ACN 139 308 973
ANNUAL REPORT 2019
CORPORATE DIRECTORY/CONTENTS PAGE
CORPORATE DIRECTORY
Board of Directors
John Prineas ‐ Executive Chairman
John Dawson – Non‐Executive Director
Sarah Shipway ‐ Non‐Executive Director
Company Secretary
Sarah Shipway
Principal Office
Ground Floor
28 Ord Street
West Perth WA 6005
Registered Office
Level 1, 115 Cambridge Street
WEST LEEDERVILLE WA 6007
Tel: + 61 8 9322 6600
Fax: + 61 8 9322 6610
Website: www.stgeorgemining.com.au
Email: info@stgeorgemining.com.au
Australian Business Number
ABN 21 139 308 973
Share Register
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
PERTH WA 6000
Tel: 1300 850 505
Int: +61 8 9323 2000
Fax: + 61 8 9323 2033
Stock Exchange Code
SGQ – Ordinary Shares
Auditors
Stantons International
Bankers
Commonwealth Bank
CONTENTS
PAGE
Chairman’s Letter
Review of Operations
Directors’ Report
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated Financial Report
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Shareholder Information
Schedule of Tenements
3
4
10
20
21
22
23
24
48
49
50
54
56
St George Mining Limited – Annual Report 2019
P 2
CHAIRMAN’S LETTER
Dear Fellow Shareholders
Welcome to the 2019 Annual Report of St George Mining Limited (ASX: SGQ), which looks back on
a successful year of exploration by the Company as we continue to grow the potential nickel‐
copper sulphide mineral resource at our flagship Mt Alexander Project in Western Australia’s
north‐eastern Goldfields.
Our methodical and systematic exploration, using modern techniques, is proving to be rewarding
with further high‐grade nickel‐copper sulphide mineralisation being identified along the 16km
strike of the Cathedrals Belt that runs through the Mt Alexander project area.
Excellent results were delivered by ongoing drill programmes – including the Project’s best
intercepts to date of thick massive nickel‐copper sulphides at the Investigators Prospect.
Regional exploration has also provided tremendous results with several new targets identified
over the large 200 sq km tenement package at Mt Alexander. We believe these targets are highly
prospective for the discovery of additional nickel‐copper sulphides and indicative of the potential
to establish a high‐grade nickel camp at Mt Alexander with multiple deposits.
This exploration success is building substantial value at Mt Alexander and broadening the
development options for the Project.
With limited drilling below 200m from surface, we are confident that we are only scratching the
surface of a large high‐grade mineral system with potential for the discovery of further significant
mineralisation at depths not yet explored.
The nickel price has rallied this year and we believe there is a compelling scenario for further
sustainable price increases. Market deficits for nickel are increasing with a lack of new projects to
meet the growing demand from the battery sector.
The capital markets are beginning to realise the dearth of quality new nickel sulphide supplies on
the horizon, resulting in strong investor interest in St George as it continues on the path to
establishing a high‐grade nickel‐copper sulphide resource.
The next year promises to be another exciting one for our Company as we continue to unlock the
full value of Australia’s latest high‐grade nickel‐copper sulphide discovery. On behalf of the Board
of Directors, we look forward to sharing the success with you.
John Prineas
Executive Chairman
St George Mining Limited – Annual Report 2019
P 3
REVIEW OF OPERATIONS
MT ALEXANDER PROJECT
The Company’s operational activities during the year ending 30 June 2019 remained focused on building a
high‐grade nickel‐copper sulphide mineral resource at its flagship Mt Alexander Project in Western
Australia’s north‐eastern Goldfields.
Thick Zones of High‐Grade Nickel‐Copper Sulphides:
Sustained drilling throughout the year continued to extend and define the footprint of mineralisation, with
the best intercepts to date of massive nickel‐copper sulphides recorded in drill holes MAD126 and MAD127
at the Investigators Prospect.
Above: Drill core tray for MAD127 showing the thick massive sulphide
interval from 183.9m downhole.
Right: Drill core from MAD126 with massive sulphides at 185m downhole.
Below: Table of the laboratory assays for the significant intersections in
MAD126 and MAD127.
Prospect
Hole
Investigators
Investigators
MAD126
including
MAD127
including
From
m
184.0
185.0
183.9
184.4
Width
m
7.86
5.25
8.49
6.39
Ni
%
5.7
7.0
5.8
6.5
Cu
%
2.1
2.7
2.6
2.8
Co
%
0.18
0.23
0.18
0.21
PGE
g/t
2.65
3.10
3.61
3.68
St George Mining Limited – Annual Report 2019
P 4
REVIEW OF OPERATIONS
Extensional Drilling at Existing Discoveries:
Drilling and downhole electromagnetic (DHEM) surveys were used concurrently to scope out the scale of the
discoveries at the Investigators, Stricklands and Cathedrals Prospects, where high‐grade mineralisation has
been intersected in multiple drill holes along a 4.5km strike of the Cathedrals Belt.
DHEM surveys carried out in drill holes completed in late 2018 and early 2019 generated a large number of
priority EM targets for further nickel‐copper sulphide mineralisation.
More than 73 off‐hole EM anomalies in total were identified by the DHEM surveys, indicating very strong
potential for the presence of much more mineralisation than has been recognised by the drilling to date.
Test drilling of these EM anomalies has commenced and will continue through the second half of 2019.
There has been very limited drilling beyond 200m from surface at the Cathedrals Belt. The down‐plunge
continuity of the mineralisation is being tested by deeper drilling with early success at Investigators where
the down‐plunge extent on the MAD60 Line has been increased to 380m. Further deep drilling and powerful
EM surveys will be escalated to test for additional high‐grade mineralisation at depth.
Figure 1 – plan view map of the Cathedrals Belt (over SAMSON FLEM Channel 18 [mid‐time] image) showing
the multiple intersections of massive nickel‐copper‐cobalt‐PGE sulphides (“$M”) within the large SAMSON
EM anomalies at the Investigators, Stricklands and Cathedrals prospects over a 4.5km strike of the
Cathedrals Belt. Extensional drilling continues to increase the footprint of mineralisation at these Prospects.
St George Mining Limited – Annual Report 2019
P 5
REVIEW OF OPERATIONS
Underexplored Targets:
To date, drilling has focused on an outcropping 4.5km section of the east‐west oriented Cathedrals Belt,
which hosts the significant discoveries of high‐grade nickel‐copper sulphides at the Investigators,
Stricklands and Cathedrals Prospects.
The remainder of the Cathedrals Belt lies under cover, is largely undrilled and offers excellent
opportunities to discover additional nickel‐copper sulphide mineralisation.
Fish Hook Prospect: The Fish Hook Prospect occurs within an interpreted 8,000m eastern extension of the
Cathedrals Belt and is located within Exploration Licence 29/954, which is 100% owned by St George.
A soil survey recently carried out at Fish Hook returned a very strong nickel‐copper anomaly that is co‐
incident with a magnetic feature – known to represent mineralised ultramafics in other parts of the
Cathedrals Belt. Further soil surveys and EM surveys will be carried out at Fish Hook to identify drill targets
for potential nickel‐copper sulphides.
Figure 2 – map of
the Mt Alexander
tenements
(against RTB
magnetics) with
key prospects
highlighted.
The inset shows
the 4.5km strike
of the Cathedrals
Belt where
drilling has
intersected large
areas of high‐
grade nickel‐
copper sulphides.
St George Mining Limited – Annual Report 2019
P 6
REVIEW OF OPERATIONS
West End Prospect: The West End Prospect covers a 2.5km western extension of the Cathedrals Belt –
from the Investigators Prospect to the deep, crustal Ida Fault in the west.
A SAM (Sub Audio Magnetics) survey completed on the Cathedrals Belt during the year was successful in
defining the structural corridor that hosts the Cathedrals Belt ultramafic complex. These structures are
interpreted to be the likely source through which mafic/ultramafic intrusions hosting nickel‐copper
sulphides in the Belt have passed upwards from the Earth’s mantle.
The SAM survey confirmed that the main Cathedrals Belt structural trend continues into the unexplored
West End while also identifying areas of paleo‐channel and other conductive cover.
A new EM programme was designed to better test for nickel‐copper sulphide targets below the areas with
conductive cover. A high‐powered moving loop EM (MLEM) will utilise both traditional and Slingram
configurations – the latter uses a sensor inside and outside of the survey loop, which results in the effects
of palaeo‐drainage and conductive cover being minimised.
Fairbridge Prospect: The Fairbridge Prospect covers a 1,000m east‐west strike of the Cathedrals Belt
between the Stricklands Prospect in the west and the Cathedrals Prospect in the east; see Figures 2 and 3.
A large number of nickel‐copper gossans have been identified across the surface at Fairbridge, which
suggests potential for nickel‐copper sulphide mineralisation below and/or proximal to the gossans.
Drilling and EM surveys have been initiated at Fairbridge to search for high‐grade mineralisation at depth.
Figure 3 – Map showing survey areas of the new EM programme underway at the Cathedrals Belt (set
against the latest SAM (MMC) survey data). The purple areas represent the strongest conductive
responses and are interpreted to represent major faults within the Cathedrals corridor, a structural
setting that is known to host nickel‐copper sulphides in this Belt.
St George Mining Limited – Annual Report 2019
P 7
REVIEW OF OPERATIONS
About the Mt Alexander Project:
The Mt Alexander Project is located 120km south‐southwest of the Agnew‐Wiluna Belt, which hosts
numerous world‐class nickel deposits. The Project comprises five granted exploration licences – E29/638,
E29/548, E29/962, E29/954 and E29/972.
The Cathedrals, Stricklands and Investigators nickel‐copper‐cobalt‐PGE discoveries are located on E29/638,
which is held in joint venture by St George Mining Limited (75%) and Western Areas Limited (25%). St George
is the Manager of the Project, with Western Areas retaining a 25% non‐contributing interest in the Project
(in regard to E29/638 only) until there is a decision to mine.
EAST LAVERTON PROJECT
Large Gold‐Bearing System:
A major diamond drilling programme was completed during the year to test a number of new gold targets at
the East Laverton Project. The drilling targeted structural breaks within the prospective lithologies (strongly
magnetic dolerite units), as indicated by low magnetic responses.
The widely spaced drill programme intersected favourable host rocks – dolerite with quartz veining and
sulphide occurrences – over a broad area.
Laboratory assays confirmed the presence of anomalous gold values in multiple drill holes. These results are
a positive indicator of a large mineral system that is prospective for gold mineralisation.
HAWAII PROJECT
The Hawaii Project is an early stage project where initial exploration has identified undercover greenstones
that may be prospective for nickel sulphides and/or gold mineralisation.
St George completed field reconnaissance and detailed geological review on the project tenements.
A drilling programme will be designed to follow up the 2019 results.
CORPORATE UPDATE
Capital Raisings:
The Company completed one capital raising during the year through the private placement of ordinary
shares to raise new funds.
