Saturn Metals Limited
ANNUAL REPORT 2018
ABN 43 619 488 498
1
Corporate Directory
Directors
Robert Tyson
Ian Bamborough Managing Director
Andrew Venn
Executive Chairman
Non-executive Director
Company Secretary
Ryan Woodhouse
Registered Office
Unit 1, 34 Kings Park Rd
WEST PERTH WA 6005
Telephone: +61 (0) 8 9382 3955
Email:
info@saturnmetals.com.au
Stock Exchange Listing
Securities of Saturn Metals Limited are
listed on the Australian Securities
Exchange (ASX)
ASX Code: STN
ACN: 619 488 498
Share Registry
Link Market Services Limited
Level 12 QV1 Building
St Georges Tce
PERTH WA 6000
Telephone +61 1300 554 474
Facsimile: +61 (0)2 9287 0303
Website:
www.linkmarketservices.com
Auditors
PricewaterhouseCoopers
Level, 15
125 St Georges Terrace
Perth WA 6000
Website
www.saturnmetals.com.au
2
Table of Contents
Chairman’s letter ............................................................................................................................................... 4
Review of Operations ....................................................................................................................................... 5
Schedule of tenements .................................................................................................................................... 12
Mineral resource estimation governance statement ...................................................................................... 13
Director’s report .............................................................................................................................................. 14
Remuneration report (audited) ....................................................................................................................... 18
Statement of profit or loss and other comprehensive income ...................................................................... 26
Statement of financial position ....................................................................................................................... 27
Statement of changes in equity ....................................................................................................................... 28
Statement of cash flows .................................................................................................................................. 29
Notes to the financial statements ................................................................................................................... 30
Director’s declaration ...................................................................................................................................... 46
Auditor’s independence declaration ............................................................................................................... 47
Independent auditor’s report .......................................................................................................................... 48
Additional ASX information ............................................................................................................................. 54
Shareholder information ................................................................................................................................. 63
Saturn Metals Limited is a company limited by shares, incorporated and domiciled in Australia. The financial
statements were authorised for issue by the Directors on 25 September 2018. The Directors have the power
to amend and reissue the financial statements.
Chairman’s letter
Dear Shareholders.
On 9 March 2018 Saturn Metals listed on the ASX following the successful raising of $7 million in a heavily
oversubscribed IPO. Shortly afterward, Saturn launched into a maiden drilling campaign at our flagship Apollo
Hill gold project where a current JORC 2012 Compliant Inferred Resource of 505,000oz (17.2Mt @ 0.9g/t Au)
exists. The intent of our drilling is to grow and improve this major gold system.
After completing nearly 10,000m of RC and diamond drilling in multiple phases, we are delighted with the
emerging picture at Apollo Hill. Results to date have provided a step-change in our understanding of the
deposit’s potential. Significant intersections returned in recent drilling include:
• 11m @ 4.06g/t Au from 132m within 18m @ 2.58g/t Au from 126m – AHRC0038;
• 20m @ 2.5g/t Au from 52m – AHRC0019;
• 16m @ 2.76g/t Au from 67m – AHRC0027.
Drill intersections returned clearly define a number of continuous higher-grade lode and shoot structures within
a broader mineralised envelope. In general, results compare favorably to historic mineralised intervals,
highlighting the potential to increase both the scale and grade of the known mineralised system from the
existing 0.5Moz resource. Importantly, mineralisation remains open along strike (NW and SE) and at depth,
highlighting the significant future exploration potential of this significant gold system.
We are incorporating all results into an updated resource estimate with a statement due for release later this
calendar year. Your board is optimistic about the pending update.
In addition, the Company has also been progressing work on its 1,000km2 contiguous land package with the
completion of high resolution airborne magnetics (750km2) and ground gravity surveys (250km2) providing a
fresh insight into the regional prospectivity and architecture of our tenure. Data compilation and interpretation
is continuing, with an aim towards developing new targets for drill testing later in 2018.
Looking forward, the Company will continue to explore and progress Apollo Hill with the next phase of work
planned to rapidly demonstrate the larger exploration potential of this extremely robust gold system.
Regionally, we plan to drill test a number of targets in the coming year and will continue to look for ways to
add value to this highly prospective land package.
On behalf of all shareholders, I would like to thank Ian Bamborough and his first-rate team for their excellent
efforts in setting up Saturn for success and for the results already achieved since listing.
Yours Sincerely,
Rob Tyson
Chairman
4
Review of
Operations
5
Review of Operations
Company Profile
Saturn Metals Limited (Saturn) was incorporated on 2 June 2017 for the purposes of gold exploration
and development and listed on the Australian Securities Exchange on 9 March 2018 after a
successful spin out from Peel Mining Limited.
Saturn’s primary objective is to focus on mineral exploration and resource opportunities that have the
potential to deliver growth for shareholders.
Saturn’s management strategy is to:
•
•
•
continue a robust exploration program in respect to the Apollo and Ra deposits towards rapidly
growing the Resource;
conduct further exploration activities within the Apollo and Ra Resource Area towards identifying and
growing new higher-grade gold lode/vein exploration targets and;
commence a cost-effective exploration program in respect to its highly prospective District
Tenement Package to seek, identify and develop large new Archaean Lode Gold deposits.
In addition, Saturn also intends to expand its current project portfolio by seeking opportunities to:
• apply for additional tenements to complement the Project; or
• acquire, either by way of an asset or share purchase, complementary projects.
• Shares on Issue: 56,000,001
• Share Price: A$0.16 (30/06/2018)
• Market Capitalisation: A$11M
• Cash: $4.982M (30/06/2018)
• 0.505Moz 2012 JORC Resource
6
Review of Operations
Apollo Hill Project
Our flagship Apollo Hill Project is at the heart of the world-class Eastern Goldfields 650km NE of Perth,
Western Australia.
The Project is located approximately 60km by road from the gold mining and
processing town of Leonora.
The Apollo Hill deposit itself has a published 2012 JORC Compliant Inferred
Resource of 17.2Mt at 0.9 g/t for 505,000 ounces of gold using a 0.5 g/t cut-off
(maximum depth of the resource at 180m below surface)¹.
The deposit, is characterised by simple metallurgy (free milling coarse gold with low cyanidation
characteristics) and thick zones of mineralisation. Importantly, the deposit has potential for a low stripping
ratio and a simple gravity gold focused circuit
During the year ~10,000m of RC and diamond drilling was undertaken in three programs to provide new
information for an additional resource estimate. Recent drilling has focused on extension corridors and on
targeting higher grade plunging shoots within the known resource. Results are increasing the size and
quality of the gold system.
7
Review of Operations
New results grow the Apollo Hill gold system
Significant near surface resource drilling intersections include:
AHRC0038, 11m @ 4.06g/t Au from 132m within 18m @ 2.58g/t Au from 126m;
AHRC0036, 10m @ 2.98g/t Au from 92m within 28m @ 1.20g/t Au from 82m;
AHRC0019, 20m @ 2.5g/t Au from 52m;
AHRC0027, 16m @ 2.76g/t Au from 67m;
AHRC0026, 8m @ 3.3g/t Au from 21m;
AHRC0024, 12m @2.8g/t Au from 4m;
AHRC0005 - 6m @ 2.26g/t Au from 11m and 8m @ 1.41g/t Au from 26m within 23m @ 1.15g/t Au from 11m.
Intersections compare favourably with historic mineralised intervals and highlight the potential to increase the
scale and grade of the known gold system from the current 0.5Moz JORC 2012 compliant inferred gold
resource of 17.2Mt at 0.9g/t Au.
A resource estimation process has begun with a new statement planned for later in 2018.
Apollo Hill recent drill hole results in plan view – new significant results sit
significantly outside the Published Resource outline illustrated.
8
Review of Operations
The Apollo Hill tenements
Excellent Infrastructure, Key Strategic Land Position
The Apollo Hill Project comprises 25 highly prospective gold mining, exploration and prospecting
licenses (approximately 1,000km2 of contiguous ground)
Saturn Metals tenure holds a central strategic land position amongst major and mid-tier Australian and
International gold companies.
Geology and Mineralisation
Located in the Archean aged Norseman-Wiluna Greenstone Belt, the Apollo Hill deposit occurs in a
mineralised structure associated with the 5km long and 500m wide Apollo-Ra Shear zone. This shear
zone is a parallel component of the district prevalent, gold fertile, and highly prospective Keith-Kilkenny
Fault system.
The extensive and intense hydrothermal alteration exhibits all the hallmarks of a major mineralised
Archean lode gold system.
The Company has identified several high priority regional prospects for follow up drilling.
9
Review of Operations
Exploring new frontiers
Regional Exploration
Potential to re-write the geology, prospectivity & history of the District
Recently completed high resolution airborne magnetics (750km²) and ground gravity surveys (250km²)
are providing a fresh insight on regional prospectivity and gold architecture of our 1,000km² tenure.
High Resolution Ground Gravity in
Progress over the Keith Kilkenny
Lineament
Lake Raeside – Yerilla Area
April 2018
10
Review of Operations
The Company’s tenement package is illustrated below. All tenements are 100% owned by
Saturn Metals Limited. Saturn currently holds 1,092km² of contiguous tenements in 25 mining,
exploration and prospecting licenses.
Saturn Metals Limited tenement map and land holdings
Competent Persons Statements
The information in this report that relates to the Apollo Hill Mineral Resource estimates, and reported
by the Company in compliance with JORC 2012 is based on information compiled by Jonathon Abbott,
a Competent Person who is a Member of the Australian Institute of Geoscientists. Jonathon Abbott is
a full-time employee of MPR Geological Consultants Pty Ltd and is an independent consultant to
Saturn Metals Limited. Mr Abbott has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of
Mineral Resources and Ore Reserves”. At the time of construction of the Apollo Hill estimates Mr
Abbott was an employee of Hellman & Schofield Pty Ltd. Mr Abbott consents to the inclusion in this
report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to exploration targets and exploration results is based on
information compiled by Ian Bamborough, a Competent Person who is a Member of The Australian
Institute of Geoscientists. Ian Bamborough is a fulltime employee and Director of the Company, in
addition to being a shareholder in the Company. Ian Bamborough 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’. Ian Bamborough consents
to the inclusion in the report of the matters based on his information in the form and context in which
it appears.
11
Schedule of tenements
Tenement Name/Location
Current Area
Area Unit
Measured km2 Grant Date
Expiry Date
E31/1063
40G
E31/1075
Ultrabasic
E31/1076
The Eye
E31/1087
McGregor
E31/1116
Southerner
E31/1132
E31/1163
E31/1164
Alone
Keith
Yerilla
E39/1198
Surrounds
E39/1887
Northerner
E39/1984
Glenorn
E40/0337
The Gap
E40/372
Artemis
M31/0486
Apollo Hill
M39/0296
Eagle Eye
P31/2068
Queen#8
P31/2069
Crossover
P31/2070
P31/2071
Hinge
Hinge
P31/2072
Black Bottle
P31/2073
Longer
E40/373
The Point
P31/2121
Mud Hut
E37/1357
The Right
E39/2092
Kilkenny
56
19
28
4
14
1
70
17
11
5
61
7
55
411
25
78
141
159
92
68
166
14
41
4
3
Standard Block
Standard Block
Standard Block
Standard Block
Standard Block
Standard Block
167.4
55.8
83.8
12
42
2.3
9/03/2015
8/03/2020
9/03/2015
8/03/2020
10/03/2015
9/03/2020
19/03/2015
18/03/2020
26/07/2016
25/07/2021
1/02/2017
31/01/2022
Standard Block
209.6
27/04/2018
26/04/2023
Standard Block
Standard Block
Standard Block
Standard Block
Standard Block
48.8
28.6
15
183
21
27/04/2018
26/04/2023
31/03/2009
30/03/2019
24/02/2016
23/02/2021
30/03/2017
29/03/2022
3/12/2014
2/12/2019
Standard Block
165.1
3/07/2018
2/07/2023
Ha
Ha
Ha
Ha
Ha
Ha
Ha
Ha
Standard Block
Ha
Standard Block
Standard Block
30
4.1
0.2
0.8
1.4
1.6
0.9
0.7
1.7
0.4
6.9
9.2
12/03/2015
11/03/2036
30/09/1993
29/09/2035
8/05/2015
7/05/2019
8/05/2015
7/05/2019
8/05/2015
7/05/2019
8/05/2015
7/05/2019
8/05/2015
7/05/2019
8/05/2015
7/05/2019
E Application
P Application
E Application
E Application
Saturn Metals Limited current tenement holdings
12
Mineral resource estimation governance statement
During the year, the Apollo Hill Mineral Resource estimate was updated from JORC 2004 to be compliant
with the JORC Code 2012 Edition.
