Saturn Metals Limited
ANNUAL REPORT 2019
ABN 43 619 488 498
1 .
This page has been intentionally left blank
2 .
Corporate Directory
Directors
Share Registry
Robert Tyson
Ian Bamborough
Andrew Venn
Executive Chairman
Managing Director
Non-executive Director
Link Market Services Limited
Level 12 QV1 Building
St Georges Tce
PERTH WA 6000
Company Secretary
Ryan Woodhouse
Registered Office
Unit 1, 34 Kings Park Rd
WEST PERTH WA 6000
Telephone: +61 1300 554 474
Facsimile: +61 (0)2 9287 0303
Website: www.linkmarketservices.com
Telephone: + 61 (08) 6424 8681
Email: info@saturnmetals.com.au
Stock Exchange Listing
Auditors
Securities of Saturn Metals Limited are listed on
the Australian Securities Exchange (ASX)
ASX Code: STN
PricewaterhouseCoopers
Level, 15
125 St Georges Terrace
Perth WA 6000
ACN: 619 488 498
Website: www.saturnmetals.com.au
3 .
Chairman’s Letter
Review of Operations
Schedule of Tenements
Mineral Resource Estimation Governance Statement
Director’s Report
Remuneration Report (audited)
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Director’s Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Additional ASX Information
Shareholder Information
Contents
5
6
14
15
17
20
29
30
31
32
33
48
49
50
56
64
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 6 September 2019. The Directors
have the power to amend and reissue the financial statements.
4 .
Chairman’s Letter
Dear Shareholders.
During the year, your Company has been extremely active, achieving several important milestones as
we pursue our goal of defining and developing a gold mining operation on our 100% owned Apollo Hill
Project.
In November 2018, the Company delivered its maiden Resource estimate at its flagship Apollo Hill
deposit increasing the Indicated and Inferred Mineral Resource by 36% to 20.7 Mt @ 1.0g/t Au for
685,000oz¹.
Since that time your Company has completed another major Resource-upgrade focussed exploration
program. Drilling successfully extended the main Apollo Hill mineralised corridor, further defined the
higher grade +1.5g/t Au architecture within the main lode, and discovered a number of higher-grade,
near-surface, hanging-wall lodes immediately adjacent and parallel to the current resource envelope.
We are delighted with the results which include intersections such as:
• 10m @ 5.78g/t Au from 46m including 5m @ 11g/t Au from 46m - AHRC0124;
• 13m @ 5g/t Au including: 4m @ 9.8g/t Au from 74m - AHRC0136;
• 16m @ 3.1g/t Au from 11m – including 12m @ 4.01g/t Au from 13m, including 6m @ 7.21g/t
Au from 19m – all contained within 51m @ 1.08g/t from 11m - AHRC0208.
This work is in anticipation of an updated Resource estimation process due in the coming weeks.
In addition, first pass regional exploration drilling identified a number of important gold and geological
trends in our greater greenfields land package and follow-up drilling is planned.
During the year, the company completed a number of successful capital raisings at successively
higher prices which has provided a strong balance sheet and diversified Shareholder register. Your
Company plans to continue driving the discovery process whilst maintaining a firm focus on
expanding the Apollo Hill Resource base.
I look forward to an exciting year as we rapidly move Apollo Hill towards development and accelerate
exploration for new opportunities across our surrounding 1000km2 land package.
On behalf of all Shareholders I would like to thank Ian Bamborough, Kath Cutler and team for their
excellent efforts and achievements since listing, along with Andrew Venn and Ryan Woodhouse for
their continued strong support.
Yours Sincerely,
Rob Tyson
Chairman
5 .
Review of Operations
6 .
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: 63,642,859 (30/06/2019)
• Share Price: $0.30 (30/06/2019)
• Market Capitalisation: $19M
• Cash: $2.745M (30/06/2019)
• 0.685Moz 2012 JORC Resource
7 .
Review of Operations
Apollo Hill Tenements
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.
During the year the Company upgraded its flagship Apollo Hill deposit Indicated and Inferred
Mineral Resource to 20.7 Mt @ 1.0g/t Au for 685,000oz reported above a cut-off grade of 0.5g/t
(maximum depth of the Resource at 180m below surface)¹.
This represented:
• A 14% increase in deposit grade to 1.0g/t Au;
• A 36% increase in overall contained Mineral Resource to 685koz;
• Based on additional Saturn Metals drilling a total of 3.3Mt @ 1.1g/t Au for 116koz is now
classified as an Indicated Mineral Resource representing a conversion of 22% of the
previous Inferred Mineral Resource.
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.
1The models are reported above nominal RLs (190 mRL - approximately 180 metres below surface (mbs) for Apollo Hill
northwest, 210 mRL approximately 150mbs for Apollo Hill southeast and 260 mRL, 90mbs for Ra deposit) and nominal 0.5 g/t
Au lower cut-off grade for all material types. Classification is according to JORC Code Mineral Resource categories. Totals
may vary due to rounded figures.
8 .
Review of Operations
Apollo Hill Tenements
Since the last Resource upgrade in November 2018 the company has completed approximately
20,000m of RC and diamond drilling over a number of programs to test new exploration targets and
provide information for an additional resource estimate.
Drilling successfully focused on:
• Extending the main Apollo Hill mineralised corridor;
• Further defining the higher grade +1.5g/t Au architecture within the main mineralised zone,
and;
• The discovery of a number of improved grade, shallow, hanging-wall lodes immediately
adjacent and parallel to the main Apollo Hill lode and resource envelope.
