewed the
working papers of Cornerstone’s auditors. There were no
matters arising.
Based on our audit procedures performed, we consider the
accounting for the acquisition and the related valuation of
the assets acquired, and liabilities assumed, to be reasonable.
We also reviewed the related disclosures in the notes to
the financial statements for compliance with accounting
standards and consistency with the results of our work,
with no matters arising.
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KEy AUDiT mATTEr
HOW OUr AUDiT ADDrESSED THE KEy AUDiT mATTEr
Carrying value of investments in Subsidiaries and intercompany Loans with Subsidiaries (Company)
In respect of the Company’s Investments in Subsidiaries and
Intercompany Loans with Subsidiaries, we evaluated and
challenged management’s assessment of the carrying values.
We independently performed an assessment of internal
and external factors, including considering the market
capitalisation of the Group with reference to the carrying
value of the Company’s Investments in Subsidiaries to
identify other possible impairment indicators and evaluated
the ability of the subsidiaries to repay the loan balances.
As a result of our work, we are satisfied that the carrying
value of the Company’s Investments in Subsidiaries and
Intercompany Loans with Subsidiaries are appropriate at
30 June 2023.
Refer to Note 9 (Investment in subsidiaries), Note 10
(Intercompany Loans with Subsidiaries).
As at 30 June 2023, the Company holds Investments
in Subsidiaries amounting to US$261 million, as well as
Intercompany Loans with Subsidiaries of US$181.5 million.
In assessing the carrying value of these assets, management
considered whether the underlying net assets of the
investments support the carrying amount, the nature of the
underlying assets and whether other facts and circumstances
could also be indicative of impairment.
Management also performed an assessment of the expected
credit losses on the Intercompany Loans with Subsidiaries.
Management concluded that no impairment is required in
relation to the carrying value of Investments in Subsidiaries
and Loans with Subsidiaries and concluded that no
expected credit losses against the Intercompany Loans with
Subsidiaries are required.
The carrying value of Investments in Subsidiaries and
Intercompany Loans with Subsidiaries was included as a key
audit matter given that this is an area of focus for the audit
of the Company due to the size of the balances.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group and the Company, the accounting processes and
controls, and the industry in which they operate.
The Group’s assets and operations are primarily located in Ecuador. In establishing the overall approach to the Group audit,
we determined the type of work required to be performed for the consolidated financial statements by the Group audit team,
or through involvement of our component auditors in Ecuador and Switzerland. We identified three significant components
which, in our view, required an audit of their complete financial information, either due to their size or risk characteristics. This
included the two main operating subsidiaries in Ecuador, namely Exploraciones Novomining S.A (“ENSA”) and SolGold Ecuador
S.A, and the Parent Company, SolGold plc. In addition, we performed specified procedures over four other components:
SolGold Finance AG., Green Rock Resources GRR S.A., Carnegie Ridge Resources S.A. and Cruz del Sol CSSA S.A.
Our component audit teams, under the Group team’s direction and supervision, performed walkthroughs to understand and
evaluate the key financial processes and controls across the Group. Where work was performed by our component auditors in
Ecuador and Switzerland, we determined the level of our involvement in the audit work for the consolidated Group in order to
be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group
financial statements as a whole.
We spent time with our component audit team in Quito, Ecuador, during the year-end phase of the audit. In addition to the site
visit, we conducted oversight of our component audit teams through regular dialogue via conference calls, video conferencing
and email communication as considered necessary. We performed remote and in-person working paper reviews to satisfy
ourselves as to the appropriateness of audit work performed by our component audit teams. We also attended key meetings
virtually and in person with Group and local management. Further specific audit procedures over the Group consolidation
and review procedures over the Annual Report and audit of the financial information disclosures were directly performed by
the Group audit team. These procedures gave us the evidence we needed for our opinion on the Group financial statements
as a whole.
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The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the
Group’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact
of climate risk. Our procedures did not identify any material impact as a result of climate risk on the Group’s and Company’s
financial statements.
materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
FinAnCiAL STATEmEnTS – GrOUp
FinAnCiAL STATEmEnTS – COmpAny
Overall materiality
US$4.8 million (Prior year: US$4.3 million).
US$3.9 million (Prior year: US$3.7 million).
How we determined it
1% of Total Assets
1% of Total Assets
rationale for
benchmark applied
We considered total assets to be an appropriate
benchmark for the Group, given the Group’s
current focus on the exploration of its assets.
In addition, the Directors use this measure as a
key performance indicator for the Group.
We considered total assets to be the most
appropriate benchmark for the Company,
as it is primarily a holding company, and
holds material investments in subsidiary
undertakings.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across components was US$0.5 million to US$4.5 million. Certain components were audited
to a local statutory audit materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 50% (Prior year: 50%) of overall materiality, amounting
to US$2.4 million (Prior year: US$2.1 million) for the Group financial statements and US$1.9 million (Prior year: US$1.9 million)
for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount at the lower end of our normal range
was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above
US$238,500 (Group audit) (Prior year: US$214,000) and US$192,950 (Company audit) (Prior year: US$185,000) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
rEpOrTinG On OTHEr inFOrmATiOn
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
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Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and
Directors’ Report for the year ended 30 June 2023 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report.
Directors’ remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006.
COrpOrATE GOvErnAnCE STATEmEnT
ISAs (UK) require us to review the Directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance
Code, which the Listing Rules of the Financial Conduct Authority specify for review by auditors of premium listed companies.
Our additional responsibilities with respect to the corporate governance statement as other information are described in the
Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit, and,
except for the matters reported in the section headed ‘Material uncertainty related to going concern’, we have nothing material
to add or draw attention to in relation to:
• The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
• The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s
ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
• The Directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment
covers and why the period is appropriate; and
• The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Group and Company was substantially
less in scope than an audit and only consisted of making inquiries and considering the Directors’ process supporting their
statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent with the financial statements and our knowledge and understanding of
the Group and Company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
• The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the Group’s and Company’s position, performance, business
model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
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responsibilities of the Directors for the financial statements
As explained more fully in the Directors’ Responsibility Statement, the Directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ 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 ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to the failure to comply with the London Stock Exchange and TSX Listing Rules, environmental regulations,
health and safety regulations, and anti-bribery and corruption laws, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations that have a direct
impact on the financial statements such as the Companies Act 2006 and applicable tax legislation in the jurisdictions in which
the Group has material operations. We evaluated management’s incentives and opportunities for fraudulent manipulation of
the financial statements (including the risk of override of controls), and determined that the principal risks were related to
posting inappropriate journal entries and management bias in accounting estimates. The Group engagement team shared this
risk assessment with the component auditors so that they could include appropriate audit procedures in response to such risks
in their work. Audit procedures performed by the Group engagement team and/or component auditors included:
• Enquiries of Directors, management and the Group’s legal counsel, including consideration of known or suspected
instances of non-compliance with laws and regulations and fraud;
• Examination of management’s responses to whistle-blowing allegations made during the year;
• Understanding and evaluating the design and implementation of controls designed to prevent and detect irregularities
•
and fraud;
Identifying and testing journal entries based on our risk assessment, in particular any journal entries posted with unusual
account combinations that could be used to manipulate the results and utilised an anomaly detection tool to identify
unusual journals based on the analysis of trends and patterns of journal entries;
• Challenging assumptions and judgements made by management in respect of critical accounting judgements and
significant accounting estimates, and assessing these judgements and estimates for management bias; and
• Review of related work performed by the component audit teams, including their responses to risks related to
management override of controls.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
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Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
O T H E R R E Q U I R E D R E P O R T I N G
COmpAniES ACT 2006 EXCEpTiOn rEpOrTinG
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
AppOinTmEnT
Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 11 November 2021
to audit the financial statements for the year ended 30 June 2022 and subsequent financial periods. The period of total
uninterrupted engagement is two years, covering the years ended 30 June 2022 and 30 June 2023.
O T H E R M A T T E R
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of
the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report
provides no assurance over whether the annual financial report will be prepared using the single electronic format specified in
the ESEF RTS.
TimOTHy mCALLiSTEr (SEniOr STATUTOry AUDiTOr)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
28 September 2023
98
SOLGOLD pLC ANNUAL REPORT 2023
C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S
A N D O T H E R C O M P R E H E N S I V E I N C O M E
For the year ended 30 June 2023
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
Expenses
Exploration costs written-off
Reversal of exploration costs written-off
Administrative expenses
Operating loss
Other income
Finance income
Finance costs
Movement in fair value of derivative liability
Remeasurement of amortised cost of financial liability
(Loss)/profit before tax
Tax expense
Loss for the year
Other comprehensive (loss)/profit
Items that may be reclassified to profit or loss
GrOUp
yEAr EnDED
30 JUnE 2023
US$
GrOUp
yEAr EnDED
30 JUnE 2022
US$
nOTES
13
13
3
6
6
22
21
7
(1,059,317)
(3,858,024)
3,780,099
–
(41,198,678)
(17,569,179)
(38,477,896)
(21,427,203)
122,443
94,056
454,077
839,140
(13,194,858)
(12,570,180)
2,147,000
539,000
–
35,003,704
(49,309,255)
2,838,538
(1,130,490)
(4,540,103)
(50,439,745)
(1,701,565)
Exchange differences on translation of foreign operations
(283,344)
(702,938)
Items that will not be reclassified to profit or loss
Remeasurement of post-employment benefits
1,173,254
165,729
Change in fair value of financial assets, net of tax
11a/15/7
(69,627)
(1,205,636)
Other comprehensive profit/(loss), net of tax
Total comprehensive loss for the year
820,283
(1,742,845)
(49,619,462)
(3,444,410)
Loss for the year attributable to:
Owners of the parent company
Non-controlling interest
Total comprehensive loss for the year attributable to:
Owners of the parent company
Non-controlling interest
LOSS pEr SHArE
Basic loss per share
Diluted loss per share
(50,336,363)
(1,587,497)
(103,382)
(114,068)
(50,439,745)
(1,701,565)
(49,516,080)
(3,330,342)
(103,382)
(114,068)
(49,619,462)
(3,444,410)
CEnTS pEr SHArE
CEnTS pEr SHArE
8
8
(2.0)
(2.0)
(0.1)
(0.1)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
SOLGOLD pLC ANNUAL REPORT 2023
99
C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N
As at 30 June 2023
Registered Number 5449516
Assets
Intangible assets
Property, plant and equipment
Financial assets held at fair value through OCI
Financial assets at amortised cost
Total non-current assets
Other receivables and prepayments
Loans receivable and other current assets
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium
Own shares reserve
Merger relief reserve
Other reserves
Accumulated loss
Foreign currency translation reserve
Equity attributable to owners of the parent company
Non-controlling interest
Total equity
Liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Lease liabilities
Other financial liabilities
Deferred tax liabilities
Borrowings
Total non-current liabilities
Total liabilities
Total equity and liabilities
nOTES
13
12
11(a)
14
16
14
17
18
18
18
18
18
19
20
20
22
15
21
GrOUp
AS AT
30 JUnE 2023
US$
GrOUp
AS AT
30 JUnE 2022
US$
411,434,084
365,579,484
23,669,380
22,084,490
5,328
1,729,033
5,351,844
1,749,213
436,837,825
394,765,031
6,920,292
2,099,527
4,742,156
3,553,291
32,481,606
26,102,133
41,501,425
34,397,580
478,339,250
429,162,611
40,452,643
32,350,699
459,986,179
426,793,240
(25,389,208)
78,692,861
–
–
11,612,697
10,931,758
(247,097,272)
(132,587,252)
(5,332,111)
(5,048,767)
312,925,789
332,439,678
–
(1,191,172)
312,925,789
331,248,506
12,689,439
6,509,078
379,239
716,170
415,132
–
13,784,848
6,924,210
169,457
240,000
326,374
2,387,000
4,200,444
4,200,444
147,018,712
84,076,077
151,628,613
90,989,895
165,413,461
97,914,105
478,339,250
429,162,611
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The consolidated financial statements were approved by the Board of Directors on 28 September 2023 and signed on its
behalf by Scott Caldwell, Chief Executive Officer.
SCOTT CALDWELL
Chief Executive Officer
100
SOLGOLD pLC ANNUAL REPORT 2023
C O M P A N Y S T A T E M E N T O F F I N A N C I A L P O S I T I O N
As at 30 June 2023
Registered Number 5449516
Assets
Property, plant and equipment
Investment in subsidiaries
Loans with subsidiaries
Financial assets held at fair value through OCI
Financial assets at amortised cost
Total non-current assets
Other receivables and prepayments
Loans receivable and other current assets
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium
Merger relief reserve
Other reserves
Accumulated loss
Foreign currency translation reserve
Equity attributable to owners of the parent company
Total equity
Liabilities
Trade and other payables
Lease liability
Provisions
Total current liabilities
Lease liability
Other financial liabilities
Total non-current liabilities
Total liabilities
Total equity and liabilities
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
nOTES
12
9
10
11(a)
14
16
14
17
18
18
18
19
20
20
22
COmpAny
AS AT
30 JUnE 2023
US$
COmpAny
AS AT
30 JUnE 2022
US$
299,025
598,919
261,013,212
152,964,303
181,525,074
185,599,916
1,425
5,346,323
734,248
756,332
443,572,984
345,265,793
247,178
2,099,527
1,061,583
3,553,291
29,041,499
21,032,524
31,388,204
25,647,398
474,961,188
370,913,191
40,452,643
32,350,699
459,975,555
426,793,240
78,692,861
–
10,898,248
11,398,063
(116,812,665)
(99,567,549)
(5,006,473)
(5,006,473)
468,200,169
365,967,980
468,200,169
365,967,980
5,479,091
299,594
716,170
1,944,970
309,668
–
6,494,855
2,254,638
26,164
240,000
266,164
6,761,019
303,573
2,387,000
2,690,573
4,945,211
474,961,188
370,913,191
The above Company Statement of Financial Position should be read in conjunction with the accompanying notes.
A separate statement of comprehensive income for the parent company has not been presented as permitted by section 408
of the Companies Act 2006. The Company’s loss for the year was US$ 20,664,167 (2022: US$5,259,315).
The Company financial statements were approved by the Board of Directors on 28 September 2023 and signed on its behalf
by Scott Caldwell, Chief Executive Officer.
SCOTT CALDWELL
Chief Executive Officer
SOLGOLD pLC ANNUAL REPORT 2023
101
FinAnCiAL
ASSETS HELD
AT FAir vALUE
THrOUGH OTHEr
COmprEHEnSivE
inCOmE
US$
3,253,029
–
(1,205,636)
(1,205,636)
–
–
–
2,047,393
–
(69,627)
(69,627)
–
–
(1,977,766)
–
–
–
–
–
–
SHArE
BASED
pAymEnT
rESErvE
US$
EmpLOyEE
BEnEFiT
rESErvE
US$
ACCUmULATED
TrAnSLATiOn
LOSS
US$
FOrEiGn
CUrrEnCy
rESErvE
US$
nOn–
COnTrOLLinG
inTErESTS
US$
TOTAL
US$
TOTAL
EQUiTy
US$
16,791,596
(632,034)
(138,895,017)
(4,345,829)
335,341,606
(1,077,104)
334,264,502
(1,587,497)
(1,587,497)
(114,068)
(1,701,565)
165,729
(702,938)
(1,742,845)
(1,742,845)
165,729
(1,587,497)
(702,938)
(3,330,342)
(114,068)
(3,444,410)
(7,895,262)
7,895,262
454,336
9,350,670
(466,305)
(132,587,252)
(5,048,767)
332,439,678
(1,191,172)
331,248,506
(50,336,363)
(50,336,363)
(103,382)
(50,439,745)
1,173,254
(283,344)
820,283
–
820,283
1,173,254
(50,336,363)
(283,344)
(49,516,080)
(103,382)
(49,619,462)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,500
31,433
1,977,766
(67,688,135)
576,679
–
–
–
–
–
–
–
–
–
–
–
–
–
(25,922)
–
454,336
830,910
35,607,500
–
–
576,679
(1,389,966)
599,267
–
–
–
–
–
–
–
–
–
–
–
–
(25,922)
–
454,336
830,910
35,607,500
–
–
576,679
(1,389,966)
599,267
312,925,789
(928,600)
928,600
599,267
10,898,247
714,450
(247,097,272)
(5,332,111)
312,925,789
1,876,910
(6,222,200)
1,294,554
(4,927,646)
C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y
For the year ended 30 June 2023
SHArE
CApiTAL
US$
SHArE
prEmiUm
US$
nOTE
OWn
SHArES
rESErvE
US$
mErGEr
rELiEF
rESErvE
US$
Balance at 30 June 2021
32,350,699 426,819,162
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Share issue costs (net of deferred tax)
Options expired
Value of share and options issued to
Directors, employees and consultants
Balance at 30 June 2022
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Shares issued to Directors and employees
Shares issued to new investors
Transfer of reserve to retained earnings
Acquisition of remaining Cornerstone
business, net of tax
Tax adjustments through reserves
Share issue costs
Options expired
Value of options issued to Directors
and employees
18
23
23
18
18
28
28
7
18
23
23
–
–
–
–
–
–
–
–
–
(25,922)
–
–
32,350,699 426,793,240
–
–
–
–
–
–
36,572
762,905
1,780,000 33,820,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,285,372
– (25,389,208) 78,692,861
–
–
–
–
–
(1,389,966)
–
–
–
–
–
–
–
–
–
–
Balance at 30 June 2023
40,452,643 459,986,179 (25,389,208) 78,692,861
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
102
SOLGOLD pLC ANNUAL REPORT 2023
SHArE
CApiTAL
US$
SHArE
prEmiUm
US$
nOTE
OWn
SHArES
rESErvE
US$
mErGEr
rELiEF
rESErvE
US$
SHArE
BASED
pAymEnT
rESErvE
US$
EmpLOyEE
BEnEFiT
rESErvE
US$
ACCUmULATED
LOSS
US$
FOrEiGn
CUrrEnCy
TrAnSLATiOn
rESErvE
US$
nOn–
COnTrOLLinG
inTErESTS
US$
TOTAL
US$
TOTAL
EQUiTy
US$
Balance at 30 June 2021
32,350,699 426,819,162
16,791,596
(632,034)
(138,895,017)
(4,345,829)
335,341,606
(1,077,104)
334,264,502
–
–
–
–
(7,895,262)
454,336
–
(1,587,497)
–
(1,587,497)
(114,068)
(1,701,565)
165,729
–
(702,938)
(1,742,845)
–
(1,742,845)
165,729
(1,587,497)
(702,938)
(3,330,342)
(114,068)
(3,444,410)
–
–
–
–
7,895,262
–
–
–
–
(25,922)
–
454,336
–
–
–
(25,922)
–
454,336
Balance at 30 June 2022
32,350,699 426,793,240
2,047,393
9,350,670
(466,305)
(132,587,252)
(5,048,767)
332,439,678
(1,191,172)
331,248,506
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
Balance at 30 June 2023
40,452,643 459,986,179 (25,389,208) 78,692,861
10,898,247
714,450
(247,097,272)
(5,332,111)
312,925,789
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
–
–
–
–
–
–
1,876,910
–
–
(928,600)
599,267
–
(50,336,363)
–
(50,336,363)
(103,382)
(50,439,745)
1,173,254
–
(283,344)
820,283
–
820,283
1,173,254
(50,336,363)
(283,344)
(49,516,080)
(103,382)
(49,619,462)
–
31,433
7,500
–
–
–
–
–
–
–
1,977,766
(67,688,135)
576,679
–
928,600
–
–
–
–
–
–
–
–
–
830,910
35,607,500
–
–
–
–
830,910
35,607,500
–
(6,222,200)
1,294,554
(4,927,646)
576,679
(1,389,966)
–
599,267
–
–
–
–
–
576,679
(1,389,966)
–
599,267
312,925,789
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Share issue costs (net of deferred tax)
Options expired
Value of share and options issued to
Directors, employees and consultants
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transfer of reserve to retained earnings
Acquisition of remaining Cornerstone
business, net of tax
Tax adjustments through reserves
Share issue costs
Options expired
Value of options issued to Directors
and employees
18
23
23
18
18
28
28
7
18
23
23
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(25,922)
–
–
–
–
–
–
–
–
–
–
–
–
Shares issued to Directors and employees
36,572
762,905
Shares issued to new investors
1,780,000 33,820,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,285,372
– (25,389,208) 78,692,861
(1,389,966)
FinAnCiAL
ASSETS HELD
AT FAir vALUE
THrOUGH OTHEr
COmprEHEnSivE
inCOmE
US$
3,253,029
(1,205,636)
(1,205,636)
(69,627)
(69,627)
(1,977,766)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
SOLGOLD pLC ANNUAL REPORT 2023
103
C O M P A N Y S T A T E M E N T O F C H A N G E S I N E Q U I T Y
For the year ended 30 June 2023
Balance at 30 June 2021 restated
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Share issue costs (net of deferred tax)
Options expired
Value of shares and options issued to Directors, employees and consultants
Balance at 30 June 2022
Loss for the year
Other comprehensive loss
Total comprehensive income for the period
Shares issued to Directors and employees
Shares issued to new investors
Transfer of reserve to retained earnings
Acquisition of Cornerstone Capital Resources Inc. through share issue
Share issue costs
Tax adjustments through reserves
Options expired
Value of options issued to Directors and employees
Balance at 30 June 2023
nOTES
SHArE
CApiTAL
US$
32,350,699
–
–
–
–
–
–
18
23
32,350,699
426,793,240
2,047,393
9,350,670
(99,567,549)
(5,006,473)
365,967,980
–
–
–
18
18
36,572
1,780,000
–
18
6,285,372
–
–
–
–
23
23
40,452,643
459,975,555 78,692,861
–
10,898,248
(116,812,665)
(5,006,473)
468,200,169
mErGEr
THrOUGH OTHEr
SHArE
COmprEHEnSivE
BASED pAymEnT
ACCUmULATED
TrAnSLATiOn
SHArE
prEmiUm
US$
rELiEF
rESErvE
US$
inCOmE
US$
rESErvE
US$
LOSS
US$
FOrEiGn
CUrrEnCy
rESErvE
US$
426,819,162
3,253,029
16,791,596
(102,203,496)
(5,006,473)
372,004,517
FinAnCiAL
ASSETS HELD
AT FAir vALUE
(1,205,636)
(1,205,636)
(69,627)
(69,627)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(7,895,262)
7,895,262
454,336
–
–
–
–
–
–
–
–
–
–
–
–
(5,259,315)
(5,259,315)
(20,664,167)
(20,664,167)
–
–
512,687
928,598
–
–
–
–
–
–
–
(928,598)
599,266
(1,977,766)
1,977,766
78,692,861
1,876,910
(25,922)
762,905
33,820,000
(1,400,590)
–
–
–
–
–
–
–
–
–
–
–
–
–
TOTAL
US$
(5,259,315)
(1,205,636)
(6,464,951)
(25,922)
–
454,336
(20,664,167)
(69,627)
(20,733,794)
799,477
35,600,000
–
86,855,143
(1,400,590)
512,687
–
599,266
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The above Company Statement of Changes in Equity should be read in conjunction with the accompanying notes.
