ACN 139 308 973
ANNUAL REPORT 2020
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
4
5
16
24
25
26
27
28
53
54
55
59
61
St George Mining Limited – Annual Report 2020
P 2
St George’s Mt Alexander Project hosts extensive massive sulphide mineralisation
enriched with high‐grade nickel, copper, cobalt and platinum group metals.
Photo: drill core from MAD177 at
approx. 185m downhole. Coarse
grained pentlandite and
chalcopyrite is observed.
Assays returned:
10.5m @ 4.82% Ni, 1.67% Cu,
0.15% Co and 2.87 g/t total PGEs
from 182.5m,
Including
4m @ 7.53% Ni, 2.47% Cu, 0.23%
Co and 3.92 g/t total PGEs from
186m
Platinum group metals include
high levels of Palladium and
Rhodium – 10.5m @ 2.33g/t Pd
and 0.08g/t Rh including 4m @
3.23g/t Pd and 0.1g/t Rh.
St George Mining Limited – Annual Report 2020
P 3
CHAIRMAN’S LETTER
Dear Fellow Shareholders
It is my pleasure to present the Annual Report of St George Mining Limited (ASX: SGQ) for 2020 – a
significant year which saw the Company achieve key milestones on our growth agenda.
At our flagship Mt Alexander Project, ongoing drilling and geophysical programmes during the year in
review delivered another significant shallow discovery of nickel‐copper sulphides at the Radar Prospect –
located in an unexplored section of the Cathedrals Belt and about 1.2km east of known mineralisation.
This blind discovery extended the east‐west strike of known high‐grade mineralisation along the Cathedrals
Belt to 5.5km encompassing four shallow discoveries at Investigators, Stricklands, Cathedrals and now
Radar.
Such an extensive strike of mineralisation is further confirmation of the large intrusive mineral system at
the Cathedrals Belt and supports the potential for significant mineralisation to also be present at depth,
below the shallow deposits already discovered.
Drilling of deep targets has commenced with thick mineralised mafic‐ultramafic units intersected in
multiple drill holes, successfully identifying a large target horizon for potential further nickel‐copper
sulphide deposits at depth. Drilling continues in this highly anticipated programme.
An important strategic initiative taken during the year was to commence a scoping study for a potential
mining operation at the shallow high‐grade deposit at Stricklands. A resource drill‐out was completed with
metallurgical and flowsheet analysis underway.
Our strategy is to establish a low‐cost, high‐margin mining operation at Mt Alexander – initially to mine the
Stricklands deposit and then rolling out the same model to the shallow high‐grade deposits at Investigators
and Cathedrals. The early results from this scoping work are highly encouraging.
We are also pleased to have established a new project in the Paterson Province. This is one of the most
highly endowed mineral provinces in Australia but remains underexplored. A number of recent significant
copper and gold discoveries – including at Rio Tinto’s Winu Project and at the Havieron Project being
explored in joint venture by Greatland Gold and Newcrest – have ensured that the region is re‐emerging as
a highly sought after exploration address with potential for world‐class discoveries.
Geophysical surveys at our Paterson Project have identified several high priority targets. Drilling of these
targets – scheduled for later this year – promises to be a very exciting time our Shareholders.
I would like to thank our technical team for the professional job they have done in systematically advancing
exploration at all our projects over the past year to bring about the key milestones achieved. These have
established a strong platform for further exploration success and creation of Shareholder wealth.
On behalf of the Board of Directors, I thank you – our Shareholders – for your continuing support. We look
forward to an exciting year ahead.
John Prineas
Executive Chairman
St George Mining Limited – Annual Report 2020
P 4
REVIEW OF OPERATIONS
The Company’s operational activities during the year ending 30 June 2020 focused on exploration and
development work at our flagship Mt Alexander Project in Western Australia’s north‐eastern Goldfields.
Exploration also commenced at our new Paterson Project, an early stage project in a world‐class mineral
district with excellent potential for a greenfields discovery.
MT ALEXANDER PROJECT
High‐grade nickel‐copper sulphide discoveries continue
Radar Prospect – new discovery:
A significant shallow discovery of nickel‐copper sulphides was made during the second half of 2019 at the
Radar Prospect – the fourth shallow high‐grade discovery at the Cathedrals Belt joining Stricklands,
Investigators and Cathedrals.
The Radar discovery was made in an unexplored section of the Cathedrals Belt situated 1.2km east of
known mineralisation. It extends the strike of high‐grade mineralisation along the Belt to 5.5km and
supports the prospectivity of more than 10km of underexplored strike of the Cathedrals Belt.
MAD152, the discovery hole at Radar, returned assays of 6m @ 2.14%Ni, 0.74%Cu and 1.62g/t PGEs from
46m, including 2.55m @ 4.29%Ni, 1.46%Cu and 3g/t PGEs from 49.05m. Follow‐up exploration at Radar
is continuing to scope the full extent of deposit.
Figure 1 – drill core from MAD152 with massive sulphides intersected from 49.05m downhole.
The Radar discovery was made by drilling an electromagnetic (EM) conductor identified beneath 10m of
transported cover and at a depth of 50m below surface. The discovery highlights the effectiveness of EM
techniques in detecting ‘blind’ nickel‐copper sulphide mineralisation in the Cathedrals Belt.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
Deeper drilling – new targets identified and fertile mafic‐ultramafic units confirmed:
The increased strike of high‐grade mineralisation along the Cathedrals Belt confirmed by the Radar discovery
is further evidence of the large mineral system at the Project. This strongly supports the potential to discover
more mineralisation along the east‐west strike of the Belt – and also at depth in the down‐dip direction.
In particular, an intrusive system like that at the Cathedrals Belt, is typically characterised by mineralised
mafic‐ultramafic intrusions that can be present to significant depths – as seen in similar North American
intrusive deposits such as Raglan (Northern Quebec) and Eagle (Michigan).
Surface EM surveys cannot reliably see beyond 250m below surface at the Cathedrals Belt, an issue
experienced by other nickel discoveries such as Nova in Western Australia and Raglan in Northern Quebec.
Initial deeper drill holes at the Cathedrals Belt were completed in late 2019 to investigate the stratigraphy at
depth. All holes successfully intersected nickel‐copper sulphides and/or the host mafic‐ultramafic intrusive
stratigraphy – confirming the continuity of mineralisation down‐dip of the shallow high‐grade deposits.
Downhole EM (DHEM) surveys in these deeper drill holes identified several off‐hole conductors, giving
further support for the presence of significant sulphide mineralisation at depth.
Magnetotelluric (MT) and Audio‐magnetotelluric (AMT) surveys, which can map structures and stratigraphy
to 1.5km below surface and beyond, were completed at the Cathedrals Belt in the first half of 2020. These
surveys identified large conductive features at depth – significantly, these are located below the extent of
current drilling and down‐plunge of known nickel‐copper sulphide deposits near surface, an ideal geological
position for the continuation of the shallow deposits.
Figure 2 – long section (east‐west, looking north) of the Cathedrals Belt with MT/AMT 3D inversion
modelling of the survey data showing large conductive zones below the current extent of drilling.
Initial drilling to test the MT/AMT targets has successfully intersected thick mineralised mafic‐ultramafic
units, identifying a target horizon with an east‐west orientation and strike of more than 4km. The thickness
of these units – upto 50m – and presence of magmatic nickel‐copper sulphides, supports the potential for
significant massive sulphide mineralisation in this target horizon.
Drilling and DHEM surveys are being used concurrently to further investigate the target horizon for nickel‐
copper sulphide deposits.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
Figure 3 – schematic orthographic view of the Cathedrals Belt showing the large target horizon, the new
discoveries in MAD181 and MAD183 as well as existing drilling and known massive nickel‐copper sulphides.
Pipeline of underexplored targets:
Exploration is continuing at a number of underexplored areas including the Fish Hook and West End
Prospects on the Cathedrals Belt.