Saturn Metals Limited has ensured that the Mineral Resource estimates are subject to good governance
arrangements and internal controls. The Mineral Resources reported have been generated by independent
external consultants who are experienced in best practices in modelling and estimation methods. The
consultants have also undertaken a review of the quality and suitability of the underlying information used to
generate the resource estimations. Additionally, Saturn Metals Limited carries out regular reviews and audits
of internal processes and external contractors that have been engaged by the Company.
The Mineral Resource estimate for Apollo Hill was compiled and reported in accordance with the
'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC
Code) 2012 Edition.
The table below sets out the Mineral Resource comparatives for 2016 and 2017.
Apollo Hill Inferred Mineral Resource estimate based on a 0.5 g/t Au cut-off grade
Apollo Hill
Gold Project
Ra Zone
Apollo Hill
Total
Mineral Resource - as at 30 June 2017
Au g/t
Koz
Mt
Mineral Resource - as at 30 June 2016
Au g/t
Koz
Mt
1.2
16
17.2
1.1
0.9
0.9
42
463
505
1.2
16
17.2
1.1
0.9
0.9
42
463
505
Note: The figures in the above table are rounded to reflect the precision of the estimates and include
rounding errors.
Competent Persons Statements
Apollo Hill
The information in this report that relates to the Apollo Hill Mineral Resource estimates, and reported by the
Company in compliance with JORC 2012 is based on information compiled by Jonathon Abbott, a
Competent Person who is a Member of the Australian Institute of Geoscientists. Jonathon Abbott is a full-
time employee of MPR Geological Consultants Pty Ltd and is an independent consultant to Saturn Metals
Ltd. Mr Abbott has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the
2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. At the time of
construction of the Apollo Hill estimates Mr Abbott was an employee of Hellman & Schofield Pty Ltd. Mr
Abbott consents to the inclusion in this report of the matters based on his information in the form and
context in which it appears.
13
Director’s report
Your Directors present their report on the entity Saturn Metals Limited (“Company”), for the financial year
ended 30 June 2018 and the comparative period.
Directors
The following persons were Directors of Saturn Metals Limited during the financial year and up to the date of
this report.
Robert Tyson – Appointed 2nd June 2017
Ian Bamborough – Appointed 12th August 2017
Andrew Venn – Appointed 29th September 2017
Simon Hadfield – Resigned 19th October 2017
Graham Hardie – Resigned 19th October 2017
Directors’ interests in shares and options
Directors’ interests in shares and options as at the date of this report are set out in the table below.
Director
Shares Directly and
Indirectly Held
Options
Performance Rights
Ian Bamborough
1,500,000
3,000,000
Robert Tyson
Andrew Venn
210,000
250,000
500,000
500,000
-
500,000
-
Principal activities
The principal activity of the Company is the exploration for economic deposits of precious metals. For the
period of this report, the emphasis has been on gold focused in Western Australia.
Results
The loss for the Company for the financial year after providing for income tax amounted to $857,320 (2017:
Nil). Loss per share $0.03 (2017: Nil).
Dividends
No dividends were paid or proposed during the year.
Review of operations
A review of the operations of the Company during the financial year and the results of those operations are
contained in pages 5 to 13 in this report.
Significant changes in the state of affairs
On 8 September 2017, the Board of Peel Mining Limited announced plans to vend its Apollo Hill Gold project
into Saturn Metals Limited (a wholly owned subsidiary) with the intention to list the Company on the ASX, via
an initial public offering (IPO). The Company held a general meeting on 10 October 2017 at which they
obtained shareholder approval for the transaction. Post successful IPO/Listing of Saturn, Peel would hold a
significant interest in the Company.
14
Director’s report
The Company employed Mr Ian Bamborough as its Managing Director on the 12th August 2017. Mr
Bamborough’s continued employment was conditional on Saturn Metals Limited listing on the Australian
Securities Exchange, which occurred on the 9th March 2018. Mr Bamborough was issued 1,000,000
performance rights in the Company in lieu of salary. Each right had converted to an ordinary share, for no
consideration, upon the Company listing on the Australian Securities Exchange. Mr Bamborough’s
performance rights were converted to ordinary shares on 9 March 2018. Mr Bamborough has been issued
3,000,000 options with an exercise price of 20 cents expiring 9 April 2021.
The Company appointed Mr Andrew Venn as a non-executive Director on the 29th September 2017. Mr
Venn’s continued employment was conditional on Saturn Metals Limited listing on the Australian Securities
Exchange, which occurred on the 9th March 2018. Mr Venn has been issued 500,000 options with an exercise
price of 20 cents which expire 9 April 2021.
The Board of the Company elected Mr Robert Tyson as its Executive Chairman on the 19th September 2017.
Mr Tyson was issued 500,000 performance rights in the Company. Each right will convert to an ordinary
share, for no consideration, upon the Company releasing an updated resource estimate for the Apollo Hill
Gold project to the market within 12 months of listing on the Australian Securities Exchange. Mr Tyson has
been issued 500,000 options with an exercise price of 20 cents expiring 9 April 2021.
On the 11th October 2017 the Company issued 20,000,000 shares to Apollo Mining Pty Ltd’s nominee for the
purchase of the Apollo Hill Gold project. The nominee company was Peel Mining Limited, the parent
company of both entities.
The Company opened its initial public offering on the 10th January 2018 seeking to raise up to $7,000,000
though the issue of up to 35,000,000 shares at $0.20 per Share. The offer was announced closed on the 20
February 2018 with the maximum amount of $7,000,000 raised. The Company was admitted to the Official
List of ASX Limited on Wednesday 7 March 2018. Official Quotation of the following securities commenced
on Friday, 9 March 2018.
The Directors are not aware of any other significant changes in the state of affairs of the Company occurring
during the financial year, other than disclosed in this report.
Events occurring after balance date
There are no matters or circumstances that have arisen since the end of the financial period which
significantly affected or may significantly affect the operations of the Company, the results of those
operations or the state of affairs of the Company in future financial years.
Likely developments and expected results
It is the Board’s current intention that the Company will seek to progress exploration on current projects.
These activities are inherently risky and there are no certainties that the Company will successfully achieve
its objectives.
Information on Directors
Ian Bamborough (BSc(Hons), MSc, MBA, MAIG, GAICD) – Managing Director
Mr Bamborough is a geologist with 20 years leadership experience in the mining industry. Mr Bamborough
developed his career with Newmont Mining Corporation and was more recently managing Director of ASX
listed Spectrum Rare Earths Limited. Mr Bamborough has previously served as a Director of the Northern
Territory Mining Board, and currently holds directorships with private exploration and mining companies
Roman Pty Ltd and Reef Mining Pty Ltd.
The Board considers that Mr Bamborough is not an independent Director.
Mr Bamborough holds 1,500,000 shares in Saturn Metals Limited and 3,000,000 share options.
15
Director’s report
Robert Maclaine Tyson (B.App Sc(Geol), GradDip Applied Finance(SIA) MAusIMM) – Executive Chairman
Mr Tyson is a geologist with more than 20 years resources industry experience having worked in exploration
and mining-related roles for companies including Cyprus Exploration Pty Ltd, Queensland Metals Corporation
NL, Murchison Zinc Pty Ltd, Normandy Mining Ltd and Equigold NL. My Tyson is the Managing Director of
Peel Mining Limited, a role he has held for 11 years.
The Board considers that My Tyson is not an independent Director.
Mr Tyson holds 210,000 shares in Saturn Metals Limited and 500,000 share options and 500,000
performance rights.
Andrew Venn (BBus, GradDip Applied Finance, FFin) – Non-Executive Director
Mr Venn has over 20 years mining industry experience and currently holds a senior executive position with
DDH1 Drilling Pty Ltd, a major mining contractor. Mr Venn has previously held senior positions across
financing and operations for Argonaut Limited, Orica Mining Services and ICI Explosives and is a Fellow of
the Financial Services Institute of Australia.
The Board considers that Mr Venn is an independent Director.
Mr Venn 250,000 shares in Saturn Metals Limited and 500,000 share options.
Simon Hadfield – Non-Executive Director
Mr Hadfield has more than 30 years company management experience and has held directorships in
publicly-listed industrial and resource companies. Mr Hadfield is a Director of RIU Conferences Pty Ltd, Peel
Mining Limited and of Resource Information Unit. No other directorships were held in the past 3 years.
Resigned 19 October 2017.
Graham Hardie FCA– Non-Executive Director
Mr Hardie is the principal of Hardie Finance Corporation, a private Perth-based property development
company, and is also the principal of Entertainment Enterprises, a private Perth-based hospitality company.
He is also a Non-Executive Director of Peel Mining Limited. He is a Fellow of the Institute of Chartered
Accountants and a former partner in a leading Chartered Accounting firm. He has extensive commercial and
financial experience and has held board positions on a number of public companies in the mining, media,
transport and retail industries. No other directorships were held in the past 3 years.
Resigned 19 October 2017.
Ryan Woodhouse – Company Secretary
Mr Woodhouse has 11 years of experience in the mining and energy industries in the area of accounting and
governance. He holds a Bachelor of Commerce from Curtin University and is a member of the Institute of
Chartered Accountants. Mr Woodhouse is currently holds the position of Company Secretary with Peel
Mining Limited.
Mr Woodhouse was appointed Company Secretary on 6 June 2017.
16
Director’s report
Meetings of Directors
Director’s attendance at Directors meetings are shown in the following table:
Director
I Bamborough
R Tyson
A Venn
S Hadfield
G Hardie
Number held whilst in office
Number attended
3
4
2
2
2
3
4
2
2
2
17
Remuneration report (audited)
The remuneration report is set out under the following headings:
a) Principles used to determine the nature and amount of remuneration
b) Details of remuneration
c) Service agreements
d) Share-based compensation
e) Option holdings of key management personnel
f) Performance rights holdings of key management personnel
g) Share holdings of directors and key management personnel, and
h) Additional information
a) Principles used to determine the nature and amount of remuneration
The objective of the remuneration framework of Saturn Metals Limited is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of
strategic objectives and the creation of value for shareholders. The Board believes that executive remuneration
satisfies the following key criteria:
•
•
•
•
•
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
capital management
These criteria result in a framework which can be used to provide a mix of fixed and variable remuneration, and a
blend of short and long-term incentives in line with the Company’s remuneration policy.
Board and senior management
The remuneration of an executive Director will be decided by the Board, without the affected executive Director
participating in that decision-making process.
The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent
variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the
Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’
remuneration within that maximum will be made by the Board having regard to the inputs and value to the
Company of the respective contributions by each non-executive Director. The current amount has been set at an
amount not to exceed $300,000 per annum.
In addition, a Director may be paid fees or other amounts (i.e. subject to any necessary Shareholder approval, non-
cash performance incentives such as Options) as the Directors determine where a Director performs special
duties or otherwise performs services outside the scope of the ordinary duties of a Director.
Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively
in or about the performance of their duties as Directors.
The Board reviews and approves the remuneration policy to enable the Company to attract and retain executives
and Directors who will create value for Shareholders having consideration to the amount considered to be
commensurate for a company of its size and level of activity as well as the relevant Directors’ time, commitment
and responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans
including the appropriateness of performance hurdles and total payments proposed. Senior management are paid
based on applicable market rates.
Remuneration is not linked to past Company performance but rather towards generating future shareholder wealth
through share price performance. The Board and management are issued share options in the company on a
periodic basis as a means to link executive rewards to shareholder value.
Saturn Metals Limited listed on 9 March 2018 at 20c per share and the share price at 30 June 2018 was 16c (2017:
Nil). The Company has recorded a loss this financial year to date. No dividends have been declared or paid during
the reporting period.
18
Remuneration report (audited)
b) Details of remuneration
Details of the nature and amount of each element of the remuneration of each of the Directors of Saturn
Metals Limited and other key management personnel of the Company during the year ended 30 June 2018
are set out in the following table:
Table 1: Director and Key Management Personnel remuneration
Short-Term
Employment
Benefits
Cash salary and
fees
Post-
Employment
Long-Term
Benefits
Share Based Payment
Super-
annuation
Leave
benefits
Options
Performance
Rights
Total
Performance
Related
2018
Directors
I Bamborough
R Tyson
A Venn
Total
$
$
$
$
$
$
%
46,152
16,667
16,667
79,486
21,186
1,583
1,583
24,352
4,540
-
-
4,540
154,821
34,656
34,656
224,133
200,000
52,091
-
252,091
426,699
104,997
52,906
584,602
83%
83%
66%
-
2017: Nil
c) Service agreements
Remuneration and other terms of employment for the Directors and key management personnel, except
those of non-executive Directors are formalised in Employment Agreements or Letters of Offer. Details of the
employment conditions for Directors and key management personnel are set out below:
The Company has entered into an executive services agreement with Mr Ian Bamborough pursuant to which
Mr Bamborough is appointed Managing Director of the Company on the following terms:
(a)
(b)
(c)
(d)
(e)
(f)
The Company will employ the Managing Director for an initial period of 6 months commencing on
12th August 2017 during which time the Company will seek to list on the ASX. Post listing,
employment in this capacity will continue on a full time on basis.
