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2023 Report2019 | Annual Report
STAVELY MINERALS LIMITED
ABN 33 119 826 907
www.stavely.com.au
CONTENTS
CORPORATE DIRECTORY ............................................................................................................................... 2
OPERATIONS REPORT ................................................................................................................................... 3
DIRECTORS’ REPORT ................................................................................................................................... 21
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS .................................................................. 32
DIRECTORS’ DECLARATION ......................................................................................................................... 33
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ......................... 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................... 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................ 36
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................ 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................................................................... 38
INDEPENDENT AUDIT REPORT .................................................................................................................... 59
ADDITIONAL SHAREHOLDER INFORMATION ............................................................................................... 62
TENEMENT SCHEDULE ................................................................................................................................. 64
2019 Annual Report | Page 1
CORPORATE DIRECTORY
Directors
Christopher Cairns (Executive Chairman & Managing Director)
Jennifer Murphy (Technical Director)
Peter Ironside (Non-Executive Director)
Amanda Sparks (Non-Executive Director)
Company Secretary
Amanda Sparks
Registered and Principal Office
First Floor, 168 Stirling Highway
Nedlands Western Australia 6009
Telephone: 08 9287 7630
08 9389 1750
Facsimile:
Web Page: www.stavely.com.au
Email: info@stavely.com.au
ABN
33 119 826 907
Share Registry
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth Western Australia 6000
Telephone: 1300 850 505
Facsimile: 08 9323 2033
Solicitors
Steinepreis Paganin
Level 4, Next Building
16 Milligan Street
Perth Western Australia 6000
Bankers
ANZ Bank
32 St Quentins Avenue
Claremont Western Australia 6010
Stock Exchange Listing
ASX Limited
Level 40, Central Park, 152-158 St Georges Terrace
Perth Western Australia 6000
ASX Code: SVY
Auditors
BDO Audit (WA) Pty Ltd
Chartered Accountants
38 Station Street
Subiaco Western Australia 6008
2019 Annual Report | Page 2
OPERATIONS REPORT
Overview
EXPLORATION
The Company’s assets are located in western Victoria
(Stavely, Ararat & Yarram Park Projects), north
Queensland (Ravenswood Project) and north eastern
Tasmania (Mathinna) in Australia.
The Stavely Project hosts an Inferred Mineral Resource
of 28 Mt at 0.4% copper for 110kt of contained copper
(gold and silver not estimated) in a chalcocite-enriched
supergene blanket developed at shallow depth over
primary wall-rock porphyry-style copper +/- gold
mineralisation.
Stavely Minerals is making very significant advances in
its search for a well mineralised copper-gold porphyry
at Thursday’s Gossan.
In excess of 13,700 metres of diamond drilling has been
conducted at the Thursday’s Gossan copper-gold
prospect during the 2019 financial year.
All the indications are that the system is a very hydrous,
strongly oxidised and well-endowed with metals, and
displays both multi-phase intrusion and mineralisation
events as well as ‘telescoping’ of later mineralisation
over earlier events – all attributes for a well-mineralised
copper-gold porphyry system. Evidence of copper-gold
porphyry mineralisation includes:
• Porphyry M Veins with intergrown chalcopyrite
• High-grade copper-gold mineralised late D veins
• Broad intervals of low-grade copper-gold wall rock
–
to pre-discovery drill
mineralisation
equivalent
in
intercepts at Cadia-Ridgeway.
in peripheral
tenor
alteration
Diamond hole SMD044 and SMD044W1, completed in
early 2019, intersected the largest and highest-grade
intervals to date:
For SMD044 -
- 952m at 0.23% copper from 11m
Including from the Copper Lode Splay (CLS):
- 70m at 0.51% Cu from 580m, incl
o 10m at 2.43% copper, 0.30g/t gold & 11g/t
silver
Including from the North-South Structure (NSS):
- 38.3m at 1.59% copper, 0.27g/t gold & 8g/t silver
from 890m, incl
o 12.3m at 2.59% copper, 0.44g/t gold & 18g/t
silver
For SMD044W1 -
- 393m at 0.32% copper from 11m
Including from the NSS:
- 18m at 3.62% copper, 0.28g/t gold & 15g/t silver
from 848m, incl
o 7m at 7.74% copper, 0.46g/t gold & 32g/t
silver, incl
o 2m at 15.7% copper, 1.07g/t gold & 65g/t
silver
These structurally-controlled zones of high-grade
copper-gold-silver mineralisation are now recognised as
copper lode-style mineralisation similar to that at the
Magma Mine in Arizona, USA, which are closely
associated with the Resolution porphyry copper deposit
(Inferred Resource of 1.8Bt at 1.53% copper – RTZ
Annual Report, 2018).
The causative porphyry intrusion, which should contain
the hottest and best-developed mineralisation, has not
yet been seen.
Deep drill hole SMD049, currently in progress is being
drilled straight down the plunge of the interpreted
structural ‘conduit’ that has accessed the causative
porphyry at depth.
The Fairview prospect in the Stavely Project is a 4.8km
long low-sulphidation mesothermal to epithermal gold
anomaly identified in soil sampling, and followed-up
with shallow reconnaissance aircore, RC and limited
diamond drilling, which returned good widths of
moderate grade gold mineralisation, including
-
11m at 2.4g/t gold
With large intervals of low-grade gold mineralisation,
including
-
30m at 1.4g/t gold from surface.
The Fairview Epithermal Gold prospect is potentially
analogous to a Lake Cowal gold deposit.
During the year, the Company’s maiden diamond
drilling program at the Mount Stavely porphyry
prospect, in the Stavely Project, intersected porphyry
zones, minor
low
temperature epithermal quartz veins and sulphides in
separate drill holes.
copper mineralisation and
A recent drill hole completed at the Toora West
prospect in the Yarram Park Project to test a discrete
magnetic anomaly has
interesting
package of rocks with fairy abundant sulphides. The
intersected an
2019 Annual Report | Page 3
OPERATIONS REPORT
assays for this drilling were pending at the end of the
reporting period.
Tasmania may earn an additional 10% interest
(to 85%).
Stavely Minerals is targeting additional Sandfire-style
VMS (volcanogenic massive sulphide) deposits in the
Ararat Project. The Ararat Project hosts Besshi-style
VMS copper-gold-zinc mineralisation at Mt Ararat with
1.2 Mt at 2.0% copper 0.5g/t gold and 0.4% zinc in
Inferred Mineral Resources.
The Ravenswood Project in northern Queensland is
prospective for porphyry hosted copper-molybdenum,
quartz-sulphide vein-hosted gold, VMS copper-gold and
epithermal gold mineralisation, as well as rare-earth
elements.
Unfortunately, neither the drilling conducted at the
Area 8
low-sulphidation eithermal target or the
Connolly North ‘Sarsfield’ style quartz-sulphide vein-
hosted gold target in the Ravenswood Project returned
any significant intercepts.
Application rights have been granted to Stavely
Tasmania Pty Ltd, to explore the high-grade Mathinna
Gold field in Tasmania, including the New Golden Gate
Mine with historical hard-rock production of 254,000oz
at an average grade of 26g/t gold.
CORPORATE
The opportunity to apply for the EL over the Mathinna
Goldfield was brought to the attention of Stavely
Minerals by some
industry colleagues of Stavely
Minerals’ management team.
Accordingly, Stavely Tasmania Pty Ltd was formed to
lodge the EL application and has entered into an
agreement with Bestlevel Holdings Pty Ltd (Bestlevel)
with the following terms:
•
• Stavely Tasmania is the manager.
• Upon the grant of the tenements, Stavely
Tasmania Pty Ltd will have a 51% interest in the
tenement(s) and Bestlevel will have a 49%
interest.
In consideration for a $50,000 payment to
Bestlevel, Stavely Tasmania has the right to earn
an interest of up to 85% in the tenement(s) in the
following stages:
o exploration-related expenditure of $500,000
within a two-year period to earn an additional
interest of 24% (to 75%); and
o at completion of a Feasibility Study and
payment of $200,000 to Bestlevel, Stavely
• Subject to Stavely Tasmania having earned its 85%
interest, a Joint Venture will be formed and
subsequent expenditure will be on a ‘contribute or
dilute’ basis.
• Should Bestlevel’s interest fall below 5%, it will be
transferred to Stavely Tasmania in consideration
for a 1.5% net smelter return (NSR).
• Stavely Tasmania retains a right to purchase
Bestlevel’s NSR for payment of $250,000 per 0.5%
NSR to a maximum of $750,000 to acquire the
entire NSR.
• Should the Joint Venture announce in a JORC-
compliant Public Report an Ore Reserve in excess
of 500,000oz, Stavely Tasmania will pay Bestlevel
$500,000.
• Both parties have pre-emptive rights over the
other’s interest.
Stavely Tasmania have been granted the application
rights to explore the rich, high-grade Mathinna
Goldfield in Tasmania, including the New Golden Gate
Mine with historical hard-rock production of 254,000oz
at an average grade of 26g/t gold. Subsequently the
Company was granted the application rights to an
additional two exploration licences, one surrounding
the New Golden Gate Mine and the other 13 kilometres
north within the highly prospective Alberton –
Mathinna “Gold Corridor”.
On 14 September, the Company announced that, due to
health reasons, Mr William ‘Bill’ Plyley stepped down as
Chairman of Stavely Minerals but would remain on the
Board as Non-executive Director. Bill had been the
Chairman of Stavely Minerals since the Company’s
listing on the ASX in 2014. Mr Chris Cairns assumed the
role of Executive Chairman.
Mrs Amanda Sparks accepted an invitation to join the
Board as Non-Executive Director and will continue as
Company Secretary. Mrs Sparks has been Stavely
Minerals’ Company Secretary since
is a
Chartered Accountant and a Fellow of the Financial
Services Institute of Australasia. Amanda has over 30
years of resources related financial experience, both
with explorers and producers and brings a range of
important skills to the Board with her extensive
experience
financial management, corporate
governance and compliance for listed companies.
listing,
in
2019 Annual Report | Page 4
OPERATIONS REPORT
On 20 November, the Company announced the sad
news that Mr William ‘Bill’ Plyley, Director and former
Chairman, had passed away after a courageous battle
with brain cancer.
In April/May 2019, Stavely Minerals completed a capital
raising which was underpinned by a Share Placement of
12.3 million shares at 26 cents per share to
sophisticated and institutional investors to raise $3.2
million before costs.
Concurrently with the Share Placement, Stavely
Minerals issued approximately 7.7 million shares at 26
cents to Titeline Drilling as an advanced payment for $2
million of drilling services to be completed in the next
12 months. The shares issued to Titeline Drilling are
held
in voluntary escrow and will be released
progressively as they are offset against a proportion of
monthly drilling invoices.
In addition, the Company completed a Share Purchase
Plan (SPP), also at 26 cents to allow existing
shareholders to participate in the capital raising on the
same terms as the Share Placement. Stavely offered
eligible shareholders the opportunity to subscribe for
new shares up to a maximum value of $15,000 per
eligible shareholder to raise a further $1.1 million.
The
funds raised through the combined Share
Placement and SPP are primarily being used to progress
drilling programs across the Company’s key projects in
western Victoria, Tasmania and Queensland.
Stavely Minerals had been successful in its application
for participation in the Federal Government’s Junior
Minerals Exploration Incentive (“JMEI”) scheme for the
2019/2020 income year. The Company has received an
allocation of up to $1,350,000 in tax credits which can
be distributed to eligible investors. The scheme is
voluntary and companies must apply each year to
participate. This is the second year that Stavely
Minerals has been successful in receiving an allocation
of JMEI credits.
During the year, Stavely Minerals were granted the
rights to apply for Block 3 in the Victorian Government’s
Stavely Ground Release Tender further consolidating
the Company’s dominant tenure position in the Stavely
Volcanic Arc of western Victoria. Block 3 is located
adjacent to the Company’s existing tenement holding at
further
the
Stavely Copper-gold Project and
consolidates Stavely Minerals’ dominant
tenure
position in the Stavely Volcanic Arc of western Victoria.
Stavely Minerals, through its 100% owned subsidiary
Stavely Tasmania Operations Pty Ltd, agreed in March
2019 to purchase a 100% beneficial interest from BCD
Resources NL in the assets of the 350,000tpa capacity
Beaconsfield gold processing plant and associated
infrastructure, property, rights, leases and permits in a
transaction summarised as:
• Payment of a $250,000 deposit on execution, to be
held in trust pending completion (which was paid
in March 2019);
• Payment of the balance of $1,750,000 within 90-
days of execution;
• On completion, all assets associated with the
to be
Beaconsfield gold processing plant
transferred to Stavely Tasmania Operations Pty Ltd
(“Stavely Tasmania Ops”);
• Also on completion, Stavely Tasmania Ops must
replace an environmental bond which, on transfer
of the mining lease, will be set at $500,000;
• Conditions precedent include:
o Stavely Tasmania Ops obtaining the prior
consent of the Tasmanian Minister for State
Growth for the transfer of the mining leases
and permits; and
o Stavely Minerals completing a capital raising
sufficient to fund the acquisition.
In June 2019, Stavely Tasmania Ops terminated the
acquisition agreement with BCD Resources NL (among
other parties) to purchase all assets associated with the
Beaconsfield gold processing plant.
in relation to
Subsequently, the Company was served with a writ of
summons
its termination of the
acquisition agreement with BCD Resources NL (among
other parties) to purchase all assets associated with the
Beaconsfield gold processing plant
(‘Acquisition
Agreement’), as detailed in its ASX announcement
dated 18 June 2019. The writ is seeking an order that
Stavely Minerals specifically perform its obligations
under the Acquisition Agreement and do all things as
may be necessary to ensure the Acquisition Agreement
is carried into effect or alternatively damages (of an
unspecified amount).