In June 2019, St George issued a total of 37,191,454 fully paid ordinary shares at $0.11 per share to raise $4
million.
Tax credits under JMEI (Junior Minerals Exploration Incentive) scheme were utilised for this placement.
Technical Team is Boosted:
In November 2018, Dave O’Neill joined the Company’s technical team as the Company’s Exploration
Manager. Mr O’Neill has more than 20 years’ experience as a geologist in the mining industry with particular
expertise in nickel sulphide exploration gained in senior roles with WMC Resources, BHP and Western Areas.
At Western Areas, Mr O’Neill worked with Charles Wilkinson, Technical Consultant to St George and
previously the General Manager of Exploration for Western Areas.
During his time at BHP and Western Areas, Mr O’Neill managed and supervised exploration programmes at
the Mt Alexander Project for each of those companies.
St George Mining Limited – Annual Report 2019
P 8
REVIEW OF OPERATIONS
In December 2018, Dave Mahon also joined the Company’s technical team. Mr Mahon is a geologist with
more than seven years’ experience in the mining industry. He has specialist expertise in nickel sulphides
gained from six years employment at Western Areas, where his roles included exploration geologist and mine
geologist at Forrestania.
Board Changes:
On 2 January 2019, John Dawson was appointed as non‐executive director of St George Mining following
Tim Hronsky’s retirement as a director of the Company.
Mr Dawson has more than 30 years’ experience in the finance and mining sectors, where he occupied
senior roles with global investment banks including Goldman Sachs and Dresdner Kleinwort Wasserstein.
At Goldman Sachs, Mr Dawson was a Managing Director of FICC (Fixed Income, Currency and Commodities)
for Australia. At Dresdner Kleinwort Wasserstein, Mr Dawson was Global Head of Commodities as well as
the Country Head for Australia.
Competent Person Statement:
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is
based on information compiled by Mr Benjamin Pollard, a Competent Person who is a Member of The Australasian Institute
of Mining and Metallurgy. Mr Pollard is employed by Cadre Geology and Mining Pty Ltd which has been retained by St
George Mining Limited to provide technical advice on mineral projects.
Mr Pollard has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Pollard consents to the inclusion in the
report of the matters based on his information in the form and context in which it appears.
This ASX announcement contains information extracted from the following reports which are available on the Company’s
website at www.stgm.com.au:
24 August 2018 Mt Alexander Continues to Deliver Outstanding Results
5 September 2018 Mt Alexander – Drilling Update
18 September 2018 More Strong Results at Mt Alexander
3 October 2018 Downhole EM Surveys Light Up Strong Conductors
19 October 2018 Extension to High‐Grade Mineralisation at Mt Alexander
25 October 2018 Best Ever Intercept at Investigators
1 November 2018 More Massive Nickel‐Copper Sulphides at Investigators
20 November 2018 Further Extensions to Nickel‐Copper Sulphides At Mt Alexander
30 November 2018 Assays Confirm Best Ever Intercepts
20 December 2018 Strong Results Continue at Mt Alexander
31 January 2019 More Outstanding Nickel‐Copper Sulphide Targets
12 February 2019 St George Ready to Drill
7 March 2019 Nickel‐Copper Sulphide Drilling at Mt Alexander
18 March 2019 Drilling at Mt Alexander – Strong Results Continue
9 April 2019 Nickel‐Copper Sulphide Drilling at Mt Alexander – Update
4 June 2019 Nickel Sulphide Extension Targets at Mt Alexander
13 June 2019 Assays Confirm Thick Nickel‐Copper Sulphides
9 July 2019 42 EM Conductors Ready to Drill at Mt Alexander
11 July 2019 Further Priority Nickel‐Copper Sulphide Targets.
The Company confirms that it is not aware of any new information or data that materially affects the exploration results
included in any original market announcements referred to in this report and that no material change in the results has
occurred. The Company confirms that the form and context in which the Competent Person’s findings are presented have not
been materially modified from the original market announcements.
St George Mining Limited – Annual Report 2019
P 9
DIRECTORS’ REPORT
The Directors of St George Mining Limited submit the annual financial report of St George Mining Limited from
1 July 2018 to 30 June 2019. In order to comply with the provisions of the Corporations Act 2001, the Directors
report as follows:
DIRECTORS
The names and particulars of the directors of the Company during the financial year ended 30 June 2019, and at
the date of this report, are as follows. Directors were in office for the entire period unless otherwise stated.
John Prineas B.EC LL.B F FIN
Special Responsibilities
Appointed
Experience
Executive Chairman
Member of Nomination and Remuneration Committee
19 October 2009
John is a founding shareholder and director of St George Mining Limited. His
involvement in the mining sector spans over 25 years with experience in
commercial, legal and finance roles.
Prior to establishing St George Mining, John was Chief Operating Officer and
Country Head of Dresdner Bank in Sydney with a focus on project and
acquisition finance for resources and infrastructure projects. John has
Economics and Law degrees from the University of Sydney and commenced
his career as a lawyer in Sydney with Allen, Allen & Hemsley.
Not applicable.
Not applicable.
Non‐Executive Director
Member of Audit and Risk Committee
2 January 2019
Mr Dawson has over 30 years’ experience in the finance and mining sectors
where he occupied very senior roles with global investment banks including
Goldman Sachs and Dresdner Kleinwort Wasserstein.
At Goldman Sachs, Mr Dawson was a Managing Director of FICC (Fixed
Income, Currency and Commodities) for Australia. At Dresdner Kleinwort
Wasserstein, Mr Dawson was Global Head of Commodities as well as the
Country Head for Australia.
Not applicable.
Not applicable.
Non‐Executive Director
Chairman of Nomination and Remuneration Committee and Chairman of
Audit and Risk Committee
11 June 2015
Sarah Shipway was appointed Non‐Executive Director on 11 June 2015 and
was appointed Company Secretary of St George Mining on 22 March 2012.
Ms Shipway has a Bachelor of Commerce from the Murdoch University and
is a member of the Chartered Accountants Australia and New Zealand.
Beacon Minerals Limited from June 2015.
Not applicable.
Other current listed company
directorships
Former listed directorships in
the last three years
John Dawson
Special Responsibilities
Appointed
Experience
Other current listed company
directorships
Former listed directorships in
the last three years
Sarah Shipway CA, B.Com
Special Responsibilities
Appointed
Experience
Other current listed company
directorships
Former listed directorships in
the last three years
St George Mining Limited – Annual Report 2019
P 10
DIRECTORS’ REPORT
Tim Hronsky B.ENG (Geology)
MAUSIMM, MSEG
Appointed
Retired
Experience
Other current listed company
directorships
Former listed directorships in
the last three years
COMPANY SECRETARY
Executive Director
25 November 2009
2 January 2019
Tim is a geologist with over 27 years international experience in the mineral
exploration and mining industry, including 15 years with Placer Dome Inc.
After graduating from the West Australian School of Mines, Tim began his
career in a number of operational roles before being appointed as the
Exploration Manager (Asia) for Placer Dome.
Tim also undertook a number of corporate roles at Placer Dome related to
business improvement, risk management and assurance. Prior to joining St
George Mining, Tim provided consulting services to a range of clients in the
global exploration and mining industry.
Argent Minerals Limited
Not applicable.
Sarah Shipway was appointed Company Secretary on 22 March 2012. For details relating to Sarah Shipway,
please refer to the details on directors above.
DIRECTORS’ INTERESTS
At the date of this report the Directors held the following interests in St George Mining.
Name
Ordinary
Shares
Listed Options
John Prineas
John Dawson
Sarah Shipway
12,214,221
14,595,940
500,000
1,021,422
1,459,594
‐
Class A
Performance
Rights
10
‐
5
Class B
Performance
Rights
10
‐
5
Class C
Performance
Rights
40
‐
10
The Directors have no interest, whether directly or indirectly, in a contract or proposed contract with St George
Mining Limited during the financial year end.
PRINCIPAL ACTIVITIES
The principal activity of the Group is mineral exploration in Australia.
RESULTS AND REVIEW OF OPERATIONS
The results of the consolidated entity for the financial year from 1 July 2018 to 30 June 2019 after income tax
was a loss of $9,594,528 (2018: $4,384,677).
A review of operations of the consolidated entity during the year ended 30 June 2019 is provided in the “Review
of the Operations” immediately preceding this Directors’ Report.
St George Mining Limited – Annual Report 2019
P 11
DIRECTORS’ REPORT
LIKELY DEVELOPMENTS
The Group will continue its exploration activities over the next financial year with a focus on its key projects at
the East Laverton Project and Mt Alexander Project. Further commentary on planned activities over the
forthcoming year is provided in the “Review of Operations”.
The Board will continue to focus on creating value from the Group’s existing resource assets, as well as
considering new opportunities in the resources sector to complement the Group’s current projects.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There has not been any significant change in the state of affairs of the Group during the financial year, other
than as noted in this financial report.
ENVIRONMENTAL ISSUES
The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it
complies with all applicable regulations when carrying out exploration work.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
DIRECTORS’ MEETINGS
The following table sets out the number of meetings held during the year ended 30 June 2019 and the number
of meetings attended by each director.
Directors Meetings
Audit & Risk Committee
Remuneration & Nomination
Committee
Eligible to
Attend
6
2
6
4
J Prineas
J Dawson*
S Shipway
T Hronsky**
*Appointed on 2 January 2019
**Retired on 2 January 2019
Attended
6
2
6
3
Eligible to
Attend
‐
‐
1
1
Attended
1
‐
1
1
Eligible to
Attend
‐
‐
‐
‐
Attended
‐
‐
‐
‐
St George Mining Limited – Annual Report 2019
P 12
DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
Remuneration policy
The remuneration policy of St George Mining Limited has been designed to align directors’ objectives with
shareholder and business objectives by providing a fixed remuneration component, which is assessed on an
annual basis in line with market rates. The Board of St George Mining Limited believes the remuneration policy
to be appropriate and effective in its ability to attract and retain the best directors to run and manage the
Company.
The Board’s policy for determining the nature and amount of remuneration for Board members is as follows:
The remuneration policy and setting the terms and conditions for the Executive directors and other senior
staff members is developed and approved by the Board based on local and international trends among
comparative companies and industry generally. It examines terms and conditions for employee incentive
schemes, benefit plans and share plans. Independent advice is obtained when considered necessary to
confirm that executive remuneration is in line with market practice and is reasonable within Australian
executive reward practices.
All executives receive a base salary (which is based on factors such as length of service and experience) and
superannuation.
The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with
attracting and retaining talented executives, directors and senior executives are paid market rates
associated with individuals in similar positions within the same industry. Options and performance
incentives may be issued particularly as the entity moves from an exploration to a producing entity and key
performance indicators such as profit and production and reserves growth can be used as measurements
for assessing executive performance.