104
SOLGOLD pLC ANNUAL REPORT 2023
Value of shares and options issued to Directors, employees and consultants
Balance at 30 June 2021 restated
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Share issue costs (net of deferred tax)
Options expired
Balance at 30 June 2022
Loss for the year
Other comprehensive loss
Total comprehensive income for the period
Shares issued to Directors and employees
Shares issued to new investors
Transfer of reserve to retained earnings
Share issue costs
Tax adjustments through reserves
Options expired
Value of options issued to Directors and employees
Balance at 30 June 2023
Acquisition of Cornerstone Capital Resources Inc. through share issue
18
6,285,372
nOTES
SHArE
CApiTAL
US$
32,350,699
–
–
–
–
–
–
–
–
–
–
–
–
–
–
18
23
23
23
18
18
36,572
1,780,000
SHArE
prEmiUm
US$
426,819,162
–
–
–
(25,922)
–
–
32,350,699
426,793,240
–
–
–
762,905
33,820,000
–
–
(1,400,590)
–
–
–
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
FinAnCiAL
ASSETS HELD
AT FAir vALUE
THrOUGH OTHEr
COmprEHEnSivE
inCOmE
US$
mErGEr
rELiEF
rESErvE
US$
SHArE
BASED pAymEnT
rESErvE
US$
ACCUmULATED
LOSS
US$
FOrEiGn
CUrrEnCy
TrAnSLATiOn
rESErvE
US$
TOTAL
US$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,253,029
16,791,596
(102,203,496)
(5,006,473)
372,004,517
–
(1,205,636)
(1,205,636)
–
–
–
–
–
–
–
(5,259,315)
–
(5,259,315)
–
(7,895,262)
7,895,262
454,336
–
–
–
–
–
–
–
(5,259,315)
(1,205,636)
(6,464,951)
(25,922)
–
454,336
2,047,393
9,350,670
(99,567,549)
(5,006,473)
365,967,980
–
(69,627)
(69,627)
–
–
(1,977,766)
–
–
–
–
–
–
78,692,861
–
–
–
–
–
–
–
–
–
1,876,910
–
–
(928,598)
599,266
(20,664,167)
–
(20,664,167)
–
–
1,977,766
–
–
512,687
928,598
–
–
–
–
–
–
–
–
–
–
–
–
(20,664,167)
(69,627)
(20,733,794)
799,477
35,600,000
–
86,855,143
(1,400,590)
512,687
–
599,266
The above Company Statement of Changes in Equity should be read in conjunction with the accompanying notes.
40,452,643
459,975,555 78,692,861
–
10,898,248
(116,812,665)
(5,006,473)
468,200,169
SOLGOLD pLC ANNUAL REPORT 2023
105
C O N S O L I D A T E D A N D C O M P A N Y S T A T E M E N T S O F C A S H F L O W S
For the year ended 30 June 2023
GrOUp
yEAr EnDED
30 JUnE 2023
US$
GrOUp
yEAr EnDED
30 JUnE 2022
US$
COmpAny
yEAr EnDED
30 JUnE 2023
US$
COmpAny
yEAr EnDED
30 JUnE 2022
US$
nOTES
Cash flows from operating activities
Loss for the year
Depreciation
Interest on lease liabilities
Interest on NSR
Interest on loan to SolGold Finance AG
Interest on loan to SolGold Canada Inc.
Interest on loan from SolGold Finance AG
12
20
21
10
10
10
(50,439,745)
(1,701,565)
(20,664,167)
(5,259,315)
298,075
46,610
619,048
64,325
13,148,231
12,505,564
283,948
34,702
–
314,071
57,907
–
–
–
–
–
–
–
–
(6,430,256)
(5,694,637)
(332,707)
2,246,679
–
–
–
–
Advances to subsidiaries prior to business combination
(1,912,102)
Share based payment expense
5/23
998,682
454,336
998,682
454,336
Write-off of exploration expenditure
Reversal of exploration costs written-off
Foreign exchange loss
Expected credit loss – Company Funded Loan Plan
Non cash employee benefit expense –
Company Funded Loan Plan
Accretion of interest – Company Funded Loan Plan
Movement in fair value of derivative liability
Remeasurement of amortised cost of financial liability
Tax expense
13
13
14
14
14
22
21
7
1,059,317
3,858,024
(3,780,099)
–
235,952
965,386
–
(131,314)
214,647
1,433,420
–
1,433,420
–
–
938,423
–
–
–
669,211
(789,946)
–
–
669,211
(789,946)
(2,147,000)
(539,000)
(2,147,000)
(539,000)
–
(35,003,704)
–
–
1,130,490
4,540,103
1,381,331
278,198
Decrease in other receivables and prepayments
601,347
2,978,509
2,731,458
3,449,370
Increase in trade and other payables
5,662,014
373,238
3,804,119
469,369
net cash outflow from operating activities
(33,664,808)
(11,006,471)
(16,576,458)
(5,652,013)
Cash flows from investing activities
Acquisition of property, plant and equipment
(1,670,405)
(2,195,892)
(2,511)
(13,726)
Acquisition of exploration and evaluation assets
(43,297,918)
(69,455,961)
Net cash acquired on business combination
1,047,190
Loans advanced to subsidiaries
Advances in investment in subsidiaries
–
–
–
–
–
–
–
–
–
(21,447,533)
(12,505,512)
(17,567,933)
(33,082,285)
net cash outflow from investing activities
(43,921,133)
(71,651,853)
(39,017,977)
(45,601,523)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital
18
36,000,000
–
36,000,000
–
Payment of issue costs
Proceeds from NSR financing
Payment of NSR costs
Repayments of lease liabilities
Loans advanced from subsidiaries
Repayment of loans from subsidiaries
(1,453,969)
(37,033)
(1,977,208)
(37,033)
21
21
50,000,000
(205,596)
–
–
–
–
–
–
(225,755)
(448,353)
(303,906)
(310,503)
–
–
–
–
49,975,286
(19,936,627)
–
–
net cash inflow/(outflow) from financing activities
84,114,680
(485,386)
63,757,545
(347,536)
net increase/(decrease) in cash and cash equivalents
6,528,739
(83,143,710)
8,163,111
(51,601,072)
Cash and cash equivalents at the beginning of year
17
26,102,133
109,562,103
21,032,524
72,918,016
Effect of foreign exchange rate changes
(149,266)
(316,260)
(154,136)
(284,420)
Cash and cash equivalents at end of year
17
32,481,606
26,102,133
29,041,499
21,032,524
The above statements of cash flows should be read in conjunction with the accompanying notes.
106
SOLGOLD pLC ANNUAL REPORT 2023
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
For the year ended 30 June 2023
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nOTE 1 ACCOUnTinG pOLiCiES
SolGold Plc (“the Company” or “SolGold”) and its subsidiaries (the “Group”) is a mineral exploration and development
company headquartered in Brisbane, Australia. The Company is a UK (London) incorporated (on 11 May 2005) and domiciled,
public company limited by shares, with the company registration number 05449516. SolGold is dual listed on the London Stock
Exchange and the Toronto Stock Exchange. The address of the Company’s registered office is 1 King Street, London EC2V 8AU,
United Kingdom.
(a) Statement of compliance
The consolidated financial statements and company financial statements have been prepared in accordance with UK adopted
International Accounting Standards and the requirements of the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdoms’ Financial Conduct Authority. The consolidated and Company financial statements have been prepared
under the historical cost convention as modified by the revaluation of certain financial instruments.
They have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The consolidated financial statements also comply with IFRSs as issued by the International Accounting Standards
Board (“IASB”), as is required as a result of the Company’s listing on the TSX in Canada. The accounting policies set out below
have been applied consistently throughout these consolidated and company financial statements.
The preparation of the Group Financial Statements in compliance with generally accepted accounting principles requires
management to make estimates and exercise judgment in applying the Group’s accounting policies. In preparing the Group
Financial Statements, the significant judgments made by management in applying the Group’s accounting policies and the key
sources of estimation uncertainty are disclosed in Note 1(v).
(b) Basis of preparation of financial statements and going concern
(i) Basis of preparation
The consolidated financial statements are presented in United States dollars (“US$”), rounded to the nearest dollar. Refer to
Note 1(d) for further details relating to the foreign exchange translation.
The Company was incorporated on 11 May 2005. From incorporation the Group has prepared the annual consolidated financial
statements in accordance with IFRS.
(ii) Going concern
At the year end, the Group had cash on hand of US$32,481,606 and net current assets of US$27,716,577. The Directors have
reviewed the cash position of the Group and the Company for the period to 31 December 2024 and consider it appropriate that
the Group and the Company financial statements are prepared on the going concern basis, which contemplates the continuity
of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business, for the
reasons set out below.
The Group has not generated revenues from operations in its history and, in common with many exploration companies,
the Group raises finance for its exploration and appraisal activities in discrete tranches. As such, the ability of the Group to
continue as a going concern depends on its ability to manage costs and secure additional financing. Management’s cashflow
forecasts show that the Group and the Company need to secure additional funding to continue their exploration and
development programme and in order to continue to meet their obligations and liabilities as they fall due.
The Company has a proven ability to execute equity and other financings as demonstrated by the successfully completed
Osisko Gold Royalty Inc. royalty agreement in November 2022 and issuance of new shares in December 2022 and the
Cornerstone acquisition in February 2023. Accordingly, the Directors have a reasonable expectation that the Group will be
able to raise funds when necessary and, as has been the case previously, the Directors expect that future funding will likely
be provided by equity investors, debt funding or via other strategic arrangements.
In the event that the Company is unable to secure sufficient funding, it may not be able to fully develop its portfolio of
exploration projects, and this may have a consequential impact on the carrying value of the related exploration assets and
the investment of the parent company in its subsidiaries as well as the going concern status of the Group and the Company.
Given the nature of the Group’s current activities, it will remain dependent on equity and/or debt funding or other strategic
arrangements until such time as the Group becomes self- financing from the commercial production of its mineral resources.
Should raising additional finance prove challenging, the Company has alternative options such as the acceleration of cost
reductions, farm-outs, the relinquishment of licences across Ecuador and Australia, or the sale of the Company’s own
treasury shares.
SOLGOLD pLC ANNUAL REPORT 2023
107
nOTE 1 ACCOUnTinG pOLiCiES CONTINUED
(b) Basis of preparation of financial statements and going concern continued
Given that the Company will need to secure further funding to meet the Group’s future exploration and working capital
commitments, the situation gives rise to a material uncertainty as there can be no assurance the Company will be able to raise
the required financing in the future. This material uncertainty may cast significant doubt upon the Group’s and the Company’s
ability to continue as a going concern. Notwithstanding this material uncertainty, the Directors consider it appropriate to adopt
the going concern basis of accounting in the preparation of the financial statements given the Company’s proven ability to
raise necessary funding. The financial statements do not include the adjustments that would result if the Group and Company
were unable to continue as a going concern.
(iii) Historical cost convention
The consolidated financial statements have been prepared on a historical cost base modified by the revaluation of financial
assets held at fair value through OCI and financial liabilities at fair value through profit or loss.
(c) Basis of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 30 June each year.
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three
of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability
of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a
single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at
their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of profit
or loss from the date on which control is obtained. They are deconsolidated from the date on which control ceases.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss
from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are
made to the financial statements of subsidiaries to bring the accounting policies in line with those used by the Group.
Non-controlling interests are allocated their share of net profit after tax and share of other comprehensive income in the
statement of profit or loss and comprehensive income and presented within equity in the consolidated statement of financial
position, separately from the equity of the owners of the parent.
(ii) Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
(d) Foreign currency
(i) Translation into the functional currency
Transactions entered into by Group entities in a currency other than the currencies of the primary economic environment in
which they operate (the “functional currency”) are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the year-end are translated into the functional currency
at the foreign exchange rate ruling as of that date. Non-monetary assets and liabilities denominated in foreign currencies are
translated at the historical foreign exchange rate. Any resultant foreign exchange currency translation amount is taken to the
profit and loss.
Management reconsiders the functional currency where there is a change in events or conditions used in initial determination.
Where the assessment indicates that a change in functional currency is required, the change is applied prospectively from the
date it is deemed to have occurred.
108
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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(d) Foreign currency continued
The functional currency of the Company and subsidiaries of the Group are detailed in the table below:
FUnCTiOnAL
CUrrEnCy
2023
FUnCTiOnAL
CUrrEnCy
2022
EXCHAnGE
rATE AT
30 JUnE
2023 USED in
prEpArATiOn
OF FinAnCiALS
EXCHAnGE
rATE AT
30 JUnE
2022 USED in
prEpArATiOn
OF FinAnCiALS
AvErAGE
EXCHAnGE
rATE FOr THE
yEAr EnDED
30 JUnE 2023
AvErAGE
EXCHAnGE
rATE FOr THE
yEAr EnDED
30 JUnE 2022
SolGold Plc
Australian Resource Management Pty Ltd
Acapulco Mining Pty Ltd
Central Minerals Pty Ltd
Solomon Operations Ltd
Honiara Holdings Pty Ltd
Guadalcanal Exploration Pty Ltd
SolGold Finance AG
SolGold Canadian Callco Corp.
SolGold Canadian Exchangeco Corp.
Exploraciones Novomining S.A.
Carnegie Ridge Resources S.A.
Green Rock Resources GRR S.A.
Valle Rico Resources VRR S.A.
Cruz del Sol CSSA S.A.
SolGold Ecuador S.A.
Novoproyectos-Sustentables S.A.
SolGold Canada Inc.
Cornerstone Exploration Inc.
Gestion Minera S.A.
Bellamaria Mining S.A.
Canabrava Mining S.A.
Exploaurum S.A.
Cornerstone Ecuador S.A.
Cornerstone Exploraciones Ecuador S.A.
Vetasgrandes Mining S.A.
Minera Cornerstone Chile Limitada
(ii) Translation into presentation currency
US$
AU$
AU$
AU$
SBD
AU$
AU$
US$
CAD
CAD
US$
US$
US$
US$
US$
US$
US$
CAD
CAD
US$
US$
US$
US$
US$
US$
US$
CLP
US$
AU$
AU$
AU$
SBD
AU$
AU$
US$
CAD
CAD
US$
US$
US$
US$
US$
US$
US$
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.6660
0.6660
0.6660
0.1186
0.6660
0.6660
n/a
0.7549
0.7549
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.7549
0.7549
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.0012
n/a
0.6902
0.6902
0.6902
0.1785
0.6902
0.6902
n/a
0.7768
0.7768
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.6732
0.6732
0.6732
0.1213
0.6732
0.6732
n/a
0.7467
0.7467
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.7467
0.7467
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0.0012
n/a
0.7256
0.7256
0.7256
0.1709
0.7256
0.7256
n/a
0.7902
0.7902
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
The assets and liabilities of the entities are translated into the Group presentation currency being the US$ at rates of exchange
ruling at the reporting date. Income and expense items are translated at average rates for the period. Any resultant foreign
exchange currency translation amount is taken to other comprehensive income. On disposal of an entity, cumulative exchange
differences are recognised in the income statement as part of the profit or loss on sale. Exchange differences recognised in
profit or loss in Group entities’ separate financial statements, on the translation of long-term monetary items forming part
of the Group’s net investment in the overseas operation concerned, are reclassified to other comprehensive income and
accumulated in the foreign exchange reserve on consolidation. Considering that these relate to loans and receivables that are
not expected to be settled in the foreseeable future they have been included as Investments in Subsidiaries in the Company.
SOLGOLD pLC ANNUAL REPORT 2023
109
nOTE 1 ACCOUnTinG pOLiCiES CONTINUED
(e) property, plant and equipment
(i) Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (see
accounting policy (h) below).
(ii) Leased assets
Items of property, plant and equipment that are accounted for under IFRS 16 Leases are recognised when contracts are
entered into at an amount equal to the corresponding lease liability (see accounting policy (q) below).
(iii) Subsequent costs
The Group recognises in the carrying amount of property, plant and equipment the cost of replacing part of such an item
when that cost is incurred if it is probable that the future economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other costs are recognised in the statement of profit or loss as an expense as incurred.
(iv) Depreciation
Depreciation is charged to the statement of profit or loss on a straight-line basis over the estimated useful lives of each item of
property, plant and equipment used in corporate and administrative operations. Depreciation is capitalised to exploration on a
straight-line basis over the estimated useful lives of each item of property, plant and equipment used in exploration operations
included within Intangible Assets. The estimated useful lives of all categories of assets are:
Office Equipment
Furniture and Fittings
Motor Vehicles
3 years
5 years
5 years
Plant and Equipment
5–10 years
Land
Not depreciated
Depreciation charged on leased assets is charged to the statement of profit or loss on a straight-line basis over the term of the
lease where it relates to corporate leases and capitalised to exploration when used in exploration operations.
The residual values and useful lives are assessed annually. Gains and losses on disposal are determined by comparing proceeds
with carrying amounts and are included in the statement of profit or loss.
(f) intangible assets (as per iFrS 6 – Exploration for and Evaluation of mineral resources)
Costs incurred in relation to the acquisition of, or application for, a tenement area are capitalised where there is a reasonable
expectation that the tenement will be acquired or granted. Where the Group is unsuccessful in acquiring or being granted a
tenement area, any such costs are immediately expensed.
All other costs incurred prior to obtaining the legal right to undertake exploration and evaluation activities on a project are
written-off as incurred.
Exploration and evaluation costs arising following the acquisition of an exploration licence are capitalised on a project-by-
project basis as exploration and evaluation assets, pending determination of the technical feasibility and commercial viability
of the project. Costs incurred include appropriate technical and administrative overheads. Exploration and evaluation assets
are carried at historical cost less any impairment losses recognised.
Once the work completed to date on an area of interest is sufficient such that the technical feasibility and commercial viability
of extracting the mineral resource has been determined, the property is considered to be an evaluated mineral property.
Following determination of the technical feasibility and commercial viability of a mineral resource, the relevant expenditure is
transferred from exploration and evaluation assets to evaluated mineral property.
Further development costs are capitalised to evaluated mineral properties, if and only if, it is probable that future economic
benefits associated with the item will flow to the entity; and the cost can be measured reliably. Cost is defined as the purchase
price and directly attributable costs. Once the asset is considered to be capable of operating in a manner intended by
management, commercial production is declared, and the relevant costs are amortised. Evaluated mineral property is carried at
cost less accumulated amortisation and accumulated impairment losses.
110
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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(g) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities on the statement of financial position.
(h) impairment of non-financial assets
Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable the asset
is reviewed for impairment. An asset’s carrying value is written down to its estimated recoverable amount (being the higher
of the fair value less costs to sell and value in use) if that is less than the asset’s carrying amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other
available fair value indicators.