Stavely Minerals strongly believes that the claims made
in the writ are without merit and will defend the
proceedings. Separately, Stavely Minerals has sought a
return of the $250,000 deposit which it paid to BCD
Resources NL under the Acquisition Agreement.
2019 Annual Report | Page 5
OPERATIONS REPORT
Review of Operations
Background
The Ararat and Stavely Projects are
located
approximately 200 kilometres west of Melbourne and
are respectively just west of the regional centre of
just east of the regional town of
Ararat and
Glenthompson in Victoria (Figure 1).
The Victorian Projects include exploration tenements
with a total area of 252 square kilometres of 100%
owned and 201 square kilometres of joint venture
tenure.
The Projects have excellent infrastructure and access
with paved highways, port connection by railroad and a
62 MW wind farm located 8 kilometres from the Stavely
Project. The primary land use is grazing and broad acre
cropping.
The Ravenswood Project is located 90km south of
Townsville and 10km south west of Ravenswood in
-
north Queensland. The Mingela- Ravenswood
Burdekin Dam road passes down the eastern boundary
of the Project.
includes
four granted
The Queensland Project
exploration licences with a total area of 548 square
kilometres. The topography is made up of rolling hills
alternating with sandy flats. The Burdekin River runs
through the Project area. Access within the tenements
is by 4WD via station tracks.
The Mathinna Project is located in north-eastern
Tasmania, approximately 55km due east of Launceston
and in the vicinity of the regional towns of Mathinna
and Alberton. The Mathinna Project comprises three
exploration licence applications covering a total area of
108 square kilometres. Access to the Project area is
excellent via sealed roads. Access within the licence
areas is be gravel roads on State Forest and private
property.
Regional Geology Western Victoria
The Ararat and Stavely Projects, while only 40
kilometres apart, are hosted within materially different
geologic domains (Figure 2).
The Ararat Project is hosted in the Stawell - Bendigo
zone of the Lachlan Fold Belt and is comprised of
Cambrian age mafic volcanic and pelitic sedimentary
units of the Moornambool Metamorphics which were
metamorphosed to greenschist to amphibolite facies
during the Silurian period.
The Stavely Project is hosted in Cambrian age fault-
bounded belts of submarine calc-alkaline volcanics,
namely the Mount Stavely Volcanics, structurally in
contact with the older quartz-rich turbidite sequence of
the Glenthompson Sandstone and the Williams Road
Serpentinite.
Figure 1. Project Location Plan.
2019 Annual Report | Page 6
OPERATIONS REPORT
Figure 2. Geology of south-eastern Australia.
These sequences were deformed in the Late Cambrian
Delamerian Orogeny. Seismic traverses and a recent
study by the Victorian Department of Economic
Development, Jobs, Transport and Resources in western
Victoria have supported the
interpretation of an
Andean-style convergent margin environment for the
development of the buried Stavely Arc beneath the
Stavely Volcanic Complex and environs (Schofield, A.
(ed) 2018). This regional architecture is considered
conducive to the formation of fertile copper / gold
mineralised porphyry systems (Crawford et al, 2003) as
is the case with the Macquarie Arc in New South Wales,
which hosts the Cadia Valley and North Parkes copper-
gold mineralised porphyry complexes.
The Lachlan Fold Belt and Delamerian sequences are in
fault contact through large-scale thrusting along the
east dipping Moyston Fault (Cayley and Taylor, 2001).
Largely unconformably overlying both these domains
by low-angle décollement is a structural outlier of the
younger Silurian fluvial to shallow marine sandstone to
mudstone sequences of the Grampians Group.
Regional Geology North Queensland
The dominant rock types within the Ravenswood
Project are typically I-type calcic hornblende-biotite
granodiorite to tonalite of the Ravenswood Batholith of
Middle Silurian to Middle Devonian age (Figure 3).
A major structure, the Mosgardies Shear Zone, cuts
east-west through the Ravenswood Batholith adjacent
to three gold centres. The shear zone is up to 2.5km
wide. The main reef at Ravenswood, the ”Buck Reef”, is
contained within the Mosgardies Shear Zone. The
majority of faults in the area are transverse to the
Morgardies Shear Zone and trend 30o to 40o either side
of north. The bulk of the auriferous quartz reefs and
leaders are hosted by shears with NW to NS orientation.
Mineralisation is associated with shear hosted quartz
veins and is dominated by pyrite-chalcopyrite-galena-
2019 Annual Report | Page 7
OPERATIONS REPORT
overlain by Silurian to Early Devonian sediments of the
Panama group.
Gold deposits occur as auriferous reefs, hosted in the
Mathinna Beds. The New Golden Gate Mine and
associated vein deposits are hosted within the Lone Star
Siltstone formation which comprises basal bioturbated
marine siltstone/shale/mudstone which is laminated to
thinly bedded. Minor, commonly pyritic black shale is
present.
gold. The veins are generally narrow and of limited
strike length. This style of mineralisation is widespread
but of low tonnage.
Copper as chalcopyrite
(and molybdenum-gold)
mineralisation is also associated with quartz porphyry
stocks. Mineralisation is contained both in sparse
quartz veins and disseminated within the intrusive.
More widespread phyllic (quartz-sericite) and potassic
(biotite) alteration is reported suggestive of porphyry
style alteration and mineralisation. This style of deposit
offers bulk tonnage potential.
Cu-Au-Mo occurs in intrusive breccias (“pipes”) at Three
Sisters and Mt Wright outside the Project area. Paleo-
placer gold deposits occur in Quaternary sediments on
the flanks of Tertiary laterites.
Figure 3. Ravenswood Project – Regional Geology Plan.
Regional Geology North East Tasmania
The regional geology of the Mathinna Project is
dominated by the Mathinna Supergroup rocks and
granitoids. Gold mineralisation within the north-
trending Mangana
westerly
to Lyndhurst gold
lineament
is hosted by the Silurian to Devonian
Mathinna Beds (Figure 4). The Mathinna Beds are a
folded sequence of sediments comprise an alternating
sequence of bedded quartzites, sandstones, siltstones
and slates. The Mathinna Beds are unconformably
Figure 4. Mathinna Project - Regional Geology Plan.
Mineral Resources
The Ararat and Stavely Projects host Mineral Resources
reported in compliance with the 2012 JORC Code:
(a) Ararat Project Mineral Resource
In the Ararat Project, the Mount Ararat prospect hosts
a Besshi-style VMS deposit with an estimated (using a
1% Cu lower cut-off) Total Mineral Resource of
1.3Mt at 2.0% copper, 0.5g/t gold, 0.4% zinc and 6g/t
silver for a contained 26kt of copper, 21,000 ounces of
gold, 5.3kt of zinc and 242,000 ounces of silver (Table
1).
2019 Annual Report | Page 8
OPERATIONS REPORT
Refer to ASX release dated 8 September 2015 for all
criteria for sections 1, 2 and 3 of the JORC Code Table 1
and 2.
The Mt Ararat Copper Indicated and Inferred Resource
Estimate, August 2017, remains unchanged from the
Mt Ararat Copper Indicated and Inferred Resource
Estimate, August 2015. There has been no additional
drill data collected from the deposit and although
economic circumstances affecting the mining industry
have changed since 2015, the underlying assumptions
utilised in 2015 Mineral Resource estimate remain
valid.
(b) Stavely Project Mineral Resource
In the Stavely Project, at the Thursday’s Gossan
prospect, a near surface secondary chalcocite enriched
blanket with an estimated (using a 0.2% Cu grade lower
cut-off) – 28Mt at 0.4% copper for 110kt of contained
copper (Table 2).
The Thursday’s Gossan Chalcocite Copper Inferred
Mineral Resource Estimate remains unchanged from
the Thursday’s Gossan Chalcocite Copper Inferred
Resource Estimate, August 2013. Although economic
circumstances affecting the mining
industry have
changed since 2013, the underlying assumptions
utilised in the 2013 Mineral Resource estimate remain
valid.
Ararat Project
The Ararat Project is prospective for VMS copper-gold-
zinc-silver mineralisation as well as ‘Stawell-style’ and
intrusion-related gold mineralisation.
The Mount Ararat copper deposit lies within a small
portion of a much more extensive prospective
exhalative horizon on the contact between the Carroll’s
Amphibolite and the Lexington Schist.
The Ararat Goldfield has significant historic alluvial and
deep lead production of circa 640,000 ounces of gold
but with no known substantial hard-rock source.
Apart from commencing a project review of the Ararat
tenements no other exploration was conducted during
the year.
Table 1. The Mount Ararat Resource Estimate (reviewed in 2019).
Reporting
Threshold
Classification
Domain
Tonnes: Cu
Resource
(KT)
Cu
Grade
(%)
Tonnes: Au,Ag,Zn
Resource (KT)
Au Grade
(ppm)
Ag Grade
(ppm)
Zn Grade
(%)
1.0% Cu
2.0% Cu
Indicated
Inferred
Total 1% Cu
Indicated
Inferred
Total 2% Cu
Supergene
Fresh
Total
Weathered
Supergene
Fresh
Total
Supergene
Fresh
Total
Weathered
Supergene
Fresh
Total
50
200
250
170
30
870
1070
1320
30
80
110
30
20
230
280
390
2.4
2.2
2.2
1.7
2.2
1.9
1.9
2.0
2.9
2.9
2.9
2.9
3.0
3.0
3.0
2.9
170
80
1070
1320
1320
30
50
310
390
390
0.5
0.4
0.5
0.5
0.5
1.3
0.3
0.6
0.6
0.6
3.1
4.4
6.2
5.7
5.7
7.9
4.2
7.7
7.3
7.3
0.1
0.4
0.4
0.4
0.4
0.2
0.4
0.6
0.5
0.5
Table shows rounded estimates. This rounding may cause apparent computational discrepancies. Significant
figures do not imply precision. Nominal copper grade reporting cuts applied. Three material types reported as
varied economic factors will be applicable to the deposit base on reported material types.
2019 Annual Report | Page 9
OPERATIONS REPORT
Table 2. The Thursday’s Gossan Chalcocite Copper Inferred Resource Estimate (reviewed in 2019).
Table shows rounded estimates. This rounding may cause apparent computational discrepancies. Significant
figures do not imply precision. Nominal copper grade reporting cuts applied. Three mineralised thicknesses
reported as varied economic factors are likely to be applicable to each.
Figure 5. Stavely, Yarram Park and Ararat Project Location Plan.
2019 Annual Report | Page 10
OPERATIONS REPORT
Stavely Project
Stavely Project hosts
The
significant
opportunities for discovery of porphyry copper-gold and
VMS base-metals +/- gold deposits (Figure 5).
several
During the year, the Company conducted diamond
drilling at the Thursday’s Gossan porphyry prospect,
completing twenty diamond holes for 11,243m and five
diamond wedges for 2,442m. In addition, two diamond
holes for 1,089m were drilled at the Mount Stavely
copper-gold porphyry target.
(designated SMD029W1) was continued to 837.5m
depth.
Assay results from diamond hole SMD029W1 have
returned strong copper-gold mineralisation within a
very broad zone of low-grade mineralisation including:
• 314m at 0.11% copper from 522m to end of hole
including:
o 1m at 1.04g/t gold from 652m
o 4m at 0.44% copper, 0.10g/t gold and 3.9g/t
silver from 690m, and
o 76m at 0.16% copper from 745m.
Drill hole SMD030 failed and subsequently SMD031 was
drilled in the opposite direction targeting the same
magnetic feature – anomaly ‘B’ (Figure 8). SMD031
intersected two hydrothermal breccia intervals which
were not well mineralised, however the footwall zones
to the west of the of both breccia does host copper
mineralisation and patchy gold mineralisation including:
• 16m at 0.18% copper from 109m
• 61m at 0.16 % copper from 164m, including
o 10 at 2.37% copper, 0.52g/t gold and 29g/t
silver, and
o 1m at 1.48% copper, 0.16g/t gold and 25g/t
silver
Figure 6 Thursday’s Gossan Prospect – Conceptual
Model.
i.
Thursday’s Gossan Porphyry Prospect
During the year twenty diamond drill holes (SMD029 to
SMD048) and five diamond wedges (SMD029W1,
SMD030W1, SMD044W1, SMD045W1 and SMD04W2)
were drilled (Figure 7). The drilling was targeting the
potassic ‘core’ where the best developed copper and
gold grades are expected to be loacted and is yet to be
discovered.
Drill hole SMD029 was designed to test aeromagnetic
anomaly ‘D’ (Figure 8). The hole failed at 384.7m
without reaching the target depth and consequently a
wedge was set in the hole and the wedged hole
Figure 7. Thursday’s Gossan Prospect – Drill Collar Location
Plan.
2019 Annual Report | Page 11
OPERATIONS REPORT
Hole SMD032 drilled to test aeromagnetic anomaly ‘C’
(Figure 8) intersected a strongly magnetic intrusive
dacite and zones of extremely strong magnetite
dissemination in sandstone – all above the LAS – and
adequately explained the aeromagnetic anomaly. The
drill hole was continued to test the area at depth on the
east side of the NSS. On the east side of the NSS, the drill
hole intersected the target quartz diorite porphyry but
not the target M veins. On the contact with a dacite
porphyry, the hole encountered a significant interval of
copper-gold-silver
basal
mineralisation, including (Figure 9):
high-sulphidation
• 63m at 0.84% copper and 0.11g/t gold from 517m,
including:
o 6m at 6.73% copper, 0.84g/t gold and 15g/t
silver from 538m, including:
1m at 22.8% copper, 0.91g/t gold and 48g/t
silver, and
2m at 2.43% copper, 0.28g/t gold and 4.9g/t
silver from 551m
The high-grade copper intercepts of 9m at 0.28% copper
and 0.21g/t gold from 719m and 2m at 2.43% copper
are separated by a late mineral dacite dyke.
