Annual Report
2024
SolGold plc
(Company number 05449516)
2024 ANNUAL REPORT
2
Contents
COMPANY OVERVIEW ......................................................................................................................................................................... 3
2024 - A YEAR OF TRANSFORMATIVE PROGRESS ................................................................................................................................ 4
STRATEGIC REPORT ............................................................................................................................................................................. 5
OUR BUSINESS MODEL ........................................................................................................................................................................ 8
CORPORATE GOVERNANCE REPORT ................................................................................................................................................. 30
CORPORATE GOVERNANCE STATEMENT .......................................................................................................................................... 32
NOMINATION COMMITTEE REPORT ................................................................................................................................................. 46
AUDIT AND RISK COMMITTEE REPORT .............................................................................................................................................. 47
ENVIRONMENTAL, SOCIAL AND GOVERNANCE COMMITTEE REPORT .............................................................................................. 50
STRATEGY COMMITTEE REPORT ....................................................................................................................................................... 51
DIRECTORS’ REMUNERATION REPORT .............................................................................................................................................. 52
DIRECTORS’ REMUNERATION POLICY ............................................................................................................................................... 61
DIRECTORS’ REPORT .......................................................................................................................................................................... 63
DIRECTORS’ RESPONSIBILITY STATEMENT ......................................................................................................................................... 68
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SOLGOLD PLC ......................................................................................... 69
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................................................. 80
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..................................................................................................................... 81
COMPANY STATEMENT OF FINANCIAL POSITION ............................................................................................................................. 82
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...................................................................................................................... 83
COMPANY STATEMENT OF CHANGES IN EQUITY POSITION .............................................................................................................. 84
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS ...................................................................................................... 85
NOTES TO THE FINANCIAL STATEMENTS ........................................................................................................................................... 86
ADDITIONAL INFORMATION ............................................................................................................................................................ 133
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
3
COMPANY OVERVIEW
ABOUT US
SolGold is a mineral exploration and development company headquartered in Perth, Australia. The Company is a UK-incorporated
public limited company that is listed on both the LSE and TSX (SOLG on both exchanges). We are committed to the responsible
development of significant copper and gold deposits, focusing on sustainability and community partnership.
Founded in 2006, SolGold has established itself as a leading player in the exploration and development of mineral resources. Our
flagship project, Cascabel, located in the richly mineralized Northern Ecuadorian district, is poised to become one of the largest and
most promising major copper-gold porphyry projects. This Alpala deposit, Cascabel’s primary target, boasts a mineral resource of 3
billion tonnes grading 0.52% CuEq in the Measured and Indicated categories.
Recent milestones have significantly advanced the Cascabel project:
In March 2024, we completed an updated Pre-Feasibility Study, reinforcing the project's robust economics and world-class
potential.
In June 2024, we signed the Exploitation Contract with the Government of Ecuador, establishing the legal and financial
framework for the project's development.
In July 2024, we secured a US$750 million financing package through a Gold Stream Purchase and Sale Agreement (Gold
Stream Agreement), providing substantial funding for the project's advancement and development.
Our operations are guided by a commitment to transparency, ethical conduct, and the development of our host communities. As we
advance the Cascabel project towards production, we are mindful of the future role high-quality copper will play in renewable
technologies and electrification, contributing to a greener future.
SolGold’s vision extends beyond mineral exploration and development. We are dedicated to fostering positive and sustainable impacts
in the regions where we operate. Through ongoing collaborations with local communities and governments, we strive to ensure that
our projects will contribute meaningfully to the socio-economic fabric of these areas.
Looking ahead, SolGold remains focused on advancing and de-risking the Cascabel Project, maintaining our commitment to safety and
environmental responsibility while creating long-term value for all our stakeholders.
SOLGOLD HIGH-LEVEL CORPORATE STRUCTURE
SolGold Plc
SolGold Finance
AG
SolGold Ecuador
S.A.
Exploraciones
Novomining S.A.
(Cascabel Project)
Ecuador Regional
Licenses
SolGold Canada
Inc.
Cornerstone
Licences
Cornerstone
Ecuador S.A.
85%
100%
15%
100%
Bramaderos S.A.
100%
12.5%
Sunstone Metals
Limited
87.5%
100%
100%
100%
Notes:
1 – Nicholas Mather holds a nominal share in
“Ecuador Regional Licences” entities
1
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
4
2024 - A YEAR OF TRANSFORMATIVE PROGRESS
In fiscal 2024, SolGold achieved several pivotal milestones that have significantly advanced our flagship Cascabel project and
strengthened our position as a leading player in the global copper-gold mining sector.
CASCABEL PROJECT
UPDATED PRE-FEASIBILITY STUDY (MARCH 2024)
Demonstrated robust economics with an after-tax net present value using a discount rate of 8% (NPV8%) of US$3.2 billion
and IRR of 24%
Introduced an optimized phased approach: initial 12 Mtpa operation, scaling to 24 Mtpa
Substantially reduced initial capital requirements from US$2.7 billion to US$1.5 billion
Significantly mitigated project execution risks through phased development
Reaffirmed Cascabel's position as a world-class copper-gold project with potential for multi-generational operations
EXPLOITATION CONTRACT SECURED (JUNE 2024)
Landmark agreement granting 33-year development and production rights, renewable for the life of the mine
Includes $75 million advance royalty payment and economic imbalance mechanism to protect against future regulatory
changes
Ensures SolGold's autonomy in commercial and technical decisions while providing robust investor protection rights
Demonstrates successful navigation of complex regulatory environments and commitment to responsible, sustainable
mining practices
US$750 MILLION GOLD STREAM AGREEMENT (JULY 2024)
Transformative financing agreement with Franco-Nevada and Osisko Gold Royalties, validating Cascabel's world-class
potential
Strategically structured in two parts - US$100 million Initial Deposit for project advancement and US$650 million
Construction Deposit
Preserves significant copper, silver, and majority of gold revenues for SolGold and its shareholders
Includes innovative buyback option, providing strategic flexibility for future corporate transactions
STRATEGIC AND OPERATIONAL ALIGNMENT
LEADERSHIP ENHANCEMENT
Appointed three new directors, Adrian (Steve) van Barneveld, Charles Joseland, and Jian (John) Liu
Broadened board expertise in project development and construction mine finance, and international markets
Maintained stability with Scott Caldwell as CEO and Chris Stackhouse as CFO
OPERATIONAL EFFICIENCY
Sharpened focus on advancing the Cascabel project, our key value driver
Implemented prudent financial management to ensure long-term sustainability
Optimized resource allocation to align with current market conditions and project priorities
Maintained core operations in Ecuador while adapting to a dynamic business environment
ENVIRONMENTAL AND SOCIAL GOVERNANCE
Maintained our commitment to environmental stewardship with zero significant incidents reported
Navigated challenges in meeting all community expectations due to necessary operational adjustments
Continued engagement with local stakeholders to manage the impacts of reduced activity levels
Focused on maintaining key environmental and social programs within resource constraints
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
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STRATEGIC REPORT
OUTLOOK FY2025
Building on our transformative achievements in 2024, SolGold is poised for an exciting and productive FY2025. We are strategically
positioned to capitalize on our recent successes and advance our flagship Cascabel project, creating sustainable value for our
shareholders while maintaining our unwavering commitment to responsible development and environmental stewardship.
KEY STRATEGIC PRIORITIES FOR FY2025:
Advancing Cascabel Project
We will progress critical de-risking activities and technical studies, utilizing the US$750 million Gold Stream Agreement proceeds to
advance key technical works. We are focused on implementing the optimized phased development approach, benefiting from a
reduced initial capital requirement and facilitating our transition toward developer and producer status.
Permitting and Financing
Leveraging our 33-year Exploitation Contract, we will advance permitting processes to support project development timelines. We will
explore financing options to secure the remainder of the required capital, building on the solid foundation laid by our recent
achievements.
Operational Excellence
We remain committed to implementing operational efficiencies that are aligned with market conditions and project priorities. By
applying learnings from Cascabel across our Ecuadorian portfolio, we will maintain a focus on cost optimization and strategic resource
allocation.
Sustainability and Stakeholder Engagement
Maintaining the highest standards of health, safety, and environmental stewardship remains a priority. We will continue our water
recycling practices and reforestation programs while fostering transparent and collaborative relationships with local communities and
government.
Growth and Discovery
We will strategically assess exploration endeavors outside Cascabel, exploring potential joint ventures or earn-in collaborations for
regional exploration licenses. Ecuadorian licenses outside of Cascabel will be maintained on a care and maintenance basis to preserve
future opportunities.
Corporate Strategy
Our ongoing strategic review aims to optimize operations and unlock value. We will explore potential partnerships and strategic
alliances to enhance growth potential while continuing to evaluate diverse funding arrangements to ensure financial flexibility.
As we progress through FY2025, we are confident in our ability to execute on these opportunities and create long-term value for our
stakeholders. The coming year presents an exciting chapter in SolGold's story as we transition from explorer to developer, backed by
our world-class Cascabel project and strengthened financial position. We look forward to sharing our continued achievements and
milestones with our shareholders and stakeholders as we work towards realizing the full potential of our assets and contributing to a
sustainable future for copper production.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
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COMPANY OVERVIEW: THE STORY OF SOLGOLD
Our journey has been marked by significant milestones and achievements.
KEY MILESTONES
2012-2014: Entered Ecuador, discovered Alpala deposit at Cascabel
2016-2017: Strategic investments from Newcrest, LSE Main Market and TSX listings
2018-2019: BHP becomes a major shareholder; maiden Mineral Resource Estimate for Alpala announced
2020-2022: Completion of PEA and PFS for Cascabel, confirming world-class potential
2023: Consolidated 100% ownership of Cascabel Project, new leadership appointed
2024: Published phased approach PFS, secured major financing, signed Exploitation Contract
RECENT ACHIEVEMENTS
In the past year, we have made significant strides:
Updated Pre-Feasibility Study demonstrating robust project economics
Exploitation Contract signed with the Government of Ecuador
US$750 million Gold Stream Agreement with Franco-Nevada and Osisko Gold Royalties
PATH FORWARD
SolGold is focused on advancing Cascabel and creating sustainable value through the following:
Progress critical de-risking activities and technical studies
Advance permitting and secure remaining project financing
Transition towards developer and producer status
Implement comprehensive environmental and social strategies
Apply Cascabel learnings across our Ecuadorian portfolio
We remain committed to responsible development, shareholder value creation, and maintaining high standards of corporate
governance. These priorities position SolGold to capitalize on the evolving global copper market while benefiting all stakeholders.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
7
CHIEF EXECUTIVE’S REVIEW
Dear Shareholders and Stakeholders,
I am pleased to present SolGold's 2024 Annual Report, a year marked by transformative progress that has significantly advanced our
flagship Cascabel project, solidifying our position as the holder of one of the largest undeveloped copper-gold projects in the world.
Our updated Pre-Feasibility Study (PFS), the highlights of which we announced in February 2024, was filed in March 2024 and
represents a pivotal achievement in project development. The study introduced an optimized phased approach, demonstrating robust
economics with an after-tax net present value using an 8% discount rate of US$3.2 billion and an IRR of 24%. This strategy substantially
reduces initial capital requirements from US$2.7 billion to US$1.5 billion, mitigating project execution risks while opening numerous
project financing paths and partnership potentials. This study reaffirms Cascabel's position as a world-class copper-gold project with
multi-generational potential.
In June 2024, we secured the Exploitation Contract with the Government of Ecuador, a landmark agreement granting 33-year
development and production rights. This contract ensures SolGold's autonomy in commercial and technical decisions while providing
robust investor protection rights. Crucially, it offers investors the economic certainty required for substantial capital investments, with
stability assured over the project's operating period.
A highlight of 2024 was the negotiation of a US$750 million Gold Stream Agreement with Franco-Nevada and Osisko Gold Royalties,
completed in July. This transformative arrangement provides financial flexibility to advance the Cascabel Project through critical de-
risking activities and technical works. It also represents a significant validation of our updated PFS and the Cascabel project. Following
their rigorous technical and governmental due diligence, the commitment of two of the most prominent mine financiers is a powerful
endorsement of Cascabel's potential.
Internally, we enhanced our leadership by appointing three new directors - Adrian (Steve) van Barneveld, Charles Joseland, and Jian
(John) Liu broadening our board expertise in mining operations, accounting and governance, finance and international markets. We
also implemented operational efficiencies to align with current market conditions and project priorities.
Our commitment to environmental stewardship and social responsibility remains steadfast, with zero significant environmental
incidents reported this year. We continue to engage with local stakeholders and maintain key environmental and social programs
within resource constraints.
As we move into the next year, SolGold is strategically positioned to build on these achievements. Our focus remains on advancing the
Cascabel project, progressing permitting processes, exploring financing options for the remainder of the required capital, and
maintaining our commitment to the responsible development of this world-class asset.
I extend my sincere thanks to our dedicated employees, shareholders, and stakeholders for their continued support. Together, we are
poised to realize the full potential of Cascabel and create sustainable value in the evolving global copper market.
Sincerely,
Scott Caldwell
Chief Executive Officer and Acting Chair
26 September 2024
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
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OUR BUSINESS MODEL
DRIVING SUSTAINABLE COPPER PRODUCTION FOR A CLEAN ENERGY FUTURE
OUR CAPITAL INPUTS
Natural
We responsibly leverage our mineral resources through sustainable exploration and development practices at Cascabel. Our enhanced
focus on renewable energy sources, water recycling practices, and environmental footprint monitoring underscores our commitment
to environmental stewardship.
Human
We have enhanced our workforce development efforts this year. Leadership and technical training programs have been implemented
to align our team’s capabilities with future project requirements.
Social
We have strengthened our engagement with local communities and governments at all levels - local, provincial, and federal - fostering
active partnerships. This approach has reinforced our social license to operate and created new avenues for collaboration.
Financial
Our financial strategy has focused on leveraging strategic partnerships and securing competitive funding that aligns with our goals.
The strengthening of our balance sheet positions us to advance efforts effectively while aiming to enhance shareholder value.
HOW WE CREATE VALUE
We focus on realizing value from our world-class Cascabel project while maintaining a disciplined approach to capital allocation. Our
strategy emphasizes:
1.
Advancing the Cascabel project through critical de-risking activities and technical works
2.
Optimizing our operations and cost structure
3.
Maintaining strong relationships with local communities and governments
4.
Leveraging our expertise to assess and develop our broader portfolio of mineral properties
SHARING THE VALUE WE CREATE
Skilled Workforce
99% Ecuadorian employees
85% of the management team are staffed by Ecuadorians
Ongoing professional development and training programs
Host Communities
US$1,043,477 invested in socioeconomic projects delivered in partnership with the local authorities in the communities
where we operate.
Prioritization of local procurement, sourcing goods and services from communities near our projects whenever possible,
ensuring direct economic benefits to the local area.
"One Million Trees" reforestation program supporting local biodiversity
Establishment of community internet cafe enhancing local digital access
Support for numerous social and cultural events throughout the year
Facilitation of community businesses, including a coffee plantation, nurseries, and local bakery
Trusted Partners
US$900,000 investment commitment, in partnership with Franco-Nevada, to deliver waste and recycling infrastructure for
the local Lita and La Carolina parishes in the Imbabura province of Northern Ecuador
Continued engagement with local and national governments to ensure alignment of interests
US$750,000 of additional funds committed towards ESG initiatives from the Franco-Nevada and Osisko Gold Royalties as
part of the Gold Stream Agreement.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
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OUR STRATEGY
SOLGOLD’S STRATEGIC VISION AND THE CASCABEL OPPORTUNITY
SolGold is on a strategic path to becoming a leading copper and gold producer in Ecuador. Our primary focus is advancing our flagship
Cascabel project, one of the largest undeveloped copper-gold projects globally. Our strategy emphasizes:
1.
Progressing Cascabel through critical development milestones
2.
Maintaining our commitment to responsible and sustainable development
3.
Optimizing our operations and cost structure
4.
Selectively advancing our broader portfolio to create additional value
The Cascabel project represents a significant opportunity for Ecuador and its people. Its development is expected to create substantial
local employment opportunities and support community development. The Ecuadorian government's supportive stance on
responsible foreign investment enhances the country's appeal as a mining destination.
The construction and operation of Cascabel are anticipated to provide significant local job opportunities and promote further mining
investment in Ecuador, potentially leading to long-term economic benefits for the country. We remain committed to delivering this
project in a manner that creates sustainable value for all our stakeholders.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
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KEY PERFORMANCE INDICATORS
We recognize that our success is measured not just by our financial performance but also by our ability to create sustainable value for
all stakeholders while advancing our projects responsibly. Our Key Performance Indicators (KPIs) reflect this holistic approach, aligning
with our strategic objectives and core values.
These KPIs serve as guideposts, ensuring we remain focused on advancing the world-class Cascabel project while maintaining the
highest standards of operational excellence, fiscal responsibility, and sustainable development. They are designed to drive
performance across all aspects of our business, from safety and environmental stewardship to technical advancement and stakeholder
engagement.
While specific metrics for each KPI are monitored internally, we present here the overarching objectives that guide our efforts and
against which we measure our progress:
Strategic Pillar
Long-Term Objective
2024 Highlights
SAFETY &
SUSTAINABILITY
Maintain the highest standards of health, safety,
and environmental stewardship across all
operations
Zero significant environmental incidents
Continued implementation of water recycling practices
Advancement of the "One Million Trees" reforestation
program
FINANCIAL
STEWARDSHIP
Optimize financial management to support long-
term stability and project advancement
Secured US$750 million Gold Stream Agreement
Reduced initial capital requirements for Cascabel from US$2.7
billion to US$1.5 billion through phased development
approach
Implemented significant cost reduction measures, including
rightsizing of operations and a substantial decrease in
corporate G&A expenses
PROJECT
DEVELOPMENT
Advance the Cascabel project through
comprehensive technical studies and strategic
optimization
Completed updated Pre-Feasibility Study with robust
economics
Introduced an optimized phased development approach
PERMITTING
Progress all necessary permitting for Cascabel in
collaboration with relevant authorities
Secured 33-year Exploitation Contract with the Government of
Ecuador
GROWTH &
DISCOVERY
Strategically advance our diverse portfolio of
mineral exploration assets
Continued exploration of Blanca-Nieves and Espejo projects
Uncovered significant mineralization, promising further
growth potential
STAKEHOLDER
ENGAGEMENT
Foster transparent and collaborative relationships
with all stakeholders.
US$1,043,477 invested in socio-economic projects
Prioritization of local procurement to benefit communities
Establishment of community internet cafes and support for
local businesses
OPERATIONAL
EXCELLENCE
Cultivate a culture of innovation and continuous
improvement.
Enhanced board expertise with three new director
appointments
Implemented operational efficiencies to align with market
conditions and project priorities
As we progress through 2025 and beyond, these KPIs will continue to guide our decision-making and resource allocation. They reflect
our commitment to responsible development, operational excellence, and creating lasting value for our shareholders, host
communities and all stakeholders.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
11
MARKET OVERVIEW
COPPER MARKET OUTLOOK
Fundamental Drivers:
The global demand for copper is anticipated to grow by approximately 3% in the coming year, fueled by advancements in renewable
energy and the increased electrification of transport systems. While demand outside of China has experienced a slight decline, China's
copper consumption is projected to rise by 4.3%, mitigating slower growth in Western markets and contributing to an overall global
increase in refined copper usage of around 2.7%. This growth is driven mainly by China's ongoing infrastructure expansion and
technological progress, securing its position as the world's largest consumer of copper.
Renewable Energy Transition:
The transition to renewable energy remains a key driver of copper demand. Copper’s excellent conductivity and durability are essential
for renewable energy systems. In 2024, the demand from the green energy sector is expected to remain strong, supported by
continuous investments in wind and solar power infrastructure and the rapidly expanding electric vehicle market. By 2035, copper
demand in these sectors is expected to push global consumption to 49 million metric tons annually, up from 24.8 million metric tons
in 2022.
Current Macroeconomic Factors:
Rising interest rates have tempered economic growth in various regions, impacting the copper market. Despite reaching a peak of
US$10,730 per metric ton, prices fell to around US$8,450 per metric ton by mid-2024. However, the market remains tight with low
inventory levels, suggesting a limited price downside. The long-term outlook for copper is positive, as demand is expected to exceed
supply due to operational challenges and disruptions in major mining regions such as Latin America.
Market Volatility:
Volatility in the copper market continues, driven by geopolitical tensions like the Russia-Ukraine conflict and economic uncertainties.
Recent supply disruptions, including the temporary closure of major mines and production cuts by Chinese smelters, have tightened
supply and supported higher prices. Low inventory levels further contribute to market tightness and price fluctuations.
Supply Side:
Refined copper production globally is expected to increase by 4.6% in 2024, mainly due to capacity expansions in China, Indonesia,
India, and the US. Despite this rise, a supply surplus is anticipated, primarily from increased production of recyclable materials and
new secondary smelters. However, supply constraints due to mine disruptions and geopolitical issues pose risks to market balance.
Future Outlook:
Copper demand is expected to remain robust, driven by the continued growth in renewable energy and the electrification of
transportation. By 2031, a significant supply deficit of 6.5 million tonnes is forecasted, underscoring the need for new mining projects
and increased investments in copper recycling.
Cascabel Strategic Positioning:
The Alpala and Tandayama-America deposits at Cascabel contain 12.4 million tonnes of copper in the Measured plus Indicated
resource category and are strategically positioned to benefit from the increasing demand for copper driven by renewable energy and
technological advancements. This positions SolGold to capitalize on the growing market opportunities.
GOLD MARKET OUTLOOK
In 2024, gold remains a resilient asset amidst economic uncertainties and geopolitical tensions. While rising interest rates have
historically pressured gold prices, recent signs of a potential pause in US rate hikes support gold's appeal as a safe haven. This trend
attracts individual and institutional investors, benefiting gold development projects like SolGold's Cascabel project, which holds 31.3
million ounces of gold in the Measured plus Indicated resource category.
ECUADOR’S UNTAPPED MINERAL WEALTH
Ecuador is solidifying its position as a significant player in the global copper and gold markets located at the northern end of the Andean
Copper Belt. The country offers substantial geological potential, with SolGold at the forefront of these developments. The Alpala
deposit at Cascabel is one of the past decade's most notable copper and gold discoveries. Despite the early stage of Ecuador's mining
sector, continued investment and high-profile development projects are expected to increase the number of operational mines.
SolGold's strong relationships with the government and local communities position it as a cornerstone of Ecuador's growing mining
industry.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
12
OPERATIONS OVERVIEW
At SolGold, our operations are centered on developing world-class mineral deposits that create sustainable value for all stakeholders.
Our portfolio is anchored by the transformative Cascabel project in Ecuador, complemented by a portfolio of promising exploration
assets that underscore our commitment to responsible resource development.
CASCABEL PROJECT: A WORLD-CLASS COPPER-GOLD ASSET
At the heart of SolGold's portfolio lies the Cascabel project, a transformative copper-gold porphyry deposit that stands as one of the
most significant discoveries of the past decade. Located in the mineral-rich Imbabura province of Northern Ecuador, Cascabel
exemplifies the potential of Ecuador's emerging mining sector.
Key Project Highlights
100% SolGold ownership
50 km² concession area
Estimated mineral resource of 3 billion tonnes grading 0.52% CuEq (Measured & Indicated)
Alpala deposit: Primary target with world-class potential
Strategic Location
Nestled in the Andean copper belt, Cascabel benefits from:
Proximity to key infrastructure (roads, power, ports)
Supportive local communities
Elevation range of 600 to 1,800 meters above sea level
Year-round operational access
FY2024 Milestones
Updated Pre-Feasibility Study (March)
After-tax net present value using a discount rate of 8% of US$3.2 billion and IRR of 24%
Optimized phased development approach
Initial capital requirement reduced to US$1.5 billion
Exploitation Contract (June)
33-year development and production rights
Establishes robust legal and fiscal framework
US$750 Million Gold Stream Agreement (July)
Partnership with Franco-Nevada and Osisko Gold Royalties
Funds critical project advancement activities
Project Advancement Strategy
We are focused on efficiently and cost-effectively moving Cascabel forward. Key activities include:
Geotechnical investigation of tailings storage facilities, plant site, and other infrastructure
Advanced metallurgical test work
Securing property agreements for essential infrastructure (tailings deposition, pipeline routes, port facilities)
Progressing critical path permits required for development
Progressing project finance discussions
Cascabel represents more than just a mining project; it's a catalyst for sustainable development in Ecuador. As we advance this world-
class asset, we remain committed to environmental stewardship, community partnership, and creating lasting value for all
stakeholders.
EXPLORATION PORTFOLIO – ECUADOR
While our primary focus remains on Cascabel, SolGold maintains a diverse portfolio of highly prospective exploration assets across
Ecuador. These assets represent significant potential for future value creation and underscore our commitment to the country's
emerging mining sector.
Recent exploration at Blanca-Nieves and Espejo Projects has uncovered significant mineralization, promising further growth potential.
Due to our strategic focus on Cascabel and prudent capital management, technical and fieldwork on these assets was temporarily
suspended during the period. However, we continue to keep all concessions in good standing, recognizing their long-term strategic
value.
As we progress with Cascabel and our financial position strengthens, we aim to advance these assets strategically, applying the
knowledge and expertise gained from our flagship project.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
13
AUSTRALIAN ASSETS
SolGold maintains a portfolio of tenements across central and southeast Queensland through our wholly-owned subsidiaries, Central
Minerals Pty. Ltd. and Acapulco Mining Pty. Ltd. In line with our focus on Cascabel and capital discipline:
Exploration programs have been reduced to a minimum
The carrying values of all Australian projects have been fully impaired
Management expects to formally relinquish these tenements in the ordinary course of business
This strategic decision allows us to concentrate our resources on advancing our core Ecuadorian assets, particularly Cascabel.
LOOKING AHEAD
As we move into 2025, our operational focus remains firmly on advancing Cascabel through critical de-risking activities and technical
works. We are committed to progressing this world-class asset responsibly, creating value for our shareholders and stakeholders while
maintaining our high environmental stewardship and community engagement standards.
The development of Cascabel promises to redefine SolGold's position in the global mining landscape and contribute significantly to
Ecuador's economic growth. By leveraging our technical expertise, strong government relationships, and commitment to sustainable
development, we are poised to unlock the full potential of our asset portfolio and cement our position as a leading copper-gold
developer in Ecuador.
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 20 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. He 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.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
14
FINANCIAL REVIEW
HIGHLIGHTS
The Group achieved several milestones during the financial year ended 30 June 2024. These have helped to progress the development
of SolGold, and in particular, the development of the Cascabel project, and have included:
Subsequent to 30 June 2024, closed Gold Stream Agreement with Franco-Nevada (Barbados) Corporation and Osisko
Bermuda Limited
o
Total of US$750 million funding including:
US$100 million paid over three tranches as milestones of de-risking, permitting, and funding development
for Cascabel are attained
US$650 million for Cascabel construction
Raised US$10 million in short-term financing, which was repaid on time following the completion of the Gold Stream
Agreement
Reduced all-in cash burn rate to US$3.0 million per month, versus US$6.5 million in 2023
RESULTS
The Group incurred a loss after tax of US$60,299,953 (2023: US$50,439,745). The increase is due primarily to the US$24.1 million non-
cash remeasurement expense of the net smelter royalty (“NSR”) financial liability, based upon the revised PFS announced in March
2024. Further, the remeasured NSR liabilities drove higher NSR non-cash interest expense, which was US$17.8 million in 2024 versus
US$13.1 million in 2023, an approximately 36% increase. In addition, the value of Australian exploration properties was written off,
resulting in US$8.3 million of non-cash expenses in 2024 versus US$1.1 million in 2023. Administrative expenses decreased significantly
(approximately US$12.5 million in 2024 compared to US$41.2 million in 2023) as a consequence of the non-recurring acquisition of
SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) in the prior year, as well as workforce reductions and the
implementation of expense reduction processes.
Cash outflows from operations and investing activities were US$35.5 million in 2024 versus US$77.6 million in 2023, a 54% reduction.
All cash-based administrative expense categories were reduced in 2024 versus 2023, while share-based payment expenses increased
to US$2.2 million in 2024 versus US$1.0 million in 2023. There were 20,000,000 options granted during 2024 versus 79,778,125 in
2023.
STATEMENT OF FINANCIAL POSITION
Total assets at 30 June 2024 were US$463,845,574 compared to US$478,339,250 at 30 June 2023, representing a decrease of
US$14,493,676.
Current assets overall decreased by US$32.3 million, primarily due to the decrease in cash balances and also an intentional effort to
convert current assets to cash, which was used to settle liabilities and pay for ongoing expenses.
Non-current assets increased by US$17.8 million. Exploration assets increased predominantly due to the exploration expenditure
incurred at Cascabel (US$15 million) and the various regional projects (US$7.5 million). All Australian properties were impaired during
2024, resulting in an expense of exploration costs written-off of US$8.3 million. Property, plant and equipment decreased by US$0.7
million, primarily due to ongoing depreciation and limited additions.
Total liabilities at 30 June 2024 were US$209.2 million, compared to US$165.4 million at 30 June 2023, representing an increase of
approximately US$43.8 million. The increase was driven primarily by the increased NSR valuation described above, ongoing interest
accretion on NSRs, as well as the short-term borrowing of US$10 million.
Current liabilities at 30 June 2024 were US$17.3 million, compared to US$13.8 million at 30 June 2023, representing an increase of
approximately US$3.5 million. Current borrowings increased due to a US$10 million short-term borrowing, which was offset by a
decrease in trade and other payables of US$6.2 million. The decrease in trade and other payables reflects a reduction in expenditures,
as well as the settlement during 2024 of a US$3.5 million liability, which was outstanding at 30 June 2023.
Non-current liabilities increased by US$40.3 million due to the same primary factors, which increased the total liabilities described
above.
The Company will need to secure further funding to meet the Group’s future exploration milestones and commitments, as well as
project construction, but the Gold Stream Agreement subsequent to 30 June 2024 provides funding for ongoing operational
requirements for at least eighteen months following 30 June 2024 for the Cascabel project; further funding is required to fund regional
Ecuadorian projects and corporate administrative expenses. The Directors consider it appropriate to adopt the going concern basis of
accounting in the preparation of the financial statements. The financial statements do not include the adjustments that would result
if the Group and Company were unable to continue as a going concern.
CASH FLOW
Cash expenditure (before financing activities) for the year ended 30 June 2024 was US$35.5 million (2023: US$77.6 million). The largest
category of cash outlay was for capitalised exploration and evaluation costs, which was US$25.1 (2023: US$43.3). The overwhelming
majority of capitalised exploration and evaluation costs in 2024 and 2023 relate to the Group’s exploration properties in Ecuador.
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SolGold plc Annual Report for the Year Ended 30 June 2024
15
During the financial year ended 30 June 2024, US$10 million cash was received from a short-term facility (2023: US$86 million received
from a share issuance and NSR financing). The net cash decrease in 2024 was US$26.4 million, including US$10 million in financing
proceeds (2023: increase of US$6.5 million, including US$86 million in financing proceeds).
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. Further information can be found under the Corporate
Governance: Audit, Risk, and Internal Controls section.
EQUITY
During 2024, the Company issued 20,000,000 options over ordinary shares and issued no ordinary shares. At year-end, the Company
had a total of 3,001,106,975 fully paid ordinary shares and 98,725,000 options on issue. At the date of this report, the Company had
a total of 3,001,106,975 fully paid ordinary shares and 92,350,000 options on issue.
Further information regarding equity movements can be found in Note 18 and Note 23 of the 2024 financial statements.
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SolGold plc Annual Report for the Year Ended 30 June 2024
16
RISK MANAGEMENT
At SolGold, effective risk management is fundamental to achieving our strategic objectives and creating long-term value for our
stakeholders. Our approach to risk management is proactive, comprehensive, and aligned with our core values of safety, respect,
integrity, excellence, and sustainability.