Impairment reviews for capitalised exploration and evaluation expenditure are carried out on a project-by-project basis, with
each project representing a potential single cash generating unit. As the material value of the Group’s property, plant and
equipment is associated with the exploration and evaluation assets, these are also considered within the impairment review. An
impairment review is undertaken when indicators of impairment arise, typically when one of the following circumstances apply:
• The period for which the entity has the right to explore in the specific area has expired during the period or will expire in the
near future, and is not expected to be renewed;
• Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither
budgeted nor planned;
• Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable
quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and
• Sufficient data exists to indicate that, although a development in the specific area 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.
Reviews for reversal of impairment for capitalised exploration and evaluation expenditures are carried out on the same basis
as impairment reviews for capitalised exploration and evaluation expenditure, with each project representing a potential
single cash generating unit. An impairment reversal review is undertaken when there is any indication that an impairment
loss recognized in prior periods may no longer exist or may have decreased, typically when one or more of the following
circumstances apply:
• The period for which the entity has the right to explore in the project area is renewed, after having previously been impaired
due to an expectation that the project exploration rights would not be renewed;
• Substantive expenditure on further exploration for and evaluation of mineral resources in the project area is planned; and
• Exploration for and evaluation of mineral resources near or geologically related to the project area have led to the discovery
of commercially viable quantities of mineral resources and the entity has reasonable evidence from prior or recently
completed activity to indicate that the project area is likely to become recoverable.
(i) Share capital
(i) Ordinary share capital
The Company’s ordinary shares are classified as equity.
(ii) Shares issued to settle liabilities
The Group from time to time settles financial liabilities by issuing shares. The Group considers these equity instruments as
‘consideration paid’ and accordingly derecognises the financial liability.
The equity instruments issued are measured at fair value, with the difference being taken to the statement of profit or loss,
unless the creditor is also a direct or indirect shareholder and is acting in their capacity as direct or indirect shareholder.
When the creditor is acting in their capacity as a direct or indirect shareholder the value of shares issued is deemed to be the
carrying value of the liability.
SOLGOLD pLC ANNUAL REPORT 2023
111
nOTE 1 ACCOUnTinG pOLiCiES CONTINUED
(j) Employee benefits
(i) Share based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Non-vesting conditions and market vesting conditions are factored into
the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market
vesting condition or where a non-vesting condition is not satisfied. Share based payments to non-employees are measured at
the fair value of goods or services rendered or the fair value of the equity instrument issued, if it is determined the fair value
of the goods or services cannot be reliably measured. Estimating fair value for share based payment transactions requires
determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate
also requires determining the most appropriate inputs to the valuation model including the expected life of the share option,
volatility and dividend yield and making assumptions about them. The assumptions and model used for estimating fair value
for share based payment transactions are disclosed in Note 23.
(ii) retirement benefits
For the employees of subsidiaries in Ecuador, the Group operates a long-term benefit for years of service plan which
represents the accrued benefits to be paid to employees (in accordance with the Ecuadorian labour code), that have
completed twenty-five years of service. This is paid in the form of a special remuneration equivalent to the monthly salary
in the month that the year of service conditions are met. The cost of providing this benefit is recognised as a liability and an
expense over the period in which the employee’s services are received. The cost is determined using the projected unit credit
method and is based on actuarial advice. The change in the net defined benefit liability arising from employee service during
the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments
are recognised as an expense in measuring profit or loss in the period in which they arise. Remeasurement changes comprise
actuarial gains and losses, are recognised immediately in other comprehensive income in the period in which they occur.
(iii) Company Funded Loan plan
The Group has put in place a Company Funded Loan Plan (“CFLP”) to provide financial assistance to employees in exercising
share options. The financial assistance provided to employees is by way of a full recourse interest free loan. The CFLP is
secured by the SolGold shares issued upon the exercise of share options under the CFLP to that employee. These shares are
held in custody by the Company’s broker.
CFLP loans to employees are initially recognised at fair value, which is determined by discounting loans to their net present
value using the risk-free interest rate at the time the loan is granted and an estimated repayment schedule. Following initial
recognition, they are carried at amortised cost using the effective interest rate method. Changes in the carrying value of the
CFLP loans are recognised within Administrative expenses in the profit or loss. The cost of providing the benefit to employees
is recognised as an employee expense in the statement of profit or loss on a straight-line basis over the expected life of the
CFLP loan. Following further changes to the scheme, the loans are carried at amortised cost less expected credit losses which
takes into account the current share price and time to settle the loans.
Further details on the CFLP are disclosed in Note 14.
(iv) Derivative Financial instruments
The options issued to BHP as part of the share subscription on 2 December 2019 fall outside the scope of IFRS 2. As such
these options are treated as derivative liabilities which are measured initially at fair value and gains or losses on subsequent re-
measurement are recorded in profit or loss. This subsequent remeasurement is valued using the Monte Carlo method.
(k) provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is more likely than
not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Contingent liabilities are possible obligations whose existence will be confirmed by uncertain future events that are not
wholly within the control of the entity. Contingent liabilities also include obligations that are not recognised because their
amount cannot be measured reliably or because settlement is not probable. Contingent liabilities do not include provisions
for which it is certain that the entity has a present obligation that is more likely than not to lead to an outflow of cash or
other economic resources, even though the amount or timing is uncertain. A contingent liability is not recognised in the
statement of financial position. However, unless the possibility of an outflow of economic resources is remote, a contingent
liability is disclosed in the notes.
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(l) Trade and other payables
Trade and other payables are not interest bearing and are stated at amortised cost, unless settled with shares as per (i) above.
The effect of discounting is immaterial.
(m) Financing costs and income
(i) Financing costs
Financing costs comprise interest payable on borrowings calculated using the effective interest rate method and lease
liabilities using the incremental borrowing rate method.
(ii) Finance income
Interest income is recognised in the statement of profit or loss as it accrues, using the effective interest method.
(n) Taxation
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets or
liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the reporting date. A deferred tax asset is recognised only to the extent that it is probable that future taxable
profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred
tax that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax
planning strategies.
The Group’s tax losses relate to subsidiaries that have a history of losses and may not be used to offset taxable income
elsewhere in the Group. The subsidiaries neither have any taxable temporary difference nor any tax planning opportunities
available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has
determined that it cannot recognise deferred tax assets on the tax losses carried forward.
Further details on taxes are disclosed in Note 7.
(o) Segment reporting
The Group determines and presents operating segments based on information that is internally provided to the Board of
Directors, who are the Group’s chief operating decision makers.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
An operating segment’s operating results and asset position are reviewed regularly by the Board to make decisions about
resources to be allocated to the segment and assess its performance, for which discrete financial information is available.
Segment results that are reported to the Board include items directly attributable to a segment, as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly corporate office assets, head office expenses, and income
tax assets and liabilities.
(p) project Financing
The Group, from time to time, enters into funding arrangements with third parties in order to progress specific projects. The
Group financial statements recognise the related exploration costs in line with the terms of the specific agreement. Costs
incurred by SolGold plc are recognised as intangible assets within the financial statements. Costs incurred by third parties are
not recognised by SolGold plc.
(q) Leases
For any contracts entered into, the Group considers whether the contract is or contains a lease. For those contracts that fall
within the exemptions of IFRS 16 and are classified as short term, these are charged as expenses on a straight-line basis over
the period of the lease. For all other leases, the Group recognises a right-of-use asset (“ROUA”) and a lease liability on the
balance sheet.
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(q) Leases continued
The ROUA is measured at cost at an amount equal to the lease liability. The process to adopt this approach can be summarised
as follows:
• Calculate the lease liability at commencement date of the lease. At the initial adoption of the standard this was calculated as
at the date on initial application of IFRS 16.
• Set the ROUA as an amount equal to the lease liability in line with the above dates.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that
date, discounted using the implicit interest rate in the lease. Where the implicit rate cannot be easily determined the Group’s
incremental borrowing rate is used instead. As there is no implicit rate in the leases the Group had chosen to use 8% per the
discount rate used in the historic economic project studies. For new leases entered into this rate will be reassessed to reflect
the current economic project studies.
The Group depreciates the ROUA on a straight-line basis from the lease commencement date to the earlier of the end of the
useful life of the ROUA or the end of the lease term.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. The liability is
remeasured to reflect any reassessment or modification. Where the lease liability is remeasured, the corresponding adjustment
is reflected in the profit and loss if the ROUA is already reduced to zero.
In the statement of financial position, ROUA have been included in property, plant and equipment and lease liabilities have
been included in both current and non-current liabilities, under Lease Liability.
(r) Financial instruments
recognition and initial measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets and financial liabilities are recognised in the Group statement of financial position when the Group becomes
a party to the contractual provisions of the instrument. Financial assets and financial liabilities are only offset and the net
amount reported in the consolidated statement of financial position and consolidated statement of profit or loss when there
is a currently enforceable legal right to offset the recognised amounts and the Group intends to settle on a net basis or realise
the asset and liability simultaneously.
Financial instruments are generally measured at initial recognition at fair value and adjusted for transaction costs where the
instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair
value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set
out below.
Financial assets
The classification of financial assets at initial recognition depends on the purpose for which the financial asset was issued and
its characteristics. All purchases and/or sales of financial assets are recorded on trade date, being the date on which the Group
becomes party to the contractual requirements of the financial asset. Unless otherwise indicated the carrying amounts of the
Group’s financial assets approximate to their fair values.
Financial assets at amortised cost
Financial assets are measured at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to an
impairment assessment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
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(r) Financial instruments continued
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
Upon initial recognition SolGold can elect to classify irrevocably its equity investments as equity instruments designated at fair
value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held
for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets
are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right
of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the
financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not
subject to impairment assessment.
SolGold elected to classify irrevocably ‘Investments in equity excluding subsidiaries’ under this category.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are measured at amortised cost
or fair value through other comprehensive income (when these are not equity instruments). The measurement of the loss
allowance depends upon the Group’s assessment at the end of each reporting period as to whether the financial instrument’s
credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is
available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a twelve-month expected
credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable to
a default event that is possible within the next twelve months. Where a financial asset has become credit impaired or where
it is determined that credit risk has increased significantly, the loss allowance is based on the asset’s lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. Please refer to Note
14 for the CFLP.
Financial liabilities
The classification of financial liabilities at initial recognition depends on the purpose for which the financial liability was issued
and its characteristics. All purchases of financial liabilities are recorded on trade date, being the date on which the Group
becomes party to the contractual requirements of the financial liability. Unless otherwise indicated the carrying amounts of the
Group’s financial liabilities approximate to their fair values.
Financial liabilities measured subsequently at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for-trading, or
(iii) designated at FVTPL, are measured subsequently at amortised cost. The Group’s financial liabilities comprise of trade and
other payables, current and non-current lease liabilities and borrowings (Franco-Nevada and Osisko NSR Financing Agreement
refer Note 21) which are measured at amortised cost.
Financial liabilities measured at fair value through profit or loss
Financial liabilities that are (i) held for trading, or (ii) designated by the entity as being at FVTPL are measured at fair value
through profit or loss. The Group’s financial liabilities at FVTPL comprise of the Derivative Liability associated with the share
issuance to BHP in December 2019.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised when:
• The rights to receive cash flows from the asset have expired: or
• SolGold has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a “pass-through’ arrangement; and either (a) SolGold
has transferred substantially all the risks and rewards of the asset, or (b) SolGold has neither transferred nor retained
substantially all the risks and rewards of the asset; but has transferred control of the asset.
A financial liability (in whole or in part) is derecognised when the Group has extinguished its contractual obligations, it expires
or is cancelled. Any gain or loss on derecognition is taken to the statement of profit or loss.
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(s) Accounting policies for the Company
The accounting policies applied to the Company are consistent with those adopted by the Group, to the extent that they are
relevant to an entity (as opposed to a consolidated) set of financial statements, with the exception of the following:
(i) Subsidiary investments
Investments in subsidiary undertakings are stated at cost less impairment losses. Expenditure incurred by the Company on
behalf of a subsidiary, and where the subsidiary does not reimburse the Company for assets that could be capitalised in
accordance with IFRS 6, is recorded within investments in subsidiary undertakings. Where investments are passed down into
the underlying operating subsidiaries where no reimbursement is expected this is recorded as an investment in subsidiary
undertakings. Within Investments in Subsidiaries we also include Loans with subsidiaries where settlement is neither planned
nor likely to occur in the foreseeable future.
(ii) intercompany loans
Intercompany loans with its subsidiary undertakings are measured in line with the Group’s policy mentioned in (r) Financial
instruments above. That is at amortised cost, with all subsequent measures using the effective interest method and are subject
to an impairment assessment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired. Refer Note 1(v).
(t) nature and purpose of reserves
(i) Own shares reserve
The own shares reserve is used to recognise the outstanding shares in the Company held in SolGold Canada Inc. (formerly
Cornerstone Capital Resources Inc.) at amortised cost in the consolidated financial statements only.
(ii) merger relief reserve
The merger relief reserve represents the merger relief applied under section 612 of the Companies Act 2006 when shares
were issued for the acquisition of Cornerstone Capital Resource Inc.
(iii) Financial assets at fair value through other comprehensive reserve
Changes in the fair value and exchange differences arising on translation of investments, such as equities, classified as
financial assets at fair value through OCI, are recognised in other comprehensive income and accumulated in a separate
reserve within equity.
(iv) Share based payment reserve
The share based payment reserve is used to recognise:
• the grant date fair value of options issued to employees that have vested but not been exercised; and
• the grant date fair value of shares issued to employees.
(v) Foreign currency translation reserve
Exchange differences arising on translation of foreign controlled entities where the functional currency differs from the
presentational currency are recognised in other comprehensive income and accumulated in a separate reserve within equity.
The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
At a Company level the foreign currency translation reserve relates to the change in presentational currency in previous
periods (2016).
(vi) Other reserves
This reserve is used to adjust the actuarial assessed fair value for the defined benefit pension obligation linked to the Group’s
employees in Ecuador.
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(u) Changes in accounting policies
new standards and amendments in the year
The Group has adopted the following revised and amended standards. The list below includes only standards and
interpretations that could have an impact on the Consolidated Financial Statements of the Group.
EFFECTivE pEriOD COmmEnCinG On Or AFTEr
Amendments to IFRS 3
Reference to the Conceptual Framework
Amendments to IFRS 16
Covid-19-Related Rent Concessions
Amendments to IAS 16
Property, Plant and Equipment — Proceeds before Intended Use
Amendments to IAS 37
Onerous Contracts – Cost of Fulfilling a Contract
Amendments to IFRS 1
Minor Amendments
Amendments to IFRS 9
First-time Adoption
Amendments to IFRS 16
Illustrative Examples
Amendments to IAS 41
Agriculture
1 January 2022
1 June 2020
1 January 2022
1 January 2022
1 January 2022
1 January 2022
1 January 2022
1 January 2022
Details of the impact that these standards had is detailed below. Other new and amended standards and interpretations issued
by the IASB do not impact the Group or Company as they are either not relevant to the Group’s activities or require accounting
which is consistent with the Group’s current accounting policies.
IFRS 3: Reference to the Conceptual Framework
In May 2020, the International Accounting Standards Board (“IASB”) amended IFRS 3 to update an outsourced reference to
the Conceptual Framework without significantly changing the requirements in the standard. Management has assessed the
effects of applying the amendment on the Group’s financial statements and has determined that there is no material impact.
IFRS 16: Covid-19-Related Rent Concessions
The amendment extends, by one year, the May 2020 amendment that provides lessees with an exemption from assessing
whether a COVID-19-related rent concession is a lease modification. Management has assessed the effects of applying the
amendment on the Group’s financial statements and has determined that there is no material impact.
IAS 16: Property, Plant and Equipment – proceeds before intended use
The amendments to the standard prohibits deducting from the cost of an item of property, plant and equipment any proceeds
from selling items produced while bringing the asset to the location and condition necessary for it to be capable of operating
in the manner intended by management. Management has assessed the effects of applying the amendment on the Group’s
financial statements and has determined that there is no material impact.
IAS 37: Onerous Contracts – Cost of Fulfilling a Contract
In May 2020 the amendments to IAS 37 specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to
the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation
of other costs that relate directly to fulfilling contracts. Management has assessed the effects of applying the amendment on
the Group’s financial statements and has determined that there is no material impact.
IFRS 1: Minor Amendments
The amendment extends existing effects of IFRS 1 First-time Adoption of International Financial Reporting Standards.
Management has assessed the effects of applying the amendment on the Group’s financial statements and has determined
that there is no material impact.
IFRS 9: First-time Adoption
IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early application permitted. IFRS 9 specifies
how an entity should classify and measure financial assets, financial liabilities, and some contracts to buy or sell non-financial
items. Management has assessed the effects of applying the amendment on the Group’s financial statements and has
determined that there is no material impact.
IFRS 16: Illustrative Examples
The IFRS 16 Leases standard was extended to include illustrative examples Management has assessed the effects of applying
the amendment on the Group’s financial statements and has determined that there is no material impact.
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(u) Changes in accounting policies continued
IAS 31: Agriculture
IAS 41 Agriculture sets out the accounting for the transformation of biological assets (living plants and animals) into
agricultural produce. In May 2020, the International Accounting Standards Board (Board) issued an amendment to IAS 41
Agriculture as part of Annual Improvements to IFRS Standards 2018–2020. The amendment to IAS 41 removed a requirement
to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in
IAS 41 with those in other IFRS Standards. Management has assessed the effects of applying the amendment on the Group’s
financial statements and has determined that there is no material impact.
new standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2023 reporting
periods and have not been early adopted by the Company. None of these are expected to have a material impact on the
Company in the current or future reporting periods and on foreseeable future transactions.
EFFECTivE FOr AnnUAL rEpOrTinG pEriODS COmmEnCinG On Or AFTEr
Amendments to IAS 12
International Tax Reform – Pillar Two Model Rules
Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements
Amendments to IAS 21
Lack of Exchangeability Between Currencies
Amendments to IAS 1
Non-Current Liabilities with Covenants
Amendments to IAS 12
Amendments to IAS 1,
PS 2 and IAS 8
Deferred Tax Related to Costs and Liabilities Arising
from a Single Transaction
Narrow Scope Amendments
Amendments to IFRS 16
Leases on Sale and Leaseback
Amendments to IFRS 17
Insurance Contracts
1 January 2023
1 January 2024
1 January 2025
1 January 2024
1 January 2023
1 January 2023
1 January 2024
1 January 2023
Amendments to IAS 21 – Lack of Exchangeability Between Currencies
Issued in August 2023, the amendments specify when a currency is exchangeable into another currency and when it is not
— a currency is exchangeable when an entity is able to exchange that currency for the other currency through markets or
exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a
specified purpose. The amendments also specify how an entity determines the exchange rate to apply when a currency is not
exchangeable, and requires the disclosure of additional information when a currency is not exchangeable.
Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements
Issued in May 2023, the amendments require an entity to disclose qualitative and quantitative information about its supplier
finance programmes, such as terms and conditions – including, for example, extended payment terms and security or
guarantees provided. Amongst other characteristics, IAS 7 explains that a supplier finance arrangement provides the entity
with extended payment terms, or the entity’s suppliers with early payment terms, compared to the related invoice payment
due date.
Amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules
Issued in May 2023, the amendments introduce an immediate temporary mandatory exception from accounting for deferred
tax related to GloBE top-up tax. However, companies will be required to provide new disclosures about their potential
exposure to the top-up tax at the reporting date in periods in which a tax law is enacted but the top-up tax does not yet apply.
The disclosure requirements apply from December 31, 2023. No disclosures are required in interim periods ending on or before
December 31, 2023.
Amendments to IAS 1 – Non-Current Liabilities with Covenants
The amendments issued in October 2022 clarify that covenants of loan arrangements which an entity must comply with only
after the reporting date would not affect classification of a liability as current or non-current at the reporting date.
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Amendments to IAS 12 – Deferred Tax Related to Costs and Liabilities Arising from a Single Transaction
The amendment clarifies that the exemption does not apply to transactions for which entities recognise both an asset and a
liability and that give rise to equal taxable and deductible temporary differences. This may be the case for transactions such as
leases and decommissioning, restoration and similar obligations.
Amendments to IAS 1, PS 2 and IAS 8 – Narrow Scope Amendments
The amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification
of debt as current or non-current at the reporting date. Instead, the amendments require a company to disclose information
about these covenants in the notes to the financial statements.
Amendments to IFRS 16 – Leases on Sale and Leaseback
The amendments to IFRS 16 require a seller-lessee to apply the subsequent measurement requirements for lease liabilities
unrelated to a sale and leaseback transaction to lease liabilities arising from a leaseback in a way that it recognises no amount
of the gain or loss related to the right of use that it retains.