From July to December 2018, holes SMD033 to SMD042,
inclusive were drilled to “prospect” along the NSS in the
northern portion of the Thursday’s Gossan prospect to
find the best / hottest occurrence of M veins below the
LAS.
Drilling issues also resulted in drill hole SMD033 being
abanonded at 121m and the subsequent redrilled hole,
SMD034, also failed to reach the target depth due to
broken ground.
SMD035 and SMD036 returned 5m at 1.10% copper and
0.15g/t gold, and 2m at 1.73% copper and 0.20g/t gold,
respectively in the NSS.
Holes SMD037 and SMD038 were drilled to target the
northern extension of the M veins in SMD035 (Figure 7).
Below the LAS and to the west of the NSS, both holes did
encounter ocassional M veins.
Figure 8. Thursday’s Gossan Prospect – Drill Collar Location
Plan over Aeromagnetic Image.
Hole SMD039 was drilled to target the northern
in SMD037. The hole
extension of the M veins
intersected magnetite/ epidote alteration, which was
followed up in hole SMD040. Under the LAS and to the
west of the NSS, SMD040 intersected patchy magnetite
and epidote alteration, trace quartz-magnetite, pyrite
and chalcopyrite as well as carbonate veining.
2019 Annual Report | Page 12
OPERATIONS REPORT
Figure 9. Thursday’s Gossan Prospect Schematic Cross Section SMD044-SMD047.
Drill holes SMD041 and SMD042 were targeting the core
of the porphyry below the LAS and to the west of the
NSS.The mineralised interval of 32m at 0.16% copper
commenced on the NSS in SMD041.
Observations from drill hole SMD042, completed to a
depth of 1,001.5m in December, resulted in a change of
focus from the north to the south. The NSS was
intersected in SMD042 at 825m which was significantly
higher up in the drill hole than the expected 1,050m.
This indicates that there has been significant shallowing
in the westerly dip of the NSS, which has the following
implications:-
The potential for a significant volume of the target host
quartz diorite porphyry (QDP) and the target porphyry
intrusion at depth is reduced on the west side of the
NSS. Conversely, there is significantly more ‘space’ for
the target host QDP and the deeper target porphyry
intrusion at depth to the east of, and below the NSS.
An analysis of the results received has led to the
observation that the section with holes SMD028,
2019 Annual Report | Page 13
OPERATIONS REPORT
SMD024, SMD023 and SMD022 all host mineralisation
on the LAS but the section to the north of that, with
holes SMD025, SMD035, SMD036 and SMD041 do not
host mineralisation on the LAS. The implication is that
the ascending mineralised fluid from the porphyry
source at depth did not penetrate along the LAS on the
northern section.
However, holes SMD035, SMD036 and SMD041 all do
host copper and high-grade copper-gold mineralisation
on the NSS. The implication is that on this northern
section, copper-gold mineralising fluids were ascending
along the NSS – probably near the northern-most extent
of the system.
The observed shallowing of the NSS at depth in SMD042
has resulted in a reinterpretation of the potential
location of the source porphyry intrusion. With the
shallowing of the NSS and with that structure clearly
hosting a series of high-grade copper-gold drill
intercepts in multiple drill holes, the causative porphyry
is now believed to be on the east side, and below the
shallowing NSS.
Figure 10. Thursday’s Gossan Prospect Schematic Cross Section SMD021–SMD045.
2019 Annual Report | Page 14
OPERATIONS REPORT
Drill hole SMD043 was collared to test a large gap in the
drilling at Thursday’s Gossan to the south of and at
depth below SMD032. Drill holes SMD033 and SMD034,
intended to test this area, both failed at shallow depths
in broken ground and were abandoned. SMD043 was
collared to test a similar space but the drill rig was
turned around 180 degrees to drill from the opposite
direction in better ground conditions.
Drill hole SMD043 was terminated due to excessive
deviation and drill hole SMD044 was collared in a similar
location.
Drill hole SMD044 returned a very large, low-grade
interval of 952m at 0.23% copper from 11m to 963m.
The drill hole intersected multiple zones of high-grade
copper-gold mineralisation including 10m at 2.43%
copper and 0.30g/t gold from the CLS structure and
38.3m at 1.59% copper and 0.27g/t gold from the NSS.
A wedge hole (SMD044W1) off drill hole SMD044 was
completed to provide further important geological
information to assist in vectoring into the causative
porphyry system.
The results from SMD044W1 include another broad
intercept of moderate-grade copper mineralisation of
393 metres at 0.32% copper. Included in these results
are the highest-grade intercepts over meaningful widths
to date with 18m at 3.62% copper, 0.28g/t gold and
15g/t silver including 2m at 15.7% copper, 1.07g/t gold
and 65g/t silver on the NSS.
Drill hole SMD045, collared to the south of SMD044,
intercepted a broad zone of moderate-grade copper,
307m at 0.22% copper from 15m as well as high-grade
structurally controlled copper- gold, 16m at 1.30%
copper and 0.15 g/t gold from 1,077m, in the NSS.
SMD045W1, drilled to target the NSS 170m vertically
above the intercept in SMD045, also returned significant
assay results including 9m at 0.28% copper and 0.21g/t
gold from 719m, however the NSS was not well
mineralised (Figure 10).
Diamond drill hole wedge SMD045W2, drilled to target
the NSS below the intercept reported in SMD045 has
returned a broad zone of moderate grade copper (74m
at 0.31% from 531m) and several higher-grade copper-
gold mineralisation including 3m at 1.12% copper and
0.26 g/t gold from 859m, as well as 12m at 0.51% Cu
and 0.1g/t gold from 1,129m in the NSS and 2m at
0.94% copper and 0.1g/t gold from 1,147m in the NSS
(Figure 10).
Diamond drill hole SMD047, drilled in the opposite
direction to previously reported intercepts in SMD044
and SMD045, intersects a broad zone of moderate
copper mineralisation with 147m at 0.31% copper and a
higher-grade interval of 8m at 0.81% copper and
0.21g/t gold in phyllic altered host-rock.
The high -grade intercepts in mineralised structures in
recent drill holes SMD044, SMD044W1, SMD045,
SMD045W1 and SMD045W2, have provided a vector to
the causative copper-gold porphyry at depth. When
modelling in the plane of the NSS, these intercepts
appear to reflect a steep southernly plunge to the well-
developed high-grade copper-gold-silver mineralisation.
This trend also appears to be reflected in a number of
different data sets
including sulphur abundance,
potassium and strontium geochemistry, vanadium over
scandium ratios (reflecting an evolved porphyry fluid
infra-red
short-wavelength white mica
source)
absorption features (as reflecting proximity to a source
porphyry),
(also reflecting
proximity to an oxidised magmatic source) and other
alteration mineralogy, copper sulphide species, the
distribution of disseminated and vein-hosted sulphate
minerals and vein characteristics.
light sulphur
isotopes
Deep drill hole SMD049 (a re-drill of SMD048 which
failed), currently in progress is planned to a depth of
1,500m, is being drilled directly down the plunge of the
interpreted structural ‘conduit’ for fluids emanating
from the porphyry at depth. This drill hole is being
drilled parallel to the NSS and is not expected to
intercept it. The primary target is the causative copper-
gold porphyry at depth.
ii.
Victor Porphyry Prospect
Hole SMD046 was drilled to test Dr Corbett’s
recommended Target ‘C’ in the centre of the Victor
porphyry target with its concentric- zoned alteration
system (Figure 11). The drill hole was succesfully pushed
beyond the ‘problematic’ drilling zone around 300m
depth (as encountered by previous explorers) and was
completed to a final depth of 636.9m. Despite
intersecting well-developed porphyry stockwork quartz
veining with
locally moderate molybdenite
mineralisation and trace to minor chalcopyrite and rare
bornite mineralisation, no significant copper intercepts
were returned.
2019 Annual Report | Page 15
OPERATIONS REPORT
disseminated magnetite, seen throughout the gabbro
explains the magnetic anomaly.
No anomalous assay results were returned and from
litho-geochemical sampling the intrusive from the hole
plots within the barren intrusive field within the Bob
Loucks’ Cu+Au productivity plot.
The age date came from a combination of U/Pb ratios on
individual spots in apatite and titanite grains was
478±21Ma. While the error is large it clearly shows the
gabbro to be of Cambrian age and contemporaneous
with the mineralisation at the Thursday’s Gossan
porphyry prospect, and not a Devonian intrusion.
Figure 11. Thursday’s Gossan Prospect – Alteration Zone with
Copper Mineralised Structures and Recent Drill Holes.
Mount Stavely Porphyry Prospect
Two diamond drill holes, MSD001 and MSD002 were
drilled during and subsequent to the half year at the
Mount Stavely Prospect to test coincident gravity low
(interpreted porphyry intrusion) and soil geochemical
gold, arsenic and molybdenum anomalies (Figure 12).
The gravity anomaly was interpreted as a composite
anomaly with two distinct gravity lows. The lows were
targeted by drill holes MSD001 and MSD002
respectively.
In diamond drill hole MSD001, weakly anomalous
copper results of up to 0.17% were returned from a zone
between 374m to 410m where trace to 1% patchy
chalcopyrite blebs and chalcopyrite, bornite and
magnetite stringer veins are associated with a moderate
to strong pervasive hematite+albite ± K-spar alteration
assemblage. No anomalous assay results were returned
for MDS002.
Black Range Joint Venture Project
Analytical results were received for hole SMD027 drilled
during the previous year to test a discrete magnetic
feature along a major north-south
structure,
approximately 2 km north of the Thursday’s Gossan
copper-gold porphyry prospect. The presence of
Figure 12. Mount Stavely Prospect – Drill Hole Plan over
Gravity draped on Magnetics.
2019 Annual Report | Page 16
OPERATIONS REPORT
Yarram Park Project
Ravenswood Project
The Yarram Park Project is located within an area where
interpretation of the regional aeromagnetic data has
identified the presence of an offset portion of either the
Mount Stavely Belt, or the parallel Bunnagul Belt,
beneath the Quaternary cover. Both the Mount Stavely
Belt and the Bunnagul Belt are considered to be highly
prospective for intrusive-related porphyry copper-gold
and diatreme-hosted gold mineralisation. Maiden
drilling in 2017 confirmed the existence of the right host
rocks with the presence of distal porphyry -style
alteration.
During the year, one diamond hole STWD004 was drilled
at the Toora West prospect (Figure 13).
i.
Toora West Prospect
Diamond hole STWD004, drilled to a depth of 372
metres to test to test a discrete magnetic anomaly in the
vicinity of the previous drilling at the Toora West
prospect, intersected a sequence of feldspar phyric
rhyodacites and basaltic andesites, as well as fine
grained basalts. Trace pyrite and occasionally trace
chalcopyrite. The assays were pending at the end of the
period.
Figure 13. Yarram Park Project – Drill Collar Plan over
Aeromagnetic Image.
The Ravenswood Project is highly prospective for gold-
copper mineralisation, with excellent potential for
orogenic and
intrusive-related gold mineralisation,
epithermal gold mineralisation as well as having four
porphyry
prospects
copper-molybdenum-gold
identified.
The exploration programmes during the previous year
led to the identification of the Connolly North quartz-
vein hosted gold target on the Ravenswood West
tenement and the Area 8 low-sulphidation epithermal
gold-silver target on the Dreghorn tenement (Figure 14).
Drill testing of these two prospects was conducted
during the year.
i.
Connolly North Prospect
At Connolly North, quartz veins in low-angle structures
similar to those seen in the Sarsfield open pit at the
Ravenswood Gold Mine, ~15km away, are observed.
The IP survey conducted during the previous quarter
returned a +10mV/V chargeability anomaly. Rock chip
sampling during the previous quarter in the Connolly
North area returned gold results of 14.8g/t, 12.75g/t,
2.07g/t and 1.42g/t. The stream sediment samples
taken in tributaries to the Connolly Creek and draining
the Connolly North prospect area returned anomalous
gold values of 1.61g/t, 1.20g/t and 1.18g/t. Previous
rock chip sampling in 2017 returned a 36.6g/t gold
result from a 5-10cm thick low-angle quartz vein at the
Connolly North prospect.
Four diamond holes (SRD006 – SRD009) for 987.2m
were drilled to test for steeply- and shallowly-dipping
quartz-gold-base metal veins associated with a NNW-
The drilling at Connolly North
trending shear.
intersected very similar veining to that reported at the
Buck Reef West Deposit at the Ravenswood Gold Mine.
Trace to weak quartz-pyrite ± carbonate ± galena ±
sphalerite ± chalcopyrite veining with chlorite ± sericite
± pyrite selvages were intersected in the granodiorite,
however no significant gold or base metal intercepts
were returned.
ii.
Area 8 Prospect
Diamond drilling was conducted at the Area 8 prospect
where previously reported surface rock-chips returned
assay results of up to 0.65g/t gold, 106g/t silver, 397
ppm arsenic and 837 ppm antimony from crustiform
and colloform quartz veins and quartz breccia in-fill. The
2019 Annual Report | Page 17
OPERATIONS REPORT
quartz
textures and geochemical signature are
consistent with a low-sulphidation epithermal gold-
silver system. At Area 8, the IP survey in 2018 returned
a well constrained resistivity anomaly.
Three diamond holes (SRD010 – SRD012) for 274.7m
were drilled to test a northeast-trending ridge of aplite
and associated quartz/chalcedony vein breccia with
epithermal geochemical signature and anomalous gold
at the Area 8 prospect. Drilling intersected variably
altered granodiorite with
rare aplite dykes. A
shear vein was
quartz+carbonate+pyrite breccia
intersected in drill hole SRD011. While sulphides were
observed in the drilling, they occurred in narrow,
centimetre scale intervals and no significant gold or base
metal intercepts were returned in the assays.