At Fish Hook, the MT/AMT surveys identified a large conductive feature at depth and co‐incident with the
high‐order nickel‐copper soil anomaly at Fish Hook. Initial drilling in 2020 at Fish Hook was too shallow to
test the MT target, and deeper drilling is being prioritised for Fish Hook.
Figure 4 – north‐south Cross Section A (looking east) of the Fish Hook Prospect with MT/AMT 3D inversion
modelling of the survey data, showing a large conductive feature below the depth of recently completed
drilling, and below the high‐order nickel‐copper soil anomaly.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
The MT/AMT surveys also identified a strong conductive feature on exploration licence E29/548, the
tenement immediately to the north of the area that hosts the Cathedrals Belt. Potentially, this feature
could represent a similar structure to the Cathedrals Belt. Geophysical surveys and drilling will be planned
for this target to further investigate the potential for mineralised ultramafics.
The Mt Alexander Belt – the north‐south oriented belt to the south of the Cathedrals Belt – also hosts
multiple underexplored targets. These include the Sultans Prospect where massive sulphide mineralisation
has been intersected by drilling. Further drilling will be prioritised for the Mt Alexander Belt.
Stricklands – advancing to a mine:
Resource Definition: The resource drill‐out of the shallow, high‐grade nickel‐copper sulphide deposit at
Stricklands was completed during the second quarter of 2020 with 52 holes for 4,077m of RC (reverse
circulation) drilling. The deposit has been defined over an area that is approximately 450m long, 50m wide
and 80m deep; see Figure 5 for a schematic diagram of the interpreted mineralisation at Stricklands.
St George has appointed Entech as its external geological consultant to certify a maiden JORC resource
estimate at the Mt Alexander Project.
Eight PQ‐size diamond core drill holes were also completed at Stricklands for 661.6m of drilling. These drill
holes will be used for metallurgical testwork and production flowsheet design.
Laboratory assaying of drill samples is being completed in Perth. Metallurgical testwork on the core samples
will be carried out by XPS (Expert Process Solutions) in Canada which will also develop a flowsheet for the
potential mining and processing of the Stricklands ore.
Figure 5 – schematic diagram of Stricklands (against TMI RTP 1VD magnetic data) showing the location of
the RC and diamond drill holes completed as part of the resource development drill programme.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
A key focus of the work by XPS will be to optimise economic recoveries of all metals in the Ni‐Cu‐Co‐PGE
mineralisation at Stricklands – including the palladium, platinum and rhodium that form the bulk of the
platinum group metals.
XPS has industry leading expertise in metallurgical and processing services for polymetallic nickel sulphide
mineralisation, which is more common in Canadian nickel sulphide deposits than in Australia. For example,
the Raglan nickel sulphide mine in Northern Quebec, which is owned by the Glencore Group, has a similar
polymetallic suite of metals to the Mt Alexander ore.
XPS is a part of the Glencore Group and based in Falconbridge, Ontario, Canada
Scoping study: The resource definition and metallurgical testwork will underpin the scoping study
assessing a potential mining operation at Stricklands. The study will consider the potential for a high‐
margin mine that can be developed with very low capital costs and a simple open‐pit mining operation.
The scoping study is initially focused on the Stricklands deposit which is assessed as potentially having the
simplest mining operation of the four shallow deposits at the Cathedrals Belt.
Once the feasibility of a mining operation at Stricklands is established, studies will also be considered for
a similar low cost, high margin mine at the shallow high‐grade deposits at Investigators and Cathedrals.
Figure 6 – photographs of drill core from STD008, one of the metallurgical holes completed at Stricklands.
STD008 intersected 14.05m of nickel‐copper sulphides from 36.7m downhole. The mineralised interval
included massive sulphides (90‐100% sulphides) between 36.7m to 46m (photo on right) and brecciated
textured sulphides (50‐75% sulphides) from 46m to 50.75m (photo on left).
St George Mining Limited – Annual Report 2020
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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, E29/972 and E29/1041.
The Cathedrals, Stricklands, Investigators and Radar 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.
PATERSON PROJECT
Exploration opportunity in world‐class district
St George secured ground in the Paterson Province on 17 December 2019 with the grant of Exploration
Licence E45/5226. A second tenement, Exploration Licence E45/5422, was granted to St George on 10 July
2020. Figure 7 illustrates the regional location of the new St George tenements.
Figure 7 – map
showing St George’s
tenements in the
Paterson Province as
well as other projects
in the region.
The Paterson
Province is one of the
most highly endowed
mineral provinces in
Australia, and hosts
the giant Nifty (2Mt
Cu) and Telfer (27M
oz Au) deposits.
The region remains
underexplored with a
number of significant
discoveries recently
announced including
Rio Tinto’s Winu
Project and
Newcrest’s Havieron
Project (in joint
venture with
Greatland Gold).
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
E45/5226 covers more than 35km strike of prospective stratigraphy, with potential similarities to the
stratigraphy that hosts the mineralisation at Winu, Nifty and Telfer.
St George completed a close‐spaced airborne magnetic survey at this tenement in March 2020 with more
than 4,000 line km flown with a line spacing of 100m.
The high‐resolution data produced by the survey identified extensive magnetic units, interpreted to be
sedimentary, throughout the 35km strike of the tenement – including sections with tectonic elements that
are prospective areas to host mineral deposits; see Figure 8.
Figure 8 – new high
resolution magnetic data
(1VD greyscale) for St
George’s E45/5226 set
against regional magnetic
data (TMI).
Multiple areas of interest
have been identified and will
be prioritised for further
exploration and drill testing.
A gravity survey was also completed over E45/5226 in June 2020. The survey was carried out on 200m
spacing, with 3,403 stations.
The gravity data acquired from the survey is currently being assessed. A preliminary review of the data has
identified several areas of anomalism, including some that are coincident with highly prospective tectonic
features and stratigraphic settings.
A detailed integration and review of the geophysical surveys will be completed to design drill targets for
the maiden drill campaign at the Paterson Project – scheduled for Q4 2020.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
EAST LAVERTON PROJECT
Large gold‐bearing system
The East Laverton Project covers approximately 2,000 sq km and hosts a number of important structures and
stratigraphic sequences that are interpreted to be prospective for gold and base metal mineralisation.
A project scale review and targeting exercise was completed during the year. The review was conducted by
our technical team in conjunction with geological consultants CSA Global.
A number of high quality gold and VMS base metal targets were identified, with further exploration
recommended.
St George believes that the Project areas remain underexplored, and we are considering further exploration
as well as strategic options for the 100%‐owned East Laverton Project.
Photo: RC drill rig at Stricklands for the resource drill‐out. Photo was taken at dawn.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
CORPORATE DEVELOPMENTS
Capital Raisings:
The Company completed a number of initiatives during the year to secure new funds for its exploration
activities.
In July 2019, the Company completed a placement of new shares which raised $3,300,000 through the
issue of 33,000,000 fully paid ordinary shares at $0.10 per share.
In October 2019, $5,795,000 was raised through the placement of 38,633,333 fully paid ordinary shares at
$0.15 per share. In addition, a corporate loan facility of $850,000 was repaid in full through the issue of
5,666,667 fully paid ordinary shares at $0.15 per share.
The Company has no loan facilities as from 31 October 2019.
In May 2020, the Company completed a placement of new shares that raised $3,600,000 through the issue
of 40,000,000 fully paid ordinary shares at $0.08 per share.
In June 2020, the Company completed a Share Purchase Plan which also raised $3,600,000 through the
issue of 40,000,000 fully paid ordinary shares at $0.08 per share.
Following the above share issuances, the Company had the below listed securities on issue:
Fully Paid Ordinary Shares ‐ 503,489,079
Listed Options exercisable at $0.20 on or before 30 September 2020 ‐ 24,576,114
Co‐funded drilling grant:
In May 2020, St George’s application for Government co‐funding of some of the deep drilling programme
at the Cathedrals Belt was approved.