Significant near surface resource and extensional drilling intersections
include:
• 13m @ 3.81g/t Au from 119m within 23m @ 2.3g/t Au from 116m within 69m @ 1.0g/t Au
from 63m - AHRC0154;
• 30m @ 1.23g/t Au from 88m including 15m @ 2.0g/t Au from 103m inc. 8m @ 2.7g/t Au
from 103m - AHRC0149;
• 18m @ 1.30g/t Au from 18m including 8m @ 2.40g/t Au from 28m - AHRC0148;
• 26m @ 1.18g/t Au from 110m including 16m @ 1.53g/t Au from 110m - AHRC0121;
• 22m @ 1.11g/t Au from surface including 12m @ 1.5g/t Au from surface - AHRC0118;
• 14m @ 2.04g/t Au from 34m inc. 6m @ 4.55g/t Au - AHRC0156;
• 15m @ 1g/t Au from 55m including 6m @ 2.05g/t Au from 64m - AHRC0121;
• 22m @ 1.50g/t Au from 128m inc. 12m @ 2.33g/t Au from 128m - AHRC0135;
• 26m @ 1.19g/t Au from 1m inc. 10m @ 2.1g/t Au from 8m - AHRC0128;
• 19m @ 1.16g/t Au from 47m inc. 8m @ 2.17g/t Au from 51m - AHRC0134; and
• 7m @ 2.78g/t Au from 57m - AHRC0135.
Significant hanging-wall discovery intersections include:
• 10m @ 5.78g/t Au from 46m including 5m @ 11g/t Au from 46m - AHRC0124;
• 13m @ 5g/t Au including: 4m @ 9.8g/t Au from 74m - AHRC0136;
• 16m @ 3.1g/t Au from 11m – including 12m @ 4.01g/t Au from 13m, including 6m @ 7.21g/t
Au from 19m – all contained within 51m @ 1.08g/t from 11m - AHRC0208;
• 17m @ 2.96g/t Au from 41m – including 10m @ 4.82g/t Au from 45m, which also includes 4m
@ 9.31g/t Au from 51m all contained within 28m @ 1.8g/t from 39m - AHRC0221;
• 5m @ 5.39g/t Au from 96m within 16m @ 1.80g/t Au from 85m - AHRC0164;
• 7m @ 3.39g/t Au from 31m - AHRC0146;
• 18m @ 2.00g/t Au from 37m including 6m @ 5.21g/t Au from 37m - AHRC0127;
• 4m @ 6.72g/t Au from 76m contained within 23m @ 1.38g/t from 76m - AHRC0212.
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 0.685Moz JORC 2012
compliant inferred gold resource of 20.7 Mt at 1.0g/t Au1.
A resource estimation process has begun with a new statement planned for later in 2019.
9 .
Review of Operations
Apollo Hill Tenements
Ongoing Metallurgical Testwork – Positive
This year a laser ore sorting test on a sample of Apollo Hill mineralised material returned excellent
first pass results and highlighted the deposits amenability to this type of mineral processing upgrade.
Ongoing mineralogical and metallurgical test work continues to show simple rapid cyanidation
characteristics and a high gravity component.
10 .
Review of Operations
Apollo Hill Tenements
Excellent Infrastructure, Key Strategic Land Position
The Apollo Hill Project comprises 20 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.
11 .
Review of Operations
Regional Tenements
Regional Exploration
Potential to re-write the geology, prospectivity and history of the District
A two phase 7,045m 137-hole aircore drilling program was undertaken at multiple targets across
Saturn Metals Keith Kilkenny regional land package. Drilling was undertaken to assess several
targets identified as a result of last year’s high resolution airborne magnetics and ground gravity
surveys.
Results of this first pass drilling identified several anomalous areas.
12 .
Review of Operations
Regional Tenements
Best results were returned at Glenorn/Bob’s Bore where a broad (400m wide) anomalous zone of
mineralisation (~0.1- 0.7g/t Au) is noted in bottom of hole assays across the gold prospective Keith
Kilkenny shear zone, approximately 3.5km east of Apollo Hill. These intersections are also 500m
south of Bob’s Bore, where historic drill results including PHA0369, 9m @ 10.9g/t Au from 90mb
have been returned. Whilst the Bob’s Bore results returned were located under significant cover
these intersections are material from a regional perspective with multiple kilometres of strike length
of this gold prospective structure remaining open to the north and south where cover is interpreted
to thin.
Anomalous results at Atlanta South are seen in association with gold prospective syenite geology.
Further work is being planned in this area. Syenite intrusions are noted in the surrounding
greenstone at the nearby Dacian Mt Morgans Operation and at Saracen’s Porphyry deposit.
The Company successfully undertook a Section 18 Aboriginal Heritage Site Clearance with the
Department of Indigenous Affairs and Traditional Aboriginal Landowners over the Bob’s Bore and
Atlanta regional exploration trends and over Apollo Hill (total land area of 102km2). Cleared areas
are illustrated on the tenement map. Section 18 clearance work has paved the way for broad spaced
first pass reconnaissance AC drilling over the Bob’s Bore and Atlanta areas where multiple kilometres
of strike length of gold prospective stratigraphy and structure remain to be tested.
The Company’s tenement package is illustrated below. All tenements are 100% owned by Saturn
Metals Limited. Saturn Metals Limited currently holds 1,049km2 of contiguous tenements in 20
mining, exploration and prospecting licenses.
Saturn Metals Limited Tenement Map and Land Holdings
13 .