Figure 14. Ravenswood Project – Prospect Location Plan.
2019 Annual Report | Page 18
OPERATIONS REPORT
Figure 15. Mathinna Project Location Plan.
Mathinna Joint Venture Project
Stavely Tasmania have been granted priority
application rights to three exploration licences within
the highly prospective Alberton – Mathinna “Gold
Corridor” in northeast Tasmania.
Application EL19/2018 covers the New Golden Gate
Mine. Application EL4/2019 covers an area of 68 km2
and surrounds EL19/2018 (Figure 15).
Numerous Tasmanian Department of Mines and
Geological Survey reports detail the mining and
mineralisation of the Mathinna Goldfield, which was
particularly prolific prior to the first World War. Official
records detail production of 289,000 ounces of gold at
an average grade of 26g/t gold up to 1932. However,
official
significantly
underestimate actual gold production from the
certainly
records
almost
Mathinna district given that estimates did not include
alluvial production and a 1914 Geological Survey of
Tasmania report estimated that production to date had
been between 300,000 and 320,000 ounces.
Since that time there has been very little modern
exploration.
The Mathinna Goldfield is hosted in a thick sequence
of bedded fine- to medium-grained quartz-rich
turbidites with shale tops considered as southern
analogues to the units within the Melbourne Zone in
Victoria that hosts the Walhalla and Woods Point
Goldfields. The host units are intruded by I and S-type
granites and are folded along a north-northwest
trending axis.
Mineralisation is interpreted to be hosted within
dextral strike-slip shear zones with right-hand jogs
2019 Annual Report | Page 19
OPERATIONS REPORT
creating dilatant zones that host the structurally
controlled quartz vein arrays. Mineralisation
is
described as being hosted in quartz veins of variable
width from a few centimetres to 10m and ranging in
strike length from 5m to over 300m.
The majority of gold productive veins are reported to
be less than 1m wide and between 30m to 60m in
strike length. The maximum vertical strike extent for a
single vein is 336m at the New Golden Gate Mine.
Gold mineralisation is reported to be in the form of
free gold, is non-refractory and is associated with low
abundance of ~1-2% sulphides including arsenopyrite,
galena, sphalerite and chalcopyrite.
There is a large volume of historical mine tailings in the
valley below the mine workings. These tailings are of
unknown volume and grade given a portion was
treated with a mobile gold plant approximately 10
years ago.
Subject to grant of the EL, Stavely Minerals intends to
complete initial environmental baseline studies to
quantify the extent of historic disturbance and to
identify flora and fauna requiring conservation.
Subject to these studies, Stavely Minerals intends to
undertake a review of the structural controls on
mineralisation and then drill the best potentially
mineralised orientations with low-impact diamond
drilling
Application EL6/2019 covers an area 40km2, is located
approximately 13km north of the New Golden Gate
Mine and host numerous historical mines and
workings.
JORC Compliance Statement
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based
on information compiled by Mr Chris Cairns, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr
Cairns is a full-time employee of the Company. Mr Cairns is the Managing Director of Stavely Minerals Limited, is a substantial
shareholder of the Company and is an option holder of the Company. Mr Cairns has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Cairns consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
With respect to reporting of the Mineral Resources at the Mt Ararat VMS copper-gold-zinc deposit and Thursday’s Gossan chalcocite
copper deposit, the information is extracted from the report entitled “Mount Ararat 2015 Resource Estimate Report” and “Appendix
1, Reporting of Thursday Gossan Chalcocite Copper Resource against criteria in Table 1 JORC Code 2012” dated 24 August 2015
authored by Mr Duncan Hackman of Hackman and Associates Pty Ltd. Mr Hackman is a Member of the Australian Institute of
Geoscientists and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to
the activity 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’ (The JORC Code, 2012 Edition).
As there has been no new information generated from the Mineral Resource areas, Mr Cairns has reviewed the underlying
assumptions in the 2015 Mineral Resources reports and finds that there have been no material changes and that the underlying
assumptions and technical parameters remain valid. There are therefore no changes to the Mineral Resources estimates from this
annual review.
Stavely Minerals’ policy for Mineral Resources estimates is to have the estimates done by suitably qualified and experienced external
consultants and have these estimates reviewed internally by suitably qualified and experienced Stavely Minerals’ personnel.
Bibliography
Cayley, R.A and Taylor, D.H., 2001, Ararat: 1:100 000 map area geological report. Geological Survey of Victoria Report
115.
Crawford, A.J., Cayley, R.A., Taylor, D.H., Morand, V.J., Gray, C.M., Kemp. A.I.S., Wohlt, K.E., Vandenberg, A.H.M., Moore,
D.H., Maher, S., Direen, N.G., Edwards, J., Donaghy, A.G., Anderson, J.A., and Black, L.P., 2003, Neoproterozoic
and Cambrian continental rifting, continent-arc collision and post-collisional magmatism in Evolution of the
Palaeozoic Basement. Geological Society of Australia, Sydney, Australia, pages 73 -93.
Schofield, A. (ed) 2018, Regional geology and mineral systems of the Stavely Arc, western Victoria. Record 2018/02.
Geoscience Australia, Canberra.
2019 Annual Report | Page 20
DIRECTORS’ REPORT
Your Directors present their report for the year ended 30 June 2019.
DIRECTORS
The names and particulars of the Directors of the Company in office during the financial year and up to the date of this
report were as follows. Directors were in office for the entire year unless otherwise stated.
Christopher Cairns
B.Sc (Hons)
Executive Chairman & Managing Director (Appointed 23 May 2006, appointed Chairman 14 September 2018)
Mr Christopher Cairns completed a First Class Honours degree in Economic Geology from the University of Canberra in
1992. Mr Cairns has extensive experience having worked for:
• BHP Minerals as Exploration Geologist / Supervising Geologist in Queensland and the Philippines
• Aurora Gold as Exploration Manager at the Mt Muro Gold Mine in Borneo
•
•
LionOre as Supervising Geologist for the Thunderbox Gold Mine and Emily Anne Nickel Mine drill outs
Sino Gold as Geology Manager responsible for the Jinfeng Gold Deposit feasibility drillout and was responsible for
the discovery of the stratabound gold mineralisation taking the deposit from 1.5Moz to 3.5Moz in 14 months.
Mr Cairns joined Integra Mining Limited in March 2004 and as Managing Director oversaw the discovery of three gold
deposits, the funding and construction of a new processing facility east of Kalgoorlie transforming the company from
explorer to gold producer with first gold poured in September 2010. In 2008 Integra was awarded the Australian Explorer
of the Year by Resources Stocks Magazine and in 2011 was awarded Gold Miner of the Year by Paydirt Magazine and the
Gold Mining Journal.
In January 2013, Integra was taken over by Silver Lake Resources Limited for $426 million (at time of bid) at which time Mr
Cairns resigned along with the whole Integra Board after having successfully recommended shareholders accept the Silver
Lake offer.
Mr Cairns is a member of the Australian Institute of Geoscientists, a member of the JORC Committee and Chairman of the
Australian Prospectors and Miners Hall of Fame.
Other directorships of listed companies in the last three years: None.
Jennifer Murphy
B.Sc(Hons), M.Sc
Executive Technical Director (Appointed 8 March 2013)
Ms Jennifer Murphy completed a First Class Honours Degree in Geology in 1989, and subsequently a Master of Science
Degree in 1993 at the University of Witwatersrand in South Africa. Ms Murphy joined Anglo American Corporation in 1993
as an exploration geologist working in Tanzania and Mali. In 1996, she immigrated to Australia and joined Normandy Mining
Limited, working initially as a project geologist in the Eastern Goldfields and Murchison Greenstone Provinces and
afterwards was responsible for the development and management of the GIS and administration of the exploration
database.
Between 2004 and 2007, Ms Murphy provided contract geological services to a range of junior exploration companies. Ms
Murphy joined Integra Mining Limited in 2007, initially as an administration geologist, and in 2010 the role was expanded
to that of corporate geologist. In 2013 Ms Murphy joined Stavely Minerals as part of the management team to provide
technical and geological expertise. Ms Murphy is a member of the Australian Institute of Geoscientists and has a broad
range of geological experience ranging from exploration program planning and implementation, GIS and database
management, business development, technical and statutory, and ASX reporting, as well as corporate research and analysis
and investor liaison.
Ms Murphy is a member of the Company’s Audit and Risk Committee.
Other directorships of listed companies in the last three years: None.
2019 Annual Report | Page 21
DIRECTORS’ REPORT
Peter Ironside
B.Com, CA
Non Executive Director (Appointed 23 May 2006)
Mr Peter Ironside has a Bachelor of Commerce Degree and is a Chartered Accountant and business consultant with over
30 years’ experience in the exploration and mining industry. Mr Ironside has a significant level of accounting, financial
compliance and corporate governance experience including corporate initiatives and capital raisings. Mr Ironside has been
a Director and/or Company Secretary of several ASX listed companies including Integra Mining Limited and Extract
Resources Limited (before $2.18Bn takeover) and is currently a non-executive director of Zamanco Minerals Limited.
Mr Ironside is Chair of the Company’s Audit and Risk Committee.
Other directorships of listed companies in the last three years: Zamanco Minerals Limited (current).
Amanda Sparks
B.Bus, CA, F.Fin
Non Executive Director (Appointed 14 September 2018) and Company Secretary (Appointed 7 November 2013)
Ms Amanda Sparks is a Chartered Accountant and a Fellow of the Financial Services Institute of Australasia.
Ms Sparks has over 30 years of resources related financial experience, both with explorers and producers. Amanda brings
a range of important skills to the Board with her extensive experience in financial management, corporate governance
and compliance for listed companies.
Ms Sparks is a member of the Company’s Audit and Risk Committee.
Other directorships of listed companies in the last three years: None.
William Plyley
B.Sc (Metallurgical Engineering)
Non Executive Chairman (appointed 6 December 2013, ceased 20 November 2018)
Mr William (Bill) Plyley sadly passed away on 20 November 2018. He was a man of great humility and integrity with an
enthusiasm for mineral exploration. Bill was Stavely Minerals’ inaugural Chairman and his steady stewardship and support
for the Company’s exploration efforts will be sorely missed by the Stavely Minerals’ team. He was a mining executive with
over 36 years operational experience in exploration, mining, processing, and management with substantial resources
companies such as Placer Dome Inc, Normandy Mining Limited and Red Back Mining Inc. He was responsible for major
mine developments in Ghana, West Africa and Australia. He also had significant roles in development and expansion of
mines in Papua New Guinea and Australia. Mr Plyley retired, in late 2010, from a role as Chief Operating Officer of La
Mancha Resources where he was responsible for the development of the Frog’s Leg and White Foil mines near Kalgoorlie,
Western Australia and the operation of mines in Sudan and Cote d’Ivoire, Africa. Recently, Mr Plyley was a Director of
Integra Mining Limited from November 2011 until the takeover of Integra by Silver Lake Resources Limited in January 2013.
2019 Annual Report | Page 22
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
During the financial year, 8 meetings of directors were held. The number of meetings attended by each director during
the year is as follows:
W Plyley (Ceased 20 Nov 2018)
C Cairns
J Murphy
P Ironside
A Sparks (Appointed 14 Sept 2018)
Board of Directors
Audit and Risk Committee
Meetings
Held**
5
8
8
8
7
Meetings
Attended
-
8
8
8
7
Meetings
Held**
1
*
2
2
1
Meetings
Attended
1
*
2
2
1
* Not a member of the Audit and Risk Committee
** Number of meetings held where the Director was a member of the Board or Committee.
In addition to formal Board meetings, the directors work in the same office and hold discussions on a regular basis.
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS
The following table sets out each director’s relevant interest in shares and options in shares of the Company as at the date
of this report.
Name of Director
Number of Shares
(direct and indirect)
C Cairns
J Murphy
P Ironside
A Sparks
DIVIDENDS
16,388,460
4,774,579
30,816,078
1,099,302
Number of Unlisted
Options at 36 cents,
expiry 31/12/2019
3,000,000
2,200,000
1,500,000
1,500,000
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
ENVIRONMENTAL REGULATIONS
The Group’s environmental obligations are regulated by the laws of Australia. The Group has a policy to either meet or
where possible, exceed its environmental obligations. No environmental breaches have been notified by any governmental
agency as at the date of this report.
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires
entities to report annual greenhouse gas emissions and energy use. The Directors have assessed that there are no current
reporting requirements, but may be required to do so in the future.
CORPORATE INFORMATION
Corporate Structure
Stavely Minerals Limited is a limited liability company that is incorporated and domiciled in Australia. Stavely Minerals
Limited has prepared a consolidated financial report incorporating the entities that it controlled during the financial year
as follows:
Stavely Minerals Limited
Ukalunda Pty Ltd
Stavely Tasmania Holdings Pty Ltd
Stavely Tasmania Operations Pty Ltd
Stavely Tasmania Pty Ltd
-
-
-
-
-
parent entity
100% owned controlled entity
100% owned controlled entity
100% owned controlled entity
100% owned controlled entity
2019 Annual Report | Page 23
DIRECTORS’ REPORT
Principal Activity
The Group’s principal activity was mineral exploration for the year ended 30 June 2019. There were no significant changes
in the nature of the principal activities during the year.
Operations review
Refer to the Operations Review on pages 3 to 20.