The Company will pay to the Managing Director for services rendered a salary of $180,000 per
annum. During the Initial Period, the portion of the Salary owing to the Managing Director shall be
satisfied by way of the issue of the Performance Rights (defined below at Share Based
Compensation) for the first six months of employment, in the event the Company obtains a
successful Listing. Following expiry of the Initial Period the Salary shall increase to $200,000 per
annum.
On the commencement date, the Managing Director will be issued 1,000,000 Class A Performance
Rights under the Company’s Performance Rights Plan.
The Managing Director is entitled to 1,000,000 Class A Options, 1,000,000 Class B Options and
1,000,000 Class C Options as part of a long-term incentive program to be granted pursuant to the
Company’s Incentive Option Plan.
The Company will reimburse the Managing Director for all reasonable expenses (including travel and
accommodation) incurred in the performance of his duties.
The Company may terminate the service agreement on 1 month’s written notice during the Initial
Period and without reason on 3 months’ notice thereafter and immediately without notice in the
event of serious misconduct.
19
Remuneration report (audited)
(g)
The Managing Director may terminate the executive service agreement at any time and without
notice if the Company commits a serious breach of the executive service agreement or by giving
three (3) months’ notice to the Company.
The Executive Service Agreements otherwise contains terms and conditions which are considered standard
for agreements of their nature, including those relating to confidentiality, non-disclosure and assignment.
The Company has entered into an executive services agreement with Mr Robert Tyson pursuant to which Mr
Tyson is appointed Executive Chairman of the Company on the following terms:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
The service agreement will continue for a period of 6 months from 29th August 2017 unless
terminated beforehand by either party. Post listing, employment in this capacity will be on an
ongoing basis.
The Company will pay to the Executive for services rendered a salary of $50,000 per annum
(excluding superannuation) payable in equal monthly instalments in arrears (or as otherwise agreed)
and to be reviewed annually.
In addition to the Salary, on the Commencement Date, the Executive Chairman will be issued 500,000
Class B Performance Rights under the Company’s Performance Rights Plan (conditions defined
below at Share-based Compensation).
The Executive Chairman is entitled to 500,000 Class A Options as part of a long-term incentive
program to be granted under the Company’s Incentive Option Plan.
The Company will reimburse the Executive Chairman for all reasonable expenses (including travel
and accommodation) incurred in the performance of his duties.
The Company may terminate the service agreement without reason on 3 months’ notice to the
Executive Chairman, on 1 months’ notice in the event of serious breach, incompetence or incapacity
or summarily without notice if the Executive Chairman is convicted of a criminal offence.
The Executive Chairman may terminate the executive service agreement at any time and without
notice if the Company commits a serious breach of the executive service agreement or by giving
three (3) months’ notice to the Company.
The Executive Service Agreements otherwise contains terms and conditions which are considered standard
for agreements of their nature, including those relating to confidentiality, non-disclosure and assignment.
The Company has entered into an appointment letter with Andrew Venn pursuant to which Mr Venn is
appointed Non-Executive Director of the Company on the following terms:
(a)
(b)
(c)
(d)
Mr Venn’s appointment will commence on 21 September 2017 and automatically ceases at the end
of any meeting at which he is not re-elected as a Director by the shareholders of the Company or
otherwise ceases in accordance with the Constitution;
$50,000 per annum (plus superannuation) payable by the Company fortnightly in arrears.
Remuneration shall be subject to annual review by the Board of the Company and approval by the
shareholders of the Company (if required);
Mr Venn is entitled to 500,000 Class A Options as part of a long-term incentive program.
The Company will reimburse Mr Venn for all reasonable expenses (including travel and
accommodation) incurred in the performance of his duties where agreed by the Board.
The appointment letter otherwise contains terms and conditions that are considered standard for
agreements of this nature.
20
Remuneration report (audited)
S Hadfield (non-executive Director)
Mr Hadfield was appointed a Director of the Company at inception. Mr Hadfield had not entered into a formal
contract with the Company in respect to his appointment as a non-executive Director. Mr Hadfield had not
received any remuneration in his role as a Director of the Company. Mr Hadfield resigned 19 October 2017.
G Hardie (non-executive Director)
Mr Hardie was appointed a Director of the Company at inception. Mr Hardie had not entered into a formal
contract with the Company in respect to his appointment as a non-executive Director. Mr Hardie had not
received any remuneration in his role as a Director of the Company. Mr Hardie resigned 19 October 2017.
d) Share-based compensation
(i) Options
Options over shares in Saturn Metals Limited may be granted under the Company’s Incentive Option Plan
which was created in September 2017 and approved by the Board. The Incentive Option Plan is designed to
provide long-term incentives for Eligible Participants to deliver long-term shareholder returns. Under the plan,
the Board may from time to time, it its absolute discretion, make a written offer to any Eligible Participant to
apply for Options, upon the terms set out in the Plan and upon such additional terms and conditions as the
Board determines. An Option may be made subject to vesting conditions as determined by the Board in its
discretion and as specified in the offer for the Option.
Details of options over ordinary shares in the Company provided as remuneration to each director and key
management personnel of Saturn Metals Limited are set out below. When exercisable, each option is
convertible into one ordinary share of Saturn Mining Limited. Further information on the options is set out in
note 18(a) to the financial statements.
Name
Fair Value at Grant Date
Directors
Ian Bamborough
Robert Tyson
Andrew Venn
2018
$
403,785
66,529
66,529
2017
$
-
-
-
Number of options
granted during year
2017
2018
Number of options vested
during year
2018
2017
3,000,000
500,000
500,000
-
-
-
-
-
-
-
-
-
The assessed fair value at grant date of options granted to the individuals is allocated equally over the
period from grant date to vesting date. Fair values at grant date have been determined using a Black-Scholes
option pricing model that takes into account the exercise price, term of the option, impact of dilution, share
price at grant date, price volatility of the underlying share, expected dividend yield and the risk-free interest
rate for the term of the option.
The classes, terms and conditions of each grant of options existing at reporting date is as follows:
Grant Date
Date Vested & Exercisable
Expiry Date
Exercise Price Value per Option
9 March 2018
Class A - 9 March 2019 (33%)
Class B - 9 March 2020 (33%)
Class C - 9 March 2021 (33%)
at Grant Date
9 April 2021
20 Cents
13 Cents
9 March 2018
Class A – 9 March 2019
9 April 2021
20 Cents
13 Cents
No options were exercised by Directors of Saturn Metals Limited.
21
Remuneration report (audited)
(i) Performance Rights
Performance Rights in Saturn Metals Limited may be granted under the Incentive Performance Rights Plan
which was created in September 2017 and approved by the Board. The Incentive Performance Rights Plan is
designed to provide short-term incentives for Eligible Participants to deliver short and long term shareholder
returns. A Performance Right may be made subject to vesting conditions as determined by the Board in its
discretion and as specified in the offer for the Performance Right. A Performance Right will lapse upon the
earlier to occur of:
(i)
(ii)
an unauthorised dealing in the Performance Right;
a vesting condition in relation to the Performance Right is not satisfied by its due date, or becomes
incapable of satisfaction, unless the Board exercises its discretion to waive the vesting conditions
and vest the Performance Right in the circumstances set out in paragraph
or the Board resolves, in its absolute discretion, to allow the unvested Performance Rights to
remain unvested after the Relevant Person ceases to be an Eligible Participant;
(iii)
Details of performance rights in the Company provided as remuneration to each Director and key
management personnel of Saturn Metals Limited are set out below. When conditions are met, each
performance right is convertible into one ordinary share of Saturn Mining Limited. Further information on the
performance rights is set out in note 18(b) to the financial statements.
Grant Date
Date Vested & No. Exercisable
Expiry Date
Exercise Price
9 March 2018
9 March 2018
Class A - 1,000,000 in lieu of
salary and vesting upon
successful listing of Saturn
Metals Limited.
Class B - 500,000 on release of
an updated resource estimate
for the Apollo Hill Gold project.
12 March
2018
(Exercised)
Nil
consideration
9 March
2019
Nil
consideration
20 Cents
Fair value
per option at
Grant Date
20 Cents
Name
Fair Value at Grant Date
Directors
Ian Bamborough
Robert Tyson
Andrew Venn
2018
$
200,000
100,000
-
2017
$
-
-
-
Number of performance
rights granted during
year
Number of performance
rights vested during year
2018
2017
2018
2017
1,000,000
500,000
-
-
-
-
1,000,000
-
-
-
-
-
The fair value of the rights is determined on the market price of the company’s shares at grant date, with an
adjustment made to take into account the one year vesting period. The maximum value of the performance
rights shares yet to vest has been determined as the amount of the grant date fair value of the rights that is
yet to be expensed. For the 2018 grant, the maximum value yet to vest for this grant was estimated based on
the share price of the company at grant date. The minimum value of performance rights shares yet to vest is
nil, as the shares will be forfeited if the vesting conditions are not met. The Directors do not receive any
dividends and are not entitled to vote in relation to the performance rights during the vesting period (note
18(b)).
22
Remuneration report (audited)
e) Option holdings of key management personnel (KMP)
Balance
at the
start of
the year
-
-
-
-
30 June 2018
Directors
I Bamborough
R Tyson
A Venn
KMP
Granted as
compensation
Expired
during
year
Exercised
Other
Change
Balance
at end of
the year
Vested and
exercisable
Unvested
3,000,000
500,000
500,000
4,000,000
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
500,000
500,000
4,000,000
-
-
-
-
3,000,000
500,000
500,000
4,000,000
No options were exercised by Directors of Saturn Metals Limited.
f) Performance rights holdings of key management personnel (KMP)
Balance
at the
start of
the year
-
-
-
-
30 June 2018
Directors
I Bamborough
R Tyson
A Venn
KMP
Granted as
compensation
Expired
during
year
Converted to
Shares
1,000,000
500,000
-
1,500,000
-
-
-
-
1,000,000
-
-
1,000,000
Balance
at end of
the year
-
500,000
-
500,000
Vested and
exercisable
Unvested
-
-
-
-
-
500,000
-
500,000
g) Share holdings of Directors and key management personnel – Shares in Saturn Metals Limited (number)
Balance at
1 July 2017
Received during
the year conversion
of performance rights
Other changes
during the year
Balance at
30 June 2018
-
-
-
-
1,000,000
-
-
1,000,000
500,000
210,000
250,000
960,000
1,500,000
210,000
250,000
1,960,000
30 June 2018
Directors
I Bamborough
R Tyson
A Venn
KMP
h) Additional information
Other transactions with key management personnel
The company’s Executive Chairman, Mr Robert Tyson is also the Managing Director of Peel Mining Limited,
which has a 35.71% holding in the Company and previous owner of the Apollo Hill Gold Project. During the
year Saturn Metals Limited paid Peel Mining Limited for costs associated with its Initial Public Offering and
Management Services.
The total of transactions with Peel Mining Limited during the year was $448,522. (2017: Nil). The outstanding
balance at year end was $2,049. A non-executive Director, Mr Andrew Venn is also the COO of DDH1 Drilling
Pty Ltd. Saturn Metals Limited purchased drilling services from DDH1 Drilling Pty Ltd during the year. The
terms are based on normal commercial terms and conditions.
The total transaction with DDH1 Drilling Pty Ltd during the year was $246,571 (2017: Nil). The outstanding
balance at year end was $245,571.
Cash bonuses
No cash bonuses have been paid by the Company during the financial year (2017:Nil).
23
Remuneration report (audited)
Share-based compensation: options & performance rights
Other than options and performance rights granted under the Incentive Option Plan and the Performance
Rights Plan as described in (d) above, there were no options issued to or exercised by Directors of Saturn
Metals Limited or other key management personnel during the year.
Use of remuneration consultants
During the year ended 30 June 2018, the Company did not employ the services of a remuneration consultant
to review its existing remuneration policies and to provide recommendations in respect of both executive
short-term and long-term incentive plan design.
Voting and comments made at the Company’s Annual General Meeting
As Saturn Metals Limited was incorporated on 7 June 2017 and listed on the ASX on 9 March 2018, the
Company has yet to hold its first Annual General Meeting.
End of Audited Remuneration Report
Shares under option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
9 March 2018
Expiry date
9 April 2021
Issue price of
shares
Number under
option
20 Cents
4,000,000
No option holder has any right under the options to participate in any other share issue of the Company.
Shares issued on the exercise of options
Date of Exercise
Nil
Issue price of shares
2017
2018
cents
cents
-
-
Number of shares issued
2018
Number
-
2017
Number
-
Shares under performance rights
Unissued ordinary shares of the Company under performance rights at the date of this report are as follows:
Date options granted
9 March 2018
Expiry date
9 March 2019
Exercise Price
Nil
consideration
Number under
performance rights
500,000
Shares issued on the conversion of performance rights
Date of Exercise
9 March 2018
Issue price of shares
2017
2018
cents
cents
-
20 Cents
Number of shares issued
2018
Number
1,000,000
2017
Number
-
Indemnification and Insurance of Directors and Officers
During the financial year the Company paid a premium of $3,377 (2017: $0) to insure the Directors and
officers of the Company. The policy indemnifies each Director and officer of the Company against certain
liabilities arising in the course of their duties.