The Board policy is to remunerate non‐executive directors at market rates for comparable companies for
time, commitment and responsibilities. The Executive Directors, in consultation with independent advisors,
determine payments to the non‐executives and review their remuneration annually, based on market
practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non‐
executive directors is subject to approval by shareholders at the Annual General Meeting and is currently
$250,000 per annum. Fees for independent non‐executive directors are not linked to the performance of
the Group. To align Directors’ interests with shareholder interests, the directors are encouraged to hold
shares in the Company.
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and
executives. The method applied to achieve this aim has been the issue of performance rights to directors
and executives to encourage the alignment of personal and shareholder interests. The Company believes
this policy was effective in increasing shareholder wealth in the past.
Analysis of the actual figures shows the Company has increased expenditure over the past 5 years, with the
shares price remaining consistent over the past 5 years.
During the year the Company issued performance‐based remuneration to directors and executives of the
Company. The measures are specifically tailored to align personal and shareholder interest. The KPI’s are
reviewed regularly to assess them in relation to the Company’s goals and shareholder wealth.
St George Mining Limited – Annual Report 2019
P 13
DIRECTORS’ REPORT
Company Performance
A summary of St George Mining’s business performance as measured by a range of financial and other
indicators, including disclosure required by the Corporations Act 2001, is outline below.
Total Comprehensive Loss Attributable to
Member of the Company
Cash and cash equivalents at year end
Basic Loss Per Share (cents)
ASX share price at the end of the year ($)
Increase/(decrease) in share price (%)
2019
2018
2017
2016
2015
9,594,528
4,384,667
4,289,216
6,142,617
3,127,847
3,357,486
3.21
0.110
(18)
5,948,692
1.70
0.135
35
4,773,546
1.75
0.100
(26)
1,437,025
3.77
0.135
29
1,569,200
2.90
0.105
23
Remuneration Consultants
No remuneration consultant was engaged in the current financial year.
Details of directors and executives
Directors
J Prineas
J Dawson
S Shipway
T Hronsky
Title
Executive Chairman
Non‐Executive Director
Non‐Executive Director
Executive Director
Date of Appointment
19 October 2009
2 January 2019
11 June 2015
25 November 2009
Date of Retirement
Not Applicable
Not Applicable
Not Applicable
2 January 2019
The Company does not have any executives that are not Directors.
Executive Directors’ remuneration and other terms of employment are reviewed annually by the non‐executive
director(s) having regard to performance against goals set at the start of the year, relative comparable
information and independent expert advice.
Except as detailed in the Director’s Report, no director has received or become entitled to receive, during or
since the financial year end, a benefit because of a contract made by the Group or a related body corporate with
a director, a firm of which a director is a member or an entity in which a director has a substantial financial
interest. This statement excludes a benefit included in the aggregate amount of emoluments received or due
and receivable by directors and shown in the Remuneration Report, prepared in accordance with the
Corporations Regulations, or the fixed salary of a full time employee of the Group.
Executive Remuneration Tables
The actual remuneration earned by Executives in FY2019 is set out below. The information is considered relevant
as it provides shareholders with a view of the remuneration actually paid to Executives for performance in
FY2019. The value of remuneration includes equity grants where the Executive received control of the shares in
FY2019 and different from the remuneration disclosures in the below table, which disclosures the value of LTI
grants which may or may not vest in future years.
St George Mining Limited – Annual Report 2019
P 14
DIRECTORS’ REPORT
Executive Actual Remuneration Earned in FY2019
Salary and
Fees 1
Termination
Payment
LTI Plan
Rights
Total Actual
Remuneration
Short‐
Term
Incentive
$
‐
‐
‐
$
383,250
34,197
155,993
Name
J Prineas
J Dawson2
S Shipway
Former Executive
T Hronsky3
1. Salary and fees comprise base salary, superannuation and leave entitlements. It reflects the total of “salary
$
383,250
34,197
155,993
$
‐
‐
‐
$
‐
‐
‐
246,579
112,083
134,496
‐
‐
and fees” and “superannuation” in the statutory remuneration table.
2. Appointed on 2 January 2019.
3. Retired on 2 January 2019.
Remuneration of directors and executives
Remuneration for the financial year ended 30 June 2019.
Short‐Term Benefits
Post
Employm
ent
Benefits
Superann
‐uation
Long Term
Benefits
Long Service
Leave
Other
(iv)
Equity Settled
Share‐Based
Payments
Shares/Options
Total
$
$
$
$
$
Non
Monetary
(i)
$
3,465
4,123
26,924
‐
33,250
25,019
44,710
‐
109,374
‐
567,723
292,497
205
‐
1,154
1,409
1,479
3,846
6,303
9,378
‐
‐
‐
‐
‐
‐
2,967
‐
13,534
8,550
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
36,458
‐
‐
‐
34,402
‐
193,605
99,959
248,058
272,846
26,924
‐
49,751
33,569
44,710
‐
145,832
‐
1,043,788
665,302
Salary
and
Fees
$
350,000
263,355
31,230
‐
142,459
90,000
Termination
Payment
$
‐
‐
‐
‐
‐
‐
112,083
269,000
134,496
‐
635,772
622,355
134,496
‐
Directors
J Prineas
2019
2018
J Dawson
(ii)
2019
2018
S Shipway
2019
2018
T Hronsky
(iii)
2019
2018
Total
2019
2018
(i) Non monetary benefits are for directors’ and officers’ liability and legal expense insurance premiums.
(ii) Appointed on 2 January 2019.
(iii) Retired on 2 January 2019.
(iv) Annual leave entitlement.
Employment contracts of directors and executives
The terms and conditions under which key management personnel and executives are engaged by the Company
are formalised in contracts between the Company and those individuals.
St George Mining Limited – Annual Report 2019
P 15
DIRECTORS’ REPORT
The Company has entered into an executive services agreement with Mr John Prineas whereby Mr Prineas
receives remuneration of $350,000 per annual plus statutory superannuation. Mr Prineas or the Company may
terminate the agreement by giving 12 months’ notice. The executive services agreement has no fixed period and
continues until terminated.
The Company has entered into a services agreement with Mr John Dawson, whereby Mr Dawson receives
remuneration of $62,460 per annuum plus statutory superannuation. Mr Dawson or the Company may
terminate the agreement by giving notice. The services agreement has no fixed period and continues until
terminated.
The Company has entered into services agreement with Ms Sarah Shipway whereby Ms Shipway receives
remuneration of $62,460 per annum plus statutory superannuation and $80,000 plus statutory superannuation
for the roles of Non‐Executive Director and Company Secretary respectively. Ms Shipway may terminate the
agreements by giving 3 months’ notice. The services agreements have no fixed period and continue until
terminated.
The Company had entered into a consultancy contract with Essential Risk Solutions (“ERS”) and Mr Hronsky
whereby a base service fee of $269,000 per annum was payable. The consultancy contract was terminated and
Mr Hronsky resigned on 2 January 2019.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every Officer or
agent of the Company shall be indemnified out of the property of the entity against any liability incurred by
him/her in his/her capacity as Officer or agent of the Company or any related corporation in respect of any act
or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
During the year the Company agreed to pay an annual insurance premium of $6,303 (2018: $9,378) in respect
of directors’ and officers’ liability and legal expenses’ insurance contracts, for directors, officers and employees
of the Company. The insurance premium relates to:
Costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal, and
whatever the outcome.
Other liabilities that may arise from their position, with the exception of conduct involving a willful breach
of duty.
Shareholdings of key management personnel
Directors
Balance at
1 July 2018
Granted as
remuneration
Net other change
Balance at
30 June 2019
J Prineas
J Dawson (i)
S Shipway
T Hronsky (ii)
Total
(i)
(ii)
On date of appointment.
On date of retirement.
12,214,221
14,595,940
500,000
2,562,500
29,872,661
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
12,214,221
14,595,940
500,000
2,562,500
29,872,661
St George Mining Limited – Annual Report 2019
P 16
DIRECTORS’ REPORT
Listed Options, exercisable at $0.20 on or before 30 September 2020, holdings of key management personnel
Directors
Balance at
1 July 2018
Granted as
remuneration
Net other change
Balance at
30 June 2019
J Prineas
J Dawson (i)
S Shipway
Tim Hronsky (ii)
Total
(i)
(ii)
On date of appointment.
On date of retirement
1,021,422
1,459,594
‐
1,062,250
3,543,266
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,021,422
1,459,594
‐
1,062,250
3,543,266
Performance Rights holdings of key management personnel
Directors
Balance at
1 July 2018
Granted as
remuneration
Net other
change (iii)
Balance at
30 June 2019
Unvested
J Prineas
J Dawson (i)
S Shipway
Tim Hronsky (ii)
Total
(i)
(ii)
(iii)
On date of appointment.
On date of retirement.
Cancelled on retirement.
‐
‐
‐
‐
‐
60
‐
20
20
100
‐
‐
‐
(20)
(20)
60
‐
20
‐
80
60
‐
20
‐
80
Value of
unvested
Rights ($)
109,374
‐
36,458
‐
145,832
Performance Rights Plan
The Group operates a Performance Rights Plan, approved at the Company’s Annual General Meeting held 22
November 2017.
During the year ended 30 June 2019 the Company issued 172 performance rights (2018: nil), during the year 20
performance rights were cancelled.
Performance righted have been issued to Directors and personnel of the Company and are subject to a number
of conditions which can restrict both the vesting and exercise of the rights.
At the date of this report a total of 152 performance rights were on issue.
There were no ordinary shares issued during the financial year from the exercise of the performance rights.
END OF REMUNERATION REPORT
St George Mining Limited – Annual Report 2019
P 17
DIRECTORS’ REPORT
SHARE OPTIONS
Unissued shares
At the date of this report the Company had 24,579,714 listed options on issue. During the financial year ended
30 June 2019, no options had been converted into fully paid ordinary shares.
At the date of this report the Company had on issue the below unlisted options:
Unlisted Options Class Grant Date
Number
Options
of
Exercise Price $ Expiry Date
Unlisted Options
Unlisted Options
02.12.2016
01.08.2019
3,500,000
2,500,000
$0.25
$0.15
On or before 2 December 2019
On or before 31 July 2022
During the financial year ended 30 June 2019, and at the date of this report, none of these unlisted options were
converted into fully paid ordinary shares.
Option holders do not have any rights to participate in any issues of shares of other interests in the Company or
any other entity.
As at the date of this report the Company had 152 performance rights on issue. On meeting of certain hurdles
each performance right would convert to 50,000 fully paid ordinary shares.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE STATEMENT
St George Mining is committed to ensuring that its policies and practices reflect a high standard of corporate
governance. The Board has adopted a comprehensive framework of Corporate Governance Guidelines.
Throughout the 2019 financial year the Company’s governance was consistent with the Corporate Governance
Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The Group’s Corporate Governance Statement can be viewed at www.stgm.com.au.