Amendments to IFRS 17 – Insurance Contracts
The amendments to IFRS 17 include a two-year deferral of the effective date and the fixed expiry date of the temporary
exemption from applying IFRS 9 Financial Instruments granted to insurers meeting certain criteria.
(v) Critical Accounting Estimates and Judgements
In the application of the Group’s accounting policies, described in Note 1, the Directors have made the following judgments and
estimates which may have a significant effect on the amounts recognised in the Group and Company Financial Statements.
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group.
Accounting Estimates
NSR royalty interest – Group
The NSR royalty has been valued using the amortised cost basis. IFRS 9 requires that amortised cost is calculated using the
effective interest method, which allocates interest expense at a constant rate over the term of the instrument. The effective
interest rate of a financial liability is calculated at initial recognition and is the rate that exactly discounts the estimated future
cash flows through the expected life of the financial liability, based on the then current mine plan and project development
study assumptions.
In the case of the Franco Nevada NSR royalty, the Company arrived at an EIR of 11.84%. In the case of the Osisko NSR royalty,
the Company arrived at EIR of 8.87%. Total interest for the financial year is calculated at US$13,148,231 (2022: US$12,505,564)
(Note 6). Based upon cash flow forecasts, a 5% increase in the sales prices for copper, gold, and silver would decrease finance
expense by approximately US$184,000, noting that the increased pricing would decrease the EIR of the Franco Nevada NSR
royalty reflecting the fact that payments are subject to a minimum metal production adjustment.
Accounting Judgements
Exploration and evaluation expenditure – Group
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or
where the activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
The carrying values of exploration and evaluation expenditure were assessed for indicators of impairment and impairment
reversal based on an estimation of the recoverability from expected future development and production. In forming this
assessment, the Group considered the external Mineral Resources Estimate, the status of its permits and internal economic
models and financing which supported the carrying value of the project.
The Directors have carried out an assessment of the carrying values of exploration and evaluation expenditure and indicators
of impairment as detailed in Note 13.
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Intercompany loan – Company
Management has made a judgement relating to the classification of loans with subsidiaries where settlement is neither planned
nor likely to occur in the foreseeable future; it has considered these loans to be Investments in subsidiaries.
The carrying values of exploration and evaluation expenditure were assessed for indicators of impairment based on an
estimation of the recoverability from expected future development and production. In forming this assessment, the Company
considered the external Mineral Resources Estimate, the status of its permits and internal economic models, the impact of any
impairment reversals, and financing which supported the carrying value of the projects.
No triggers of impairment were identified at 30 June 2023 on the carrying values of the Cascabel exploration and evaluation
asset, which is directly linked to the repayment of the loan from SolGold Finance AG. All recovery strategies indicate that the
loan will be fully recovered, therefore no loss allowances have been made.
Business combination – Group
Following the Cornerstone acquisition, management has made a judgement with respect to the allocation of the total
consideration paid between the purchase of the Group’s non-controlling interest, own shares and the assets and liabilities
acquired from Cornerstone. This is detailed in Note 28.
nOTE 2 SEGmEnT rEpOrTinG
The Group determines and separately reports operating segments based on information that is internally provided to the
Board of Directors, who are the Group’s chief operating decision makers. The Group’s operating segments are aligned to those
business units that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in
assessing performance. Operating segments with similar economic characteristics are aggregated into reportable segments.
The Group has outlined below the separately reportable operating segments, having regard to the quantitative threshold tests
provided in IFRS 8, namely that the relative, asset or profit/(loss) position of the operating segment equates to 10% or more
of the Group’s respective total. The Group reports information to the Board of Directors along these project category lines.
The financial information of the other projects that do not exceed the thresholds outlined above, and is therefore not reported
separately, is aggregated as Other Projects.
FinAnCE
inCOmE
US$
DEprECiATiOn
US$
impAirmEnT
OF E&E
US$
LOSS FOr
THE yEAr
US$
ASSETS
US$
LiABiLiTiES
US$
SHArE
BASED
pAymEnTS
US$
nOn–CUrrEnT
ASSET
ADDiTiOnS
US$
42,052
(58,740)
–
(2,260,431) 303,474,003
5,425,778
–
30,590,591
46,560
53,127
478,817
(8,404,502)
131,510,493
1,800,742
Other projects
–
2,172
580,500
(601,858)
9,734,663
17,271
–
–
17,829,097
(738,538)
Corporate
5,444
301,516
–
(39,172,954)
33,620,091
158,169,670
998,682
(5,608,357)
Total
94,056
298,075
1,059,317
(50,439,745) 478,339,250 165,413,461
998,682 42,072,793
FinAnCE
inCOmE
US$
DEprECiATiOn
US$
impAirmEnT
OF E&E
US$
(LOSS)/
prOFiT FOr
THE yEAr
US$
ASSETS
US$
LiABiLiTiES
US$
SHArE
BASED
pAymEnTS
US$
nOn–CUrrEnT
ASSET
ADDiTiOnS
US$
–
140,989
227,847
(1,014,326)
270,791,351
2,411,948
48,581
163,834
3,466,350
(5,272,198)
114,262,932
1,793,313
Other projects
30
24
–
(20,273)
10,463,708
390
Corporate
790,529
314,201
163,827
4,605,232
33,644,619
93,708,453
454,336
Total
839,140
619,048
3,858,024
(1,701,565)
429,162,611
97,914,105 454,336
69,484,271
120
SOLGOLD pLC ANNUAL REPORT 2023
–
–
–
35,308,857
33,907,523
259,717
8,174
30 JUnE 2023
Cascabel
project
Other
Ecuadorian
projects
30 JUnE 2022
Cascabel
project
Other
Ecuadorian
projects
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 nOTE 2 SEGmEnT rEpOrTinG
Geographical information
nOn-CUrrEnT ASSETS
Switzerland
Australia
Canada
Solomon Islands
Chile
Ecuador
nOTE 3 ADminiSTrATivE EXpEnSES
The operating loss includes the following items:
Administrative and consulting expenses
Auditors’ remuneration
Insurance
Acquisition-related costs
Employment expenses
Expected credit loss
Depreciation
Legal fees
Foreign exchange losses
Share based payments
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
2023
US$
73,624
2022
US$
8,174
10,647,500
12,540,078
–
–
76,315
–
599,559
–
426,040,386
381,617,220
436,837,825
394,765,031
GrOUp
2023
US$
GrOUp
2022
US$
7,785,779
1,474,849
488,976
16,054,495
10,300,752
1,433,420
298,075
2,127,698
235,952
998,682
5,522,532
914,224
3,215,136
–
5,112,716
–
619,048
765,599
965,591
454,336
Administrative expenses, as reported
41,198,678
17,569,182
Details of auditor remuneration:
Incurred for audit of SolGold plc annual report
incurred for audit of other services to the Group:
Audit of Group subsidiaries
Auditors’ remuneration reported in operating loss
Audit-related assurance services
Other assurance services
Total auditors’ remuneration
GrOUp
2023
US$
GrOUp
2022
US$
589,121
640,024
885,729
1,474,849
111,021
1,457,033
1,568,045
274,200
914,224
–
–
914,224
SOLGOLD pLC ANNUAL REPORT 2023
121
nOTE 4 STAFF nUmBErS AnD COSTS (mOnTHLy AvErAGES FOr THE yEAr)
Finance and administration
Technical – permanent
Technical – temporary
The aggregate payroll costs of employees were:
Wages and salaries
Contributions to superannuation
Share based payments
Pensions
Social security costs
Total staff costs
GrOUp
STAFF nUmBEr
2023
GrOUp
STAFF nUmBEr
2022
COmpAny
STAFF nUmBEr
2023
COmpAny
STAFF nUmBEr
2022
36
425
127
588
33
497
364
894
11
1
–
12
11
8
–
19
GrOUp
2023
US$
GrOUp
2022
US$
COmpAny
2023
US$
COmpAny
2022
US$
21,198,305
26,053,759
6,198,717
5,446,110
96,564
998,682
311,598
277,318
97,607
454,336
242,403
313,214
96,201
998,682
58,429
273,473
97,607
454,336
144,796
312,623
22,882,467
27,161,319
7,625,502
6,455,472
Included within total staff costs is US$10,503,286 (2022: US$21,844,082) which has been capitalised as part of capitalised
exploration and evaluation expenditure.
122
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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A
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S
nOTE 5 rEmUnErATiOn OF KEy mAnAGEmEnT pErSOnnEL
2023
Directors
Scott Caldwell2
Darryl Cuzzubbo7
Keith Marshall3
Nicholas Mather
James Clare
Liam Twigger
Elodie Grant Goodey4
Kevin O’Kane4
María Amparo Albán
Dan Vujcic5
BASiC
AnnUAL
SALAry/
DirECTOr FEE
US$
125,000
588,609
9,636
67,049
67,057
114,697
40,132
34,909
70,508
46,664
BOnUS
US$
OTHEr
BEnEFiTS1
US$
pEnSiOnS
US$
TOTAL
rEmUnErATiOn
US$
106,250
–
–
–
–
–
–
–
–
–
263,012
399,417
2,755
8,323
497,017
996,349
–
–
–
–
–
–
–
–
–
–
–
12,029
58,429
–
–
4,261
9,636
67,049
67,057
126,726
98,561
34,909
70,508
50,925
Other key management personnel6
2,526,059
69,291
336,253
54,899
2,986,502
Total paid to key management personnel
Other staff and contractors
Total staff costs
3,690,320
17,446,810
175,541
142,952
998,682
140,696
5,005,239
–
267,466
17,857,228
21,137,130
318,493
998,682
408,162
22,862,467
1 Other Benefits represents the fair value of the share options granted during the year based on the Black-Scholes model considering the effects of the
vesting conditions.
2 Scott Caldwell appointed as a Director on 24 October 2022, Interim Chief Executive Officer on 10 November 2022 and Chief Executive Officer on 17 March 2023.
3
Includes consultancy fees paid post resignation as an independent Non-Executive Director on 12 August 2022. Payments post resignation US$9,636.
4 Resigned from the Board on 22 December 2022.
5 Elected as an Independent Non-Executive Director on 24 October 2022.
6 Other key management personnel consist of the aggregated remuneration of Ryan Wilson (Company Secretary – until 10 August 2023), Rufus Gandhi
(former Company Secretary – until 28 February 2023), Dennis Wilkins (former Company Secretary – until 31 July 2023), Chris Stackhouse (Chief Financial
Officer), Keith Pollocks (former Interim Chief Financial Officer – until 31 July 2023), Ayten Saridas (former Chief Financial Officer – until 10 August 2022),
Fawzi Hanano (former Head of Investor Relations – until 7 April 2023), Benn Whistler (former Technical Services Manager – until 23 August 2022), Steve Botts
(former President, SolGold Ecuador – until 17 March 2023), Harold ‘Bernie’ Loyer (former Vice President Projects – until 28 February 2023) and Tania Cashman
(former Chief Human Resources Officer – until 11 November 2022).
7 Darryl Cuzzubbo was terminated on 10 November 2022. The Company is currently in dispute with Darryl Cuzzubbo over his fees.
SOLGOLD pLC ANNUAL REPORT 2023
123
nOTE 5 rEmUnErATiOn OF KEy mAnAGEmEnT pErSOnnEL CONTINUED
2022
Directors
Darryl Cuzzubbo2
Keith Marshall3
Nicholas Mather
Jason Ward4
Brian Moller5
James Clare
Liam Twigger
Elodie Grant Goodey
Kevin O’Kane
María Amparo Albán
Other key management personnel6
Total paid to key management personnel
Other staff and contractors
Total staff costs
BASiC
AnnUAL
SALAry/
DirECTOr FEE
US$
260,301
258,549
72,205
334,653
33,255
72,305
118,931
85,965
79,331
72,423
1,694,266
3,082,184
22,578,392
336,436
454,418
349,587
BOnUS
US$
OTHEr
BEnEFiTS1
US$
pEnSiOnS
US$
TOTAL
rEmUnErATiOn
US$
–
117,982
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10,951
–
–
–
–
–
271,252
376,531
72,205
334,653
33,255
72,305
11,893
130,824
–
–
–
85,965
79,331
72,423
80,335
2,111,037
103,179
3,639,781
454,336
139,225
23,521,540
25,660,576
804,005
454,336
242,404
27,161,321
1 Other Benefits represents the fair value of the share options granted during the year based on the Black-Scholes model considering the effects of the
vesting conditions.
2 Darryl Cuzzubbo appointed as CEO and Managing Director effective 1 December 2021.
3 Keith Marshall acted as interim CEO until 1 December 2021.
4 Jason Ward’s Basic Annual Consultancy Fees includes total remuneration paid for the year including payments post his resignation as an Executive Director
13 May 2022. Payments post resignation US$33,352.
5 Brian Moller was not re-elected to the Board on 15 December 2021.
6 Other key management personnel consist of the aggregated remuneration of Dennis Wilkins (Company Secretary – until 31 July 2022), Ayten Saridas (Chief
Financial Officer, appointed May 2022, until 10 August 2022), Benn Whistler (Technical Services Manager – until 23 August 2022), Chris Connell (Regional
Exploration Manager – until February 2022), Peter Holmes (Director of Studies – until 9 September 2022), Ingo Hofmaier (Interim Chief Financial Officer to May
2022, Executive General Manager Projects and Corporate Finance – until 13 August 2022), Tania Cashman (Chief Human Resources Officer, appointed January
2022 until 11 November 2022), and Geoff Woodcroft (Chief Human Resources Officer – until 29 October 2021).
nOTE 6 FinAnCE inCOmE AnD COSTS
Interest income
Accretion of Interest on company funded loan plan (Note 14)
Finance income
General interest
Interest on lease liability
Interest on NSR (Note 21)
Finance costs
GrOUp
2023
US$
94,056
–
94,056
GrOUp
2023
US$
17
GrOUp
2022
US$
49,194
789,946
839,140
GrOUp
2022
US$
291
46,610
64,325
13,148,231
12,505,564
13,194,858
12,570,180
124
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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m
E
n
T
S
nOTE 7 TAX EXpEnSE
Factors affecting the tax charge for the current year
SolGold’s headquarters is in Australia and as the Company has its central management and control in Australia, the applicable
tax rates are Australian. The tax profit for the year is higher than the credit resulting from the application of the standard
rate of corporation tax in Australia of 30% (2022: 30%) being applied to the profit before tax arising during the year. The
differences are explained below.
Tax reconciliation
Profit/(loss) before tax
Tax at 30% (2022: 30%)
Add/(less) tax effect of:
Permanent differences
Derecognise current year tax losses
(Recognise)/derecognise prior year losses
Prior year tax expense attributable to Ecuador
Current year tax expense attributable to Ecuador
Prior period adjustments to true-up tax return
Other
Impact of tax rate differences
Temporary differences not recognised
income tax expense on loss
GrOUp
2023
US$
GrOUp
2022
US$
(49,309,255)
2,838,538
(14,792,777)
851,561
8,610,987
917,878
1,071,135
795,731
–
(215,502)
(61,460)
(189,380)
–
(6,056)
2,425,379
3,276,930
–
61,460
2,921
19,600
(3,417,092)
6,319,277
1,130,490
4,540,103
Components of tax expense on other comprehensive income comprise of:
Tax on valuation loss on investments held at fair value through OCI (see note 15)
(804,652)
(267,087)
income tax expense on other comprehensive income
(804,652)
(267,087)
Amounts recognised directly in equity
Attributable to prior periods
Net deferred tax credited directly to equity
income tax (expense) recognised directly in equity
–
(576,679)
(576,679)
–
(11,111)
(11,111)
Deferred tax assets are recognised only to the extent of deferred tax liabilities. Where deferred tax assets exceed deferred
tax liabilities, deferred tax assets on carried forward tax losses are derecognised in the first instance considering their
recoverability.
Factors that may affect future tax charges
The Group has carried forward gross tax losses of approximately US$110,976,883 (2022: US$100,073,452) in Australia and
Ecuador. These losses may be deductible against future taxable income dependent upon the on-going satisfaction by the
relevant Group Company of various tax integrity measures applicable in the jurisdiction in which the tax loss has been incurred.
The jurisdictions in which tax losses have been incurred include Australia, Ecuador, Switzerland and the Solomon Islands. Tax
losses in Australia (US$80,576,525) can be carried forward indefinitely while in Ecuador (US$42,774,681), tax losses may be
carried forward and offset against profits in the following five years, provided that the amount offset does not exceed 25% of
the year’s profits.
SOLGOLD pLC ANNUAL REPORT 2023
125
nOTE 8 LOSS pEr SHArE
Basic loss per share
Diluted loss per share
(a) Loss
2023
CEnTS pEr SHArE
2022
CEnTS pEr SHArE
(2.0)
(2.0)
2023
US$
(0.1)
(0.1)
2022
US$
Loss used to calculate basic and diluted loss per share
(50,439,745)
(1,701,565)
(b) Weighted average number of shares
Used in calculating basic LpS
Weighted average number of dilutive options
nUmBEr
OF SHArES
nUmBEr
OF SHArES
2,576,779,125
2,293,816,433
–
–
Weighted average number of ordinary shares and potential ordinary shares used in
calculating dilutive LpS
2,576,779,125
2,293,816,433
Options granted are not included in the determination of diluted earnings per share as they are considered to be anti-dilutive.
These out of the money options may become dilutive in the future.
nOTE 9 invESTmEnT in SUBSiDiAriES
EnTiTy
Australian Resource Management
(ARM) Pty Ltd
Acapulco Mining Pty Ltd
Central Minerals Pty Ltd
Honiara Holdings Pty Ltd
Guadalcanal Exploration Pty Ltd
Solomon Operations Ltd
Exploraciones Novomining S.A.
Carnegie Ridge Resources S.A.
Green Rock Resources GRR S.A.
Valle Rico Resources VRR S.A.
Cruz del Sol CSSA S.A.
SolGold Ecuador S.A.
COUnTry OF
inCOrpOrATiOn
AnD OpErATiOn
Australia
Australia
Australia
Australia
Australia
Solomon
Islands
Ecuador
Ecuador
Ecuador
Ecuador
Ecuador
Ecuador
rEGiSTErED ADDrESS
Level 27, 111 Eagle Street
Brisbane, QLD, 4000
Australia
C/- Morris & Sojnocki
Chartered Accountants, 1st
Floor, City Centre Building,
Mendana Avenue, Honiara,
Solomon Islands
Avenida La Coruna No.
E25-58 y calle SAN IGNACIO
Edificio: ALTANA PLAZA
Número de oficina: 406 piso:
4 Quito, Ecuador
Novoproyectos-Sustentables S.A.
Ecuador
SolGold Canadian Callco Corp.
SolGold Canadian Exchangeco Corp.
SolGold Finance AG
Canada
Canada
Switzerland
4500, 855 – 2nd Street S.W,
Calgary, Alberta T2P 4K7
Industriestrasse 47, 6300
Zug, Switzerland
SOLGOLD pLC’S
EFFECTivE inTErEST
prinCipAL
ACTiviTy
2023
2022
Exploration
100%
100%
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Services
Management
Project
development
Investment
Investment
Investment
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
85%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
126
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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S
nOTE 9 invESTmEnT in SUBSiDiAriES CONTINUED
EnTiTy
SolGold Canada Inc.
COUnTry OF
inCOrpOrATiOn
AnD OpErATiOn
Canada
Cornerstone Exploration Inc.
Canada
Gestion Minera S.A.
Bellamaria Mining S.A.
Canabrava Mining S.A.
Exploaurum S.A.
Cornerstone Ecuador S.A.
Ecuador
Ecuador
Ecuador
Ecuador
Ecuador
Cornerstone Exploraciones Ecuador S.A.
Ecuador
Vetasgrandes Mining S.A.
Ecuador
Minera Cornerstone Chile Limitada
Chile
SOLGOLD pLC’S
EFFECTivE inTErEST
prinCipAL
ACTiviTy
Investment
2023
100%
2022
5%
Investment
100%
0%
Services
Management
Exploration
Exploration
Exploration
Exploration
Investment
Exploration
Exploration
100%
100%
100%
84%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
rEGiSTErED ADDrESS
c/o Bennett Jones LLP
4500, 855 – 2nd Street SW
Calgary, Alberta T2P 4K7
1730 St. Laurent Blvd.,
Suite 800 Ottawa, Ontario
K1G 5L1
Av. 12 de Octubre N24-562 y
Luis Cordero Edificio World
Trade Center Quito, Ecuador
Av. Isadora
Goyenechea 3000 Piso 21,
Las Condes Santiago, Chile
The Company’s indirect 12.5% interest in La Plata Minerales S.A. are being accounted for at fair value through other comprehensive income.