The drilling grant is made by the Western Australian Government under its Exploration Incentive Scheme
(EIS) and provides St George with a 50% re‐imbursement of direct drilling costs capped at $150,000.
Performance rights:
On 23 July 2020, the Company issued key management personnel (including directors) with certain
Performance Rights linked to significant milestones. A total of 125 Performance Rights were issued.
Details of the Performance Rights issued to directors, including the Performance Rights Plan, is contained
in the Company’s Notice of Meeting dated 15 June 2020. Four classes of Performance Rights were issued
with the following milestones:
Class D Performance Rights: an announcement by the Company to the Australian Securities Exchange
(ASX) is made by 30 June 2021 stating that the Company has made a Decision to Mine at the Mt Alexander
Project.
Class E Performance Rights: an announcement by the Company to the ASX is made by 30 June 2022 stating
that the Company has commenced production at the Mt Alexander Project of Nickel that will be
commercially sold under an offtake or sales agreement.
St George Mining Limited – Annual Report 2020
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REVIEW OF OPERATIONS
Class F Performance Rights. an announcement by the Company to the ASX is made by 30 June 2022 stating
that the Company has defined an inferred 2012 JORC compliant resource at the Mt Alexander Project of
not less than 100,000 tones contained nickel.
Class G Performance Rights: drill intersections of economically significant mineralisation at the Company’s
Paterson Project by 30 June 2022 that the Board believes are indicative of the discovery of an ore deposit.
The directors did not receive any Class G Performance Rights.
COVID ‐19
The Company’s projects are all located in Western Australia, ensuring that the Company has an attractive
regulatory and bio‐security environment to effectively progress its exploration programmes and strategies
through the COVID‐19 pandemic.
St George is managing its operations in compliance with COVID‐19 regulations issued by State and
Commonwealth authorities. We will continue to proactively manage drilling and other field programmes
to protect the health and safety of our team and service providers.
Photo: (left to right) Dave
O’Neill, Charles Wilkinson
and John Prineas at Mt
Alexander inspecting drill
core from MAD152, the
discovery hole at Radar.
St George Mining Limited – Annual Report 2020
P 14
REVIEW OF OPERATIONS
COMPETENT PERSON STATEMENT:
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore
Reserves for the Mt Alexander Project is based on information compiled by Mr Dave O’Neill, a Competent Person
who is a Member of The Australasian Institute of Mining and Metallurgy. Mr O’Neill is employed by St George
Mining Limited to provide technical advice on mineral projects, and he holds performance rights issued by the
Company.
Mr O’Neill 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 O’Neill
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:
13 August 2019 High‐Grade Nickel‐Copper Sulphide Drilling
2 September 2019 New Discovery of Nickel‐Copper Sulphides
12 September 2019 Thick Nickel‐Copper Sulphides Intersected Down‐Plunge
4 October 2019 Deep Drilling Confirms Continuity of Mineralisation
9 October 2019 Assays Confirm High‐Grade Discovery
21 October 2019 More Extensions of High‐Grade Mineralisation
29 October 2019 More Strong Results at Mt Alexander
8 November 2019 More Nickel Sulphide Targets at Mt Alexander
12 November 2019 Thich Intercept in Drilling of Deeper Conductors
20 November 2019 More Thick Intercepts Down‐Plunge of Shallow Deposits
23 December 2019 Drilling Success Continues at Mt Alexander
28 January 2020 2020 Begins With More Strong Results
25 February 2020 More EM Targets Emerge at Mt Alexander
27 February 2020 St George Launches Exploration at Paterson Province
11 March 2020 St George Finalises Drill Targets
1 April 2020 Breakthrough Results at Mt Alexander
8 April 2020 Strong Results at Paterson Province Hotspot
22 April 2020 MT Survey Continues to Unlock Mt Alexander
22 May 2020 St George Starts Major Drilling Campaign
5 June 2020 St George Steps Up Drilling at Mt Alexander
2 July 2020 Mt Alexander – Drilling Update
23 July 2020 Mt Alexander – Drilling Update
13 August 2020 Mt Alexander – Drilling Update
27 August 2020 Thick Mineralised Unit Intersected at Investigators
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 2020
P 15
DIRECTORS’ REPORT
The Directors of St George Mining Limited submit the annual financial report of St George Mining Limited from
1 July 2019 to 30 June 2020. 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 2020, 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
Appointed
Experience
Executive Chairman
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.
listed company
Other current
directorships
Former listed directorships in the
last three years
John Dawson B.Com MBA INSEAD Non‐Executive Director
Appointed
Experience
Not applicable.
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
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 is Non‐Executive Director/Company Secretary for Beacon
Minerals Limited (ASX: BCN) and Company Secretary for Cardinal Resources
Limited (ASX/TSX: CDV).
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 (ASX: BCN) from June 2015.
Not applicable.
listed company
Other current
directorships
Former listed directorships in the
last three years
Sarah Shipway CA, B.Com
Appointed
Experience
listed company
Other current
directorships
Former listed directorships in the
last three years
St George Mining Limited – Annual Report 2020
P 16
DIRECTORS’ REPORT
COMPANY SECRETARY
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
John Prineas
John Dawson
Sarah Shipway
Ordinary
Shares
12,588,178
14,895,242
649,479
Listed
Options
1,021,422
1,459,594
‐
Class A
10
5
5
Class B
10
5
5
Performance Rights
Class D
Class C
8
40
5
10
5
10
Class E
8
5
5
Class F
10
6
6
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 2019 to 30 June 2020 after income tax
was a loss of $8,584,901 (2019: $9,594,528).
A review of operations of the consolidated entity during the year ended 30 June 2020 is provided in the “Review
of the Operations” immediately preceding this Directors’ Report.
LIKELY DEVELOPMENTS
The Group will continue its mineral exploration and development activities over the next financial year with a
focus on the Mt Alexander Project and the Paterson 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.
St George Mining Limited – Annual Report 2020
P 17
DIRECTORS’ REPORT
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 2020 and the number
of meetings attended by each director.
J Prineas
J Dawson
S Shipway
Directors Meetings
Eligible to Attend
9
9
9
Attended
9
9
9
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
$500,000 per annum. Fees for independent non‐executive directors are not linked to the performance of
the Group. To align Directors’ interests with shareholder interests, the directors are encouraged to hold
shares in the Company.
St George Mining Limited – Annual Report 2020
P 18
DIRECTORS’ REPORT
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and
executives. The method applied to achieve this aim has been the issue of performance rights to directors
and executives to encourage the alignment of personal and shareholder interests. The Company believes
this policy was effective in increasing shareholder wealth in the past.
Analysis of the actual figures shows the Company has increased expenditure over the past 5 years, with the
shares price remaining consistent over the past 5 years.
The Company has issued performance‐based remuneration to directors and executives of the Company. The
measures are specifically tailored to align personal and shareholder interest. The KPI’s are reviewed regularly
to assess them in relation to the Company’s goals and shareholder wealth.
Company Performance
A summary of St George Mining’s business performance as measured by a range of financial and other
indicators, including disclosure required by the Corporations Act 2001, is outline below.
2020
2019
2018
2017
2016
Total Comprehensive Loss Attributable to
Member of the Company
Cash and cash equivalents at year end
Basic Loss Per Share (cents)
ASX share price at the end of the year ($)
Increase/(decrease) in share price (%)
8,584,901
9,594,528
4,384,667
4,289,216
6,142,647
8,310,582
2.12
0.115
5
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
Remuneration Consultants
No remuneration consultant was engaged in the current financial year.