EVENTS SUBSEQUENT TO BALANCE DATE
On 29 July 2019 the Company completed a placement of 33,000,000 fully paid ordinary shares at an issue price
of $0.10 per share to raise $3,300,000 before costs.
On 1 August 2019 the Company issued 2,500,000 unlisted options exercisable at $0.15 on or before 31 July 2022.
Except for the above no other matters or circumstances have arisen since the end of the financial year which
significantly affected or could significantly affect the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity in future financial years.
St George Mining Limited – Annual Report 2019
P 18
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2019 has been received and can be found
on page 49 of the financial report.
Non Audit Services
The Company’s auditor, Stantons International, did not provide any non‐audit services to the Company during
the financial year ended 30 June 2019.
Signed in accordance with a resolution of the directors made pursuant to s 298(2) of the Corporations Act 2001.
On behalf of the directors
JOHN PRINEAS
Executive Chairman
St George Mining Limited
Dated 3 September 2019
St George Mining Limited – Annual Report 2019
P 19
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019
Australian Dollar ($)
Note
30 JUNE 2019
$
30 JUNE 2018
$
REVENUE
Interest
Other income – Research and Development Tax
Incentive
EXPENDITURE
Administration expenses
Exploration expenditure written off
Finance expenses
LOSS BEFORE INCOME TAX
3
3
4
5
6
37,919
524,182
562,101
(3,009,021)
(6,864,453)
(283,155)
(9,594,528)
53,412
1,887,393
1,940,805
(1,463,653)
(4,861,829)
‐
(4,384,677)
Income Tax
7(a)
‐
‐
NET LOSS ATTRIBUTABLE TO MEMBERS OF THE
COMPANY
(9,594,528)
(4,384,677)
Other comprehensive income
TOTAL COMPREHENSIVE INCOME (LOSS)
‐
(9,594,528)
‐
(4,384,677)
TOTAL COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO MEMBERS OF THE
COMPANY
LOSS PER SHARE
Basic and diluted – cents per share
(9,594,528)
(4,384,677)
16
(3.21)
(1.70)
The above consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2019
P 20
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Australian Dollar ($)
Note
30 JUNE 2019
$
30 JUNE 2018
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Security bond
Plant and equipment
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Borrowings
TOTAL CURRENT LIABILITIES
17(a)
10(a)
10(b)
11
12
13
3,357,486
22,313
379,417
3,759,216
1,000
50,384
51,384
5,948,692
38,623
189,939
6,177,254
1,000
14,145
15,145
3,810,600
6,192,399
3,553,417
117,304
854,424
4,525,145
1,401,598
27,903
‐
1,429,501
TOTAL LIABILITIES
4,525,145
1,429,501
NET (LIABILITIES)/ NET ASSETS
(714,545)
4,762,898
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
14(a)
14(b)
15
34,366,720
476,722
(35,557,987)
(714,545)
30,514,215
212,142
(25,963,459)
4,762,898
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2019
P 21
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Australian ($)
BALANCE AT 1 JULY 2018
Loss for the year
Other comprehensive income
Total comprehensive loss
Shares issued during the year
Share based payments
Options exercised during the year
Expiry of options
Share and option issue expenses
BALANCE AT 30 JUNE 2019
BALANCE AT 1 JULY 2017
Loss for the year
Other comprehensive income
Total comprehensive loss
Shares issued during the year
Option/Share based payments
Options exercised during the year
Expiry of options
Share and option issue expenses
BALANCE AT 30 JUNE 2018
SHARE CAPITAL
ACCUMULATED LOSSES
$
$
30,514,215
‐
‐
‐
4,091,060
‐
‐
‐
(238,555)
34,366,720
24,142,945
‐
‐
‐
6,731,800
145,000
61,415
‐
(566,945)
30,514,215
(25,963,459)
(9,594,528)
‐
(9,594,528)
‐
‐
‐
‐
‐
(35,557,987)
(21,771,632)
(4,384,677)
‐
(4,384,677)
‐
‐
‐
192,850
‐
(25,963,459)
SHARE OPTION
RESERVE
$
212,142
‐
‐
‐
‐
264,580
‐
‐
‐
476,722
430,876
‐
‐
‐
9,500
‐
‐
(192,850)
(35,384)
212,142
TOTAL EQUITY
$
4,762,898
(9,594,528)
‐
(9,594,528)
4,091,060
264,580
‐
‐
(238,555)
(714,545)
2,802,189
(4,384,677)
‐
(4,384,677)
6,741,300
145,000
61,415
‐
(602,329)
4,762,898
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2019
P 22
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Australian Dollar ($)
CASH FLOWS FROM OPERATING ACTIVITIES
Expenditure on mining interests
Payments to suppliers and employees
Interest received
Other – GST
Research and Development Incentive Grant
Net cash outflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tenements
Purchase of plant and equipment
Net cash outflow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares and options net of
capital raising costs
Proceeds from borrowings
Net cash flows from financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the financial year
CASH AND CASH EQUIVALENTS AT THE END
OF THE FINANCIAL YEAR
Note
30 JUNE 2019
$
30 JUNE 2018
$
17(b)
(4,796,750)
(2,423,385)
40,653
13,576
524,182
(6,641,724)
‐
(52,074)
(52,074)
3,160,592
942,000
4,102,592
(5,669,941)
(1,354,844)
57,336
42,996
1,887,393
(5,037,060)
‐
(4,041)
(4,041)
6,216,247
‐
6,216,247
(2,591,206)
1,175,146
5,948,692
4,773,546
17(a)
3,357,486
5,948,692
The above consolidated statement of cash flows should be
read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2019
P 23
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
1
CORPORATE INFORMATION
The financial report of St George Mining Limited (“St George Mining” or “the Company”) for the year ended 30
June 2019 was authorised for issue in accordance with a resolution of the directors on 3 September 2019.
St George Mining Limited is a company limited by shares, incorporated in Australia on 19 October 2009. The
consolidated financial statements of the Company for year ended 30 June 2019 comprise of the Company and its
subsidiaries together referred to as the Group or consolidated entity.
The nature of the operations and principal activity of the Group is mineral exploration.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Statement of compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(“IFRS”).
(b)
Basis of Preparation of the Financial Report
The financial report is a general‐purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other
requirements of the law. The financial report has also been prepared on a historical cost basis.
The financial report is presented in Australian dollars. The following accounting policies have been approved by
the consolidated entity, except as noted below.
Going Concern
The directors have prepared the financial statements on a going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of
business.
The Consolidated Entity has recorded a net accounting loss of $9,594,528 and net operating cash outflows of
$6,641,724 for the year ended 30 June 2019.
The net assets of the consolidated group have decreased from $4,762,898 at 30 June 2018 to net liabilities of
$714,545 as at 30 June 2019. Total assets and Shareholder’s equity decreased in 2019 due to borrowings of
$854,424 at 30 June 2019 compared to no borrowings at 30 June 2018 and an increase in trade and other payables
from $1,401,598 as at 30 June 2018 compared to $3,553,417 as at 30 June 2019.
At 30 June 2019 the Company held a cash balance of $3,357,486. Subsequent to the end of the financial year the
Company raised $3,300,000 (before costs) via a placement to sophisticated investors.
Equity raisings or debt financing arrangements will be required in the future to fund the Company’s activities. The
Directors are assessing a number of options in respect of equity and debt financing arrangements, and have
reasonable expectations that further funding will be arranged to meet the Company’s objectives. There is no
certainty that new funding will be successfully completed to provide adequate working capital for the Company.
The Board is confident that the Group will have sufficient funds to finance its operations in the 2019/2020 year
following successful completion of equity raisings or debt financing arrangements.
St George Mining Limited – Annual Report 2019
P 24
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(c)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent St George
Mining Limited and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent
controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries
is provided in Note 22.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the
Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non
controlling interests". The Group initially recognises non‐controlling interests that are present ownership interests
in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation at either fair
value or at the non‐controlling interests' proportionate share of the subsidiary's net assets. Subsequent to initial
recognition, non‐controlling interests are attributed their share of profit or loss and each component of other
comprehensive income. Non‐controlling interests are shown separately within the equity section of the statement
of financial position and statement of comprehensive income.
(d)
Significant accounting estimates and judgements
The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Deferred taxation
The potential deferred tax asset arising from the tax losses and temporary differences have not been recognised
as an asset because recovery of the tax losses is not yet considered probable (refer note 7).
Capitalised exploration costs
The Group expenses all exploration and evaluation expenditure incurred.
Subsidiary Loans
Provision has been made for all unsecured loans with subsidiaries as it is uncertain if and when the loans will be
recovered. All inter‐company loans have been eliminated on consolidation.
(e)
Revenue
Under AASB 15 Revenue from contracts with customers, revenue is recognised when a performance obligation is
satisfied, being when control of the goods or services underlying the performance obligations is transferred to the
customer.
Interest
Interest revenue is recognised using the effective interest method.
St George Mining Limited – Annual Report 2019
P 25
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(f)
Employee benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits expected to be settled within one year together with entitlements arising from
wages and salaries and annual leave which will be settled after one year, have been measured at the amounts
expected to be paid when the liability is settled, plus related on‐costs. Other employee benefits payable later than
one year have been measured at the present value of the estimated cash outflows to be made to those benefits.
Contributions are made by the Group to employee superannuation funds and are charged as expenses when
incurred.
(g)
Share based payment transactions
The Company accounts for all equity‐settled stock‐based payments based on the fair value of the award on grant
date. Under the fair value‐based method, compensation cost attributable to options granted is measured at fair
value at the grant date and amortised over the vesting period. The amount recognised as an expense is adjusted
to reflect any changes in the Company’s estimate of the shares that will eventually vest and the effect of any non‐
market vesting conditions.
Share‐based payment arrangements in which the Company receives goods or services as consideration are
measured at the fair value of the good or service received, unless that fair value cannot be reliably estimated.
(h)
Research & Development Tax Incentives
Refundable tax incentives are accounted for as a government grant under AASB 120 Accounting for Government
Grants and Disclosure of Government Assistance.
(i)
Exploration and evaluation expenditure
Exploration and evaluation expenditure on areas of interest are expensed as incurred. Costs of acquisition will
normally be expensed but will be assessed on a case by case basis and may be capitalised to areas of interest and
carried forward where right of tenure of the area of interest is current and they are expected to be recouped
through sale or successful development and exploitation of the area of interest or, where exploration and
evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of
the existence of economically recoverable reserves.
When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated
acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of
interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that
they will not be recoverable in the future. Where projects have advanced to the stage that directors have made a
decision to mine, they are classified as development properties. When further development expenditure is
incurred in respect of a development property, such expenditure is carried forward as part of the cost of that
development property only when substantial future economic benefits are established. Otherwise such
expenditure is classified as part of the cost of production or written off where production has not commenced.