OUR APPROACH
SolGold's risk management framework is designed to identify, assess, and mitigate risks that could impact our business across multiple
dimensions. In 2024, we continued to refine our risk management processes, focusing on key areas that are critical to our business:
•
Health, Safety & Security
•
Social License to Operate
•
Geopolitical and Sovereign Risk
•
Project Development
•
Funding
•
Environmental Stewardship
•
Permitting and Land Access
•
Talent Attraction and Retention
RISK MANAGEMENT ENHANCEMENTS
In 2024, we made incremental improvements to our risk management approach:
•
Refinement of our corporate risk register
•
Implementation of regular risk reviews
•
Enhanced reporting to the Audit and Risk Committee
These efforts aim to improve our ability to identify and respond to risks and opportunities in our dynamic operating environment.
PROJECT RISK MANAGEMENT: CASCABEL FOCUS
The announcement of our updated Pre-Feasibility Study (PFS) for the Cascabel project in February 2024 marked a significant milestone
in our risk management approach. Key aspects include:
•
Adoption of a phased development approach, reducing upfront capital requirements from US$2.7 billion to US$1.5 billion
•
Reduction in project execution risk
•
Ongoing assessment of project risks to inform design and operational strategies
As we progress towards final design and development, we will continue to refine our risk management strategies for Cascabel, ensuring
they align with industry best practices and our commitment to responsible development.
RISK APPETITE
SolGold's risk appetite is calibrated to balance our growth ambitions with prudent management practices. We recently reviewed our
risk appetite statement, which provides guidance across key areas of our business, including funding, governance, regulatory
compliance, environment, community, and health and safety.
EVOLVING RISK LANDSCAPE
Based on our latest assessment, we've observed several notable changes in our risk profile:
•
Health, Safety & Security: Risk decreased due to reduced exploration activities
•
Geopolitical and Sovereign Risk: Increased due to ongoing changes in the Ecuadorian government
•
Funding: Significantly decreased following the execution of the US$750 million Gold Stream Agreement; noting that further
funding will be required to maintain and progress regional Ecuadorian projects
•
Environmental: Reduced due to decreased exploration activities
•
Permitting and Land Access: Increased as we focus on advancing the Cascabel project
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SolGold plc Annual Report for the Year Ended 30 June 2024
17
PRINCIPAL RISKS
This updated risk table reflects the current status of SolGold's risk landscape, incorporating recent developments such as the Gold
Stream Agreement and the phased development approach for the Cascabel project. It also aligns with the company's focus on
responsible development, environmental stewardship, and community engagement, as discussed throughout the annual report.
The following table outlines our principal risks, their potential impacts, and the key mitigating actions we've implemented. This list is
not exhaustive but represents the primary risks that could materially affect our business.
Risk Category
Description
Potential Impact
Key Mitigating Actions
Risk Trend
Health, Safety &
Security
Inherent risks in exploration
and mining activities,
including transportation
accidents and limited access
to emergency medical
assistance in remote
locations.
Personal security risks
operating in remote areas.
Potential for serious
injuries, fatalities,
litigation, regulatory
action, and
reputational damage.
Compromise to the
security of personnel.
• Implementation of stringent safety protocols and
transportation policies
• Regular safety reviews, inspections, and hazard
assessment
• Enhanced emergency response planning for remote sites
• Retention of consultant security forces on worksites
↓
Social License
to Operate
Maintaining strong
community relations is
fundamental to our
operations and reputation.
Loss of community
support could impact
project viability and
the Company's
broader reputation.
• Ongoing community engagement and socialization
programs
• Development of comprehensive relocation and
resettlement plans
• Implementation of local employment and training
initiatives
• Maintenance of a robust grievance and obligations register
↔
Talent
Attraction and
Retention
Ability to recruit and retain
high-performing leaders and
skilled personnel in a
competitive market.
Potential impact on
project development,
financing abilities, and
operational
effectiveness.
• Enhanced HR functions and feedback processes
• Development of an Industrial Relations Strategy for
Ecuador
• Implementation of succession planning and performance
management tools
• Focus on local hiring and skills development
↔
Geopolitical
and Sovereign
Risk
Operating in Ecuador
exposes the Company to
risks of political and
regulatory instability.
Potential for changes
in government
policies, tax regimes,
and civil unrest that
could impact
operations and
project development.
• Active monitoring of political developments
• Maintenance of open relationships with local and national
authorities
• Engagement with pro-business government initiatives
• Implementation of robust security protocols
↑
Project
Development
Challenges in transitioning
from exploration to
development and
production phases.
Lack of a cohesive business
strategy.
Failure to develop a
fundable and
achievable a business
plan, can lead to
delays, cost overruns,
and inability to realize
the full potential of
discoveries.
• Application of rigorous project management processes
• Engagement of industry experts and consultants
• Phased development approach to optimize capital
efficiency
• Regular project reviews and risk assessments
• Development of strategy by management and endorsed by
the Board
↔
Funding
Access to capital for project
development in volatile
market conditions.
Potential delays or
indefinite
postponement of
exploration and
development
activities.
• Regular engagement with shareholders and financiers
• Diversification of funding sources
• Phased development approach to reduce initial capital
requirements
• Successful execution of US$750 million Gold Stream
Agreement post year end
↓
Environmental
Stewardship
Compliance with
environmental laws and
management of
environmental impacts.
Potential for
regulatory penalties,
reputational damage,
and loss of social
license to operate.
• Implementation of comprehensive Environmental
Management Plans
• Regular environmental audits and compliance monitoring
• Investment in water recycling and management practices
• Advancement of the "One Million Trees" reforestation
program
↓
Permitting and
Land Access
Complexities in obtaining
necessary permits and
securing land access for
operations.
Potential delays in
exploration and
development
activities, increased
costs, and operational
disruptions.
• Proactive engagement with regulatory authorities
• Development of comprehensive stakeholder engagement
plans
• Strategic approach to land acquisition and community
agreements
• Regular review and updating of permitting strategies
↑
Risk Trend Key:
↑ Increased risk ↓ Decreased risk ↔ Stable risk
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SolGold plc Annual Report for the Year Ended 30 June 2024
18
LOOKING AHEAD
As we advance our projects, particularly Cascabel, we remain committed to continuous improvement in our risk management
practices. By integrating risk management into our strategic planning and operational processes, we aim to enhance our resilience,
capitalize on opportunities, and deliver sustainable value to all our stakeholders.
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SolGold plc Annual Report for the Year Ended 30 June 2024
19
ENGAGING WITH OUR STAKEHOLDERS – SECTION 172 STATEMENT
In accordance with the provisions outlined in section 172 of the Companies Act 2006 (UK) (the “Act”), the Board of Directors of SolGold
plc is committed to considering the interests of all its stakeholders when determining the Group’s strategy and objectives. The Board
of Directors is aware of its duty to act in good faith and promote the success of the Company for the benefit of all of its members
equally and fairly, and, in doing so, it has regard for the interests of wider stakeholders.
We are conscious that the decisions we make have long-term consequences and are aware of the need to foster close relationships
with all our stakeholders and employees, as well as to consider the impact of our business on local communities and the environment.
Our key stakeholder groups and how we engaged with them during the 2024 financial year are summarized below:
Stakeholder
Importance
Engagement Methods
Key Topics
Investors
Critical for ongoing growth and project
development
•
Investor meetings with total
attendance of over 700 investors
•
Webinars
•
Presentations
•
Strategy
•
Governance
•
Project advancements
•
Performance
Employees
Essential for long-term success and
project execution
•
Regular town hall meetings
•
Performance reviews
•
Safety initiatives
•
Training
•
Project updates
•
Health and safety
•
Career development
Government
Bodies
Crucial for maintaining our license to
operate in Ecuador
•
Ongoing dialogue with various
levels of government
•
Cascabel project development
•
Infrastructure requirements
•
Regulatory compliance
Communities
Vital for social license and sustainable
operations
•
Weekly interaction
•
Information sessions
•
Local partnerships
•
Local employment
•
Community development
initiatives
•
Environmental stewardship
Suppliers
Critical for project development and
operational efficiency
•
Local vendor engagement
•
Collaboration on project studies
•
Responsible resource
management
•
Ethical conduct
•
Local economic development
In the Strategic Report section of this Annual Report, the Company has set out the short to long-term strategic priorities and described
the plans to support their achievement. Throughout the Annual Report, we have illustrated how section 172 factors have been
considered during the year and how we have engaged with key stakeholder groups.
Throughout the year and post year end, the Board has considered these stakeholder interests in key decisions, particularly regarding:
•
The updated Pre-Feasibility Study for Cascabel, adopting a phased approach to balance stakeholder interests
•
Securing the Exploitation Contract with the Government of Ecuador
•
Executing the US$750 million Gold Stream Agreement
The development of the Cascabel project is a long-term endeavour, and the considerations taken into account in making the above
key decision in respect of the Gold Stream Agreement was to secure the short-term viability of the Company firstly but at the same
time, lay a platform for the long-term interests of the project and with that our key stakeholders and our shareholders, and the
community and environment in which we operate.
By maintaining an open dialogue with our stakeholders and considering their diverse perspectives, we aim to create sustainable value
and advance our projects responsibly.
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SolGold plc Annual Report for the Year Ended 30 June 2024
20
SOLGOLD PLC 2024 SUSTAINABILITY REPORT AND TCFD DISCLOSURES
The Company has reported consistent with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations during
the year ended June 30, 2024. While we have not yet established specific emissions reduction targets, we are actively working towards
developing forward-looking metrics and targets based on the detailed climate risk assessment, as explained later in this report.
This Sustainability Report highlights how sustainability is embedded within our operations and details our performance over the past
12 months. The Report also contains our climate-related disclosures aligned with TCFD.
Through our exploration, discovery and development of copper and gold deposits in Ecuador, we work closely with local communities
and operate in some of the world’s most biodiverse natural environments. Our sustainability approach is rooted in a deep
understanding of our activities' potential environmental and socio-economic impacts and our commitment to respecting and
protecting natural resources and communities. The core pillars of this approach are:
The Environment
Our People
Health & Safety
Our Communities
We demonstrate our commitment to operating sustainably through our alignment with key UN Sustainable Development Goals (SDGs),
developed with reference to the ten fundamental principles across human rights, labour, environment and anti-corruption, as part of
our participation in the UN Global Compact. These SDG-aligned objectives are embedded throughout our operations, strategy, and
culture, enabling us to drive sustainable innovations and adapt to evolving global sustainability challenges. Our contributions align with
SDGs such as:
SDG 8: Promoting an injury and incident-free workplace
SDG 5: Ensuring equal opportunities for all employees
SDG 11: Proactively contributing to local communities
SDG 12: Supporting responsible mining practices
SDG 15: Rehabilitating and reforesting land
SDG 6, 7, and 12, Ensuring the responsible use of energy, water and waste
OUR CLIMATE-RELATED FINANCIAL DISCLOSURES
As a mineral exploration and development company, we recognize our pivotal role in the transition to a low-carbon economy and the
opportunities and challenges this presents. We are aware of the impacts of climate change and how our operations affect the
environment, our workforce, and the communities in which we operate.
We adhere to TCFD guidelines in our reporting. This marks the second year of our specific TCFD reporting. This section provides an
overview of the governance of climate-related risks and opportunities, their implications for our operations, and our management
strategies, including metrics and targets.
Following the introduction of new global standards for sustainability and climate-related disclosures in 2023, we are working to
improve our systems and procedures to better manage and disclose climate-related risks and opportunities. We are aware of the TCFD
additional guidance (2021 TCFD Annex) in preparing SolGold’s disclosures, and are still working through its implications.
GOVERNANCE OF CLIMATE-RELATED RISKS AND OPPORTUNITIES
Climate-related risks and opportunities are overseen at the board level and managed by our Executive management team.
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SolGold plc Annual Report for the Year Ended 30 June 2024
21
The Board’s Oversight
The Board of Directors is responsible for overseeing climate-related risks and opportunities, with day-to-day management delegated
to the Environmental Social Governance Management (ESGM) Committee. The ESGM Committee is comprised of the environmental
manager, social manager, communications manager, and director of corporate operations.
The ESGM Committee incorporates climate considerations into SolGold’s strategic and operational decisions. It identifies and assesses
climate-related risks, monitors progress towards climate-related goals and provides reports to the Board. The Committee also develops
strategies for climate change mitigation and provides guidance on the transition to low-carbon technologies and energy efficiency.
Management’s Role
SolGold's management team integrates climate-related considerations into our business operations and strategy as part of our overall
risk management framework. While specific ESG metrics are not explicitly included in the CEO's performance assessment, several key
performance indicators (KPIs) align with and support ESG principles, including:
Safety and Environmental Performance - Reducing safety and environmental incident rates to zero.
Governance and Compliance - Maintaining 100% compliance with governance standards and protocols.
Stakeholder Engagement - Organizing community engagement events and increasing the number of shareholder meetings.
Operational Efficiency - Implementing cost control plans and meeting budget targets to enhance business sustainability.
Project Advancement - Completing technical studies, which include considerations for sustainable project development.
Ensuring compliance with transparency initiatives - Management oversees our adherence to the Extractive Sector
Transparency Measures Act (ESTMA) and supports the principles of the Extractive Industries Transparency Initiative (EITI),
maintaining up-to-date reporting and disclosures.
Management is responsible for identifying, evaluating, and developing strategies to address climate-related risks and opportunities
within our enterprise risk management process. This includes:
Overseeing the implementation of mitigation and adaptation measures
Monitoring progress against our sustainability goals
Ensuring climate considerations are integrated into strategic planning and decision-making
As we consolidate our management team and advance our projects, particularly Cascabel, we will continue to evolve our approach to
climate-related risks and opportunities. This evolution will be integrated into our existing enterprise risk management framework,
ensuring our processes and procedures are fit for purpose and support sustainable project development. Key aspects of our ongoing
approach include:
Refining our corporate risk register, which includes climate-related considerations
Conducting regular risk reviews encompassing climate factors
Improved reporting to the Audit and Risk Committee on all material risks, including those related to climate change
Aligning climate risk management practices with project development strategies
Leveraging our ESGM Committee to provide oversight on environmental and social aspects of our operations
By integrating climate considerations into our established risk management processes, we aim to maintain a balanced and practical
approach that supports our business objectives while addressing the evolving challenges posed by climate change.
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SolGold plc Annual Report for the Year Ended 30 June 2024
22
STRATEGY
Climate-Related Risks and Opportunities
As a copper-gold exploration and development company, SolGold faces various climate-related risks that could affect our operations,
assets, and business model. While our current focus on permitting and de-risking the Cascabel deposit involves minimal environmental
impact compared to full-scale mining operations, we are aware of the future implications of climate-related risks and opportunities on
our strategic and operational plans.
As part of our overall risk management process, we have identified the following key climate-related risks and opportunities most
relevant to our business, particularly in the context of our Cascabel project.
Risk Category
Risk Description
Opportunity
Environmental Stewardship
Climate change may exacerbate
environmental challenges, potentially
impacting our compliance with environmental
laws and our social license to operate.
Adopt sustainable mining practices and
technologies that minimize environmental
impact, enhancing regulatory compliance and
stakeholder relationships.
Project Development
Extreme weather events and changing climate
patterns could affect construction timelines
and operational planning.
Design and construct climate-resilient
infrastructure, reducing the risk of operational
disruptions and enhancing long-term cost
savings.
Social License to Operate
Climate-related impacts on local communities
may influence our relationships and ability to
maintain community support.
Engage with local communities on climate
adaptation projects, strengthening
community relations and enhancing our social
license to operate.
To address these risks and capitalize on opportunities, we are:
Implementing comprehensive Environmental Management Plans that consider climate change impacts
Designing infrastructure with climate resilience in mind
Engaging with local communities on climate adaptation projects
Exploring renewable energy options for our operations
Investing in water-efficient technologies and practices
By integrating these climate considerations into our broader risk management and strategic planning processes, we aim to enhance
our resilience to climate-related challenges while positioning SolGold as a responsible and forward-thinking player in the mining
industry.
Impacts on our Business, Strategy & Financial Planning
Our assessment of climate-related risks and opportunities is integrated into our broader risk management framework. This approach
ensures we identify, assess, and manage climate-related issues alongside other material business risks. The findings from this
assessment inform our strategic planning and decision-making processes, aligning with our long-term objectives and resilience
strategies.
As we progress from exploration to development, particularly with the Cascabel project, we continue to refine our understanding of
climate-related impacts on our operations. This ongoing evaluation allows us to adapt our strategies to the changing climate landscape
while pursuing sustainable growth.
Climate Considerations in Project Development Phases
During our Project‘s pre-construction and construction phases, we consider various climate-related factors. These considerations are
part of our approach to mitigating environmental impacts and aligning with global best practices for climate resilience. Our assessment
includes potential risks, their impacts, and strategies to address these challenges, ensuring continuity and efficiency while safeguarding
the environments in which we operate.
Climate Risk Opportunities
In addition to managing risks, we have identified several opportunities to enhance sustainability and operational efficiency in response
to climate change. These initiatives aim to reduce our environmental impact and position SolGold as a responsible player in the
sustainable mining industry. Key areas of focus include:
Investing in renewable energy sources
Improving energy efficiency across our operations
Adopting innovative technologies to reduce our carbon footprint
Enhancing our resilience to climate variability
Assessing Transition Risks in a Changing Climate
As SolGold continues its journey towards a low-carbon economy, understanding and managing transition risks is crucial for our
sustainability and operational adaptability. We have enhanced our strategies to address an evolving regulatory landscape,
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SolGold plc Annual Report for the Year Ended 30 June 2024
23
technological advancements, and shifting market dynamics. Our proactive measures are designed to mitigate risks and harness
opportunities arising from these transitions, ensuring that SolGold remains resilient and competitive.
Risk Category
Risk Description
Mitigation Measures
Policy and Legal
Risks
Introduction of stricter environmental regulations,
carbon pricing mechanisms, and emission reduction
targets
Stay informed about regulatory changes, engage in policy
discussions, and proactively implement measures to comply with
anticipated regulations, ensure robust environmental compliance,
and proactively address potential impacts.
Reputational Risks
Negative public perception and stakeholder pressure
regarding environmental impact
Enhance transparency and communication about sustainability
efforts, engage with stakeholders, and demonstrate commitment
to environmental stewardship.
Technological
Risks
Shifting demand for environmentally responsible
mining practices and products
Embrace and invest in innovative mining technologies to maintain
operational efficiency and reduce our environmental footprint.
Market Risks
Shifting demand for environmentally responsible
mining practices and products
Adjust market strategies to meet the growing demand for
sustainable mining practices and position SolGold as a leader in
climate resilience within the industry.
Our Next Steps
As SolGold progresses towards a more sustainable operational model, we will enhance our approach to managing climate-related
challenges with the following strategic actions:
1.
Enhanced Climate Scenario Analysis: As SolGold progresses towards key milestones in the Cascabel project's development,
we will broaden the scope of our climate scenario analysis to better assess the resilience of our strategic development and
operating plans against a variety of potential future climate scenarios.
2.
Refined Risk Management Framework: Update and refine our Climate-Related Risk Management Framework to integrate
the latest in risk identification, assessment, and mitigation practices.
3.
Robust Monitoring and Reporting: Implement more rigorous monitoring and reporting mechanisms to track the
effectiveness of our climate strategies and improve transparency in our disclosures in line with global standards such as the
TCFD.
4.
Targeted Stakeholder Engagement: Strengthen engagement with stakeholders to refine our understanding of climate-
related impacts and enhance the inclusiveness of our response strategies.
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. This framework is
integrated into our broader enterprise risk management process, ensuring that climate-related issues are considered alongside other
material business risks.
Key components of our framework include:
1.
Risk Identification: Regular assessment of climate-related risks and opportunities across our operations.
2.
Risk Assessment: Evaluation of potential impacts and likelihood of identified risks.
3.
Risk Management: Development and implementation of mitigation strategies for key risks.
4.
Monitoring and Reporting: Ongoing monitoring of climate-related issues and regular reporting to the Board and
stakeholders.
By implementing this framework, we aim to make informed decisions, evaluate and respond to risks, and take advantage of
opportunities that may arise as we transition to a low-carbon economy.
METRICS AND TARGETS
Current Metrics & Targets to Assess Climate-Related Risks and Opportunities
SolGold monitors key ESG and sustainability data, including climate change, environmental stewardship, responsible consumption,
human capital, zero harm, and social opportunities, which align with the UN Sustainable Development Goals specific to our operating
activities. As we progress through different stages of project development, we recognize the need to evolve our metrics and targets
to align with our operational realities. Our approach is to implement fit-for-purpose metrics that reflect our activities' changing scale
and nature. We are committed to continuous improvement in our sustainability practices, including the assessment and management
of climate-related risks and opportunities. This adaptive strategy allows us to balance our growth objectives with responsible
environmental stewardship, ensuring that our metrics and targets remain relevant and achievable as our operations expand and
evolve.
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SolGold plc Annual Report for the Year Ended 30 June 2024
24
Our Emissions Profile
We monitor our Scope 1 and Scope 2 emissions, the total energy consumed and the consumption intensity. While we have not
established reduction targets, we plan to develop forward-looking metrics and targets contributing to the global transition to a low-
carbon economy upon completing a detailed climate risk assessment. Regarding Scope 3 emissions, we have assessed these to be
immaterial in the context of our current business operations and overall emissions profile. However, we will continue to evaluate the
relevance and materiality of Scope 3 emissions as our operations evolve.
Methodology
SolGold measures and calculates our GHG emissions in line with the GHG Protocol methodology to allow for aggregation and
comparability across organizations and jurisdictions, as recommended by the TCFD.
Emissions Sources
2024
2023
Total Scope 1 Emissions (tCO2-e)
254
900
Total Scope 2 Emissions (tCO2-e)
28
217
ENVIRONMENT
Our exploration and development 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
In 2024, our total emissions were 281.49 tCO2-e, and energy consumption from our operations totalled 4,382.8 GJ. The primary source
of energy consumption and our scope 1 emissions was diesel used in our exploration, camp, machinery, and vehicles. We have seen a
decrease of 75% in Scope 1 and 2 emissions compared to last year’s total emissions, attributable to a reduction in field activities.
Energy Source
Annual Energy Consumption (kWh)
Diesel
718,025
LPG
152,445
Electricity
302,306
Gasoline
44,667
Total
1,217,443
Emissions Sources
2024
2023
Total Scope 1 Emissions (tCO2-e)
254
900
Total Scope 2 Emissions (tCO2-e)
28
217
Energy Activity
GHG Emissions Intensity
N/A
0.11
GHG Emissions Intensity Unit
tCO2-e per metre drilled
This year, SolGold conducted a comprehensive climate risk identification and assessment, allowing us to develop targeted strategies
to manage the identified risks and seize opportunities. Building on this, we are implementing specific actions as part of our transition
towards a low-carbon economy, including participation in the Zero Carbon Ecuador Program (PECC), led by the Ministry of the
Environment, Water and Ecological Transition. The PECC program is designed to engage industry stakeholders in achieving Ecuador's
climate goals, promoting projects that reduce greenhouse gas emissions and conserve and restore the environment. Emissions are
calculated based on our operations in Ecuador; UK emissions are considered negligible and immaterial.
WATER AND WASTE MANAGEMENT
Responsible water and waste management are paramount in an exploration and development mining operation.
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 efficiently to reduce this critical natural resource usage in our field
operations.
To achieve these aims and comply with requirements relating to water quality, we have established specific guidelines centred around
the 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 2024, the total water withdrawn for our activities was 13,441 m3, with water discharge amounting to 6,336 m3. This is a decrease
in our water discharge and withdrawal levels compared to 2023. The reduction in water discharge is related to the decrease in drilling
in the current period. Surface water was the primary source for water withdrawal and discharge.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
25
Water Withdrawn (m³)
2024
2023
Surface Water
13,365
29,032
Groundwater
0
0
Seawater
0
0
Produced Water
0
0
Third-party Water (bottled water for human consumption)
76
127
Total Water Withdrawn (m³)
13,441
29,159
Water Discharge (m³)
2024
2023
Surface Water
6,336
14,716
Groundwater
0
0
Seawater
0
0
Produced Water (water reused as part of the recirculation process)
0
6
Third-party Water
0
0
Total Water Discharge (m³)
6,336
14,722
Waste Management
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 landfills. Our Waste Minimisation Plan outlines our commitment to responsible waste
management.
To reduce waste in our managed operations, in 2024, we recycled and reused 5,329.85 kg of hazardous waste and diverted 1,583 kg
of non-hazardous waste from landfills.
Waste Category
Amount of Waste Generated and Sent to Landfill
2024
2023
Unit
Non-Hazardous Waste
9,094
16,615
kg
Hazardous Waste
0
0
kg
Process Waste
N/A
N/A
N/A
Waste Category
Amount of Waste Generated and Recycled/Reused
2024
2023
Unit
Non-Hazardous Waste
1,583
6,457
kg
Hazardous Waste
5,330
15,475
kg
Process Waste
4,289
13,786
N/A
BIODIVERSITY AND LAND REHABILITATION
Our exploration activities are located in Ecuador, in some of the world’s most biologically rich and ecologically significant regions. We
recognize our responsibility to protect and enhance these ecosystems through responsible mining practices, aiming to leave a positive
environmental legacy.
Biodiversity
We conduct environmental surveys to identify and understand the ecological makeup of the operational areas, using the International
Union for Conservation of Nature (IUCN) Red List to identify threatened species of flora and fauna. These surveys are conducted on
new and existing exploration projects to actively monitor and mitigate impacts on 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
12
Almost threatened
0
Vulnerable
5
Endangered
5
Critically endangered
3
Mammals
2
Almost threatened
0
Vulnerable
2
Endangered
2
Critically endangered
1
Birds
3
Almost threatened
0
Vulnerable
4
Endangered
1
Critically endangered
0
Amphibian
12
Almost threatened
0
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
26
IUCN Red List Species Name
Number of species registered in
biotic studies and monitoring
Number of species in IUCN Red List Species
Vulnerability Categories
Vulnerable
5
Endangered
13
Critically endangered
0
Reptiles
6
Almost threatened
0
Vulnerable
2
Endangered
2
Critically endangered
0
Land Rehabilitation and Nature Restoration
Our land rehabilitation and nature restoration efforts focus on restoring and rehabilitating landscapes disturbed by exploration
activities to a functional state, mitigating long-term environmental impacts. In 2024, we rehabilitated a total of 0.18 hectares of land.
The reduction from the prior year is a result of a decrease in exploration fieldwork.
Total Land Rehabilitated
2024
2023
Area Rehabilitated (ha)
0.18
0.51
One Million Trees Programme
As part of our commitment to addressing deforestation and enhancing biodiversity conservation through SolGold’s One Million Trees
Programme. The Programme focuses on rehabilitating and reforesting areas impacted by historical agricultural activities; we planted
22,492 native plants, covering an area of 20.29 hectares in 2024. The total number of plantings from the beginning of the program
until 30 June 2024 is now 249,181 plants, covering a total area of 192.77 hectares.
OUR PEOPLE
At SolGold, our commitment to sustainability extends beyond environmental considerations to encompass the well-being of our
employees and communities. Our approach is underpinned by our rigorous health and safety framework, engagement with local
communities, and providing educational, health, and socioeconomic opportunities.
Our Workforce
We are committed to fostering a local, inclusive and diverse workplace. To achieve this, we have been actively working towards
increasing female participation in our workforce and promoting employment for women in the broader community. At the end of the
2024 reporting period, 17.5% of our workforce was female, an increase of 3.9% from the previous year. Our employees also represent
all age groups, reflecting the diverse communities that make up our workforce. The Company had one female director and six male
directors. Of the three senior managers within the Group including directors of subsidiary entities, there are two males and one female
holding these positions. See Corporate Governance Report on page 35 for further information.
Employment Type
Male
Female
Other
Total
Permanent Employees
272
48
0
320
Temporary Employees
18
7
0
25
Non-guaranteed hours employees
1
5
0
6
Total
291
60
0
351
Employment Type
Under 30
30-50 years old
Over 50 years old
Total
Permanent Employees
45
225
50
320
Temporary Employees
13
10
2
25
Non-guaranteed hours employees
3
2
1
6
Total
61
237
53
351
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
27
Health and Safety
Safeguarding the health, safety and well-being of our workforce and communities is integral to our sustainability framework. Our
Health and safety commitments and workforce development initiatives are embedded in our core values and drive our operations.
Incidents
2024
2023
Number of Fatalities
0
0
Lost Time Injury (“LTI”)
0
2
Restricted Work Injury (“RWI”)
0
2
Medical Treatment Injury (“MTI”)
0
1
First Aid Injury
3
2
Hours Worked
863,443
1,191,195
Total Recordable Injury Frequency Rate (“TRIFR”)
0
4.19
In 2024, we are pleased to report zero fatalities and no lost time injuries, and our TRIFR was 0 for the reporting period. This represents
a decrease from our 2023 TRIFR of 4.19. We continue to review, revise, and implement new health and safety procedures to strengthen
this performance and achieve our goal of an injury and incident-free workplace.
Our Communities
Building strong relationships with our communities is fundamental to creating safe, sustainable and successful operations. An
important aspect of our business is to invest in and create opportunities that positively impact the communities in which we operate.
The relationships 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. SolGold has maintained good standing with local
authorities and engages in joint activities where we can support them.
SolGold invests in its local communities through various socioeconomic development initiatives, focussing on the following activities:
Education and training
Health care
Socioeconomic investment
Social, cultural and sporting activities in
partnership with local governments of
our communities
Transparency and Stakeholder Engagement
As a Canadian Reporting Issuer (TSX: SOLG), SolGold complies with the Extractive Sector Transparency Measures Act (ESTMA) and that
supports Canada's role in the Extractive Industries Transparency Initiative (EITI). Our ESTMA reports are maintained online and
submitted annually to Natural Resources Canada (NRCAN), demonstrating our commitment to open and accountable practices in our
operations and financial dealings.
Local Procurement & Community Employment and Training Opportunities
We prioritize local procurement and employment opportunities. In 2024, we spent US$2,069,988 in our local communities,
representing 19.55% of our total expenditure. This investment directly supports local businesses and contributes to the economic
growth of our host communities.
2024
2023
Community Workers
266
229
Technicians
94
31
Key training and employment initiatives in 2024 included:
Establishing garden maintenance services at the ENSA camp, providing local employment and skills development
Creating plot maintenance services for ENSA's One Million Trees reforestation project, combining environmental
stewardship with job creation
Ongoing employment and training for women in community bakery and dining room operations, promoting gender diversity
in our workforce
Training families in beekeeping and apiary maintenance, supporting sustainable livelihoods
Continuing our coffee program, providing training and support for local coffee plantation businesses, enhancing agricultural
skills and economic opportunities
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
28
Our Mi Futuro en Cascabel Programme continues to invest in the future of local youth, having provided 25 university scholarships to
local students since its inception. This program supports education in science, technology, and humanities, contributing to long-term
capacity building in our communities.
These initiatives, combined with our broader community investment activities - which totaled US$1,618,041 in 2024 for community
grants, sponsorships, infrastructure, and services - demonstrate our holistic approach to community development. By focusing on
education, employment, and sustainable business practices, we aim to create lasting positive impacts in the regions where we operate.
Community Investment Activity
2024 (USD)
2023 (USD)
Community Grants and Sponsorship
1,043,477
764,365
Community Infrastructure and Services Investment (including
payment of mining easements and permits)
574,564
1,708,373
Community Engagement
In 2024, we held 633 community meetings and events involving 7,887 community members. We maintain formal and informal
communication channels for community feedback and grievances. From June 2023 to July 2024, we registered 12 grievances, of which
6 were resolved, and 6 are in the resolution process.