Schedule of Tenements
Tenement Name/Location Current Area Area Unit
Measured km2 Grant Date Expiry Date
E31/1063
APOLLO HILL
E31/1075
APOLLO
E31/1076
APOLLO
E31/1087
YERILA
56 Standard Block
19 Standard Block
28 Standard Block
4 Standard Block
168
55.8
83.8
12.0
9/03/2015
8/03/2020
9/03/2015
8/03/2020
10/03/2015
9/03/2020
19/03/2015
18/03/2020
E31/1116
APOLLO HILL
14 Standard Block
42.0
26/07/2016
25/07/2021
E31/1132
YERILLA
1 Standard Block
2.3
1/02/2017
31/01/2022
E31/1163
APOLLO HILL
70 Standard Block
214
27/04/2018
26/04/2023
E31/1164
APOLLO HILL
17 Standard Block
48.8
27/04/2018
26/04/2023
E39/1198
APOLLO HILL
11 Standard Block
E39/1887
APOLLO HILL
5 Standard Block
28.6
15.0
31/03/2009
30/03/2021
24/02/2016
23/02/2021
E39/1984
GLENORN
61 Standard Block
183.0
30/03/2017
29/03/2022
E40/0337
APOLLO
7 Standard Block
21.0
3/12/2014
2/12/2019
E40/372
APOLLO HILL
55 Standard Block
165.1
3/07/2018
2/07/2023
E40/373
APOLLO HILL
14 Standard Block
21.4
16/11/2019
15/11/2024
M31/0486
APOLLO HILL
M39/0296
APOLLO HIILL
P31/2068
YERILLA
P31/2072
YERILLA
P31/2073
YERILLA
E31/1202
YERILLA
411 Ha
25 Ha
78 Ha
68 Ha
166 Ha
4.1
0.2
0.8
0.7
1.7
12/03/2015
11/03/2036
30/09/1993
29/09/2035
8/05/2015
7/05/2021
8/05/2015
7/05/2021
8/05/2015
7/05/2021
2 Standard Block
2.9 E Application
Saturn Metals Limited Current Tenement Holdings
14 .
Mineral Resource Estimation Governance Statement
During the year, the Company provided an update to JORC 2012 Apollo Hill Mineral Resource
estimate.
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 reported in 2017 (no change June 2018).
Apollo Hill Inferred Mineral Resource estimate based on a 0.5 g/t Au cut-off grade
Mineral Resource - as at 30 June 2017
Apollo Hill
Gold
Project
Ra Zone
Apollo Hill
Total
Mt
Au g/t
1.2
16
17.2
1.1
0.9
0.9
Koz
42
463
505
Note: The figures in the above table are rounded to reflect the precision of the estimates and include rounding errors.
The table below sets out the updated November 2018 Apollo Hill Mineral Resource
The models are reported above nominal RLs (190 mRL – approximately 180 metres below surface
(mbs) for Apollo Hill northwest, 210 mRL approximately 150mbs for Apollo Hill southeast and 260
mRL 90mbs for Ra deposit) and nominal 0.5 g/t Au lower cut-off grade for all material types.
Saturn Metals advise that there is no material depletion by mining within the model area.
Estimation is by localized multiple indicator kriging for Apollo Hill zone; estimation of Ra zone used
restricted ordinary kriging due to limited data.
The model assumes a 7.5 mE by 7.5 mN by 5 mRL Selective Mining Unit (SMU) for selective open pit
mining.
The final models are SMU models and incorporate internal dilution to the scale of the SMU.
Technically the models do not account for mining related edge dilution and ore loss. These
parameters should be considered during the mining study as being dependent on grade control,
equipment and mining configurations including drilling and blasting.
Classification is according to JORC Code Mineral Resource categories.
Totals may vary due to rounded figures.
15 .
Mineral Resource Estimation Governance Statement
Competent Persons Statements - Resource
Apollo Hill and Apollo Hill Project
The information in this report that relates to Exploration Targets, geology, and Exploration Results
and data compilation is based on information compiled by Kathryn Cutler, a Competent Person who is
a Member of The Australian Institute of Mining and Metallurgists. Kathryn Cutler is a fulltime
employee of the Company. Kathryn Cutler 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’. Kathryn Cutler consents to the inclusion
in the report of the matters based on her information in the form and context in which it appears.
The information in this announcement that relates to the Apollo Hill Mineral Resource estimate (gold)
is based on information compiled and generated by Ingvar Kirchner, an employee of AMC
Consultants. Mr Kirchner consents to the inclusion, form and context of the relevant information
herein as derived from the original resource reports. Mr Kirchner has sufficient experience relevant to
the style of mineralisation and type of deposit under consideration and to the activity which is being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
16 .
Director’s Report
Your Directors present their report on the entity Saturn Metals Limited (“Company”), for the
financial year ended 30 June 2019 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.
Ian Bamborough
Robert Tyson
Andrew Venn
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
Ian Bamborough
Robert Tyson
Andrew Venn
Principal activities
Shares Directly and
Indirectly Held
Options
Performance Rights
1,563,941
710,000
250,000
3,500,000
1,000,000
1,000,000
-
-
-
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 gold focused exploration near Leonora, in
Western Australia.
Results
The loss for the Company for the financial year after providing for income tax amounted to
$1,187,119 (2018: $857,320). Loss per share $0.02 (2018: $0.03).
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 are contained in pages 6 to 13
in this report.
Significant changes in the state of affairs
Contributed equity increased during the financial year by $1,500,000 through the issue of 7,142,858
ordinary shares as part of a placement to professional shareholders.
500,000 performance rights were converted to fully paid ordinary shares for no consideration issued
to the Chairman due to the release to the ASX of the Resource upgrade at the Apollo Hill Gold Project
within 12 months of the offer as defined in the Saturn Limited’s IPO Prospectus.
Details of changes in contributed equity is disclosed in note 8 in the financial statements.
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.
17 .
Director’s Report
Events occurring after balance date
The company held a general meeting of shareholders on the 12th August 2019, to ratify the placement
of 7,142,858 ordinary shares, issued under ASX Listing Rule 7.1, to professional shareholders. This
resolution was passed by shareholders at the meeting.