(j)
Income Tax
Current income tax refunded/(expensed) charged to profit or loss is tax refundable/(payable). Those amounts
recognised are expected to be recovered from/(paid to) the relevant taxation authority.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
St George Mining Limited – Annual Report 2019
P 26
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
except where the deferred income tax liability arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither that
accounting profit nor taxable profit or loss; and,
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognised for all the deductible temporary differences, carry‐forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry‐forward of unused tax assets and unused tax losses can be
utilised:
except where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and,
in respect of deductible temporary differences with investments in subsidiaries, associates and interest in
joint ventures, deferred tax assets in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred income tax is reviewed at each balance sheet date and reduced to the extent
that is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are not in the income statement.
(k)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
consolidated Statement of Financial Position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
Consolidated Statement of Financial Position.
Cash Flows are included in the Consolidated Statement of Cash Flows net of GST. The GST components of cash
flows arising from investing and financial activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.
(l)
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the assets as follows:
Class of Fixed Asset
Plant and Equipment
‐ Year 1
‐ Subsequent Years
Depreciation Rate
18.75%
37.50%
St George Mining Limited – Annual Report 2019
P 27
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each financial year end.
(m)
Earnings per share
Basic earnings per share is calculated as net loss attributable to members of the Company, adjusted to exclude
any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for any bonus element.
(n)
Cash and cash equivalents
Cash and short‐term deposits in the consolidated Statement of Financial Position comprise cash at bank and in
hand and short‐term deposits with an original maturity of three months or less.
For the purposes of the consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and
cash equivalents as defined above, net of outstanding bank overdrafts.
(o)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value; less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash‐
generating unit to which it belongs. When the carrying amount of an asset or cash‐generating unit exceeds its
recoverable amount, the asset or cash‐generating unit is considered impaired and it is written down to its
recoverable amount.
In assessing the 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. Impairment losses relating to continuing operations are recognised in those expense categories consistent
with the function of the impaired asset unless the asset is carried at revalued amount (in which case the
impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the
case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at
revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the
depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual
value, on a systemic basis over its remaining useful life.
(p)
Contributed equity
Ordinary shares and options are classified as contributed equity. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of GST, from the proceeds.
St George Mining Limited – Annual Report 2019
P 28
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(q)
Investments
All investments are initially recognised at cost, being the fair value of the consideration given and including
acquisition charges associated with the investment.
After initial recognition, investments, which are classified as held for trading and available‐for‐sale, are measured
at fair value. Gains or losses on investments held for trading are recognised in the consolidated profit or loss.
Gains or losses on available‐for‐sale investments are recognised as a separate component of equity until the
investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at
which time the cumulative gain or loss previously reported in equity is included in the profit or loss.
(r)
Financial Instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument. Financial instruments (except for trade receivables) are measured initially
at fair value adjusted by transactions costs, except for those carried “at fair value through profit or loss”, in which
case transaction costs are expensed to profit or loss. Where available, quoted prices in an active market are used
to determine the fair value. In other circumstances, valuation techniques are adopted. Subsequent measurement
of financial assets and financial liabilities are described below.
Trade receivables are initially measured at the transaction price if the receivables do not contain a significant
financing component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires.
Financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the
transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as
hedging instruments, are classified into the following categories upon initial recognition:
amortised cost;
fair value through other comprehensive income (FVOCI); and
fair value through profit or loss (FVPL).
Classifications are determined by both:
The contractual cash flow characteristics of the financial assets; and
The entities business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated
as FVPL):
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows; and
St George Mining Limited – Annual Report 2019
P 29
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most
other receivables fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income (Equity instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
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; and
The financial asset is held within a business model with the objective of both holding to collect contractual
cash flows and selling the financial asset.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI.
Upon initial recognition, the Group 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 AASB 132 Financial
Instruments: Presentation and are not held for trading.
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless
the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or
losses recognised in profit or loss.
All interest‐related charges and, if applicable, gains and losses arising on changes in fair value are recognised in
profit or loss.
Effective interest rate method
The effective interest rate method is a method of calculating the amortised cost of a financial instrument and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument or, where appropriate, a
shorter period, to the net carrying amount on initial recognition.
St George Mining Limited – Annual Report 2019
P 30
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
Transaction costs
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition.
Impairment of financial assets
From 1 July 2018, the Group assesses on a forward‐looking basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether
there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach
permitted by AASB, which requires expected lifetime losses to be recognised from initial recognition of the
receivables.
Comparative information
The Group has applied AASB 9 Financial Instruments retrospectively, but has elected not to restate comparative
information. As a result, the comparative information provided continues to be accounted for in accordance with
the Group’s previous accounting policy.
Classification
Until 30 June 2018, the group classified its financial assets in the following categories:
financial assets at fair value through profit or loss;
loans and receivables;
held‐to‐maturity investments; and
available‐for‐sale financial assets.
The classification depended on the purpose for which the investments were acquired. Management determined
the classification of its investments at initial recognition and, in the case of assets classified as held‐to‐maturity,
re‐evaluated this designation at the end of each reporting period.
(s)
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses and results in the
consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving
entities or businesses under common control. The acquisition method requires that for each business combination
one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will
be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the
parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited
exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent
liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be
reliably measured.
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted
for the measurement of goodwill will impact on the measurement of any non‐controlling interest to be recognised
in the acquiree where less than 100% ownership interest is held in the acquiree.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition
date fair value of any previously held equity interest shall form the cost of the investment in the separate financial
St George Mining Limited – Annual Report 2019
P 31
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by
the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre‐existing holdings are taken to the statement of comprehensive income. Where
changes in the value of such equity holdings had previously been recognised in other comprehensive income, such
amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a contingent
consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a
financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of
consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value
through the statement of comprehensive income unless the change in value can be identified as existing at
acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
comprehensive income.
(t)
Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade
receivables are recognised initially at the amount of consideration that is unconditional unless they contain
significant financing components, when they are recognised at fair value. The group holds the trade receivables
with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised
cost using the effective interest method. Details about the group’s impairment policies and the calculation of the
loss allowance are provided in note 2(r).
(u)
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid
at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid
within 30 days of recognition of the liability. Trade and other payables are initially measured at fair value and
subsequently measures at amortised costs using the effective interest method.
(v)
Adoption of new and revised standards
The Group has adopted AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments which
became effective for financial reporting periods commencing on or after 1 January 2018.
AASB 15 Revenue from contracts with customers
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and several revenue‐related
Interpretations. AASB 15 establishes a five‐step model to account for revenue arising from contracts with
customers and requires that revenue to be recognised at an amount that reflects the consideration to which an
entity expects to be entitled in exchange for transferring goods or services to a customer.
The Group has applied the new Standard effective from 1 July 2018 using the modified retrospective approach.
Under this method, the cumulative effect of initial application is recognised as an adjustment to the opening
balance of retained earnings at 1 July 2018 and comparatives are not restated.
The adoption of AASB 15 does not have a significant impact on the Group as the Group does not currently have
any revenue from customers.
St George Mining Limited – Annual Report 2019
P 32
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for annual
periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial
instruments: classification and measurement, impairment, and hedge accounting.
As a result of adopting AASB 9 Financial Instruments, the Group has amended its financial instruments accounting
policies to align with AASB 9. AASB 9 makes major changes to the previous guidance on the classification and
measurement of financial assets and introduces an ‘expected credit loss’ model for impairment of financial assets.
There were no financial instruments which the Group designated at fair value through profit or loss under AASB
139 that were subject to reclassification. The Board assessed the Group’s financial assets and determined the
application of AASB 9 does not result in a change in the classification of the Group’s financial instruments.
The adoption of AASB 9 does not have a significant impact on the financial report.
(w)
Comparative information
Comparative information is amended where appropriate to ensure consistency in presentation with the current
year.
3
REVENUE
Interest income
Research and Development Tax Incentive (i)
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
37,919
524,182
562,101
53,412
1,887,393
1,940,805
(i)
The Research and Development rebate $524,182 is in relation to the year ended 30 June 2018 (2018:
$1,887,393 in relation to the year ended 30 June 2017).
4
ADMINISTRATION EXPENSES
Administration expenses include the following expenses:
Employee benefit expense
Wages and salaries
Accrued leave
Accrued leave paid out
Employee share based payments
Defined contribution superannuation expense
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
694,047
89,402
‐
264,580
83,258
1,131,287
499,925
32,884
(31,070)
‐
45,111
546,850
St George Mining Limited – Annual Report 2019
P 33
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
Other administration costs
Accounting and administration fees
Consulting fees
Legal fees
Publications and subscriptions
Presentations and seminars
Office rent
Share registry costs
Travel expenses
Other
Total administration expenses
5
EXPLORATION EXPENDITURE WRITTEN OFF
Exploration expenditure written off
Tenement acquisition costs
6
FINANCE EXPENSES
Facility fee
Establishment fee
Interest expense
Refer to Note 13 for details in relation to the facility.
7
INCOME TAX
45,247
653,366
247,574
87,072
148,594
41,808
47,066
335,256
271,751
1,877,734
3,009,021
46,208
106,862
82,747
38,884
122,265
‐
84,066
206,450
229,321
916,803
1,463,653
CONSOLIDATED
30 JUNE 2019
$
6,864,453
‐
6,864,453
CONSOLIDATED
30 JUNE 2018
$
4,861,829
‐
4,861,829
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
170,731
50,000
62,424
283,155
‐
‐
‐
‐
(a)
Prima facie income tax benefit at 27.5% on loss from ordinary activities is reconciled to the income tax
provided in the financial statements
Loss before income tax
Income tax calculated at 27.5% (2018: 27.5%)
Tax effect of;‐
Sundry – temporary differences
Section 40‐880 deduction
Future income tax benefit not brought to account
Income tax benefit
CONSOLIDATED
30 JUNE 2019
$
(9,594,528)
(2,638,495)
CONSOLIDATED
30 JUNE 2018
$
(4,384,677)
(1,205,786)
58,351
(127,640)
2,707,784
‐
(5,488)
(125,480)
1,336,754
‐
St George Mining Limited – Annual Report 2019
P 34
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(b)
Deferred tax assets
The potential deferred tax asset arising from the tax losses and temporary differences have not been recognised
as an asset because recovery of tax losses is not yet probable.
Australian accumulated tax losses (i)
Provisions ‐ net of prepayments
Section 40‐880 deduction
Unrecognised deferred tax assets relating
to the above temporary differences
CONSOLIDATED
30 JUNE 2019
$
5,046,932
52,902
251,164
5,350,998
CONSOLIDATED
30 JUNE 2018
RESTATED
$
2,339,149
(6,352)
309,543
2,642,340
(i)
The Australian accumulated tax losses opening balance at 30 June 2018 has been restated due to the 30
June 2018 Research and Development rebate $524,182 being received during the 2018/2019 financial
year and the adjustment for JMEI credits for 2018 being $2,500,000 in Australian Tax losses.