By maintaining a solid commitment to sustainability across all aspects of our operations, SolGold aims to contribute positively to the
environment, our people and the communities we serve.
STRATEGIC REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
29
VIABILITY STATEMENT
In accordance with provision 31 of the 2018 UK Corporate Governance Code, the Directors have assessed the prospects of the Group
over a period of approximately three years, extending to the anticipated commencement of construction of the Cascabel Project. This
timeframe aligns with the expected completion of conditions to draw the full US$100 million Initial Deposit under the recently
announced Gold Stream Agreement, securing the remainder of project financing and obtaining all necessary licenses and permits.
The Directors' assessment primarily considered:
The execution and implications of the US$750 million Gold Stream Agreement
The political and economic environment in Ecuador and globally
Potential fluctuations in copper and gold prices
The state of equity and debt capital markets
The ability to attract and retain key talent
Mitigating actions available to the Group
Critically, subsequent to the year-end, SolGold executed the US$750 million Gold Stream Agreement with Franco-Nevada and Osisko
Gold Royalties, two of the most respected players in the streaming and royalty sector. The first tranche of US$33.4 million of the Initial
Deposit was drawn at closing, significantly bolstering the Group's cash position. The remaining US$66.6 million is expected to be drawn
as milestones are achieved over the next fifteen-months, providing a clear pathway for funding through to the final investment
decision.
The N.I. 43-101 Technical Report titled "Pre-Feasibility Study For the Cascabel Project" (2024 PFS), released on March 8, 2024,
demonstrates the Cascabel Project's robust potential over a 28-year mine life, following a 4-year construction period. The execution
of the Exploitation Contract (for 33 years) and the granted license period (renewable for the life of the mine) further validate the
project's quality and highlight the Ecuadorian government's support. Additionally, the Gold Stream Agreement not only substantiates
the project's technical and economic merits but also further secures US$650 million towards the US$1.55 billion initial capital
requirement outlined in the 2024 PFS.
The Directors have considered the ability to meet the draw down conditions in their financial forecasts over the viability period. The
base case forecast, incorporating the Gold Stream Agreement and modest additional financing for non-Cascabel expenditures,
provides sufficient funding for the Group's operations and Cascabel advancement over this initial period.
The Directors acknowledge that as SolGold transitions from explorer to developer, significant additional funding will be required
beyond the initial US$100 million deposit to reach the total US$1.55 billion needed to commence construction. This includes raising
approximately US$900 million in addition to the second part of the Gold Stream Agreement (US$650 million). The Directors remain
confident in the Group's ability to secure the necessary financing to advance the Cascabel Project. This confidence is underpinned by
the project's quality, the significant de-risking anticipated over the next two years, and the extensive technical due diligence completed
to date. As the project progresses, the Group will explore a comprehensive range of funding options typically available for projects of
this scale and quality. Additionally, the Group remains open to exploring strategic partnerships that could bring valuable expertise in
mine development and operations. The specific funding strategy will be evaluated and refined as the project advances and its
requirements become more defined. However, the Directors recognize that this phase is subject to greater uncertainty, being reliant
on debt and equity market conditions, copper prices, and other external factors.
The involvement of industry leaders like Franco-Nevada and Osisko Gold Royalties, following their rigorous project finance-level due
diligence, represents a significant vote of confidence in the Cascabel Project's viability. Their substantial commitment, particularly the
upfront nature of the Initial Deposit, signals a strong belief in the Cascabel Project's potential. This investment demonstrates their
conviction that Cascabel will successfully advance to become a producing mine. Such external validation from experienced mining
investors further supports the Directors' assessment of the Group's prospects and ability to raise further funding.
Based on this assessment and project development at this stage, the Directors have a reasonable expectation that the Group will be
able to continue in operation and meet liabilities as they fall due over the period of their assessment. This expectation is underpinned
by the executed Gold Stream Agreement, the quality of the Cascabel Project as evidenced by the 2024 PFS and Exploitation Contract,
and the Group's commitment to exploring and pursuing appropriate financing strategies as the project advances.
The Strategic Report was authorised for issue and signed on behalf of the Directors by:
Scott Caldwell
Director
26 September 2024
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
30
CORPORATE GOVERNANCE REPORT
CHAIR’S INTRODUCTION
Dear Shareholders,
I am pleased to present the Corporate Governance Report for the financial year ending 30 June 2024.
BOARD EVOLUTION AND GOVERNANCE
The past year has seen substantial changes to our Board of Directors, reflecting our commitment to evolving our governance structure.
We welcomed three new independent Non-Executive Directors: Adrian (Steve) van Barneveld, Jian (John) Liu, and Charles Joseland.
Their diverse expertise in project development, corporate finance, and financial accounting strengthens our leadership team and
supports our strategic objectives.
As we continue to enhance our Board composition, including the search for a new Chair, we are focusing on implementing governance
practices that are both robust and appropriate for a company at our stage of development. The recent reconstitution of our Board
Committees is a significant step in this direction, ensuring specialized oversight across critical business areas.
GOVERNANCE FRAMEWORK AND COMPLIANCE
SolGold has been operating with reference to the UK Corporate Governance Code 2018. However, as we continue to evolve, we
recognize that full compliance with this code may not be the most practical approach for a company at our stage of development. We
are currently reviewing our governance framework to ensure it remains fit for purpose, supports our strategic objectives, and aligns
with shareholder expectations. As part of this review, we are considering a transition to the Quoted Companies Alliance (QCA)
Corporate Governance Code, which may be more appropriate for our size and stage of evolution. Details of our current compliance
status with the 2018 UK Corporate Governance Code and explanations for any deviations can be found on pages 32 of this report
SHAREHOLDER ENGAGEMENT
At our Annual General Meeting (“AGM”) in December 2023, we received valuable feedback from our shareholders on several key
resolutions. We have since engaged in constructive dialogues with a broad range of shareholders to better understand their
perspectives with respect to the allotment of shares, the disapplication of pre-emption rights, and other topics. These insights are
instrumental in shaping our governance practices and strategic decisions moving forward.
LOOKING AHEAD
As we focus on de-risking the Cascabel Project, the Board is poised to provide robust support to our management team. Our newly
constituted committees are well-positioned to contribute their expertise to critical workstreams, ensuring thorough oversight and
informed decision-making.
In the coming year, we will continue to refine our governance framework, aiming to enhance our practices in a manner that is
proportionate to our size and complexity while meeting the expectations of our stakeholders.
CONCLUSION
The past year has been one of strategic restructuring for SolGold. I extend my sincere gratitude to our shareholders for their continued
support and to our Board members for their unwavering commitment. As we move forward, we remain focused on creating long-term
value for all our stakeholders and shareholders.
We look forward to the opportunities that lie ahead and to keeping you informed of our progress.
Sincerely,
Scott Caldwell
Director
26 September 2024
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
31
OVERVIEW
SHAREHOLDERS
EXECUTIVE MANAGEMENT
BOARD OF DIRECTORS
Audit & Risk
Committee
Remuneration
Committee
Nomination
Committee
Environmental, Social &
Governance Committee
THE BOARD OF DIRECTORS
The Board is responsible for ensuring SolGold’s long-term success and making critical decisions. The matters reserved for the Board
are available on the Company’s website in the Corporate Governance Charter (https://solgold.com.au/documents/corporate-
governance-charter/).
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 policies, including Corporate Governance
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
Health and safety of our employees through monthly reporting of KPIs to the Environmental, Social, and Governance
Committee
Monitoring investor sentiment regularly and frequently engaging with the Group’s major shareholders
Approval of treasury policy and significant financing 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 management team as often as necessary.
MAJOR BOARD DECISIONS
Approval of the Exploitation Contract for the Cascabel Project
Entering into a Gold Stream Agreement with Franco-Nevada (Barbados) Corporation and Osisko Bermuda Limited (Post
year-end)
Entering into a bridge loan with Franco-Nevada Corporation
Appointment of additional Directors
Approval of the Phased PFS
Change of Company Secretary
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
32
CORPORATE GOVERNANCE STATEMENT
SolGold plc is committed to maintaining high standards of corporate governance, reflecting our dedication to best practices and
transparency. Our governance framework is shaped by multiple regulatory environments due to our listings on the London Stock
Exchange (LSE) and Toronto Stock Exchange (TSX).
REGULATORY FRAMEWORK AND VOLUNTARY COMMITMENTS
The Company’s LSE listing requires compliance with the United Kingdom's Financial Conduct Authority’s (FCA) UK Listing Rules
sourcebook and the Disclosure Guidance and Transparency Rules sourcebook. As a TSX-listed company, SolGold is regulated by the
Canadian National Policy 58-201 – Corporate Governance Guidelines.
While our Equity Shares (transition) listing on the LSE does not mandate compliance with the UK Corporate Governance Code 2018
("UK Code"), the Board has voluntarily referenced its principles where appropriate for our size and stage of development. As we evolve,
we are actively reviewing our governance framework to ensure it remains fit for purpose, including considering a transition to the
Quoted Companies Alliance (QCA) Corporate Governance Code, which may be more suitable for our current stage. The UK Code is
available to view on the Financial Reporting Council’s website (www.frc.org.uk).
COMPLIANCE AND EVOLUTION
For the financial year ended 30 June 2024, SolGold has aligned its practices with the UK Code, with some exceptions that reflect our
Company's unique position and stage of growth. A comprehensive disclosure table detailing these exceptions and the reasons for non-
compliance immediately follows this statement, offering full transparency to our stakeholders.
Our approach to corporate governance continues to evolve, considering SolGold's size, stage of development, and operational
complexity. We are committed to maintaining high standards while ensuring our practices are proportionate and add value to the
business. As we progress, we remain focused on refining our governance framework to support our strategic objectives, meet
regulatory requirements across jurisdictions, and align with shareholder expectations.
Provision of the Code
(Including Reference Number)
Non-Compliance
Reason for Non-Compliance
Compliance or Progress
towards compliance
Provision 2: Culture
A formal process to
monitor culture was not
undertaken.
The significant changes at
management level did not
avail a formal assessment.
As the business grows, a
formal culture assessment
may be considered.
Provision 3: Engagement with Shareholders
Throughout the year,
the Committee Chairs
have
not
regularly
engaged
with
shareholders
on
significant
matters
related to their areas of
responsibility.
The
changes
to
Board
composition
during
the
period
meant
that
committee functions were
generally undertaken by the
Board as a whole or by the
Executive Director.
It is expected that, with the
recent stabilisation of the
Board, Committee Chairs
will be able to engage with
Shareholders directly.
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
UK 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. Our s172 disclosure
can be found on page 19
Relationship
dynamics
between the Board and
stakeholders
are
considered
during
decision-making at Board
and Committee levels.
Provision 9: The chair should be independent on
appointment when assessed against the
circumstances set out in Provision 9. The roles of
chair and chief executive should not be exercised by
the same individual. A chief executive should not
become chair of the same company. If,
exceptionally, this is proposed by the board, major
shareholders should be consulted ahead of
appointment. The board should set out its reasons
to all shareholders at the time of the appointment
and also publish these on the company website.
The Company does not
have a chair who was
independent on
appointment.
Furthermore, the
position of chair and
chief executive are
currently being
undertaken by the
same individual.
The previous chair did not
seek re-election at the AGM
in 2023 and subsequently
ceased his tenure as a
director. With the need to
appoint one of their own to
the role of Chair, the Board
considered the requirement
for
independence
of
directors to be maintained.
The appointment of the CEO
to the position preserved
such independence.
The Board will look to
appoint a new director to
the Board to act as chair.
Consideration will be given
to ensuring that such
person
is
independent
upon appointment.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
33
Provision of the Code
(Including Reference Number)
Non-Compliance
Reason for Non-Compliance
Compliance or Progress
towards compliance
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
role
of
senior
independent director is
currently vacant.
Due to the changes at Board
level and the limited number
of independent directors, the
Board did not appoint a
senior independent Director
during the period under
review.
It is the intention that upon
the recruitment of a Chair,
and the position of Senior
Independent Director will
be reviewed.
Provision 13: Non-executive directors have a prime
role in appointing and removing executive directors.
Non-executive directors should scrutinise and hold
to account the performance of management and
individual executive directors against agreed
performance objectives. The chair should hold
meetings with the non-executive directors without
the executive directors present.
No meetings were held
during the year of the
Board at the exclusion
of
the
executive
director.
With no chair and limited
independent non-executive
directors for the majority of
the year, no meetings of this
kind were held.
Following the appointment
of additional independent
non executive directors
and
a
future
chair
appointment,
it
is
envisaged that additional
meetings will be held
without
executive
attendance
to
review
performance.
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.
During
FY2024,
the
Nomination committee
did
not
have
the
requisite majority of
independent
Non-
Executive membership.
Throughout the majority of
the period under review,
there was a limited number
of
independent
Non-
Executive Directors.
The Board has recently
reconstituted
the
Nomination
Committee
and it now complies with
the Provision.
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 recruitment
of recent Non-Executive
Directors, the positions
were not filled via open
advertising or the use of
an
external
search
consultancy.
The Board determined that
there
were
sufficient
prospective candidates with
the requisite knowledge and
experience from the Board’s
wider networks.
For the appointment of
further
Non-Executive
Directors or the Chair, the
Board will consider the use
of open advertising or
external
search
consultancies.
Provision 21: There should be a formal and rigorous
annual evaluation of the performance of the board,
its committees, the chair and individual directors.
The chair should consider having a regular externally
facilitated board evaluation. In FTSE 350 companies
this should happen at least every three years. The
external evaluator should be identified in the annual
report and a statement made about any other
connection it has with the company or individual
directors.
A formal and rigorous
annual evaluation of the
performance
of
the
Board
was
not
completed.
During
the
year
under
review, a process began but
due to changes in board
membership
was
not
completed.
Post
year
end,
an
evaluation
process
has
been instigated.
Provision 22: The chair should act on the results of
the evaluation by recognising the strengths and
addressing any weaknesses of the board. Each
director should engage with the process and take
appropriate action when development needs have
been identified.
A
process
was
not
conducted
During
the
year
under
review, a formal process was
begun but due to changes in
board membership was not
completed.
Post year end, a formal
evaluation
has
been
conducted.
Provision 23: The annual Report should describe the
work of the nomination committee, including:
the process used in relation to appointments,
its approach to succession planning and how
both support developing a diverse pipeline;
how the board evaluation has been conducted,
the nature and extent of an external
evaluator’s contact with the board and
individual directors, the outcomes and actions
taken, and how it has or will influence board
composition.
The Company does not
currently have a
succession planning
process for the Board.
A Board evaluation was
not carried out during
the FY2024 year.
Consideration around Board
succession planning is
underway.
Significant changes to the
Non-Executive director
positions, needing time for
the board to stabilise to
ensure effectiveness of an
evaluation.
The Board will continue to
review Board succession in
FY2025.
An evaluation is currently
underway.
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
For some of the year,
the ARC was not made
up entirely of
independent directors.
Until the appointment of
additional independent
Directors the composition of
the Board did not facilitate
compliance.
The ARC composition now
complies with the
provision.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
34
Provision of the Code
(Including Reference Number)
Non-Compliance
Reason for Non-Compliance
Compliance or Progress
towards compliance
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, review 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.
The Company will
undertake a review of the
effectiveness of all
material controls in
FY2025 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 2025 Annual Report
Provision 32: Before appointment as chair of the
Remuneration Committee, the appointee should
have served on a remuneration committee for at
least 12 months.
During the year, Dan
Vujcic was Chair of the
Remuneration
Committee but had not
served at least 12
months on a
remuneration
committee prior to his
appointment to the
Remuneration
Committee.
The retirement of Non-
Executive Directors
The recent appointment of
María Amparo Albán fulfils
this requirement, having
served for more than 12
months on the
Remuneration Committee
before becoming Chair.
Provision 33: The remuneration committee should
have delegated responsibility for determining the
policy for executive director remuneration and
setting remuneration for the chair, executive
directors and senior management. It should review
workforce remuneration and related policies and
the alignment of incentives and rewards with
culture, taking these into account when setting the
policy for executive director remuneration.
Whilst the
Remuneration
Committee reviews
executive and senior
management
remuneration,
determination of policy
is left to the Board as a
whole.
Due to numerous
management changes, the
Board has taken an active
role in this area by reviewing
first hand remuneration
questions rather than
delegating to the
Remuneration Committee.
The Board will reconsider
this approach in the future
and will report on this
provision in FY2025.
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;
a description, with examples, of how the
remuneration committee has addressed the
factors in Provision 40;
what engagement with the workforce has
taken place to explain how executive
remuneration aligns with wider company pay
policy
SolGold currently do
not have pay ratios nor
grading completed.
The factors in Provision
40 have not been
analysed or applied.
No engagement with
workforce.
The number of employees in
management positions is
limited and analysis of pay
ratios and pay gaps are not
considered appropriate.
No analysis of the factors in
Provision 40 as no updated
policy is being
recommended nor has
application in the current
year due to the time period
from when the Executive
Directors started his
position.
Due to the continued
decrease in the overall size
of the workforce wider
company policy is difficult to
assess.
The Board will provide an
update on its actions to
address this Provision in
FY2025.
Will be analysed when the
next remuneration policy
is put to shareholders and
applied at the next
appropriate time.
As the Group workforce
stabilises along with the
executive, engagement
will be more appropriate.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
35
DIVERSITY AND INCLUSION TARGETS
In accordance with the disclosure requirements under FCA UK Listing Rule 22.2.30, as at 30 June 2024, 14% of the individuals on the
Board are women, which is below the recommended 40%. Currently a woman does not hold any of the senior positions of Chair,
Senior Independent Director, CEO, or CFO. There are three members of the Board who are 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 Company acknowledges the importance
of diversity in its broadest sense, including diversity of thought, experience, and background. The Board recognizes the value that
different perspectives can bring to decision-making processes and is committed to maintaining a balanced and effective leadership
team. As part of our ongoing commitment to good governance, the Board regularly reviews its composition to ensure it has the right
mix of skills, experience, and diversity to drive the Company's strategy forward. Information collected for the purposes of UK Listing
Rule 22.2.30, has been collated by management and confirmed individually by the individuals.
GENDER IDENTITY REPORTING (AT 30 JUNE 2024)
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
6
86%
1
6
86%
Women
1
14%
0
1
14%
ETHNIC BACKGROUND REPORTING (AT 30 JUNE 2024)
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)
4
57%
1
4
57%
Mixed/Multiple Ethnic groups
-
-
-
1
14%
Asian/Asian British
1
14%
-
-
-
Black/African/Caribbean/Black British
-
-
-
-
-
Other ethnic group
2
29%
-
2
29%
Not specified/ prefer not to say
-
-
-
-
-
Additional information as required by UK Disclosure Guidance and Transparency Rules sourcebook (DTR) 7.2 can be found in the
Corporate Governance Report and the Directors report on pages 30 to 67
Further details of the way the Code has been applied can be found on the following pages;
Board Leadership
and Company
Purpose
Promoting the long-term sustainable success of the Company
Pages 39 to 41
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
Division of
Responsibilities
Leadership responsibilities from the Chair and effectiveness
Pages 43 to 44
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
Sufficiency of time 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
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
36
Evaluation of the Board to ensure strategic objectives met
Audit, Risk and
Internal Control
External audit functions are independent and effective
Page 45
Ability to present a fair, balanced and understandable assessment of the Company’s
position 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 reviewed during the period under review. The
remuneration of the CEO is designed to support strategy and promote long-term
sustainable success that is aligned with the Company’s purpose and values
Pages 52 to 62
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
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
37
BOARD OF DIRECTORS
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 seven (7) Directors, five (5) of whom are considered
independent and six (6) of whom are Non-Executive under the Code.
Scott Caldwell,
BSc (Mine Engineering)
Executive Director / CEO / Acting Chair
Appointment: November 2022
Nationality:
Canadian
Age:
67
Committees
- ESG Committee
- Nomination Committee
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 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,
External Appointments
Stella Minerals Canada ULC
Nicholas Mather
BSc (Geology)(Hons)
Non-Executive Director
Appointment: May 2005
Nationality:
Australian
Age:
67
Committees
- Nomination Committee
Career
Mr. Mather has 35 years of 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
- DGR Global Limited (ASX)
- Armour Energy Limited (ASX) (in liquidation)
- Clara Resources Limited (ASX)
- Lakes Blue Energy NL (ASX)
María Amparo Albán Ricaurte
JD, MecLaw, SIPA, Cert. Business Excellence
Independent Non-Executive Director
Appointment: October 2020
Nationality:
Ecuadorian
Age:
55
Committees
- Audit & Risk Committee
- Remuneration Committee (Chair)
- ESG Committee (Chair)
Career
Mrs. Albán was appointed Non-Executive Director on 21 October 2020
and has more than 25 years of experience in international trade and
sustainable development, particularly environmental compliance. Mrs.
Albán 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.
Skills and Expertise
Strategy & Leadership, Financial Management, Contract Management,
Sustainability/ESG, Legal, Risk, Corporate Governance
External Appointments
Nil
Slobodan (Dan) Vujcic
B. Bus (Hons), CA
Independent Non-Executive Director
Appointment: October 2022
Nationality:
Australian
Age:
45
Committees
- Nomination Committee (Chair)
Career
Mr. Vujcic is an investment banker and corporate advisor with almost
two decades of experience in global capital markets. Over his career,
Mr. Vujcic has advised clients in a diverse range of commodities across
numerous jurisdictions, including raising capital in equity and debt
markets globally, supporting the growth ambitions of emerging miners,
and attaining a significant presence in the industry. Previously, Mr.
Vujcic led the effort to expand Jefferies’ global footprint by covering
emerging small/mid-caps and family offices. He was instrumental in
leading First Quantum Minerals Ltd.’s C$5 billion acquisition of Inmet
Mining. Mr. Vujcic is currently the Chief Development Officer of Metals
Acquisition Limited (NYSE:MTAL) which owns the CSA Copper Mine.
Skills and Expertise
Business Development Acquisitions, APAC, Investment Banking
External Appointments
Nil
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
38
Adrian (Steve) van Barneveld
B. Minerals Technology
Independent Non-Executive Director
Appointment: December 2023
Nationality:
New Zealander
Age:
61
Committees
- Remuneration Committee
- ESG Committee
Career
Mr. Barneveld is a seasoned professional with a distinguished career
spanning over 35 years in the international resources and
infrastructure sectors. In his current role as General Manager, Australia
West, Mr. van Barneveld has been a key player at a leading provider of
minerals processing and associated infrastructure solutions for the
global resources industry. His tenure at the company has been marked
by significant growth and expansive international operations. Mr. van
Barneveld has a history of impressive leadership roles, including serving
as General Manager of Strategy & Growth, Chief Operating Officer, and
Principal Engineer, showcasing his versatile skill set and strategic vision
in the industry.
Skills and Expertise
Strategy & Growth, Minerals Processing and Engineering
External Appointments
Jameson Resources Limited (ASX)
Jian (John) Liu
B.Sc., MBA
Independent Non-Executive Director
Appointment: February 2024
Nationality:
Canadian
Age:
59
Committees
- Nomination Committee
Career
Mr.Liu brings over 30 years of private investment advisory experience
to the SolGold board, with a diverse background spanning multiple
sectors, including mining, energy, technology, consumer, and
healthcare. He previously worked as a partner at Valuestone Advisors
for mining investments, as an advisor at Jiangxi Copper Corp for its
overseas M&A projects, as a partner at Greenwoods PE Funds, as a
director at Mousse Partners and Actis, and as an associate at Merrill
Lynch Direct Investment Group. His experience includes assisting
portfolio companies in strategy formation, fundraising, investing and
corporate governance. Mr. Liu’s academic credentials include an MBA
from the University of British Columbia in Canada and a B.Sc. in
computer science and engineering from Shanghai Jiaotong University in
Shanghai, China, underscore his exceptional qualifications and
expertise.
Skills and Expertise
Financial Advisory
External Appointments
Nil
Charles Joseland
MA (Classics)
Independent Non-Executive Director
Appointment: February 2024
Nationality:
British
Age:
61
Committees
- Audit and Risk Committee (Chair)
- Remuneration Committee
Career
Mr. Joseland joins SolGold’s board as a highly experienced finance
professional with a career focused on the mining, utilities, and energy
sectors. With 32 years previously at PwC and as an audit partner
working on large listed international groups, Mr. Joseland brings a
wealth of knowledge in financial oversight, governance, and risk
management. His extensive career includes working in Spain and the
Former Soviet Union and advising many organisations in Africa and
North & South America. He currently serves as an independent non-
executive director at Kodal Minerals Plc and holds key advisory roles at
Southern Housing and Saddle Skedaddle. Mr. Joseland’s experience,
pragmatic approach and commitment to integrity and teamwork will
enhance SolGold’s corporate governance practices and strategic
decision-making processes.
Skills and Expertise
Financial oversight, governance, and risk management.
External Appointments
- Kodal Minerals plc (LSE:AIM)
- Raleigh International Trust (In liquidation)
BOARD CHANGES DURING FY2024
Mr. Adrian (Steve) van Barneveld was appointed to the Board as an Independent Non-Executive Director on 20 December 2023.
Mr. Jian (John) Liu and Mr. Charles Joseland were appointed to the Board as Independent Non-Executive Directors on 25 February
2024 and 27 February 2024, respectively.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
39
Mr. Liam Twigger and Mr. James Clare did not seek re-election at the AGM on 20 December 2023 and, as such, ceased to hold their
positions as Directors of the Company with effect from the conclusion of such AGM.
EXECUTIVE MANAGEMENT TEAM
Scott Caldwell
BSc (Mine Engineering)
Executive Director CEO
Career
Mr. Caldwell is a mining engineer with over 40 years of experience in the
global mining industry, having held several 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 several 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.
Chris Stackhouse
BBA (Hons), CPA, CA
Group Chief Financial Officer
Career
Mr. Stackhouse is an accomplished finance professional with over 20
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, where 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; he worked and lived for three years in Chile.
More recently, Mr. Stackhouse has served as CFO of Rockcliff Metals and
VP Finance for Generation Mining.
BOARD LEADERSHIP AND COMPANY PURPOSE
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 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 8 to 9 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 from management on these issues and ensures
that action is taken to align activities 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, with the continued significant changes to our employee stakeholders, no formal assessment of culture was conducted.
BOARD ACTIVITY DURING THE YEAR
SolGold over the past year witnessed substantial change to the business, being a continuation of the changes implemented in the
previous financial year. Further changes to the composition of the Board and the increased activity regarding financing activities meant
an increased level of activity, particularly in the second half of the financial year.
The Board has been heavily focused on the demands of integrating SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.)
into the Group and the restructure of our management team. Financing activities has taken a significant amount of time of the Board’s
focus. Performance in some areas, such as the further development of Governance Policies has been impacted whilst the Board
focusses on resetting the Group to ensure a great foundation upon which future progress will be 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
Integration of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.).
to consolidate ownership of the Cascabel project to demonstrate SolGold’s position
of supporting Ecuador becoming the next copper frontier
Reviewed and approved the key strategic priorities for the Group for the current
Financial Year
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SolGold plc Annual Report for the Year Ended 30 June 2024
40
Board Responsibilities
Activities
tenements and overseeing the Group’s operations
and risk appetite statements.
Received presentations from the CEO at Board Meetings, updating the Board on
progress against the Group’s strategic goals
Financing activities including reviewing the Gold Stream Financing Proposal
Approval of the Exploitation Licence for the Cascabel Project
Governance
Supervising the Group’s corporate policies and
procedures, including receiving 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.
Implementation of the Directors’ Remuneration Policy
Working towards voluntary compliance with the UK Corporate Governance Code
Reviews of Directors’ conflicts of interest and independence of Non-Executive
Directors
Reviewed and updated Board Committee memberships
Financial
Scrutiny and overall responsibility for the financial
affairs and controls of the Company.
Considered recommendations from the Audit and Risk Committee to adopt the
2023 Annual Report and Accounts, the 2024 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 2024-25 budget
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 management 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 financial community generally
Responsibilities to clients, customers, consumers
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 Policy
Bullying, Harassment & Discrimination Policy
Grievance, Complaints & Disputes Policy
Equity, Diversity & Inclusion Policy
Whistleblower Policy
Worksite Health & Safety
Alcohol & Drugs Policy
The Company’s Whistle-blower, Anti-Bribery & Anti-Corruption, and Code of Conduct are available on the Company’s website at
https://solgold.com.au/
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
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
41
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.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
42
STAKEHOLDER ENGAGEMENT
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 2025.
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 workforce is fostered through ongoing engagement, encompassing
site visits and quarterly townhalls with Senior Management.
STAKEHOLDER ENGAGEMENT: FOSTERING STRONG CONNECTIONS
SolGold maintains a 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. Management 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, which are 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.
The notice of the AGM, dispatched at least 21 clear 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 via a Regulatory Information Service and displayed on our website.
STAKEHOLDER FEEDBACK AND RESPONSIVENESS: A COMMITMENT TO GROWTH
The 2023 AGM noted shareholder concerns regarding the re-election of Mr. Nicholas Mather, and the director requests for
the authority to allot shares and disapplication of pre-emption rights. Acknowledging this input, CEO Scott Caldwell engaged
with corporate, institutional and smaller shareholders to comprehend their concerns. The Board continues to look to
improve adherence to Code provisions. The addition of three independent Non-Executive Directors during the year
underlines the importance the Board places on robust governance.
A comprehensive engagement extends to broader stakeholder groups, including the workforce, where Section 172 on
page 19 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 their
views are understood and considered.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
43
DIVISION OF RESPONSIBILITIES
CHAIR
Liam Twigger stepped down as our Non-Executive Chair on 20 December 2023. Since then, Scott Caldwell has acted as Chair at Board
meetings. It is the intention of the Directors to appoint a new Chair to the Board in due course.
CHIEF EXECUTIVE OFFICER
Scott Caldwell, appointed as CEO on 10 November 2022, is responsible for:
Executive Management matters of the Group
Operational performance and resource management
Implementing Board-established policies and strategies
Maintaining stakeholder and shareholder relationships
Ensuring timely and accurate reporting to the Board
BOARD COMPOSITION, INDEPENDENCE, AND DIVISION OF RESPONSIBILITIES
The Board comprises seven (7) Directors, of whom five (5) are considered independent. This composition provides an appropriate
balance of Executive and Non-Executive Directors to advocate shareholder interests and oversee Executive Management practices.
RECENT CHANGES
Liam Twigger and James Clare did not seek re-election at the AGM on 20 December 2023.
Adrian (Steve) van Barneveld was appointed as Non-Executive Director on 20 December 2023.
Jian (John) Liu and Charles Joseland were appointed as Non-Executive Directors on 25 and 27 February 2024, respectively.
DIRECTOR INDEPENDENCE
The Board annually reviews the independence of its Non-Executive Directors. All Independent Non-Executive Directors continue to
demonstrate objectivity and the ability to challenge Executive Management constructively.
Nicholas Mather is not considered independent due to his previous
role as CEO and significant interest in the share capital of the
Company. During the year, the Company became compliant with the
Code's requirement for at least half the Board, excluding the Chair,
to be independent Non-Executive Directors.
CONFLICTS OF INTEREST
Directors are bound by the Articles of Association and statutory duty
to avoid conflicts of interest. Potential conflicts are recorded in the
Company's conflict register and reviewed before every Board Meeting.