Cost
Balance at 30 June 2021
Acquisitions and advances in the year
Balance at 30 June 2022
Reclassification
Acquisitions and advances in the year
Balance at 30 June 2023
Expected credit and impairment losses
Balance at 30 June 2021
Balance at 30 June 2022
Balance at 30 June 2023
Carrying amounts
Balance at 30 June 2021
Balance at 30 June 2022
Balance at 30 June 20231
inTErCOmpAny
LOAnS
US$
SUBSiDiAry
invESTmEnTS
US$
TOTAL
invESTmEnT
US$
129,713,547
25,508,982
155,222,529
32,008,275
910,183
32,918,458
161,721,822
26,419,165
188,140,987
(23,675,342)
23,675,342
–
15,463,322
92,587,013
108,050,335
153,509,802
142,681,520
296,191,322
(35,178,110)
(35,178,110)
–
–
(35,178,110)
(35,178,110)
(31,602,416)
(3,575,694)
(35,178,110)
94,535,437
25,508,982
120,044,419
126,543,712
26,419,165
152,962,877
121,907,386
139,105,826
261,013,212
1
Loans which are not expected to be repaid are included in investment in subsidiaries (see Note 1 (s)).
SOLGOLD pLC ANNUAL REPORT 2023
127
nOTE 10 inTErCOmpAny LOAnS WiTH SUBSiDiAriES
Cost
Balance at 30 June 2021
Advances in the year
Interest accrued in the year
Balance at 30 June 2022
Advances in the year
Borrowings in the year
Repayments in the year
Interest accrued in the year
Interest incurred in the year
Balance at 30 June 2023
Amortisation and impairment losses
Balance at 30 June 2021
Balance at 30 June 2022
Balance at 30 June 2023
Carrying amounts
Balance at 30 June 2021
Balance at 30 June 2022
Balance at 30 June 2023
inTErCOmpAny
LOAnS WiTH
SUBSiDiAriES
LOAn
US$
167,399,767
12,505,512
5,694,637
185,599,916
21,447,515
(49,975,286)
19,936,627
6,762,963
(2,246,662)
181,525,074
–
–
–
167,399,767
185,599,916
181,525,074
The Company has assessed the receivable and no loss allowances have been made, refer Note 1(s).
nOTE 11 invESTmEnTS
a. investments accounted for as financial assets held at fair value through OCi
GrOUp
2023
US$
2022
US$
COmpAny
2023
US$
2022
US$
movements in financial assets
Opening balance at 1 July
5,351,844
6,825,042
5,346,323
6,819,046
Fair value adjustment through OCI
(361,785)
(1,473,198)
(360,167)
(1,472,723)
Deemed disposal of investment on business
acquisition
(4,984,731)
–
(4,984,731)
–
Balance at 30 June
5,328
5,351,844
1,425
5,346,323
In the prior year, financial assets comprised an investment in the ordinary issued capital of Cornerstone Capital Resources Inc.,
previously listed on the TSX Venture Exchange. On acquisition of the remaining outstanding shares of Cornerstone Capital
Resources Inc., the investment was disposed. In the current year, financial assets comprised an investment in the ordinary
issued capital of Clara Resources Australia Ltd, a company listed on the Australian Securities Exchange.
128
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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E
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T
S
nOTE 11 invESTmEnTS CONTINUED
b. Fair value
Fair value hierarchy
The following table details the Group’s assets, measured or disclosed at fair value, using a three-level hierarchy, based on the
lowest level of input that is significant to the entire fair value measurement being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly.
Level 3: Unobservable inputs for the asset or liability.
The fair values of financial assets approximate their carrying amounts principally due to their short-term nature or the fact
that they are measured and recognised at fair value.
The following table represents the Group’s financial assets measured and recognised at fair value.
2023
Financial assets held at fair value through OCI
2022
US$
LEvEL 1
5,328
Financial assets held at fair value through OCI
5,351,844
US$
LEvEL 2
US$
LEvEL 3
–
–
–
–
US$
TOTAL
5,328
5,351,844
The financial assets are measured based on the quoted market prices at 30 June and therefore are classified as Level 1.
nOTE 12 prOpErTy, pLAnT AnD EQUipmEnT
GrOUp
LAnD
US$
pLAnT AnD
EQUipmEnT
US$
mOTOr
vEHiCLES
US$
OFFiCE
EQUipmEnT
US$
FUrniTUrE
& FiTTinGS
US$
TOTAL
US$
COmpAny
TOTAL1
US$
Cost
Balance 30 June 2021
16,513,460
3,473,196
1,073,678
919,586
275,191
22,255,111
1,783,050
Effect of foreign exchange
on opening balance
Additions
Disposals
–
(123,985)
(4,578)
3,836,561
406,964
–
–
–
(38,490)
(2,767)
80,751
–
(873)
(132,203)
(119,085)
5,719
4,329,995
14,772
–
(38,490)
–
Balance 30 June 2022
20,350,021
3,756,175
1,030,610
997,570
280,037
26,414,413
1,678,737
Effect of foreign exchange
on opening balance
Additions
Disposals
Assets acquired through
business combinations
–
(20,069)
(826)
(480)
(158)
(21,533)
(25,947)
1,904,767
247,947
–
52,838
–
2,205,552
15,470
–
–
(234,557)
(52,388)
(135,687)
(27,039)
(449,671)
(299,286)
65,059
203,621
90,300
115,131
474,111
–
Balance 30 June 2023
22,254,788
3,814,555
1,181,017
1,004,541
367,971
28,622,872
1,368,974
SOLGOLD pLC ANNUAL REPORT 2023
129
nOTE 12 prOpErTy, pLAnT AnD EQUipmEnT CONTINUED
GrOUp
LAnD
US$
pLAnT AnD
EQUipmEnT
US$
mOTOr
vEHiCLES
US$
OFFiCE
EQUipmEnT
US$
FUrniTUrE
& FiTTinGS
US$
TOTAL
US$
COmpAny
TOTAL1
US$
Depreciation and
impairment losses
Balance 30 June 2021
Effect of foreign exchange
on opening balance
Depreciation charge for
the year
Depreciation capitalised
to exploration
Disposals
Balance 30 June 2022
Effect of foreign exchange
on opening balance
Depreciation charge for
the year
Depreciation capitalised
to exploration
Disposals
Assets acquired through
business combinations
Balance 30 June 2023
Carrying amounts
–
–
–
–
–
–
–
–
–
–
–
–
(1,630,850)
(870,577)
(711,877)
(218,709)
(3,432,013)
(824,200)
64,391
4,577
2,766
873
72,607
59,500
(490,621)
–
(121,419)
(7,008)
(619,048)
(314,071)
(194,668)
(166,686)
(5,313)
(18,185)
(384,852)
(1,047)
–
33,379
–
–
33,379
–
(2,251,748)
(999,307)
(835,843)
(243,029)
(4,329,927)
(1,079,818)
13,038
826
480
(105)
14,239
13,252
(208,934)
(30,597)
(47,439)
(11,105)
(298,075)
(283,948)
(436,645)
(14,100)
(66,921)
(4,386)
(522,052)
(358)
227,703
52,388
122,889
26,828
429,808
280,923
(33,905)
(109,971)
(69,744)
(33,869)
(247,489)
–
(2,690,491)
(1,100,761)
(896,578)
(265,666) (4,953,496)
(1,069,949)
At 30 June 2021
16,513,460
1,842,346
203,101
207,709
56,482
18,823,098
958,850
At 30 June 2022
20,350,021
1,504,427
31,303
161,727
37,008 22,084,486
598,919
At 30 June 2023
22,254,788
1,124,064
80,256
107,963
102,305 23,669,380
299,025
1 Company assets include fixture and fittings and office equipment.
The gross carrying amount of fully depreciated property, plant and equipment that is still in use is US$930,562
(2022: US$204,627).
130
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 nOTE 13 inTAnGiBLE ASSETS
Cost
Balance at 30 June 2021
Effect of foreign exchange on opening balances
Additions – expenditure
Balance at 30 June 2022
Effect of foreign exchange on opening balances
Additions – expenditure
Balance at 30 June 2023
Accumulated impairment losses
Balance at 30 June 2021
Impairment charge
Balance at 30 June 2022
Impairment charge
Reversal of exploration costs previously written-off
Balance at 30 June 2023
Carrying amounts
At 30 June 2021
At 30 June 2022
At 30 June 2023
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
CApiTALiSED
EXpLOrATiOn
AnD EvALUATiOn
EXpEnDiTUrE
US$
341,441,030
(696,468)
66,066,237
406,810,799
(286,667)
43,420,485
449,944,617
(37,601,137)
(3,630,178)
(41,231,315)
(1,059,317)
3,780,099
(38,510,533)
303,839,893
365,579,484
411,434,084
As capitalised exploration and evaluation expenditure are not definite lived intangible assets, they are not amortized. The
accounting treatment of capitalised exploration and evaluation expenditure is described at Note 1(f).
Recoverability of the carrying amount of exploration assets is dependent on the successful development and commercial
exploitation of areas of interest, and the sale of minerals or the sale of the respective areas of interest. An impairment charge
of US$1,059,317 (2022: US$3,630,178) was recognised in the year for exploration expenditure associated with concessions in
Ecuador and the Solomon Islands that the board decided to relinquish.
A reversal of prior year impairment of US$3,780,099 (2022: nil) was recognised for 9 concessions in Ecuador which were
previously impaired based upon the decision to relinquish these properties by prior management. Subsequently, former CEO
(Darryl Cazzubbo) reversed this decision, as those properties were re-assessed and considered to have value to the company.
Under direction of the current CEO (Scott Caldwell), the same evaluation was made and supported.
An assessment of the carrying values of capitalised exploration and evaluation expenditure is provided below.
Cascabel project
The Alpala deposit, discovered at Cascabel, is in northern Ecuador, lying upon the gold rich section of the northern section of
the prolific Andean Copper belt, renowned as the base for nearly half of the world’s copper production. The project area hosts
mineralisation from the Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and
Peru to the south. The project is a three-hour drive north of Quito, close to water, power supply and Pacific ports. On 17 July
2023, the Company announced a 25-year term renewal (until the year 2048) for the Cascabel concession. The term renewal
confirmed that Cascabel comprises 4,979 contiguous hectares and is a large-scale mining regime in accordance with Ecuador’s
mining regulations. The PFS for our Cascabel project was published in April 2022 including consideration of environmental,
social and economic impacts. Work on a revised PFS is underway evaluating further upsides and optimisations.
SOLGOLD pLC ANNUAL REPORT 2023
131
nOTE 13 inTAnGiBLE ASSETS CONTINUED
Cascabel project continued
Based on the exploration work conducted to date at the Cascabel project, the Company:
• continues to have the right to explore in the area
• has met its expenditure commitments
• remains positive around the prospectivity of the project area, with encouraging geological results encountered to date
•
is not aware of any data that would require or demand to abandon or relinquish the project
Management have assessed that there are no indicators of impairment and therefore management is of the opinion that
the exploration and evaluation assets capitalised at 30 June 2023 are recoverable and fairly stated and that no impairment
provision is required.
regional concessions granted for 100% SolGold Ecuador subsidiaries
The eight 100% owned subsidiary companies in Ecuador: Carnegie Ridge Resources S.A., Green Rock Resources GRR S.A., Cruz
del Sol CSSA S.A., Valle Rico Resources VRR S.A., Cornerstone Ecuador S.A., Canabrava Mining S.A., Vetasgrandes Mining S.A.,
and Bellamaria Mining S.A. hold 88 mining concessions in Ecuador for which the companies were successful in bidding as part
of the auction process in 2016 and 2017, inclusive of 13 mining concessions obtained through the acquisition of Cornerstone
(Note 28). Initial exploration work programmes have been carried out on these concessions and a listing of priority projects
has been identified. The ongoing exploration programme on these projects continues to focus on:
• Drill testing targets
• Collection and interpretation of geophysical data
• Mapping and geochemical sampling of new areas
Based on the exploration work conducted to date, the Company:
• continues to have the right to explore in the area
• has not lost access rights to any areas and is working pro-actively with communities to build a strong licence to operate
ahead of major field work
• has met its expenditure commitments
• remains positive around the prospectivity of the projects, with encouraging geological results encountered to date
• concluded insufficient data exists to abandon or relinquish any of these projects
Accordingly, management has assessed that there are no indicators of impairment.
Acapulco mining & Central minerals projects
The main exploration project of Acapulco Mining Pty Ltd is the Mt Perry project. A comprehensive assessment of the project
has identified the Upper Chinaman’s Creek prospects as the highest priority high-grade opportunity. The main exploration
project of Central Minerals Pty Ltd is the Cooper Consolidated project.
Based on the exploration work conducted to date, the Company:
• continues to have the right to explore in the area
• has met its expenditure commitments and is now actively seeking a joint venture partner to pursue further exploration on
the projects
• remains positive around the prospectivity of the project areas, with encouraging exploration results encountered to date
•
insufficient data exists to abandon or relinquish the project
Management was notified that three of the exploration permits were not renewed due to proposed exploration activities
not having been carried out, and renewal documents submitted which contained insufficient information to satisfy renewal.
Management is able to renew the permits by lodging work programmes documenting how proposed exploration activities
will bring the exploration permits into compliance and providing a technical commitments documents. Management is
able and intends to bring the permits into compliance. Accordingly, management has assessed that there are no indicators
of impairment.
132
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
nOTE 14 FinAnCiAL ASSETS AT AmOrTiSED COST AnD LOAnS rECEivABLE AnD OTHEr
CUrrEnT ASSETS
Loan receivables and other current assets
Company Funded Loan Plan Receivable
2,099,527
3,553,291
2,099,527
3,553,291
Closing balance at the end of the reporting period
2,099,527
3,553,291
2,099,527
3,553,291
GrOUp
2023
US$
GrOUp
2022
US$
COmpAny
2023
US$
COmpAny
2022
US$
Financial assets at amortised cost
Security bonds
1,729,033
Closing balance at the end of the reporting period
1,729,033
1,749,213
1,749,213
GrOUp
2023
US$
GrOUp
2022
US$
COmpAny
2023
US$
734,248
734,248
COmpAny
2022
US$
756,332
756,332
Company funded loan plan receivable
Balance at beginning of reporting period
3,553,291
6,495,930
3,553,291
6,495,930
Proceeds received from repayment of the loans
during the period
Fair value adjustment recognised as an employee
benefit expense
Accretion of interest
Effect of foreign exchange
Expected credit loss
(4,522)
(2,408,511)
(4,522)
(2,408,511)
–
–
(669,211)
789,946
–
–
(669,211)
789,946
(15,822)
(654,863)
(15,822)
(654,863)
(1,433,420)
–
(1,433,420)
–
Balance at end of reporting period
2,099,527
3,553,291
2,099,527
3,553,291
The Company Funded Loan Plan (the “CFLP”) is a legacy plan established by the Company to assist employees in exercising
share options. On 29 October 2018, the Company assisted employees to exercise 19,950,000 options previously issued to
employees of the Company in 2016 via the CFLP. Since inception and until 30 June 2023, repayments of US$3,478,278 have
been received against the loans provided. As at 30 June 2023, 3 participants remain beneficiaries of the Plan.
The key terms of this CFLP on the date the loans were granted were as follows:
• The employee may only use a loan under the Plan to pay for the exercise of Employee Options granted by the Company.
• The loan will be granted for a maximum period of 2 years (extended in the meantime).
• No interest will be charged on the loan.
• The loan is secured by the shares granted on the exercise of the Employee Options.
• The loans provided are full recourse.
The Board of Directors in June 2021 resolved to extend the CFLP until 31 March 2022. During the October 2021 Board meeting,
the Board of Directors resolved to extend the CFLP again, this time for a further six months, to 30 June 2022. This extension of
the loan resulted in an overall increase of US$669,211 in employee benefits expense. This fair value adjustment is represented
in the above table and was recognised as an employee benefit expense. On 24 August 2022, the CFLP was extended for 3
individuals whom due to their positions in the Company had additional restrictions from trading during the year ended 30 June
2022. This extension saw their loan repayments terms extended by periods potentially up until 21 December 2023.
Management has considered the recoverability of the loan based on the movement in the share price over the period and
has calculated an expected credit loss of USD$1,433,420 at 30 June 2023 (2022: nil). The Company has the ability to sell the
shares, and accordingly the exposure to credit risk is limited to the value of the shares.
Security bonds relate to cash security held against office premises (111 Eagle Street, Brisbane QLD Australia), cash security
held by the Queensland Department of Natural Resources and Mines against Queensland exploration tenements held by the
Group and on cash backed bank guarantees held by the Ecuadorian Ministry of Environment against Ecuadorian exploration
tenements held by the Group.
SOLGOLD pLC ANNUAL REPORT 2023
133
nOTE 15 DEFErrED TAXATiOn
recognised deferred tax assets and liabilities
nET
(CHArGED)/
OpEninG
BALAnCE
US$
nET
(CHArGED)/
CrEDiTED
TO inCOmE
US$
CrEDiTED
TO OTHEr
COmprEHEnSivE
inCOmE
US$
nET
(CHArGED)/
CrEDiTED TO
EQUiTy
US$
nET
mOvEmEnT
On UnWinD/
TrAnSFEr
US$
GrOUp
2023
recognised deferred tax assets
Carried forward tax losses
6,295,129
2,261,049
Accruals/provisions
1,084,728
(32,270)
potential benefit
7,379,857
2,228,779
recognised deferred tax
liabilities
Financial assets held at
fair value through other
comprehensive income
(832,003)
27,351
Derivative liabilities
(47,110)
(619,011)
NSR Liability (borrowings)
(4,200,444)
–
Exploration and evaluation
assets
(2,452,342)
238,976
Foreign exchange gains/losses
(3,843,124)
(3,337,962)
Property, plant and equipment
(1,069)
893
IFRS 16 right of use asset
(204,209)
79,643
potential benefit
(11,580,301)
(3,610,110)
net deferred taxes
(4,200,444)
(1,381,331)
Deferred tax assets not
recognised
Unused tax losses
21,296,512
15,892,849
Unused capital losses
–
425,452
Temporary differences
15,660,869
–
Tax benefit
36,957,381
16,318,301
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
576,679
576,679
804,652
–
–
–
–
–
–
804,652
1,381,331
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
CLOSinG
BALAnCE
US$
8,556,178
1,629,137
10,185,315
–
(666,121)
(4,200,444)
(2,213,366)
(7,181,086)
(176)
(124,567)
(14,385,759)
(4,200,444)
37,189,361
425,452
15,660,869
53,275,682
134
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
nOTE 15 DEFErrED TAXATiOn CONTINUED
recognised deferred tax assets and liabilities continued
nET
(CHArGED)/
OpEninG
BALAnCE
US$
nET
(CHArGED)/
CrEDiTED
TO inCOmE
US$
CrEDiTED
TO OTHEr
COmprEHEnSivE
inCOmE
US$
nET
(CHArGED)/
CrEDiTED
TO EQUiTy
US$
nET
mOvEmEnT
On UnWinD/
TrAnSFEr
US$
GrOUp
2022
recognised deferred tax assets
Carried forward tax losses
–
6,295,129
Accruals/provisions
potential benefit
1,517,126
(443,509)
1,517,126
5,851,620
–
–
–
–
11,111
11,111
recognised deferred tax
liabilities
Financial assets held at
fair value through other
comprehensive income
(1,201,733)
102,643
267,087
Derivative liabilities
43,314
(90,424)
NSR Liability (borrowings)
–
(4,200,444)
Exploration and evaluation
assets
(2,599,253)
146,911
Foreign exchange gains/losses
2,518,843
(6,361,967)
Property, plant and equipment
–
(1,069)
IFRS 16 right of use asset
(278,297)
74,088
–
–
–
–
–
–
potential benefit
net deferred taxes
(1,517,126)
(10,330,262)
–
(4,478,642)
267,087
267,087
Deferred tax assets not
recognised
Unused tax losses
25,423,063
(4,126,551)
Temporary differences1
9,341,592
6,319,277
Tax benefit
34,764,655
2,192,726
–
–
–
–
–
–
–
–
–
–
–
11,111
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
CLOSinG
BALAnCE
US$
6,295,129
1,084,728
7,379,857
(832,003)
(47,110)
(4,200,444)
(2,452,342)
(3,843,124)
(1,069)
(204,209)
(11,580,301)
(4,200,444)
21,296,512
15,660,869
36,957,381
1 Exploration expenditure incurred in the Solomon Islands that has been expensed. This expenditure is deductible over 5 years from when production commences.