Summary of Financial Position, Asset Transactions and Corporate Activities
A summary of key financial indicators for the Group, with prior period comparison, is set out in the following table:
Cash and cash equivalents held at year end
Net loss for the year after tax
Included in loss for the year:
Exploration costs
Equity-based payments
Year
Year
30 June 2019
30 June 2018
$
$
2,875,862
6,559,041
(9,012,511)
(6,921,479)
(6,700,678)
(5,119,491)
(1,172,406)
(1,106,742)
Basic loss per share (cents) from continuing operations
(5.65)
(5.21)
Net cash used in operating activities
Net cash used in investing activities
Net cash from financing activities
(7,336,529)
(4,234,312)
(364,225)
(133,414)
4,017,574
8,387,666
During the year:
- On 17 April 2019, Stavely issued 12,307,767 shares at 26 cents per share pursuant to a placement to sophisticated
and institutional investors. Gross proceeds were $3,200,019.
- On 17 April 2019, Stavely issued 7,692,308 shares at 26 cents as a prepayment of $2,000,000 for drilling services
to be utilised over 12 months to April 2020. As at 30 June 2019, $1.348 million of prepaid drilling services remains
to be utilised.
- On 10 May 2019, Stavely issued 4,263,544 shares at 26 cents per share pursuant to a Share Purchase Plan. Gross
proceeds were $1,108,500.
-
In October 2014, Stavely Minerals entered into a $2 million Share Subscription Agreement with its existing drilling
contractor, Titeline Drilling Pty Ltd. Pursuant to this agreement, the drilling contractor has agreed to subscribe for
up to $2 million of shares, with Stavely Minerals having the option to settle monthly drilling charges by way of cash
payment and by way of offset of the price of subscription application for shares.
During the year ended 30 June 2019, the remaining 3,026,026 shares ($865,306) were issued pursuant to this
agreement. On 22 March 2019, 272,123 shares ($84,358) were issued to Titeline Drilling Pty Ltd outside of the
Subscription Agreement in payment of the balance of drilling services rendered.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year are detailed on pages 3 to 20 of this report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group anticipates to continue its exploration activities and consider corporate transactions to ensure further
development of its tenements.
2019 Annual Report | Page 24
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the 2019 Remuneration Report, outlining key aspects of Stavely’s remuneration policy and
framework, together with remuneration awarded this year.
The report is structured as follows:
A. Key management personnel (KMP) covered in this report
B. Remuneration policy, link to performance and elements of remuneration
C. Contractual arrangements of KMP remuneration
D. Remuneration of key management personnel
E.
Equity holdings and movements during the year
F. Other transactions with key management personnel
G. Use of remuneration consultants
H. Voting of shareholders at last year’s annual general meeting
A. KEY MANAGEMENT PERSONNEL (KMP) COVERED IN THIS REPORT
For the purposes of this report key management personnel of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including
any Director (whether Executive or otherwise).
Key Management Personnel during the Year
Non-Executive Directors
William Plyley
Peter Ironside
Amanda Sparks
–
–
–
Non-executive Chairman (from 6 December 2013 to 20 November 2018)
Director (from 23 May 2006)
Director (from 14 September 2018)
Executive Directors
Christopher Cairns
Jennifer Murphy
–
–
Executive Chairman and Managing Director (from 23 May 2006,
Chairman from 14 September 2018)
Technical Director (from 8 March 2013)
B. REMUNERATION POLICY, LINK TO PERFORMANCE AND ELEMENTS OF REMUNERATION
Remuneration Governance
The Board is responsible for ensuring that the Company’s remuneration structures are aligned with the long-term interests
of Stavely and its shareholders.
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. The Board has adopted the following policies for Directors’ and executives’ remuneration.
2019 Annual Report | Page 25
DIRECTORS’ REPORT
Remuneration Philosophy
The performance of the Group depends upon the quality of its Directors and Executives. To prosper, the Group must
attract, motivate and retain highly skilled Directors and Executives.
To this end, the Group embodies the following principles in its remuneration framework:
•
•
•
provide competitive rewards to attract high calibre Executives;
link Executive rewards to shareholder value; and
in the future, will establish appropriate, demanding performance hurdles in relation to variable Executive
remuneration.
In accordance with best practice corporate governance, the structure of non-executive director and executive
compensation is separate and distinct.
Non-Executive directors’ remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
Non-executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to time.
Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act as
at the time of the Director’s retirement or termination. Non-executive Directors’ remuneration may include an incentive
portion consisting of options, as considered appropriate by the Board, which may be subject to shareholder approval in
accordance with ASX listing rules. The option incentive portion is targeted to add to shareholder value by having a strike
price considerably greater than the market price at the time of granting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board considers the amount of Director fees being paid by comparable
companies with similar responsibilities and the experience of the Non-executive Directors when undertaking the annual
review process.
Executive Director Remuneration
Objective
The Group aims to reward Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Group and so as to:
•
•
•
reward Executives for company, and individual performance;
ensure continued availability of experienced and effective management; and
ensure total remuneration is competitive by market standards.
Structure
In determining the level and make-up of Executive remuneration, the Board negotiates a remuneration to reflect the
market salary for a position and individual of comparable responsibility and experience. Remuneration is regularly
compared with the external market by participation in industry salary surveys and during recruitment activities generally.
If required, the Board may engage an external consultant to provide independent advice in the form of a written report
detailing market levels of remuneration for comparable Executive roles.
Remuneration consists of a fixed remuneration and a long term incentive portion as considered appropriate.
Fixed Remuneration - Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position
and is competitive in the market. Fixed remuneration is reviewed annually by the Board and the process consists of a
review of Group and individual performance, and relevant comparative remuneration in the market. As noted above, the
Board may engage an external consultant to provide independent advice.
Fixed Remuneration - Structure
The fixed remuneration is a base salary or monthly consulting fee.
2019 Annual Report | Page 26
DIRECTORS’ REPORT
Variable Pay - Long Term Incentives - Objective
The objective of long term incentives is to reward Executives in a manner which aligns this element of remuneration with
the creation of shareholder wealth. The incentive portion is payable based upon attainment of objectives related to the
Executive’s job responsibilities. The objectives vary, but all are targeted to relate directly to the Group’s business and
financial performance and thus to shareholder value.
Variable Pay — Long Term Incentives – Structure
Long term incentives granted to Executives are delivered in the form of options. The option incentives granted are aimed
to motivate Executives to pursue the long term growth and success of the Group within an appropriate control framework
and demonstrate a clear relationship between key Executive performance and remuneration. Director options are granted
at the discretion of the Board and approved by shareholders. Other key management employees may be granted options.
Performance hurdles are not attached to vesting periods; however the Board determines appropriate vesting periods to
provide rewards over a period of time to key management personnel.
During the year, no performance related cash payments were made.
C. CONTRACTUAL ARRANGEMENTS OF KMP REMUNERATION
On appointment to the board, all non-executive directors enter into a service agreement with the Company in the form of
a letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the
office of director.
Remuneration and other terms of employment for the executive directors and the other key management personnel are
also formalised in service agreements. The major provisions of the agreements relating to remuneration are set out below.
Director Name
Term of agreement
Base annual salary
exclusive of
statutory
superannuation at
30/6/2019
Christopher Cairns
Commenced 22/1/2014 (varied effective 1/11/2017)
$200,000
Termination
benefit
12 months
Jennifer Murphy
Commenced 22/1/2014 (varied effective 1/11/2017 &
15/10/2018)
$150,000
12 months
Peter Ironside
Ongoing, subject to re-elections
Amanda Sparks
Ongoing, subject to re-elections
$36,000
$36,000
None
None
2019 Annual Report | Page 27
DIRECTORS’ REPORT
D. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Details of the remuneration of each key management personnel of the Group, including their personally-related entities,
during the year were as follows:
Cash salary,
directors fees,
consulting fees,
insurances and
movement in
leave provisions
$
95,833
37,499
198,580
195,510
141,519
112,001
28,700
-
53,500
-
518,132
345,010
Directors
W Plyley*
C Cairns
J Murphy
P Ironside
A Sparks**
TOTAL
Year
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Post Employment
Share Based
Superannuation
$
Total Cash
and
Provisions
$
Options (1)
$
Total
including
share based
payments
$
219,261
106,039
442,322
558,233
319,867
371,072
143,797
75,441
168,597
-
1,293,844
112,371
64,978
224,742
345,306
164,811
248,621
112,371
75,441
112,371
-
726,666
734,346
1,110,785
11,057
3,562
19,000
17,417
13,537
10,450
2,726
-
2,726
-
49,046
31,429
106,890
41,061
217,580
212,927
155,056
122,451
31,426
-
56,226
-
567,178
376,439
(1) Equity based payments – options. These represent the amount expensed for options granted and vested in the year.
* Ceased as a director on 20 November 2018
** Appointed as director on 14 September 2018. Remuneration includes director and company secretarial fees.
There were no performance related payments made during the year. Performance hurdles are not attached to
remuneration options; however the Board determines appropriate vesting periods to provide rewards over a period of
time to key management personnel.
Share-based Compensation
During the year the following options were granted as equity compensation benefits to Directors and other Key
Management Personnel. These options vested at grant date.
2019
Directors
C Cairns
J Murphy
P Ironside
A Sparks
Number of Options
at 36 cents,
expiry 31/12/2019
Value* per option
at grant date
$
3,000,000
2,200,000
1,500,000
1,500,000
0.0749
0.0749
0.0749
0.0749
These options were granted to recognise the contribution made by the Directors, by the Directors agreeing to reduce their
salaries / fees and also provide an incentive component in the remuneration package for the Directors to motivate and
reward their performance in their respective roles as Directors, which adds value for Shareholders. By offering these
incentives in the form of options, rather than cash, the Company maximises the availability of cash for exploration
activities. Issue of these Director options were approved by Shareholders at the Company’s Annual General Meeting held
on 28 November 2018.
* Value at grant date has been calculated in accordance with AASB 2 Share-based Payment. Stavely used a Black Scholes
option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share
2019 Annual Report | Page 28
DIRECTORS’ REPORT
price at grant date and the expected volatility of the underlying share, the expected dividend yield and the risk-free interest
rate for the term of the option. Further details are in note 3 of the financial statements.
Shares issued to Key Management Personnel on exercise of compensation options
On 25 October 2018, 7,075,000 options were exercised by Directors using the cashless exercise mechanism as part of
Stavely’s Employee Incentive Plan. On exercise of the options, the Company issued 2,808,892 shares. The number of
shares was determined by the value calculated between the market price of the shares (based on a VWAP for the 5
trading days prior to the exercise date) of 31.51 cents and the exercise price of 19 cents in relation to the options.
E.. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
30 June 2019
Directors
W Plyley
C Cairns
J Murphy
P Ironside
A Sparks
Balance at
beginning of the year
Net change
on appointment/
ceasing to be a KMP
Net change
during the year
Balance at
end of the year
22,000
15,007,419
3,497,097
30,295,361
-
48,821,877
(22,000)
-
-
-
435,942
413,942
-
665,542
762,323
434,858
484,486
2,347,209
-
15,672,961
4,259,420
30,730,219
920,428
51,583,028
All equity transactions with Key Management Personnel have been entered into under terms and conditions no more
favourable than those the entity would have adopted if dealing at arms-length.
(b) Option holdings of Key Management Personnel
30 June 2019
Directors
W Plyley
C Cairns
J Murphy
P Ironside
A Sparks
Balance at
beginning of
the year
Net change on
appointment/
ceasing to be a
KMP
Granted as
remuneration
Exercised
during the
year
Balance at
end of the
year
Exercisable
1,050,000
(300,000)
-
(750,000)
-
-
5,000,000
3,600,000
1,250,000
3,000,000
(2,500,000)
5,500,000
5,500,000
2,200,000
(1,800,000)
4,000,000
4,000,000
1,500,000
(950,000)
1,800,000
1,800,000
1,700,000
1,500,000
(1,075,000)
2,125,000
2,125,000
10,900,000
1,400,000
8,200,000
(7,075,000)
13,425,000
13,425,000
F. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. Ironside Pty Ltd is a shareholder of the 168
Stirling Highway Syndicate, the entity which owns the premises the Company occupies in Western Australia. During the
year an amount of $131,250 (net of GST) was paid/payable for office rental and variable outgoings (2018: $134,611, net of
GST).
2019 Annual Report | Page 29
DIRECTORS’ REPORT
Mr Peter Ironside, Director, is also a shareholder and non-executive director of Zamanco Minerals Limited (“Zamanco”).
Zamanco sub-leases office space in the premises the Company occupies. During the year an amount of $37,630 (net of
GST) was paid/payable by Zamanco to the Company for reimbursement of office rental and associated expenses (2018:
$36,948, net of GST).
G. USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by the Company during the year.
H. VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
The Company received 99.14% of ‘yes’ votes for its remuneration report for the 2018 financial year and did not receive
any specific feedback at the AGM or throughout the year on its remuneration practices.
End of Audited Remuneration Report.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company has paid a premium to insure the Directors and Officers of the Company and its controlled entities. Details of
the premium are subject to a confidentiality clause under the contract of insurance.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the Company.
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Unlisted Options
Number
15,650,000
Exercise Price
36 cents
Expiry Date
31/12/2019
No option holder has any right under the options to participate in any other share issue of the Company or any other
related entity.
9,587,500 unlisted employee/consultant options with an exercise price of 19 cents were exercised during the year. Of the
options exercised, 7,075,000 options were exercised by Key Management Personnel (2018: nil).
Subsequent to the end of the year, 7,050,000 unlisted employee/consultant options with an exercise price of 21 cents
were exercised. Of the options exercised, 4,900,000 options were exercised by Key Management Personnel.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
There are no matters or circumstances that have arisen since 30 June 2019 that have or may significantly affect the
operations, results, or state of affairs of the Group in future financial years.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Stavely
Minerals Limited support and adhere to the principles of corporate governance. Please refer to the Company’s website for
details of corporate governance policies: https://www.stavely.com.au/corporate-governance.