Independent Directors
Non-independent
María Amparo Albán Ricaurte
Scott Caldwell
Dan Vujcic
Nicholas Mather
Adrian (Steve) van Barneveld
Liam Twigger (until 20 Dec 2023)
Jian (John) Liu
James Clare (until 20 Dec 2023)
Charles Joseland
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SolGold plc Annual Report for the Year Ended 30 June 2024
44
BOARD COMMITTEES
The Company’s Board has formal Committees established in the following areas:
Audit and Risk
Remuneration
Nomination
Environment, Social, and Governance (formerly Health Safety Environment)
Strategy (disbanded on 16 January 2024)
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 2023 to 30 June 2024, there were 16 Board meetings (including one
delegated sub-committee meeting). Directors’ attendance at Board and Committee meetings which they were eligible to attend during
this period was as follows:
Board (inc. sub)
(16)
Audit and Risk
Committee (4)
Remuneration
Committee (1)
Nomination
Committee (1)
ESG Committee
(2)
Strategy
Committee (0)
Scott Caldwell
16/16
2/2
Nicholas Mather
15/15
0/1
María Amparo Albán
Ricaurte
15/15
4/4
1/1
1/1
2/2
Dan Vujcic
12/15
4/4
1/1
1/1
Adrian (Steve) van
Barneveld
10/10
2/2
1/1
1/1
Jian (John) Liu
6/6
Charles Joseland
5/6
Liam Twigger1
6/6
1/1
James Clare2
4/5
2/2
Notes:
1.
Liam Twigger ceased his role as Chair on 20 December 2023
2.
James Clare ceased his role as Director on 20 December 2023
NON-EXECUTIVE DIRECTORS’ ROLE AND TIME COMMITMENT
Non-Executive Directors are expected to provide objective judgement, hold management accountable, and demonstrate sufficient
time, knowledge, and skill for their responsibilities. The performance of directors is assessed.
SENIOR INDEPENDENT DIRECTOR
The Board did not have a formal Senior Independent Director during the year ended 30 June 2024.
COMPANY SECRETARY
Steven Wood currently serves as Company Secretary and is responsible for Board functioning, maintenance of materials and records,
and certain regulatory filings. The Board has access to the Company Secretary's advice and services as required.
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SolGold plc Annual Report for the Year Ended 30 June 2024
45
AUDIT, RISK AND INTERNAL CONTROL
INTERNAL AND EXTERNAL AUDIT
While 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.
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, are fair, balanced and understandable and provide 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, 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 Spanish and/or 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
Post year end, the Audit and Risk Committee conducted a robust assessment of the Company’s principal and emerging risks. This
comprehensive report of the principal and emerging risks and how these are managed and/or mitigated can be found on pages 16
to 18.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
46
NOMINATION COMMITTEE REPORT
A statement to shareholders from the Chair of the Nomination Committee.
Dear Shareholders,
I am pleased to present the Nomination Committee Report for 2024.
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 Nomination
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
Nomination Committee Terms of Reference were updated in 2022, and a copy is available on the Company’s website.
OBJECTIVES AND ACHIEVEMENTS IN 2024
The focus for the Nomination Committee Members throughout the year was on Board succession. Following the departure of several
Directors during the 2023 financial year, the focus on members was to source and evaluate new director appointments to the Board.
The number of meetings throughout the year does not reflect the intensity of the work undertaken by members, with director
succession being considered by the Board as a whole.
BOARD CHANGES
Liam Twigger and James Clare notified the Board that they would not seek re-election at the AGM held on 20 December 2023, and as
such, their tenures ended. In order to appoint additional Non-Executive Directors the Nomination Committee sought nominations of
potential appointees from management and fellow Directors. Upon review and following discussions with Nomination Committee
members and other Directors, the Board proposed that Adrian (Steve) van Barneveld be appointed as a Non-Executive Director. His
appointment as a Director of the Company was resolved by shareholders at the AGM held on 20 December 2023. The Nomination
Committee used a similar process appointment for Adrian (Steve) van Barneveld and was pleased that Jian (John) Liu and Charles
Joseland were appointed as Non-Executive Directors on 25 February 2024 and 27 February 2024 respectively. No external advisers
were used in the appointment process as it was felt that the nominations from within the Directors’ and managements networks
provided appropriate candidates. Diversity and inclusion is considered in the process (as it is when appointments are made at senior
management level and their direct reports), but is reviewed as only one aspect of a candidate’s appropriateness for the role.
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 under
2/3rds of the Nomination Committee were independent Non-Executive Directors, including the Chair. With the recent reconstitution
of the Nomination Committee, compliance with the Code has been attained with the majority of members being Independent Non-
Executive Directors.
KEY OBJECTIVES FOR 2025
The primary focus of the Nomination Committee will be to identify and appoint a new Chair for the Company. Following the changes
to the Board and Executive Management over the past 24 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.
Dan Vujcic
Chair – Nomination Committee
26 September 2024
NOMINATION COMMITTEE MEMBERSHIP
Member
Attendance
Dan Vujcic: Chair (from 16 Jan 2024)
Nicholas Mather
0/1
Jian (John) Liu (from 1 Aug 2024)
Scott Caldwell (16 Jan 2024 – 1 Aug 2024)
Liam Twigger (until 20 Dec 2023)
1/1
María Amparo Albán Ricaurte (until 1 Aug 2024)
1/1
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
47
AUDIT AND RISK COMMITTEE REPORT
A statement to shareholders from the Chair of the Audit and Risk Committee.
Dear Shareholders,
I am pleased to present my first Audit and Risk Committee (“ARC”) Report for 2024. I became Chair of the ARC on 1 August 2024, post
the year under review, and I report on the activities of my predecessors and this year-end's audit.
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 external auditors to discuss the audit of the financial statements and the Group’s internal controls.
In the year under review, the Board and management’s focus was on reducing cost overheads and strengthening the balance sheet of
the Company. The execution of the Gold Stream Agreement post year end allows the Company to focus on derisking of the Cascabel
project towards a decision on construction.
The CEO, CFO, Group General Counsel & Company Secretary, and external auditors 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.
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 risk identification
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.
COMMITTEE DISCUSSIONS
The ARC met four times during the year ended 30 June 2024 paying particular attention to financial planning, reporting and controls
and the Group’s liquidity position. Throughout the period under review, the Board took over some key decisions of the ARC as Board
AUDIT AND RISK COMMITTEE MEMBERSHIP
Member
Attendance
Charles Joseland: Chair
0/0
Dan Vujcic (Chair until 1 Aug 2024)
4/4
María Amparo Albán Ricaurte
4/4
Adrian (Steve) van Barneveld (until 1 Aug 2024)
2/2
James Clare (until 20 Dec 2024)
2/2
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
48
(and Committee) membership changes meant it was better suited to ensuring timely management and discussion of key issues as a
whole. The key topics discussed by the Committee are set out on the following pages.
SYSTEM OF INTERNAL CONTROL
Review of internal controls
Reviewing the Group’s
internal financial controls
With the closure of the Brisbane finance function, the ARC oversaw the transitioning of all finance
functions to newly recruited personnel. This is part of the increased focus on developing and
strengthening the overall control environment across the Group.
RISK ASSURANCE
Risk management
Assessing the Group’s risk
profile and the process by
which risks are identified and
assessed
The ARC discussed and reviewed the risk management framework and processes with management;
also the key risks, related controls and the mitigation plans in place, as well as the rationale for the
risk appetite for the identified risks.
External audit
Reviewing the results of the
external
audit
work,
evaluating the quality of the
external
audit
and
consideration of management
letter recommendations
The ARC reviewed and approved the 2024 Audit Plan. They received the presentation of the final audit
findings memo from PwC, and discussed the audit findings, control recommendations and other
observations. The ARC also met with PwC in private without management present; the previous Chair
of ARC and I have had meetings during the year and through the year-end audit process with PwC.
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 three years.
Internal audit
The Group does not currently have an internal audit function. This will be kept under review as the
internal control framework is improved and embedded and different sources of assurance sought.
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 and Group
The ARC reviewed the presentation of the Group’s audited results for the year ended 30 June 2024
and the unaudited results for the six months ended 31 December 2023 as well as the quarterly interim
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.
The ARC reviewed the significant judgements associated with the 2024 financial statements, including
“key audit matters”, and also reviewed the supporting evidence for the Group being a going concern.
In conducting these reviews, particular focus was given to the disclosures included in the basis of
preparation in Note 1 in the Notes to the Consolidated Financial Statements in relation to the Group’s
funding position and the suitability of the going concern assumption and viability statement
The ARC reviewed papers prepared by the finance team and the findings from the external auditors
in relation to the above matters. In particular, accounting judgements on going concern, carrying
value of E&E assets, the Net Smelter Royalty agreement and the Company’s investments in, and loans
to, the subsidiaries were debated.
EXTERNAL AUDITOR INDEPENDENCE
A key factor that may impair an auditor’s independence is the provision of non-audit services 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 SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.)
in previous years, but for the year under review has not provided any additional non-audit services apart from the review of the interim
results. The ARC has satisfied itself that the external auditors’ independence was not impaired with the provision of these services.
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. The upcoming year will be focussed on ensuring that internal controls, policies and procedures and risk management
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
49
processes are updated and/or developed to ensure that they are applicable and relevant to our business and ensuring we comply with
best practice corporate governance.
Given the early-stage development of the company, consideration will be given to whether the UK Corporate Governance Code is the
most appropriate code for the Company at this stage of its evolution, and a move to the Quoted Companies Alliance Code is being
considered.
Charles Joseland
Chair – Audit and Risk Committee
26 September 2024
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
50
ENVIRONMENTAL, SOCIAL AND GOVERNANCE COMMITTEE REPORT
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 2024. 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. I
encourage shareholders to review the comprehensive "STRATEGIC REPORT: SOLGOLD PLC 2024 SUSTAINABILITY REPORT AND TCFD
DISCLOSURES" section of this Annual Report, which provides detailed insights into our sustainability initiatives and climate-related
disclosures.
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 2024
The Committee met twice during the year ended 30 June 2024. Key matters discussed included:
Safety, Environment, Community Relations, and Security
Permitting progress and challenges
Addressing illegal mining concerns
Climate-related risks and opportunities, in line with TCFD recommendations
Progress on our One Million Trees Programme
Advancements in local community engagement and development initiatives
HIGHLIGHTS AND ACHIEVEMENTS
I am pleased to report significant progress in our ESG initiatives:
Achieved zero lost time injuries and a Total Recordable Injury Frequency Rate of 0
Reduced our Scope 1 and 2 emissions by 71% compared to the previous year
Planted 22,492 native plants, covering 20.29 hectares as part of our reforestation efforts
Increased female workforce participation to 17.5%, up 3.9% from last year
Invested US$1,043,477 in community grants and sponsorships
The ESG Committee commends the excellent work of our local environment and social teams who continue to develop and implement
the Group's sustainability initiatives. We remain committed to transparent stakeholder engagement and encourage all employees and
stakeholders to speak up on matters of concern, especially regarding safety.
Looking ahead, we will focus on enhancing our climate risk assessment, refining our ESG metrics and targets, and further integrating
sustainability into our operational strategies as we progress towards project development.
María Amparo Albán Ricaurte
Chair – ESG Committee
26 September 2024
ENVIRONMENT, SOCIAL AND GOVERNANCE COMMITTEE MEMBERSHIP
Member
Attendance
María Amparo Albán Ricaurte: Chair
2/2
Scott Caldwell
2/2
Adrian (Steve) van Barneveld (from 16 Jan 2024)
1/1
Dan Vujcic (until 16 Jan 2024)
1/1
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SolGold plc Annual Report for the Year Ended 30 June 2024
51
STRATEGY COMMITTEE REPORT
A statement to shareholders from the Final Chair of the Strategy Committee.
Dear Shareholders,
The Strategy Committee did not meet during the year ended 30 June 2024. During the year, all strategic decisions were made by the
Board as a whole and as such the Board disbanded the Strategy Committee in January 2024.
Dan Vujcic
Final Chair – Strategy Committee
26 September 2024
STRATEGY COMMITTEE MEMBERSHIP
Member
Attendance
Dan Vujcic: Chair
0/0
Nicholas Mather
0/0
James Clare
0/0
Liam Twigger
0/0
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
52
DIRECTORS’ REMUNERATION REPORT
A statement to shareholders from the Chair of the Remuneration Committee.
Dear Shareholders,
I am pleased to present the Remuneration Committee Report for the financial year ending 30 June 2024.
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 2018. 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 operated under the Director Remuneration
Policy which was passed at the EGM held on 30 June 2022. The Committee continues to recognise that a meaningful proportion of
shareholders did not support the resolution on the Directors’ Policy Remuneration that received 69.2% of votes in favour. Together
with the then Chair, Liam Twigger, and the previous CEO, Mr. Darryl Cuzzubbo we sought shareholders’ feedback. That feedback
indicated that shareholders did not believe it aligned with peer companies and that there was a preference that CEO remuneration 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 continues to reflect on the feedback and 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. With this in mind, it is the intention of the Board to update
the Director Remuneration Policy at the upcoming AGM. It is envisaged that more flexibility be given to the Board to remunerate
directors to take into account the current development stage of the Company and to incentivise the retention and recruitment of
appropriate executives.
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 create value for shareholders; and
Be robust, transparent and simple to understand and administer.
Members of the Remuneration Committee are independent Non-Executive Directors, including myself (as Chair), Adrian (Steve) van
Barneveld and Charles Joseland. I want to thank Dan Vujcic and Liam Twigger, who were also members for some of the period under
review. 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 to design 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 considered market trends
and benchmark data where appropriate. Internal departments or independent third parties can also assist the Committee in measuring
the level of achievement of the targets set in the Annual Bonuses or Long-Term Incentives. The Committee has had input into the
remuneration of other senior management to ensure it aligns with the Executive Director’s remuneration. As noted in the Directors’
Remuneration Report, no comparison is given between the Executive’s remuneration and that of the employees of the parent
company due to the significant changes in employee numbers. Similarly, due to significant changes in employee numbers across the
Group any comparison would not be useful.
REMUNERATION COMMITTEE MEMBERSHIP
Member
Attendance
María Amparo Albán Ricaurte: Chair
1/1
Adrian (Steve) van Barneveld
1/1
Charles Joseland
0/0
Dan Vujcic (until 1 August 2024)
1/1
Liam Twigger (until 20 Dec 2023)
0/0
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
53
KEY ACTIVITIES OF THE COMMITTEE
This year, the Committee’s overall objective has been to ensure that the remuneration structure supports the delivery of the
Company’s long-term strategy, and alignment with the interests of shareholders while delivering market-competitive remuneration to
employees, enabling SolGold to attract, incentivise and retain the best talents. The Committee met on one occasion and also approved
items through the execution of a written resolution. Specific activities have included:
Providing background to and advising the Board regarding the CEO’s remuneration;
Providing background to and advising the Board regarding remuneration for Senior Management;
Reviewing SolGold’s Directors’ Remuneration Policy, as approved by Shareholders at the EGM on 30 June 2022;
Providing input to the Board on Share Incentives for Employees and making recommendations for incentive awards and
remuneration increases for senior management; and
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.
CEO REMUNERATION
During the period under review, the Committee carefully considered the terms of our CEO’s remuneration arrangements and exercised
their discretion to advise the Board on amending Mr. Caldwell’s remuneration package in 2024.
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 was well below what would be considered ‘market’ for his role, and a significant uplift was
made to his base remuneration effective 1 January 2024 to bring it more into line with what would be considered ‘market.’ It is still
acknowledged that his base remuneration is still low by ‘market’ standards. Variable remuneration for Mr. Caldwell was not considered
during the course of FY2024.
SENIOR MANAGEMENT REMUNERATION
The Committee considered the remuneration of Senior Management during the year. Having benchmarked senior management
remuneration against peers, it was determined that the remuneration was below ‘market’ and that an increase was warranted. These
increases were approved by the Board with effect from 1 January 2024.
NON-EXECUTIVE DIRECTOR REMUNERATION
Non-Executive Director fees were last reviewed in 2021, and the Committee, when reviewing executive pay, also reviewed the fees
payable to Non-Executive Directors. Taking into account market data and also being cognisant of the terms of the Director
Remuneration Policy and the Company’s Articles of Association, it was determined that Non-Executive Director fees should be
increased to US$85,000. In addition, the Chair of the Company should receive an additional US$65,000, the Audit & Risk Committee
chair – US$8,500, other board committee chairs US$7,500 and the Senior Independent Director (“SID”) – US$7,500. Currently, the
Chair fee and SID fee are not being paid due to vacancies in those positions.
CONCLUSION
Shareholders will be asked to approve the Annual Remuneration Report as an ordinary resolution at the AGM in December 2024. In
line with the statutory requirement for a vote by shareholders on a director remuneration policy every three years, a new policy will
be proposed at the upcoming AGM. It is envisaged that amendments to the current policy will be proposed to the policy with the aim
of alignment with industry standards and drive success for all stakeholders. Furthermore, shareholders will be asked at the AGM to
approve amendments to the Company’s Articles of Association in relation to the restriction on Directors’ remuneration, and other
minor administrative matters. I hope that you find this report informative and that 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.
María Amparo Albán Ricaurte
Chair – Remuneration Committee
26 September 2024
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
54
ANNUAL REPORT ON REMUNERATION
This report outlines how the SolGold Directors’ Remuneration Policy will be implemented over the next financial year and provides
details regarding remuneration paid to the Executive Director during FY24. 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 Remuneration Committee shall review the appropriateness of the Policy
at least annually. An updated Remuneration Policy will be put to shareholders at the upcoming AGM of the Company.
The Remuneration Committee met once during the year under review.
REMUNERATION POLICY ALIGNMENT WITH THE UK CODE 2018
When determining executive remuneration policy, the Committee includes the following principles during their decision-making
process:
UK CODE PRINCIPLE
APPLICATION
Clarity
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.
Simplicity
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 the Executive Director 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 include non-financial KPIs linked to the
Company’s overall culture.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
55
AUDITED INFORMATION – DIRECTORS’ REMUNERATION
Single Total Figure of Remuneration
The detailed emoluments received by the Executive and Non-Executive Directors during the financial years ended 30 June 2024 and
2023 are detailed below:
Total salary
and fees
Taxable
Benefits
Bonus
Other
Pensions
Total
Total Fixed
Remuneration
Total Variable
Remuneration
US$
US$
US$
US$
US$
US$
US$
US$
Chair
Liam Twigger
Liam Twigger’s period in office ended on 20 December 2023
2024
50,622
-
-
-
5,570
56,192
56,192
-
2023
114,697
-
-
-
12,029
126,726
126,726
-
Non-Executive Directors
Nicholas Mather
2024
65,532
-
-
-
-
65,532
65,532
-
2023
67,049
-
-
-
-
67,049
67,049
-
María Amparo Albán
2024
81,111
-
-
-
-
81,111
81,111
-
2023
70,508
-
-
-
-
70,508
70,508
-
Dan Vujcic
Dan Vujcic was appointed on 24 October 2022
2024
65,672
-
-
-
6,919
72,591
72,591
-
2023
46,664
-
-
-
4,261
50,925
50,925
-
Adrian (Steve) van Barneveld
Adrian (Steve) van Barneveld was elected 20 December 2023
2024
37,909
-
-
-
3,844
41,753
41,753
-
2023
-
-
-
-
-
-
-
-
Jian (John) Liu
Jian (John) Liu was appointed 25 February 2024
2024
23,192
-
-
1,327
24,519
24,519
-
2023
-
-
-
-
-
-
-
-
Charles Joseland
Charles Joseland was appointed 27 February 2024
2024
22,468
-
-
-
-
22,468
22,468
-
2023
-
-
-
-
-
-
-
-
James Clare
James Clare’s period in office ended on 20 December 2023
2024
32,606
-
-
-
-
32,606
32,606
-
2023
67,057
-
-
-
-
67,057
67,057
-
Keith Marshall
Keith Marshall resigned on 12 August 2022
2024
-
-
-
-
-
-
-
-
2023
9,636
-
-
-
-
9,636
9,636
-
Elodie Grant Goodey
Elodie Grant Goodey resigned on 23 December 2022
2024
-
-
-
-
-
-
-
-
2023
38,538
-
-
-
38,538
38,538
-
Kevin O’Kane
Kevin O’Kane resigned on 23 December 2022
2024
-
-
-
-
-
-
-
-
2023
34,909
-
-
-
-
34,909
34,909
-
Total
2024
379,112
-
-
-
17,660
396,772
396,772
-
2023
449,058
-
-
-
16,290
465,348
465,348
-
Total salary
and fees
Taxable
Benefits
Bonus
Other1
Pensions
Total
Total Fixed
Remuneration
Total Variable
Remuneration
US$
US$
US$
US$
US$
US$
US$
US$
Chief Executive Officer
Scott Caldwell
Scott Caldwell appointed as a Director on 24 October 2022, Interim Chief Executive officer on 10 November 2022 and Chief Executive Officer on 20 March 2023.
2024
250,0003
60,0004
-
93,750
3,002
406,752
406,752
-
2023
125,000
-
-
106,250
-
231,250
231,250
-1,2
Darryl Cuzzubbo
2024
-
-
-
-
-
-
-
-
2023
588,6095
-
-
-
8,323
596,9325
596,9325
-2
Grand Total
2024
250,000
60,000
-
93,750
3,002
406,752
406,752
-
2023
713,609
-
-
106,250
8,323
828,182
828,182
-2
Notes:
1.
Other relates to a sign-on bonus paid to Mr. Caldwell. It has been reported over the two financial years in which it was paid rather than entirely in the year of award.
This amount was previously allocated to variable remuneration and has been reclassified to fixed remuneration.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
56
2.
Historically LTIP Awards were included on an accounting basis and not when all performance criteria had been determined. Previous year information is restated
from US$263,012 and US$399,417 for Mr. Caldwell and Mr. Cuzzubbo, respectively.
3.
During the current period, Mr. Caldwell’s salary was increased to US$300,000 per annum effective 1 January 2024.
4.
For the period 1 January 2024 – 30 June 2024, Mr. Caldwell was eligible for an overseas living allowance of US$10,000 per month. This amount was paid post year
end.
5.
Prior year ‘total salary and fees’ restated from US$544,136 which was reported in error in the prior year, and the necessary restatement of the total figures.
Share option schemes – audited
The Employee Share Option Plan (ESOP) of the Company was adopted by the Board in July 2017 and approved by shareholders at the
Annual General Meeting held on 28 July 2017. The ESOP is no longer available and has been replaced with the Long-Term Incentive
Plan Rules (LTIP), the Performance Bonus Plan (PBP), and the SolGold Employee Share Option Plan 2023 (ESOP 2023). All options
awarded under the ESOP have expired.
As at 30 June 2024, the following options are held by Directors under the LTIP:
Balance at
30 June 2023
Granted as
remuneration
Exercised
Forfeited / Lapsed
Balance at
30 June 2024
Exercise price
Exercise period
Scott Caldwell
30,000,000
-
-
-
30,000,000
17p
17/03/26-17/03/33
Total
30,000,000
-
-
-
30,000,000
17p
17/03/26-17/03/33
The Performance conditions associated with these options are outlined on page 58.
Payments to past Directors – audited
No payments were made to past executive directors in the year ended 30 June 2024.
Payments for loss of office – audited
No payments were made for loss of office in the year ended 30 June 2024.
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 2024
were as follows:
Beneficial
Non-Beneficial
30 June 2023
30 June 2024
30 June 2023
30 June 2024
Non-Executive Directors
Nicholas Mather
84,249,2821
84,249,282
5,480,6582
5,480,6582
María Amparo Albán
51,676
51,676
Nil
Nil
Dan Vujcic
Nil
Nil
Nil
Nil
Adrian (Steve) van Barneveld
N/A
Nil
N/A
Nil
Jian (John) Liu
N/A
Nil
N/A
Nil
Charles Joseland
N/A
Nil
N/A
Nil
Former Directors
Liam Twigger
392,156
N/A
James Clare
1,143,137
N/A
Nil
N/A
Total
85,836,251
84,300,958
5,480,658
5,480,658
Chief Executive Officer
Scott Caldwell
18,617,244
19,462,244
N/A
N/A
Darryl Cuzzubbo
N/A
N/A
N/A
N/A
GRAND TOTAL
104,453,495
103,763,202
5,480,658
5,480,658
Notes:
1.
Due to a change in persons closely associated with Nicholas Mather prior to 30 June 2023, the number of shares in which Nicholas Mather has a beneficial interest as
at 30 June 2023 has been restated – a decrease of 16,770 shares. The totals have been restated accordingly.
2.
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.
On 6 September 2024, Mr. Mather has stepped down as a Trustee of the Mather Foundation and consequently has no Non-Beneficial
Interest to declare as at the date of this document. Prior to him stepping down and post 30 June 2024, the Mather Foundation, sold
450,000 shares. Mr. Joseland acquired 86,000 shares on 1 August 2024.
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. Scott Caldwell’s holding meets this guideline.
Relationship between remuneration and Company performance (non-audited)
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
57
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:
30 June 2020
30 June 2021
30 June 2022
30 June 2023
30 June 2024
Share price at year end
£0.210
£0.285
£0.292
£0.159
£0.0876
Loss per share (cents)
(0.7)
(1.1)
(1.4)
(2.8)
(2.1)
There were no dividends paid during the year ended 30 June 2024, and the previous four years.
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.
CEO TOTAL REMUNERATION
Executive Officer
Financial Year
Single total figure of remuneration,
US$
Annual Bonus (STI)
(% of maximum)
LTIP (% of maximum)
Scott Caldwell
2024
346,752
0%
-
2023
231,2501
0%
Darryl Cuzzubbo
2023
996,349
-
-
2022
271,252
40%3
-
Keith Marshall
2022
376,531
90%
-
2021
212,145
-
-
Nicholas Mather
2021
227,3812
-
-
2020
400,162
-
-
2019
539,422
100%
100%4
2018
307,480
-
100%4
2017
314,382
-
-
2016
109,252
-
-
2015
15,716
-
-
Alan Martin
2015
268,756
-
-
Notes:
1.
Previous year restated to remove LTIP element.
2.
Restated from prior year as previously included an AUD600,000 amount for loss of office payment.
3.
Considering the terms of the termination of Darryl Cuzzubbo, the Board has determined that his bonus payment for the year ended 30 June 2022 was not payable.
4.
Options granted at an exercise price of £0.60, which subsequently expired and were not exercised.
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.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
58
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$300,000, payable monthly, for the performance of executive duties at the
Company. The CEO’s base remuneration was increased from US$200,000 with effect from 1 January 2024, however the uplift in
amount was only paid post year end.
Benefits: The CEO receives a monthly ex-patriate payment of US$10,000 due to relocating to Ecuador. Lodging, medical insurance and
pension contributions are paid to the CEO.
Short-Term Incentive: 50/100/150% (Threshold/Target/Stretch respectively of base salary US$300,000). 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$300,000) in each financial year
(starting with the financial year beginning 1 July 2024).
Recruitment Inducement (Sign-on Bonus): The CEO received 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 was 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
0%
Threshold – Average daily price per Share is equal to
£0.25 pence over three years from grant date
50%
Target – Average daily price per Share is equal to or
higher than £0.35 pence over three years from grant date
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. To date,
no formal qualitative and quantitative assessment of the CEO’s contribution has been concluded.
NON-EXECUTIVE DIRECTOR FEES
During the period, the Remuneration Committee and the Board assessed whether the fees for Non-Executive Directors (NEDs) are
competitive, fair and reasonable. The Committee looked at external information when reviewing the fee structure and levels for our
Non-Executive Directors.
The Articles of Association of the Company state 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 2024, the Directors’ fee was modified to US$85,000 (from AUD100,000), in line with similar companies. The Chair
receives an additional fee of US$65,000 for the additional time commitment needed. The chair of the Audit & Risk Committee receives
an additional US$8,500 and the chairs of other Board committees receive an additional US$7,500 each. The Senior Independent
Director (when one is appointed) will receive an additional US$7,500.
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
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.
Subject to any statutory provisions, Non-Executive Directors are not eligible to participate in the Company’s incentive program(s).
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
59
CHANGES IN DIRECTORS’ REMUNERATION
The table below sets out the percentage change in remuneration for the CEO’s and Non-Executive Directors. No comparison to remuneration of the employees of the parent company are included as due
to the significant changes (both increase and decrease) of employee numbers the comparison would not provide a useful comparison.
2024
2023
2022
2021
2020
Base Salary
Fees % Change
Benefits %
Change
STI %
Change
Base
Salary Fees
% Change
Benefits %
Change
STI %
Change
Base
Salary Fees
% Change
Benefits %
Change
STI %
Change
Base
Salary Fees
% Change
Benefits %
Change
STI %
Change
Base
Salary Fees
% Change
Benefits %
Change
STI %
Change
CEO
Scott Caldwell1
100%
-
-
-
-
-
-
-
-
-
Darryl Cuzzubbo2
(100%)
-
-
14%
-
-
-
-
-
-
Keith Marshall3
-
-
-
-
-
-
68%
-
100%
-
Nicholas Mather
-
-
-
-
-
-
(91%)
-
-
102%
-
(6%)
(100%)
(100%)
Non-Executive Directors
María Amparo Albán
15%
-
-
(20%)
-
-
53%
-
-
-
-
-
Dan Vujcic
41%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Adrian (Steve) van Barneveld
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Jian (John) Liu
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Charles Joseland
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Nicholas Mather4
(2%)
-
-
(22%)
-
-
276%
-
-
-
-
-
-
-
-
Liam Twigger5
(56%)
-
-
(21%)
-
-
28%
-
-
117%
(100%)
-
-
-
-
James Clare6
(51%)
-
-
(22%)
-
-
17%
-
-
32%
-
-
-
-
-
Elodie Grant Goodey7
(100%)
-
-
(53%)
-
-
20%
-
-
-
-
-
-
-
-
Kevin O’Kane8
(100%)
-
-
(56%)
-
-
55%
-
-
-
-
-
-
-
-
Keith Marshall9
(100%)
-
-
-
-
-
68%
-
100%
-
-
-
-
-
-
Jason Ward10
-
-
-
(100%)
-
-
10%
-
-
(6%)
-
-
24%
(100%)
-
Brian Moller11
-
-
-
(100%)
-
-
(49%)
-
-
(12%)
-
-
(6%)
(100%)
-
Robert Weinberg12
-
-
-
-
-
-
(100%)
-
-
(50%)
-
-
(6%)
(100%)
-
Notes:
1.
Scott Caldwell’s compensation base salary increase to USD300,000 per annum was effective 1 January 2024, but such increase was paid after year end. Scott Caldwell effective 1 January 2024 receives an overseas living allowance.
2.
Darryl Cuzzubbo ceased being a director on 10 November 2022
3.
Keith Marshall stepped down as Interim CEO on 30 November 2022
4.
Nicholas Mather resigned as CEO on 31 March 2021
5.
Liam Twigger ceased being a director on 20 December 2023
6.
James Clare ceased being a director on 20 December 2023
7.
Elodie Grant Goodey ceased being a director on 22 December 2022
8.
Kevin O’Kane ceased being a director on 22 December 2022
9.
Keith Marshall ceased being a director on 12 August 2022
10. Jason Ward ceased being a director on 13 May 2022
11. Brian Moller ceased being a director on 15 December 2021
12. Robert Weinberg ceased being a director on 17 December 2020
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
60
Pay Ratios Table
We have not included a CEO pay ratio in this report, as the Company has only one non-director 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 the Company’s Consolidated Financial Statement’s Note
5 on page 101 and the Consolidated Statements of Cash Flows on page 85.
2024
2023
Difference in spend
between years
Difference in spend
between years (%)
Total Employee Remuneration
9,797,184
21,198,305
(11,401,121)
(54%)
Expenditure of exploration and evaluation
25,140,364
43,297,918
(18,157,554)
(42%)
Dividends paid to shareholders
-
-
-
-
Shareholder support for the Directors’ Remuneration Policy and 2023 Directors’ Remuneration Report
The Company received shareholder approval of its Directors’ 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 Report was put to an advisory
shareholder vote at the 2023 AGM of the Company on 20 December 2023. The table below shows full details of the voting outcomes.