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.
24
Directors Report
Environmental Regulation
The Company holds exploration licences and mining leases in Australia. These licences specify guidelines
for environmental impacts in relation to exploration activities. The licence conditions provide for the full
rehabilitation of the areas of exploration in accordance with the respective jurisdiction’s guidelines and
standards. The Company is not aware of any significant breaches of the licence condition.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act
2001 is included at the end of this financial report.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company are important. The Board has considered the
position and is satisfied that the provision of the non-audit services is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the
provision of non-audit services by the auditor as set out below did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and
objectivity of the auditor; and
• None of the services undermine the general principles relating to the auditor independence as set out in
APEX 110 Code of Ethics for Professional Accountants.
Details of the fees paid to the auditor during the year can be found at note 19 of the notes to the financial
statements.
This report is made in accordance with a resolution of the Board of Directors and signed for on behalf of the
Board by:
Ian Bamborough
Managing Director
Perth, Western Australia
25th September 2018
25
Statement of profit or loss and other
comprehensive income
For the year ended 30 June 2018
2018
2017
Note
$
$
Interest revenue
Revenue and other income
Share-based remuneration to Directors
Employee and Directors’ benefit expenses
Administration expenses
Loss before income tax
Income tax benefit (expense)
Loss from continuing operations after income tax
Other comprehensive income
Total Loss and comprehensive income for the year
attributable to the members of Saturn Metals Limited
Basic Loss per share for the year attributable to the
members of Saturn Metals Limited
Diluted Loss per share for the year attributable to the
members of Saturn Metals Limited
10
18
11
12
20
20
27,334
27,334
(476,224)
(157,507)
(250,923)
(857,320)
-
(857,320)
-
(857,320)
(0.03)
(0.03)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
-
-
-
-
-
-
-
-
-
-
-
26
Statement of financial position
For the year ended 30 June 2018
Current Assets
Cash and cash equivalents
Trade and other receivables
Loan to Parent
Total Current Assets
Non-Current Assets
Plant & equipment
Exploration assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Accumulated losses
Option reserve
Total Equity
Note
2018
$
2017
$
3
4
5
6
7
8
9
9
4,982,038
195,080
-
5,177,118
101,379
5,086,787
5,188,166
10,365,284
315,379
315,379
315,379
10,049,905
10,631,001
(857,320)
276,224
10,049,905
The above statement of financial position should be read in conjunction with the accompanying notes.
-
-
1
1
-
-
-
1
-
-
-
1
1
-
-
1
27
Statement of changes in equity
For the year ended 30 June 2018
Contributed
Equity
$
Accumulated
Losses
$
Reserves
$
Total
Equity
$
Balance at 1 July 2017
Loss for the year
Total comprehensive
profit for the year
Transactions with equity
holders in their capacity
as equity holders:
Issue of share capital
Share issue expenses
Share based payments
Balance at 30 June 2017
Loss for the year
Total comprehensive loss
for the year
Issue of share capital
Share issue expenses
Share based payments
Balance at 30 June 2018
Note
9
8
8
9
9
8
8
9
-
-
1
-
-
1
-
-
11,200,001
(569,000)
-
10,631,001
-
-
-
-
-
-
(857,320)
(857,320)
-
-
-
(857,320)
-
-
1
-
-
1
-
-
-
-
-
-
-
-
-
-
276,224
276,224
(857,320)
11,200,001
(569,000)
276,224
10,049,905
The above statement of changes in equity should be read in conjunction with the accompanying notes.
28
Statement of cash flows
For the year ended 30 June 2018
Note
13
Cash flows from operating activities
Payments to suppliers and employees
Net cash outflow from operating activities
Cash flows from investing activities
Payments for exploration expenditure
Payments for purchase of plant and equipment
Interest received
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the start of year
Cash and cash equivalents at the end of year
3
The above statement of cash flows should be read in conjunction with the accompanying notes.
2018
$
2017
$
(562,596)
(562,596)
(790,296)
(106,020)
9,949
(886,367)
7,000,001
(569,000)
6,431,001
4,982,038
-
4,982,038
-
-
-
-
-
-
-
-
-
-
-
-
29
Notes to the financial statements
1. Significant Changes to Accounting Policy
The principal accounting policies adopted in the preparation of the financial report are set out in the notes
below including note 22. These policies have been consistently applied to all the years presented, unless
otherwise stated. The financial report includes the financial statements for the Company at the end of, or
during the financial years ended 30 June 2018 and the comparative period.
2. Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief decision maker has been identified as the Board of Directors. The Board
of Directors have determined that Saturn Metals Limited only has one segment, being exploration for precious
metals at the Apollo Hill Gold Project, in Western Australia.
3. Cash & Cash Equivalents
For statement of cash flows preparation purposes, cash and cash equivalents includes cash on hand and short
term deposits held at call (other than deposits used as cash backing for performance bonds) with financial
institutions. Any bank overdrafts are shown within borrowings in the current liabilities on the statement of
financial position.
Cash at bank and in hand
Term deposits with financial institutions
Refer to note 14 for the policy on financial risk management
2017
$
2018
$
732,038
4,250,000
4,982,038
4. Trade and other receivables
Trade receivables, which generally have 30 to 90 day terms, are recognised initially at fair value and
subsequently at amortised cost less an allowance for any potentially unrecoverable amounts. An allowance
for doubtful debts is made when there is objective evidence that the Company may not be able to collect the
debts. The allowance for bad debts is recognised in a separate account. Bad debts are written off when
identified.
The Company classifies its financial assets as loans and receivables. Management determines the
classification at initial recognition and where applicable re-evaluates this designation at the end of each
reporting period. Loans and receivables are carried at amortised cost using the effective interest method. The
Company assesses at the end of each financial period whether a financial asset is impaired.
Receivables (Current)
Receivable from parent
GST recoverable from taxation authority
Accrued income
Prepayments
Refer to note 14 for the policy on financial risk management
2018
$
2017
$
-
161,191
17,384
16,505
195,080
-
-
-
1
-
-
-
1
30
Notes to the financial statements
5. Property, Plant & Equipment
Plant and equipment
All assets acquired, including plant and equipment are initially recorded at their cost of acquisition, being the
fair value of the consideration provided plus incidental costs directly attributable to the acquisition.
Depreciation on plant and equipment is calculated using the straight-line method to allocate their cost or
revalued amounts over their estimated useful lives from the time the asset is held ready for use as follows:
3-10 years
- Plant
3-8 years
- Vehicles
- Office equipment
3-5 years
- Computer software 3-5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is impaired.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
Impairment of assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and
is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs of disposal and value in use. It is determined for an
individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs of
disposal and it does not generate cash inflows that are largely independent of those from other assets or
groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which
the asset belongs.
Nil impairment losses have been recognised for the year ending 30 June 2018 (2017: $nil).
Plant and equipment
Depreciating plant and equipment
Less accumulated depreciation
Total property, plant and equipment
Reconciliation
Carrying amount at beginning of year
Additions
Depreciation expense
Disposals
Closing balance
2018
$
106,020
(4,641)
101,379
-
106,020
(4,641)
-
101,379
2017
$
-
-
-
-
-
-
-
-
31
Notes to the financial statements
6. Exploration and evaluation assets
All exploration and evaluation expenditure is capitalised under AASB 6 Exploration for and Evaluation of
Mineral Resources. Mineral interest acquisition costs and exploration and evaluation expenditure incurred is
accumulated and capitalised in relation to each identifiable area of interest. These costs are only carried
forward to the extent that the Company’s right to tenure to that area of interest are current and either the costs
are expected to be recouped through successful development and exploitation of the area of interest
(alternatively by sale) or where areas of interest have not at reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active, and
significant operations are undertaken in relation to the area of interest.
Amortisation is not charged on costs carried forward in respect of areas of interest in the exploration and
evaluation phase or development phase until production commences.
On 8 September 2017, the Board of Peel Mining Limited announced plans to vend its Apollo Hill Gold project
into Saturn Metals Limited (a wholly owned subsidiary) with the intention to list the Company on the ASX, via
an initial public offering (IPO). The Company held a general meeting on 10 October 2017 at which they obtained
shareholder approval for the transaction. Post successful IPO/Listing of Saturn, Peel would hold a significant
interest in the Company.
On the 11th October 2017 the Company issued 20,000,000 shares to Apollo Mining Pty Ltd’s nominee for the
purchase of the Apollo Hill Gold project. The nominee company was Peel Mining Limited, the parent company
of both entities.
At cost
Reconciliation
Opening balance
Acquisition of Apollo Hill Gold project
Exploration expenditure
Impairment Expense
Closing balance
2018
$
5,086,787
-
4,000,000
1,086,787
-
5,086,787
2017
$
-
-
-
-
-
-
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful
development and commercial exploitation, or alternatively the sale, of the respective areas of interest.
7. Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the
financial year which are unpaid. The amounts are unsecured and are usually payable within 30 days of invoice.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their
short-term nature.
Trade payables
Accrued expenses & other payables
2018
$
2017
$
261,524
53,855
315,379
-
-
-
32
Notes to the financial statements
8. Contributed Equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for
the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
If the entity acquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are
deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss
and the consideration paid including any directly attributable incremental costs (net of income taxes) are
recognised directly in equity.
(a) Share capital
2018
2017
Number of
Shares
$
Number of
Shares
$
Authorised and issued,
ordinary shares fully paid
56,000,001 10,631,001
(b) Movements in ordinary share capital
Opening balance, 1 July
Shares issued on incorporation of Company
Shares issued for the purchase of Apollo Hill
Gold Project
Shares issued as a result of initial public
offering
Shares issued as a result of conversion of
performance rights
Transaction costs on share issues
Adjustments to share issue costs and related
tax
Closing balance, 30 June
1
-
1
-
20,000,000
4,000,000
35,000,000
7,000,000
1,000,000
-
200,000
(569,000)
-
56,000,001 10,631,001
-
1
-
1
-
-
-
-
-
1
1
-
1
-
-
-
-
-
1
(c) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a
poll each share is entitled to one vote.
(d) Options & performance rights
Information relating to options and performance rights issued during the year is set out in note 18.
(e) Capital risk management
In employing its capital the Company seeks to ensure that it will be able to continue as a going concern
and in time provide value to shareholders by way of increased market capitalisation and/or dividends. In
the current stage of its development, the Company has invested its available capital in acquiring and
exploring mining tenements. As is appropriate at this stage, the Company is funded entirely by equity. As
it moves forward to develop its tenements towards production, the Company will adjust its capital
structure to support its operational and strategic objectives, by raising additional capital or taking on
debt, as is seen to be appropriate from time to time given the overriding objective of creating shareholder
value. In this regard, the Board will consider each step forward in the development of the Company on its
merits and in the context of the then capital markets, in deciding how to structure funding arrangements.
33
Notes to the financial statements
9. Reserves and accumulated losses
(i) Accumulated losses
Opening balance
Loss for the year
Closing balance
(ii) Share-based payments reserve
Opening balance
Option expenses (Director options)
Net Performance rights (Directors rights)
Closing balance
2018
$
2017
$
-
857,320
857,320
-
224,133
52,091
276,224
-
-
-
-
-
-
Nature and purpose of reserve
The share-based payment reserve represents the fair value of equity benefits provided to Directors and
employees as part of their remuneration for services provided to the Company paid for by the issue of equity.
Share options and reserve movements
2018
Opening balance
Options issued to Directors
Exercised
Closing balance
Exercisable at 20 cents each on or before 9
March 2019
Exercisable at 20 cents each on or before 9
March 2020
Exercisable at 20 cents each on or before 9
March 2021
Options
-
4,000,000
-
4,000,000
$
-
224,133
-
224,133
2,000,000
1,000,000
1,000,000
4,000,000
2017
Options
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future
trends, which may also not necessarily be the actual outcome. No other features of options granted were
incorporated into the measurement of fair value (note 18(a)).
Performance rights and reserve
movements
Opening balance
Performance Rights issued to Directors
Performance Rights converted to
ordinary shares
Closing balance
Exercisable on or before 9 March 2019
2018
2017
Performan
ce Rights
-
1,500,000
$
-
300,000
Performan
ce Rights
-
-
(1,000,000)
500,000
500,000
(200,000)
100,000
-
-
-
-
$
-
-
-
-
-
34
Notes to the financial statements
The fair value of the rights is determined on the market price of the company’s shares at grant date, with an
adjustment made to take into account the one year vesting period. The maximum value of the performance
rights shares yet to vest has been determined as the amount of the grant date fair value of the rights that is
yet to be expensed. For the 2018 grant, the maximum value yet to vest for this grant was estimated based on
the share price of the company at grant date. The minimum value of performance rights shares yet to vest is
nil, as the shares will be forfeited if the vesting conditions are not met. The Directors do not receive any
dividends and are not entitled to vote in relation to the performance rights during the vesting period. (note
18(b)).