2019 Annual Report | Page 30
DIRECTORS’ REPORT
AUDIT INDEPENDENCE AND NON-AUDIT SERVICES
Auditor’s independence - section 307C
The Auditor’s Independence Declaration is included on page 29 of this report.
Non-Audit Services
The following non-audit services were provided by the entity’s auditor, BDO. The Directors are satisfied that the provision
of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations
Act. The nature and scope of each type of non-audit service provided means that auditor independence was not
compromised. BDO received, or are due to receive, the following amounts for the provision of non-audit services:
Taxation and Corporate advice services
Signed in accordance with a resolution of the Directors.
2019
$19,375
2018
$9,810
Christopher Cairns
Managing Director
Dated this 3rd day of September 2019
2019 Annual Report | Page 31
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS
2019 Annual Report | Page 32
DIRECTORS’ DECLARATION
1.
In the opinion of the directors:
a) The financial statements and notes are in accordance with the Corporations Act 2001, including:
i)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for
the year then ended; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the
Corporations Regulations 2001 and other mandatory professional reporting requirements; and
iii) complying with International Financial Reporting Standards (IFRS) as stated in note 1 of the financial
statements; and
b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
This declaration is signed in accordance with a resolution of the Board of Directors.
Christopher Cairns
Managing Director
Dated this 3rd day of September 2019
2019 Annual Report | Page 33
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue and Income
Interest revenue
Rental sub-lease revenue
Profit on sale of fixed assets
Expenses
Administration and corporate expenses
Administration – equity based expenses
Exploration expensed
Total expenses
Consolidated
Year ended
30 June 2019
Year ended
30 June 2018
Note
$
$
69,299
37,630
11,951
86,128
36,948
-
118,880
123,076
2(a)
3
2(b)
(1,258,307)
(1,172,406)
(6,700,678)
(818,322)
(1,106,742)
(5,119,491)
(9,131,391)
(7,044,555)
Loss before income tax
(9,012,511)
(6,921,479)
Income tax expense
Loss after income tax attributable to members of
Stavely Minerals Limited
4
-
-
(9,012,511)
(6,921,479)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Other
Other comprehensive income/(loss) for the year, net of tax
-
-
-
-
Total comprehensive loss for the year
(9,012,511)
(6,921,479)
Loss per share for the year attributable to the members of
Stavely Minerals Limited
Basic loss per share
5
Cents Per
Share
(5.65)
Cents Per
Share
(5.21)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
2019 Annual Report | Page 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Receivables
Property, plant and equipment
Deferred exploration expenditure acquisition costs
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
30 June 2019
$
Note
30 June 2018
$
6
7
7
8
9
10
11
2,875,862
2,022,727
4,898,589
72,500
157,588
3,006,057
3,236,145
6,559,041
292,011
6,851,052
42,500
128,605
3,006,057
3,177,162
8,134,734
10,028,214
667,590
108,578
776,168
776,168
7,358,566
1,732,473
64,308
1,796,781
1,796,781
8,231,433
12
13
31,711,470
4,468,259
(28,821,163)
24,744,232
3,295,853
(19,808,652)
7,358,566
8,231,433
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
2019 Annual Report | Page 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
At 1 July 2017
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
As at 30 June 2018
At 1 July 2018
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
15,977,562
2,189,111
(12,887,173)
5,279,500
-
-
-
9,276,254
(509,584)
-
-
-
-
-
-
1,106,742
8,766,670
1,106,742
(6,921,479)
(6,921,479)
-
-
(6,921,479)
(6,921,479)
-
-
-
-
9,276,254
(509,584)
1,106,742
9,873,412
24,744,232
3,295,853
(19,808,652)
8,231,433
24,744,232
3,295,853
(19,808,652)
8,231,433
-
-
-
7,258,183
(290,945)
-
-
-
-
-
-
1,172,406
6,967,238
1,172,406
(9,012,511)
(9,012,511)
-
-
(9,012,511)
(9,012,511)
-
-
-
-
7,258,183
(290,945)
1,172,406
8,139,644
As at 30 June 2019
31,711,470
4,468,259
(28,821,163)
7,358,566
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
2019 Annual Report | Page 36
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated
Year ended
Year ended
30 June 2019
30 June 2018
Note
$
$
Cash flows from operating activities
Receipts in the ordinary course of activities (mostly GST
and Victorian Government Co-Funding)
Payments to suppliers and employees
Interest received
867,993
361,006
(8,280,039)
(4,675,228)
75,517
79,910
Net cash flows used in operating activities
6(i)
(7,336,529)
(4,234,312)
Cash flows from investing activities
Payments for plant and equipment
Proceeds from disposal of plant and equipment
Payment for bonds
Other – Beaconsfield Deposit
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue costs
Net cash flows from financing activities
(97,225)
13,000
(30,000)
(250,000)
(364,225)
(133,414)
-
-
-
(133,414)
4,308,519
(290,945)
4,017,574
8,897,250
(509,584)
8,387,666
Net (decrease)/increase in cash and cash equivalents
held
(3,683,179)
4,019,940
Add opening cash and cash equivalents brought forward
6,559,041
2,539,101
Closing cash and cash equivalents carried forward
6
2,875,862
6,559,041
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
2019 Annual Report | Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
These financial statements are general purpose financial statements, which have been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a
historical cost basis.
The financial report is presented in Australian dollars, which is the Group’s functional and presentation currency.
Stavely Minerals Limited is a for-profit entity for the purpose of preparing the financial statements.
The annual report of Stavely Minerals Limited for the year ended 30 June 2019 was authorised for issue in
accordance with a resolution of the Directors on 3 September 2019.
(b)
Statement of Compliance
These financial statements comply with Australian Accounting Standards and International Financial Reporting
Standards (IFRS).
(c)
Adoption of New and Revised Standards and Change in Accounting Standards
Early adoption of accounting standards
The Group has not elected to apply any pronouncements before their operative date in the annual reporting year
beginning 1 July 2018.
New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current reporting period for which the Group
has adopted:
•
•
AASB 15 Revenue from Contracts with Customers; and
AASB 9 Financial Instruments.
The new accounting policies are disclosed below. There is no impact on the Group for the year ended 30 June 2019.
AASB 15 Revenue from contracts with Customers
AASB 15 Revenue from contracts with Customers replaces AASB 118 Revenue. AASB 15 was adopted by the Group
on 1 July 2018. AASB 15 provides a single, principles-based five-step model to be applied to all contracts with
customers.
The Company has considered AASB 15 and determined that there is no impact on the financial statements as the
Group is not generating sales revenue at this stage.
The Group’s new revenue accounting policy is detailed below:
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount to
which the Group expects to be entitled. If the consideration promised includes a variable component, the Group
estimates the expected consideration for the estimated impact of the variable component at the point of
recognition and re-estimated at every reporting period.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces the provisions of AASB 139 Financial Instruments: Recognition and
Measurement that relate to the recognition, classification and measurement of financial assets and financial
liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting. The
adoption of AASB 9 Financial Instruments from 1 July 2018 did not give rise to any transitional adjustments.
2019 Annual Report | Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
(c)
Adoption of New and Revised Standards and Change in Accounting Standards – continued
The new accounting policies (applicable from 1 July 2018) are set out below.
Classification and measurement:
Except for certain trade receivables the Group initially measures a financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or loss, transaction costs.
Under AASB 9 financial assets are subsequently measured at fair value through profit or loss (FVPL), amortised cost,
or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Group’s
business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely
payments of principal and interest’ on the principal amount outstanding (the ‘SPPI criterion’).
Impairment:
From 1 July 2018, the Group will assess, on a forward looking basis, any expected credit losses (ECLs) associated
with any debt instruments carried at amortised cost and FVOCI. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to
receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate.
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of
financial assets is impaired. For trade and other receivables, the Group applies the simplified approach permitted
by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The
expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s
historical credit loss experience.
New and amended standards not yet adopted by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June
2019 reporting period. The Group’s assessment of the impact of these new standards and interpretations that may
have an impact on the Group is set out below:
AASB 16 Leases
AASB 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months.
Stavely has not yet determined the impact on the group accounts, however it is likely that the rental of office
premises in WA, residential premises used for site-based staff in Victoria will require Stavely to recognise lease
liabilities and right-of-use assets on its’ statement of financial position. This standard is not applicable until the
financial year commencing 1 July 2019.
(d)
Significant Accounting Estimates and Judgments
Significant accounting judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual reporting year are:
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined using a Black-Scholes model.
2019 Annual Report | Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
(d)
Significant Accounting Estimates and Judgments - continued
Deposit for Beaconsfield (current asset)
As disclosed in note 14(c), on 18 June 2019, Stavely terminated the Beaconsfield Assets Acquisition Agreement with
BCD on the basis that BCD had breached several clauses of the Acquisition Agreement. On 26 June 2019, BCD served
a writ of summons in relation to that termination. Stavely strongly believes that the claims made in the writ are
without merit and are defending the proceedings. Separately, Stavely Minerals has sought a return of the $250,000
deposit which it paid to BCD Resources NL under the Acquisition Agreement, which it believes it is entitled
to. Accordingly, the Stavely Group has determined that the full $250,000 remains as a current receivable as at 30
June 2019.
Commitments - Exploration
The Group has certain minimum exploration commitments to maintain its right of tenure to exploration permits.
These commitments require estimates of the cost to perform exploration work required under these permits.
(e)
Basis of Consolidation and Business Combinations
The consolidated financial statements comprise the financial statements of Stavely Minerals limited (“Company” or
“Parent Entity”) and its subsidiaries as at 30 June each year (the Group). Subsidiaries are all entities over which the
group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
-
-
-
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee),
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
The financial statements of the subsidiaries are prepared for the same period as the parent entity, using consistent
accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit or losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the
date on which control is transferred out of the Group. Control exists where the company has the power to govern
the financial and operating policies of an entity so as to obtain benefits from its activities.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase
method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired
and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial
statements include the results of subsidiaries for the period from their acquisition.
The purchase method of accounting is used to account for all business combinations regardless of whether equity
instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or
liabilities incurred or assumed at the date of exchange plus costs directly attributable to the combination. Where
equity instruments are issued in a business combination, the fair value of the instruments is their published market
price as at the date of exchange, adjusted for any conditions imposed on those shares. Transaction costs arising on
the issue of equity instruments are recognised directly in equity.
All identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of the cost of the business combination over
the net fair value of the Group's share of the identifiable net assets acquired is recognised as goodwill. If the cost of
acquisition is less than the Group's share of the net fair value of the identifiable net assets of the subsidiary, the
difference is recognised as a gain in the statement of profit or loss and other comprehensive income, but only after
a reassessment of the identification and measurement of the net assets acquired.
2019 Annual Report | Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2 - EXPENSES
(a) Administration and Corporate Expenses
Administration and corporate expenses include:
Depreciation - administration
Operating lease rental expense
Other administration and corporate expenses
Equity based payments expense – refer note 3
(b) Exploration Costs Expensed
Exploration costs expensed include:
Depreciation - exploration
Exploration drilling – non-cash - refer note 12
Exploration other – non-cash – refer note 6(ii)
Other exploration costs expensed
Victorian Government Co-Funding for exploration
Year ended
30 June 2019
Year ended
30 June 2018
$
$
7,500
127,644
1,123,163
1,258,307
1,172,406
2,430,713
59,693
1,602,114
-
5,147,080
(108,209)
6,700,678
3,577
134,612
680,133
818,322
1,106,742
1,925,064
53,000
349,004
30,000
4,753,404
(65,917)
5,119,491
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses)
Equity settled transactions:
The Group provides benefits to executive directors, employees and consultants of the Group in the form of share based
payments, whereby those individuals render services in exchange for shares or rights over shares (equity-settled
transactions).
When provided, the cost of these equity-settled transactions with these individuals is measured by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value of options is determined using a Black-
Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of Stavely Minerals Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become
fully entitled to the award (the vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i)
(ii)
(iii)
the grant date fair value of the award;
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors of the Company, will ultimately vest taking into
account such factors as the likelihood of non-market performance conditions being met.
This opinion is formed based on the best available information at reporting date .
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition.
2019 Annual Report | Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses) – continued
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. If an equity-settled award is forfeited, any expense previously
recognised for the award is reversed. However, if a new award is substituted for a cancelled award and designated as a
replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification
of the original award, as described in the previous paragraph.
(a) Value of equity based payments in the financial statements
Expensed in the profit or loss:
Equity-based payments- options
30 June 2019
30 June 2018
$
$
1,172,406
1,106,742
(b) Summary of equity-based payments granted during the year:
Granted to key management personnel and consultants as equity compensation:
Grant Date Number of
Terms
Options
2018/2019
6/12/2018 15,650,000
Expire 31/12/2019 at 36c exercise price
- 5,950,000 granted to employees and
consultants as incentives.
- 9,700,000 granted to Directors as
approved by Shareholders at the AGM
held on 28/11/2018.
2017/2018
20/10/17
9,587,500
Expire 31/12/2018 at 19c exercise price
20/10/17
7,050,000
Expire 31/12/20 at 21c exercise price
- 3,587,500
granted
Company
Secretary, employees and consultants
as incentives.
to
- 6,000,000 granted to Directors as
approved by Shareholders at the AGM
held on 18/10/2017.
granted
Company
Secretary, employees and consultants
as incentives.
- 2,150,000
to
- 4,900,000 granted to Directors as
approved by Shareholders at the AGM
held on 18/10/2017.