Votes for
Votes against
Withheld
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 2023 (at the 2023 AGM)
1,715,682,056 (88.94%)
213,284,080 (11.06%)
3,419,676
The Board notes that the Directors’ 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. For details regarding shareholder
feedback and responses, see page 52.
SUMMARY OF DIRECTORS’ TERMS
Non-Executive Director
Appointment Date
Notice Period
Nicholas Mather
11 May 2005
3 month’s notice
María Amparo Albán Ricaurte
21 October 2020
3 month’s notice
Dan Vujcic
24 October 2022
3 month’s notice
Adrian (Steve) van Barneveld
20 December 2023
3 month’s notice
Jian (John) Liu
25 February 2024
3 month’s notice
Charles Joseland
27 February 2024
3 month’s notice
Executive Director
Appointment Date
Notice Period
Scott Caldwell
10 November 2022
(Non-Executive from 24 October 2022
until appointment as CEO)
12 months’ notice
Notice periods in a Director’s contract may be paid out in lieu of notice.
Copies of the Executive Director’s service contract are available for inspection at the Company’s Registered Office.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
61
DIRECTORS’ REMUNERATION POLICY
STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY
The 2022 Remuneration Policy which was designed to attract, motivate and retain qualified industry professionals. In line with the
statutory requirement for a vote by shareholders on a director remuneration policy every three years, a new policy will be proposed
at the upcoming AGM. It is envisaged that amendments to the current policy will be proposed to the policy with the aim of alignment
with industry standards and drive success for all stakeholders.
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; and
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.
Further detail on the variable remuneration elements - Short and Long-Term Incentive can be found below the table.
Component
Link to Company Strategy
Policy Summary
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.
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 discretionary supplementary pension or retirement plan.
Benefits
Benefits are offered to complement base salary to
attract and retain Executive Directors.
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).
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 that are within
Director’s control.
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 the policy). 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).
Long-Term Incentive
Plan (‘LTI’)
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 LTI are made annually, in the form of shares, options, or
in exceptional circumstances, cash. LTI 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 Director(s) 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 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.
CORPORATE GOVERNANCE REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
62
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(s) 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:
María Amparo Albán Ricaurte
Director
Remuneration Committee Chair
26 September 2024
DIRECTORS’ REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
63
DIRECTORS’ REPORT
The Directors present the Annual Report of SolGold plc together with the audited financial statements for the year ended 30 June
2024.
In accordance with section 415 of the Companies Act 2006 (UK), the Directors present their report which incorporates the Strategic
Report, Corporate Governance Report and responsibility statements required under the Disclosure Guidance and Transparency Rules
sourcebook (“DTRs”) of the United Kingdom’s Financial Conduct Authority as set out on pages 5 to 62, for listed companies and the
audited accounts for the year ended 30 June 2024 as set out on pages 80 to 132.
PRINCIPAL ACTIVITIES
SolGold plc (“SolGold” or the “Company”) is a mineral exploration and development company headquartered in Perth, Australia. The
Company is a UK incorporated public limited company with the registration number 05449516 and registered address of 1 Cornhill,
London, EC3V 3ND, United Kingdom. SolGold is listed on both the LSE and TSX (SOLG on both exchanges) and has a leading exploration
and project team focused on copper-gold exploration and mine development with its primary assets in Ecuador and other mineral
exploration assets in 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 5 to 29 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.
RESULTS AND DIVIDENDS
The Directors do not recommend the payment of a dividend (2023: nil). The results for the year are set out in the consolidated financial
statements for the year ended 30 June 2024.
SHARE CAPITAL
Details of the issued share capital of the Company, including details of ordinary shares issued during the year, is set out in Note 18 of
the financial statements.
As at the date of this report, the Company’s issued share capital consisted of 3,001,106,975 ordinary shares of GBP0.01 each. Whilst
the Company does not hold any shares in Treasury, its subsidiary, SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.),
holds 157,141,000 shares in the Company. These shares were acquired as part of the acquisition of SolGold Canada Inc. (formerly
Cornerstone Capital Resources Inc.). They are available to be sold by SolGold Canada Inc. (formerly Cornerstone Capital Resources
Inc.) at its full discretion. 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 a Company 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.
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 approved by shareholders at the EGM 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. As at 30 June 2024, there were 56,000,000 options outstanding for the issue of ordinary shares
under the current employee incentive plans.
The current power to allot shares was granted by shareholder resolution at the 2023 Annual General Meeting (“AGM”) and a new
authority will be sought at the 2024 AGM within the limits which will be set out in the notice of meeting for the 2024 AGM.
DIRECTORS’ REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
64
DIRECTORS AND DIRECTORS’ INTERESTS
The Directors of the Company who held office during the year were as follows:
Appointed
Resigned
Scott Caldwell
24 October 2022
Nicholas Mather
11 May 2005
CEO: May 2005 – March 2021
María Amparo Albán Ricaurte
21 October 2020
Slobodan (Dan) Vujcic
24 October 2022
Adrian (Steve) van Barneveld
20 December 2023
Jian (John) Liu
25 February 2024
Charles Joseland
27 February 2024
Liam Twigger
17 June 2019
Chair: 5 August 2020
20 December 20231
James Clare
1 May 2018
20 December 20232
Notes:
1.
Mr. Twigger did not seek re-election at the AGM held on 20 December 2023, and as such his tenure as a director ceased at the conclusion of that meeting.
2.
Mr. Clare did not seek re-election at the AGM held on 20 December 2023, and as such his tenure as a director ceased at the conclusion of that meeting.
Further details about the current Directors and their roles within the Company are available in the Directors’ biographies on page 37
to 38. Details of the remuneration of the Directors, and their interests in the shares of the Company are contained in the Directors’
Remuneration Report on pages 52 to 62.
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, and any director appointed by the Directors also submits himself or herself for election at his or her first AGM.
However, all Directors intend to stand for re-election at the 2024 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 Directors’ Remuneration Report on page 56.
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 2024, 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
% of ISC
BHP Billiton Holdings Limited
310,965,736
10.36%
Newcrest International Pty Ltd
309,309,996
10.31%
DGR Global Ltd
204,151,800
6.80%
Jiangxi Copper (Hong Kong) Investment Company Limited
180,753,608
6.02%
SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.)
157,141,000
5.24%
Maxit Capital LP
153,366,663
5.11%
Tenstar Trading Limited
107,877,393
3.59%
Norges Bank Investment Management
91,526,468
3.05%
CORPORATE GOVERNANCE
The Corporate Governance Statement as required by DTR 7.2.1 can be found on pages 32 to 36 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 Corporate Governance Report as found on pages
30 to 62 forms part of this Directors’ Report and is incorporated by cross reference.
WHISTLE-BLOWER REPORTS
DIRECTORS’ REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
65
During the year ended 30 June 2024, we received two new reports to our dedicated confidential whistleblower hotlines, which have
been investigated, reported upon and finalised. There are no active whistleblowing cases. The 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 the 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, the Franco-Nevada Barbados/Osisko Bermuda
Gold Stream 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”) expired on 21 December 2023, 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 were made during the year.
GOING CONCERN
The Directors consider it appropriate to prepare the financial statements on a going concern basis, and have identified no material
uncertainties as to the Group’s ability to continue as a going concern for a period of twelve-months from the date of approval of the
financial statements for the year ended 30 June 2024. Further details of the Directors’ going concern analysis are included at Note
1(b)(ii) to the financial statements for the year ended 30 June 2024.
Further details of the Company’s cash balances and borrowings are included in Note 17and Note 21 in the Financial Statements from
pages 116 and 118.
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. Furthermore, the Company now has a roadmap to build the world’s first large scale carbon neutral copper mine at Cascabel.
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 are from activities of the operation associated with the consumption and purchase of electricity from the grid for
the camps.
DIRECTORS’ REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
66
Reported annual emissions are presented in tonnes 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.
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 (UK) (Strategic Report and Directors’ Reports). The Company does not have responsibility for
any emission sources that are not included in its consolidated statements.
INTENSITY RATIO
In previous years, we reported an intensity ratio based on mtCO2e/metre drilled. However, due to the cessation of all drilling operations
in FY2024, this metric is no longer applicable or meaningful for our current operations. We continue to monitor and report our absolute
GHG emissions and are evaluating alternative metrics that better reflect our current operational profile and environmental impact.
For further details on the Company’s emissions report and details refer to page 24.
CURRENCY
The functional currency of the subsidiaries in Australia is considered to be Australian Dollars (AUD). 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 subsidiary in Switzerland is considered to be United
States Dollars (US$). The functional currency of the subsidiaries in Canada is considered to be Canadian Dollars (CAD). 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, in some instances, subject
to the discretion of the Board regarding their Employee Share Incentive Plans.
Furthermore, under the Directors Remuneration Policy approved on 30 June 2022, Directors are not provided with compensation for
loss of office or employment that occurs because of a takeover bid.
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 29 to the financial statements. The Directors are not
aware of any other significant changes in the state of affairs of the Group and Company 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 its duties under section 172 of the Companies Act 2006 (UK) can be found on page 19
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 19).
A separate communication will be sent to shareholders and published on the Company’s website regarding the Company’s 2024 AGM,
which is likely to be held by December 2024.
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. It is
the intention of the Directors to seek Shareholder approval to make amendments to the Company’s Articles of Association in relation
to the restriction on Directors’ remuneration, and other minor administrative matters, at the upcoming AGM to be held in 2024.
Further information on this change will be included in the Notice of Meeting to be sent to shareholders with respect to the AGM.
DIRECTORS’ REPORT
SolGold plc Annual Report for the Year Ended 30 June 2024
67
DISCLOSURE OF AUDIT INFORMATION
In the case of each director in office at the date the Directors’ Report is approved:
so far as the director is aware, there is no relevant audit information of which the Group’s and Company’s auditors are
unaware; and
they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant
audit information and to establish that the Group’s and Company’s Auditors are aware of that 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 2024
AGM.
By order of the Board
Steven Wood
Company Secretary
SolGold plc
Level 5/191 St Georges Terrace
Perth WA 6000
Australia
26 September 2024
DIRECTORS’ RESPONSIBILITY STATEMENT
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68
DIRECTORS’ RESPONSIBILITY STATEMENT
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:
select suitable accounting policies and then apply them 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 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.
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 – 26 September 2024
On behalf of the Board,
Scott Caldwell
Director
SolGold plc
26 September 2024
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
69
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SOLGOLD PLC
Independent auditors’ report to the
members of SolGold plc
Report on the audit of the financial statements
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 2024 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, which comprise: the
Consolidated and Company Statements of Financial Position as at 30 June 2024; 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, comprising material accounting policy information and other explanatory
information.
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(a) 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.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
70
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(b), we have provided no non-audit services to the Company or its
controlled undertakings in the period under audit.
Our audit approach
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 an audit of specific account balances at four
other components: SolGold Finance AG, Green Rock Resources GRR S.A., Carnegie Ridge S.A. and Cruz del
Sol CSSA S.A.
● Financial reporting is undertaken for the consolidated Group by management in both North America and
in London, UK. Our scope enabled us to obtain 98.7% coverage of the Group’s consolidated total assets
and 90.8% coverage of the Group’s consolidated loss before tax.
Key audit matters
● Carrying value of Intangible assets (Group)
● Carrying value of Investments in subsidiaries and loans with subsidiaries (Company)
Materiality
● Overall Group materiality: US$4.6 million (Prior year: US$4.8 million) based on 1% of Total Assets.
● Overall Company materiality: US$4.2 million (Prior year: US$3.9 million) based on 1% of Total Assets.
● Performance materiality: US$3.4 million (Prior year: US$2.4 million) (Group) and US$3.1 million (Prior
year: US$1.9 million) (Company).
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.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
71
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.
This is not a complete list of all risks identified by our audit.
The acquisition of Cornerstone Capital Resources Inc (Group) and the Material uncertainty related to going
concern (Group), which were key audit matters last year, are no longer included because the business
combination, and the related accounting for the acquisition, do not have an impact on the current year
financial statements and there is no longer a material uncertainty related to going concern. 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)
Refer to Note 13 (Intangible assets).
As at 30 June 2024, the Group has intangible assets of
US$425.5 million, relating to deferred exploration costs.
IFRS 6 “Exploration for and evaluation of mineral
resources” sets out that exploration and evaluation
(E&E) assets shall be assessed for impairment when
facts and circumstances suggest that the carrying
amount of an E&E asset may exceed its recoverable
amount; if such indications exist, management is
required to undertake an impairment assessment of the
E&E assets under the requirements of IAS 36,
“Impairment of assets”.
In line with the requirements of IFRS 6, at 30 June
2024, 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
We evaluated management’s assessment of
potential indicators of impairment of the
intangible assets, being the deferred exploration
costs.
We undertook the following procedures in our
evaluation of management’s impairment
indicator assessment:
●
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,
and verification of licence status to
supporting documentation and through
discussion with external lawyers, in
order to confirm legal title;
●
Obtained management’s committed
spend, the timing thereof and
understood the legal implications of not
meeting the committed spend in the
agreed terms of the original licences,
supporting their assessment of
indicators of impairment, along with
their plans for future expenditure to
meet minimum licence requirements;
and
●
Obtained management’s assessment of
the viability of the future economic
benefits of the concessions in each
region to assess management’s
decision to continue exploration
activities and to determine whether the
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
72
Key audit matter
How our audit addressed the key
audit matter
E&E asset is unlikely to be recovered in full by
successful development or by sale.
As a result of their impairment trigger assessment at 31
December 2023, being the Group’s half year,
management concluded that there were indicators of
impairment relating to all seven Australian tenements
that were not expected to be approved for renewal and
were not considered to have commercial recoverability.
The entire tenement balance of US$8.3 million was
written off at 31 December 2023.
As at 30 June 2024, management did not identify any
impairment indicators relating to the remaining
intangible assets. However, they recognise the need for
additional funding to maintain non-Cascabel exploration
licences. Without this funding, they may have to halt
spending on the Regional Ecuadorian Properties, which
would result in an impairment trigger for the E&E
assets.
Impairment assessments can 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 quantum of intangible assets
and the significant judgement involved.
carrying amount is supportable by
successful development or sale.
We assessed the completeness and accuracy of
the impairment charges recognised in respect of
the seven Australian tenements by obtaining
licence status records from the Queensland
Department of Resources to confirm that the
Australian entities no longer held the rights to
the licences and thus no additional costs were
anticipated in relation to losing the tenements.
Based on the work performed, we are satisfied
that the impairment charges recognised against
the seven Australian tenements are appropriate.
As a result of the other procedures performed,
we determined that no other indicators of
impairment existed for the remaining intangible
assets as at 30 June 2024 and that adequate
disclosures have been made in the financial
statements.
Carrying value of Investments in subsidiaries and loans
with subsidiaries (Company)
Refer to Note 9 (Investment in subsidiaries), Note 10
(Intercompany loans with subsidiaries).
At 30 June 2024, the Company held Investments in
subsidiaries amounting to US$258.1 million, as well as
Intercompany loans with subsidiaries of US$205.6
million.
In assessing for impairment indicators of the
investments, 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 an impairment. The Company’s market
capitalisation was below its net assets as at 30 June
2024 but was not considered a trigger for impairment
considering other internal and external sources of
information. For the loan balances, management
considered whether the relevant subsidiary could repay
the loans if they were demanded at the balance sheet
date.
Based on management’s assessment, an impairment
was recognised in respect of the carrying value of
investments in subsidiaries, in line with the impairments
of the Australian tenements. No expected credit losses
In respect of the Company’s Investments in
subsidiaries, 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.
We also evaluated the ability of the subsidiaries
to repay the loan balances.
Based on the procedures performed, we are
satisfied with the completeness and accuracy of
the impairment of the carrying value of the
Company’s investments in subsidiaries, being
the impairment charges recognised against the
Australian tenements. We determined the
recognition of no expected credit losses on
intercompany loans as at 30 June 2024 was
appropriate, and are satisfied with the related
disclosures in the financial statements.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
73
Key audit matter
How our audit addressed the key
audit matter
on intercompany loans were identified at the balance
sheet date.
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 the involvement of our component audit teams in Ecuador.
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 Company,
SolGold plc. In addition, we, together with PwC Ecuador, performed an audit of specific account balances at
four other components: SolGold Finance AG, audited by PwC UK, and Green Rock Resources GRR S.A.,
Carnegie Ridge S.A. and Cruz del Sol CSSA S.A., audited by PwC Ecuador.
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 audit teams in Ecuador, 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.
As part of our year end audit, we spent time with our component audit teams in Quito, Ecuador, during the
year-end phase of the audit. In addition to the site visit, we conducted oversight of the 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 the 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 procedures over the Annual Report and the 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.
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.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
74
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$4.6 million (Prior year: US$4.8 million).
US$4.2 million (Prior year: US$3.9
million).
How we
determined it
1% of Total Assets
1% of Total Assets
Rationale for
benchmark
applied
We deemed total assets to be an
appropriate benchmark for the Group,
given the Group's current focus on
exploration and evaluation assets. In
addition, the Directors utilise this measure
as a key performance indicator for the
Group.
We determined that the most
suitable benchmark for the Company,
which primarily functions as a holding
company with substantial
investments in subsidiary
undertakings, is total assets. The
Company’s materiality has been
capped at approximately 90% of
Group materiality.
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$0.8 million to US$4.2
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 25% (Prior year: 50%) of overall materiality, amounting to US$3.4million (Prior year: US$2.4
million) for the Group financial statements and US$3.1 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$231,900 (Group audit) (Prior year: US$238,500) and US$210,000 (Company audit) (Prior
year: US$192,950) as well as misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
75
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group's and 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 2025, 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 delaying exploration expenditure,
particularly relating to non-Cascabel exploration, 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 regarding the ability to draw down on current funding available through
the stream agreement and to fulfil certain conditions precedent included in this agreement;
● Testing the cash flow 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.
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the Group's and the Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as
to the Group's and the Company's ability to continue as a going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, 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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in
the relevant sections of this report.
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
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
76
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.
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 2024 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 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 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.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
77
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.
Responsibilities for the financial statements and the audit
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.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
78
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 environmental regulations, health
and safety regulations, and anti-bribery and corruption laws in the jurisdictions in which the Group operates,
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 audit teams 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 audit teams 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;
● 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.
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.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC
SolGold plc Annual Report for the Year Ended 30 June 2024
79
Other required reporting
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 three years, covering the years ended 30 June 2022
to 30 June 2024.
Other matter
The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to
include these financial statements in an annual financial report prepared under the structured digital format
required by DTR 4.1.15R - 4.1.18R and filed on the National Storage Mechanism of the Financial Conduct
Authority. This auditors’ report provides no assurance over whether the structured digital format annual
financial report has been prepared in accordance with those requirements.
Timothy McAllister (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
26 September 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report for the Year Ended 30 June 2024
80
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Group
Year ended
30 June 2024
Group
Year ended
30 June 2023
Note(s)
US$
US$
Expenses
Exploration costs written-off
13
(8,277,279)
(1,059,317)
Reversal of exploration costs written-off
13
-
3,780,099
Administrative expenses
3
(12,519,277)
(41,198,678)
Operating loss
(20,796,556)
(38,477,896)
Other income
389,733
122,443
Finance income
6
307,345
94,056
Finance costs
6
(18,307,253)
(13,194,858)
Movement in fair value of derivative liability
22
239,000
2,147,000
Remeasurement of amortised cost of financial
liability
21
(24,145,761)
-
Loss before tax
(62,313,492)
(49,309,255)
Tax benefit / (expense)
7
2,013,539
(1,130,490)
Loss for the year
(60,299,953)
(50,439,745)
Other comprehensive (loss)/profit
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
(201,378)
(283,344)
Items that will not be reclassified to profit or loss
Remeasurement of post-employment benefits
(41,158)
1,173,254
Change in fair value of financial assets, net of tax
-
(69,627)
Other comprehensive (loss)/profit, net of tax
(242,536)
820,283
Total comprehensive (loss)
(60,542,489)
(49,619,462)
Loss for the year attributable to:
Owners of the parent company
(60,299,953)
(50,336,363)
Non-controlling interest
-
(103,382)
(60,299,953)
(50,439,745)
Total comprehensive loss for the year attributable
to:
Owners of the parent company
(60,542,489)
(49,516,080)
Non-controlling interest
-
(103,382)
(60,542,489)
(49,619,462)
Loss per share (cents)
Basic loss per share
8
(2.0)
(2.0)
Diluted loss per share
8
(2.0)
(2.0)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
SolGold plc – Registered Number 05449516
SolGold plc Annual Report for the Year Ended 30 June 2024
81
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Group
As at
30 June 2024
Group
As at
30 June 2023
Notes
US$
US$
Assets
Intangible assets
13
425,548,038
411,434,084
Property, plant and equipment
12
23,014,517
23,669,380
Financial assets held at fair value through OCI
11
-
5,328
Financial assets at amortised cost
20
1,706,305
1,729,033
Other receivables and prepayments
16
4,407,796
-
Total non-current assets
454,676,656
436,837,825
Other receivables and prepayments
16
1,988,382
6,920,292
Loans receivable and other current assets
14
1,152,493
2,099,527
Cash and cash equivalents
17
6,028,043
32,481,606
Total current assets
9,168,918
41,501,425
Total assets
463,845,574
478,339,250
Equity
Share capital
18
40,452,643
40,452,643
Share premium
18
459,986,179
459,986,179
Own shares reserve
18
(25,389,208)
(25,389,208)
Merger relief reserve
18
78,692,861
78,692,861
Other reserves
18
12,755,050
11,612,697
Accumulated loss
(306,351,714)
(247,097,272)
Foreign currency translation reserve
(5,533,489)
(5,332,111)
Total equity
254,612,322
312,925,789
Liabilities
Trade and other payables
19
6,503,000
12,689,439
Lease liabilities
70,510
379,239
Borrowings
21
10,002,796
-
Provisions
716,170
716,170
Total current liabilities
17,292,476
13,784,848
Lease liabilities
136,808
169,457
Other financial liabilities
22
1,076,806
240,000
Deferred tax liabilities
15
1,780,898
4,200,444
Borrowings
21
188,946,264
147,018,712
Total non-current liabilities
191,940,776
151,628,613
Total liabilities
209,233,252
165,413,461
Total equity and liabilities
463,845,574
478,339,250
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The financial statements on pages 80 to 132 were approved by the Board of Directors on 26 September 2024 and signed on its behalf
by:
Scott Caldwell
Chief Executive Officer
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc – Registered Number 05449516
SolGold plc Annual Report for the Year Ended 30 June 2024
82
COMPANY STATEMENT OF FINANCIAL POSITION
Company
As at
30 June 2024
Company
As at
30 June 2023
Notes
US$
US$
Assets
Property, plant and equipment
12
-
299,025
Investment in subsidiaries
9
258,109,300
261,013,212
Loans with subsidiaries
10
205,600,844
181,525,074
Financial assets held at fair value through OCI
11
-
1,425
Financial assets at amortised cost
20
584,518
734,248
Total non-current assets
464,294,662
443,572,984
Other receivables and prepayments
16
288,074
247,178
Loans receivable and other current assets
14
1,152,493
2,099,527
Cash and cash equivalents
17
4,124,142
29,041,499
Total current assets
5,564,709
31,388,204
Total assets
469,859,371
474,961,188
Equity
Share capital
18
40,452,643
40,452,643
Share premium
18
459,975,555
459,975,555
Merger relief reserve
18
78,692,861
78,692,861
Other reserves
18
12,122,374
10,898,248
Accumulated loss
(130,532,612)
(116,812,665)
Foreign currency translation reserve
(5,006,473)
(5,006,473)
Total equity
455,704,348
468,200,169
Liabilities
Trade and other payables
19
3,435,057
5,479,091
Lease liabilities
-
299,594
Borrowings
21
10,002,796
-
Provisions
716,170
716,170
Total current liabilities
14,154,023
6,494,855
Lease liabilities
-
26,164
Other financial liabilities
22
1,000
240,000
Total non-current liabilities
1,000
266,164
Total liabilities
14,155,023
6,761,019
Total equity and liabilities
469,859,371
474,961,188
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 (UK). The Company’s loss for the year was US$14,651,303 (2023: US$20,644,167).
The company financial statements were approved by the Board of Directors on 26 September 2024 and signed on its behalf by Scott
Caldwell, Chief Executive Officer.
Scott Caldwell
Chief Executive Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
83
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Note
Share capital
US$
Share
premium
US$
Own shares
reserve
US$
Merger
relief
reserve
US$
Financial assets
held at fair value
through other
comprehensive
income
US$
Share based
payment
reserve
US$
Employee
benefit
reserve
US$
Accumulated
loss
US$
Foreign
currency
translation
reserve
US$
Total
US$
Non-
controlling
interests
US$
Total Equity
US$
Balance at 1 July 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
Loss for the year
-
-
-
-
-
-
-
(50,336,363)
-
(50,336,363)
(103,382)
(50,439,745)
Other comprehensive (loss) /
profit
-
-
-
-
(69,627)
-
1,173,254
-
(283,344)
820,283
-
820,283
Total comprehensive loss for
the year
-
-
-
-
(69,627)
-
1,173,254
(50,336,363)
(283,344)
(49,516,080)
(103,382)
(49,619,462)
Shares issued to Directors and
employees
18
36,572
762,905
-
-
-
-
-
31,433
-
830,910
-
830,910
Shares issued to new
investors
18
1,780,000
33,820,000
-
-
-
-
7,500
-
-
35,607,500
-
35,607,500
Transfer of reserves to
retained earnings
28
-
-
-
-
(1,977,766)
-
-
1,977,766
-
-
-
-
Acquisition of remaining
Cornerstone (renamed to
SolGold Canada Inc.) business,
net of tax
28
6,285,375
-
(25,389,208)
78,692,861
-
1,876,910
-
(67,688,135)
-
(6,222,200)
1,294,554
(4,927,646)
Tax adjustments through
reserves
28
-
-
-
-
-
-
-
576,679
-
576,679
-
576,679
Share issue costs
18
-
(1,389,966)
-
-
-
-
-
-
-
(1,389,966)
-
(1,389,966)
Options expired
23
-
-
-
-
-
(928,600)
-
928,600
-
-
-
-
Value of options issued to
Directors and employees
23
-
-
-
-
-
599,267
-
-
-
599,267
-
599,267
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
-
312,925,789
Loss for the year
-
-
-
-
-
-
-
(60,299,953)
-
(60,299,953)
-
(60,299,953)
Other comprehensive loss
-
-
-
-
-
-
(41,158)
-
(201,378)
(242,536)
-
(242,536)
Total comprehensive loss for
the year
-
-
-
-
-
-
(41,158)
(60,299,953)
(201,378)
(60,542,489)
-
(60,542,489)
Value of options issued to
directors and employees
23
-
-
-
-
-
2,155,483
-
-
-
2,155,483
-
2,155,483
Options expired
23
-
-
-
-
-
(931,356)
-
931,356
-
-
-
-
Employee benefit reserve
adjustment
-
-
-
-
-
-
(40,616)
114,155
-
73,539
-
73,539
Balance at 30 June 2024
40,452,643
459,986,179
(25,389,208)
78,692,861
-
12,122,374
632,676
(306,351,714)
(5,533,489)
254,612,322
-
254,612,322
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
84
COMPANY STATEMENT OF CHANGES IN EQUITY POSITION
Notes
Share capital
US$
Share premium
US$
Merger relief
reserve
US$
Financial assets
held at fair
value through
other
comprehensive
income
US$
Share based
payment reserve
US$
Accumulated
loss
US$
Foreign
currency
translation
reserve
US$
Total
US$
Balance at 1 July 2022
32,350,699
426,793,240
-
2,047,393
9,350,670
(99,567,549)
(5,006,473)
365,967,980
Loss for the year
-
-
-
-
-
(20,664,167)
-
(20,664,167)
Other comprehensive loss
-
-
-
(69,627)
-
-
-
(69,627)
Total comprehensive loss for the year
-
-
-
(69,627)
-
(20,664,167)
-
(20,733,794)
Shares issued to Directors and
employees
18
36,572
762,905
-
-
-
-
-
799,477
Shares issued to new investors
18
1,780,000
33,820,000
-
-
-
-
-
35,600,000
Acquisition of own shares
18
6,285,372
-
78,692,861
(1,977,766)
1,876,910
2,490,453
-
87,367,831
Share issue costs
18
-
(1,400,590)
-
-
-
-
-
(1,400,590)
Options expired
23
-
-
-
-
(928,598)
928,598
-
-
Value of options issued to Directors and
employees
23
-
-
-
-
599,266
-
-
599,266
Balance at 30 June 2023
40,452,643
459,975,555
78,692,861
-
10,898,248
(116,812,665)
(5,006,473)
468,200,169
Loss for the year
-
-
-
-
-
(14,651,303)
-
(14,651,303)
Other comprehensive loss
-
-
-
-
-
-
-
-
Total comprehensive loss for the year
-
-
-
-
-
(14,651,303)
-
(14,651,303)
Options expired
23
-
-
-
-
(931,357)
931,356
-
(1)
Value of options issued to directors
and employees
23
-
-
-
-
2,155,483
-
-
2,155,483
Balance at 30 June 2024
40,452,643
459,975,555
78,692,861
-
12,122,374
(130,532,612)
(5,006,473)
455,704,348
The above Company Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
85
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
Notes
Group
Year ended
30 June 2024
Group
Year ended
30 June 2023
Company
Year ended
30 June 2024
Company
Year ended
30 June 2023
US$
US$
US$
US$
Cash flows from operating activities
Loss for the year
(60,299,953)
(50,439,745)
(14,651,303)
(20,664,167)
Depreciation
12
406,004
298,075
287,435
283,948
Loss on disposal of depreciable assets
88,912
-
10,268
-
Interest on lease liabilities
-
46,610
-
34,702
Interest on NSR
21
17,781,791
13,148,231
-
-
Interest on loan to SolGold Finance AG
10
-
-
(6,563,897)
(6,430,256)
Interest on loan to SolGold Canada Inc. (formerly
Cornerstone Capital Resources Inc.)