SOLGOLD pLC ANNUAL REPORT 2023
135
nOTE 15 DEFErrED TAXATiOn CONTINUED
recognised deferred tax assets and liabilities continued
COmpAny
2023
recognised deferred tax assets
nET
(CHArGED)/
CrEDiTED
TO OTHEr
COmprEHEnSivE
inCOmE
US$
nET
(CHArGED)/
CrEDiTED
TO inCOmE
US$
OpEninG
BALAnCE
US$
Carried forward tax losses
3,847,148
2,501,561
Accruals/provisions
Capital raising costs
Other temporary differences
341,446
662,016
49,200
114,084
(391,139)
237,388
potential benefit
4,899,810
2,461,894
recognised deferred tax liabilities
Financial assets held at fair value through other
comprehensive income
Derivative liabilities
(832,004)
832,004
(47,111)
(619,011)
Foreign exchange gains/(losses)
(3,848,385)
(3,337,810)
Property, plant and equipment
IFRS 16 right of use asset
potential benefit
net deferred tax liabilities
Deferred tax assets not recognised
Unused tax losses
Unused capital losses
Temporary differences
Tax benefit
(1,069)
(171,241)
893
85,353
(4,899,810)
(3,038,573)
–
(576,679)
14,863,578
753,201
–
–
–
–
14,863,578
753,201
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
nET
(CHArGED)/
CrEDiTED TO
EQUiTy
CLOSinG
BALAnCE
US$
–
–
576,679
–
6,348,709
455,530
847,556
286,588
576,679
7,938,383
–
–
–
–
–
–
–
(666,122)
(7,186,195)
176
(85,889)
(7,938,383)
576,679
–
–
–
–
–
15,616,779
–
–
15,616,779
The deferred tax asset in respect of these items has not been recognised as future taxable profit and is not anticipated within
the foreseeable future.
136
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023
nOTE 15 DEFErrED TAXATiOn CONTINUED
recognised deferred tax assets and liabilities continued
nET
(CHArGED)/
OpEninG
BALAnCE
US$
nET
(CHArGED)/
CrEDiTED
TO inCOmE
US$
CrEDiTED
TO OTHEr
COmprEHEnSivE
inCOmE
US$
nET
(CHArGED)/
CrEDiTED TO
EQUiTy
COmpAny
2022
recognised deferred tax assets
Carried forward tax losses
Accruals/provisions
Capital raising costs
Other temporary differences
potential benefit
recognised deferred tax liabilities
Financial assets held at fair value through other
comprehensive income
Derivative liabilities
Foreign exchange gains/(losses)
Property, plant and equipment
IFRS 16 right of use asset
potential benefit
net deferred tax liabilities
Deferred tax assets not recognised
Unused tax losses
Unused capital losses
Temporary differences
Tax benefit
–
3,847,148
303,013
38,433
1,119,475
(468,570)
11,039
38,161
1,433,527
3,455,172
–
–
–
–
–
(1,201,733)
102,642
267,087
43,313
(90,424)
–
–
(3,848,385)
(1,069)
(275,107)
103,866
(1,433,527)
(3,733,370)
–
(278,198)
–
–
–
–
267,087
267,087
22,008,697
(7,145,119)
–
–
2,973,922
(2,973,922)
24,982,619
(10,119,041)
–
–
–
–
i
F
i
n
A
n
C
A
L
S
T
A
T
E
m
E
n
T
S
CLOSinG
BALAnCE
US$
3,847,148
341,446
662,016
49,200
–
–
11,111
–
11,111
4,899,810
–
–
–
–
–
–
(832,004)
(47,111)
(3,848,385)
(1,069)
(171,241)
(4,899,810)
11,111
–
–
–
–
–
14,863,578
–
–
14,863,578
The deferred tax asset in respect of these items has not been recognised as future taxable profit and is not anticipated within
the foreseeable future.
nOTE 16 OTHEr rECEivABLES AnD prEpAymEnTS
Other receivables
Taxes receivable
Prepayments
GrOUp
2023
US$
GrOUp
2022
US$
2,104,349
1,807,935
4,614,942
2,592,334
201,001
341,887
COmpAny
2023
US$
14,335
51,361
181,482
COmpAny
2022
US$
623,282
128,258
310,043
Other receivables and prepayments
6,920,292
4,742,156
247,178
1,061,583
Other receivables represent Australian Goods and Services Tax receivable and deposits made to landowners in Ecuador
for land purchases. Management has considered the expected credit loss on the deposits to landowners as immaterial and
accordingly, no impairment has been recognised at 30 June 2023. As these land deposits are dependent on the Cascabel
project, they are not impaired. There is no indication the Cascabel project will not go ahead.
SOLGOLD pLC ANNUAL REPORT 2023
137
nOTE 17 CASH AnD CASH EQUivALEnTS
Cash at bank
32,481,606
26,102,133
29,041,499
21,032,524
Cash and cash equivalents in the statement
of cash flows
32,481,606
26,102,133
29,041,499
21,032,524
GrOUp
2023
US$
GrOUp
2022
US$
COmpAny
2023
US$
COmpAny
2022
US$
nOTE 18 ALLOTTED, CALLED-Up AnD FULLy pAiD SHArE CApiTAL AnD rESErvES
(a) Authorised Share Capital
At 1 July 2021 – Ordinary shares
Previous increase in authorised capital having expired
2022
nO. OF SHArES
2022
nOminAL vALUE £
3,077,201,722
30,772,017
(1,230,880,689)
(12,308,807)
Increase in authorised share capital of two-thirds of issued capital on 15 December 2021
1,529,211,000
15,282,110
At 30 June 2022 – Ordinary shares
3,375,532,033
33,745,320
At 1 July 2022 – Ordinary shares
Previous increase in authorised capital having expired
Increase in authorised share capital on 22 December 2022
At 30 June 2023 – Ordinary shares
2023
nO. OF SHArES
2023
nOminAL vALUE £
3,375,532,033
33,745,320
(1,529,211,000)
(15,282,110)
1,530,701,000
15,307,010
3,377,022,033
33,770,220
Ordinary shares participate in dividends and the proceeds on winding up the Company in proportion to the number of shares
held. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has
one vote on show of hands.
(b) Changes in Allotted, Called-up and Fully paid Share Capital and Share premium
Ordinary shares of 1p each at 1 July 2021
2,293,816,433
32,350,699
426,819,162
459,169,861
Share issue costs charge to share premium account
–
–
(25,922)
(25,922)
Ordinary shares of 1p at 30 June 2022
2,293,816,433
32,350,699
426,793,240
459,143,939
nO. OF
SHArES
nOminAL vALUE
US$
SHArE prEmiUm
US$
TOTAL
US$
nO. OF
SHArES
nOminAL vALUE
US$
SHArE prEmiUm
US$
TOTAL
US$
Ordinary shares of 1p each at 1 July 2022
2,293,816,433
32,350,699
426,793,240
459,143,939
Shares issued at £0.241 – Executive share issue
Shares issued at £0.274 – Executive share issue
1,336,182
898,886
16,572
10,602
382,845
280,439
399,417
291,041
Shares issued at $0.20 – Directors share issue
12 December 2022
Shares issued at $0.20 – Jiangxi share issue
12 December 2022
Shares issued at $0.20 – Maxit Capital share issue
12 December 2022
Shares issued on business acquisition – SolGold
Canada Inc.
2,000,000
20,000
380,000
400,000
155,000,000
1,550,000
29,450,000
31,000,000
23,000,000
230,000
4,370,000
4,600,000
525,954,360
6,285,372
–
6,285,372
Shares received for nil consideration and cancelled
(898,886)
(10,602)
(280,439)
(291,041)
Share issue costs charge to share premium account
–
–
(1,389,906)
(1,389,906)
Ordinary shares of 1p at 30 June 2023
3,001,106,975
40,452,643
459,986,179
500,438,822
138
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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nOTE 18 ALLOTTED, CALLED-Up AnD FULLy pAiD SHArE CApiTAL AnD rESErvES CONTINUED
(c) Other reserves
Own shares reserve1
Merger relief reserve2
GrOUp
2023
US$
(25,389,208)
78,692,861
GrOUp
2022
US$
–
–
COmpAny
2023
US$
–
78,692,861
COmpAny
2022
US$
–
–
Financial assets held at fair value through other
comprehensive income
–
2,047,393
–
2,047,393
Share based payment reserve
10,898,248
9,356,670
10,898,248
9,350,670
Other reserves3
Total Other reserves
714,450
(466,305)
–
–
90,305,559
10,931,758
89,591,109
11,398,063
1 Represents outstanding shares in the Company bought back with the acquisition of Cornerstone Capital Resources Inc.
2 The Group has applied merger relief under section 612 of the Companies Act 2006 as part of the acquisition of Cornerstone Capital Resources Inc.
3 Other reserves include Share based payment reserve and Employee benefit reserve.
Capital management
The Group’s objective when managing capital is to optimise long-term shareholder value, which includes: safeguarding the
Group’s ability to continue as a going concern; ensuring the Group has sufficient cash available to continue exploration and
development activities; and optimising its capital structure to minimize the cost of capital. Management manages share capital
and borrowings as capital. Management assesses the Group’s financial risks and adjusts its capital structure in response to
changes in these risks and in the market and these responses include share issues and borrowing considerations. Given the
nature of the Group’s current activities, the entity will remain dependent on a combination of equity and borrowed funding
in the short to medium term until such time as the Group becomes self-financing from the commercial production of mineral
resources. Management is meeting its capital management objectives by raising sufficient cash to enable the completion of
strategic milestones.
Borrowings (Note 21)
147,018,712
84,076,077
GrOUp
2023
US$
GrOUp
2022
US$
COmpAny
2023
US$
–
COmpAny
2022
US$
–
Equity attributable to owners of the parent company
312,925,789
332,439,678
468,200,169
365,967,980
459,944,501
416,515,755
468,200,169
365,967,980
nOTE 19 TrADE AnD OTHEr pAyABLES
Current
Trade payables
Accrued expenses
Other payables1
GrOUp
2023
US$
GrOUp
2022
US$
COmpAny
2023
US$
2,225,163
4,254,655
6,209,621
1,294,293
1,168,066
4,046,719
488,839
4,254,654
735,598
COmpAny
2022
US$
885,985
760,658
298,327
Trade and other current payables
12,689,439
6,509,078
5,479,091
1,944,970
1 Other payables include employee benefits payable and provisions for capitalised exploration and evaluation expenditure.
SOLGOLD pLC ANNUAL REPORT 2023
139
nOTE 20 LEASES
Current liability
Lease liability
Balance at the end of the reporting period
non-current liability
Lease liability
Balance at the end of the reporting period
(a) right-of-Use assets
At 1 July 2022
Additions
Depreciation
Foreign exchange movements
At 30 June 2023
(b) Lease liabilities
At 1 July 2022
Additions
GrOUp
2023
US$
379,239
379,239
GrOUp
2022
US$
415,132
415,132
COmpAny
2023
US$
299,594
299,594
COmpAny
2022
US$
309,668
309,668
169,457
169,457
326,374
326,374
26,164
26,164
303,573
303,573
GrOUp
prOpErTy,
pLAnT &
EQUipmEnT
US$
702,681
236,456
COmpAny
prOpErTy,
pLAnT &
EQUipmEnT
US$
570,807
–
(429,700)
(266,053)
(7,029)
502,408
(18,457)
286,297
GrOUp
US$
741,506
236,466
46,610
185
COmpAny
US$
613,242
–
34,702
–
(469,427)
(303,906)
(6,644)
548,696
(18,280)
325,758
Interest expense included in statement of profit and loss (note 6)
Interest expense capitalised
Lease payments
Foreign exchange movements
At 30 June 2023
The Group’s leasing activities include rental of office premises (111 Eagle Street and Industriestrasse 47), as well as the leasing
of various construction equipment in Ecuador.
140
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 nOTE 21 BOrrOWinGS
non-current liability
Net Smelter Royalty
Balance at the end of the reporting period
nSr Financing
Balance at beginning of reporting period
Additions – funds received under new agreements
Transaction costs
Accrued interest
Remeasurement of amortised cost
Balance at end of reporting period
NSR Financing Agreements
Franco-Nevada Corporation
Osisko Gold Royalties Ltd
Balance at end of reporting period
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GrOUp
2023
US$
GrOUp
2022
US$
147,018,712
84,076,077
147,018,712
84,076,077
84,076,077
106,574,217
50,000,000
(205,596)
–
–
13,148,231
12,505,564
–
(35,003,704)
147,018,712
84,076,077
94,579,463
84,076,077
52,439,249
–
147,018,712
84,076,077
On 11 September 2020, Franco-Nevada paid SolGold US$100 million, the Royalty Purchase Price under the NSR Financing
Agreement, less the amount of outstanding principal and interest under the US$15 million secured bridge loan pursuant to
the Bridge Loan Agreement. In return for the royalty purchase price, Franco-Nevada has been granted a perpetual 1% royalty
interest to be calculated by reference to net smelter returns from the Cascabel concession area. This financing arrangement is
classified as a financial liability at amortised cost and was recognised at the amount received adjusted for transaction costs paid.
Key terms to the financing include:
• Funding amount: US$100 million with upscale option to US$150 million (option has expired)
• Royalty terms: 1.0% NSR for $100 million
• Buy-back option: A 50% buy-back option exercisable at SolGold’s election for six years from closing at a price delivering
Franco-Nevada a 12% IRR
• Gold conversion: option in favour of Franco-Nevada to convert the NSR interest into a gold-only NSR interest (six years from
year two of operations). The amount of the gold net smelter return will be calculated on a net present value neutral basis
• Proceeds to fund the costs to complete the feasibility study, with any surplus to be used for SolGold’s share of the
development of Alpala
Financial liabilities classified at amortised cost are calculated using the Effective Interest Method, which allocates expenses at
a constant rate over the term of the investment. The Effective Interest Rate (EIR) is the internal rate of return of the liability at
initial recognition through the expected life of the financial liability. The EIR was calculated using the available development
plan at the time of recognising the NSR and results in a discount rate of 11.84% (real).
For the year ended 30 June 2022, a remeasurement of US$35,003,704 was recorded against the NSR financial liability, which
represented a gain. The remeasurement was triggered by Board approval in April 2022 of the Preliminary Feasibility Study
resulting in amendments to anticipated cash flows of the NSR agreement due to changes in the timing of construction and the
mine life and updated production volumes. This remeasurement was a non-cash flow book entry accounting for the financial
liability at amortised cost.
SOLGOLD pLC ANNUAL REPORT 2023
141
nOTE 21 BOrrOWinGS CONTINUED
Management has reviewed its assessment and considers that the buy-back option is not an embedded derivative which needs
to be separately accounted for as it is closely related. As such, it is not required to be accounted for as a separate instrument
in accordance with IFRS 9. In previous periods Management assessed that the fair value of this embedded derivative was nil
or immaterial, as there is no expectation or likelihood that the buy-back option will be exercised by SolGold.
On 2 December 2022, Osisko Gold Royalties Ltd (“Osisko”) paid SolGold US$50 million, the Royalty Purchase Price under a
new Royalty Financing Agreement announced on 7 November 2022. This financing arrangement is classified as a financial
liability at amortised cost and was recognised at the amount received adjusted for transaction costs paid.
In return for the royalty purchase price, Osisko has been granted a perpetual 0.6% royalty interest to be calculated by
reference to net smelter returns from the Cascabel concession area in accordance with the terms and conditions set out in the
agreement. Financial liabilities classified at amortised cost are calculated using the Effective Interest Method, which allocates
expenses at a constant rate over the term of the investment. The Effective Interest Rate (EIR) is the internal rate of return
of the liability at initial recognition through the expected life of the financial liability, which in this case is the time from the
recognition until the end of the mine life of the Alpala mine.
Key terms to the financing include:
• Funding amount: US$50 million
• Royalty terms: 0.6% NSR for $50 million
• Buy-back option: A 33.3% buy-back option exercisable at SolGold’s election for four years from closing at a price delivering
Osisko a 12% IRR. The buy-back option can be exercised annually, in November, subject to the Royalty Financing Agreement.
Key inputs for the estimation of future cash flows of the effective interest rate are:
• All operating assumptions are based on the latest available development plan, which was consistent with the plan used for
the Franco-Nevada NSR Financing Agreement
• Gold price of US$1,700 per ounce
• Copper price of US$7,937 per tonne
• Silver price of US$19.90 per ounce
The EIR was calculated using the available development plan at the time of recognising the NSR and results in a discount rate
of 8.87% (real). The financial liability will be re-measured using the latest QP approved assumptions from the Technical Report.
Management has performed an assessment and considers that the buy-back option is an embedded derivative which needs
to be separately accounted for as it is not closely related. However, management has assessed that the fair value of this
embedded derivative is nil at 30 June 2023.
The financial liability for both NSRs will be re-measured using the latest QP approved assumptions from the Technical Report
when this is materially updated.
nOTE 22 OTHEr FinAnCiAL LiABiLiTiES
movements in financial liabilities
Balance at 1 July
Additions
GrOUp
2023
US$
2022
US$
COmpAny
2023
US$
2022
US$
2,387,000
2,926,000
2,387,000
2,926,000
–
–
–
–
Fair value adjustment through profit or loss
(2,147,000)
(539,000)
(2,147,000)
(539,000)
Balance at 30 June
240,000
2,387,000
240,000
2,387,000
Other financial liabilities consist of the derivative liability for options issued to BHP as part of the share subscriptions on 2
December 2019. The fair values of these financial liabilities approximate their carrying amounts principally due to their short-
term nature or the fact that they are measured and recognised at fair value.
142
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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nOTE 22 OTHEr FinAnCiAL LiABiLiTiES CONTINUED
The following table represents the Group and Company’s financial liabilities measured and recognised at fair value.
2023
Derivative liability at fair value through profit or loss
2022
Derivative liability at fair value through profit or loss
–
–
–
–
240,000
240,000
2,387,000
2,387,000
US$
LEvEL 1
US$
LEvEL 2
US$
LEvEL 3
US$
TOTAL
The derivative liability at fair value through profit or loss has been valued using the Monte Carlo Simulation method.
FAir vALUE OF SHArE OpTiOnS AnD ASSUmpTiOnS
Number of options (Note 23)
Share price at valuation date
Exercise price
Expected volatility
Time to expiry
Expected dividends
Risk-free interest rate (short-term)
Fair value
Valuation methodology
FOr THE FinAnCiAL yEAr EnDED 30 JUnE 2023/2022
2023
£0.37 OpTiOnS
30 JUnE 2023
2022
£0.37 OpTiOnS
30 JUnE 2022
19,250,000
19,250,000
£0.159
£0.37
57.3%
£0.292
£0.37
65.7%
1.43 years
2.43 years
0.00%
5.31%
$0.012
0.00%
1.91%
$0.124
Monte Carlo
Value
Monte Carlo
Value
2023
US$
2022
US$
Derivative liability recognised in other comprehensive profit/(loss)
(2,147,000)
(539,000)
nOTE 23 SHArE OpTiOnS
At 30 June 2023 the Company had 95,028,125 options outstanding for the issue of ordinary shares (2022: 32,250,000).
Options
Share options are granted to employees under the company’s Employee Share Option Plan 2023 (“ESOP”) and Directors
under the Long-Term Incentive Plan (“LTIP”). The ESOP and LTIP is designed to align participants’ interests with those of
shareholders.
Unless otherwise documented with the Company, when a participant ceases employment prior to the vesting of their share
options, the share options are forfeited after 90 days unless cessation of employment is due to termination for cause,
whereupon they are forfeited immediately.
The contractual life of each option granted is between two to ten years. There are no cash settlement alternatives.
Each option can be exercised from vesting date to expiry date for one share with the exercise price payable in cash.
SOLGOLD pLC ANNUAL REPORT 2023
143
nOTE 23 SHArE OpTiOnS CONTINUED
Share options issued
There were 79,778,125 options granted during the year ended 30 June 2023 (2022: 3,000,000).
On 1 July 2022, the Company issued a combined total of 10,000,000 share options over ordinary shares of the company
to Mr Darryl Cuzzubbo, former Chief Executive Officer and Managing Director, in accordance with the Company’s Directors
Remuneration Policy and Long-Term Incentive Plan Rules. The share options were subsequently forfeited on 10 November 2022.
On 24 February 2023, the Company issued a combined total of 33,778,125 replacement share options over ordinary shares
of the Company to option holders of Cornerstone. In accordance with the terms of the Arrangement Agreement, 15 SolGold
options were granted for every 1 Cornerstone option held by option holders as below:
• 10,303,125 options are exercisable at CAD0.29 and expire on 12 September 2023.
• 6,375,000 options are exercisable at CAD0.27 and expire on 6 August 2024.
• 7,350,000 options are exercisable at CAD0.27 and expire on 10 August 2026.
• 4,125,000 options are exercisable at CAD0.30 and expire on 29 March 2027.
• 5,625,000 options are exercisable at CAD0.22 and expire on 13 July 2027.
On 17 March 2023, the Company issued a combined total of 30,000,000 share options over ordinary shares of the company to
Mr Scott Caldwell, Chief Executive Officer and Managing Director, in accordance with the Company’s Directors Remuneration
Policy and LTIP Rules. The options will vest in three years, subject to applicable Performance Conditions.