10. Other Income
Income recognition
Income is recognised to the extent that it is probable that the economic benefit will flow to the Company and
the income can be reliably measured. The following specific recognition criteria must also be met before
income is recognised.
Interest income
Income is recognised as the interest accrues using the nominal interest rate.
Interest Income
Total
11. Expenses
Loss before income taxes includes the following specific expenses:
Employees and Director’s benefit expenses
Employee costs
Directors fees
Recruitment costs
Employment on costs
2018
$
27,334
27,334
2017
$
2018
2017
$
42,784
34,917
65,858
13,948
157,507
-
-
$
-
-
-
-
-
12. Income tax
The income tax expense (or benefit) for the period is the tax payable (or refundable) on the current period’s
taxable income based on the notional income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax assets are recognised for all 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. A deferred income tax asset is not recognised 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 income or when the deductible temporary difference is associated with
investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is
only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable
future and taxable profit will be available against which the temporary difference can be utilised.
35
Notes to the financial statements
The carrying amount of deferred income tax assets are reviewed at each reporting date and reduced to the
extent it is no longer probable that sufficient taxable income 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
at the reporting date. Income taxes relating to items recognised directly in equity are recognised in equity
and not in profit and loss for the year.
2018
$
2017
$
Income tax expense
Current tax
Deferred tax
Numerical reconciliation of income tax to prima facie tax
payable:
Loss from continuing operations before income tax
At the statutory income tax rate of 30% (2017: 30%)
Expenditure not allowed for income tax purposes:
- Current year 30 June 2018 permanent adjustments
Benefit of temporary differences
Tax losses not brought to account
Income tax benefit/(expense) reported in the statement of profit
and loss and other comprehensive income
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting
period and not recognised in net profit or loss or other
comprehensive income but directly debited or credited to equity:
Deferred tax: share issue costs recognised through equity
-
-
857,320
(257,196)
108,727
(535)
149,004
-
(136,560)
-
-
-
-
-
-
-
-
-
The Company has total carried forward tax losses arising in Australia of $417,945 (2017: Nil) available for
offset against future assessable income of the Company. The deferred tax asset in respect of these losses
has been used to offset a deferred tax liability. The net deferred tax asset attributable to the residual tax
losses of $149,004 has not been brought to account until convincing evidence exists that assessable income
will be earned of a nature and amount to enable such benefit to be realised.
Deferred taxes: the balance comprises temporary differences attributable to:
DTA – Deferred income
DTA – Other
DTL – Exploration & Evaluation
DTA – Tax Losses
Net deferred tax liability/ (asset)
-
137,095
(406,036)
268,941
268,941
-
-
-
-
-
-
36
Notes to the financial statements
13. Reconciliation of cash flows from operating activities to loss after income tax
For statement of cash flows preparation purposes, cash and cash equivalents includes cash on hand and
short term deposits held at call (other than deposits used as cash backing for performance bonds) with
financial institutions. Any bank overdrafts are shown within borrowings in the current liabilities on the
statement of financial position.
Net cash outflow from operating activities
Adjustments for
Share-based payments
Depreciation
Interest received and receivable
Change in operating assets and liabilities
Increase in receivables
Increase in payables
Loss after income tax
14. Financial Risk Management
2018
$
(562,597)
2017
$
-
(476,224)
(4,641)
27,334
177,696
(18,888)
(857,320)
-
-
-
-
-
Overview
The Company is exposed to financial risks through the normal course of its business operations. The key
risks impacting the Company’s financial instruments are considered to be, interest rate risk, liquidity risk, and
credit risk. The Company’s financial instruments exposed to these risks are cash and cash equivalents, trade
receivables, trade payables and other payables.
Credit risk
The Company’s maximum exposures to credit risk in relation to each class of recognised financial asset is
the carrying amount of those assets as indicated in the statement of financial position. Credit risk arises
from the non-performance by counterparties of contractual financial obligations. Credit risk arises from cash
and cash equivalents, deposits with banks, any outstanding receivables and committed transactions.
Management assesses the credit quality of the counterparties by taking into account its financial position,
past experience and other factors. For banks and financial institutions, management considers independent
ratings and only dealing with banks licensed to operate in Australia.
Trade and other receivables
The Company operates in the mining exploration sector and does not have trade receivables from
customers. It does however have credit risk arising from other receivables.
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The
Company’s maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents AA- rated banks
External receivables with taxation authority
External receivables from AA- rated banks
Prepayments with unrated counterparties
2018
$
4,982,038
161,191
17,384
16,505
2017
$
-
-
-
-
3
4
4
4
Impairment losses
At 30 June 2018 the Company has not recognised any impairment losses.
37
Notes to the financial statements
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company’s reputation. The Company manages liquidity by
maintaining adequate reserves by continuously monitoring forecast and actual cash flows ensuring there are
appropriate plans in place to finance these future cash flows.
Typically the Company ensures it has sufficient cash on hand to meet expected operational expenses,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances
that cannot reasonably be predicted, such as natural disasters.
30 June 2018
Trade and other payables less than 6 months
30 June 2017
Trade and other payables less than 6 months
Financial
Obligations
$
315,379
-
Interest rate risk
Interest rate risk is the risk that the Company’s financial position will be adversely affected by movements in
interest rates, cash and cash equivalents at variable rates exposes the Company to cash flow interest rate
risk. The Company is not exposed to fair value interest rate risk as all of its financial assets and liabilities are
carried at amortised amount.
At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments was:
Short term cash deposits
2.59%
Carrying Amount
2018
$
4,250,000
2017
$
-
Cash flow sensitivity analysis for variable rate instruments of the Company
At 30 June 2018 if interest rates had changed +/- 100 basis points from year end rates with all other
variables held constant, equity and post-tax loss would have been $42,500 lower/higher (2017: Nil
lower/higher).
Fair values
The carrying values of all financial assets and financial liabilities, as disclosed in the statement of financial
position, approximate their fair values.
15. Contingencies & Commitments
The Company had no contingent assets or liabilities as at 30 June 2018 (2017: $Nil).
Operating lease commitments
Saturn Metals Limited as lessee has entered into a commercial property lease agreement for its Perth office.
The lease has 9 months remaining with an option to extend for an additional 12 months. The remaining
commitment is $13,500. The lease includes a clause to enable revision of the rental charge on an annual
basis.
The Company had no operating lease commitments within 12, before 60 or later than 60 months as at 30
June 2018.
38
Notes to the financial statements
Exploration commitments
Under the terms of mineral tenement licences held by the Company, minimum annual expenditure
obligations are required to be expended during the forthcoming financial year in order for the tenements to
maintain a status of good standing. This expenditure may be subject to variation from time to time in
accordance with the relevant state department’s regulations. The Company may at any time relinquish
tenements and as such avoid the requirement to meet applicable expenditure requirement, or may seek
exemptions from the relevant authority.
Expenditure commitments within one year at the reporting date but not recognised as liabilities were
$622,860 (2017: Nil). Due to the uncertain nature of exploration and the fact that the Company may at any
time relinquish tenements it does not believe it to be appropriate to recognise these commitments post 12
months. The Company had no other expenditure commitments greater than 12 months.
16. Events after the reporting period
There are no matters or circumstances that have arisen since the end of the financial period which
significantly affected or may significantly affect the operations of the Company, the results of those
operations or the state of affairs of the Company in future financial years.
17. Related Parties
Peel Mining Limited (PEX) holds 35.71% of Saturn Metals Limited. During the year the company purchased
the Apollo Hill Gold Project from Peel Mining Limited for $4,000,000 in shares. The Company engaged Peel
Mining Limited in a non-exclusive basis to perform and provide administrative services and facilities through
a service agreement. Throughout the year the Company made reimbursements for costs associated with the
initial public offering and management services, to Peel Mining Limited.
The Company also purchased drilling services from DDH1 Drilling Pty Ltd, which the Company’s non-
executive Director, Andrew Venn, is the Chief Operations Officer.
(a) Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
(b) Transactions with related parties
Purchase of Mining and Exploration Leases from associate
Purchases of management service from associate
Purchases of goods and services from entities controlled by key
management personnel
iydfiuysdfsiysdfuiysiydfiys
(c) Outstanding balances arising from purchases of services with
related parties
Current payables
Peel Mining Limited
Entities controlled by key management personnel
2018
$
2017
$
79,486
24,352
4,540
476,224
584,602
2018
$
4,000,000
448,522
246,571
4,695,093
2017
$
2018
$
2017
$
(2,049)
(246,571)
(248,620)
-
-
-
-
-
-
-
-
=
-
-
-
-
-
Other than the above, the Company had no other transactions with related parties.
39
Notes to the financial statements
18. Share–based payments
Share-based compensation benefits to directors, employees and consultants are provided at the discretion
of the Board.
The fair value of options granted is recognised as an expense with a corresponding increase in equity. The
fair value is measured at grant date and recognised over the period during which the recipient becomes
unconditionally entitled to the options.
The fair value at grant date is independently determined using a Black-Scholes option pricing model that
takes into account the exercise price, term of the option, share price at grant date, expected price volatility of
the underlying share, expected dividend yield and the risk free interest rate for the term of the option.
During the year the Company has granted options and performance rights to Directors through is Incentive
Option Plan and Performance Rights Plan respectively.
Total expenses arising from share-based payment transactions recognised in the profit and loss during the
year were as follows:
(a) Options
Options granted to Directors
2018
Number
4,000,000
2018
$
224,133
2017
Number
2017
$
-
-
Grant
date
Expiry
date
Exercise
price
Bal. at
start of
the year
Granted
during the
year
Expired
during
the year
Exercised
during the
year
Balance at
end of the
year
Vested and
exercisable
at end of the
year
$
9 Mar 18
9 Apr 21
20 cents
9 Mar 18
9 Apr 21
20 cents
Numbe
r
-
-
-
Number
Number
Number
Number
Number
3,000,000
1,000,000
4,000,000
-
-
-
-
-
-
3,000,000
1,000,000
4,000,000
-
-
-
Fair value of options granted
The assessed fair value at grant date of options granted to Directors during the period ended 30 June 2018 was 13
cents per option (2017: Nil). The fair value at grant date is independently determined using a Black-Scholes option
pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option.
The model inputs for options granted during the years ended 30 June 2018 included:
Recipient
Options are granted for no consideration
and vest accordingly
Exercise Price
Grant Date
Expiry Date
Share Price at Grant Date
Expected Price Volatility
Expected Dividend Yield
Risk-free interest rate
2018
Executive & Non-exec
Director Options
2018
Executive & Non-exec
Director Options
2018
Executive & Non-exec
Director Options
2,000,000 vest 9 Mar 2019
1,000,000 vest 9 Mar 2020
1,000,000 vest 9 Mar 2021
20 cents
1,000,000 at 9-Mar-18
1,000,000 at 9-Mar-18
9-Apr-21
20 cents
100%
0.00%
1.91%
20 cents
9-Mar-18
9-Apr-21
20 cents
100%
0.00%
1.91%
20 cents
9-Mar-18
9-Apr-21
20 cents
100%
0.00%
1.91%
40
Notes to the financial statements
(b) Performance Rights
During the year the Company has granted performance rights to Directors through the Performance Rights
Plan.
Total expenses arising from share-based payment transactions recognised in the profit and loss during the
year were as follows:
Performance rights granted to Directors
2018
Number
1,500,000
2018
$
252,091
2017
Number
2017
$
-
-
Grant date
Expiry
date
Balance at
start of the
year
Granted
during the
year
Expired
during the
year
Converted to
ordinary
shares
during the
year
Balance at
end of the
year
Vested and
exercisable
at end of the
year
Number
Number
Number
Number
Number
Number
9 Mar 18
9 Apr 21
9 Mar 18
9 Apr 21
-
-
1,000,000
500,000
1,500,000
-
-
-
(1,000,000)
-
(1,000,000)
-
500,000
500,000
-
500,000
500,000
Fair value of performance rights granted
The fair value of the rights is determined on the market price of the company’s shares at grant date, with
an adjustment made to take into account the one year vesting period. The maximum value of the
performance rights shares yet to vest has been determined as the amount of the grant date fair value of
the rights that is yet to be expensed. For the 2018 grant, the maximum value yet to vest for this grant was
estimated based on the share price of the company at grant date. The minimum value of performance
rights shares yet to vest is nil, as the shares will be forfeited if the vesting conditions are not met. The
Directors do not receive any dividends and are not entitled to vote in relation to the performance rights
during the vesting period.