10
-
-
(978,176)
(332,707)
Interest on loan from SolGold Finance AG
10
-
-
2,333,300
2,246,679
Impairment of investments in subsidiaries
-
-
11,919,586
-
Advances to subsidiaries prior to business combination
-
(1,912,102)
-
-
Share based payment expense
5 / 23
2,155,483
998,682
2,155,483
998,682
Capitalised exploration costs written-off
13
8,277,279
1,059,317
11,794
-
Reversal of capitalised exploration costs written-off
13
-
(3,780,099)
-
(131,314)
Foreign exchange (gain)/loss
(256,006)
235,952
18,558
214,647
Expected credit loss – Company Funded Loan Plan
14
925,993
1,433,420
925,993
1,433,420
Accretion of interest – short-term loan facility
21
497,531
-
497,531
-
Movement in fair value of derivative liability
22
(239,000)
(2,147,000)
(239,000)
(2,147,000)
Remeasurement of amortised cost of
financial liability
21
24,145,761
-
-
-
Tax benefit
7
(2,419,546)
1,130,490
-
1,381,331
Decrease / (increase) in other receivables
and prepayments
415,454
601,347
(39,781)
2,731,458
(Decrease) / increase in trade and other payables
(1,722,193)
5,662,014
(2,028,879)
3,804,119
Net cash outflow from operating activities
(10,242,490)
(33,664,808)
(6,341,088)
(16,576,458)
Cash flows from investing activities
Acquisition of property, plant and equipment
(241,459)
(1,670,405)
(1,725)
(2,511)
Acquisition of exploration and evaluation assets
(25,140,364)
(43,297,918)
-
-
Net cash acquired on business combination
-
1,047,190
-
-
Loans advanced to subsidiaries
-
-
(1,355,564)
(21,447,533)
Advances in investment in subsidiaries
-
-
(9,027,468)
(17,567,933)
Loan repayments from subsidiaries
-
-
187,698
-
Redemption of bank term deposit
137,832
-
137,832
-
Net cash outflow from investing activities
(25,243,991)
(43,921,133)
(10,059,227)
(39,017,977)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital
18
-
36,000,000
-
36,000,000
Payment of issue costs
-
(1,453,969)
-
(1,977,208)
Proceeds from NSR financing
21
-
50,000,000
-
-
Payment of NSR costs
21
-
(205,596)
-
-
Proceeds from short-term loan facility
21
10,000,000
-
10,000,000
-
Costs of short-term loan facility
(494,735)
-
(494,735)
-
Repayments of lease liabilities
(452,503)
(225,755)
(323,175)
(303,906)
Loans advanced from subsidiaries
10
-
-
-
49,975,286
Repayment of loans to subsidiaries
10
-
-
(17,699,132)
(19,936,627)
Net cash inflow from financing activities
9,052,762
84,114,680
(8,517,042)
63,757,545
Net (decrease) / increase in cash and cash equivalents
(26,433,719)
6,528,739
(24,917,357)
8,163,110
Cash and cash equivalents at the beginning of year
17
32,481,606
26,102,133
29,041,499
21,032,524
Effect of foreign exchange rate changes
(19,844)
(149,266)
-
(154,135)
Cash and cash equivalents at end of year
17
6,028,043
32,481,606
4,124,142
29,041,499
The above statements of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
86
NOTES TO THE FINANCIAL STATEMENTS
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 Cornhill, London EC3V 3ND, United Kingdom.
Note 1(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 material 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 judgement in applying the Group’s accounting policies. In preparing the Group Financial Statements, the significant
judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty are disclosed in
Note 1(v).
Note 1(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 annual consolidated financial statements in
accordance with IFRS.
(ii) Going concern
At the year end, the Group had cash on hand of US$6,028,043 and net current liabilities of US$8,123,558. The Directors have reviewed the cash
position of the Group and the Company for the fifteen-month period to 31 December 2025 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 Company has a proven ability to execute equity and other financings as demonstrated by the successfully completed $750 million gold stream
agreement announced on 15 July 2024 (borrowed amounts are limited to the advancement of Cascabel); the Osisko Gold Royalty Inc. royalty
agreement in November 2022; the share issue in December 2022; and the SolGold Canada Inc (formerly Cornerstone Capital Resources Inc.)
acquisition in February 2023.
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.
Subsequent to the year-end, SolGold executed the US$750 million gold stream agreement with Franco-Nevada and Osisko Gold Royalties; this
funding covers the ongoing operational requirements for the Cascabel Project and associated administration expenses, for at least fifteen-months
following the date of approval of the Annual Report. The first tranche of US$33.4 million of the Initial Deposit was drawn at closing, significantly
bolstering the Group's cash position. The remaining US$66.6 million is expected to be drawn as milestones are achieved over the period to 31
December 2025, providing a clear pathway for funding through to the final investment decision. Further funding is required to fund regional
Ecuadorian projects.
In the Group’s and Company’s financial forecasts, the Directors have considered the conditions precedent to drawing funds under the gold stream
financing under a base case and also a severe, but plausible, scenario reflecting unanticipated cost overruns to meet the conditions precedent,
and no financing received for projects outside Cascabel. The base case, incorporating the stream transaction and modest additional financing for
non-Cascabel expenditures, provides sufficient funding for operations and Cascabel advancement over this period. Even in a severe but plausible
scenario, the Group's ability to continue as a going concern and advance the Cascabel Project remains intact, though the carrying value of certain
non-Cascabel projects might be impacted, as it may not be able to obtain the funding to fully develop these exploration projects.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
87
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
(ii) Going concern (Continued)
In the event that the Company is unable to secure sufficient funding for the non-Cascabel projects, management has mitigating options including
farm-outs, the relinquishment of licences across Ecuador, or the sale of the Company’s own treasury shares.
Therefore, the Directors consider it appropriate that the going concern basis of accounting, for the Group and Company, be adopted for the period
of at least twelve months from the date of the approval of these financial statements.
(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.
Note 1(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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
88
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(c) Basis of consolidation (continued)
(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.
Note 1(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 the 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.
The functional currency of the Company and its subsidiaries are detailed in the tables below:
Listing of Company and Subsidiaries’ Functional Currencies
SolGold Plc – US$ (2024 and 2023)
Subsidiaries Using US$ (2024 and 2023)
SolGold Finance AG
Gestion Minera S.A.
Exploraciones Novomining S.A.
Bellamaria Mining S.A.
Carnegie Ridge Resources S.A.
Canabrava Mining S.A.
Green Rock Resources GRR S.A.
Exploaurum S.A.
Valle Rico Resources VRR S.A.
Cornerstone Ecuador S.A.
Cruz del Sol CSSA S.A.
Cornerstone Exploraciones Ecuador S.A.
SolGold Ecuador S.A.
Vetasgrandes Mining S.A.
Novoproyectos-Sustentables S.A.
Subsidiaries Using AU$ (2024 and 2023)
Australian Resource Management Pty Ltd
Honiara Holdings Pty Ltd
Acapulco Mining Pty Ltd
Guadalcanal Exploration Pty Ltd
Central Minerals Pty Ltd
Subsidiaries Using CAD (2024 and 2023)
SolGold Canada Inc. (formerly
Cornerstone Capital Resources Inc.)
SolGold Canadian Callco Corp.
Cornerstone Exploration Inc.
SolGold Canadian Exchangeco Corp.
Subsidiaries Using SBD (2024 and 2023)
Solomon Operations Ltd
Subsidiaries Using CLP (2024 and 2023)
Minera Cornerstone Chile Limitada
Currency
Exchange rate at
30 June 2024
Exchange rate at
30 June 2023
Average exchange rate
for the year ended
30 June 2024
Average exchange rate
for the year ended
30 June 2023
US$
n/a
n/a
n/a
n/a
AU$
0.6676
0.6660
0.6557
0.6732
CAD
0.7307
0.7549
0.7382
0.7467
SBD
0.1185
0.1186
0.1185
0.1213
CLP
0.0011
0.0012
0.0011
0.0012
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
89
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(d) Foreign currency (Continued)
(ii) Translation into presentation currency
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 year. Any resultant foreign exchange currency translation gain
or loss 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 the 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 financial assets that
are not expected to be settled in the foreseeable future and form part of the net investment in foreign operations, they have been included as
Investments in Subsidiaries in the Company.
Note 1(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
3 years
Furniture and Fittings
5 years
Motor Vehicles
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.
As capitalised exploration and evaluation expenditure are not definite lived intangible assets, they are not amortised.
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.
Note 1(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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
90
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(f) Intangible assets (as per IFRS 6 - Exploration for and Evaluation of Mineral Resources) (Continued)
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.
Note 1(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. Figures on the statements of cash flows for the Group and Company are presented gross.
Note 1(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 recognised 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.
Note 1(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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
91
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 a 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.
Note 1(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 the fair value of 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 (in accordance with the Ecuadorian
labour code) which represents the accrued benefits to be paid to employees, 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 are based upon actuarial gains and losses,
and are recognised immediately in other comprehensive income in the period in which they occur.
(iii) Company Funded Loan Plan
The Company Funded Loan Plan (“CFLP”) provided financial assistance to certain employees who exercised 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 were initially recognised at fair value, which was determined by discounting loans to their net present value using the
risk-free interest rate at the time of the loan and an estimated repayment schedule. Following initial recognition, they were 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
statement of 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, which is now closed, 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 of 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.
Note 1(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.
Note 1(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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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92
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(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.
Note 1(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.
Note 1(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.
Note 1(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.
Note 1(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.
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 the 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 chose 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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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93
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(q) Leases (continued)
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.
Note 1(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.
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
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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94
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(r) Financial Instruments (continued)
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 are comprised of trade and other payables, current and non-
current lease liabilities and borrowings (Franco-Nevada and Osisko NSR Financing Agreement, and Franco-Nevada Short-Term Loan Facility, 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.
Note 1(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 measurement using the effective interest method and 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).
Note 1(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 SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
95
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(t) Nature and purpose of reserves (Continued)
(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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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96
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(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.
Standard
Description of Standard
Effective period
commencing on
or after
Impact of
adoption
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.
1 January 2023
No significant
impact
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.
1 January 2023
No significant
impact
Amendments
to IAS 1 and
IFRS Practice
Statement 2
Disclosure of Accounting Policies
The IASB amended IAS 1 Presentation of Financial Statements to require entities to
disclose their material rather than their significant accounting policies. The
amendments define what is ‘material accounting policy information’ (being
information that, when considered together with other information included in an
entity’s financial statements, can reasonably be expected to influence decisions
that the primary users of general purpose financial statements make on the basis
of those financial statements) and explain how to identify when accounting policy
information is material. They further clarify that immaterial accounting policy
information does not need to be disclosed. If it is disclosed, it should not obscure
material accounting information.
To support this amendment, the IASB also amended IFRS Practice Statement 2 -
Making Materiality Judgements to provide guidance on how to apply the concept
of materiality to accounting policy disclosures.
1 January 2023
No significant
impact
Details of the impact that these standards had is detailed in the table above. 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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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97
NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(u) Changes in accounting policies (Continued) - New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2024 reporting periods and have
not been early adopted by the company. Amendments to IAS 21 Lack of Exchangeability Between Currencies and IFRS 19 Subsidiaries with Public
Accountability: Disclosures are not expected to have a material impact on the company in the current or future reporting periods and on
foreseeable future transactions. The impact of IFRS 18 Presentation and Disclosure in Financial Statements has not been assessed.
Standard
Description of Standard
Effective for annual reporting periods commencing on or
after
Amendments to
IAS 21
Lack of Exchangeability Between Currencies
1 January 2025
IFRS 18
Presentation and Disclosure in Financial Statements
1 January 2027
IFRS 19
Subsidiaries without Public Accountability: Disclosures
1 January 2027
Note 1(v) Critical Accounting Estimates and Judgements
In the application of the Company and the Group's accounting policies, described in Note 1, the Directors have made the following judgements
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 the 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.
Note 1(v)(1) Critical Accounting Estimates and Judgements: 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 over 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 effective interest rate (“EIR”) of 11.84%. In the case of the Osisko NSR
royalty, the Company arrived at an EIR of 8.87%. Total interest for the financial year is calculated at US$17,781,791 (2023: US$13,148,231) (Note
6). Based upon cash flow forecasts covering the latest PFS mine plan, a 5% increase in the sales prices for copper, gold, and silver would decrease
finance expense by approximately US$3,905,834 (2023: decrease of US$184,000), noting that in 2023, the increased pricing would decrease the
EIR of the Franco Nevada NSR royalty, payments of which are subject to a minimum metal production adjustment.
Note 1(v)(2) Critical Accounting Estimates and Judgements: 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 upon
internal and external sources of information, which includes information particular to the Group and Company and their projects. 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 projects. A key judgement in the assessment is that the additional funding required to maintain and
progress regional Ecuadorian projects will be obtained.
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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NOTE 1 | ACCOUNTING POLICIES (CONTINUED)
Note 1(v)(2) Critical Accounting Estimates and Judgements: Accounting Judgements (Continued)
Investments in Subsidiaries and Intercompany Loans – Company
The Company’s recovery of investments in subsidiaries and intercompany loans is dependent upon the value of the mining exploration projects
owned by the subsidiaries. The recoverability of intercompany loans has been evaluated on a mineral property by mineral property basis,
considering the ability of each legal entity holding exploration and evaluation assets to repay its obligations.
As of 30 June 2024, no indicators of impairment were identified with respect to the carrying value of the exploration and evaluation assets,
including the Cascabel project held by ENSA. All recovery strategies indicate that the carrying value of intercompany loans will be fully recovered.
The carrying values of capitalised exploration and evaluation costs were assessed for indicators of impairment based on the estimated
recoverability from expected future development and production. The assessment considered the external Mineral Resources Estimate, the status
of its permits, internal economic models, the impact of any impairment reversals, and financing which supported the carrying value of the projects.
The Directors acknowledge that the Company's market capitalisation was below the value of its net assets during 2024. This was considered as a
potential indicator of impairment under IAS 36. However, after evaluating market capitalisation, recoverability of capitalised exploration and
evaluation costs, and other internal and external sources of information, management have made the judgement that the fact of net assets
exceeding market capitalisation was not an indicator of impairment.
Management has made a judgement relating to loans with subsidiaries where settlement is neither planned nor likely to occur in the foreseeable
future. These loans are considered as part of the Company’s investments in subsidiaries.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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NOTE 2 | SEGMENT REPORTING
Note 2(a) Operating Segments
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.
30 June 2024
Finance
Income
Depreciation
Capitalised
exploration
costs written-
off
Loss for the
year
Assets
Liabilities
Share
Based
Payments
Non-current
asset
additions /
(disposals)
US$
US$
US$
US$
US$
US$
US$
US$
Cascabel project
50,248
-
-
775,809
319,269,300
3,459,516
-
20,037,462
Other Ecuadorian projects
55,414
101,341
-
2,342,228
136,170,085
1,443,512
-
7,825,837
Other projects
-
(1,039)
8,277,279
8,285,076
149,057
1,926
-
(9,554,428)
Corporate
201,683
305,702
-
48,896,840
8,257,132
204,328,298
2,155,483
(470,040)
Total
307,345
406,004
8,277,279
60,299,953
463,845,574
209,233,252
2,155,483
17,838,831
30 June 2023
Finance
Income
Depreciation
Impairment
of E&E
Loss for the year
Assets
Liabilities
Share
Based
Payment
s
Non-current
asset
additions /
(disposals)
US$
US$
US$
US$
US$
US$
US$
US$
Cascabel project
42,052
(58,740)
-
2,260,431
303,474,003
5,425,778
-
30,590,591
Other Ecuadorian projects
46,560
53,127
478,817
8,404,502
131,510,493
1,800,742
-
17,829,097
Other projects
-
2,172
580,500
601,858
9,734,663
17,271
-
(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
Note 2(b) Geographical Information
Non-current assets
2024
US$
2023
US$
Switzerland
53,762
73,624
Australia
596,201
10,647,500
Chile
123,006
76,315
Ecuador
453,903,687
426,040,386
454,676,656
436,837,825
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
100
NOTE 3 | ADMINISTRATIVE EXPENSES
Note 3(a) Components of Administrative Expenses
Group Administrative Expenses
2024
US$
2023
US$
Administrative and consulting expenses
4,387,083
7,785,779
Auditors’ remuneration
900,011
1,474,849
Insurance
291,458
488,976
Acquisition-related costs1
(1,379,150)
16,054,495
Employment expenses
3,777,237
10,300,752
Expected credit loss (Note 14)
925,993
1,433,420
Depreciation
406,004
298,075
Legal fees
985,879
2,127,698
Foreign exchange losses
69,279
235,952
Share based payments
2,155,483
998,682
Administrative expenses, as reported
12,519,277
41,198,678
Notes:
1 During the year ended 30 June 2024, liabilities, which were accrued at 30 June 2023, were re-negotiated and settled at a gain on settlement. The liability was recognised in
administrative expenses when originally recorded (in the prior year, and the gain on settlement during the year ended 30 June 2024 has accordingly been offset against administrative
expenses).
Note 3(b) Auditors’ Remuneration
The following table discloses remuneration to PricewaterhouseCoopers LLP, the auditors who opined on the financial statements as at and for the
year ended 30 June 2024. In 2024, the Group remunerated other auditors, who performed audits of certain Group subsidiaries for statutory
requirements, US$93,706. Together with the US$900,011 remunerated to PricewaterhouseCoopers LLP.
Remuneration to PricewaterhouseCoopers LLP
Group
2024
US$
Group
2023
US$
Details of auditors’ remuneration:
Incurred for audit of SolGold plc annual report
573,674
589,121
Incurred for audit of other services to the Group:
Audit of Group subsidiaries
201,260
885,729
Auditors’ remuneration reported in operating loss
774,934
1,474,850
Audit-related assurance services
125,077
111,021
Other assurance services
-
1,457,033
Total auditors’ remuneration
900,011
3,042,904
NOTE 4 | STAFF NUMBERS AND COSTS
Note 4(a) Staff Numbers
Monthly averages during the year
Group
Staff number
2024
Group
Staff number
2023
Company
Staff number
2024
Company
Staff number
2023
Finance and administration
29
36
6
11
Technical – permanent
259
425
-
1
Technical – temporary
8
127
-
-
296
588
6
12
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
101
NOTE 4 | STAFF NUMBERS AND COSTS (CONTINUED)
Note 4(b) Aggregate Payroll Costs of Employees
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Wages and salaries
9,797,184
21,198,305
2,289,724
6,198,717
Contributions to superannuation
29,590
96,564
29,590
96,201
Share based payments
2,155,483
998,682
2,155,483
998,682
Pensions
37,003
311,598
19,721
58,429
Social security costs
21,955
277,318
12,875
273,473
Total staff costs
12,041,215
22,882,467
4,507,393
7,625,502
Included within total Group staff costs is US$5,694,712 (2023: US$10,503,286) which has been capitalised as part of capitalised exploration and
evaluation expenditure.
NOTE 5 | REMUNERATION OF KEY MANAGEMENT PERSONNEL
2024
Basic Annual
Salary/Director
Fee
US$
Bonus
US$
Other Benefits1
US$
Pensions
US$
Total
Remuneration
US$
Directors
Scott Caldwell
250,000
93,750
978,047
3,002
1,324,799
Nicholas Mather
65,532
-
-
-
65,532
James Clare2
32,606
-
-
-
32,606
Liam Twigger2
50,622
-
-
5,570
56,192
María Amparo Albán Ricaurte
81,111
-
-
-
81,111
Slobodan (Dan) Vujcic
65,672
-
-
6,919
72,591
Adrian (Steve) van Barneveld3
37,909
-
-
3,844
41,753
Jian (John) Liu4
23,192
-
-
1,327
24,519
Charles Joseland4
22,468
-
-
-
22,468
Other key management personnel5
928,321
279,831
1,237,435
39,930
2,485,517
Total for Key Management Personnel
1,557,433
373,581
2,215,482
60,592
4,207,088
Notes
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. For the period
1 January 2024 – 30 June 2024, Mr. Caldwell was eligible for an overseas living allowance of US$10,000 per month. This amount was paid post year end.
2 Mr. James Clare and Mr. Liam Twigger ended their periods in office on 20 December 2023
3 Mr. Adrian (Steve) van Barneveld was appointed 20 December 2023
4 Mr. Jian (John) Liu and Mr. Charles Joseland were appointed 25 and 27 February 2024 respectively
5 Other key management personnel consist of the aggregated remuneration of Chris Stackhouse (Chief Financial Officer); Ryan Wilson (Group General Counsel), Christina Robinson
(Director of Operations and Communications), Ryan Kee (VP Finance); Perry Holloway (Strategic Advisor); Christina Weber (Director of SolGold Finance AG); and Joerg Eichenberger
(Director of SolGold Finance AG).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
102
NOTE 5 | REMUNERATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
2023
Basic Annual
Salary/Director
Fee
US$
Bonus
US$
Other Benefits1
US$
Pensions
US$
Total
Remuneration
US$
Directors
Scott Caldwell2
125,000
106,250
263,012
2,755
497,017
Darryl Cuzzubbo
588,609
-
399,417
8,323
996,349
Keith Marshall3
9,636
-
-
-
9,636
Nicholas Mather
67,049
-
-
-
67,049
James Clare
67,057
-
-
-
67,057
Liam Twigger
114,697
-
-
12,029
126,726
Elodie Grant Goodey4
40,132
-
-
58,429
98,561
Kevin O’Kane4
34,909
-
-
-
34,909
María Amparo Albán Ricaurte
70,508
-
-
-
70,508
Slobodan (Dan) Vujcic5
46,664
-
-
4,261
50,925
Other key management personnel6
2,526,059
69,291
336,253
54,899
2,986,502
Total paid to key management personnel
3,690,320
175,541
998,682
140,696
5,005,239
Notes:
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 was appointed as a Director on 24 October 2022 and as Chief Executive Officer on 20 March 2023.
3 Includes consultancy fees paid post resignation as an independent Non-Executive Director on 12 August 2022. Payments post resignation US$9,636.
4 Resigned from the Board on 23 December 2022.
5 Elected as an Independent Non-Executive Director on 24 October 2022.
6 Other key management personnel consist of the aggregated remuneration of Ryan Wilson (Group General Counsel), Rufus Gandhi (former Company Secretary), Dennis Wilkins
(former Company Secretary), Chris Stackhouse (Chief Financial Officer), Keith Pollocks (former Interim Chief Financial Officer), Ayten Saridas (former Chief Financial Officer), Fawzi
Hanano (former Head of Investor Relations), Benn Whistler (former Technical Services Manager), Steve Botts (former President, SolGold Ecuador S.A), Harold ‘Bernie’ Loyer (former
Vice President Projects) and Tania Cashman (former Chief Human Resources Officer).
NOTE 6 | FINANCE INCOME AND COSTS
Note 6(a) Finance Income
Group
2024
US$
Group
2023
US$
Interest income earned from bank deposits
307,345
94,056
Finance income
307,345
94,056
Note 6(b) Finance Costs
Group
2024
US$
Group
2023
US$
General interest
550
17
Accretion on short-term loan facility (Note 21)
497,531
-
Interest on lease liability
27,381
46,610
Interest on NSR (Note 21)
17,781,791
13,148,231
Finance costs
18,307,253
13,194,858
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
103
NOTE 7 | TAX EXPENSE
Note 7(a) 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% (2023: 30%) being applied to the profit before tax arising during the year. The differences are explained below.
Group
2024
US$
Group
2023
US$
Tax reconciliation
Profit / (loss) before tax
(62,313,492)
(49,309,255)
Tax at 30% (2023: 30%)
(18,694,048)
(14,792,777)
Add / (less) tax effect of:
Permanent differences
3,724,353
8,610,987
Derecognised current year tax losses
4,609,150
1,071,135
(Recognise) / derecognise prior year losses
-
795,731
Current year true-up related to prior year tax items
(481,527)
-
Prior year tax expense attributable to Ecuador
-
(61,460)
Current year tax expense attributable to Ecuador
-
(189,380)
Other
-
(6,056)
Impact of tax rate differences
6,542,911
2,425,379
Temporary differences not recognised
2,285,622
3,276,930
Income tax (benefit) / expense on loss
(2,013,539)
1,130,491
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
Income tax expense on other comprehensive income
-
804,652
Amounts recognised directly in equity
Attributable to prior periods
-
-
Net deferred tax credited directly to equity
-
576,679
Income tax expense recognised directly in equity
-
576,679
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.
Note 7(b) Factors that may affect future tax charges
The Group has carried forward gross tax losses of approximately US$119,400,720 (2023: US$106,225,848). 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 US$76,213,878 in Australia
(2023: US$72,217,913); US$10,718,447 in Ecuador (2023: US$9,779,611); US$28,757,525 in Switzerland (2023:US$21,914,423); and
US$3,710,870 in Canada (2023:US$2,313,901). Tax losses in Australia of US$76,213,878 can be carried forward indefinitely, while tax losses in
Ecuador of US$10,718,447 may be carried forward and offset against profits in the following five years, provided that the amount offset does not
exceed 25% of the year’s profits.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
104
NOTE 8 | LOSS PER SHARE
2024
Cents per share
2023
Cents per share
Basic loss per share
(2.0)
(2.0)
Diluted loss per share
(2.0)
(2.0)
2024
US$
2023
US$
(a) Loss
Loss used to calculate basic and diluted loss per share
(60,299,953)
(50,439,745)
Number of shares
Number of shares
(b) Weighted average number of shares
Used in calculating basic LPS
3,001,106,975
2,576,779,125
Weighted average number of dilutive options
-
-
Weighted average number of ordinary shares and potential ordinary shares used
in calculating dilutive LPS
3,001,106,975
2,576,779,125
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
105
NOTE 9 | INVESTMENT IN SUBSIDIARIES (COMPANY)
Note 9(a) Information of Subsidiaries
Entity
Country of
incorporation
and operation
Registered Address
Principal activity
SolGold plc’s
effective interest
2024
2023
Australian Resource Management
(ARM) Pty Ltd
Australia
Level 5/191 St Georges Terrace
Perth WA 6000
Australia
Exploration
100%
100%
Acapulco Mining Pty Ltd
Australia
Exploration
100%
100%
Central Minerals Pty Ltd
Australia
Exploration
100%
100%
Honiara Holdings Pty Ltd
Australia
Exploration
100%
100%
Guadalcanal Exploration Pty Ltd
Australia
Exploration
100%
100%
Solomon Operations Ltd1
Solomon
Islands
C/- Morris & Sojnocki Chartered
Accountants, 1st Floor, City Centre
Building, Mendana Avenue, Honiara,
Solomon Islands
Exploration
100%
100%
Exploraciones Novomining S.A.
Ecuador
Avenida La Coruna No. E25-58 y calle
SAN IGNACIO Edificio: ALTANA
PLAZA Número de oficina: 406 piso: 4
Quito, Ecuador
Exploration
100%
100%
Carnegie Ridge Resources S.A.
Ecuador
Exploration
100%
100%
Green Rock Resources GRR S.A.
Ecuador
Exploration
100%
100%
Valle Rico Resources VRR S.A.
Ecuador
Exploration
100%
100%
Cruz del Sol CSSA S.A.
Ecuador
Exploration
100%
100%
SolGold-Ecuador S.A.
Ecuador
Services
Management and
land holding
100%
100%
Novoproyectos-Sustentables S.A.2
Ecuador
Project
development
100%
100%
SolGold Canadian Callco Corp.
Canada
4500, 855 – 2nd Street S.W,
Calgary, Alberta T2P 4K7
Investment
100%
100%
SolGold Canadian Exchangeco
Corp.
Canada
Investment
100%
100%
SolGold Finance AG
Switzerland
Industriestrasse 47, 6300 Zug,
Switzerland
Investment
100%
100%
SolGold Canada Inc. (formerly
Cornerstone Capital Resources
Inc.)
Canada
c/o Bennett Jones LLP
4500, 855 - 2nd Street SW
Calgary, Alberta T2P 4K7
Investment
100%
100%
Cornerstone Exploration Inc.
Canada
1730 St. Laurent Blvd., Suite 800
Ottawa, Ontario K1G 5L1
Investment
100%
100%
Gestion Minera S.A.
Ecuador
Av. 12 de Octubre N24-562 y Luis
Cordero Edificio World Trade Center
Quito, Ecuador
Services
Management
100%
100%
Bellamaria Mining S.A.
Ecuador
Exploration
100%
100%
Canabrava Mining S.A.
Ecuador
Exploration
100%
100%
Exploaurum S.A.3
Ecuador
Exploration
84%2
84%
Cornerstone Ecuador S.A.
Ecuador
Exploration
100%
100%
Cornerstone Exploraciones
Ecuador S.A.
Ecuador
Investment
100%
100%
Vetasgrandes Mining S.A.
Ecuador
Exploration
100%
100%
Minera Cornerstone Chile
Limitada
Chile
Av. Isadora Goyenechea 3000
Piso 21, Las Condes
Santiago, Chile
Exploration
100%
100%
The Company’s indirect 12.5% interest in Bramaderos S.A. is accounted for at fair value through other comprehensive income.
Notes:
1 Solomon Operations Ltd is in the process of being wound up.
2 Novoproyectos-Sustentables S.A. has been liquidated effective 27 August 2024.
3 The Group legally holds 100% of Exploaurum S.A. although its contractual interest upon completion of conditions with its partners is expected to be 84%.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
106
NOTE 9 | INVESTMENT IN SUBSIDIARIES (COMPANY) (CONTINUED)
Note 9(b) Schedule of Investments in Subsidiaries
Intercompany loans
Subsidiary investments
Total investment
US$
US$
US$
Cost
Balance at 1 July 2022
161,721,822
26,419,165
188,140,987
Reclassification
(23,675,342)
23,675,342
-
Acquisitions and advances in the year
15,463,322
92,587,013
108,050,335
Balance at 30 June 2023
153,509,802
142,681,520
296,191,322
Advances in the year
7,981,096
1,026,358
9,007,454
Balance at 30 June 2024
161,490,898
143,707,878
305,198,776
Expected credit and impairment losses
Balance at 1 July 2022
(35,178,110)
-
(35,178,110)
Balance at 30 June 2023
(31,602,416)
(3,575,694)
(35,178,110)
Impairments during the year
(7,550,422)
(4,360,944)
(11,911,366)
Balance at 30 June 2024
(39,152,838)
(7,936,638)
(47,089,476)
Carrying amounts
Balance at 30 June 2022
126,543,712
26,419,165
152,962,877
Balance at 30 June 2023
121,907,386
139,105,826
261,013,212
Balance at 30 June 20241
122,338,060
135,771,240
258,109,300
Notes:
1 Loans which are not expected to be repaid are included in investment in subsidiaries (see Note 1 (s)).
The Company’s investments in its subsidiaries, Acapulco Mining Pt Ltd, and Central Minerals Pty Ltd, were fully impaired during the year ended 30
June 2024, following the impairment of those subsidaries’ capitalised exploration costs (Note 13).
NOTE 10 | INTERCOMPANY LOANS WITH SUBSIDIARIES (COMPANY)
Intercompany Loans with Subsidiaries
US$
Cost
Balance at 1 July 2022
185,599,916
Advances in the year
21,447,515
Borrowings in the year
(49,975,286)
Repayments of loans in the year
19,936,627
Interest accrued in the year
6,762,964
Interest incurred in the year
(2,246,662)
Balance at 30 June 2023
181,525,074
Advances in the year
1,355,564
Borrowings in the year
-
Repayments of debts in the year
(187,698)
Repayments of loans in the year
17,699,132
Interest accrued in the year
7,542,072
Interest incurred in the year
(2,333,300)
Balance at 30 June 2024
205,600,844
Amortisation and impairment losses
Balance at 1 July 2022
-
Balance at 30 June 2023
-
Balance at 30 June 2024
-
Carrying amounts
Balance at 30 June 2022
185,599,916
Balance at 30 June 2023
181,525,074
Balance at 30 June 2024
205,600,844
The Company has assessed the receivable and no loss allowances have been made, refer Note 1(s).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
107
NOTE 11 | INVESTMENTS
Note 11(a) Investments accounted for as financial assets held at fair value through OCI
Group
Company
2024
US$
2023
US$
2024
US$
2023
US$
Movements in financial assets
Opening balance at 1 July
5,328
5,351,844
1,425
5,346,323
Fair value adjustment through OCI
(5,328)
(361,785)
(1,425)
(360,167)
Deemed disposal of investment on business acquisition
-
(4,984,731)
-
(4,984,731)
Balance at 30 June
-
5,328
-
1,425
In the prior year, financial assets comprised an investment in the ordinary issued capital of SolGold Canada Inc. (formerly Cornerstone Capital
Resources Inc.), previously listed on the TSX Venture Exchange, and an investment in the ordinary issued capital of Aus Tin Mining Ltd, a company
listed on the Australian Securities Exchange. On acquisition of the remaining outstanding shares of SolGold Canada Inc. (formerly Cornerstone
Capital Resources Inc.), the investment was disposed. In the current year, financial assets comprised an investment in the ordinary issued capital
of Aus Tin Mining Ltd, for which nil approximates the quoted market price value.
Note 11(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.