The benefits will only be obtained if:
(i)
(ii)
(iii)
The Group derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deduction for the losses to be realised;
The Group continues to comply with the conditions in deductibility imposed by the Law; and
No change in tax legislation adversely affect the Group in realising the benefits from the deductions or
the losses.
8
AUDITOR’S REMUNERATION
CONSOLIDATED
30 JUNE 2019
$
44,195
44,195
CONSOLIDATED
30 JUNE 2018
$
35,292
35,292
Auditing and review of the Group’s financial statements
9
(a)
KEY MANAGEMENT PERSONNEL
Details of key management personnel
Directors
John Prineas
John Dawson – Appointed on 2 January 2019
Sarah Shipway
Timothy Hronsky – Retired on 2 January 2019
Executive
John Prineas – Executive Chairman
Timothy Hronsky – Executive Director – Retired on 2 January 2019
St George Mining Limited – Annual Report 2019
P 35
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(b)
Compensation of key management personnel
Salaries and fees
Non‐monetary
Termination payments
Other
Post employment benefits – superannuation
Equity settled share based payments
Long term benefits – long service leave
10
CURRENT ASSETS
(a)
Trade and Other Receivables
Current
CONSOLIDATED
30 JUNE 2019
$
635,772
6,303
134,496
26,924
49,751
145,832
44,710
1,043,788
CONSOLIDATED
30 JUNE 2018
$
622,355
9,378
‐
‐
33,569
‐
665,302
CONSOLIDATED
30 JUNE 2019
$
22,313
22,313
CONSOLIDATED
30 JUNE 2018
$
38,623
38,623
Other receivables include amounts outstanding for goods and services tax (GST) of $21,726 (2018: $35,302) and
interest receivable of $587 (2018: $3,321).
GST amounts are non‐interest bearing and have repayment terms applicable under the relevant government
authorities. No trade and other receivables are impaired or past due.
(b)
Other Assets
Prepayments
Other receivables
Deposit
11
PLANT AND EQUIPMENT
Plant and Equipment
At Cost
Accumulated depreciation
Total plant and equipment
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
281,166
98,251
‐
379,417
148,939
21,000
20,000
189,939
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
120,815
(70,431)
50,384
71,542
(57,397)
14,145
St George Mining Limited – Annual Report 2019
P 36
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
Plant and Equipment
Carrying amount at the beginning of the year
Additions
Disposals
Depreciation expense
Total carrying amount at end of year
12
CURRENT LIABILITIES
Trade and other payables
14,145
52,074
(2,801)
(13,034)
50,384
24,685
4,032
(4,559)
(10,013)
14,145
CONSOLIDATED
30 JUNE 2019
$
3,553,417
3,553,417
CONSOLIDATED
30 JUNE 2018
$
1,401,598
1,401,598
Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of trade
and other payables are considered to be the same as their fair values due to their short‐term nature. As at 30
June 2019 $2,145,665 (2018: $491,174) was past 30 days due.
13
BORROWINGS
Credit facility
Repayment
Capitalised interest
Unsecured Credit Facility
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
942,000
(150,000)
62,424
854,424
‐
‐
‐
The credit facility is unsecured and the key terms of the credit facility are as follows:
Credit facility of $1.0 million, the Company has repaid $150,000;
Establishment fee of 7.5%;
12‐month repayment term, being 29 January 2020;
Interest rate of 15%;
100% of the interest is capitalised and repayable on loan maturity;
The credit facility is unsecured; and
There are no loan covenants.
The Company entered into a facility of $1.0m, during the year the Company drew down $942,000 of the facility.
In June 2019 the Company repaid $150,000 on the facility.
As at 30 June 2019 $792,000 had been drawn on the $850,000 credit facility and total funds owed at 30 June
2019 is $854,424, due the capitalising of interest.
St George Mining Limited – Annual Report 2019
P 37
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
14
ISSUED CAPITAL
Australian Dollar $
Issued and paid up capital
(a)
At the beginning of the reporting period
June 2019: 37,191,454 shares issued at $0.11 per share
March 2018: 22,360,002 shares issued at $0.18 per share
March 2018: 250,000 shares issued at $0.20
March 2018: 250,000 shares issued at $0.18
March 2018: 277,778 shares issued at $0.18
June 2018: 19,335,711 shares issued at $0.14 per share
Exercise of Options
Transactions costs arising from issue of shares
At reporting date 335,307,665 (30 June 2018: 298,116,211)
fully paid ordinary shares
Movements in Ordinary Shares
At the beginning of the reporting period
Shares issued during the year
Conversion of performance shares
Options exercised during the year
At reporting date
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
30,514,215
4,091,060
‐
‐
‐
‐
‐
‐
(238,555)
24,142,945
‐
4,024,800
50,000
45,000
50,000
2,707,000
61,415
(566,945)
34,366,720
30,514,215
Number
298,116,211
37,191,454
‐
‐
335,307,665
Number
250,360,825
42,473,491
5,000,000
281,895
298,116,211
Movements in Performance Shares
At the beginning of the reporting period
Changes to performance shares issued during the year (i)
Issued during the year
At reporting date
Number
Number
‐
‐
‐
‐
100
(100)
‐
‐
(i)
100 Performance shares converted on 20 March 2018.
Movements in Performance Rights
At the beginning of the reporting period
Changes to Performance Rights issued during the year
Performance Rights cancelled during the year
Issued during the year
At reporting date
Number
Number
‐
172
(20)
‐
152
‐
‐
‐
‐
(b) Option Reserve
Movements in options reserve
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
At the beginning of the year
Listed options
Expiry of options transferred to accumulated losses (i)
Option based payments (ii)
Performance rights issued (iii)
Options issue expense
At reporting date
212,142
‐
‐
‐
264,580
‐
476,722
St George Mining Limited – Annual Report 2019
430,876
‐
(192,850)
9,500
‐
(35,384)
212,142
P 38
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(i)
(ii)
(iii)
The Company had on issue 600,000 Class E Options under the Company’s Employee Incentive Option Plan.
On 28 November 2017 600,000 Class E Options expired, unexercised.
The Company issued 95,000 Listed Options for services rendered.
The Company issued 172 Performance Rights during the year (see note 18) and 20 Performance Rights were
cancelled.
A summary of the outstanding options at 30 June 2019 in the Company is listed below:
Class
Listed Options
Unlisted Options
Number of Options
24,579,714
3,500,000
Exercise Price
$0.20
$0.25
Expiry Date
30 September 2020
02 December 2019
15
ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Loss for the year
Expiry of options
Accumulated losses at the end of the year
16
LOSS PER SHARE
Basic loss per share after income tax attributable to
members of the Company (cents per share)
Diluted loss per share (cents per share)
Weighted average number of shares on issue during the
financial year used in the calculation of basic earnings
per share
Weighted average number of ordinary shares for
diluted earnings per share
CONSOLIDATED
30 JUNE 2019
$
(25,963,459)
(9,594,528)
‐
(35,557,987)
CONSOLIDATED
30 JUNE 2018
$
(21,771,632)
(4,384,677)
192,850
(25,963,459)
CONSOLIDATED
30 JUNE 2019
$
CONSOLIDATED
30 JUNE 2018
$
(3.21)
(3.21)
(1.70)
(1.70)
2019
Number
2018
Number
298,523,789
258,509,084
298,523,789
258,509,084
17
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a)
Reconciliation of cash and cash equivalents
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash at bank
and in hand and short‐term deposits with an original maturity of three months or less, net of outstanding bank
overdrafts.
Current – cash at bank
CONSOLIDATED
30 JUNE 2019
$
3,357,486
3,357,486
CONSOLIDATED
30 JUNE 2018
$
5,948,692
5,948,692
St George Mining Limited – Annual Report 2019
P 39
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(b)
Reconciliation of loss after tax to net cash flows from operations
Loss after income tax
Share based payments
Depreciation expense
Capitalised loan facility expenses
(Increase)/decrease in assets
Trade and other receivables
Other assets
Increase/(decrease) in liabilities
Trade and other payables
Provisions
CONSOLIDATED
30 JUNE 2019
$
(9,594,528)
264,580
13,034
62,424
16,310
41,481
2,465,573
89,402
(6,641,724)
CONSOLIDATED
30 JUNE 2018
$
(4,384,677)
209,500
10,013
‐
50,653
(3,248)
(921,115)
1,814
(5,037,060)
18
(i)
SHARE/OPTION BASED PAYMENTS
The Company agreed and Shareholders approved at the Company’s General Meeting held on 16 July 2018
to allot and issue a total 140 performance rights to Directors of the Company. On 6 February 2019, 20
performance rights were cancelled.
On the 17 December 2018 the Company issued 32 performance rights to employees of the Company.
As at 30 June 2019 there was 152 performance rights on issue.
The performance rights had the below milestones attached to them.
(i)
(ii)
Class A Performance Rights: in the event that the Undiluted Market Capitalisation of the Company
is equal to or higher than AUD$100,000,000.00 for a minimum of 10 consecutive trading days, the
vesting condition shall be deemed satisfied, subject to the milestone being achieved by that date
which is 3 years from the date of issue;
Class B Performance Rights: in the event that the Undiluted Market Capitalisation of the Company
is equal to or higher than AUD$150,000,000.00 for a minimum of 10 consecutive trading days, the
vesting condition shall be deemed satisfied, subject to the milestone being achieved by that date
which is 3 years from the date of issue.
(iii) Class C Performance Rights: the Company announces an inferred 2012 JORC compliant resource
at any Project of not less than:
(A) in regard to a gold resource, 1,000,000 ounces of Au; or
(B) in regard to a nickel resource, 50,000t contained Ni; or
(C) in regard to a cobalt resource, 10,000t contained Co.,
by the date which is 15 August 2021.
The terms and conditions of the options are detailed in the Notice of General Meeting dated 11 June 2018.
St George Mining Limited – Annual Report 2019
P 40
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
The performance rights issued on 15 August 2018 were ascribed the following value:
Class of
Rights
Class A
Class B
Class C
Total
Number of
Performance
Rights(1)
25
25
70
‐
Valuation
Date
15.08.18
15.08.18
15.08.18
‐
Market
Price of
Shares
$0.125
$0.125
$0.125
‐
Exercise
Price
Expiry
Date
‐
‐
‐
‐
15.08.21
15.08.21
15.08.21
‐
Indicative
Value per
Option
$0.125
$0.125
$0.125
‐
Total
Value
($)
156,250
156,250
437,500
750,000
Expense
for the
year ($)
45,572
45,572
127,603
218,747
1. One performance right converts to 50,000 fully paid ordinary shares on achievement
A probability of 100% has been applied to the milestones occurring.