2019 Annual Report | Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses) – continued
The assessed fair values of the options were determined using a Black-Scholes option pricing model, taking into account
the exercise price, term of option, the share price at grant date and expected price volatility of the underlying share,
expected dividend yield and the risk-free interest rate for the term of the option. The inputs to the model used were:
Grant date
Option exercise price ($)
Expected life of options (years)
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Underlying share price ($)
Value of Option ($)
Vesting Conditions
6/12/2018
0.36
1.07
-
101.41
1.90
0.25
0.0749
None
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.
(c) Weighted average fair value
The weighted average fair value of equity-based payment options granted during the year was $0.0749 (2018: $0.0665).
(d) Range of exercise price
The range of exercise price for options granted as share based payments outstanding at the end of the year was $0.21 to
$0.36 (2018: $0.19 to $0.21).
(e) Weighted average remaining contractual life
The weighted average remaining contractual life of share based payment options that were outstanding as at the end of
the year was 0.81 years (2018: 1.35 years).
(f) Weighted average exercise price
The following table shows the number and weighted average exercise price (“WAEP”) of share options granted as share
based payments.
12 Months to
30 June 2019
Number
12 Months to
30 June 2019
WAEP $
12 Months to
30 June 2018
Number
12 Months to
30 June 2018
WAEP $
Outstanding at the beginning of year
Granted during the year
Granted during the year
Exercised during the year
Lapsed during the year
Lapsed during the year
Lapsed during the year
16,637,500
15,650,000
-
(9,587,500)
-
-
-
Outstanding at the end of the year
Exercisable at year end
22,700,000
22,700,000
0.20
0.36
-
0.19
-
-
-
0.31
0.31
17,150,000
9,587,500
7,050,000
(500,000)
(2,400,000)
(5,150,000)
(9,100,000)
16,637,500
16,637,500
0.24
0.19
0.21
0.19
-
-
-
0.20
0.20
The weighted average share price for options exercised during the year was $0.19 (2018: $0.19).
2019 Annual Report | Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 4 - INCOME TAX EXPENSE
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the reporting date.
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 liabilities are recognised for all taxable temporary differences except:
▪ when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
▪ when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
operations, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
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 credits and unused tax losses can be utilised,
except:
▪ when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
▪ when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint operations, 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 is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income legislation and the anticipation that the Group will derive sufficient future assessable
income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
2019 Annual Report | Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 4 - INCOME TAX EXPENSE - continued
(a) Income Tax Expense
The reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Group’s
applicable income tax rate is as follows:
Loss for year
Prima facie income tax (benefit) @ 30% (2018: 27.5%)
Tax effect of non-deductible items
Net deferred tax assets not brought to account
Income tax attributable to operating loss
(b) Net deferred tax assets not recognised relate to the following:
DTA - Tax losses
DTL - Other Timing Differences, net
Year ended
30 June 2019
Year ended
30 June 2018
$
$
(9,012,511)
(6,921,479)
(2,703,753)
(1,903,407)
354,551
2,349,202
313,773
1,589,634
-
-
7,001,724
(112,992)
4,110,677
(206,407)
6,888,732
3,904,270
These deferred tax assets have not been brought to account as it is not probable that tax profits will be available against
which deductible temporary differences can be utilised.
Tax Consolidation
The Company and its 100% owned subsidiaries have formed a tax consolidated group. Members of the Group have
entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned controlled entities
on a pro-rata basis. The agreement provides for the allocation of income tax liabilities between the entities should the
head entity default on its tax payment obligations. At reporting date, the possibility of default is remote. The head entity
of the tax consolidated group is Stavely Minerals Limited.
Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides
for the allocation of current taxes to members of the tax consolidated group. Deferred taxes are allocated to members
of the tax consolidated group in accordance with a group allocation approach which is consistent with the principles of
AASB 112 Income Taxes. The allocation of taxes under the tax funding agreement is recognised as an increase/decrease
in the controlled entities intercompany accounts with the tax consolidated group head company, Stavely Minerals
Limited.
(c) Franking Credits
The franking account balance at year end was $nil (2018: $nil).
2019 Annual Report | Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 5 - EARNINGS PER SHARE
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
▪
▪
▪
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
Basic loss per share
Year ended
30 June 2019
Year ended
30 June 2018
Cents
(5.65)
Cents
(5.21)
$
$
Loss attributable to ordinary equity holders of the Company used in
calculating:
- basic loss per share
(9,012,511)
(6,921,479)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
159,399,340
132,742,263
For the year ended 30 June 2019, diluted earnings per share was not disclosed because potential ordinary shares,
being options granted, are not dilutive and their conversion to ordinary shares would not demonstrate an inferior
view of the earnings performance of the Company.
Number
of shares
Number
of shares
2019 Annual Report | Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 6 - CASH AND CASH EQUIVALENTS
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as described
above, net of outstanding bank overdrafts.
Cash at bank and on hand
(i) Reconciliation of loss for the period to net cash flows used in operating
activities
Loss after income tax
Adjustments to reconcile profit before tax to net operating cash flows:
Depreciation
Gain on disposal of property, plant and equipment
Share based payments expensed - options
Exploration drilling – non-cash*
Exploration other – non-cash **
Change in assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
Year ended
30 June 2019
$
Year ended
30 June 2018
$
2,875,862
6,559,041
(9,012,511)
(6,921,479)
67,193
(11,951)
1,172,406
1,602,114
-
(133,166)
(1,064,884)
44,270
56,577
-
1,106,742
349,004
30,000
(178,976)
1,317,458
6,362
Net cash flows used in operating activities
(7,336,529)
(4,234,312)
* 3,026,026 shares ($865,306) were issued pursuant to the Share Subscription Agreement with Titeline Drilling
Pty Ltd and Greenstone Property Pty Ltd, 272,123 shares ($84,358) were issued to Titeline Drilling Pty Ltd
outside of the Subscription Agreement in payment of the balance of drilling services rendered and 7,692,308
shares were issued to Titeline Drilling Pty Ltd as a prepayment of $2,000,000 for drilling services to be utilised
over 12 months to April 2020 (of which $652,450 had been utilised to 30 June 2019). Refer to note 12.
** In July 2017, the Company issued 283,019 shares ($30,000) to New Challenge Resources Pty Ltd as
consideration for extension of the Stavely Royalty Agreement.
(ii) Non-Cash Financing and Investing Activities
No non-cash financing and investing activities were undertaken during the year (2018: none).
NOTE 7 – TRADE AND OTHER RECEIVABLES
Receivables are initially recognised at fair value and subsequently measured at amortised cost, less provision for doubtful
debts. Current receivables for GST are due for settlement within 30 days and other current receivables within 12 months.
Cash on deposit is not due for settlement until rights of tenure are forfeited or performance obligations are met.
Revenues, expenses and assets are recognised net of the amount of GST except:
▪ when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
receivables and payables, which are stated with the amount of GST included.
▪
2019 Annual Report | Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7 – TRADE AND OTHER RECEIVABLES - continued
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the statement of financial position. Cash flows are included in the Cash Flow Statement on a gross basis and the GST
component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount
of GST recoverable from, or payable to, the taxation authority.
Current
GST refundable
Bonds – credit card
Pre-paid drilling services (refer note 12b)
Deposit for Beaconsfield Assets (refer note 14c)
Other
Total current receivables
Non-Current
Cash on deposit - security bonds
30 June 2019
$
30 June 2018
$
372,330
40,000
1,347,550
250,000
12,847
237,218
40,000
-
-
14,793
2,022,727
292,011
72,500
42,500
Fair Value and Risk Exposures – all above excluding the Deposit for Beaconsfield Assets:
(i) Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair
value.
(ii) The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security.
(iii) Details regarding interest rate risk exposure are disclosed in note 18.
(iv) Other current receivables generally have repayments between 30 and 90 days.
Receivables do not contain past due or impaired assets as at 30 June 2019 (2018: none).
Fair Value and Risk Exposures –Deposit for Beaconsfield Assets:
Stavely has terminated the agreement to acquire these assets, and the vendor has subsequently served a writ of
summons in relation to the termination. Stavely has requested a return of the $250,000 deposit. For further
details, refer to note 14c.
NOTE 8 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment
Motor vehicles
- 0 to 4 years
- 3 to 5 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
Disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset
is derecognised.
2019 Annual Report | Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 8 - PROPERTY, PLANT AND EQUIPMENT - continued
Motor vehicles- at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
30 June 2019
30 June 2018
$
95,650
(67,721)
27,929
350,330
(220,671)
129,659
$
95,650
(47,508)
48,142
278,105
(197,642)
80,463
Total property, plant and equipment
157,588
128,605
Reconciliation of property, plant and equipment:
Motor Vehicles
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount at end of year
Plant and Equipment
Carrying amount at beginning of year
Additions
Disposals
Depreciation
Carrying amount at end of year
NOTE 9 - DEFERRED EXPLORATION EXPENDITURE
48,142
-
(20,213)
27,929
80,463
97,225
(1,049)
(46,980)
129,659
21,455
38,286
(11,599)
48,142
30,313
95,128
-
(44,978)
80,463
Exploration expenditure is expensed to the statement of profit or loss and other comprehensive income as and when it is
incurred and included as part of cash flows from operating activities. Exploration costs are only capitalised to the
statement of financial position if they result from an acquisition.
Costs carried forward in respect of an area of interest which is abandoned are written off in the year in which the
abandonment decision is made.
30 June 2019
$
30 June 2018
$
Deferred exploration acquisition costs brought forward
Capitalised acquisition expenditure incurred during the year, net
Deferred exploration costs carried forward
3,006,057
3,006,057
-
-
3,006,057
3,006,057
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or, alternatively, sale of the respective areas.
2019 Annual Report | Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 10 - TRADE AND OTHER PAYABLES
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of the purchase of these goods and services.
Trade creditors
Accruals
30 June 2019
30 June 2018
$
488,018
179,572
667,590
$
755,879
976,594
1,732,473
Fair Value and Risk Exposures
(i) Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
(ii) Trade and other payables are unsecured and usually paid within 60 days of recognition.
NOTE 11 – PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Wages, salaries and, annual leave
(i)
Liabilities for wages and salaries, including non-monetary benefits and annual leave and expected to be settled wholly
within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefit obligations
(ii)
The liability for long service leave and annual leave not expected to be settled wholly within 12 months of the reporting
date are recognised in the provision for employee benefits and measured as the present value of expected future payments
to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service.
Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currencies that match, as closely as possible, the estimated future cash outflows. The obligations are
presented as current liabilities if the Group does not have an unconditional right to defer settlement for at least 12 months
of the reporting date, regardless of when actual settlement is expected to occur.
Current
Employee entitlements
30 June 2019
30 June 2018
$
$
108,578
64,308
2019 Annual Report | Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 12 – ISSUED CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(a)
Issued Capital
181,236,479 (2018: 149,868,317) ordinary shares fully paid
(b) Movements in Ordinary Share Capital
30 June 2019
$
30 June 2018
$
31,711,470
24,744,232
121,227,119 Opening balance at 1 July 2017
283,019
623,845
417,520
434,066
20,000,000
5,888,972
100,000
493,776
400,000
Issue of shares – New Challenge Royalty 4 July 2017
Issue of shares – Share Subscription Agreement 6 July 2017
Issue of shares – Share Subscription Agreement 14 September 2017
Issue of shares – Share Subscription Agreement 13 December 2017
Issue of shares – Placement 8 February 2018
Issue of shares – Share Purchase Plan 23 February 2018
Issue of shares – Exercise of Unlisted Consultant Options 11 April 2018
Issue of shares – Share Subscription Agreement 13 April 2018
Issue of shares – Exercise of Unlisted Consultant Options 13 June 2018
Costs of equity issues
149,868,317 Closing Balance at 30 June 2018
149,868,317 Opening balance at 1 July 2018
500,000
1,290,323
3,806,394
Issue of shares – Share Subscription Agreement 19 July 2018
Issue of shares – Share Subscription Agreement 6 September 2018
Issue of shares – Exercise of Unlisted Employee/Consultant Options 20
October 2018
572,271
436,681
498,874
Issue of shares – Share Subscription Agreement 14 November 2018
Issue of shares – Share Subscription Agreement 22 January 2019
Issue of shares – Share Subscription Agreement and additional issue
for drilling services 22 March 2019
12,307,767
7,692,308
4,263,544
Issue of shares – Placement 17 April 2019
Issue of shares – Advance payment of drilling services 17 April 2019
Issue of shares – Share Purchase Plan 10 May 2019
Costs of equity issues
181,236,479 Closing Balance at 30 June 2019
15,977,562
30,000
63,008
61,375
82,907
6,800,000
2,002,250
19,000
141,714
76,000
(509,584)
24,744,232
24,744,232
140,500
400,000
-
154,513
100,000
154,651
3,200,019
2,000,000
1,108,500
(290,945)
31,711,470
Placement
On 17 April 2019, Stavely issued 12,307,767 shares at 26 cents per share pursuant to a placement to
sophisticated and institutional investors. Gross proceeds were $3,200,019.
Pre-payment of Drilling Services
On 17 April 2019, Stavely issued 7,692,308 shares at 26 cents as a prepayment of $2,000,000 for drilling services to
be utilised over 12 months to April 2020. As at 30 June 2019, $1.35 million of prepaid drilling services remains to
be utilised.
Share Purchase Plan
On 10 May 2019, Stavely issued 4,263,544 shares at 26 cents per share pursuant to a Share Purchase Plan.
Gross proceeds were $1,108,500.
2019 Annual Report | Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 12 – ISSUED CAPITAL - continued
Share Subscription Agreement
In October 2014, Stavely Minerals entered into a $2 million Share Subscription Agreement with its existing
drilling contractor, Titeline Drilling Pty Ltd. Pursuant to this agreement, the drilling contractor agreed to
subscribe for up to $2 million of shares, with Stavely Minerals having the option to settle monthly drilling
charges by way of cash payment and by way of offset of the price of subscription application for shares.