Details of directors and executives
Directors
J Prineas
J Dawson
S Shipway
Title
Executive Chairman
Non‐Executive Director
Non‐Executive Director
Date of Appointment
19 October 2009
2 January 2019
11 June 2015
Date of Retirement
Not Applicable
Not Applicable
Not Applicable
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 FY2020 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
FY2020. The value of remuneration includes equity grants where the Executive received control of the shares in
FY2020 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 2020
P 19
DIRECTORS’ REPORT
Executive Actual Remuneration Earned in FY2020
Salary and
Fees 1
Termination
Payment
Name
J Prineas
J Dawson
S Shipway
1.
$
383,249
68,393
155,992
$
‐
‐
‐
Short‐
Term
Incentive
$
‐
‐
‐
LTI Plan
Rights
Total Actual
Remuneration
$
‐
‐
‐
$
383,249
68,393
155,992
Salary and fees comprise base salary, superannuation and leave entitlements. It reflects the total of “salary
and fees” and “superannuation” in the statutory remuneration table.
Remuneration of directors and executives
Remuneration for the financial year ended 30 June 2020.
Short‐Term Benefits
Post
Employment
Benefits
Long Term
Benefits
Termination
Payment
Superann‐
uation
Long Service
Leave
Salary
and
Fees
$
350,000
350,000
62,460
31,230
142,459
142,459
$
‐
‐
‐
‐
‐
‐
‐
112,083
‐
134,496
554,919
635,772
‐
134,496
Directors
J Prineas
2020
2019
J Dawson (i)
2020
2019
S Shipway
2020
2019
T Hronsky (ii)
2020
2019
Total
2020
2019
$
33,249
33,250
5,933
2,967
13,533
13,534
‐
‐
52,715
49,751
Equity Settled
Share‐Based
Payments
Shares/Options
Total
$
$
124,998
109,374
46,100
‐
41,666
36,458
‐
‐
534,001
537,334
114,493
34,197
197,658
192,451
‐
246,579
$
25,754
44,710
‐
‐
‐
‐
‐
‐
25,754
44,710
212,764
145,832
846,152
1,010,561
(i)
(ii)
Appointed on 2 January 2019.
Retired on 2 January 2019.
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.
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.
St George Mining Limited – Annual Report 2020
P 20
DIRECTORS’ REPORT
The Company has entered into service agreements 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.
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.
Shareholdings of key management personnel
Directors
Balance at
1 July 2019
Granted as
remuneration
Net other change
(i)
Balance at
30 June 2020
J Prineas
J Dawson
S Shipway
Total
(i)
12,214,221
14,595,940
500,000
27,310,161
Acquired under the Company’s Share Purchase Plan in May 2020
‐
‐
‐
‐
373,957
389,302
149,479
912,738
12,588,178
14,985,242
649,479
28,222,899
Listed Options, exercisable at $0.20 on or before 30 September 2020, holdings of key management personnel
Directors
Balance at
1 July 2019
Granted as
remuneration
Net other change
Balance at
30 June 2020
J Prineas
J Dawson
S Shipway
Total
1,021,422
1,459,594
‐
2,481,016
‐
‐
‐
‐
‐
‐
‐
‐
1,021,422
1,459,594
‐
2,481,016
Performance Rights holdings of key management personnel
Directors
Balance at
1 July 2019
Granted as
remuneration
Net other
change
Balance at
30 June 2020
Unvested
J Prineas
J Dawson
S Shipway
Total
60
‐
20
80
‐
20
‐
20
‐
‐
‐
‐
60
20
20
100
60
20
20
100
Value of
unvested
Rights ($)
375,000
135,000
135,000
645,000
Each performance rights convert to 50,000 fully paid ordinary shares on achievement of certain milestones.
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 2020 the Company issued 20 performance rights (2019: 172).
Performance rights 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.
St George Mining Limited – Annual Report 2020
P 21
DIRECTORS’ REPORT
Subsequent to the year end 125 performance rights were issued.
At the date of this report a total of 297 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
SHARE OPTIONS
Unissued shares
At the date of this report the Company had 24,576,114 listed options on issue. During the financial year ended
30 June 2020, 3,600 options had been converted into fully paid ordinary shares.
At the date of this report the Company had on issue the below unlisted options:
Options
Unlisted
Class
Unlisted Options
Grant Date
Number of Options
01.08.2019
2,500,000
Exercise Price
$
$0.15
Expiry Date
On or before 31 July 2022
During the financial year ended 30 June 2020, 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 297 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 2020 financial year the Company’s governance was consistent with the Corporate Governance
Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council.
The Group’s Corporate Governance Statement can be viewed at www.stgm.com.au.
St George Mining Limited – Annual Report 2020
P 22
DIRECTORS’ REPORT
EVENTS SUBSEQUENT TO BALANCE DATE
On 24 July 2020 the Company advised the issue of 600,000 fully paid ordinary shares, the shares were issued as
consideration to acquire tenement E26/1041.
On 24 July 2020 the Company advised that 125 performance rights had been issued to directors and employees
of the Company.
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.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2020 has been received and can be found
on page 54 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 2020.
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 10 September 2020
St George Mining Limited – Annual Report 2020
P 23
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020
Australian Dollar ($)
REVENUE
Interest
Other income
EXPENDITURE
Administration expenses
Exploration expenditure written off
Finance expenses
LOSS BEFORE INCOME TAX
Note
30 JUNE 2020
$
30 JUNE 2019
$
3
3
4
5
6
23,264
52,500
75,764
(2,292,263)
(6,313,787)
(54,615)
(8,584,901)
37,919
524,182
562,101
(3,009,021)
(6,864,453)
(283,155)
(9,594,528)
Income Tax
7(a)
‐
‐
NET LOSS ATTRIBUTABLE TO MEMBERS OF THE
COMPANY
(8,584,901)
(9,594,528)
Other comprehensive income
TOTAL COMPREHENSIVE INCOME (LOSS)
‐
(8,584,901)
‐
(9,594,528)
TOTAL COMPREHENSIVE (LOSS) ATTRIBUTABLE
TO MEMBERS OF THE COMPANY
(8,584,901)
(9,594,528)
LOSS PER SHARE
Basic and diluted – cents per share
17
(2.12)
(3.21)
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 2020
P 24
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Australian Dollar ($)
Note
30 JUNE 2020
$
30 JUNE 2019
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Security bond
ROU asset
Plant and equipment
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease Liability
Provisions
Borrowings
TOTAL CURRENT LIABILITIES
NON‐CURRENT LIABILITIES
Lease liability
TOTAL NON‐CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS/ NET (LIABILITIES)
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
18(a)
10(a)
10(b)
11(a)
12
13
11(b)
14
11(b)
8,310,582
97,150
147,056
8,554,788
30,659
117,029
45,320
193,008
3,357,486
22,313
379,417
3,759,216
1,000
‐
50,384
51,384
8,747,796
3,810,600
1,078,347
67,482
135,628
‐
1,281,457
56,696
56,696
1,338,153
7,409,643
3,553,417
‐
117,304
854,424
4,525,145
‐
‐
4,525,145
(714,545)
15(a)
15(b)
16
50,695,011
588,369
(43,873,737)
7,409,643
34,366,720
476,722
(35,557,987)
(714,545)
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2020
P 25
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Australian ($)
SHARE CAPITAL
ACCUMULATED LOSSES
$
BALANCE AT 1 JULY 2019
Loss for the year
Other comprehensive income
Total comprehensive loss
Shares/options issued during the year
Share based payments – employees/directors
Shares based payments
Options exercised during the year
Expiry of options
Share and option issue expenses
BALANCE AT 30 JUNE 2020
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
$
34,366,720
‐
‐
‐
17,167,946
‐
‐
‐
‐
(839,655)
50,695,011
30,514,215
‐
‐
‐
4,091,060
‐
‐
‐
(238,555)
34,366,720
(35,557,987)
(8,584,901)
‐
(8,584,901)
‐
‐
‐
‐
269,151
‐
(43,873,737)
(25,963,459)
(9,594,528)
‐
(9,594,528)
‐
‐
‐
‐
‐
(35,557,987)
SHARE OPTION
RESERVE
$
476,722
‐
‐
‐
‐
380,548
250
‐
(269,151)
‐
588,369
212,142
‐
‐
‐
‐
264,580
‐
‐
‐
476,722
TOTAL EQUITY
$
(714,545)
(8,584,901)
‐
(8,584,901)
17,167,946
380,548
250
‐
‐
(839,655)
7,409,643
4,762,898
(9,594,528)
‐
(9,594,528)
4,091,060
264,580
‐
‐
(238,555)
(714,545)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2020
P 26
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Australian Dollar ($)
CASH FLOWS FROM OPERATING ACTIVITIES
Expenditure on mining interests
Payments to suppliers and employees
Interest received
Other – GST
Government Grants
Net cash outflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Bank Deeds
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
Loan facility received
Interest on loan and facilities
Lease payments
Net cash flows from financing activities
Net increase/(decrease) 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 2020
$
30 JUNE 2019
$
18(b)
(8,459,553)
(2,009,336)
21,897
(73,469)
52,500
(10,467,961)
(29,659)
(17,021)
(46,680)
15,570,823
58,000
(105,454)
(55,632)
15,467,737
(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
4,953,096
(2,591,206)
3,357,486
5,948,692
18(a)
8,310,582
3,357,486
The above consolidated statement of cash flows should be
read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2020
P 27
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
1
CORPORATE INFORMATION
The financial report of St George Mining Limited (“St George Mining” or “the Company”) for the year ended 30
June 2020 was authorised for issue in accordance with a resolution of the directors on 10 September 2020.