Of the above options granted, the following were issued to key management personnel:
Key Management
Personnel
Grant Date
Number of
Performance
Rights
J Prineas
Class A
Class B
Class C
S Shipway
Class A
Class B
Class C
15.08.18
15.08.18
15.08.18
15.08.18
15.08.18
15.08.18
10
10
40
5
5
10
The performance rights issued on 17 December 2018 were ascribed the following value:
Class of
Rights
Class 1
Class 2
Class 3
Total
Number of
Performance
Rights(1)
8
8
16
‐
Valuation
Date
17.12.18
17.12.18
17.12.18
‐
Market
Price of
Shares
$0.135
$0.135
$0.135
‐
Exercise
Price
Expiry
Date
‐
‐
‐
‐
31.07.21
31.07.21
31.07.21
‐
Indicative
Value per
Option
$0.135
$0.135
$0.135
‐
Total
Value
($)
54,000
54,000
108,000
216,000
Expense
for the
year ($)
11,521
11,521
22,791
45,833
1. One performance right converts to 50,000 fully paid ordinary shares on achievement
Of the above performance granted, none were issued to key management personnel.
St George Mining Limited – Annual Report 2019
P 41
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
A summary of the movements of all the Company options issued as share based payments is as follows:
Options outstanding as at 1 July 2017
Granted
Exercised
Expired
Options outstanding as at 30 June 2018
Granted
Forfeited
Exercised
Expired
Options outstanding as at 30 June 2019
Options exercisable as at 30 June 2019
Options exercisable as at 30 June 2018
Number
4,100,000
37,183,291
(281,895)
(12,921,682)
28,079,714
‐
‐
‐
‐
28,079,714
28,079,714
28,079,714
Weighted
Average Exercise
Price $
0.289
0.200
‐
‐
0.206
‐
‐
‐
‐
0.206
‐
‐
The weighted average remaining contractual life of options outstanding at the year‐end was 1.15 years (2018:
2.15 years). The weighted average exercise price of outstanding options at the end of the report period was $0.206
(2018: $0.206).
19
(a)
COMMITMENTS AND CONTINGENCIES
Commitment
Mineral exploration commitments
The Group has the following minimum exploration expenditure requirements in connection with its exploration
tenements.
Not later than one year
Later than one year but not later than two years
(b)
Contingent liabilities and commitments
30 June
2019
$
954,447
34,581
989,028
30 June
2018
$
759,345
216,796
976,141
The Group fully owns three subsidiaries, Desert Fox Resources Pty Ltd, Blue Thunder Resources Pty Ltd and Destiny
Nickel Pty Ltd, the main activities of which are exploration. The effect of these subsidiaries is to make the St George
Mining owned subsidiaries contractually responsible for any transactions undertaken by the subsidiary. The parent
entity has provided certain guarantees to third parties whereby certain liabilities of the subsidiary are guaranteed.
The Group has not made guarantees to third parties at 30 June 2019.
20
EVENTS SUBSEQUENT TO BALANCE DATE
On 29 July 2019 the Company completed a placement of 33,000,000 fully paid ordinary shares at an issue price of
$0.10 per share to raise $3,300,000 before costs.
On 1 August 2019 the Company issued 2,500,000 unlisted options exercisable at $0.15 on or before 31 July 2022.
Except for the above no other matters or circumstances have arisen since the end of the financial year which
significantly affected or could significantly affect the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity in future financial years.
St George Mining Limited – Annual Report 2019
P 42
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
21
(a)
FINANCIAL INSTRUMENTS
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that the financial instrument’s value will fluctuate as a
result of changes in market interest rates and the effective weighted average interest rates on those financial
assets and financial liabilities, is as follows:
2019
Note
Floating
interest
rate
Fixed
interest
rate
Non‐
interest
bearing
Total
Weighted
average
interest
rate
$
$
$
$
%
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Security bond
Financial liabilities
Trade and other payables
Borrowings
2018
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Security bond
Financial liabilities
Trade and other payables
17(a)
10(a)
10(b)
‐
3,305,936
‐
‐
‐
20,000
‐
‐
‐
31,550
22,313
98,251
1,000
3,357,486
22,313
98,281
1,000
1.14%
‐
‐
‐
12
13
Note
‐
‐
‐
792,000
3,553,417
62,424
3,553,417
854,424
‐
15%
Floating
interest
rate
Fixed
interest
rate
Non‐
interest
bearing
Total
Weighted
average
interest
rate
$
$
$
$
%
17(a)
10(a)
10(b)
‐
3,916,436 2,010,586
‐
‐
‐
‐
‐
‐
21,669
38,623
41,000
1,000
5,948,691
38,623
41,000
1,000
0.90%
‐
‐
‐
12
‐
‐
1,401,598
1,401,598
‐
Based on the balances at 30 June 2019 a 1% movement in interest rates would increase/decrease the loss for the
year before taxation by $25,339 (2018: $59,270).
(b)
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount of those assets, net of any allowance for doubtful debts, as
disclosed in the statement of financial position and notes to the financial report.
The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial
instruments entered into by the Group.
St George Mining Limited – Annual Report 2019
P 43
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
(c)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised costs using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting
date, the loans or borrowings are classified as non‐current.
The contractual maturities of the Group’s financial liabilities are as follows:
Within one month:
Trade and other payables
Later than one month and no later than one year:
Trade and other payables
30 June 2019
30 June 2018
$3,553,417
$1,401,598
‐
$3,553,417
‐
$1,401,598
Contractual maturities of
financial liabilities
As at March 31, 2019
Non‐derivatives
Trade payables
Borrowing
Total non‐derivatives
Less
than 6
months
6 – 12
months
Between
1 and 2
years
Between 2
and 5
years
Over 5
years
Total
contractual
cash flows
Carrying amount
(assets)/liabilities
‐
‐
‐
‐
854,424
854,424
‐
‐
‐
‐
‐
‐
‐
‐
‐
854,424
854,424
‐
854,424
854,424
(d)
Net Fair Values
The carrying amount of financial assets and financial liabilities recorded in the financial statements represent their
respective net fair value and is determined in accordance with the accounting policies disclosed in note 2 to the
financial statements.
(e)
Financial Risk Management
The Group’s financial instruments consist mainly of deposits with recognised banks, investment in term deposits
up to 90 days, accounts receivable, accounts payable and borrowings. Liquidity is managed, when sufficient funds
are available, by holding sufficient funds in a current account to service current obligations and surplus funds
invested in term deposits. The directors analyse interest rate exposure and evaluate treasury management
strategies in the context of the most recent economic conditions and forecasts. The main risks the Group is
exposed to through its financial instruments are the depository banking institution itself, holding the funds, and
interest rates. The Group's credit risk is minimal as being an exploration Company, it has no significant financial
assets other than cash and term deposits.
(f)
Foreign Currency Risk
The Group is not exposed to any foreign currency risk as at 30 June 2019.
(g)
Market Price Risk
The Group is not exposed to market price risk as it does not have any investments other than an interest in the
subsidiaries.
St George Mining Limited – Annual Report 2019
P 44
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
22
RELATED PARTIES
The Company had entered into a consultancy contract with Essential Risk Solutions (“ERS”) and Mr Hronsky
whereby a base service fee of $269,000 per annum was payable by the Company. ERS has the right to terminate
the Agreement by giving 3 months’ notice. The consultancy contract with ERS had no fixed period and continued
until terminated. The consultancy contract was terminated and Mr Hronsky resigned on 2 January 2019.
The Group has 100% owned subsidiaries Blue Thunder Resources Pty Ltd, Desert Fox Resources Pty Ltd and Destiny
Nickel Pty Ltd.
At 30 June 2019 balances due from the subsidiaries were:
Blue Thunder Resources Pty Ltd
Desert Fox Resources Pty Ltd
Destiny Nickel Pty Ltd
30 JUNE 2019
$
12,305,971
22,028,224
‐
34,334,195
30 JUNE 2018
$
7,891,273
20,515,935
‐
28,407,208
These amounts comprise of funds provided by the parent company for exploration activities. The amounts were
fully provided for as at 30 June 2019.
23
SEGMENT REPORTING
For management purposes, the Group is organised into one main operating segment, which involves the
exploration of minerals in Australia. All of the Group’s activities are interrelated, and discrete financial information
is reported to the Board as a single segment. Accordingly, all significant operating decisions are based upon
analysis of the Group as one segment.
The financial results from this segment are equivalent to the financial statements of the Group as a whole.
The accounting policies applied for internal reporting purposes are consistent with those applied in the
preparation of these financial statements.
24
JOINT VENTURES
The Group recognises that joint ventures are a key mechanism for sharing of risk on individual exploration projects.
Where appropriate for a particular project, the Group will consider a joint venture with a suitable party in order
to share the exploration risk. Those funds otherwise set aside for the project will be employed to advance another
project.
St George Mining Limited – Annual Report 2019
P 45
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
25
(a)
PARENT COMPANY DISCLOSURE
Financial Position as at 30 June 2019
Australian Dollar ($)
Assets
Current assets
Non‐current assets
Total assets
Liabilities
Current liabilities
Non‐current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
(b)
Financial Performance for the year ended 30 June 2019
Australian Dollar $
Profit (loss) for the year
Other comprehensive income
Total comprehensive income (loss)
(c)
Guarantees entered into by the Parent Entity
30 JUNE 2019
$
30 JUNE 2018
$
3,620,605
50,384
3,670,989
4,525,141
‐
4,525,141
(854,152)
6,078,493
14,145
6,092,638
1,429,499
‐
1,429,499
4,663,139
34,366,720
476,722
(35,697,594)
(854,152)
30,514,215
212,142
(26,063,218)
4,663,139
30 JUNE 2019
$
(9,634,376)
‐
(9,634,376)
30 JUNE 2018
$
(4,380,779)
‐
(4,380,779)
Other than as disclosed in Note 19(b) the parent entity has not provided guarantees to third parties as at 30 June
2019.
26
NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS
AASB 16: Leases applies to annual reporting periods beginning on or after 1 January 2019.
This Standard supersedes AASB 117 Leases and related interpretations,. AASB 16 sets out the principles for the
recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases
under a single on‐balance sheet model similar to the accounting for finance leases under AASB 117.
The key features of AASB 16 are as follows:
‐
‐
Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months,
unless the underlying asset is of low value.
A lessee measures right‐of‐use assets similarly to other non‐financial assets and lease liabilities similarly to
other financial liabilities.
St George Mining Limited – Annual Report 2019
P 46
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
‐
Assets and Liabilities arising from the lease are initially measured on a present value basis. The measurement
includes non‐cancellable lease payments (including inflation‐linked payments), and also includes payments
to be made in optional periods if the lessee is reasonably certain to exercise an option to extend to lease, or
not to exercise an option to terminate the lease.
‐ AASB 16 contains disclosure requirements for leases.
Lessor accounting
‐
‐
AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a lessor
continues to classify its leases as operating leases or finance leases, and to account for those two types of
leases differently.
AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed
about a lessor’s risk exposure, particularly to residual value risk.
Estimated impact of AASB 16 on the Group when the standard is applied
Due to the adoption of AASB 16, the Group’s EBITDA will improve, while its interest expense and amortisation
(depreciation) will increase. This is due to the change in the accounting for expenses of leases that were classified
as operating leases under AASB 117. The current liabilities may will also increase which could reduce the net
working capital of the Group.
The group has reviewed all of the group’s leasing arrangements in light of the new lease accounting rules in AASB
16, with the standard primarily affecting accounting for the group's operating leases.
As at the reporting date, the group has operating lease commitments of $954,447, see note 19. Of these
commitments, approximately $919,865 relate to short‐term leases which will be recognised on a straight‐line basis
as expense in the profit or loss.
As at the reporting date, the group has operating lease commitments of $954,447, see note 19. Of these
commitments, approximately $919,865 relate to short‐term leases (being exploration tenements leases) which
will be recognised on a straight‐line basis as expense in the profit or loss.
For the remaining lease commitments (being Office lease), the Group expects to recognise right‐of‐use asset of
approximately $115,113 before depreciation on 1 July 2019, lease liabilities are estimated to be $98,291. The
right‐of‐use asset will be depreciated over three years being the lease period.
The Group expects that net profit after tax will be affected by increase in interest expenses of approximately
$10,608 and depreciation expenses of $38,476 for the next financial year. The operating expenses will be
recognised only for the portion of monthly outgoings.
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
St George Mining Limited – Annual Report 2019
P 47
DIRECTOR’S DECLARATION
In the opinion of the Directors of St George Mining Limited (“the Company”)
(a)
The financial statements and the notes and the additional disclosures included in the directors’ report
designated as audited of the Group are in accordance with the Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
performance for the year ended that date; and
(ii)
Complying with Accounting Standards and Corporations Regulations 2001, and:
(b)
(c)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
The financial statements and notes comply with International Financial Reporting Standards as disclosed
in note 2.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act
2001.
On behalf of the Board
John Prineas
Executive Chairman
Dated: 3 September 2019
Perth, Western Australia
St George Mining Limited – Annual Report 2019
P 48
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
3 September 2019
Board of Directors
St George Mining Limited
Level 1, 115 Cambridge Street
WEST LEEDERVILLE WA 6007
Dear Directors
RE:
ST GEORGE MINING LIMITED
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of St George Mining Limited.
As Audit Director for the audit of the financial statements of St George Mining Limited for the year ended 30
June 2019, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
P 49
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ST GEORGE MINING LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of St George Mining Limited (“the Company”) and its subsidiaries (“the Group”),
which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Relating to Going Concern
Without modifying our audit opinion expressed above, attention is drawn to the following matter.
As referred to in Note 2(b) to the financial statements, the consolidated financial statements have been prepared on
a going concern basis. At 30 June 2019, the Group had cash and cash equivalents of $3,357,486, and incurred a
loss after income tax of $9,594,528. The Group had Net Liabilities of $714,545 as at 30 June 2019.
The ability of the Group to continue as a going concern and meet its planned exploration, administration and other
commitments is dependent upon the Group raising further working capital and/or successfully exploiting its mineral
assets. In the event that the Group is not successful in raising further equity or successfully exploiting its mineral
assets, the Group may not be able to meet its liabilities as and when they fall due and the realisable value of the
Group’s current and non-current assets may be significantly less than book values.
Liability limited by a scheme approved
under Professional Standards Legislation
P 50
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current year. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matters
How the matter was addressed in the audit
Share based payments - Performance rights
(refer to Note 2(g) and note 18)
As referred to in Note 18 to the consolidated financial
statements, the Company awarded 172 performance
rights to directors and employees, of which 20 were
cancelled during the year. The awards vest subject to
the achievement of certain vesting conditions.
The Group valued the awards based on the share price
at grant date and estimated likelihood of performance
conditions being achieved over the vesting period for
each tranche of awards. The fair value of the
performance rights at the grant date was $966,000
vesting over three years from the date of issue.
The Group has performed calculations to record the
related share based payment expense of $264,580 in
the consolidated statement of profit or loss and other
comprehensive income.
Due to the complex nature of the transaction and
estimates used in determining the valuation of the
share based payment arrangement and vesting
expense, we consider the Group’s calculation of the
share based payment expense to be a key audit
matter.
In determining the fair value of the awards and related
expense, the Group used assumptions in respect of
future market and economic conditions as well as
estimates of achievement of certain exploration
targets.
Trade and Other Payables – risk of unrecorded
liabilities
(refer to Note 2(u) and note 12)
As referred to in Note 12 of the consolidated financial
statements, the Group’s Trade and Other Payables
amounted to $3,553,417. This is an increase of 153%
on the prior year balance of $1,401,598, and comprises
74% of the Total Liabilities reported by the Group. More
than 60% of Trade and Other payables were over 30
days past due as disclosed in Note 12 to the Financial
Report.
Due to the significance of the balance and significant
risk associated with completeness of the liabilities, we
considered Trade and Other Payables to be a key audit
matter.
Inter alia, our audit procedures included the following:
i.
ii.
iii.
iv.
the
inputs and examining
the
Verifying
assumptions used in the Group’s valuation of
performance rights, being the share price of the
underlying equity, time to maturity (expected life)
and grant date;
Challenging management’s assumptions
relation
likelihood of achieving
performance conditions;
the
to
in
the
Assessing the fair value of the calculation through
re-performance using appropriate inputs; and
Assessing the accuracy of the share based
the adequacy of
payments expense and
disclosures made by the Group in the financial
report.
Inter alia, our audit procedures included the following:
i.
ii.
iii.
iv.
Assessing the Accounts payable ageing report
and considering potential unrecorded liabilities by
comparing with those of the prior year;
Reviewing agreements, Board of Directors
Minutes, Solicitors confirmations to identify any
potential unrecorded liabilities at 30 June 19;
Performing a detailed search for unrecorded
liabilities
the review of subsequent
payments for the period until 28 August 2019;
through
Assessing the adequacy of disclosures made by
the Group in the financial report.
P 51 Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. 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 in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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 to cease operations, or has no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the
Australian Auditing Standards 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 this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
P 52 We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 17 of the directors’ report for the year ended 30
June 2019.
In our opinion, the Remuneration Report of St George Mining Limited for the year ended 30 June 2019 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
3 September 2019
P 53 SHAREHOLDER INFORMATION
1
Distribution of holders
As at 3 September 2019 the distribution of shareholders was as follows:
Ordinary shares
Size of holding
1 – 1,000
1,001 –5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
2
Voting rights
Number of holders
239
514
590
1,606
565
3,514
There are no restrictions to voting rights attached to the ordinary shares. On a show of hands every member
present in person will have one vote and upon a poll, every member present or by proxy will have one vote each
share held.
3
Substantial shareholders
The company has no substantial shareholders who have notified the Company in accordance with Section 671B
of the Corporation Act 2001.
4
Top 20 shareholders
The names of the 20 largest shareholders on the share register as at 3 September 2019, who hold 26.95% of the
ordinary shares of the Company, were as follows;
Shareholder
John Prineas
Impulzive Pty Ltd
HSBC Custody Nominees (Australia) Limited
Ms Betty Frilingos
Allcap Pty ltd (S&L Capannolo Family A/C>
JP Morgan Nominees Australia Pty Limited
Moho Resources Limited
Citicorp Nominees Pty Ltd
Mr Paul Sumade Lee
Oceanic Capital Limited
Fox Resources Limited
Mr Robert Addison Ramsay
Mr David Davidson
Mrs Nerida Ruth Scott
CS Fourth Nominees Limited
Mr John David Brauman
Yarandi Investments Pty Ltd
Mrs Karen Dawson
DDH1 Drilling Pty Ltd
Impulzive Pty Ltd
Number
10,355,021
8,354,990
7,886,726
6,318,182
6,029,568
5,101,911
5,000,000
4,966,086
4,770,833
4,400,000
4,040,000
4,016,205
4,000,000
4,000,000
3,836,622
3,600,000
3,225,000
3,144,470
3,106,060
3,096,480
St George Mining Limited – Annual Report 2019
P 54
SHAREHOLDER INFORMATION
5
Top 20 listed option holders
The names of the 20 largest listed option holders on the share register as at 3 September 2019, who hold 33.15%
of the ordinary shares of the Company, were as follows;
Shareholder
HSBC Custody Nominees (Australia) Limited
Mr John Prineas
Impulzive Pty Ltd
Allcap Pty ltd (S&L Capannolo Family A/C>
Mr Paul Lee
Oceanic Capital Pty ltd
James Prineas Pty ltd
Mrs Karen Dawson
Impulzive Pty Ltd
Mr Christopher Bell + Mrs Jennifer Bell (C&J Bell Superfund A/C>
Mr Barry Lipscombe + Mrs Frances Lipscombe
Blujak Pty Ltd
Mr Christopher John Girling + Mrs Yvette Louise Clark
Mr Jeremy James Coleman
Allcap Pty Ltd
Heyward Ham Super Pty Ltd
Ian Tyler Super Pty Ltd
Lipic Pty Ltd
Yarandi Investments Pty Ltd
Citicorp Nominees Pty Ltd
6
Consistency with business objectives
Number
877,749
835,502
835,499
766,614
477,083
420,000
350,000
314,447
309,648
305,883
300,570
300,000
300,000
279,154
277,700
255,000
245,000
241,488
232,500
225,361
The Company has used its cash and assets in a form readily convertible to cash that it had at the time of listing
in a way the consistent with its stated objectives.
St George Mining Limited – Annual Report 2019
P 55
TENEMENT INFORMATION
St George Mining Limited mineral interests as at 3 September 2019
TENEMENT SCHEDULE – EAST LAVERTON:
Tenement ID
Registered Holder
Location
E39/0981
E39/0982
E39/0985
E39/1066
E39/1229
E39/1461
E39/1472
E39/1473
E39/1474
E39/1475
E39/1476
E39/1467
E39/1492
E39/1518
E39/1519
E39/1520
E39/1521
E39/1549
E39/1572
E39/1608
E39/1666
E39/1667
E39/1722
E39/1779
E39/1852
E39/2026
E39/2027
E39/2028
E39/2029
E39/2030
E39/2031
Desert Fox Resources Pty Ltd
East Laverton Property
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
St George Mining Limited – Annual Report 2019
P 56
TENEMENT INFORMATION
TENEMENT SCHEDULE – MT ALEXANDER/HAWAII:
Tenement ID
Registered Holder
Location
E29/638
E29/548
E29/954
E29/962
E29/972
E36/741
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Hawaii
St George Mining Limited – Annual Report 2019
P 57
St George Mining Limited ACN 139 308 973
www.stgeorgemining.com.au
ATE DIRECTORY/CONTENTS PAGE