On 18 April 2023, the Company issued a combined total of 6,000,000 share options over ordinary shares of the company
to Mr Chris Stackhouse, Chief Financial Officer, in accordance with the Company’s ESOP Rules. The options will vest in three
years, with exercise prices of £0.1982, £0.21 and £0.25.
DATE OF GrAnT
EXErCiSABLE FrOm
EXErCiSABLE TO
2 December 20191 The options vested immediately and
EXErCiSE
priCE
nUmBEr
GrAnTED
nUmBEr AT
30 JUnE 2023
27 April 2020
2 March 2021
exercisable through to 2 December 2024
2 December 2024
£0.37
19,250,000 19,250,000
The options vested immediately and
expired on 26 April 2023
n/a
£0.25
7,000,000
–
The options vested immediately and are
exercisable through to 2 March 2024
2 March 2024
£0.36
3,000,000
3,000,000
24 February 2022 The options vested immediately and are
exercisable through to 15 June 2024
15 June 2024
£0.26
3,000,000
3,000,000
1 July 2022
1 July 2022
1 July 2022
The options were forfeited on
10 November 2023
The options were forfeited on
10 November 2023
The options were forfeited on
10 November 2023
24 February 2023 The replacement options vested
and are exercisable through to
12 September 2023
24 February 2023 The replacement options vested
and are exercisable through to
6 August 2024
24 February 2023 The replacement options vested
and are exercisable through to
10 August 2026
24 February 2023 The replacement options vested
and are exercisable through to
29 March 2027
n/a
n/a
n/a
£0.292
4,000,000
£0.35
3,000,000
£0.50
3,000,000
–
–
–
12 September 2023
£0.174
10,303,125
10,303,125
6 August 2024
£0.162
6,375,000
6,375,000
10 August 2026
£0.162
7,350,000
7,350,000
29 March 2027
£0.182
4,125,000
4,125,000
24 February 2023 The replacement options vested and are
exercisable through to 13 July 2027
13 July 2027
£0.133
5,625,000
5,625,000
144
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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Share options issued continued
DATE OF GrAnT
EXErCiSABLE FrOm
EXErCiSABLE TO
EXErCiSE
priCE
nUmBEr
GrAnTED
nUmBEr AT
30 JUnE 2023
17 March 2023
18 April 2023
18 April 2023
18 April 2023
The options will vest in 3 years and are
exercisable to 17 March 2033
The options will vest in 12 months and
are exercisable to 18 April 2033
The options will vest in 24 months and
are exercisable to 18 April 2033
The options will vest in 36 months and
are exercisable to 18 April 2033
17 March 2033
£0.17 30,000,000 30,000,000
18 April 2033
£0.1982
2,000,000
2,000,000
18 April 2033
£0.21
2,000,000
2,000,000
18 April 2033
£0.25 2,000,000
2,000,000
112,028,125
95,028,125
1 Options issued to BHP as part of the share subscriptions on 2 December 2019 and exercisable at £0.37 within 5 years. These options fall outside the scope of
IFRS 2 and are classified as a derivative financial liability as they do not meet the fixed for fixed test.
Share based payments
The number and weighted average exercise price of share options are as follows:
WEiGHTED
AvErAGE
EXErCiSE priCE
2023
nUmBEr OF
OpTiOnS
2023
WEiGHTED
AvErAGE
EXErCiSE priCE
2022
nUmBEr OF
OpTiOnS
2022
Outstanding at the beginning of the year
£0.33
32,250,000
£0.53
106,875,000
Exercised during the year
Expired/lapsed during the year
Forfeited during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
–
£0.25
£0.37
£0.20
£0.22
£0.25
–
–
–
(7,000,000)
£0.60
(77,625,000)
(10,000,000)
79,778,125
95,028,125
59,028,125
–
£0.26
£0.32
£0.32
–
3,000,000
32,250,000
32,250,000
The options outstanding at 30 June 2023 have an exercise price of £0.133, £0.162, £0.17, £0.174, £0.182, £0.1982, £0.21, £0.25,
£0.26, £0.292, £0.35, £0.36, £0.37, £0.50 (2022: £0.25, £0.26, £0.36 and £0.37) and a weighted average contractual life of
4.76 years (2022: 1.97 years).
Share options held by the following individuals are as follows:
SHArE OpTiOnS HELD
Scott Caldwell
Chris Stackhouse
Former Cornerstone option holders
AT 30 JUnE 2023
AT 30 JUnE 2022
OpTiOn priCE
EXErCiSE pEriOD
30,000,000
6,000,000
33,778,125
–
£0.17
17/3/2026 – 16/3/2033
– £0.1982 – £0.25
18/4/2024 – 17/4/2033
–
£0.133 – £0.182
24/2/2023 – 13/7/2027
The fair value of services received in return for share options granted is measured by reference to the fair value of share
options granted. This estimate is based on the Black-Scholes model considering the effects of the vesting conditions, expected
exercise period and the dividend policy of the Company.
SOLGOLD pLC ANNUAL REPORT 2023
145
nOTE 23 SHArE OpTiOnS CONTINUED
Share based payments continued
FAir vALUE OF SHArE
OpTiOnS AnD ASSUmpTiOnS
2023
rEpLACEmEnT
OpTiOnS
(WEiGHTED
AvErAGE)
24 FEBrUAry 2023
2023
£0.17 OpTiOnS
17 mArCH 2023
2023
£0.1982 OpTiOnS
18 ApriL 2023
2023
£0.20 OpTiOnS
18 ApriL 2023
2023
£0.25 OpTiOnS
18 ApriL 2023
Number of options
33,778,125
30,000,000
2,000,000
2,000,000
2,000,000
Share price at issue date
Exercise price
Expected volatility
Option life (years)
Expected dividends
Risk-free interest rate
Fair value
£0.203
£0.248
77.28%
2.42
0.00%
2.56%
£0.165
£0.1758
£0.17
62.887%
10
0.00%
3.23%
£0.073
£0.203
£0.1982
61.37%
5.5
0.00%
3.57%
£0.118
£0.203
£0.21
60.33%
6.0
0.00%
3.56%
£0.118
£0.203
£0.25
61.34%
6.5
0.00%
3.56%
£0.116
Valuation methodology
Black-Scholes
Monte Carl
Black-Scholes
Black-Scholes
Black-Scholes
FOr THE FinAnCiAL yEAr
EnDED 30 JUnE 2023
US$
US$
US$
US$
US$
Share based payment expense recognised in statement of statement
of profit or loss and other comprehensive income
202,485
263,012
73,116
36,647
24,007
Share based payment expense recognised in statement of statement of profit or loss and other
comprehensive income
2023
2022
998,682
454,336
nOTE 24 FinAnCiAL inSTrUmEnTS (GrOUp AnD COmpAny)
Financial instruments by category (Group)
FinAnCiAL ASSETS
Cash and cash equivalents
Other receivables
Financial assets at amortised cost
Loans receivable and other current assets
Equity investments
Total financial assets
FinAnCiAL LiABiLiTiES
Trade and other payables
Derivative liability
NSR
Lease liabilities
FinAnCiAL ASSETS
AT AmOrTiSED COST (US$)
FinAnCiAL ASSETS HELD
AT FAir vALUE THrOUGH OCi (US$)
2023
2022
2023
2022
32,481,606
26,102,133
2,104,349
1,729,033
2,099,527
–
1,807,935
1,749,213
3,553,291
–
38,414,515
33,212,572
–
–
–
–
–
–
–
–
5,328
5,328
5,351,844
5,351,844
FinAnCiAL LiABiLiTiES
AT AmOrTiSED COST (US$)
FinAnCiAL LiABiLiTiES AT FAir
vALUE THrOUGH prOFiT Or LOSS (US$)
2023
2022
6,479,818
1,864,4901
2023
–
2022
–
–
–
240,000
2,387,000
147,018,712
84,076,077
548,696
741,506
–
–
–
–
Total financial liabilities
154,047,226
86,682,073
240,000
2,387,000
1 Amount previously reported included balances that were not financial liabilities.
146
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 nOTE 24 FinAnCiAL inSTrUmEnTS (GrOUp AnD COmpAny) CONTINUED
Financial instruments by category (Company)
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Loans receivable and other current assets
2,099,527
3,553,291
FinAnCiAL ASSETS
Cash and cash equivalents
Other receivables
Financial assets at amortised cost
Loans with subsidiaries
Equity investments
Total financial assets
FinAnCiAL LiABiLiTiES
Trade and other payables
Derivative liability
Lease liabilities
FinAnCiAL ASSETS
AT AmOrTiSED COST (US$)
FinAnCiAL ASSETS HELD
AT FAir vALUE THrOUGH OCi (US$)
2023
2022
2023
2022
29,041,499
21,032,524
14,335
734,248
623,282
756,332
181,525,074
185,599,916
–
–
213,414,683
211,565,345
–
–
–
–
–
–
–
–
–
–
–
–
5,346,323
5,346,323
FinAnCiAL LiABiLiTiES
AT AmOrTiSED COST (US$)
FinAnCiAL LiABiLiTiES AT FAir
vALUE THrOUGH prOFiT Or LOSS (US$)
2023
2022
4,743,494
1,407,2501
2023
–
2022
–
–
–
240,000
2,387,000
325,758
613,241
–
–
Total financial liabilities
5,069,252
2,020,491
240,000
2,387,000
1 Amount previously reported included balances that were not financial liabilities.
If required, the Board of Directors determines the degree to which it is appropriate to use financial instruments, commodity
contracts or other hedging contracts or techniques to mitigate risks. The main risks for which such instruments may be
appropriate are foreign currency risk and liquidity risk, each of which is discussed below. The main credit risk is the non-
collection of loans and other receivables which include refunds and tenement security deposits. There were no overdue
receivables at year end, apart from the amounts owing for the CFLP (Note 14).
For the Company, the main credit risk is the non-collection of loans made to its subsidiaries. The Directors expect to collect the
loans through the successful exploration and subsequent exploitation of the subsidiaries’ tenements.
There have been no changes in financial risks from the previous year. During the years ended 30 June 2023 and 2022 no
trading in commodity contracts was undertaken.
market risk
interest rate risks
The Group’s and Company’s policy is to retain its surplus funds on the most advantageous terms of deposit available up to
twelve months’ maximum duration. The increase/decrease of 2% in interest rates will impact the Group’s income statement by
a gain/loss of US$649,630 (2022: US$522,043) and the Company’s income statement by US$580,830 (2022: US$420,650).
The Group considers that a +/- 2% movement in interest rates represents reasonable possible changes.
Foreign currency risk
The Group has potential currency exposures in respect of items denominated in foreign currencies comprising:
• Transactional exposure in respect of operating costs, capital expenditures and, to a lesser extent, in currencies other than
the functional currency of operations which require funds to be maintained in currencies other than the functional currency
of operation; and
• Translation exposures in respect of investments in overseas operations which have functional currencies other than United
States dollars.
Currency risk in respect of non-functional currency expenditure is reviewed by the Board.
SOLGOLD pLC ANNUAL REPORT 2023
147
nOTE 24 FinAnCiAL inSTrUmEnTS (GrOUp AnD COmpAny) CONTINUED
market risk continued
The table below shows the extent to which Group companies have monetary assets and liabilities in different currencies. Foreign
exchange differences on retranslation of such assets and liabilities are taken to the statement of comprehensive income.
GrOUp
nET FinAnCiAL ASSETS/(LiABiLiTiES)
2023
Australian dollar (AU$)
Canadian dollar (CAD)
Pound Sterling (GBP)
Swiss franc (CHF)
Chilean Peso (CLP)
GrOUp
nET FinAnCiAL ASSETS/(LiABiLiTiES)
2022
Australian dollar (AU$)
Solomon Island dollar (SBD)
Canadian dollar (CAD)
Pound Sterling (GBP)
Swiss franc (CHF)
COmpAny
nET FinAnCiAL ASSETS/(LiABiLiTiES)
2023
Australian dollar (AU$)
Canadian dollar (CAD)
Pound Sterling (GBP)
COmpAny
nET FinAnCiAL ASSETS/(LiABiLiTiES)
2022
Australian dollar (AU$)
Canadian dollar (CAD)
Pound Sterling (GBP)
FUnCTiOnAL CUrrEnCy OF EnTiTy
AU$
US$
TOTAL
31,508
–
–
–
–
221,677
139,292
138,337
66,286
13,471
31,508
579,063
253,185
139,292
138,337
66,286
13,471
610,571
FUnCTiOnAL CUrrEnCy OF EnTiTy
AU$
US$
TOTAL
35,890
4,477,773
4,513,663
23
–
–
–
–
1,155,292
2,097,138
162,691
23
1,155,292
2,097,138
162,691
35,913
7,892,894
7,928,807
FUnCTiOnAL CUrrEnCy OF EnTiTy
AU$
US$
TOTAL
–
–
–
–
95,862
79,641
138,337
313,840
95,862
79,641
138,337
313,840
FUnCTiOnAL CUrrEnCy OF EnTiTy
AU$
US$
TOTAL
–
–
–
–
4,347,334
4,347,334
1,147,090
2,097,138
1,147,090
2,097,138
7,591,562
7,591,562
148
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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nOTE 24 FinAnCiAL inSTrUmEnTS (GrOUp AnD COmpAny) CONTINUED
market risk continued
The main currency exposure relates to the effect of re-translation of the Group’s assets and liabilities in Australian dollar (AUD)
and the Pound Sterling (GBP). A 10% increase in the AU$/US$ and GBP/US$ exchange rates would give rise to a change of
approximately US$39,152 (2022: US$734,533) in the Group’s net assets and reported earnings. A 10% decrease in the AU$/
US$ and GBP/US$ exchange rates would give rise to a change of approximately US$23,420 (2022: US$600,981). The Group
does not hedge foreign currency exposures and manages net exposures by buying and selling foreign currencies at spot rates
where necessary. In respect of other monetary assets and liabilities held in currencies other than United States dollars, the
Group ensures that the net exposure is kept to an acceptable level, by buying or selling foreign currencies at spot rates where
necessary to address short-term imbalances.
Credit risk
The Group is exposed to credit risk primarily from the financial institutions with which it holds cash and cash deposits and
loans receivable under the CFLP. Credit risk of the CFLP is also linked to market risks due to the Company’s underlying shares
held as security for repayment of the CFLP.
The banks and their credit ratings with which the Group had cash accounts at 30 June 2023 were US$29,413,786 in cash
accounts with Westpac Banking Corporation (A+) in Australia, US$2,645,160 in cash accounts with Banco Guayaquil (B-)
in Ecuador, US$11,291 in cash accounts with Produbanco (B-) in Ecuador, US$18,914 in cash accounts with Lloyds Bank (A),
US$107,548 in cash accounts with Credit Suisse (C) in Switzerland, US$197,044 in cash accounts with Banco del Pichincha
(B) in Ecuador, US$13,471 in cash accounts with Banco Itau (BB) in Chile, US$63,689 in cash accounts with the Royal Bank of
Canada (AA-) in Canada and US$10,602 in petty cash. Including other receivables, the maximum exposure to credit risk at the
reporting date is the carrying value of these assets and was US$39,047,192 (2022: US$30,844,289).
The Company is also exposed to credit risk due to the cash balance it holds directly. It is also exposed to credit risk on the
CFLP receivable. At 30 June 2023, the Company had US$29,041,499 in cash and cash equivalents (2022: US$21,032,524)
and US$2,099,527 of CFLP receivable (2022: US$3,553,291). The maximum exposure to credit risk at the reporting date was
US$31,141,026 (2022: US$24,585,815).
Credit risk is managed by dealing with banks with high credit ratings assigned by international credit rating agencies.
Furthermore, funds are deposited with banks of high standing in order to obtain market interest rates. Credit risk over the
CFLP is reduced due to the loan being secured by shares and the Company has full recourse to recover the loans from the
employees in the event that there is a shortfall when the shares are exercised.
Liquidity risks
The Group and Company raises funds as required on the basis of budgeted expenditure for the next 12 to 24 months,
dependent on a number of prevailing factors. Funds are generally raised in capital markets from a variety of eligible private,
corporate and fund investors, or from interested third parties (including other exploration and mining companies) which may
be interested in earning or purchasing an interest in the Group’s projects. The success or otherwise of such capital raisings is
dependent upon a variety of factors including general equities and metals market sentiment, macro-economic outlook, project
perspectivity, operational risks and other factors from time to time. When funds are sought, the Group balances the costs and
benefits of equity financing versus alternate financing options. Funds are provided to local sites monthly, based on the sites’
forecast expenditure.
The amounts disclosed in the table are the contractual undiscounted cash flows. All liabilities held by the Group and Company
are contractually due and payable within 1 year, excluding the non-current lease liability payments, NSR financing agreement
and derivative liabilities which are greater than 12 months as set in the table overleaf:
SOLGOLD pLC ANNUAL REPORT 2023
149
nOTE 24 FinAnCiAL inSTrUmEnTS (GrOUp AnD COmpAny) CONTINUED
Liquidity risks continued
COnTrACTUAL mATUriTiES
OF FinAnCiAL LiABiLiTiES (US$)
LESS THAn
6 mOnTHS
6–12 mOnTHS
1 AnD 2 yEArS
2 AnD 5 yEArS
BETWEEn
BETWEEn
OvEr
5 yEArS
TOTAL
COnTrACTUAL
CASH FLOWS
As at 30 June 2023
Trade payables
Borrowings
Lease liabilities
6,479,818
–
–
–
–
–
205,165
205,165
185,778
Derivative liabilities
–
–
240,000
–
–
6,479,818
– 694,054,604 694,054,604
–
–
–
–
596,108
240,000
Total
6,684,983
205,165
425,778
– 694,054,604 701,370,530
COnTrACTUAL mATUriTiES
OF FinAnCiAL LiABiLiTiES (US$)
LESS THAn
6 mOnTHS
6–12 mOnTHS
1 AnD 2 yEArS
2 AnD 5 yEArS
BETWEEn
BETWEEn
OvEr
5 yEArS
TOTAL
COnTrACTUAL
CASH FLOWS
As at 30 June 2022
Trade payables
Borrowings1
Lease liabilities
Derivative liabilities
–
–
–
2,387,000
6,509,078
–
–
–
–
–
–
–
6,509,078
– 694,054,604 694,054,604
207,566
207,566
326,374
–
–
–
741,506
2,387,000
Total
6,716,644
207,566
326,374
2,387,000 694,054,604
703,692,188
1 Amount previously reported at amortized cost and has been corrected to undiscounted future payments.
Fair values
In the Directors’ opinion, there is no material difference between the book value and fair value of the Group’s and Company’s
financial instruments, except Borrowings. The Group has determined that the fair value of total Borrowings at 30 June 2023 is
US$147,018,712 (2022: US$84,076,077).
All the Group’s financial assets, with the exception of investments held at fair value through other comprehensive income, are
categorised as other financial assets at amortised cost.
nOTE 25 COmmiTmEnTS
The Group also has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may
be varied from time to time and are expected to be fulfilled in the normal course of operations of the Group.
The combined commitments of the Group related to its granted tenement interests are as follows:
LOCATiOn
Ecuador1
Queensland
Up TO
12 mOnTHS (US$)
13 mOnTHS
TO 5 yEArS (US$)
LATEr THAn
5 yEArS (US$)
11,957,940
278,752
12,236,692
–
754,126
754,126
–
–
–
1 Ecuadorian tenement area exploration commitments are made on a calendar year basis. This amount represents the calendar 2023 commitment amount.
To keep tenements in good standing, work programmes should meet certain minimum expenditure requirements. If the
minimum expenditure requirements are not met, the Group has the option to negotiate new terms or relinquish the tenements.
The Group also has the ability to meet expenditure requirements by joint venture or farm in agreements.
150
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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nOTE 26 rELATED pArTiES
(a) Group
Transactions between related parties are on normal commercial terms and conditions and are no more favourable than those
available to other parties unless otherwise stated.
i.
The Company had a commercial agreement with Samuel Capital Pty Ltd (“Samuel”) for the engagement of Nicholas
Mather as Non-Executive Director of the Company. For the year ended 30 June 2023, US$74,741 was paid or owed to
Samuel (2022: US$72,205). These amounts are included in Note 5 (Remuneration of Key Management Personnel). The
total amount outstanding at year end is US$6,106 (2022: US$6,330).
ii. Mr James Clare (a Director), is a partner in the Canadian law firm, Bennett Jones LLP and also a shareholder in the
Company. For the year ended 30 June 2023, Bennett Jones were paid or owed US$1,574,012 (2022: US$301,730) for the
provision of legal services to the Company. The services were based on normal commercial terms and conditions. The total
amount outstanding at year end was US$nil (2022: US$nil).
iii. The Company had various commercial agreements with Maxit Capital LP, a shareholder of the Company. For the year ended
30 June 2023, US$5,182,210 was paid to Maxit Capital LP for the provision of advisory services to the Company. The services
were based on normal commercial terms and conditions. The total amount outstanding at year end was US$nil (2022: US$nil).
iv. D.R. Loveys and Associates Inc., a service company owned by David Loveys, a director of SolGold Canada Inc. and former
Chief Financial Officer for SolGold Canada Inc., provided the Company with accounting and management consulting
services. For the year ended 30 June 2023, US$54,849 was paid to D.R. Loveys and Associates Inc. for the provision of
advisory services to the Company. The services were based on normal commercial terms and conditions.
v. Computershare Investor Services PLC, a shareholder of the Company provided the Company with share registry services.