US$
US$
US$
US$
Level 1
Level 2
Level 3
Total
2024
Financial assets held at fair value through OCI
-
-
-
-
2023
Financial assets held at fair value through OCI
5,328
-
-
5,328
The financial assets are measured based on the quoted market prices at 30 June and therefore are classified as Level 1.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
108
NOTE 12 | PROPERTY, PLANT AND EQUIPMENT
Note 12(a) Property, Plant and Equipment
Group
Land
Group
Plant and Equipment
Group
Other
depreciable
assets 1
Group
Total
Company
Total 2
US$
US$
US$
US$
US$
COST
Cost balance – 1 July 2022
20,350,021
3,756,175
2,308,217
26,414,413
1,678,737
Effect of foreign exchange on
opening balance
-
(20,069)
(1,464)
(21,533)
(25,947)
Additions
1,904,767
247,947
52,838
2,205,552
15,470
Disposals
-
(234,557)
(215,114)
(449,671)
(299,286)
Assets acquired through
business combinations
-
65,059
409,052
474,111
-
Cost balance - 30 June 2023
22,254,788
3,814,555
2,553,529
28,622,872
1,368,974
Effect of foreign exchange on
opening balance
-
5,292
44
5,336
4,023
Additions
120,000
117,120
4,339
241,459
1,725
Disposals
-
(15,216)
(431,302)
(446,518)
(25,580)
Cost balance - 30 June 2024
22,374,788
3,921,751
2,126,610
28,423,149
1,349,142
DEPRECIATION AND IMPAIRMENT
LOSSES
Depreciation and impairment losses
balance – 1 July 2022
-
(2,251,748)
(2,078,175)
(4,329,923)
(1,079,818)
Effect of foreign exchange on
opening balance
-
13,038
1,201
14,239
13,252
Depreciation charge for the
year
-
(208,934)
(89,141)
(298,075)
(283,948)
Depreciation capitalised to
exploration
-
(436,645)
(85,407)
(522,052)
(358)
Disposals
-
227,703
202,105
429,808
280,923
Assets acquired through
business combinations
-
(33,905)
(213,584)
(247,489)
-
Depreciation and impairment losses
balance - 30 June 2023
-
(2,690,491)
(2,263,001)
(4,953,492)
(1,069,949)
Effect of foreign exchange on
opening balance
-
(24,179)
(76,123)
(100,302)
(6,947)
Depreciation charge for the
year
-
(379,405)
(26,599)
(406,004)
(286,941)
Depreciation capitalised to
exploration
-
(232,079)
(74,361)
(306,440)
-
Disposals
-
44,132
313,474
357,606
14,695
Depreciation and impairment losses
balance - 30 June 2024
-
(3,282,022)
(2,126,610)
(5,408,632)
(1,349,142)
CARRYING AMOUNTS
At 30 June 2022
20,350,021
1,504,427
230,042
22,084,490
598,919
At 30 June 2023
22,254,788
1,124,064
290,528
23,669,380
299,025
At 30 June 2024
22,374,788
639,729
-
23,014,517
-
Notes:
1 Includes office equipment, furniture and fittings, and motor vehicles. All motor vehicles were sold during 2024.
2 Comprised of right-of-use assets for office lease and office furniture and equipment.
Note 12(b) Other Disclosures of Property, Plant and Equipment
The gross carrying amount of fully depreciated assets still in use is US$307,303 (2023: US$930,562). See Note 21 for descriptions of assets
pledged as security against borrowings.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
109
NOTE 13 | INTANGIBLE ASSETS
Note 13(a) Capitalized Exploration and Evaluation Costs
US$
COST
Cost balance at 1 July 2022
406,810,799
Effect of foreign exchange on opening balances
(286,667)
Additions – expenditure
43,420,485
Cost balance at 30 June 2023
449,944,617
Effect of foreign exchange on opening balances
169,183
Additions – expenditure
22,222,050
Cost balance at 30 June 2024
472,335,850
ACCUMULATED EXPLORATION COSTS WRITTEN-OFF
Accumulated impairment losses balance at 1 July 2022
(41,231,315)
Exploration costs written-off
(1,059,317)
Reversal of exploration costs previously written-off
3,780,099
Accumulated exploration costs written-off balance at 30 June 2023
(38,510,533)
Exploration costs written-off
(8,277,279)
Reversal of exploration costs previously written-off
-
Accumulated exploration costs written-off balance at 30 June 2024
(46,787,812)
Carrying amounts
At 30 June 2022
365,579,484
At 30 June 2023
411,434,084
At 30 June 2024
425,548,038
The accounting treatment of capitalised exploration and evaluation expenditure is described in 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; successful development and commercial exploitation are dependent
upon the availability of funding.
An impairment charge of US$8,277,279 (2023: US$1,059,317) was recognised in the year for exploration expenditure associated with concessions
in Australia which were not expected to be approved for renewal and did not have commercial recoverability.
A reversal of prior impairment of $Nil (2023: US$3,780,099) was reported for the year ended 30 June 2024. The 2023 impairment reversal related
to properties which were planned for relinquishment by previous management but were reassessed and considered to be recoverable by later
management.
An assessment of the carrying values of capitalised exploration and evaluation expenditure is provided in notes 13(b) and 13 (c).
See Note 21 for details on pledges and restrictions made under NSR financings.
Note 13(b) 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. A PFS for the Cascabel project was published in April 2022 including consideration of environmental,
social and economic impacts. A revised PFS (announced 12 March 2024) reported the successful completion of the updated Cascabel Pre-
Feasibility Study (“PFS”) incorporating a phased approach plan. The study presents significantly reduced initial capital costs, a pre-tax NPV8% of
US$5.4 billion, 33% IRR, and a post-tax NPV8% of US$3.2 billion with a 24% IRR, along with significant copper, gold, and silver production estimates
over a 28-year mine life. The PFS included updated mineral resource and reserve statements for the Alpala Deposit and an updated mineral
resource statement for the Tandayama America deposit.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
110
NOTE 13 | INTANGIBLE ASSETS (CONTINUED)
Note 13(b) 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; and
has plans and resources to continue exploration and development.
Accordingly, management have assessed that there are no indicators of impairment.
Note 13(c) Regional concessions granted for 100% SolGold Ecuador S.A. 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 75
mining concessions in Ecuador for which the companies were successful in bidding as part of the auction process in 2016 and 2017, as well as 13
mining concessions obtained through the acquisition during the year ended 30 June 2023 of SolGold Canada Inc. (formerly Cornerstone Capital
Resources Inc., refer to 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:
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 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; and
had plans for further exploration, as well as the intent to raise funding to execute those plans at 30 June 2024, and noting that
management has made the judgement that successfully obtaining the required additional funding is feasible.
Based on its analysis, management have assessed that there are no indicators of impairment. New sources of funding will be required to progress
planned exploration activities for regional Ecuadorian concessions.
In January 2024, management received notifications from the Queensland Department of Resources that four licences would not be
recommended for renewal. The four licences for which non-renewal notifications were received included: EPM 19410 Normanby Consolidated
(held by Acapulco Mining Pty Ltd), as well as EPM 18032 Cracow West, EPM 19639 Goovigen Consolidated, and EPM 27211 Mount Pring (held by
Central Minerals Pty Ltd). Management evaluated the recoverability of these licences and the other remaining Australian licences held and
determined that successful development and commercial exploitation is now considered unlikely, and the carrying values are therefore no longer
recoverable. Accordingly, the associated capitalised exploration costs were expensed, resulting in the recognition of an impairment of
US$8,277,279 in exploration costs written-off expense (2023: US$1,059,317). Following this write-off of capitalised exploration costs, the
aggregate carrying value of all Australian properties reported by the Company was $Nil (2023: US$9,457,439).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
111
NOTE 14 | LOANS RECEIVABLE AND OTHER CURRENT ASSETS
Company Funded Loan Plan receivable
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Balance at beginning of year
2,099,527
3,553,291
2,099,527
3,553,291
Proceeds received from repayment of the loans during
the year
-
(4,522)
-
(4,522)
Effect of foreign exchange
(21,041)
(15,822)
(21,041)
(15,822)
Expected credit loss
(925,993)
(1,433,420)
(925,993)
(1,433,420)
Balance at end of year
1,152,493
2,099,527
1,152,493
2,099,527
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 certain 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 2024, repayments of US$3,478,278 have been received against the loans provided. As at 30 June
2024, 3 employees 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 subsequently).
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. On 24 August 2022, the CFLP was extended for three 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 repayment
terms extended until 21 December 2023, and the Board of Directors did not resolve to extend the due date, and as such the loans are due. The
Company has the ability to sell the shares, and accordingly the exposure to credit risk is limited to the value of the shares. Management does not
intend to liquidate shares, until the share price appreciates to at least the price of the original loan, which was £0.28.
Management has considered the recoverability of the loans based on the movement in the share price over the year and has calculated an
expected credit loss for the year ended 30 June 2024 of US$925,993 (2023: US$1,433,420).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
112
NOTE 15 | DEFERRED TAXATION
Note 15 (a) Recognised deferred tax assets and liabilities
The full balance of the deferred tax liability is expected to be recovered or settled more than twelve months after 30 June 2024.
Group
2024
Opening balance
Net (charged)
/credited to
income
Net (charged) /
credited to
other
comprehensive
income
Net
(charged) /
credited to
equity
Net movement
on unwind /
transfer
Closing balance
US$
US$
US$
US$
US$
US$
Recognised deferred tax
assets
Carried forward tax losses
8,556,178
610,157
-
-
-
9,166,335
Accruals / provisions
1,629,137
(575,284)
-
-
-
1,053,853
Potential benefit
10,185,315
34,873
-
-
-
10,220,188
Recognised deferred tax
liabilities
Derivative liabilities
(666,121)
-
-
-
-
(666,121)
NSR liability borrowings
(4,200,444)
1,789,745
-
-
-
(2,410,699)
Capitalised exploration
and evaluation costs
(2,213,366)
594,929
-
-
-
(1,618,437)
Foreign exchange
gains/losses
(7,181,086)
-
-
-
-
(7,181,086)
Property, plant and
equipment
(176)
-
-
-
-
(176)
IFRS 16 right of use asset
(124,567)
-
-
-
-
(124,567)
Potential benefit
(14,385,759)
2,384,674
-
-
-
(12,001,086)
Net deferred taxes
(4,200,444)
2,419,546
-
-
-
(1,780,898)
Deferred tax assets not
recognised
Unused tax losses
37,189,361
(16,378,789)
-
-
-
20,810,572
Unused capital losses
425,452
-
-
-
-
425,452
Temporary differences
15,660,869
7,003,047
-
-
-
22,663,916
Tax benefit
53,275,682
(9,375,742)
-
-
-
43,899,940
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
113
NOTE 15 | DEFERRED TAXATION (CONTINUED)
Note 15(a) Recognised deferred tax assets and liabilities (continued)
Group
2023
Opening
balance
Net
(charged)/credited to
income
Net (charged) /
credited to
other
comprehensive
income
Net (charged)
/ credited to
equity
Net
movement
on unwind
/ transfer
Closing balance
US$
US$
US$
US$
US$
US$
Recognised deferred tax
assets
Carried forward tax losses
6,295,129
2,261,049
-
-
-
8,556,178
Accruals / provisions
1,084,728
(32,270)
-
576,679
-
1,629,137
Potential benefit
7,379,857
2,228,779
-
576,679
-
10,185,315
Recognised deferred tax
liabilities
Financial assets held at fair
value through other
comprehensive income
(832,003)
27,351
-
804,65
-
-
Derivative liabilities
(47,110)
(619,011)
-
-
-
(666,121)
NSR Liability (borrowings)
(4,200,444)
-
-
-
-
(4,200,444)
Exploration and evaluation
assets
(2,452,342)
238,976
-
-
-
(2,213,366)
Foreign exchange
gains/losses
(3,843,124)
(3,337,962)
-
-
-
(7,181,086)
Property, plant and
equipment
(1,069)
893
-
-
-
(176)
IFRS 16 right of use asset
(204,209)
79,643
-
-
-
(124,567)
Potential benefit
(11,580,301)
(3,610,110)
-
804,652
-
(14,385,759)
Net deferred taxes
(4,200,444)
(1,381,331)
-
1,381,331
-
(4,200,444)
Deferred tax assets not
recognised
Unused tax losses
21,296,512
15,892,849
-
-
-
37,189,361
Unused capital losses
-
425,452
-
-
-
425,452
Temporary differences1
15,660,869
-
-
-
-
15,660,869
Tax benefit
36,957,381
16,318,301
-
-
-
53,275,682
Notes:
1 Exploration expenditure incurred in the Solomon Islands that has been expensed. This expenditure is deductible over 5 years from when production commences.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
114
NOTE 15 | DEFERRED TAXATION (CONTINUED)
Note 15(a) Recognised deferred tax assets and liabilities (continued)
Company
2024
Opening balance
US$
Net (charged)
/ credited to
income
US$
Net (charged) /
credited to
other
comprehensive
income
US$
Net
(charged) /
credited to
equity
Closing balance
US$
Recognised deferred tax assets
Carried forward tax losses
6,348,709
-
-
-
6,348,709
Accruals / provisions
455,530
-
-
-
455,530
Capital raising costs
847,556
-
-
-
847,556
Other temporary differences
286,588
-
-
-
286,588
Potential benefit
7,938,383
-
-
-
7,938,383
Recognised deferred tax liabilities
Derivative liabilities
(666,122)
-
-
-
(666,122)
Foreign exchange gains / (losses)
(7,186,195)
-
-
-
(7,186,195)
Property, plant and equipment
(176)
-
-
-
(176)
IFRS 16 right of use asset
(85,889)
-
-
-
(85,889)
Potential benefit
(7,938,383)
-
-
-
(7,938,383)
Net deferred tax liabilities
-
-
-
-
-
Deferred tax assets not recognised
Unused tax losses
15,616,779
(7,499,139)
-
-
8,117,640
Unused capital losses
-
-
-
-
-
Temporary differences
-
1,927,460
-
-
1,927,460
Tax benefit
15,616,779
(5,571,679)
-
-
10,045,100
The deferred tax asset has not been recognised as future taxable profit is not anticipated within the foreseeable future.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
115
NOTE 15 | DEFERRED TAXATION (CONTINUED)
Note 15(a) Recognised deferred tax assets and liabilities (continued)
Company
2023
Opening balance
Net (charged) /
credited to income
Net (charged) /
credited to
other
comprehensive
income
Net
(charged)
/ credited
to equity
Closing balance
US$
US$
US$
US$
US$
Recognised deferred tax
assets
Carried forward tax losses
3,847,148
2,501,561
-
-
6,348,709
Accruals / provisions
341,446
114,084
-
-
455,530
Capital raising costs
662,016
(391,139)
-
576,679
847,556
Other temporary differences
49,200
237,388
-
-
286,588
Potential benefit
4,899,810
2,461,894
-
576,679
7,938,383
Recognised deferred tax
liabilities
Financial assets held at fair
value through other
comprehensive income
(832,004)
832,004
-
-
-
Derivative liabilities
(47,111)
(619,011)
-
-
(666,122)
Foreign exchange gains /
(losses)
(3,848,385)
(3,337,810)
-
-
(7,186,195)
Property, plant and
equipment
(1,069)
893
(176)
IFRS 16 right of use asset
(171,241)
85,353
-
-
(85,889)
Potential benefit
(4,899,810)
(3,038,571)
-
-
(7,938,383)
Net deferred tax liabilities
-
(576,679)
-
576,679
-
Deferred tax assets not
recognised
Unused tax losses
14,863,578
753,201
-
-
15,616,779
Unused capital losses
-
-
-
-
-
Temporary differences
-
-
-
-
-
Tax benefit
14,863,578
753,201
-
-
15,616,779
The deferred tax asset in respect of these items has not been recognised as future taxable profit is not anticipated within the foreseeable future.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
116
NOTE 16 | OTHER RECEIVABLES AND PREPAYMENTS
Note 16(a) Other Receivables and Prepayments - Current
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Other receivables and prepayments
568,843
2,104,349
14,500
14,335
Taxes receivable
1,174,726
4,614,942
70,424
51,361
Prepayments
244,813
201,001
203,150
181,482
Other receivables and prepayments
1,988,382
6,920,292
288,074
247,178
Note 16(b) Other Receivables and Prepayments - Non-current
At 30 June 2024, the balance of US$4,407,796 represents value added tax recoverable in Ecuador pertaining to the Cascabel project. The amount
becomes recoverable upon commencement of production, which is longer than twelve months from 30 June 2024, and is therefore classified as
non-current. The comparable balance at 30 June 2023 was US$3,662,732 and was reported within the current amount of other receivables and
prepayments (within Taxes receivable in the table in Note 16(a)).
NOTE 17 | CASH AND CASH EQUIVALENTS
Group
30 June 2024
US$
Group
30 June 2023
US$
Company
30 June 2024
US$
Company
30 June 2023
US$
Cash at bank
6,028,043
32,481,606
4,124,142
29,041,499
Cash and cash equivalents in the statement of cash
flows
6,028,043
32,481,606
4,124,142
29,041,499
NOTE 18 | ALLOTTED, CALLED-UP AND FULLY PAID SHARE CAPITAL AND RESERVES
Note 18(a) Share Capital
No. of Shares
Nominal Value £
At 1 July 2022 – Ordinary shares
3,375,532,033
33,745,320
Previous increase in authorised capital having expired
(1,529,211,000)
(15,282,110)
Increase in authorised share capital on 22 December 2022
1,530,701,000
15,307,010
At 30 June 2023 – Ordinary shares
3,377,022,033
33,770,220
No. of Shares
Nominal Value £
At 1 July 2023 – Ordinary shares
3,377,022,033
33,770,220
Previous increase in authorised capital having expired
(1,530,701,000)
(15,307,010)
Increase in authorised share capital on 20 December 2023
2,000,738,000
20,007,380
At 30 June 2024 – Ordinary shares
3,847,059,033
38,470,590
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
117
NOTE 18 | ALLOTTED, CALLED-UP AND FULLY PAID SHARE CAPITAL AND RESERVES (CONTINUED)
Note 18(b) Changes in Allotted, Called-up and Fully Paid Share Capital and Share Premium
No. of Shares
Nominal Value
US$
Share Premium1
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
1,336,182
16,572
382,845
399,417
Shares issued at £0.274 – Executive share issue
898,886
10,602
280,439
291,041
Shares issued at US$0.20 – Directors share issue 12
December 2022
2,000,000
20,000
380,000
400,000
Shares issued at US$0.20 – Jiangxi share issue 12
December 2022
155,000,000
1,550,000
29,450,000
31,000,000
Shares issued at US$0.20 – Maxit Capital share issue 12
December 2022
23,000,000
230,000
4,370,000
4,600,000
Shares issued on business acquisition – SolGold Canada
Inc.
525,954,360
6,285,372
-
6,285,372
Shares cancelled for nil consideration
(898,886)
(10,602)
(280,439)
(291,041)
Share issue costs charge to share premium account
-
-
(1,389,906)
(1,389,906)
Ordinary shares of 1p at 30 June 2023
3,001,106,975
40,452,643
459,986,179
500,438,822
No. of Shares
Nominal Value
US$
Share Premium1
US$
Total
US$
Ordinary shares of 1p each at 1 July 2023
3,001,106,975
40,452,643
459,986,179
500,438,822
Ordinary shares of 1p at 30 June 2024
3,001,106,975
40,452,643
459,986,179
500,438,822
Notes:
1 Share premium for the Group and the Company are comprised of the same transactions and balances, except for a difference of US$10,624, which is comprised of share issue costs
reported by the Company but not the Group.
Note 18(c) Other Reserves
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Own shares reserve1
(25,389,208)
(25,389,208)
-
-
Merger relief reserve2
78,692,861
78,692,861
78,692,861
78,692,861
Share based payment reserve
12,122,374
10,898,248
12,122,374
10,898,248
Employee benefit reserve
632,676
714,450
-
-
Total Other Reserves
66,058,703
64,916,351
90,815,235
89,591,109
Notes:
1 Represents outstanding shares in the Company acquired with the acquisition of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.).
2 The Group has applied merger relief under section 612 of the Companies Act 2006 as part of with the acquisition of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.).
Note 18(d) 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 minimise 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.
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Borrowings, non-current (Note 21)
188,946,264
147,018,712
-
-
Borrowings, current (Note 21)
10,002,796
-
10,002,796
-
Equity attributable to owners of the parent company
254,612,322
312,925,789
455,704,348
468,200,169
453,561,382
459,944,501
465,707,144
468,200,169
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
118
NOTE 19 | TRADE AND OTHER PAYABLES
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Current
Trade payables
1,683,668
2,225,163
1,904,549
488,839
Accrued expenses
1,495,952
4,254,655
1,119,747
4,254,654
Other payables1
3,323,380
6,209,621
410,761
735,598
Trade and other current payables
6,503,000
12,689,439
3,435,057
5,479,091
Notes:
1 Includes sundry payables and employee benefits payable.
NOTE 20 | FINANCIAL ASSETS AT AMORTISED COST
Financial assets at amortised cost
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Security bonds – office leases1
592,692
743,846
584,518
734,248
Security bonds – Ecuador2
1,101,929
971,469
-
-
Security bonds – Australia3
11,684
13,718
-
-
Closing balance at the end of the year
1,706,305
1,729,033
584,518
734,248
Notes:
1 Cash security held against office premises (Level 27, 111 Eagle Street, Brisbane QLD Australia)
2 Cash backed bank guarantees held by the Ecuadorian Ministry of Environment against Ecuadorian exploration tenements held by the Group
3 Cash security held by the Queensland Department of Natural Resources and Mines against Queensland exploration tenements held by the Group
NOTE 21 | BORROWINGS
Note 21(a) Balances of Borrowings
Group
2024
US$
Group
2023
US$
Non-current liability
Net Smelter Royalties (Note 21(b))
188,946,264
147,018,712
Current liability
Short term loan facility (Note 21(c))
10,002,796
-
Balance at the end of the year
198,949,060
147,018,712
Note 21(b) Net Smelter Royalty Financing
NSR Financing
Group
2024
US$
Group
2023
US$
Balance at beginning of reporting year
147,018,712
84,076,077
Additions – funds received under new agreements
-
50,000,000
Transaction costs
-
(205,596)
Accreted interest
17,781,791
13,148,231
Remeasurement of amortised cost
24,145,761
-
Balance at end of the year
188,946,264
147,018,712
NSR Financing balances owed to:
Franco-Nevada Corporation (Note 21(b)(1))
131,783,326
94,579,463
Osisko Gold Royalties Ltd (Note 21(b)(2))
57,162,938
52,439,249
Balance at end of the year
188,946,264
147,018,712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
119
NOTE 21 | BORROWINGS (CONTINUED)
Note 21(b)(1) Net Smelter Royalty Financing: Franco-Nevada Corporation (“Franco-Nevada”)
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 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 US$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; and
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.
The Franco-Nevada NSR is secured by substantially all Group assets invested directly or indirectly in the Cascabel project.
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 resulted in a
discount rate of 11.84% (real).
During the year ended 30 June 2024, a remeasurement of US$24,265,654 was recorded against the NSR financial liability, which represented a
loss. The remeasurement was triggered by Board approval in February 2024 of the revised Preliminary Feasibility Study (announced in March
2024) 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.
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
years 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.
The financial liability for the Franco Nevada NSR will next be re-measured using the latest Qualified Person (“QP”) approved assumptions from the
Technical Report when this is materially updated and approved by the Board.
Note 21(b)(2) Net Smelter Royalty Financing: Osisko
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 US$50 million; and
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.
The Osisko NSR is secured by substantially all Group assets invested directly or indirectly in the Cascabel project.
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 resulted in a
discount rate of 8.87% (real). Key inputs for the estimation of future cash flows of the effective interest rate were:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
120
NOTE 21 | BORROWINGS (CONTINUED)
Note 21(b)(2) Net Smelter Royalty Financing: Osisko (Continued)
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; and
Silver price of US$19.90 per ounce.
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 2024
(2023: nil).
During the year ended 30 June 2024, a remeasurement of US$119,893 was recorded against the NSR financial liability, which represented a gain.
The remeasurement was triggered by Board approval in February 2024 of the revised Preliminary Feasibility Study (announced in March 2024)
resulting in amendments to anticipated cash flows of the NSR agreement. This remeasurement was a non-cash flow book entry accounting for the
financial liability at amortised cost.
The financial liability for the Osisko NSR will next be re-measured using the latest QP approved assumptions from the Technical Report when this
is materially updated and approved by the Board.
Note 21(c) Short-term Loan Facility borrowed from Franco Nevada
Short term loan facility
Group
2024
US$
Group
2023
US$
Company
2024
US$
Company
2023
US$
Balance at beginning of reporting year
-
-
-
-
Additions
10,000,000
-
10,000,000
-
Transaction costs
(494,735)
-
(494,735)
-
Accreted interest
497,531
-
497,531
-
Balance at end of reporting year
10,002,796
-
10,002,796
-
On 14 May 2024, the Group announced interim funding of US$10,000,000 under a “Short-term Loan Facility” provided by Franco-Nevada
Corporation, and further information about the Short-term Loan Facility was announced on 25 June 2024. The Short-term Loan Facility accrued
interest at 12% per annum and was to mature on 19 July 2024. Subsequent to 30 June 2024, all amounts due under the loan were paid off with a
payment of US$10,211,242. The funds were borrowed to provide working capital until the Gold Stream Agreement (Note 29(a)) was completed.
The Short-term Loan Facility was secured by substantially all Group assets invested directly or indirectly in the Cascabel project.
NOTE 22 | OTHER FINANCIAL LIABILITIES
Note 22(a) Schedule of Other Financial Liabilities
Group
Company
Balance comprised of:
2024
US$
2023
US$
2024
US$
2023
US$
Derivative liability for options issued to BHP
1,000
240,000
1,000
240,000
Non-current employee benefits
1,075,806
-
-
-
Balance at 30 June
1,076,806
240,000
1,000
240,000
Group
Company
Movements in derivative liabilities
2024
US$
2023
US$
2024
US$
2023
US$
Balance at 1 July
240,000
2,387,000
240,000
2,387,000
Additions
-
-
-
-
Fair value adjustment through
profit or loss
(239,000)
(2,147,000)
(239,000)
(2,147,000)
Balance at 30 June
1,000
240,000
1,000
240,000
Other financial liabilities include 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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
121
NOTE 22 | OTHER FINANCIAL LIABILITIES (CONTINUED)
Note 22(b) Financial Liabilities Measured and Recognized at Fair Value
The following table represents the Group’s financial liability measured and recognised at fair value.
US$
US$
US$
US$
Level 1
Level 2
Level 3
Total
2024
Derivative liability at fair value through
profit or loss
-
-
1,000
1,000
2023
Derivative liability at fair value through
profit or loss
-
-
240,000
240,000
Note 22(b)(1) Valuation of Liability Measured at Fair Value
The derivative liability at fair value through profit or loss has been valued using the Monte Carlo Simulation method. Following are the inputs used
in the valuation.
Fair value of share options and assumptions
£0.37 Options
30 June 2024
£0.37 Options
30 June 2023
Number of options (Note 23)
19,250,000
19,250,000
Share price at valuation date
£0.0876
£0.159
Exercise price
£0.37
£0.37
Expected volatility
72.46%
57.3%
Time to expiry
0.42 years
1.43 years
Expected dividends
0.00%
0.00%
Risk-free interest rate (short-term)
4.58%
5.31%
Fair value
$0.00004
$0.012
Valuation methodology
Monte Carlo Value
Monte Carlo Value
Note 22(c) Movement in Derivative Liability Recognized in Other Comprehensive (Loss) / Profit
For the financial year ended 30 June
2024
US$
2023
US$
Movement in derivative liability recognised in other
comprehensive (loss) / profit
(239,000)
(2,147,000)
NOTE 23 | SHARE OPTIONS
Note 23(a) Share Option Plan and Grant Information
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 are 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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
122
NOTE 23 | SHARE OPTIONS (CONTINUED)
Note 23(b) Options Issued and Outstanding
At 30 June 2024 the Company had 98,725,000 options outstanding for the issue of ordinary shares (2023: 95,028,125).
There were 20,000,000 options granted during the year ended 30 June 2024 (2023: 79,778,125).
Date of grant
Vesting
Exercisable to
Exercise
price
Number granted
Number
outstanding at
30 June 2024
Number
outstanding at
30 June 2023
Granted prior to 1 July 2022
27-Nov-19
On grant
27-Nov-24
£0.37
19,250,000
19,250,000
19,250,000
27-Nov-20
On grant
27-Apr-20
£0.25
7,000,000
-
-
2-Mar-21
On grant
2-Mar-24
£0.36
3,000,000
-
3,000,000
22-Feb-24
On grant
15-Jun-24
£0.26
3,000,000
-
3,000,000
Total granted prior to 1 July 2022
32,250,000
19,250,000
19,250,000
Granted during 2023
1-Jul-23
On 1 Dec 2022
1-Dec-25
£0.292
4,000,000
-
-
1-Jul-23
On 1 Dec 2023
1-Dec-26
£0.35
3,000,000
-
-
1-Jul-23
On 1 Dec 2024
1-Dec-27
£0.50
3,000,000
-
-
24-Feb-23
On grant
12-Sep-23
£0.174
10,303,125
-
10,303,125
24-Feb-23
On grant
6-Aug-24
£0.162
6,375,000
6,375,000
6,375,000
24-Feb-23
On grant
10-Aug-26
£0.162
7,350,000
7,350,000
7,350,000
24-Feb-23
On grant
29-Mar-27
£0.182
4,125,000
4,125,000
4,125,000
24-Feb-23
On grant
13-Jul-27
£0.133
5,625,000
5,625,000
5,625,000
17-Mar-23
On 17 March 2026
17-Mar-33
£0.17
30,000,000
30,000,000
30,000,000
18-Apr-23
On 18 April 2024
18-Apr-33
£0.1982
2,000,000
2,000,000
2,000,000
18-Apr-23
On 18 April 2025
18-Apr-33
£0.21
2,000,000
2,000,000
2,000,000
18-Apr-23
On 18 April 2026
18-Apr-33
£0.25
2,000,000
2,000,000
2,000,000
Total granted during 2023
79,778,125
59,475,000
69,778,125
Granted during 2024
6-Jul-23
On 6 July 2024
5-Jul-33
£0.17
2,000,000
2,000,000
-
6-Jul-23
On 6 July 2025
5-Jul-33
£0.21
2,000,000
2,000,000
-
6-Jul-23
On 6 July 2026
5-Jul-33
£0.25
2,000,000
2,000,000
-
27-Jul-23
On 27 July 2024
26-Jul-33
£0.17
500,000
500,000
-
27-Jul-23
On 27 July 2025
26-Jul-33
£0.21
500,000
500,000
-
27-Jul-23
On 27 July 2026
26-Jul-33
£0.25
500,000
500,000
-
25-Aug-23
On 25 Aug 2024
24-Aug-33
£0.17
1,000,000
1,000,000
-
25-Aug-23
On 25 Aug 2025
24-Aug-33
£0.21
1,000,000
1,000,000
-
25-Aug-23
On 25 Aug 2026
24-Aug-33
£0.25
1,000,000
1,000,000
-
12-Apr-24
1/3 on 1 January 2025, 1/3 on 1
January 2026, and 1/3 on 1 January
2027
11-Apr-30
$0.10
9,500,000
9,500,000
-
Total granted during 2024
20,000,000
20,000,000
-
Totals
112,028,125
98,725,000
95,028,125
Notes:
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
123
NOTE 23 | SHARE OPTIONS (CONTINUED)
Note 23(b) Options Issued and Outstanding (Continued)
Share options held by the following individuals are as follows:
Share options held
At 30 June 2024
Number
At 30 June 2023
Number
Option Price
Exercise Period
Scott Caldwell
30,000,000
30,000,000
£0.17
17/3/2026 – 17/3/2033
Chris Stackhouse
9,000,000
6,000,000
£0.10285 - £0.25
18/4/2024 – 24/8/2033
Former Cornerstone1 option holders
23,475,000
33,778,125
£0.133 - £0.182
24/2/2023 – 13/7/2027
Total / Range
62,475,000
69,778,125
£0.10285 - £0.25
18/4/2024 –24/8/2033
Notes:
1 Cornerstone Capital Resources Inc, renamed to SolGold Canada Inc. after it was acquired by the Company.
Note 23(c) Movement in Share Options Outstanding and Exercisable
The number and weighted average exercise price of share options are as follows:
Weighted average
exercise price
2024
Number of
options
2024
Weighted average
exercise price
2023
Number of
options
2023
Outstanding at the beginning of the year
£0.22
95,028,125
£0.33
32,250,000
Expired/lapsed during the year
£0.22
(16,303,125)
£0.25
(7,000,000)
Forfeited during the year
-
-
£0.37
(10,000,000)
Granted during the year
£0.16
20,000,000
£0.20
79,778,125
Outstanding at the end of the year
£0.20
98,725,000
£0.22
95,028,125
Exercisable at the end of the year
£0.25
44,725,000
£0.25
59,028,125
Note 23(d) Fair Valuation and Expense of Share Options
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, the dividend policy of
the Company, and historical volatility of the Company’s quoted market share price.