During the year ended 30 June 2019, 3,026,026 ordinary shares ($865,306) were issued pursuant to the Share
Subscription Agreement with Titeline Drilling Pty Ltd and Greenstone Property Pty Ltd as trustee for the
Titeline Property Trust. As at 30 June 2019, cumulative subscriptions totalled $2,000,000 (2018: $1,134,694).
On 22 March 2019, 272,123 shares ($84,358) were issued to Titeline Drilling Pty Ltd outside of the
Subscription Agreement in payment of the balance of drilling services rendered.
(c) Options on issue at 30 June 2019
Unlisted Options
Unlisted Options
Number
15,650,000
7,050,000
22,700,000
Exercise Price
36 cents
21 cents
Expiry Date
31/12/2019
31/12/2020
15,650,000 unlisted options were granted as share-based payments (2018: 16,637,500);
No unlisted options expired (2018: 28,650,000); and
During the year:
(i)
(ii)
(iii) On 25 October 2018, 9,587,500 options were exercised using the cashless exercise mechanism as part of
Stavely’s Employee Incentive Plan. On exercise of the options, the Company issued 3,806,394 shares. The
number of shares was determined by the value calculated between the market price of the shares (based on a
VWAP for the 5 trading days prior to the exercise date) of 31.51 cents and the exercise price of 19 cents in
relation to the options. (2018: 500,000 unlisted options were exercised at an exercise price of 19 cents).
(d) Terms and conditions of issued capital
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all
other shareholders and creditors are fully entitled to any proceeds of liquidations.
(e) Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as
maintains optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
Management may in the future adjust the capital structure to take advantage of favourable costs of capital and issue
further shares in the market. Management has no current plans to adjust the capital structure. There are no plans to
distribute dividends in the next year.
2019 Annual Report | Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13 - RESERVES
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value is determined using a Black-Scholes option pricing model.
Equity-based payments reserve
Balance at the beginning of the year
Equity-based payments expense
Balance at the end of the year
30 June 2019
$
30 June 2018
$
3,295,853
1,172,406
4,468,259
2,189,111
1,106,742
3,295,853
Nature and purpose of the reserve: The Equity-based payments reserve is used to recognise the fair value of options
granted.
NOTE 14 – COMMITMENTS AND CONTINGENCIES
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to profit or loss on a straight-line basis over the period of the lease.
(a)
Operating leases (non-cancellable):
Within one year
More than one year but not later than five years
30 June 2019
$
30 June 2018
$
114,312
2,453
116,765
127,260
96,605
223,865
These non-cancellable operating leases are primarily for office premises, residential premises at site and a ground lease.
(b)
Exploration Commitments
The Group has certain minimum exploration commitments to maintain its right of tenure to exploration permits. These
commitments require estimates of the cost to perform exploration work required under these permits.
Tenement Expenditure Commitments:
The Group is required to maintain current rights of tenure to tenements,
which require outlays of expenditure in 2019/2020. Under certain
circumstances these commitments are subject to the possibility of
adjustment to the amount and/or timing of such obligations, however, they
are expected to be fulfilled in the normal course of operations.
30 June 2019
$
30 June 2018
$
1,108,000
531,200
2019 Annual Report | Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14 – COMMITMENTS AND CONTINGENCIES – continued
(c)
Contingencies
Deed of Option and Royalty
The Company is party to a Deed of Option and Royalty relating to the Stavely tenement EL 4556.
Farm-In Agreement – Mathinna Gold Project, Tasmania
Stavely’s wholly owned subsidiary, Stavely Tasmania Pty Ltd (Stavely Tasmania) entered into a Farm-in agreement with
Bestlevel Holdings Pty Ltd (Bestlevel). The main terms of the Farm-in agreement are:
Stavely Tasmania is the manager.
•
• Upon the grant of the tenements, Stavely Tasmania Pty Ltd will have a 51% interest in the tenement(s) and
•
•
•
•
•
Bestlevel will have a 49% interest.
In consideration for a $50,000 payment to Bestlevel, Stavely Tasmania has the right to earn an interest of up to
85% in the tenement(s) in the following stages:
o Exploration-related expenditure of $500,000 within a two-year period to earn an additional interest of
24% (to 75%); and
o At completion of a Feasibility Study and payment of $200,000 to Bestlevel, Stavely Tasmania may earn
an additional 10% interest (to 85%).
Subject to Stavely Tasmania having earned its 85% interest, a Joint Venture will be formed and subsequent
expenditure will be on a ‘contribute or dilute’ basis.
Should Bestlevel’s interest fall below 5%, it will be transferred to Stavely Tasmania in consideration for a 1.5% net
smelter return (NSR).
Stavely Tasmania retains a right to purchase Bestlevel’s NSR for payment of $250,000 per 0.5% NSR to a maximum
of $750,000 to acquire the entire NSR.
Should the Joint Venture announce in a JORC-compliant Public Report an Ore Reserve in excess of 500,000oz,
Stavely Tasmania will pay Bestlevel $500,000.
• Both parties have pre-emptive rights over the other’s interest.
Beaconsfield Dispute
On 22 March 2019, Stavely announced on ASX that it had entered into an agreement to acquire the Beaconsfield gold
processing plant and associated assets (Acquisition Agreement) with BCD Resources NL and associated parties (BCD). A
deposit of $250,000 was paid in March 2019. The Acquisition Agreement was subject to various conditions. On 18 June
2019, Stavely terminated the Acquisition Agreement and gave notice to BCD on the basis that BCD had breached several
clauses of the Acquisition Agreement.
On 27 June 2019, Stavely announced on ASX that it had been served with a writ of summons in relation to its termination
of the Acquisition Agreement with BCD. The writ is seeking an order that Stavely Minerals specifically perform its
obligations under the Acquisition Agreement and do all things as may be necessary to ensure the Acquisition Agreement
is carried into effect or alternatively damages (of an unspecified amount).
Stavely Minerals strongly believes that the claims made in the writ are without merit and are defending the proceedings.
Separately, Stavely Minerals has sought a return of the $250,000 deposit which it paid to BCD Resources NL under the
Acquisition Agreement, which it believes it is entitled to.
The Group had no other contingent liabilities at year end (2018: same).
2019 Annual Report | Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15 – RELATED PARTIES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Equity-based payment
30 June 2019
$
30 June 2018
$
518,132
49,046
726,666
345,010
31,429
734,346
1,293,844
1,110,785
(b) Other transactions and balances with Key Management Personnel
Other Transactions with Key Management Personnel
Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. Ironside Pty Ltd is a shareholder of the 168
Stirling Highway Syndicate, the entity which owns the premises the Company occupies in Western Australia. During the
year an amount of $131,250 (net of GST) was paid/payable for office rental and variable outgoings (2018: $134,611, net of
GST).
Mr Peter Ironside, Director, is also a shareholder and non-executive director of Zamanco Minerals Limited (“Zamanco”).
Zamanco sub-leases office space in the premises the Company occupies. During the year an amount of $37,630 (net of
GST) was paid/payable by Zamanco to the Company for reimbursement of office rental and associated expenses (2018:
$36,948, net of GST).
(c) Transactions with Other Related Parties
There were no transactions with other related parties (2018: none).
NOTE 16 – AUDITOR’S REMUNERATION
30 June 2019
$
30 June 2018
$
Amount received or due and receivable by the auditor for:
Auditing the financial statements, including audit review - current year audits
Other services – taxation and corporate advisory
Total remuneration of auditors
34,483
19,375
53,858
34,611
9,810
44,421
2019 Annual Report | Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17 – SEGMENT INFORMATION
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance and for which discrete financial information is
available. Management will also consider other factors in determining operating segments such as the existence of a line
manager and the level of segment information presented to the board of Directors.
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the executive management team.
The Group aggregates two or more operating segments when they have similar economic characteristics, and the segments
are similar in each of the following respects:
Nature of the products and services,
-
Type or class of customer for the products and services,
-
Methods used to distribute the products or provide the services, and if applicable
-
Nature of the regulatory environment.
-
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the quantitative criteria is still reported separately where information about the
segment would be useful to users of the Financial Statements.
Management has determined the operating segments based on the reports reviewed by the board of directors that are
used to make strategic decisions. The Group does not have any material operating segments with discrete financial
information. The Group does not have any customers and all its’ assets and liabilities are primarily related to the mining
industry and are located within Australia. The Board of Directors review internal management reports on a regular basis
that is consistent with the information provided in the statement of profit or loss and other comprehensive income,
statement of financial position and statement of cash flows. As a result no reconciliation is required because the
information as presented is what is used by the Board to make strategic decisions.
2019 Annual Report | Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Interest revenue
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
The Group’s principal financial instrument comprises cash. The main purpose of this financial instrument is to provide
working capital for the Group’s operations.
The Group has various other financial instruments such as sundry debtors, security bonds and trade creditors, which arise
directly from its operations.
It is, and has been throughout the year under review, the Group’s policy that no trading in financial instruments shall be
undertaken.
The main risk arising from the Group’s financial instruments is interest rate risk. The Board reviews and agrees on policies
for managing each of these risks and they are summarised below.
Interest rate risk
At reporting date the Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s cash
and bonds. The Group constantly analyses its exposure to interest rates, with consideration given to potential renewal of
existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed.
At reporting date, the Group had the following financial assets exposed to variable interest rates that are not designated
in cash flow hedges:
Financial Assets:
Cash and cash equivalents - interest bearing
Trade and other receivables – bonds & deposits
Net exposure
30 June 2019
$
30 June 2018
$
2,797,232
331,320
3,128,552
6,559,041
80,000
6,639,041
Sensitivity
At 30 June 2019, if interest rates had increased by 0.5% from the year end variable rates with all other variables held
constant, post tax profit and equity for the Group would have been $14,387 higher (2018: changes of 0.5% $32,576 higher).
The 0.5% (2018: 0.5%) sensitivity is based on reasonably possible changes, over a financial year, using an observed range
of historical RBA movements over the last year.
Liquidity risk
The Group has no significant exposure to liquidity risk as there is effectively no debt. The Group manages liquidity risk by
monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained.
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or
other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures
credit risk on a fair value basis.
Significant cash deposits are with institutions with a minimum credit rating of AA (or equivalent) as determined by a
reputable credit rating agency e.g. Standard & Poor.
The Group does not have any other significant credit risk exposure to a single counterparty or any group of counterparties
having similar characteristics.
2019 Annual Report | Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19 – PARENT ENTITY INFORMATION
Statement of Financial Position Information
Current assets
Non-current assets
Current liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Profit or loss information
Loss for the year
Comprehensive loss for the year
Company
30 June 2019
$
30 June 2018
$
4,877,227
3,179,719
(775,035)
7,281,911
6,821,894
3,150,733
(1,773,327)
8,199,300
31,711,470
24,744,232
4,468,259
3,295,853
(28,897,818)
7,281,911
(19,840,785)
8,199,300
(9,057,033)
(6,922,516)
(9,057,033)
(6,922,516)
Commitments and contingencies
There are no commitments or contingencies, including any guarantees entered into by Stavely Minerals Limited on behalf
of its subsidiaries.
Subsidiaries
Name of Controlled Entity
Ukalunda Pty Ltd
Stavely Tasmania Holdings Pty Ltd
Class of
Share
Ordinary
Ordinary
Stavely Tasmania Operations Pty Ltd
Ordinary
Stavely Tasmania Pty Ltd
Ordinary
Place of Incorporation
% Held by Parent Entity
30 June 2019
30 June 2018
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
-
-
-
NOTE 20 – EVENTS OCCURRING AFTER THE REPORTING PERIOD
There are no matters or circumstances that have arisen since 30 June 2019 that have or may significantly affect the
operations, results, or state of affairs of the Group in future financial years.
2019 Annual Report | Page 58
INDEPENDENT AUDIT REPORT
.
2019 Annual Report | Page 59
INDEPENDENT AUDIT REPORT
2019 Annual Report | Page 60
INDEPENDENT AUDIT REPORT
2019 Annual Report | Page 61
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 30 August 2019
a) Substantial Shareholders
Name
Peter Reynold Ironside
Christopher John Cairns
Greenstone Property Pty Ltd and Associates
Number of Ordinary Shares
per Notice given to
Stavely Minerals Limited
30,672,526
15,672,961
20,870,974
b) Shareholder Distribution Schedule
Size of Holding
1 -
1,001 -
5,001 -
10,001 -
1,000
5,000
10,000
100,000
100,001 and over
Total
Number of shareholders holding less
than a marketable parcel
c) Voting Rights
Number of
Shareholders
79
252
218
629
195
1,373
162
(i)
at meetings of members entitled to vote each member may vote in person or by proxy or attorney, or in the
case of a member which is a body corporate, by representative duly appointed under section 250D;
(ii) on a show of hands every member entitled to vote and present in person or by proxy or attorney or
representative duly authorised shall have one (1) vote;
(iii) on a poll every member entitled to vote and present in person or by proxy or attorney or representative duly
authorised shall have one (1) vote for each fully paid share of which he is the holder and in the case of
contributing shares until fully paid shall have voting rights pro rata to the amount paid up or credited as paid up
on each such share; and
(iv) a member shall not be entitled to vote at general meeting or be reckoned in a quorum in respect of any shares
upon which any call or other sum presently payable by him is unpaid.
2019 Annual Report | Page 62
ADDITIONAL SHAREHOLDER INFORMATION
d)
Twenty largest shareholders:
Name
1
2
3
4
5
6
7
8
9
Chaka Investments Pty Ltd
Greenstone Property Pty Ltd
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