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 2020 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
(a)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 $8,584,901 and net operating cash outflows of
$10,467,961 for the year ended 30 June 2020.
The net assets of the consolidated group have increase from net liabilities of $714,545 at 30 June 2019 to net
assets of $7,409,643 as at 30 June 2020. Total assets and Shareholder’s equity increased in 2020 due to various
capital raisings during the period totalling $17,167,946 (before issue costs) and a decrease in trade and other
payables from $3,553,417 as at 30 June 2019 compared to $1,078,347 as at 30 June 2020.
At 30 June 2020 the Company held a cash balance of $8,310,582.
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 2020/2021 year
following successful completion of equity raisings or debt financing arrangements.
St George Mining Limited – Annual Report 2020
P 28
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
(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 23.
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).
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 2020
P 29
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
Government Grants
Government grants are accounted for when received.
(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.
St George Mining Limited – Annual Report 2020
P 30
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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:
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:
St George Mining Limited – Annual Report 2020
P 31
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
Class of Fixed Asset
Plant and Equipment
‐ Year 1
‐ Subsequent Years
Depreciation Rate
18.75%
37.50%
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 2020
P 32
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
(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 2020
P 33
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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 2020
P 34
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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
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.
(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
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.
St George Mining Limited – Annual Report 2020
P 35
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
(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(o).
(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 measured at amortised costs using the effective interest method.
(v)
Adoption of new and revised standards
The Group has considered the implications of new and amended Accounting Standards which have become
applicable for the current financial reporting period. The Group had to change its accounting policies and make
adjustments as a result of adopting the following Standard:
‐
AASB 16: Leases
The impact of the adoption of this Standard and the respective accounting policies is disclosed in Note 11.
Changes in Accounting Policies
This note describes the nature and effect of the adoption of AASB 16: Leases on the Group’s financial statements
and discloses the new accounting policies that have been applied from 1 July 2019, where they are different to
those applied in prior periods.
As a result of the changes in Group’s accounting policies, prior year financial statements were required to be
restated. However, the Group has adopted AASB 16: Leases using modified retrospective approach with the
cumulative effect of initially applying AASB 16 recognised as 1 July 2019.
Leases
The Group as lessee
At inception of a contract the Group assesses if the contract contains or is a lease. If there is a lease present, a
right‐of‐use asset and a corresponding liability are recognised by the Group where the Group is a lessee. However,
all contracts that are classified as short‐term leases (i.e. leases with a remaining lease term of 12 months or less)
and leases of low‐value assets are recognised as an operating expense on a straight‐line basis over the term of the
lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate
cannot be readily determined, the Group uses incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows;
St George Mining Limited – Annual Report 2020
P 36
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
-
-
-
-
-
-
fixed lease payments less any lease incentives;
variable lease payments that depend on index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if the lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of options to terminate
the lease.
The right‐of‐use assets comprise the initial measurement of the corresponding lease liability less any lease
payments made at or before the commencement date and any initial direct costs. The subsequent measurement
of the right‐of‐use assets is at cost less accumulated depreciation and impairment losses.
Right‐of‐use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the
shorter.
Where a lease transfers ownership of the underlying asset or the costs of the right‐of‐use asset reflects that the
Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the
underlying asset.
Initial Application of AASB 16: Leases
The Group has adopted AASB 16: Leases retrospectively with the cumulative effect of initially applying AASB 16
recognised as 1 July 2019. In accordance with AASB 16, the comparatives for the 2019 reporting period have not
been restated.
The Group has recognised a lease liability and right‐of‐use asset for all leases (with exception of short‐term and
low value leases) recognised as operating leases under AASB 117: Leases where the Group is a lessee.
Lease liabilities are measured at the present value of the remaining lease payments. The Group’s incremental
borrowing rate as at the commencement of the lease was used to discount the lease payments.
The right‐of‐use assets were measured at their carrying values as if AASB 16 Leases had been applied since the
commencement date but discounted using the Group’s incremental borrowing rate per lease term. The right‐of‐
use assets have been recognised in the statement of financial position effective from the application date of 1 July
2019.
The following practical expedients have been used by the Group in applying AASB 16 Leases for the first time:
- Leases that have remaining lease term of less than 12 months as at 1 July 2019 have been accounted for in
the same way as short‐term lease.
- The use of hindsight to determine lease terms or contracts that have options to extend or terminate.
The Group’s incremental borrowing rate applied to the lease liabilities was 11.24%.
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 2020
P 37
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
(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)
Government grants
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
23,264
‐
52,500
75,764
37,919
524,182
‐
562,101
(i)
4
During the year ended 30 June 2020 there was no Research and Development rebate in relation to the
year ended 30 June 2019 (2019: $524,182 in relation to the year ended 30 June 2018).
ADMINISTRATION EXPENSES
Administration expenses include the following expenses:
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
Employee benefit expense
Wages and salaries
Accrued leave
Accrued leave paid out
Employee share based payments
Defined contribution superannuation expense
Other administration costs
Accounting and administration fees
Consulting fees
Legal fees
Publications and subscriptions
Presentations and seminars
Rental expenses
Share registry costs
Travel expenses
ROU depreciation
Depreciation
Other
Total administration expenses
484,268
18,323
‐
380,547
108,717
991,855
56,757
35,556
17,729
123,485
505,432
24,835
64,120
88,864
51,196
22,086
310,348
1,300,408
2,292,263
694,047
89,402
‐
264,580
83,258
1,131,287
45,247
653,366
247,574
87,072
148,594
41,808
47,066
335,256
‐
13,034
258,717
1,877,734
3,009,021
St George Mining Limited – Annual Report 2020
P 38
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
5
EXPLORATION EXPENDITURE WRITTEN OFF
Exploration expenditure written off
Tenement acquisition costs
6
FINANCE EXPENSES
Facility fee
Establishment fee
Interest expense
Lease interest
Refer to Note 14 for details in relation to the facility.