For the year ended 30 June 2023, US$27,657 was paid (2022: US$27,389). The services were based on normal commercial
terms and conditions.
vi. Repayments totalling $US4,522 were made to the Company by former employees as beneficiaries of the of the Company
Funded Loan Plan.
vii. Loyer CMS LLC, a consultancy company owned by Harold ‘Bernie’ Loyer, a former employee, provided management
consulting services to the Group. For the year ended 30 June 2023, US$695,513 (2022: nil) was paid to Loyer CMS LLC
for the provision of management services, including termination of contract costs. The services were based on normal
commercial terms and conditions.
Share and Option transactions of Directors are shown under Notes 5, 18 and 23.
(b) Company
The Company has related party relationships with its subsidiaries (see Note 9 and Note 10), Directors and other key personnel
(see Notes 5, 18 and 23).
Subsidiaries
The Company has an investment in subsidiaries balance of US$261,014,637 (2022: US$152,964,303). The transactions during
the year have been included in Note 9. The Company also has an intercompany loan with SolGold Finance AG with a balance of
US$181,525,074 (2022: US$185,599,916). The transactions during the year have been included in Note 10.
(c) Controlling party
In the Directors’ opinion there is no ultimate controlling party.
nOTE 27 COnTinGEnT ASSETS AnD LiABiLiTiES
A 2% net smelter royalty is payable to Santa Barbara Resources Limited, who were the previous owners of the Cascabel
tenements. These royalties can be bought out by paying a total of approximately US$4,000,000. Fifty percent (50%) of the
royalty can be purchased for approximately US$1,000,000 90 days following the completion of a definitive-feasibility study
and the remaining 50% of the royalty can be purchased for approximately US$3,000,000 90 days following a production
decision. The smelter royalty is considered to be a contingent liability as the Group has not yet completed a definitive-
feasibility study at 30 June 2023 and as such there is significant uncertainty over the timing of any payments that may fall due.
The terms of the Term Sheet (“Term Sheet”) previously signed between SolGold plc, Cornerstone Capital Resources Inc.
(“CGP”), CGP’s subsidiary Cornerstone Ecuador S.A. (“CESA”), and Exploraciones Novomining S.A. (“ENSA”) is now an internal
arrangement due to the Company’s acquisition of the remaining shares of CGP executed on 24 February 2023. The amount
receivable from CESA and associated provision for impairment was therefore derecognised.
A provision of US$716,170 has been recognised at 30 June 2023 for legal and employee expenses.
There are no other material contingent assets and liabilities.
SOLGOLD pLC ANNUAL REPORT 2023
151
nOTE 28 ACQUiSiTiOn OF COrnErSTOnE
On 24 February 2023, SolGold acquired all of the issued and outstanding shares of Cornerstone Capital Resources Inc.
(“Cornerstone”), other than Cornerstone Shares already held, directly or indirectly, by SolGold. The acquisition is expected to
significantly strengthen the ability of the Group to create value for shareholders by consolidating ownership of the Cascabel
Project, along with a robust portfolio of other projects primarily across Ecuador.
Consideration for the acquisition was paid using SolGold shares and options, with Cornerstone Shareholders receiving 15
SolGold shares and options for each Cornerstone share and option (Note 24) respectively. The acquisition consisted of the
repurchase of the Group’s non-controlling interest in ENSA, the purchase of the Company’s own shares and acquisition of
Cornerstone’s net identifiable assets. Details of the purchase consideration, the net assets acquired, and goodwill are as follows:
pUrCHASE COnSiDErATiOn
Cash paid
Shares issued to shareholders of Cornerstone (94.5%)
Replacement Options of Cornerstone options holders
Total consideration paid
Fair value of SolGold’s existing ownership in Cornerstone (5.5%)
Less: Consideration for Cornerstone’s existing ownership in Exploraciones Novomining S.A (15%)
Less: Fair value of Cornerstone’s existing ownership in SolGold (6.3%)
Total consideration paid for the remaining business
$US
Nil
84,978,233
1,876,910
86,855,143
4,984,731
(64,417,777)
(25,389,208)
2,032,890
The fair value of the 525,954,360 shares issued as part of the consideration paid for Cornerstone was based on the published
share price on 24 February 2023 of £0.1352 per share. The fair value of the 33,778,125 replacement options issued was
calculated using the Black–Scholes pricing model.
The assets and liabilities recognised as a result of the acquisition are as follows:
CALCULATiOn OF GOODWiLL
Cash and cash equivalents
Financial assets held at fair value through OCI
Other receivables and prepayments
Property, plant and equipment
Trade and other payables
net identifiable assets acquired
Goodwill
$US
1,047,190
827
1,166,756
226,622
(408,505)
2,032,890
nil
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
liabilities incurred to the former owners of the acquired business
• fair values of the assets transferred
•
• equity interests issued by the Group
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
152
SOLGOLD pLC ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 30 June 2023 i
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nOTE 28 ACQUiSiTiOn OF COrnErSTOnE CONTINUED
The excess of the:
• consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity.
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Acquisition-related costs
Acquisition-related costs of US$16,054,495 that were not directly attributable to the issue of shares are included in
administrative expenses in the statement of profit or loss and in operating cash flows in the statement of cash flows.
purchase Consideration – Cash Outflow
inFLOW/(OUTFLOW) OF CASH TO ACQUirE SUBSiDiAry, nET OF CASH ACQUirED
Cash consideration
Less: Balances acquired
Cash and cash equivalents
net inflow of cash – investing activities
nOTE 29 SUBSEQUEnT EvEnTS
$US
Nil
1,047,190
1,047,190
On 17 July 2023, the Group completed negotiations for the renewal of the mining concession for the Cascabel Project. The
Northern Zonal Coordination of the Ministry of Energy and Mines issued the renewal of the Cascabel Mining Concession (Code
402288) for a period 25 years until 2048.
On 20 July 2023, the Group completed negotiations with the Government of Ecuador for the Exploitation Agreement in
relation to the Cascabel Project. SolGold plc, through its wholly owned subsidiary in Exploraciones Novomining S.A. negotiated
the right to develop the Cascabel Project and produce copper, gold, and silver from the contract area for 33 years, which may
be renewed. The Group and the Government of Ecuador agreed to an advanced royalty payment totalling $75 million, with $25
million due upon the concentrator construction start date. The remaining two payments, each of $25 million, will be made on
the first and second anniversary, respectively, from the date of the first payment. The actual royalty on net smelter revenues
ranges from 3% to 8%. Revenue from the royalties collected by the government will be allocated to productive and sustainable
projects through the municipal governments and parish councils of the communities of the Cascabel Project.
In July and August 2023, the Company granted 10,500,000 employee options to various members of management in
accordance with the Employee Share Option Plan 2023. The options have exercise prices of £0.17, £0.21 and £0.25 and vest in
12 months, 24 months and 36 months (respectively).
The Directors are not aware of any other significant changes in the state of affairs of the Group or events after the reporting
date that would have a material impact on the consolidated or Company financial statements.
SOLGOLD pLC ANNUAL REPORT 2023
153
G R I C O N T E N T I N D E X
DiSCLOSUrE
Gri 2: General disclosures
2-1
Organisational details
COmmEnTAry/SECTiOn AnD pAGE nUmBEr
rEFErEnCES FOr THE Fy2023 AnnUAL rEpOrT
EXTErnAL
ASSUrAnCE
The Story of SolGold: Pages 4 and 5
Throughout this Annual Report 2023
2-2
2-3
2-4
2-5
2-6
Entities included in the organisation’s
sustainability reporting
SolGold Corporate Structure: Page 2
Notes to the Financial Statements: Page 107
Reporting period, frequency and
contact point
Chair’s Review: Pages 6 and 7
Chief Executive’s Review: Pages 8 and 9
Directors’ Report: Pages 83 to 87
Restatements of information
N/A
External assurance
Activities, value chain and other business
relationships
Independent Auditors’ Report to the
Members of SolGold Plc: Pages 90 to 98
Business Model: Pages 10 and 11
Engaging with our Stakeholders: Pages 30 to 33
Sustainability Report: Pages 34 to 36
Corporate Governance statement: Pages 50 to 53
Stakeholder engagement: Page 59
2-7
Employees
Engaging with our Stakeholders: Page 30 to 33
Sustainability Report and TCFD Disclosures: Pages 34 to 47
2-8
2-9
Workers who are not employees
Engaging with our Stakeholders: Pages 30 to 33
Governance structure and composition
Corporate Governance Statement: Pages 50 to 53
Executive Management Team: Page 56
Board Leadership and Company Purpose: Pages 57 and 58
2-10
Nomination and selection of the highest
governance body
Risk Management: Pages 22 to 28
Nomination Committee Report: Page 64
2-11
Chair of the highest governance body
Chair’s Review: Pages 6 and 7
Corporate Governance Statement: Pages 50 to 53
Board Leadership and Company Purpose: Pages 57 and 58
2-12
Role of the highest governance body in
overseeing the management of impacts
Corporate Governance Statement: Pages 50 to 53
Executive Management Team: Page 56
Board Leadership and Company Purpose: Pages 57 and 58
Division of Responsibilities: Pages 60 to 62
Directors’ Report: Pages 83 to 87
Directors’ Responsibility Statement: Page 88
2-13
Delegation of responsibility for
managing impacts
Executive Management team: Pages 56
Division of Responsibilities: Pages 60 to 62
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2-15
2-16
2-17
2-18
Role of the highest governance
body in sustainability reporting
Environmental, Social and Governance
Committee Report: Page 68
Conflicts of interest
Division of Responsibilities: Pages 60 to 62
Communication of critical concerns
Engaging with our Stakeholders: Pages 30 to 33
Corporate Governance Statement: Pages 50 to 53
Stakeholder Engagement: Page 59
Collective knowledge of the highest
governance body
Board Leadership and Company Purpose: Pages 57 and 58
Evaluation of the performance of the
highest governance body
Corporate Governance statement: Pages 50 to 53
Stakeholder Engagement: Page 59
2-19
Remuneration policies
Directors’ Remuneration Policy: Pages 81 and 82
2-20
Process to determine remuneration
Directors’ Remuneration Report: Pages 70 and 71
Annual Report on Remuneration: Pages 72 to 80
Remuneration at–a–Glance: Pages 81 and 82
2-21
Annual total compensation ratio
Directors’ Remuneration Report: Pages 70 and 71
Annual Report on Remuneration: Pages 72 to 80
Remuneration at–a–Glance: Pages 81 and 82
2-22
Statement on sustainable development strategy Sustainability Report and TCFD Disclosures: Pages 34 to 47
2-23
Policy commitments
Non–financial Information Statement: Page 47
2-24
Embedding policy commitments
Corporate Governance Statement: Pages 50 to 53
Executive Management Team: Pages 56
Board Leadership and Company Purpose: Pages 57 and 58
Division of Responsibilities: Pages 60 to 62
2-25
2-26
Processes to remediate negative impacts
Sustainability Report Grievance Mechanism: Page 44
Mechanisms for seeking advice and
raising concerns
Corporate Governance Whistle–blower Policy: Page 58
2-27
Compliance with laws and regulations
Sustainability Report: Pages 34 to 46
Corporate Governance Statement: Pages 50 to 53
2-28
Membership associations
Sustainability Report and TCFD Disclosures: Pages 34 to 47
2-29
Approach to stakeholder engagement
Engaging with our Stakeholders: Pages 30 to 33
Stakeholder Engagement: Page 59
2-30
Collective bargaining agreements
N/A
SOLGOLD pLC ANNUAL REPORT 2023
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3-1
3-2
3-3
Process to determine material topics
Not available
List of material topics
Not available
Management of material topics
Not available
Gri 201: Economic performance
201-1
Direct economic value generated and
distributed
Business Model: Pages 10 and 11
Sustainability Report and TCFD Disclosures: Pages 34 to 47
201-2
201-3
Financial implications and other risks and
opportunities due to climate change
Not stated
Defined benefit plan obligations and other
retirement plans
Notes to the Financial Statements: Page 112
201-4
Financial assistance received from government
N/A
Gri 202: market presence
202-1
Ratios of standard entry level wage by
gender compared to local minimum wage
202-2
Proportion of senior management hired
from the local community
Not stated
Not stated
Gri 203: indirect Economic impacts
203-1
Infrastructure investments and services
supported
Not stated
203-2
Significant indirect economic impacts
Business Model: Pages 10 and 11
Sustainability Report and TCFD Disclosures: Page 43
Gri 204: procurement practices
204-1
Proportion of spending on local suppliers
Not stated
Gri 205: Anti-corruption
205-1
Operations assessed for risks related to
corruption
205-2
Communication and training about anti-
corruption policies and procedures
205-3
Confirmed incidents of corruption and
actions taken
Not stated
Not stated
Directors’ Report: Pages 83 to 87
Independent Auditors’ Report to the
Members of SolGold Plc: Pages 90 to 98
Gri 206: Anti-competitive behaviour
206-1
Legal actions for anti-competitive behaviour,
anti-trust, and monopoly practices
N/A
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207-1
Approach to tax
Notes to the Financial Statements: Page 107
207-2
Tax governance, control, and risk management
Not stated
207-3
Stakeholder engagement and management of
concerns related to tax
Not stated
207-4
Country-by-country reporting
Not stated
Gri 301: materials
301-1
Materials used by weight or volume
Not stated
301-2
Recycled input materials used
301-3
Reclaimed products and their
packaging materials
Gri 302: Energy
Not stated
Not stated
Felipe
Castillo
Felipe
Castillo
302-1
Energy consumption within the organisation
Sustainability Report and TCFD Disclosures: Page 39
302-2
Energy consumption outside of the
organisation
Not available
302-3
Energy intensity
Sustainability Report: Page 39
302-4
Reduction of energy consumption
Sustainability Report: Page 39
302-5
Reductions in energy requirements of
products and services
Not available
Gri 303: Water and effluents
303-1
Interactions with water as a shared resource
Sustainability Report and TCFD Disclosures: Page 40
303-2 Management of water discharge-related impacts Sustainability Report and TCFD Disclosures: Page 40
303-3 Water withdrawal
Sustainability Report and TCFD Disclosures: Page 40
303-4 Water discharge
Sustainability Report and TCFD Disclosures: Page 40
303-5 Water consumption
Sustainability Report and TCFD Disclosures: Page 40
Gri 304: Biodiversity
304-1
Operational sites owned, leased, managed in,
or adjacent to, protected areas and areas of
high biodiversity value outside protected areas
Sustainability Report and TCFD Disclosures: Page 41
304-2
Significant impacts of activities, products
and services on biodiversity
Sustainability Report and TCFD Disclosures: Page 41
304-3
Habitats protected or restored
Sustainability Report and TCFD Disclosures: Page 41
304-4
IUCN Red List species and national
conservation list species with habitats
in areas affected by operations
Sustainability Report and TCFD Disclosures: Page 41
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Gri 305: Emissions
COmmEnTAry/SECTiOn AnD pAGE nUmBEr
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305-1
Direct (Scope 1) GHG emissions
Sustainability Report and TCFD Disclosures: Page 39
305-2
Energy indirect (Scope 2) GHG emissions
Sustainability Report and TCFD Disclosures: Page 39
305-3 Other indirect (Scope 3) GHG emissions
Not stated
305-4 GHG emissions intensity
Sustainability Report and TCFD Disclosures: Page 39
305-5
Reduction of GHG emissions
Sustainability Report and TCFD Disclosures: Page 39
Felipe
Castillo
Felipe
Castillo
Felipe
Castillo
Felipe
Castillo
305-6
Emissions of ozone-depleting substances
(ODS)
Not stated
305-7
Nitrogen oxides (NOx), sulphur oxides (SOx),
and other significant air emissions
Sustainability Report and TCFD Disclosures: Page 39
Gri 306: Waste
306-1 Waste generation and significant
Sustainability Report and TCFD Disclosures: Page 40
waste-related impacts
306-2 Management of significant waste-related
Sustainability Report and TCFD Disclosures: Page 40
impacts
306-3 Waste generated
Sustainability Report and TCFD Disclosures: Page 40
306-4 Waste diverted from disposal
Sustainability Report and TCFD Disclosures: Page 40
306-5 Waste directed to disposal
Sustainability Report and TCFD Disclosures: Page 40
Gri 308: Supplier environmental assessment
308-1
New suppliers that were screened using
environmental criteria
308-2
Negative environmental impacts in the
supply chain and actions taken
Not stated
Not stated
Gri 401: Employment
401-1
New employee hires and employee turnover
Not stated
401-2
Benefits provided to full-time employees that
are not provided to temporary or part-time
employees
Not stated
401-3
Parental leave
Not stated
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Gri 402: Labour/management relations
402-1
Minimum notice periods regarding
operational changes
Gri 403: Occupational health and safety
403-1
Occupational health and safety
management system
Not stated
Sustainability Report and TCFD Disclosures: Page 42
403-2
Hazard identification, risk assessment,
and incident investigation
403-3 Occupational health services
403-4 Worker participation, consultation, and
communication on occupational health
and safety
Not stated
Not stated
Not stated
403-5 Worker training on occupational health
Not stated
and safety
403-6
Promotion of worker health
Not stated
403-7
Prevention and mitigation of occupational
health and safety impacts directly linked
by business relationships
Risk Management: Page 23
403-8 Workers covered by an occupational
health and safety management system
Not stated
403-9 Work-related injuries
Sustainability Report: Page 42
403-10 Work-related ill health
Not stated
Gri 404: Training and education
404-1
Average hours of training per year per
employee
Not stated
404-2
Programmes for upgrading employee skills
and transition assistance programs
Not stated
404-3
Percentage of employees receiving regular
performance and career development reviews
Not stated
Gri 405: Diversity and equal opportunity
405-1
Diversity of governance bodies and employees Engaging with our Stakeholders: Page 31
405-2
Ratio of basic salary and remuneration
of women to men
Not stated
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COmmEnTAry/SECTiOn AnD pAGE nUmBEr
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406-1
Incidents of discrimination and corrective
actions taken
Not stated
Gri 407: Freedom of association and collective bargaining
407-1
Operations and suppliers in which the
right to freedom of association and
collective bargaining may be at risk
Not stated
Gri 408: Child labour
408-1
Operations and suppliers at significant
risk for incidents of child labour
Not stated
Gri 409: Forced or compulsory labour
409-1
Operations and suppliers at significant risk
for incidents of forced or compulsory labour
Not stated
Gri 410: Security practices
410-1
Security personnel trained in human rights
policies or procedures
Not stated
Gri 411: rights of indigenous peoples
411-1
Incidents of violations involving rights of
indigenous peoples
Not stated
Gri 413: Local communities
413-1
413-2
Operations with local community
engagement, impact assessments,
and development programmes
Operations with significant actual and
potential negative impacts on local
communities
Not stated
Risk Management: Page 26
Engaging with our Stakeholders: Page 33
Gri 414: Supplier social assessment
414-1
New suppliers that were screened using
social criteria
Not stated
414-2
Negative social impacts in the supply chain
and actions taken
Not stated
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DISCLOSURE
GRI 415: Public policy
415-1
Political contributions
COMMENTARY/SECTION AND PAGE NUMBER
REFERENCES FOR THE FY2023 ANNUAL REPORT
EXTERNAL
ASSURANCE
Directors’ Report: Page 85
GRI 416: Customer health and safety
416-1
416-2
Assessment of the health and safety impacts of
product and service categories
Not applicable
Incidents of non-compliance concerning the
health and safety impacts of products and
services
Not applicable
GRI 417: Marketing and labelling
417-1
417-2
417-3
Requirements for product and service
information and labelling
Not applicable
Incidents of non-compliance concerning
product and service information and labelling
Not applicable
Incidents of non-compliance concerning
marketing communications
Not stated
GRI 418: Customer privacy
418-1
Substantiated complaints concerning
breaches of customer privacy and losses
of customer data
Not available
SOLGOLD PLC ANNUAL REPORT 2023
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BRISBANE HEAD OFFICE:
Level 27, 111 Eagle Street,
Brisbane, Queensland,
Australia 4000
LONDON REGISTERED OFFICE:
1 King Street,
London, United Kingdom,
EC2V 8AU
QUITO CORPORATE OFFICE:
Avenida Coruña E2558 y San
Ignacio, Edificio Altana Plaza,
piso 4 oficina 406, Quito,
Ecuador
www.solgold.com.au
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