On, 26th August 2019, the Company announced it had completed a share placement of 9,546,428
ordinary shares to institutional and sophisticated investors. The placement was completed at a share
price of 35 cents per share to raise $3,341,25TU (before costs). The new shares were quoted on the
ASX on Monday 2nd September 2019.
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 more than 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 Road Pty Ltd and Reef Mining Pty Ltd.
The Board considers that Mr Bamborough is not an independent Director.
Mr Bamborough holds 1,563,941 shares in Saturn Metals Limited and 3,500,000 share options.
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 12 years.
The Board considers that My Tyson is not an independent Director.
Mr Tyson holds 710,000 shares in Saturn Metals Limited and 1,000,000 share options.
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 holds 250,000 shares in Saturn Metals Limited and 1,000,000 share options.
Ryan Woodhouse – Company Secretary
Mr Woodhouse has 12 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.
18 .
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
Number held whilst in office
8
8
8
Number attended
8
8
8
19 .
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.
The Company has recorded a loss this financial year to date. No dividends have been declared or paid
during the reporting period.
20 .
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 2019 are set out in the following table:
Table 1: Director and Key Management Personnel remuneration
Short-Term
Employment
Benefits
Post-
Employment
Long-Term
Benefits
Share Based Payment
Cash salary
and fees
Super-
annuation
Leave
benefits
Options
Performance
Rights
Total
Performance
Related
$
$
$
$
$
$
%
201,684
50,000
50,000
301,684
25,730
4,750
4,750
35,230
-
-
-
170,761
50,379
50,379
271,519
-
47,909
-
47,909
398,175
153,038
105,129
656,342
43%
64%
48%
-
2019
Directors
I Bamborough
R Tyson
A Venn
Total
Short-Term
Employment
Benefits
Post-
Employment
Long-Term
Benefits
Share Based Payment
Cash salary
and fees
Super-
annuation
Leave
benefits
Options
Performance
Rights
Total
Performance
Related
$
$
$
$
$
$
%
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%
-
2018
Directors
I Bamborough
R Tyson
A Venn
Total
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)
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 $200,000
(excluding superannuation) per annum.
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.
21 .
Remuneration Report (Audited)
(f)
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 above Executive Service Agreement 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 above Executive Service Agreement 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 (excluding 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.
22 .
Remuneration Report (Audited)
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
2019
$
77,225
77,225
77,225
2018
$
403,785
66,529
66,529
Number of options
granted during year
2018
2019
Number of options vested
during year
2019
2018
500,000
500,000
500,000
3,000,000
500,000
500,000
1,000,000
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 at Grant
Date
6 December 2018 1) 50% vest on 1Moz at Apollo Hill
2) 20% on new 100koz discovery
3) 30% continuous employment for 2 years
6 Dec 2021
26.4 cents
15.4 cents
9 March 2018
Class A - 9 March 2019 (2,000,000)
Class B - 9 March 2020 (1,000,000)
Class C - 9 March 2021 (1,000,000)
9 Apr 2021
20.0 cents
13.0 cents
No options were exercised by Directors of Saturn Metals Limited.
23 .
Remuneration Report (Audited)
(ii) 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
(iii)
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;
No performance rights in the Company were issued during the year, however details of performance
rights issued in the prior year provided as remuneration to Director’s of Saturn Metals Limited are set
out below. When conditions attaching to the right 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
Fair value per
option at
Grant Date
9 March 2018
9 March 2018
Class A - 1,000,000 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
2018)
9 March 2019
(Exercised
2019)
Nil consideration
20 Cents
Nil consideration
20 Cents
Name
Fair Value at Grant Date
Directors
Ian Bamborough
Robert Tyson
Andrew Venn
2019
$
2018
$
200,000
100,000
-
-
-
-
Number of performance
rights granted during year
Number of performance
rights vested during year
2019
2018
2019
2018
-
-
-
1,000,000
500,000
-
-
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)).
24 .
Remuneration Report (Audited)
e) Option holdings of key management personnel (KMP)
30 June 2019
Balance
at the
start of
the year
Directors
I Bamborough 3,000,000
R Tyson
A Venn
500,000
500,000
Granted
as
compensation
Expired
during
year
Exercised
Other
Change
Balance at
end of the
year
Vested
and
exercisable
Unvested
500,000
500,000
500,000
-
-
-
-
-
-
-
-
-
3,500,000 1,000,000 2,500,000
1,000,000
500,000
500,000
1,000,000
500,000
500,000
KMP
No options were exercised by Directors of Saturn Metals Limited.
1,500,000
4,000,000
-
-
-
5,500,000 2,000,000 3,500,000
f) Performance rights holdings of key management personnel (KMP)
30 June 2019
Directors
I Bamborough
R Tyson
A Venn
KMP
Balance
at the
start of
the year
-
500,000
-
500,000
Granted as
compensation
Expired
during
year
Converted
to Shares
Balance
at end of
the year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
500,000
-
500,000
-
-
-
-
-
-
-
-
-
-
-
-
g) Share holdings of Directors and key management personnel – Shares in Saturn Metals
Limited (number)
30 June 2019
Balance at
The start of the year
Received during
the year conversion
of performance
rights
Other changes
during the year
Closing balance
Directors
I Bamborough
R Tyson
A Venn
KMP
1,500,000
210,000
250,000
1,960,000
-
500,000
-
500,000
63,941
-
-
63,941
1,563,941
710,000
250,000
2,523,941
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 27.33% holding in the Company at the time of this report, and previous owner of
the Apollo Hill Gold Project. During the year Saturn Metals Limited paid Peel Mining Limited for costs
associated with shared Management Services. The total of transactions with Peel Mining Limited
during the year was $153,238 (2018: $448,522). The outstanding balance at year-end was $13,232
(2018: $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 $92,729 (2018: $246,571). There was nil outstanding balance at year-end (2018:
$246,571).
25 .