(c) Acquisition – Share based payment
During the year the company purchased the Apollo Hill Gold Project south of Leonora, Western Australia
from Peel Mining Limited for consideration of 20,000,000 in Saturn Metals Limited shares, at a value of
20 cents per share.
(d) Weighted averages – Options
The weighted average exercise price $0.20 (2017: Nil).
The weighted average fair value of options is $0.13 (2017: Nil).
The weighted average remaining contractual life is 1.82 years (2017: Nil).
19. Remuneration of Auditors
Amounts paid or due and payable to the
PricewaterhouseCoopers
Auditing and reviewing financial reports
Taxation services
Indirect taxation services
Valuation services
Total
2018
$
2017
$
33,000
33,000
-
15,200
38,474
53,674
-
-
-
-
-
-
41
Notes to the financial statements
20. Loss per share
-
-
-
-
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued
during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
Basic loss per share
Loss from continuing operations attributable to the ordinary equity
holders of the Company
Diluted loss per share
Loss from continuing operations attributable to the ordinary equity
holders of the Company
Reconciliation of loss used in calculation of loss per share
Loss from continuing operations attributable
to the ordinary equity holders of the company per share
2018
2017
(0.03)
(0.03)
(857,230)
Weighted average number of shares used as the denominator
Weighted average number of shares used in
calculating basic loss per share
25,501,371
Number of
Shares
2018
Number of
Shares
2017
Effect of dilutive securities
Options on issue at reporting date could potentially dilute earnings per share in the future. The effect in
the current year is to reduce the loss per share hence they are considered anti-dilutive.
21. Non-cash investing and financing activities
On 8 September 2017, the Board of Peel Mining Limited announced plans to vend its Apollo Hill Gold project
into Saturn Metals Limited (a wholly owned subsidiary) with the intention to list the Company on the ASX, via
an initial public offering (IPO). The Company held a general meeting on 10 October 2017 at which they
obtained shareholder approval for the transaction. Post successful IPO/Listing of Saturn, Peel would hold a
significant interest in the Company.
On the 11th October 2017 the Company issued 20,000,000 shares to Apollo Mining Pty Ltd’s nominee for the
purchase of the Apollo Hill Gold project. The nominee company was Peel Mining Limited, the parent
company of both entities. (2017: Nil).
The Company employed Mr Ian Bamborough as its Managing Director on the 12th August 2017. Mr
Bamborough’s continued employment was conditional on Saturn Metals Limited listing on the Australian
Securities Exchange, which occurred on the 9th March 2018. Mr Bamborough was issued 1,000,000
performance rights in the Company in lieu of salary. Each right had converted to an ordinary share, for no
consideration, upon the Company listing on the Australian Securities Exchange. Mr Bamborough’s
performance rights were converted to ordinary shares on 9 March 2018. For further information please refer
note 18(b).
42
Notes to the financial statements
22. Statement of Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. The financial
report includes the financial statements for the Company during the financial years ended 30 June 2018 and
the comparative period.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian
Accounting Interpretations and the Corporations Act 2001. Saturn Metals Limited is a for-profit entity for the
purpose of preparing the financial statements. The presentation currency of these accounts is Australian
Dollars (AUD).
Compliance with IFRS
The financial statements and notes of the Company comply with International Financial Reporting Standards
(IFRS).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
New and amended standards adopted by the Company
There was no new significant accounting standards or amendments adopted by the Company for the period
commencing 1 July 2018.
(b) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is
estimated by discounting the future contractual cash flows at the current market interest rate that is
available to the Company for similar financial instruments.
(c) Leases
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and
rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating
leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to
the present value of the minimum lease payments, each determined at the inception of the lease. The
corresponding liability to the Lessor is included in the statement of financial position as a finance lease
obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation
so as to achieve a constant rate of interest on the liability. Finance charges are charged directly to the
statement of profit or loss and other comprehensive income.
Operating lease payments are recognised as an expense when incurred.
43
Notes to the financial statements
(d) Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and leave entitlements that are expected
to be settled wholly within 12 months after the end of the period in which the employees render the related
service are recognised in respect of employees’ services up to balance date and are measured at the
amounts expected to be paid when the liabilities are settled.
(e) Goods and services tax
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable
is included as a current asset in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from the taxation authority are
classified as operating cash flows.
(f) New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2018 reporting periods and have not been early adopted by the company. The company’s assessment
of the impact of these new standards and interpretations is set out below.
AASB 9 Financial Instruments
AASB 9 addresses the classification, measurement and de-recognition of financial assets and financial
liabilities and introduces new rules for hedge accounting. In December 2014, the AASB made further
changes to the classification and measurement rules and also introduced a new impairment model. These
latest amendments now complete the financial instruments standard.
Management has assessed the assets, liabilities and contracts and believe they currently do not constitute
financial instruments. The classification of assets and liabilities is not likely to change under the new
standard, therefore the application of the standard will not have an impact on the Company’s accounting for
financial assets and liabilities during the period.
AASB 15 Revenue from Contracts with Customers
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which
covers contracts for goods and services and AASB111 which covers construction contracts. The new
standard is based on the principle that revenue is recognised when control of a good or service transfers to a
customer, so the notion of control replaces the existing notion of risks and rewards. The standard permits
either a full retrospective or a modified retrospective approach for the adoption. Management has assessed
the impact of the new standard, and at this stage, its application to the Company’s financial statements will
have nil effect as the Company is not currently a revenue generating business.
AASB 16 Leases – (Effective date 1 July 2019)
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the balance
sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset
(the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions
are short-term and low-value leases.
The accounting for lessors will not significantly change.
Management has considered significant contracts, such as those for drilling, and believes the Company
does not hold any contracts that constitute leases under the standard. The Company has not entered into
any financial leases however has entered into an operating lease for the rental of office space, however this
is considered short term and therefore the implementation of the standard will have no impact at the current
time.
At this stage the Company does not intend to adopt any of the above standard before its effective date.
There are no other standards that are not yet effective and that are expected to have a material impact on
the Company in the current or future reporting periods and on foreseeable future transactions.
44
Notes to the financial statements
(g) Critical accounting estimates and judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information.
The Company makes estimates and judgements in applying the accounting policies. Critical judgements in
respect of accounting policies relate to exploration assets, where exploration expenditure is capitalised in
certain circumstances. Recoverability of the carrying amount of any exploration assets is dependent on the
successful development and commercial exploitation or sale of the respective areas of interest.
Share-based payment transactions
The Company measures the cost of equity-settled share-based payment transactions with employees by
reference to the fair value of the equity instruments at the grant date. The fair value is determined using a
Black-Scholes model. The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within the next annual
reporting period but may impact expenses and equity.
Impairment of capitalised exploration and evaluation expenditure
It is the Company’s policy to capitalise costs relating to exploration and evaluation activities. The future
recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors,
including whether the Company decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future
technological changes which could impact the cost of mining, future legal changes (including changes to
environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in
the future, profits and net assets will be reduced in the period in which the determination is made.
Income tax related judgements
(h)
The Company is subject to income taxes in Australia. Significant judgement is required in determining the
provision for income taxes. There are certain transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The Company estimates its tax
liabilities based on the Company’s understanding of the tax law. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the current
and deferred income tax assets and liabilities in the period in which such determination is made.
In addition, the Company has recognised deferred tax assets relating to carried forward tax losses.
Utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the
losses are recouped. Refer to note 12 for the current recognition of tax losses.
45
Director’s declaration
The Board of Directors of Saturn Metals Limited declares that:
(a) the financial statements, comprising the statement of profit or loss and other comprehensive
income, statement of financial position, statement of cash flows, statement of changes in equity and
accompanying notes are in accordance with the Corporations Act 2001 and:
(i) comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory
professional reporting requirements ; and
(ii) give a true and fair view of the financial position as at 30 June 2018 and performance for the
financial year ended on that date of the entity.
(b) The Company has included in the notes to the financial statements an explicit and unreserved
statement of compliance with International Financial Reporting Standards.
(c) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they become due and payable;
(d) the Board of Directors have been given the declaration by the chief executive officer and chief
financial officer required by Section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the Directors by:
Ian Bamborough
Managing Director
Perth, Western Australia
25th September 2018
46
Auditor’s Independence Declaration
As lead auditor for the audit of Saturn Metals Limited for the year ended 30 June 2018, I declare that
to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
Ben Gargett
Partner
PricewaterhouseCoopers
Perth
25 September 2018
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Saturn Metals Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Saturn Metals Limited (the Company) is in accordance with the
Corporations Act 2001, including:
(a)
giving a true and fair view of the Company's financial position as at 30 June 2018 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
•
•
•
•
•
•
the statement of financial position as at 30 June 2018
the statement of changes in equity for the year then ended
the statement of cash flows for the year then ended
the statement of profit or loss and other comprehensive income for the year then ended
the notes to the financial statements, which include a summary of significant accounting policies
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
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.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Company, its accounting processes and controls and the industry in which it operates.
Materiality
• For the purpose of our audit we used overall materiality of $103,000, which represents
approximately 1% of the Company’s total assets.
• We applied this threshold, together with qualitative considerations, to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
• We chose the Company's total assets, in our view, it is the benchmark against which the
performance of the Company is most commonly measured whilst in the exploration phase.
• We utilised a 1% threshold based on our professional judgement, noting it is within the range of
commonly acceptable asset related thresholds.
Audit Scope
• Our audit focused on where the Company made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
• The Company's operational and financial processes are managed by a corporate function in Perth,
where substantially all of our audit procedures are performed.
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 for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Board of Directors.
Key audit matter
How our audit addressed the key audit matter
Carrying value of exploration and evaluation
assets
(Refer to note 6)
The Company holds mining, exploration and
prospecting licenses across Western Australia and
recognised exploration and evaluation assets of
$5,086,787 at 30 June 2018 in respect of carry forward
expenditure on these tenements.
The Company performed an assessment as to whether
impairment indicators existed at 30 June 2018 in
respect of exploration and evaluation assets and
concluded that there were no indicators of impairment.
The carrying value of exploration and evaluation assets
was a key audit matter due to the size of the exploration
and evaluation assets on the consolidated statement of
financial position as at 30 June 2018 and the risk of
impairment of exploration and evaluation assets should
the result of exploration activities not be positive or the
Company relinquish certain exploration licenses as it
continues to assess future viability.
We performed the following procedures, amongst
others:
• Tested whether the Company retained right of
tenure for its exploration licence areas by obtaining
licence status records from relevant government
databases.
• For a sample of additions to exploration and
evaluation assets during the year inspected relevant
supporting documentation, such as invoices, and
compared the amounts to accounting records.
• Obtained management’s exploration expenditure
forecasts supporting their assessment of indicators
of impairment and compared these to the approved
budgets and future cash flow forecasts of the
Company.
•
Inquired of management and directors as to the
future planned expenditure on capitalised
exploration and evaluation assets and assessed
plans for future expenditure to meet minimum
licence requirements.
Share-based payments
(Refer to note 18)
The Company provides benefits to directors in the form
of share-based payments, whereby directors render
services and receive rights over shares (performance
rights and share options). These share-based payment
transactions are classified by the Company as equity-
settled share-based payment transactions.
We performed the following procedures, amongst
others:
• Compared the terms and conditions in the signed
agreements for all options and performance rights
issued to directors during the financial year to
those included in the share-based payment expense
calculations.
Key audit matter
How our audit addressed the key audit matter
The accounting for share-based payments was a key
audit matter due to the magnitude of the share-based
payments expense and the judgement involved in
determining the value of the performance rights and
options using Black Scholes models, primarily in
relation to the discount rates and share price volatility
used in the models.
Basis of preparation of the financial report
The financial statements have been prepared by the
Company on a going concern basis, which contemplates
that the Company will continue to meet its
commitments, realise its assets and settle its liabilities
in the normal course of business.
The Company is in the exploration and evaluation
phase and therefore does not generate revenue from its
operations and relies on funding from its shareholders
or other sources to continue as a going concern. These
funds are used to meet expenditure requirements to
maintain the good standing of the Company’s
tenements, progress project feasibility studies, and to
cover corporate overheads.
In determining the appropriateness of their going
concern basis of preparation of the financial report, the
Company made a number of judgements, including
expenditure required to progress the Company’s
projects and the minimum corporate overhead
expenditure required to continue operations.
• Compared the options and performance rights
grant dates used in the share-based payment
expense calculations to signed agreements.
• Ascertained whether key inputs used in the
calculations were appropriate for the performance
rights and share option valuation models, by
agreeing to supporting documentation.
• Tested that the share based payment expense was
recognised over the appropriate vesting period in
accordance with contractual terms.
• Assessed the reasonableness of the fair value
calculation through re-performing the calculation
and performing sensitivity analysis of the assumed
share price volatility used in the Company’s
calculation.
• Evaluated the adequacy of disclosures made by the
Company in the financial report in light of the
requirements of Australian Accounting Standards.