CONSOLIDATED
30 JUNE 2020
$
6,279,048
34,739
6,313,787
CONSOLIDATED
30 JUNE 2019
$
6,864,453
‐
6,864,453
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
‐
‐
43,052
11,563
54,615
170,731
50,000
62,424
‐
283,155
7
(a)
INCOME TAX
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%
Tax effect of;‐
Sundry – temporary differences
Section 40‐880 deduction
Future income tax benefit not brought to account
Income tax benefit
(b)
Deferred tax assets
CONSOLIDATED
30 JUNE 2020
$
(8,584,901)
(2,360,848)
CONSOLIDATED
30 JUNE 2019
$
(9,594,528)
(2,638,495)
(65,059)
(151,139)
2,577,046
‐
58,351
(127,640)
2,707,784
‐
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 2020
$
6,498,528
(123,638)
334,589
CONSOLIDATED
30 JUNE 2019
$
5,046,932
52,902
251,164
6,709,479
5,350,998
St George Mining Limited – Annual Report 2020
P 39
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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
Auditing and review of the Group’s financial statements
9
(a)
KEY MANAGEMENT PERSONNEL
Details of key management personnel
Directors
John Prineas
John Dawson
Sarah Shipway
Executive
John Prineas – Executive Chairman
(b)
Compensation of key management personnel
Salaries and fees
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 2020
$
46,123
46,123
CONSOLIDATED
30 JUNE 2019
$
44,195
44,195
CONSOLIDATED
30 JUNE 2020
$
554,919
‐
‐
52,715
212,764
25,754
846,152
CONSOLIDATED
30 JUNE 2019
$
635,772
134,496
26,924
49,751
145,832
44,710
1,037,485
CONSOLIDATED
30 JUNE 2020
$
97,150
97,150
CONSOLIDATED
30 JUNE 2019
$
22,313
22,313
Other receivables include amounts outstanding for goods and services tax (GST) of $95,196 (2019: $21,726) and
interest receivable of $1,954 (2019: $587).
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.
St George Mining Limited – Annual Report 2020
P 40
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
(b)
Other Assets
Prepayments
Other receivables
11
(a)
RIGHT OF USE ASSET AND LEASE LIABILITY
Right of use asset
On initial recognition
Accumulated deprecation
Carrying value at the end of the period
(b)
Lease Liability
Current
Property lease liability
Non‐Current
Property lease liability
Total lease liabilities
CONSOLIDATED
30 JUNE 2020
$
147,056
‐
147,056
CONSOLIDATED
30 JUNE 2019
$
281,166
98,251
379,417
CONSOLIDATED
30 JUNE 2020
$
168,225
(51,196)
117,029
CONSOLIDATED
30 JUNE 2019
$
‐
‐
‐
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
67,482
56,696
124,178
‐
‐
‐
Property leases
The above right‐of‐use asset (ROU) and lease liability relate to the office lease and storage lease entered into by
the Group. The lease has been accounted in accordance with AASB 16 adopted by the Group on 1 July 2019 under
the modified retrospective approach.
The right‐of‐use asset is measured at the amount equal to the lease liability at initial recognition and then
amortised over the life of the lease. The lease liability and ROU asset at initial recognition is $168,225.
The right‐of‐use asset is being depreciated over the lease term on a straight‐line basis which is approximately 27
and 36 months for the office and storage lease, respectively, in place at 30 June 2020. Depreciation expense of
$51,196 was included in corporate administration expense in the consolidated statement of profit or loss and
other comprehensive income.
At initial recognition, the lease liability was measured as the present value of minimum lease payments using the
Group’s incremental borrowing rate of 11.24%. The incremental borrowing rate was based on the unsecured
interest rate that would apply if finance was sought for an amount and time period equivalent to the lease
requirements of the Group. Each lease payment is allocated between the liability and interest expense. The
interest expense of $11,584 was included in corporate administration expense in the consolidated statement of
profit or loss and other comprehensive income. Lease payments during the year was $55,632 including interest.
Option to extend or terminate
The Group uses hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
St George Mining Limited – Annual Report 2020
P 41
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
12
PLANT AND EQUIPMENT
Plant and Equipment
At Cost
Accumulated depreciation
Total plant and equipment
Plant and Equipment
Carrying amount at the beginning of the year
Additions
Disposals
Depreciation expense
Total carrying amount at end of year
13
CURRENT LIABILITIES
Trade and other payables
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
137,836
(92,516)
45,320
50,384
17,022
‐
(22,086)
45,320
120,815
(70,431)
50,384
14,145
52,074
(2,801)
(13,034)
50,384
CONSOLIDATED
30 JUNE 2020
$
1,078,347
1,078,347
CONSOLIDATED
30 JUNE 2019
$
3,553,417
3,553,417
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 2020 $92,384 (2019: $2,145,665) was past 30 days due.
14
BORROWINGS
Credit Facility
At the beginning of the year
Credit facility drawn down
Repayment of credit facility
Interest Accrued
At the beginning of the year
Accrued for the year
Repayment during the year
Total Borrowings
Unsecured Credit Facility
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
792,000
58,000
(850,000)
‐
62,424
43,030
(105,454)
‐
‐
942,000
‐
(150,000)
792,000
‐
62,424
‐
62,424
854,424
On 25 January 2019 the Company entered into a loan facility with an existing shareholder and non‐related party
of the Company, Mr Paul Lee, pursuant to which the Company was provided a loan facility of $1,000,000 (Loan
Facility). The first draw down of funds under the Loan Facility was made on 14 March 2019.
St George Mining Limited – Annual Report 2020
P 42
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
The Loan Facility was unsecured and had the following key terms:
•
•
•
•
•
•
loan facility amount of $1,000,000, which reduced to $850,000 by the repayment of $150,000 by the
Company on 27 June 2019;
establishment fee of 5%:
12 month repayment term, being 29 January 2020;
interest rate of 15%;
100% of the interest is capitalised and repayable on loan maturity; and
there were no loan covenants.
The establishment fee and interest were paid by the Company in cash.
On 31 October 2019, the Company issued 5,666,667 Shares at $0.15 per share to fully repay the amount
outstanding under the Loan Facility.
The interest of $105,454, less $10,545 withholding tax, was paid in cash.
15
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
July 2019: 33,000,000 shares issued at $0.10 per share
October 2019: 44,300,000 shares issued at $0.15 per share
May 2020: 45,277,814 shares issued at $0.08
June 2020: 45,000,000 shares issued at $0.08
Exercise of Options
Transactions costs arising from issue of shares
At reporting date 502,889,079 (30 June 2019: 335,307,665)
fully paid ordinary shares
Movements in Ordinary Shares
At the beginning of the reporting period
Shares issued during the year
June 2019: 37,191,454 shares issued at $0.11 per share
July 2019: 33,000,000 shares issued at $0.10 per share
October 2019: 44,300,000 shares issued at $0.15 per share
May 2020: 45,277,814 shares issued at $0.08
June 2020: 45,000,000 shares issued at $0.08
Conversion of performance shares
Options exercised during the year
At reporting date
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
34,366,720
‐
3,300,000
6,645,000
3,622,226
3,600,000
720
(839,655)
30,514,215
4,091,060
‐
‐
‐
‐
‐
(238,555)
50,695,011
34,366,720
Number
335,307,665
33,000,000
44,300,000
45,277,814
45,000,000
‐
3,600
502,889,079
Number
298,116,211
37,191,454
‐
‐
‐
‐
‐
‐
335,307,665
St George Mining Limited – Annual Report 2020
P 43
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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 (i)
At reporting date
Number
Number
152
‐
20
172
‐
(20)
172
152
(i)
The Company issued 20 performance rights (2019: 172) during the year. Please refer to note 19.
(b)
Option Reserve
Movements in options reserve
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
At the beginning of the year
Listed Options
Expiry of options transferred to accumulated losses (i)
Option based payments (ii)
Share based payments expense (iii)
Options issue expense
At reporting date
476,722
‐
(269,151)
250
380,548
‐
588,369
212,142
‐
‐
‐
264,580
‐
476,722
(i)
(ii)
(iii)
The Company had on issue 3,500,000 Unlisted Options, on 3 December 2019 the options expired,
unexercised.
The Company issued 2,500,000 unlisted options as part consideration for services rendered.