Remuneration Report (Audited)
Cash bonuses
No cash bonuses have been paid by the Company during the financial year (2018: Nil).
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 other options issued to or
exercised by Directors of Saturn Metals Limited or key management personnel during the year.
Use of remuneration consultants
During the year ended 30 June 2019, 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
Saturn Metals Limited received 97% of “yes” votes on its remuneration report for the 2018 financial
year. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
End of Audited Remuneration Report
26 .
Shares under option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Directors’ Report
Date options granted
6 December 2018
9 March 2018
No option holder has any right under the options to participate in any other share issue of the
Company.
Expiry date
6 Dec 2021
9 Apr 2021
26.4 cents
20.0 cents
2,560,000
4,000,000
Issue price of
shares
Number under
option
Shares issued on the exercise of options
Date of Exercise
Nil
Issue price of shares
2018
2019
cents
cents
Number of shares issued
2019
Number
2018
Number
-
-
-
-
Shares issued on the conversion of performance rights
Date of Conversion
6 December 2018
9 March 2018
Issue price of shares
2018
2019
cents
cents
Number of shares issued
2019
Number
2018
Number
20 Cents
-
-
20 Cents
500,000
-
-
1,000,000
Indemnification and Insurance of Directors and Officers
During the financial year the Company paid a premium of $12,668 (2018: $3,377) 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.
27 .
Director’s 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
6th September 2019
28 .
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2019
Interest revenue
Revenue and other income
Share-based remuneration
Employee and Directors’ benefit expenses
Administration expenses
Loss before income tax
Income tax benefit (expense)
Note
2019
$
2018
$
10
18
11
12
80,126
80,126
(365,565)
(509,985)
(391,695)
(1,187,119)
27,334
27,334
(476,224)
(157,507)
(250,923)
(857,320)
-
-
Loss from continuing operations after income tax
(1,187,119)
(857,320)
Other comprehensive income
-
-
Total Loss and comprehensive income for the year
attributable to the members of Saturn Metals Limited
(1,187,119)
(857,320)
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
20
20
(0.02)
(0.02)
(0.03)
(0.03)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
29 .
Current Assets
Cash and cash equivalents
Trade and other receivables
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
Statement of Financial Position
For the Year Ended 30 June 2019
Note
2019
$
2018
$
3
4
5
6
7
8
9
9
2,745,167
170,942
2,916,109
109,228
8,176,971
8,286,199
4,982,038
195,080
5,177,118
101,379
5,086,787
5,188,166
11,202,308
10,365,284
572,957
572,957
315,379
315,379
572,957
315,379
10,629,351
10,049,905
12,132,001
(2,044,439)
541,789
10,629,351
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.
30 .
Statement of Changes in Equity
For the Year Ended 30 June 2019
Balance at 1 July 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
Loss for the year
Total comprehensive loss for the year
Issue of share capital
Share issue expenses
Share based payments
Balance at 30 June 2019
Contributed
Equity
$
Accumulated
Losses
$
Reserves
$
Total
Equity
$
Note
9
9
8
8
9
9
8
8
9
-
-
11,200,001
(569,000)
-
10,631,001
-
-
1,600,000
(99,000)
-
12,132,001
(857,320)
(857,320)
-
-
-
(857,320)
(1,187,119)
(1,187,119)
-
-
-
(2,044,439)
(857,320)
-
(857,320)
- 11,200,001
(569,000)
-
276,224
276,224
276,224 10,049,905
(1,187,119)
-
(1,187,119)
-
1,600,000
-
(99,000)
-
265,565
265,565
541,789 10,629,351
The above statement of changes in equity should be read in conjunction with the accompanying notes.
31 .
Statement of Cash Flows
For the Year Ended 30 June 2019
Note
13
2019
$
2018
$
(771,285)
(771,285)
(562,596)
(562,596)
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
Grant refunds
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 (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the start of year
Cash and cash equivalents at the end of year
3
(2,983,951)
56,916
(28,564)
89,013
(2,866,586)
1,500,000
(99,000)
1,401,000
(2,236,871)
4,982,038
2,745,167
(790,296)
-
(106,020)
9,949
(886,367)
7,000,001
(569,000)
6,431,001
4,982,038
-
4,982,038
The above statement of cash flows should be read in conjunction with the accompanying notes.
32 .
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 21. 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 2019 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 its tenement package, south of Leonora, 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
2019
$
245,167
2,500,000
2,745,167
2018
$
732,038
4,250,000
4,982,038
4. Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within 30 days and therefore are
all classified as current. Trade receivables are recognised initially at the amount of consideration that
is unconditional unless they contain significant financing components, when they are recognised at
fair value. The group holds the trade receivables with the objective to collect the contractual cash
flows and therefore measures them subsequently at amortised cost using the effective interest
method.
The Company applies the AASB 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables. Other current receivables and
prepayments were previously presented together with trade receivables but are now presented as
other financial assets at amortised cost (receivables) and other current assets (prepayments) in the
balance sheet, to reflect their different nature.
In determining the recoverability of a trade or other receivable using the expected credit loss model,
the Company performs a risk analysis considering the type and age of the outstanding receivables,
the creditworthiness of the counterparty, contract provisions, letter of credit and timing of payment.
The Company has applied the new rules retrospectively from 1 July 2018, and no material provision
for credit losses was required to be recognised in the current period ending 30 June 2019.
Receivables (Current)
GST recoverable from taxation authority
Accrued income
Grant receivable
Prepayments
Refer to note 14 for the policy on financial risk management
2019
$
2018
$
128,059
8,498
17,233
17,152
170,942
161,191
17,384
-
16,505
195,080
33 .
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 2019 (2018: $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
6. Exploration and evaluation assets
2019
$
2018
$
134,584
(25,356)
109,228
101,379
28,564
(20,715)
-
109,228
106,020
(4,641)
101,379
-
106,020
(4,641)
-
101,379
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
34 .