In assessing the appropriateness of the Company’s
going concern basis of preparation for the financial
report, we performed the following procedures,
amongst others:
● Evaluated the appropriateness of the Company's
assessment of its ability to continue as a going
concern, including whether the period covered is at
least 12 months from the date of the financial
report and that relevant information of which we
are aware as a result of the audit has been included.
●
Inquired of management and the directors whether
they were aware of any events or conditions,
including beyond the period of assessment that
may cast significant doubt on the Company's ability
to continue as a going concern.
● Evaluated the Company’s plans for future actions,
whether the outcome is likely to improve the
situation and whether they are feasible in the
circumstances.
Key audit matter
How our audit addressed the key audit matter
Assessing the appropriateness of the Company’s basis
of preparation for the financial report was a key audit
matter due to its importance to the financial report and
the judgement involved in forecasting future cash flows
for a period of at least 12 months from the date of the
financial report.
● Compared the key underlying data and
assumptions in the Company’s cash flow forecast to
approved budgets, internal reporting and historical
cash outflows, including an assessment of the
reasonableness of exploration and evaluation
expenditure for the forecast period by comparing
forecast expenditure to minimum annual
expenditure commitments for each tenement as
listed on the Western Australian Department of
Mines, Industry Regulation and Safety’s Mineral
Titles Online database.
● Developed an understanding of what forecast
expenditure in the cash flow forecast is committed
and what could be considered discretionary.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2018, including the Corporate
Directory, Chairman's Letter, Review of Operations, Mineral Resource Estimation Governance
Statement, Directors' Report, Schedule of Tenements as at 30 June 2018, Additional ASX Information
and Shareholder Information, 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 conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 Company
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 Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our 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 the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 18 to 24 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the remuneration report of Saturn Metals Limited for the year ended 30 June 2018
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Ben Gargett
Partner
Perth
25 September 2018
Additional ASX information
ASX BEST PRACTICE RECOMMENDATIONS
This statement outlines the main corporate governance practices that were formally in place from 21
September 2017 onwards. These corporate governance practices comply with the ASX Corporate
Governance Council recommendations unless otherwise stated.
BOARD OF DIRECTORS
The Board operates in accordance with the broad principles set out in its plan, which is available from
the corporate governance information section of the Company website at www.saturnmetals.com.au.
ROLE AND RESPONSIBILITIES OF THE BOARD
The Board is responsible for ensuring that the Company is managed in a manner which protects and
enhances the interests of its shareholders and takes into account the interests of all stakeholders.
This includes setting the strategic directions for the company, establishing goals for management and
monitoring the achievement of these goals.
A summary of the key responsibilities of the Board include:
1.
2.
3.
4.
5.
6.
7.
Strategy - Driving strategic direction of the Company, including contributing to the development
of and approving the corporate strategy and ensuring appropriate resources are available to
meet objectives:
Financial performance - Approving budgets, monitoring management and financial
performance;
Financial reporting and audits - Monitoring financial performance including approval of the
annual and half-year financial reports and liaison with the external auditors;
Leadership selection and performance - Appointment, performance assessment and removal of
the Managing Director. Ratifying the appointment and/or removal of other senior management,
including the Company Secretary and other Board members;
Remuneration – Approval and management of the Company’s remuneration framework for
executive management and staff;
Risk management - Reviewing and ratifying systems of audit, risk management and internal
compliance and control, codes of conduct and legal compliance to minimise the possibility of
the Company operating beyond acceptable risk parameters; and
Relationships with the exchanges, regulators and continuous disclosure - Ensuring that the
capital markets are kept informed of all relevant and material matters and ensuring effective
communications with shareholders.
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to
do with the proper functioning of the Board. All Directors have direct access to the Company
Secretary.
The Board has delegated to management responsibility for the day-to-day operation and
administration of the Company is delegated by the Board to the Managing Director. The Board ensures
that the Managing Director and the management team is appropriately qualified and experienced to
discharge their responsibilities and has in place procedures to assess the performance of the
Managing Director and executive Directors.
The roles of Chairman and Managing Director are not combined. The Managing Director is
accountable to the Board for all authority delegated to the position.
54
Additional ASX information
Whilst there is a clear division between the responsibilities of the Board and management, the Board is
responsible for ensuring that management’s objectives and activities are aligned with the expectations
and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is
achieved including:
➢ Board approval and monitoring of a strategic plan;
➢
approval of annual and semi-annual budgets and monitoring actual performance against budget;
and
➢ procedures are in place to incorporate presentations to each Board meeting by financial and
operations management.
COMPOSITION OF THE BOARD
The names, skills, experiences and period of office of the Directors of the Company in office at the
date of this Statement are set out in the Director’s Report. A summary of these skills and experiences
are provided in table 1.
The composition of the Board is determined using the following principles:
➢ Persons nominated as Non-executive Directors shall be expected to have qualifications,
experience and expertise of benefit to the Company and to bring an independent view to the
Board’s deliberations. Persons nominated as Executive Directors must be of sufficient stature and
security of employment to express independent views on any matter.
➢ The Chairperson should ideally be independent, but in any case be Non-executive and be elected
by the Board based on his/her suitability for the position.
➢ The roles of Chairperson and Managing Director should not be held by the same individual.
➢ All Non-executive Directors are expected voluntarily to review their membership of the Board from
time-to-time taking into account length of service, age, qualifications and expertise relevant to the
Company’s then current policy and programme, together with the other criteria considered
desirable for composition of a balanced board and the overall interests of the Company.
➢ The Company considers that the Board should have at least three Directors (minimum required
under the Company's Constitution) and to have a majority of independent Directors but
acknowledges that this may not be possible at all times due to the size of the Company. Currently
the Board has three Directors, with only Mr Venn as independent. The number of Directors is
maintained at a level which will enable effective spreading of workload and efficient decision
making.
The Board has accepted the following definition of an independent Director:
An independent Director is a Director who is not a member of management (a Non-executive Director)
and who:
➢
➢ does not hold more than 5% of the voting shares of the Company and is not an officer of, or
otherwise associated directly or indirectly with, a shareholder of more than 5% of the voting
shares of the Company;
is not, or has not been, employed in an executive capacity by the Company or any of its child
entities and there has not been a period of at least three years between ceasing such
employment and serving on the board;
is not, or has not within the last three years been, a partner, director or senior employee of a
provider of material professional services or a material consultant to the Company or any of its
child entities;
➢
55
Additional ASX information
➢
➢
is not, or has not been within the last three years, in a material business relationship (eg as a
supplier or customer) with the Company or any of its child entities, or an officer of, or otherwise
associated with, someone with such a relationship;
is not a substantial security holder of the Company or an officer of, or otherwise associated with,
a substantial security holder of the Company;
➢ does not have a material contractual relationship with the Company or its child entities other
than as a Director;
➢ does not have close family ties with any person who falls within any of the categories described
above; or
➢ has not been a Director of the Company for such a period that his or her independence may have
been compromised.
The materiality thresholds are assessed on a case-by-case basis, taking into account the relevant
Director’s specific circumstances, rather than referring to a general materiality threshold.
Table 1: Skills and Experience Matrix of Saturn Metals Limited’s Directors
Area
Business and Finance
Leadership
Sustainability & Stakeholder
Industry Specific (Australia)
Competence
Accounting, Business Strategy, Corporate Financing, Financial Literacy,
Agreements/Fiscal Terms and Risk Management
Business Leadership, Executive Management and Mentoring, Public Listed
Company Experience
Community Relations, Corporate Governance, Environmental Issues,
Government Affairs, Health & Safety, Human Resources, Industrial Relations
and Remuneration
Geology (Technical), Precious Metals – Exploration & Production, Base
Metals – Exploration & Production, Mining & Resources
The Directors on the Board collectively have a combination of skills and experience in the
competencies set out in the table above. These competencies are set out in the skills matrix that the
Board uses to assess the skills and experience of each Director and the combined capabilities of the
Board. Where an existing or projected competency gap is identified, the Board will address those
gaps. The Board does not currently consider that there are any existing or projected competency
gaps.
INDEPENDENT PROFESSIONAL ADVICE AND ACCESS TO COMPANY INFORMATION
Each Director has the right to seek independent external professional advice as they considered
necessary at the expense of the Company, subject to prior consultation with the Chairman. A copy of
any such advice received is made available to all members of the Board.
NOMINATION COMMITTEE / APPOINTMENT OF NEW DIRECTORS
Because of the size of the Company and the size of the Board, the Directors do not believe it is
appropriate to establish a separate Nomination Committee. The Board has taken a view that the full
Board will hold special meetings or sessions as required. The Board are confident that this process for
selection and review is stringent and full details of all Directors are provided to shareholders in the
annual report and on the web.
56
Additional ASX information
The composition of the Board is reviewed on an annual basis to ensure the Board has the appropriate
mix of expertise and experience. Where a vacancy exists, through whatever cause, or where it is
considered that the Board would benefit from the services of a new Director with particular skills, the
Board determines the selection criteria for the position based on the skills deemed necessary for the
Board to best carry out its responsibilities and then appoints the most suitable candidate who must
stand for election at the next general meeting of shareholders.
Each Director and senior executive is a party to a written agreement with the Company which sets out
the key terms and conditions of that Director’s appointment.
The Boards undertakes appropriate checks before appointing a candidate, or putting forward to
security holders candidate for election, as a Director, including checks in respect of character,
experience, education, criminal record and bankruptcy history (as appropriate). Shareholders are
provided with all material information in its possession concerning a Director standing for election or
re-election in the relevant notice of meeting.
An informal induction is provided to all new Directors, which includes meeting with technical and
financial personnel to understand Saturn Metals Limited’s business, including strategies, risks,
company policies and health and safety.
All Directors are required to maintain professional development necessary to maintain their skills and
knowledge needed to perform their duties. In additional to training provided by relevant professional
affiliations of the Directors, additional development is provided through attendance at seminars and
provision of technical papers on industry related matters and developments offered by various
professional organisations, such as accounting firms and legal advisors.
TERM OF OFFICE
Under the Company's Constitution, the minimum number of Directors is three. At each Annual General
Meeting, one third of the Directors (excluding the Managing Director) must resign, with Directors
resigning by rotation based on the date of their appointment. Directors resigning by rotation may offer
themselves for re-election. Where standing for re-election as a Director, the term of office served by
the Director and a statement whether the Board considers the candidate to be independent and if the
Board supports the re-election of the candidate will be provided to shareholders.
PERFORMANCE OF DIRECTORS AND MANAGING DIRECTOR
The performance of all Directors, the Board as a whole and the Managing Director and Company
Secretary is reviewed annually.
The Board meets once a year with the specific purpose of conducting a review of its composition and
performance. This review includes:
➢ assessment of the performance of the Board over the previous twelve months having regard to
the corporate strategies, operating plans and the annual budget;
➢ comparison of the performance of the Board against the requirements of the plan;
➢
➢
➢
review the Board’s interaction with management;
review the nature of information provided to the Directors;
identification of any particular goals and objectives of the Board for the next year; and
57
Additional ASX information
➢
identification of any necessary or desirable improvements to Board or committee plans.
As the company was officially listed on 9 March 2018, no review was undertaken during the reporting
period. The Board plans to undertake a review around the time of the anniversary of listing each year.
PERFORMANCE OF SENIOR EXECUTIVES
The Managing Director is responsible for assessing the performance of the key executives within the
Company. This is to be performed through a formal process involving a formal meeting with each
senior executive on an annual basis. The basis of evaluation of senior executives will be on agreed
performance measures.
As the company was officially listed on 9 March 2018 and a review of risks was outlined in the
company’s prospectus, no additional review has been undertaken post listing. The Board plans to
undertake a review around the time of the annual anniversary of listing.
CONFLICT OF INTEREST
In accordance with the Corporations Act 2001 and the Company’s constitution, Directors must keep
the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the
Company. Where the Board believes a significant conflict exists, the Director concerned does not
receive the relevant Board papers and is not present at the Board meeting whilst the item is
considered. Details of Directors related entity transactions with the Company are set out in the related
parties note in the financial statements.
DIVERSITY
Saturn Metals Limited recognises the benefits arising from employee and Board diversity, including a
broader pool of high quality employees, improving employee retention, accessing different
perspectives and ideas and benefiting from all available talent. Diversity includes, but is not limited to,
gender, age, ethnicity and cultural background.
The Diversity Policy defines the initiatives which assist Saturn Metals Limited with maintaining and
improving the diversity of its workforce. A copy of the Diversity Policy can be found in the company’s
Corporate Governance Framework on the Company’s website. The company currently has a naturally
diverse workplace in terms of gender, age, ethnicity and cultural background, and believes that
currently meets the objectives of its policy. As such no formal measurable objectives have been
required or set for achieving diversity. This will be monitored by the Board on an annual basis and as
the company grows.
The policy was formally adopted by the company on the 21 September 2017.