Performance rights expense (see note 19).
A summary of the outstanding options at 30 June 2020 in the Company is listed below:
Class
Listed Options
Unlisted Options
Number of Options
24,576,114
2,500,000
Exercise Price
$0.20
$0.15
Expiry Date
30 September 2020
31 July 2022
16
ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Loss for the year
Expiry of options transferred from accumulated losses
Accumulated losses at the end of the year
17
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)
CONSOLIDATED
30 JUNE 2020
$
(35,557,987)
(8,584,901)
269,151
(43,873,737)
CONSOLIDATED
30 JUNE 2019
$
(25,963,459)
(9,594,528)
‐
(35,557,987)
CONSOLIDATED
30 JUNE 2020
$
CONSOLIDATED
30 JUNE 2019
$
(2.12)
(2.12)
(3.21)
(3.21)
St George Mining Limited – Annual Report 2020
P 44
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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
2020
Number
2019
Number
404,418,783
298,523,789
404,418,783
298,523,789
18
(a)
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
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 2020
$
8,310,582
8,310,582
CONSOLIDATED
30 JUNE 2019
$
3,357,486
3,357,486
(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 2020
$
(8,584,901)
380,547
22,086
‐
(74,837)
232,361
(2,424,893)
(18,324)
(10,467,961)
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)
St George Mining Limited – Annual Report 2020
P 45
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
19
(i)
SHARE/OPTION BASED PAYMENTS
On 21 November 2019 at the Company’s Annual General Meeting the Company agreed and Shareholders
approved the issue of 20 performance rights to a Director of the Company.
On 3 December 2019, 20 performance rights were issued.
As at 30 June 2020 there was 172 performance rights on issue.
The performance rights had the below milestones attached to them.
(i)
(ii)
(iii)
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.
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.
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
120
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
‐
‐
‐
‐
31.07.21
31.07.21
31.07.21
‐
Indicative
Value per
Option
$0.125
$0.125
$0.125
‐
Total
Value
($)
156,250
156,250
437,500
750,000
Expense
for the
year ($)
52,082
52,082
145,832
249,996
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 performance rights 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
St George Mining Limited – Annual Report 2020
P 46
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
The performance rights issued on 17 December 2018 were ascribed the following value:
Class of
Rights
Class A
Class B
Class C
Total
Number of
Performance
Rights(1)
8
8
16
32
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 ($)
21,064
21,064
42,324
84,452
1. One performance right converts to 50,000 fully paid ordinary shares on achievement
Of the above performance rights granted, none were issued to key management personnel.
The performance rights issued on 3 December 2019 were ascribed the following value:
Number of
Performance
Rights(1)
5
5
10
20
Class of
Rights
Valuation
Date
Exercise
Price
Expiry
Date
Indicative
Value per
Option
Class A
Class B
Class C
Total
15.08.21
15.08.21
15.08.21
‐
1. Each Performance Right will convert into 50,000 shares.
2. The value of the rights was determined as per the date the rights were issued.
03.12.19
03.12.19
03.12.19
‐
$0.135
$0.135
$0.135
‐
‐
‐
‐
‐
Market
Price of
Shares
$0.135
$0.135
$0.135
‐
Total
Value
($)
33,750
33,750
67,500
135,000
Expense
for the
year ($)
11,810
11,810
22,480
46,100
A probability of 100% has been applied to the milestones occurring.
Of the above performance rights granted, the following were issued to key management personnel:
Key Management
Personnel
Grant Date
Number of
Performance
Rights
J Dawson
Class A
Class B
Class C
03.12.19
03.12.19
03.12.19
5
5
10
A summary of the movements of all the Company options issued as share based payments is as follows:
Number
Weighted
Average Exercise
Price $
Options outstanding as at 30 June 2018
Granted
Forfeited
Exercised
Expired
Options outstanding as at 30 June 2019
Granted
Forfeited
Exercised
Expired
Options outstanding as at 30 June 2020
Options exercisable as at 30 June 2019
Options exercisable as at 30 June 2019
St George Mining Limited – Annual Report 2020
28,079,714
‐
‐
‐
‐
28,079,714
2,500,000
‐
(3,600)
(3,500,000)
27,076,114
27,076,114
28,079,714
0.206
‐
‐
‐
‐
0.206
0.15
‐
0.20
0.25
0.20
‐
‐
P 47
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
The weighted average remaining contractual life of options outstanding at the year‐end was 1.18 years (2019:
1.15 years). The weighted average exercise price of outstanding options at the end of the report period was $0.20
(2019: $0.206).
20
(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
2020
$
447,399
557,523
1,004,922
30 June
2019
$
954,447
34,581
989,028
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 2020.
21
EVENTS SUBSEQUENT TO BALANCE DATE
On 24 July 2020 the Company advised the issue of 600,000 fully paid ordinary shares, the shares were issued as
consideration to acquire tenement E26/1041.
On 24 July 2020 the Company advised that 125 performance rights had been issued to directors and employees
of the Company.
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 2020
P 48
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
22
(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:
2020
Note
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Security bond
18(a)
10(a)
10(b)
‐
Financial liabilities
Trade and other payables
Lease liability
2019
13
‐
Note
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Security bond
18(a)
10(a)
10(b)
‐
Financial liabilities
Trade and other payables
Borrowings
13
14
Floating
interest
rate
Fixed
interest
rate
Non‐
interest
bearing
Total
Weighted
average
interest
rate
$
$
$
$
%
8,250,274
‐
‐
‐
8,250,274
20,000
‐
‐
29,659
49,659
40,308
97,150
147,056
1,000
285,514
8,310,582
97,150
147,056
30,659
8,585,447
0.28%
‐
‐
‐
‐
‐
124,178
124,178
‐
‐
‐
1,078,347
‐
1,078,347
1,078,347
124,178
1,202,525
‐
11.24%
‐
Floating
interest
rate
Fixed
interest
rate
Non‐
interest
bearing
Total
Weighted
average
interest
rate
$
$
$
$
%
3,305,936
‐
‐
‐
3,305,936
20,000
‐
‐
‐
20,000
31,550
22,313
98,251
1,000
153,114
3,357,486
22,313
98,281
1,000
3,479,080
‐
‐
‐
‐
854,424
854,424
3,553,417
‐
3,553,417
3,553,417
854,424
4,407,841
1.14%
‐
‐
‐
‐
‐
7.50%
‐
Based on the balances at 30 June 2020 a 1% movement in interest rates would increase/decrease the loss for the
year before taxation by $81,758 (2019: $25,339).
(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.
St George Mining Limited – Annual Report 2020
P 49
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
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.
(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
Borrowings
Lease liability
Later than one month and no later than one year:
Trade and other payables
30 June 2020
$
30 June 2019
$
1,078,347
‐
124,178
‐
1,202,525
3,553,417
854,424
‐
‐
4,407,841
Contractual maturities of
financial liabilities
As at 30 June 2020
Non‐derivatives
Lease liability
Total non‐derivatives
(d)
Net Fair Values
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
35,042
35,042
32,327
32,327
50,545
50,545
‐
‐
‐
‐
117,917
117,917
124,178
124,178
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 2020.
St George Mining Limited – Annual Report 2020
P 50
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
(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.
23
RELATED PARTIES
The Group has 100% owned subsidiaries Blue Thunder Resources Pty Ltd, Desert Fox Resources Pty Ltd and Destiny
Nickel Pty Ltd. St George Mining is required to make all the financial and operating decisions of these subsidiaries.
Subsidiaries of St George Mining
Limited
Desert Fox Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Destiny Nickel Pty Ltd
Country of Incorporation
Percentage Owned %
Australia
Australia
Australia
30 June 2020
100%
100%
100%
30 June 2019
100%
100%
100%
At 30 June 2020 balances due from the subsidiaries were:
Blue Thunder Resources Pty Ltd
Desert Fox Resources Pty Ltd
Destiny Nickel Pty Ltd
30 JUNE 2020
$
17,174,873
22,771,465
‐
39,946,338
30 JUNE 2019
$
12,305,971
22,028,224
‐
34,334,195
These amounts comprise of funds provided by the parent company for exploration activities. The amounts were
fully provided for as at 30 June 2020.