Notes to the Financial Statements
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.
Grants (R&D Tax Incentive grant income /Co Operative Drill Funding)
The Company accounts for funds received from the ATO under the Research and Development (“R&D”)
Tax Incentive Scheme as an offset to the Exploration and Evaluation asset, where the initial expenses to
which it relates were capitalised. During the year, the Company also received a refund through the Co-
Operative Drill Funding scheme through the Western Australian Government. These funds are also
offset to the Exploration and Evaluation asset, where the initial expenses to which it relates were
capitalised.
At cost
Reconciliation
Opening balance
Acquisition of Apollo Hill Gold project
Exploration expenditure
Grant Refund
Closing balance
2019
$
2018
$
8,176,971
5,086,787
5,086,787
-
3,147,100
(56,916)
8,176,971
-
4,000,000
1,086,787
-
5,086,787
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 the same as their fair
values, due to their short-term nature.
Trade payables
Accrued expenses & other payables
8. Contributed Equity
Ordinary shares are classified as equity.
2019
$
128,055
444,902
572,957
2018
$
261,524
53,855
315,379
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.
35 .
Notes to the Financial Statements
2019
2018
Number of
Shares
$
Number of
Shares
$
63,642,859
12,132,001
56,000,001
10,631,001
(a) Share capital
Authorised and issued,
ordinary shares fully paid
(b) Movements in ordinary share capital
Opening balance, 1 July
56,000,001 10,631,001
1
1
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
Shares issued as a result of share placements
Transaction costs on share issues
Closing balance, 30 June
-
-
-
-
20,000,000
4,000,000
35,000,000
7,000,000
500,000
100,000
1,000,000
200,000
7,142,858
1,500,000
-
(99,000)
-
(569,000)
63,642,859 12,132,001
56,000,001
10,631,001
(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.
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)
Option expenses (Employee options)
Net Performance rights (Directors rights)
Closing balance
2019
$
2018
$
857,320
1,187,119
2,044,439
276,224
271,519
46,137
(52,091)
541,789
-
857,320
857,320
-
224,133
-
52,091
276,224
36 .
Notes to the Financial Statements
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
2019
2018
Opening balance
Options issued to Directors
Options issued to Employees
Exercised
Closing balance
Exercisable at 26.4 cents each on or before 6 Dec 21
Exercisable at 26.4 cents each on or before 6 Dec 21
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
Exercisable at 26.4 cents each on or before 6 Dec 21
Exercisable at 26.4 cents each on or before 6 Dec 21
$
-
224,133
-
224,133
Options
4,000,000
1,500,000
1,060,000
-
6,560,000
1,500,000
1,060,000
2,000,000
1,000,000
1,000,000
1,500,000
1,060,000
6,560,000
$
224,133
271,519
46,137
-
541,789
Options
-
4,000,000
-
4,000,000
-
-
2,000,000
1,000,000
1,000,000
-
-
4,000,000
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
2019
2018
Performance
Rights
500,000
-
$
52,091
47,909
Performance
Rights
-
1,500,000
$
-
252,091
(500,000)
(100,000)
(1,000,000)
(200,000)
-
-
500,000
52,091
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 vested has been determined as the amount of the grant date fair value of
the rights that is expensed. For the 2018 grant, the maximum value vested for this grant was
estimated based on the share price of the company at grant date. The minimum value of performance
rights shares vested 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
2019
$
80,126
80,126
2018
$
27,334
27,334
37 .
Notes to the Financial Statements
11. Expenses
Loss before income taxes includes the following specific expenses:
Employees and Director’s benefit expenses
Employment costs
Directors’ fees
Recruitment costs
12. Income tax
2019
$
2018
$
397,585
100,000
12,400
509,985
56,732
34,917
65,858
157,507
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.
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.
The Company has total carried forward tax losses arising in Australia of $1,734,380 (2018: $417,945)
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 $853,458 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.
38 .
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/(decrease) in receivables
Increase in payables
Loss after income tax
14. Financial Risk Management
Overview
2019
$
(771,285)
(365,565)
(21,347)
80,126
2018
$
(562,597)
(476,224)
(4,641)
27,334
(32,404)
(76,644)
(1,187,119)
177,696
(18,888)
(857,320)
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
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as
well as credit exposures to wholesale and retail customers, including outstanding receivables.
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.
The Company applies the AASB 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure the
expected credit losses, trade receivables and contract assets have been grouped based on shared
credit risk characteristics and the days past due.
Tax receivables and prepayments do not meet the definition of financial assets.
Risk management
The Company limits its exposure to credit risk in relation to cash and cash equivalents and other
financial assets by only utilising banks and financial institutions with acceptable credit ratings.
The Company operates in the mining exploration sector and does not have trade receivables from
customers.
Impairment losses
At 30 June 2019 the Company has not recognised any impairment losses.
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
39 .
Notes to the Financial Statements
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 2019
Trade and other payables less than 6 months
30 June 2018
Trade and other payables less than 6 months
Interest rate risk
Financial
Obligations
$
572,957
315,379
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
4
Carrying Amount
2019
$
2,500,000
2018
$
4,250,000
Cash flow sensitivity analysis for variable rate instruments of the Company
At 30 June 2019 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 $25,000 lower/higher (2018:
$42,500 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 2019 (2018: $Nil).
Operating lease commitments
The Company had no operating lease commitments within 12, before 60 or later than 60 months as at
30 June 2019.
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
$615,580 (2018: $622,860). 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.
40 .
Notes to the Financial Statements
16. Events after the reporting period
The company held a general meeting of shareholders on the 12th August 2019, to ratify the placement
of 7,142,858 ordinary shares, issued under ASX Listing Rule 7.1, to professional shareholders. This
resolution was passed by shareholders at the meeting.