The respective proportions of men and women on the Board, in senior executive positions and across
the whole organisation are set out in the table below:
Proportion of Women
Organisation as a whole
Executive Management Team
Board
Proportion of
women
4 out of 11 (36%)
0 out of 2 (0%)
0 out of 3 (0%)
58
Additional ASX information
REMUNERATION
The performance of the Company depends upon the quality of its Directors and Executives. To
prosper, the Company must attract, motivate and retain highly skilled Directors and Executives.
To this end, the Company embodies the following principles in its remuneration framework:
➢ Provide competitive rewards to attract high quality Executives;
➢ Design executive remuneration to attract, retain and motivate high quality senior executives;
➢ Link Executive rewards to shareholder value; and
➢ Establish appropriate performance hurdles in relation to variable Executive remuneration.
A full discussion of the Company’s remuneration philosophy and framework and the remuneration
received by Directors and Executives in the current year is included in the remuneration report, which is
contained within the Report of the Directors.
There are no schemes for retirement benefits for Non-executive Directors, other than superannuation.
BOARD REMUNERATION COMMITTEE
Once the Board is of a sufficient size and structure, and the Company’s operations are of a sufficient
magnitude, to assist the Board in fulfilling its duties, the Board will establish a Remuneration
Committee. Until that time, the Board has taken a view that the full Board will hold special meetings or
sessions as required. The Board are confident that this process is stringent and full details of
remuneration policies and payments are provided to shareholders in the annual report and on the
web.
AUDIT AND RISK COMMITTEE
Due to the limited size of the Company and of its operations and financial affairs, the use of a
separate audit committee is not considered appropriate. The Board assures integrity of the financial
statements by:
a) reviewing the Company’s statutory financial statements to ensure the reliability of the financial
information presented and compliance with current laws, relevant regulations and accounting
standards;
b) monitoring compliance of the accounting records and procedures in conjunctions with the
Company’s auditor, on matters overseen by the Australian Securities and Investments
Commission, ASX and Australian Taxation Office;
c) ensuring that management reporting procedures, and the system of internal control, are of a
sufficient standard to provide timely, accurate and relevant information as a sound basis for
management of the Company’s business;
d) reviewing audit reports and management letters to ensure prompt action is taken;
e) when required, nominating the external auditor and at least annually review the external auditor in
terms of their independence and performance in relation to the adequacy of the scope and
quality of the annual statutory audit and half-year review and the fees charged.
RISK OVERSIGHT AND MANAGEMENT
The Board determines the Company’s ‘risk profile’ and is responsible overseeing and approving risk
management strategy and policies, internal compliance and internal control systems. In summary, the
Company policies are designed to ensure strategic, operational, legal, reputation and financial risks
are identified, assessed, effectively and efficiently managed and monitored to enable achievement of
the Company’s business objectives.
59
Additional ASX information
The Company has exposure to economic risks, including general economy wide economic risks and
risks associated with the economic cycle which impact on the price and demand for minerals which
affects the sentiment for investment in exploration companies.
There will a requirement in the future for the Company to raise additional funding to pursue its
business objectives. The Company’s ability to raise capital may be effected by these economic risks.
Company has in place risk management procedures and processes to identify, manage and minimise
its exposure to these economic risks where appropriate.
The operations and proposed activities of the Company are subject to State and Federal laws and
regulations concerning the environment. As with most exploration projects and mining operations, the
Company’s activities are expected to have an impact on the environment, particularly if advanced
exploration or mine development proceed. It is the Company’s intention to conduct its activities to the
highest standard of environmental obligation, including compliance with all environmental laws.
The Board currently considers that the Company does not have any material exposure to social
sustainability risk.
The Company’s Corporate Code of Conduct outlines the Company’s commitment to integrity and fair
dealing in its business affairs and to a duty of care to all employees, clients and stakeholders. The
code sets out the principles covering appropriate conduct in a variety of contexts and outlines the
minimum standard of behaviour expected from employees when dealing with stakeholders.
As the company was officially listed on 9 March 2018, the Board has not yet reviewed the Risk
Management Framework for year. The Board plans to undertake a review around the time of the
annual anniversary of listing.
A summary of Saturn Metals Limited’s Risk Management review procedures can be found in the
corporate governance information section of the Company website at www.saturnmetals.com.au.
Considerable importance is placed on maintaining a strong control environment. The Board actively
promotes a culture of quality and integrity. Control procedures cover management accounting,
financial reporting, compliance and other risk management issues.
No internal audit function is currently in place due to the size of the Company, however Board regularly
assess the need for an internal audit function. The Board encourages management accountability for
the Company’s financial reports by ensuring ongoing financial reporting during the year to the Board.
Half yearly, the Financial Controller (or equivalent) and the Managing Director are required to state in
writing to the Board that in all material respects:
Declaration required under s295A of the Corporations Act 2001 -
the financial records of the Company for the financial period have been properly maintained;
the financial statements and notes comply with the accounting standards;
the financial statements and notes for the financial year give a true and fair view; and
➢
➢
➢
➢ any other matters that are prescribed by the Corporations Act regulations as they relate to the
financial statements and notes for the financial year are satisfied.
60
Additional ASX information
Additional declaration required as part of corporate governance -
➢
the risk management and internal compliance and control systems in relation to financial risks
are sound, appropriate and operating efficiently and effectively.
These declarations were received for the June 2018 financial year.
CODE OF CONDUCT
The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the
Board and applies to all Directors and employees. The Code is regularly reviewed and updated as
necessary to ensure it reflects the highest standards of behaviour and professionalism and the
practices necessary to maintain confidence in the Company’s integrity.
The Code of Conduct embraces the values of:
Integrity & Objectivity
➢
➢ Excellence
➢ Commercial Discipline
The Board encourages all stakeholders to report unlawful/unethical behaviour and actively promotes
ethical behaviour and protection for those who report potential violations in good faith.
TRADING IN SATURN METALS LIMITED SECURITIES BY DIRECTORS, OFFICERS AND EMPLOYEES
The Board has adopted a specific policy in relation to Directors and officers, employees and other
potential insiders buying and selling shares.
Directors, officers, consultants, management and other employees are prohibited from trading in the
Company’s shares, options and other securities if they are in possession of price-sensitive
information.
The Company's Security Trading Policy is provided to each new employee as part of their induction
training.
The Directors are satisfied that the Company has complied with its policies on ethical standards,
including trading in securities.
CONTINUOUS DISCLOSURE
The Board has a Market Disclosure Policy to ensure the compliance of the Company with the various
laws and ASX Listing Rule obligations in relation to disclosure of information to the market. The
Managing Director is responsible for ensuring that all employees are familiar with and comply with the
policy.
The Company is committed to:
a) complying with the general and continuous disclosure principles contained in the Corporations
Act and the ASX Listing rules;
b) preventing the selective or inadvertent disclosure of material price sensitive information;
c) ensuring shareholders and the market are provided with full and timely information about the
Company’s activities; and
d) ensuring that all market participants have equal opportunity to receive externally available
information issued by the Company.
61
Additional ASX information
SHAREHOLDER COMMUNICATIONS STRATEGY
The Company recognises the value of providing current and relevant information to its shareholders.
The Company has adopted a Shareholder Communications Strategy which can be accessed from
Saturn Metals Limited’s website at http://www.saturnmetals.com.au
Information is communicated to shareholders through the annual and half yearly financial reports,
quarterly reports on activities, announcements through the Australian Stock Exchange and the media,
on the Company’s web site and through the Chairman’s address at the annual general meeting. After
the Annual General Meeting, the Managing Director provides shareholders with a presentation.
Afterwards all Directors are available to meet with any shareholders and answer questions.
Shareholders are encouraged to contact the Company through the “Contact Us” section on Saturn
Metals Limited’s website, to submit any questions via email, or call.
The Company’s website provides communication details for its Share Registry, including an email
address for shareholder enquiries direct to the Share Registry.
In addition, news announcements and other information are sent by email to all persons who have
requested their name to be added to the email list. If requested, the Company will provide general
information by email.
The Company will, wherever practicable, take advantage of new technologies that provide greater
opportunities for more effective communications with shareholders.
The Company ensures that its external auditor is present at all Annual General Meetings to enable
shareholders to ask questions relevant to the audit directly to the auditor.
COMPANY WEBSITE
Saturn Metals Limited has made available details of all its corporate governance principles, which can
be found in the corporate governance information section of the Company website at
www.saturnmetals.com.au.
62
Shareholder information
Information relating to shareholders at 21 September 2018
Distribution of shareholders
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
No. of Holders
No. Ord Shares
%
3
17
74
268
72
434
603
0.01
56,522
0.10
722,356
1.29
12,359,731
22.07
42,860,789
76.54
56,000,001
400
Substantial shareholders
No. Ord Shares
%
1
PEEL MINING LIMITED
20,000,001
35.71
2 WHYTHENSHAWE PTY LTD AND ASSOCIATES
1,250,000
7.59
63
Twenty largest shareholders
No. Ord Shares
%
1
2
PEEL MINING LIMITED
20,000,001
35.71%
ROMAN ROAD HOLDINGS PTY LTD ATF ROMAN ROAD TRUST
3 WYTHENSHAWE PTY LTD
DENKEY PTY LTD
4 HAMPTON HILL MINING NL
5 WASHINGTON H SOUL PATTINSON & COMPANY LIMITED
6 WARRAMBOO HOLDINGS PTY LTD
6 MR ANDREW LENOX HEWITT
6
REDCLIFF PTY LTD
7 WYTHENSHAWE PTY LTD
PERTH CAPITAL PTY LTD
7
7
PERTH CAPITAL PTY LTD
8 HOWARD TRADING CO PTY LTD
9
10 NAVIGATOR AUSTRALIA LTD
11 PARKRANGE NOMINEES PTY LTD
11 PATINA RESOURCES PTY LTD
12 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
13 PROSPER WA PTY LTD
13 JASPER HILL RESOURCES PTY LTD
13 MR SIMON LEE & DR ERIC TAN
14 MR KEIRAN HAYNES
15 G & N LORD SUPERANNUATION PTY LTD
16 JOJO ENTERPRISES PTY LTD
17 MR KENNETH BIDDICK & MRS CATHERINE BIDDICK
17 ADVANCE PUBLICITY PTY LTD
17 JOST SUPERANNUATION PTY LTD
17 MR CHRISTOPHER MARK ROVIRA
17 MRS PETREA KRISTINE MCGHEE
17 TRAYBURN PTY LTD
17 APPOLO PTY LTD
18 1215 CAPITAL PTY LTD
19 MR PATRICK JAMES DYMOCK ELLIOTT
19 ASTROGEM PTY LTD
19 ARINYA INVESTMENTS PTY LTD
19 MS BIANCA POPE
19 MR ANTHONY PAUL ROVIRA
19 MR ANDREW LENOX HEWITT
19 MRS LEANNE MAY HOSIE & MR CRAIG COLIN HOSIE
19 MR SIMON HADFIELD & MRS FIONA HADFIELD
19 RUSSELL HOWARD PTY LTD
19 WALSEC PTY LTD
19 SOMNUS PTY LTD
19 MULCASTER SUPER FUND PTY LTD
20 WALSEC PTY LTD
1,400,000
1,375,000
1,250,000
1,100,000
1,000,000
1,000,000
1,000,000
625,000
625,000
625,000
600,000
545,000
500,000
375,000
375,000
365,000
300,000
300,000
300,000
290,000
285,000
250,930
250,000
250,000
250,000
250,000
250,000
250,000
250,000
231,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
191,182
2.50%
2.46%
2.23%
1.96%
1.79%
1.79%
1.79%
1.12%
1.12%
1.12%
1.07%
0.97%
0.89%
0.67%
0.67%
0.65%
0.54%
0.54%
0.54%
0.52%
0.51%
0.45%
0.45%
0.45%
0.45%
0.45%
0.45%
0.45%
0.45%
0.41%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.36%
0.34%
39,058,113
69.75
64
Shareholder information
At the prevailing market price of $0.21 per share there were 5 shareholders with less than a
marketable parcel of shares at 20 September 2018.
At 20 September 2018 there were 434 holders of ordinary shares in the Company.
At the date of this report, 20,000,001 shares held by Peel Mining Limited was held under escrow.
There were no shares or options restricted by the ASX.
Unquoted securities
At the date of this report the Company had 4,000,000 unlisted share options on issue.
Voting Rights
“Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at
meetings of Shareholders or classes of Shareholders:
a) each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;
b) on a show of hands, every person present who is a Shareholder or a proxy, attorney or
Representative of a Shareholder has one vote (even though he or she may represent more
than one member); and
c) on a poll, every person present who is a Shareholder or a proxy, attorney or Representative of
a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he
is appointed a proxy, attorney or Representative, have one vote for the Share, but in respect of
partly paid Shares, shall have such number of votes being equivalent to the proportion which
the amount paid (not credited) is of the total amounts paid and payable in respect of those
Shares (excluding amounts credited).”
65