24
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.
25
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.
There were no joint ventures in place during and at the end of the financial year.
St George Mining Limited – Annual Report 2020
P 51
NOTES TO THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
26
(a)
PARENT COMPANY DISCLOSURE
Financial Position as at 30 June 2020
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
30 JUNE 2020
$
30 JUNE 2019
$
8,470,127
192,007
8,662,134
1,281,456
56,696
1,338,152
7,323,982
3,620,605
50,384
3,670,989
4,525,141
‐
4,525,141
(854,152)
50,695,010
588,369
(43,959,395)
7,323,984
34,366,720
476,722
(35,697,594)
(854,152)
(b)
Financial Performance for the year ended 30 June 2020
Australian Dollar $
Profit (loss) for the year
Other comprehensive income
Total comprehensive income (loss)
30 JUNE 2020
$
(8,530,951)
‐
(8,530,951)
30 JUNE 2019
$
(9,634,376)
‐
(9,634,376)
During the year $269,151 was transferred from the Reserves to accumulated losses on expiry of options.
(c)
Guarantees entered into by the Parent Entity
Other than as disclosed in Note 20 (b) the parent entity has not provided guarantees to third parties as at 30 June
2020.
St George Mining Limited – Annual Report 2020
P 52
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 2020 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 2020.
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: 10 September 2020
Perth, Western Australia
St George Mining Limited – Annual Report 2020
P 53
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
10 September 2020
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 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
P 54
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 2020, 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)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
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.
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.
We have determined the following matters to be the key audit matters to be communicated in our report.
Liability limited by a scheme approved
under Professional Standards Legislation
P 55
Key Audit Matters
How the matter was addressed in the audit
Inter alia, our audit procedures included the following:
i. Obtaining an understanding of
the underlying
transactions;
ii. Verifying all issued capital movements to the relevant
ASX announcements;
iii. Vouching proceeds from capital raisings to bank
supporting
other
relevant
and
statements
documentation;
iv. Verifying underlying capital
raising costs and
ensuring these costs were appropriately recorded;
v. Ensuring consideration for services provided are
measured in accordance with AASB 2 Share-Based
Payments and agreed the related costs to relevant
supporting documentation; and
vi. Ensuring the requirements of the relevant accounting
standards and disclosures achieve fair presentation
and reviewing the financial statements to ensure
appropriate disclosures are made.
Inter alia, our audit procedures included the following:
i. Verifying the inputs and examining the 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;
ii. Challenging management’s assumptions in relation
to the likelihood of achieving the performance
conditions;
iii. Assessing the fair value of the calculation through re-
performance using appropriate inputs; and
iv. Assessing
the accuracy of
the share-based
payments expense and the adequacy of disclosures
made by the Group in the financial report.
Issued Capital
(refer to Note 15(a))
The Group’s Issued Capital amounted to $50,695,011. During
the reporting year, 167,581,414 ordinary shares were issued
through placements and shares issued as consideration for
services, resulting in an increase in Contributed Equity of
$16,328,291 net of capital raising costs (refer to Note 15(a) to
the financial report).
Contributed Equity is a key audit matter due to:
•
•
the quantum of share capital issued during the year;
and
the varied nature of the movements during the year.
We have spent significant audit effort on ensuring the Issue
Capital was appropriately accounted for and disclosed.
Share based payments - Performance rights
(refer to Note 2(g) and Note 19)
As referred to in Note 19 to the consolidated financial
statements, the Company awarded 20 performance rights
(each performance right to converts into 50,000 ordinary
shares on conversion). The awards vest subject to the
achievement of certain vesting conditions. The company
also had on issue 152 performance rights granted in prior
year which are yet to vest.
The Group valued the performance rights 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 $135,000, vesting
over three years from the date of issue.
The Group has performed calculations to record the related
share-based payment expense of $380,547
the
consolidated statement of profit or
loss and other
comprehensive income.
in
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.
P 56 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 2020, 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 57 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 from pages 18 to 22 included in the directors’ report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of St George Mining Limited for the year ended 30 June 2020 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible or 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
10 September 2020
P 58 SHAREHOLDER INFORMATION
1
Distribution of holders
As at 10 September 2020 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
246
464
591
1,907
803
4,011
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 10 September 2020, who hold 20.41% of
the ordinary shares of the Company, were as follows;
Shareholder
John Prineas
J P Morgan Nominees Australia Pty Ltd
Impulzive Pty Ltd
Citicorp Nominees Pty Limited
Ms Betty Frilingos
Allcap Pty Ltd
HSBC Custody Nominees (Australia) Limited
Mr Paul Sumade Lee
National Nominees Limited
Yarandi Investments Pty Ltd
Mr Christopher Bell + Mrs Jennifer Bell
Mr David Davidson
Ms Swee Hoong Tan
Northmead Holdings Pty Ltd
RHB Securities Singapore Pte Ltd
Mr Paul Malcolm Koshy
Cheriton Holdings Pty Ltd
Mrs Karen Dawson
Chaos Investments Pty Limited
DDH 1 Drilling Pty Ltd
Number
10,504,501
8,685,796
8,504,641
7,370,228
6,318,182
6,261,219
5,028,489
4,770,833
4,700,000
4,562,686
4,514,831
4,150,000
4,078,600
3,500,000
3,455,000
3,403,665
3,374,651
3,294,121
3,200,000
3,106,060
St George Mining Limited – Annual Report 2020
P 59
SHAREHOLDER INFORMATION
5
Top 20 listed option holders
The names of the 20 largest listed option holders on the share register as at 10 September 2020, who hold
38.25% 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 Christopher Bell + Mrs Jennifer Bell
Mr Christopher John Girling + Ms Yvette Louise Clark
Mr Paul Sumade Lee
Mr Andrew Michael Inglis
Oceanic Capital Pty Ltd
Mr Jeremy James Coleman
Mr Ross Dix Harvey
Lipic Pty Ltd
Mr Ian Whitmore Tyler
Mr Vinod Kumar Deut
Mrs Karen Dawson
Impulzive Pty Ltd
Mr Barry Lipscombe + Mrs Frances Lipscombe
Blujak Pty Limited
Mr Rafli Rafli
Ms Kathryn Silas
6
Consistency with business objectives
Number
942,249
835,502
835,499
754,914
505,716
497,586
477,083
461,353
420,000
414,154
386,077
385,892
360,000
322,000
314,447
309,648
300,570
300,000
288,500
288,030
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 2020
P 60
TENEMENT INFORMATION
St George Mining Limited mineral interests as at 10 September 2020
EAST LAVERTON:
Tenement ID
Registered Holder
Location
E39/0981
E39/0982
E39/0985
E39/1229
E39/1461
E39/1472
E39/1475
E39/1476
E39/1467
E39/1492
E39/1518
E39/1520
E39/1549
E39/1572
E39/1608
E39/1667
E39/1722
E39/2027
E39/2028
E39/2029
E39/2030
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
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
MT ALEXANDER/HAWAII:
Tenement ID
Registered Holder
Location
E29/638
E29/548
E29/954
E29/962
E29/972
E29/2041
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
Blue Thunder Resources Pty Ltd
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Hawaii
PATERSON:
Tenement ID
Registered Holder
Location
E45/5226
E45/5422
St George Mining Limited
St George Mining Limited
Paterson
Paterson
Ownership
(%)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Ownership
(%)
75
100
100
100
100
100
100
Ownership
(%)
100
100
St George Mining Limited – Annual Report 2020
P 61
St George Mining Limited ACN 139 308 973
www.stgeorgemining.com.au
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