On, 26th August 2019, the Company announced it had completed a share placement of 9,546,428
ordinary shares to institutional and sophisticated investors. The placement was completed at a share
price of 35cents per share to raise $3,341,250 (before costs). The new shares were quoted on the
ASX on Monday 2nd September 2019.
There were no other 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
In the prior year, the company purchased the Apollo Hill Gold Project from Peel Mining Limited for
$4,000,000 in shares. At 30 June 2019, Peel Mining Limited (PEX) held 31.43% of Saturn Metals
Limited (2018: 35.71%). 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 to Peel Mining Limited for costs associated with the
provision management services.
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
2019
$
2018
$
301,684
35,230
-
319,428
656,342
2019
$
-
153,238
92,729
245,967
79,486
24,352
4,540
476,224
584,602
2018
$
4,000,000
448,522
246,571
4,695,093
2019
$
2018
$
(13,232)
-
(13,232)
(2,049)
(246,571)
(248,620)
Other than the above, the Company had no other transactions with related parties.
41 .
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 to Directors and employees through is Incentive
Option Plan.
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
Options granted to employees
2019
Number
1,500,000
2019
$
271,519
2018
Number
4,000,000
2018
$
224,133
1,060,000
46,137
-
-
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
Cents Number Number Number Number
Number
Vested and
exercisable
at end of
the year
Number
6 Dec 18
6 Dec 21
6 Dec 18
6 Dec 21
26.4
26.4
- 1,500,000
- 1,060,000
9 Mar 18
9 Apr 21
20.0 3,000,000 3,000,000
9 Mar 18
9 Apr 21
20.0 1,000,000 1,000,000
4,000,000 6,560,000
-
-
-
-
-
- 1,500,000
- 1,060,000
-
-
- 3,000,000
1,000,000
- 1,000,000
1,000,000
- 6,560,000
2,000,000
Fair value of options granted
The assessed fair value at grant date of options granted to Directors during the period ended 30 June 2019 was
15 cents per option (2018: 13 cents). The assessed fair value at grant date of options granted to employees
during the period ended 30 June 2019 was also 15 cents per option (2018: 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.
42 .
Notes to the Financial Statements
The model inputs for options granted during the years ended 30 June 2019 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
2019
Executive & Non-exec Director
Options
1) 50% vest on 1Moz at Apollo Hill
2) 20% on new 100koz discovery
3) 30% continuous employment for
2 years
26.4 cents
6 December 2018
6 December 2021
25.11 cents (20 day VWAP)
100%
0.00%
1.93%
2019
Employee options
1) 50% vest on 1Moz at Apollo Hill
2) 20% on new 100koz discovery
3) 30% continuous employment for
2 years
26.4 cents
6 December 2018
6 December 2021
25.11 cents (20 day VWAP)
100%
0.00%
1.93%
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
2,000,000 vest 9 Mar
2019
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%
2018
Executive & Non-exec
Director Options
1,000,000 vest 9 Mar
2020
20 cents
2018
Executive & Non-exec
Director Options
1,000,000 vest 9 Mar
2021
20 cents
9-Mar-18
9-Apr-21
20 cents
100%
0.00%
1.91%
9-Mar-18
9-Apr-21
20 cents
100%
0.00%
1.91%
(b) Performance Rights
In the prior year, the Company had 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:
2018 performance rights granted to Directors
2019
Number
-
2019
$
47,909
2018
Number
1,500,000
2018
$
252,091
Grant date
Expiry
date
Balance at
start of the
year
Granted
during the
year
Expired
during the
year
Number
Number
Number
Converted
to ordinary
shares
during the
year
Number
Balance at
end of the
year
Vested and
exercisable
at end of the
year
Number
Number
9 Mar 18
9 Apr 21
500,000
500,000
-
-
-
-
(500,000)
(500,000)
-
-
-
-
43 .
Notes to the Financial Statements
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
Saturn Metals Limited made no acquisitions using share-based payments during the year.
(d) Weighted averages – Options
The weighted average exercise price $0.22 (2018: $0.20).
The weighted average fair value of options is $0.14 (2018: $0.13).
The weighted average remaining contractual life is 2.04 years (2018: 1.82 years).
19. Remuneration of Auditors
Amounts paid or due and payable to the PricewaterhouseCoopers
Auditing and reviewing financial reports
Indirect taxation services
Valuation services
Total
20. Loss per share
2019
$
2018
$
35,000
35,000
3,061
-
3,061
33,000
33,000
15,200
38,474
53,674
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
2019
2018
(0.02)
(0.03)
(0.02)
(0.03)
(1,187,119)
(857,230)
Number of Number of
Shares
2019
Shares
2018
Weighted average number of shares used as the denominator
Weighted average number of shares used in calculating basic loss per share
57,045,402 25,501,371
44 .
Notes to the Financial Statements
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. 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 2019 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.
(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.
(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.
45 .
Notes to the Financial Statements
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 standards and amendments
Certain new accounting standards and interpretations have been published that are mandatory for the
30 June 2019 reporting period. 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 whilst introducing a new
impairment model. These latest amendments now complete the financial instruments standard.
Management completed a detailed assessment of its financial assets as at 1 July 2018. Most of the
requirements in AASB 139 for classification and measurement of the group’s financial assets were
carried forward in AASB 9. Hence, the Company’s accounting policy for financial assets did not
change except for the application of new impairment rules.
In determining the recoverability of a trade or other receivable using the expected credit loss model,
the group performs a risk analysis considering the type and age of the outstanding receivables, the
creditworthiness of the counterparty, contract provisions, letter of credit and timing of payment.