2024
2024
2024
2024
Fair value of share options
and assumptions
£0.10285 Options
24 April 2024
£0.21 Options
25 August 2023
(Weighted average)
£0.21 Options
27 July 2023
(Weighted average)
£0.21 Options
06 July 2023
(Weighted average)
Number of options
9,500,000
3,000,000
1,500,000
6,000,000
Share price at issue date
£0.0996
£0.1462
£0.1648
£0.1604
Exercise price
£0.10285
£0.21
£0.21
£0.21
Expected volatility
60.56%
59.26%
59.44%
59.61%
Option life (years)
3.9
6.0
6.0
6.0
Expected dividends
0.00%
0.00%
0.00%
0.00%
Risk-free interest rate
4.08%
4.44%
4.34%
4.77%
Fair value
£0.0480
£0.0750
£0.0891
£0.0869
Valuation methodology
Monte Carlo
Black-Scholes
Black-Scholes
Black-Scholes
For the financial year
ended 30 June 2024
US$
US$
US$
US$
Share based payment
expense recognised in
statement of statement of
profit or loss and other
comprehensive income
84,357
177,209
104,097
405,736
2024 (US$)
2023 (US$)
Share based payment expense recognised in statement of statement of profit or loss and other
comprehensive income
2,155,481
998,682
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
124
NOTE 24 | FINANCIAL INSTRUMENTS
Note 24(a) Financial instruments by category (Group)
Financial assets
Financial assets at
amortised cost
Financial assets held at
fair value through OCI
2024
US$
2023
US$
2024
US$
2023
US$
Cash and cash equivalents
6,028,043
32,481,606
-
-
Other receivables (current)
568,843
2,104,349
-
-
Financial assets at amortised cost
1,706,305
1,729,033
-
-
Loans receivable and other current assets
1,152,493
2,099,527
-
-
Equity investments
-
-
-
5,328
Total financial assets
9,455,684
38,414,515
-
5,328
Financial liabilities
Financial liabilities at
amortised cost
Financial liabilities at
fair value through profit or loss
2024
US$
2023
US$
2024
US$
2023
US$
Trade and other payables
3,179,620
6,479,818
-
-
Derivative liability
-
-
1,000
240,000
NSR
188,946,264
147,018,712
-
-
Short-term Loan Facility
10,002,796
-
-
-
Lease liabilities
207,318
548,696
-
-
Total financial liabilities
202,335,998
154,047,226
1,000
240,000
Note 24(b) Financial instruments by category (Company)
Financial assets
Financial assets at
amortised cost
Financial assets held at
fair value through OCI
2024
US$
2023
US$
2024
US$
2023
US$
Cash and cash equivalents
4,124,142
29,041,499
-
-
Other receivables
14,500
14,335
-
-
Financial assets at amortised cost
584,518
734,248
-
-
Loans receivable and other current assets
1,152,493
2,099,527
-
-
Loans with subsidiaries
205,600,844
181,525,074
-
-
Total financial assets
211,476,497
213,414,683
-
-
Financial liabilities
Financial liabilities at
amortised cost
Financial liabilities at
fair value through profit or loss
2024
US$
2023
US$
2024
US$
2023
US$
Trade and other payables
3,024,296
4,743,494
-
-
Derivative liability
-
-
1,000
240,000
Lease liabilities
-
325,758
-
-
Total financial liabilities
3,024,296
5,069,252
1,000
240,000
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.
There have been no changes in financial risks from the previous year. During the years ended 30 June 2024 and 2023 no trading in commodity
contracts was undertaken.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
125
NOTE 24 | FINANCIAL INSTRUMENTS (CONTINUED)
Note 24(c) Market risk
Note 24(c)(1) 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. An increase/decrease of 2% in interest rates will impact the Group’s income statement by a gain / (loss) of approximately
US$385,000 / (US$307,000) (2023: US$649,630 / (US$649,630)) and the Company’s income statement by a gain / (loss) of approximately
US$331,000 / (US$200,000) (2023: US$580,830 / (US$580,830)). The Group considers that a +/- 2% movement in interest rates represents
reasonable possible changes.
Note 24(c)(2) Market risk: Foreign currency risk
The Group has potential currency exposures in respect of items denominated in foreign currencies comprising:
Transactional exposure in respect of operating costs, capital expenditures and, to a lesser extent, in currencies other than the functional
currency of operations which require funds to be maintained in currencies other than the functional currency of operation; and
Translation exposures in respect of investments in overseas operations which have functional currencies other than United States
dollars.
Currency risk in respect of non-functional currency expenditure is reviewed by the Board.
The Group’s exposure to foreign currency risk at the end of the reporting period was as follows:
30 June 2024
30 June 2023
Group
Cash at bank
Trade and other
payables
Cash at bank
Trade and other
payables
Australian dollar (AU$)
391,698
(728,716)
380,158
(3,184)
Canadian dollar (CAD)
65,710
(1,236,561)
479,597
(677,654)
Swiss franc (CHF)
9,113
(97,553)
59,333
-
Chilean Peso (CLP)
9,599,718
-
-
-
Pound Sterling (GBP)
27,780
(118,955)
108,955
(105,000)
30 June 2024
30 June 2023
Company
Cash at bank
Trade and other
payables
Cash at bank
Trade and other
payables
Australian dollar (AU$)
391,541
(728,716)
143,917
-
Canadian dollar (CAD)
24,012
(807,878)
105,496
(499,189)
Pound Sterling (GBP)
30,855
(238,596)
108,955
(105,000)
Note 24(c)(2) Market Risk: Foreign currency risk
In 2024, the main currency exposure related to the effect of re-translation of the Group’s assets and liabilities in Canadian dollar (CAD). This
changed from prior year due to the impairment of substantially all of the Group’s Australian dollar denominated assets during 2024, and the
limited ongoing activity and associated liabilities in Australian dollars. A 10% change in the CAD$/US$ exchange rate would give rise to a change
of approximately US$95,890 in the Group’s net assets and reported earnings.
In 2023, the main currency exposure related to the effect of the re-translation of the Group’s assets and liabilities in Australian dollars (AUD) and
the Pound Sterling (GBP). A 10% increase in the A$/US$ and GBP/US$ exchange rates would give rise to a change of approximately US$39,152 in
the Group’s net assets and reported earnings. A 10% decrease in the A$/US$ and GBP/US$ exchange rates would give rise to a change of
approximately US$23,420.
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
126
NOTE 24 | FINANCIAL INSTRUMENTS (CONTINUED)
Note 24(d) 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.
Including other receivables, the maximum exposure to credit risk at the reporting date is the carrying value of these assets and was US$12,179,409
(2023: US$39,047,192).
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 2024, the Company had US$4,124,142 in cash and cash equivalents (2023: US$29,041,499) and US$1,152,493 of CFLP receivable (2023:
US$2,099,527). The maximum exposure to credit risk at the reporting date was US$5,276,635 (2023: US$31,141,026).
Credit risk is managed by primarily dealing with reputable banks and limiting funds maintained in banks in jurisdictions where preferred banks are
unavailable. 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.
Note 24(e) Liquidity risks
The Group and Company raise 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.
In addition to traditional funding sources, subsequent to year end, the Group has secured a significant liquidity boost through a Gold Stream
Agreement, providing access to $100 million of capital expected over the next 24 months. This agreement substantially enhances the Group's
liquidity position and provides a stable funding base for ongoing operations and development of the Cascabel project. However, the Group will
still need to raise additional funds for regional exploration.
The success of capital raisings is dependent upon a variety of factors including general equities and metals market sentiment, macro-economic
outlook, project perspectivity, operational risks and other factors from time to time. When funds are sought, the Group balances the costs and
benefits of equity financing versus alternate financing options, including strategic agreements such as the aforementioned gold stream.
Funds are provided to subsidiaries monthly, based on the subsidiaries' forecast expenditure. The combination of traditional funding methods and
the Gold Stream Agreement provides the Group with a diversified and robust approach to managing its liquidity risks, particularly for the Cascabel
project.
The amounts disclosed in the table below are the contractual undiscounted cash flows. All liabilities held by the Group and Company are
contractually due and payable within 1 year, excluding the non-current lease liability payments, NSR financing agreement and derivative liabilities
which are greater than 12 months as set out in the table below:
Contractual maturities of
financial liabilities
Less than 6
months
US$
6 – 12
months
US$
Between 1 and
2 years
US$
Between 2 and
5 years
US$
Over 5 years
US$
Total contractual
cash flows
US$
As at 30 June 2024
Trade payables
6,503,000
-
-
-
-
6,503,000
Borrowings
10,002,796
-
-
-
745,512,584
755,515,380
Lease liabilities
-
70,510
136,808
-
-
207,318
Derivative liabilities
1,000
-
-
-
-
1,000
Total
16,506,796
70,510
136,808
-
745,512,584
762,226,698
Contractual maturities of
financial liabilities
Less than 6
months
US$
6 – 12
months
US$
Between 1 and
2 years
US$
Between 2 and
5 years
US$
Over 5 years
US$
Total contractual
cash flows
US$
As at 30 June 2023
Trade payables
6,479,818
-
-
-
-
6,479,818
Borrowings
-
-
-
-
694,054,604
694,054,604
Lease liabilities
205,165
205,165
185,778
-
-
596,108
Derivative liabilities
-
-
240,000
-
-
240,000
Total
6,684,983
205,165
425,778
-
694,054,604
701,370,530
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
127
Note 24(f) 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 2024 is US$198,949,060 (2023: US$147,018,712).
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.
Ecuadorian tenement area exploration commitments are made on a calendar year basis. The calendar year 2024 commitment of $6,932,784 had
been met as at 30 June 2024, and the 2025 commitments in the table below are estimates of the expected calendar year 2025 commitments.
Commitments to spend on tenements are as follows:
Region
Up to 12 Months
13 Months to 5 Years
Later than 5 Years
Ecuador
7,279,423
-
--
Queensland (exploration work
programs)
449,980
942,005
-
Total
7,729,403
942,005
-
The Group also has the ability to meet expenditure requirements by joint venture or farm in agreements. Management does not currently intend
to complete the Queensland exploration work programs.
The Group and Franco-Nevada have each committed to contribute US$450,000, for a total of US$900,000, to a community recycling and waste
management initiative in the vicinity of the Cascabel project. No funds have been contributed to the initiative. Management expects to contribute
US$320,000 in 2025 and US$130,000 in 2026.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
128
NOTE 26 | RELATED PARTIES
Note 26(a) Group
Transactions between related parties are on normal commercial terms and conditions and are no more favourable than those available to other
parties unless otherwise stated.
At and for the year ended
30 June
2024
US$
2023
US$
Samuel Capital Pty Ltd (“Samuel”)
Paid or owed
65,892
74,741
Amount outstanding
6,425
6,106
Commercial agreement with Samuel for the engagement of Mr. Nicholas Mather as Non-Executive Director of the Company.
Bennett Jones LLP
Paid or owed
716,602
1,574,012
Amount outstanding
974,000
Nil
Mr. James Clare (a former Director whose period in office ended on 20 December 2023), is a partner in the Canadian law firm Bennett Jones
LLP which has provided legal services and is also a shareholder in the Company. Included in the amounts disclosed above at 30 June 2024, are
accrued expenses of approximately US$635,000 for services rendered and not billed as well as approximately US$339,000 for Mr. James
Clare’s Director fees.
D.R. Loveys and Associates Inc.
Paid or owed
33,209
54,849
Amount outstanding
Nil
Nil
A service company which provides accounting and management consulting services, is owned by Mr. David Loveys, a shareholder of the
Company and a director of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.).
Loyer CMS LLC
Paid or owed
Nil
695,513
Amount outstanding
Nil
Nil
A consultancy company owned by Mr. Harold ‘Bernie’ Loyer, a former employee, provided management consulting services to the Group.
DGR Global Limited (“DGR”)
Paid or owed
5,188
17,735
Amount outstanding
58
Nil
Provision of exploration licence maintenance and administration services. Mr. Nicholas Mather, Non-Executive Director, is a director of DGR,
and DGR is an owner of 204,151,800 shares of the Company.
Maxit Capital LP
Paid or owed
Nil
5,182,210
Amount outstanding
Nil
Nil
A shareholder of the Company with a financial advisory agreements with the Company.
Repayments totalling $nil (2023: US$4,522) were made to the Company by former employees as beneficiaries of the of the Company Funded Loan
Plan.
Share and Option transactions of Directors are shown under Notes 5, 18 and 23.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
129
NOTE 26 | RELATED PARTIES (CONTINUED)
Note 26(b) Company
At and for the year ended
30 June
2024
US$
2023
US$
Samuel Capital Pty Ltd (“Samuel”)
Paid or owed
65,892
74,741
Amount outstanding
6,425
6,106
Commercial agreement with Samuel for the engagement of Mr. Nicholas Mather as Non-Executive Director of the Company.
Bennett Jones LLP
Paid or owed
716,602
1,574,012
Amount outstanding
974,000
Nil
Mr. James Clare (a former Director whose period in office ended on 20 December 2023), is a partner in the Canadian law firm Bennett Jones LLP
which has provided legal services and is also a shareholder in the Company. Included in the amounts disclosed above at 30 June 2024, the
Company has accrued approximately US$635,000 for services rendered and not billed as well as approximately US$339,000 for Mr. James
Clare’s Director fees.
Loyer CMS LLC
Paid or owed
Nil
695,513
Amount outstanding
Nil
Nil
A consultancy company owned by Mr. Harold ‘Bernie’ Loyer, a former employee, provided management consulting services to the Company.
Maxit Capital LP
Paid or owed
Nil
1,440,000
Amount outstanding
Nil
Nil
A shareholder of the Company with various commercial agreements with the Company, including advisory services pertaining to the capital
fundraising in December 2022.
SolGold Canada Inc. (formerly Cornerstone
Capital Resources Inc.)
Paid or owed
1,426,447
Nil
Amount outstanding
1,426,447
Nil
A subsidiary of the Company which bills for corporate support services.
The Company has related party relationships with its subsidiaries (see Note 9 and Note 10) as well as Directors and other key personnel (see Notes
5, 18 and 23).
Note 26(b)(1) Company - Subsidiaries
The Company has an investment in subsidiaries balance of US$258,109,300 (2023: US$261,013,212). The transactions during the year have been
included in Note 9. The Company also has an intercompany loans with a balance of US$205,600,844 (2023: US$181,525,074) - the transactions
during the year have been included in Note 10.
Note 26(b)(2) Company - Ultimate Controlling Party
In the Directors’ opinion there is no ultimate controlling party.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
130
NOTE 27 | CONTINGENT ASSETS AND LIABILITIES
Note 27(a) 2% Net Smelter Royalty Payable to Santa Barbara Resources Limited - Group
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 2024 and as such there is significant uncertainty over the timing of any payments
that may fall due.
Note 27(b) Term Sheet Between SolGold plc and Group Subsidiaries – Group and Company
The terms of the Term Sheet (“Term Sheet”) previously signed between SolGold plc (assigned and assumed to/by SolGold Finance AG), SolGold
Canada Inc. (formerly Cornerstone Capital Resources Inc.), SolGold Canada Inc.'s (formerly Cornerstone Capital Resources Inc.) subsidiary
Cornerstone Ecuador S.A. (“CESA”), and Exploraciones Novomining S.A. (“ENSA”) became an internal arrangement which was eliminated upon
consolidation of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) due to the Company’s acquisition of the remaining shares of
SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) executed on 24 February 2023. The Term Sheet documented CESA’s obligation
to repay SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) for its proportionate 15% share of Cascabel expenditures. The amount
receivable from CESA and associated provision for impairment were eliminated for consolidated reporting, although the arrangement still exists.
Note 27(c) Provision for Legal and Employee Expenses – Group and Company
A provision of US$716,170 has been recognised at 30 June 2024 (30 June 2023: US$716,170) for legal and employee expenses.
There are no other material contingent assets and liabilities.
NOTE 28 | BUSINESS COMBINATIONS
Note 28(a) Business Combinations in Current Year
There were no business combinations during the year ended 30 June 2024.
Note 28(b) Business Combination in Prior Year - SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.)
On 24 February 2023, SolGold acquired all of the issued and outstanding shares of SolGold Canada Inc. (formerly Cornerstone Capital Resources
Inc.) (“Cornerstone”), other than the Cornerstone Shares already held, directly or indirectly, by SolGold. The acquisition consolidated ownership
of the Cascabel Project, along with a robust portfolio of other projects primarily across Ecuador.
Consideration for the acquisition was paid using SolGold shares and options, with Cornerstone Shareholders receiving 15 SolGold shares and
options for each Cornerstone share and option, respectively. The business combination consisted of the repurchase of the Group’s non-controlling
interest in ENSA, the purchase of the Company’s own shares and acquisition of Cornerstone’s net identifiable assets. Details of the purchase
consideration, the net assets acquired, and goodwill are as follows:
Purchase consideration
2023
US$
Cash paid
Nil
Shares issued to shareholders of Cornerstone (94.5%)
84,978,233
Replacement Options of Cornerstone options holders
1,876,910
Total consideration paid
86,855,143
Fair value of SolGold’s existing ownership in Cornerstone (5.5%)
4,984,731
Less: Consideration for Cornerstone’s existing ownership in Exploraciones Novomining S.A (15%)
(64,417,777)
Less: Fair value of Cornerstone’s existing ownership in SolGold (6.3%)
(25,389,208)
Total consideration paid for the remaining business
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
131
NOTE 28 | BUSINESS COMBINATIONS (CONTINUED)
Note 28(b) Business Combination in Prior Year - SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) (Continued)
The assets and liabilities recognised as a result of the acquisition were as follows:
Calculation of Goodwill
2023
US$
Cash and cash equivalents
1,047,190
Financial assets held at fair value through OCI
827
Other receivables and prepayments
1,166,756
Property, plant and equipment
226,622
Trade and other payables
(408,505)
Net identifiable assets acquired
2,032,890
Goodwill
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:
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
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.
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$16,054,495 that were not directly attributable to the issue of shares are included in administrative expenses
in the statement of profit or loss and in operating cash flows in the statement of cash flows.
Purchase Consideration – Cash Outflow
Inflow/(Outflow) of cash to acquire subsidiary, net of cash acquired
2023
US$
Cash consideration
Nil
Less: Balances acquired
Cash and cash equivalents
1,047,190
Net inflow of cash – investing activities
1,047,190
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
SolGold plc Annual Report: Financial Statements for the Year Ended 30 June 2024
132
NOTE 29 | SUBSEQUENT EVENTS
Note 29(a) Gold Stream Agreement with Franco Nevada and Osisko
On 15 July 2024, the Company announced entry into a syndicated Gold Stream Agreement ("Agreement") with Franco-Nevada (Barbados)
Corporation ("Franco-Nevada") and Osisko Bermuda Limited ("Osisko") (together, the "Syndicate") for the provision of US$750 million in project
advancement funding and a proportion of development funding ("Deposit") in exchange for a percentage of the gold to be produced from the
Cascabel Project ("Cascabel" or the "Project"). The percentage of gold will be 20% of recovered gold until 750,000 ounces of gold have been
provided, after which the percentage will be 12% for the remaining life of the mine.
The Deposit comprises two funding segments, of which Franco-Nevada and Osisko will contribute 70% and 30%, respectively:
i) the initial deposit ("Initial Deposit"): US$100 million paid over three tranches, a third of which was received in July 2024, allocated towards
de-risking, permitting, completion of the development funding package and completion of the feasibility study ("FS") on the Project to
take it to a Final Development Investment Decision, and
ii) the construction deposit ("Construction Deposit") of US$650 million to be contributed to funding the construction of the Project.
In exchange for the Deposit and ongoing payments to SolGold equivalent to 20% of the spot gold price at the time, the Syndicate will receive an
amount in reference to 20% of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold have been provided, after which the
percentage will reduce to 12% for the life of the mine.
The Agreement includes a buyback option for five years following the closing of the Gold Stream Agreement, exercisable upon a change of control
transaction, to reduce the Gold Stream Agreement by 50% within three years of the closing date of the Agreement or by 33.33% thereafter until
the fifth anniversary of the closing date of the Agreement.
ADDITIONAL INFORMATION
GRI CONTENT INDEX
Disclosure
Commentary / section and page number references for the FY2024 Annual
Report
External
assurance
GRI 2: General disclosures
2-1 Organisational details
The Story of SolGold: Pages 3
Throughout this Annual Report 2024
2-2 Entities included in the
organisation’s sustainability reporting
SolGold corporate structure: Page 3
Notes to the Financial Statements: Page 86
2-3 Reporting period, frequency and
contact point
Chief Executive's review: Pages 7
Directors' report: Pages 63
2-4 Restatements of information
2-5 External assurance
Independent auditors’ report to the Members of SolGold Plc: Pages 69
2-6 Activities, value chain and other
business relationships
Business model: Page 8
Engaging with our stakeholders: Page 19
Sustainability report: Page 20
Corporate Governance statement: Page 30
2-7 Employees
Engaging with our stakeholder: Page 19
Sustainability report: Page 20
2-8 Workers who are not employees
Engaging with our stakeholder: Page 19
2-9 Governance structure and
composition
Corporate Governance statement: Page 32
Executive Management team: Pages 39
Board leadership and company purpose: Pages 39
2-10 Nomination and selection of the
highest governance body
Risk management: Page 16
Nomination Committee Report: 46
2-11 Chair of the highest governance
body
Corporate Governance statement: Page 30
Board leadership and company purpose: Page 39
2-12 Role of the highest governance
body in overseeing the management of
impacts
Corporate Governance statement: Page 30
Executive Management team: Page 39
Board leadership and company purpose: Page 39
Division of responsibilities: Page 43
Directors' Report: Page 63
Directors’ Responsibility Statement: Page 68
2-13 Delegation of responsibility for
managing impacts
Executive Management team: Page 39
Division of responsibilities: Page 43
2-14 Role of the highest governance
body in sustainability reporting
Environment, Social and Governance (ESG) Committee Report: Page 50
2-15 Conflicts of interest
Division of responsibilities: Page 43
2-16 Communication of critical concerns
Engaging with our stakeholders: Page 19
Corporate Governance statement: Page 30
2-17 Collective knowledge of the highest
governance body
Board leadership and company purpose: Page 39
Composition: Page 37
2-18 Evaluation of the performance of
the highest governance body
Corporate Governance statement: Page 30
Stakeholder engagement: Page 19
2-19 Remuneration policies
Directors' Remuneration Policy: Page 61
2-20 Process to determine
remuneration
Directors' Remuneration Report: Page 52
2-21 Annual total compensation ratio
Directors' Remuneration Report: Page 52
2-22 Statement on sustainable
development strategy
Sustainability report: Page 20
2-23 Policy commitments
Not available
2-24 Embedding policy commitments
Corporate Governance statement: Pages 78-81
Executive Management team: Page 39
Board leadership and company purpose: Page 39
Division of responsibilities: Page 43
2-25 Processes to remediate negative
impacts
Sustainability Report: Page 20
Disclosure
Commentary / section and page number references for the FY2024 Annual
Report
External
assurance
2-26 Mechanisms for seeking advice and
raising concerns
Corporate Governance Whistle-blower policy: Page 40
2-27 Compliance with laws and
regulations
Sustainability report: Page 20-28
Corporate Governance statement: Page 32
2-28 Membership associations
Sustainability report: Page 20
2-29 Approach to stakeholder
engagement
Engaging with our stakeholders: Page 19
2-30 Collective bargaining agreements
Not available
GRI 3: Material topics
3-1 Process to determine material topics
Not available
3-2 List of material topics
Not available
3-3 Management of material topics
Not available
GRI 201: Economic performance
201-1 Direct economic value generated
and distributed
Business model: Page 8
Sustainability report: Page 20
201-2 Financial implications and other
risks and opportunities due to climate
change
Not stated
201-3 Defined benefit plan obligations
and other retirement plans
Not available
201-4 Financial assistance received from
government
Not available
GRI 202: Market presence
202-1 Ratios of standard entry level
wage by gender compared to local
minimum wage
Not available
202-2 Proportion of senior management
hired from the local community
Not stated
GRI 203: Indirect Economic Impacts
203-1 Infrastructure investments and
services supported
Sustainability report: Page 20
203-2 Significant indirect economic
impacts
Business model: Page 8
Sustainability report: Page 20
GRI 204: Procurement Practices
204-1 Proportion of spending on local
suppliers
Sustainability report: Page 20
GRI 205: Anti-corruption
205-1 Operations assessed for risks
related to corruption
Not stated
205-2 Communication and training
about anti-corruption policies and
procedures
Risk management: Page 16
Board leadership and company purpose: Pages 40
205-3 Confirmed incidents of corruption
and actions taken
Directors' report: Page 63
Independent Auditors’ Report to the Members of SolGold Plc: Page INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SOLGOLD PLC69Error! Bookmark not defined.
GRI 206: Anti-competitive behaviour
206-1 Legal actions for anti-competitive
behaviour, anti-trust, and monopoly
practices
N/A
GRI 207: Tax
207-1 Approach to tax
Notes to the Financial Statements: Page 86
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
Financial review: Page 14
Disclosure
Commentary / section and page number references for the FY2024 Annual
Report
External
assurance
GRI 301: Materials
301-1 Materials used by weight or
volume
Sustainability report: Page 20
301-2 Recycled input materials used
Sustainability report: Page 20
301-3 Reclaimed products and their
packaging materials
Not stated
GRI 302: Energy
302-1 Energy consumption within the
organisation
Sustainability report: Page 20
Felipe
Castillo
(third-party
consultant)
302-2 Energy consumption outside of
the organisation
Not available
302-3 Energy intensity
Sustainability report: Page 20
Felipe
Castillo
(third-party
consultant)
302-4 Reduction of energy consumption
Sustainability report: Page 20
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: Page 20
303-2 Management of water discharge-
related impacts
Sustainability report: Page 20
303-3 Water withdrawal
Sustainability report: Page 20
303-4 Water discharge
Sustainability report: Page 20
303-5 Water consumption
Sustainability report: Page 20
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: Page 20
304-2 Significant impacts of activities,
products and services on biodiversity
Sustainability report: Page 20
304-3 Habitats protected or restored
Sustainability report: Page 20
304-4 IUCN Red List species and national
conservation list species with habitats in
areas affected by operations
Sustainability report: Page 20
GRI 305: Emissions
305-1 Direct (Scope 1) GHG emissions
Sustainability report: Page 20
Felipe
Castillo
(third-party
consultant)
305-2 Energy indirect (Scope 2) GHG
emissions
Sustainability report: Page 20
Felipe
Castillo
(third-party
consultant)
305-3 Other indirect (Scope 3) GHG
emissions
Not stated
305-4 GHG emissions intensity
Sustainability report: Page 20
Felipe
Castillo
(third-party
consultant)
305-5 Reduction of GHG emissions
Sustainability report: Page 20
Felipe
Castillo
(third-party
consultant)
Disclosure
Commentary / section and page number references for the FY2024 Annual
Report
External
assurance
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: Page 20
GRI 306: Waste
306-1 Waste generation and significant
waste-related impacts
Sustainability report: Page 20
306-2 Management of significant waste-
related impacts
Sustainability report: Page 20
306-3 Waste generated
Sustainability report: Page 20
306-4 Waste diverted from disposal
Sustainability report: Page 20
306-5 Waste directed to disposal
Sustainability report: Page 20
GRI 308: Supplier environmental assessment
308-1 New suppliers that were screened
using environmental criteria
Not stated
308-2 Negative environmental impacts
in the supply chain and actions taken
Not stated
GRI 401: Employment
401-1 New employee hires and
employee turnover
Sustainability report: Page 20
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
GRI 402: Labour/Management relations
402-1 Minimum notice periods
regarding operational changes
Not stated
GRI 403: Occupational health and safety
403-1 Occupational health and safety
management system
Sustainability report: Page 20
403-2 Hazard identification, risk
assessment, and incident investigation
Not stated
403-3 Occupational health services
Not stated
403-4 Worker participation,
consultation, and communication on
occupational health and safety
Sustainability report: Page 20
403-5 Worker training on occupational
health and safety
Sustainability report: Page 20
403-6 Promotion of worker health
Sustainability report: Page 20
403-7 Prevention and mitigation of
occupational health and safety impacts
directly linked by business relationships
Risk management: Page 16
403-8 Workers covered by an
occupational health and safety
management system
Not stated
403-9 Work-related injuries
Sustainability report: Page 20
403-10 Work-related ill health
Sustainability report: Page 20
GRI 404: Training and education
404-1 Average hours of training per year
per employee
Sustainability report: Page 20
404-2 Programs for upgrading employee
skills and transition assistance programs
Not stated
404-3 Percentage of employees
receiving regular performance and
career development reviews
Noted stated
Disclosure
Commentary / section and page number references for the FY2024 Annual
Report
External
assurance
GRI 405: Diversity and equal opportunity
405-1 Diversity of governance bodies
and employees
Engaging with our stakeholders: Page 42
Sustainability report: Page 20
405-2 Ratio of basic salary and
remuneration of women to men
Sustainability report: Page 20
GRI 406: Non-discrimination
406-1 Incidents of discrimination and
corrective actions taken
Sustainability report: Page 20
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 Operations with local community
engagement, impact assessments, and
development programs
Sustainability report: Pages 20
413-2 Operations with significant actual
and potential negative impacts on local
communities
Risk management: Page 16
Engaging with our stakeholder: Page 19
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
GRI 415: Public policy
415-1 Political contributions
Directors' Report: Page 65
GRI 416: Customer health and safety
416-1 Assessment of the health and
safety impacts of product and service
categories
Not applicable
416-2 Incidents of non-compliance
concerning the health and safety impacts
of products and services
Not applicable
GRI 417: Marketing and labelling
417-1 Requirements for product and
service information and labelling
Not applicable
417-2 Incidents of non-compliance
concerning product and service
information and labelling
Not applicable
417-3 Incidents of non-compliance
concerning marketing communications
Not stated
GRI 418: Customer privacy
Disclosure
Commentary / section and page number references for the FY2024 Annual
Report
External
assurance
418-1 Substantiated complaints
concerning breaches of customer privacy
and losses of customer data
Not available
MAILING ADDRESS:
PO Box 7059,
Cloisters Square PO,
Perth, WA 6850,
Australia
LONDON REGISTERED OFFICE:
1 Cornhill,
London,
EC3V 3ND,
United Kingdom
QUITO OFFICE:
Avenida Coruña E25-58 y San Ignacio, Edificio Altana
Plaza, piso 4 oficina 406, 170517 – Quito, Ecuador
www.solgold.com.au