The group has applied the new rules retrospectively from 1 July 2018, and no material provision for
credit losses was required to be recognised in the current period ending 30 June 2019.
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 its application to the
Company’s financial statements, and determined there is nil effect as the Company is not currently a
revenue generating business.
(g) New accounting standards and interpretations not yet adopted
AASB 16 Leases
AASB 16 replaces AASB 117 Leases and for the lessees eliminates the classificiations of operating
leases and finance leases. Except for short-term leases and leases of low-value assets, rights-of-use
assets and corresponding lease liabilities are recognised in the statement of financial position. The
right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a
straight-line basis, while the lease liability is reduced by an allocation of each lease payment. In the
earlier periods of the lease, the expense associated with the lease under AASB 16 will be higher
when compared to lease expenses under AASB 117. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases.
The Company has reviewed its contracts that were in place at 1 July 2019 or have been entered into
since and determined that there are no long-term operating leases. As a result, no impact on the
current or prior reporting periods is expected upon adoption of AASB 16.
There are no other standards that are yet effective and that would be expected to have a material
impact on the entity in its current or future reporting periods and on any foreseeable future
transactions.
(h) 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.
46 .
Notes to the Financial Statements
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
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.
47 .
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 2019 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
6th September 2019
48 .
Auditor’s Independence Declaration
As lead auditor for the audit of Saturn Metals Limited for the year ended 30 June 2019, 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
6 September 2019
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 2019 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 2019
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 (including Independence
Standards) (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 $110,000, 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 because, 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
$8,176,971 at 30 June 2019 in respect of carry forward
expenditure on these tenements.
The Company performed an assessment as to whether
impairment indicators existed at 30 June 2019 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 2019 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:
● For a sample of exploration licence areas,
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.
Key audit matter
How our audit addressed the key audit matter
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.
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.
In assessing the appropriateness of the Company’s
going concern basis of preparation for the financial
report, we performed the following procedures,
amongst others:
● Agreed the amounts received from capital
raising during the year and subsequent to year
end to third party bank support.
● 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 Group’s plans for future actions
in relation to raising additional funds,
whether the outcome is likely to improve the
situation, and whether they are feasible in the
circumstances. This included tracing the cash
received by the Group from a share placement
subsequent to 30 June 2019 to bank
statements.
● 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 2019, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, 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 19 to 26 of the directors’ report for the year
ended 30 June 2019.
In our opinion, the remuneration report of Saturn Metals Limited for the year ended 30 June 2019
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
PricewaterhouseCoopers
Ben Gargett
Partner
Perth
6 September 2019
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.
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:
56 .
Additional ASX Information
➢ 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;
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
57 .
Additional ASX Information
➢ 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, Equity
Markets
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, Mining/Production & 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.
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.
58 .
Additional ASX Information
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
identification of any necessary or desirable improvements to Board or committee plans.
A review was undertaken during the post the year end reporting period.
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.
The Board undertook a review of senior executives post the year end reporting period.
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.
59 .
Additional ASX Information
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
REMUNERATION
Proportion of women
5 out of 12 (42%)
0 out of 2 (0%)
0 out of 3 (0%)
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.
60 .
Additional ASX Information
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.
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.
The Board reviewed the Company’s Risk Management Framework during year.
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.
61 .
Additional ASX Information
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.
➢ 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 30 June 2019 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.
62 .
Additional ASX Information
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.
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.
63 .
Shareholder Information
Information relating to shareholders at 5 September 2019
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
9
51
88
357
95
600
No. Ord Shares
945
167,995
817,529
14,582,749
57,620,069
73,189,287
%
1.50
8.50
14.67
59.50
15.83
100.00
Substantial shareholders
1 PEEL MINING LIMITED
2 WHYTHENSHAWE PTY LTD AND ASSOCIATES
No. Ord Shares
%
20,000,001
4,250,000
27.33
5.81
64 .
Twenty largest shareholders
1 PEEL MINING LIMITED
2 WYTHENSHAWE PTY LTD
3 MR ANDREW LENOX HEWITT
4 SIR LENOX HEWITT
5 CHESAPEAKE CAPITAL LTD
6 ROMAN ROAD HOLDINGS PTY LTD ATF ROMAN ROAD
7 T T NICHOLLS PTY LTD
TRUST
8 REDCLIFF PTY LTD
9 CAMPBELL KITCHENER HUME & ASSOCIATES PTY LTD
10 WYTHENSHAWE PTY LTD
11 WARRAMBOO HOLDINGS PTY LTD
11 NATIONAL NOMINEES LIMITED
12 PERTH CAPITAL PTY LTD
13 HOWARD TRADING CO PTY LTD
14 HAMPTON HILL MINING NL
15 G & N LORD SUPERANNUATION PTY LTD
16 BT PORTFOLIO SERVICES LIMITED
16 MS BIANCA POPE
17 PERTH CAPITAL PTY LTD
18 EQUITY TRUSTEES LIMITED
19 RUBI HOLDINGS PTY LTD
20 DENKEY PTY LTD
Shareholder Information
No. Ord Shares
%
20,000,001
27.33%
2,145,000
1,700,000
1,620,000
1,430,000
1,400,000
1,285,715
1,280,000
1,131,400
1,099,000
1,000,000
1,000,000
866,290
820,000
800,000
790,000
700,000
700,000
625,000
600,000
560,385
545,000
2.93%
2.32%
2.21%
1.95%
1.91%
1.76%
1.75%
1.55%
1.50%
1.37%
1.37%
1.18%
1.12%
1.09%
1.08%
0.96%
0.96%
0.85%
0.82%
0.77%
0.74%
At the prevailing market price of $0.42 per share there were 9 shareholders with less than a
marketable parcel of shares at 5 September 2019.
42,097,791
57.52%
At 5 September 2019 there were 600 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 6,560,000 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 .