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2023 Report2020 | Annual Repor t
S T A V E L Y M I N E R A L S L I M I T E D
A B N 3 3 1 1 9 8 2 6 9 0 7
w w w . s t a v e l y . c o m . a u
FIND ING THE COPPER THE WORLD NEEDS FOR A LOW- CAR BON FUTU RE
CONTENTS
ONTENTS
CORPORATE DIRECTORY ............................................................................................................... 3
OPERATIONS REPORT ................................................................................................................... 4
DIRECTORS’ REPORT ................................................................................................................... 37
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS .................................................. 48
DIRECTORS’ DECLARATION ......................................................................................................... 49
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ......... 50
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................... 51
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................ 52
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................ 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................................................... 54
INDEPENDENT AUDIT REPORT .................................................................................................... 76
ADDITIONAL SHAREHOLDER INFORMATION ............................................................................... 79
TENEMENT SCHEDULE ................................................................................................................. 81
2020 Annual Report | Page 2
CORPORATE DIRECTORY
ORPORATE 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
2020 Annual Report | Page 3
OPERATIONS REPORT
Overview
EXPLORATION
The Company’s assets are located in western Victoria (Stavely, Ararat & Yarram Park Projects), central Victoria
(Myola Project), north Queensland (Ravenswood Project) and north eastern Tasmania (Mathinna & Lefroy
Projects) 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.
A review of drill core, assay results and other technical data from the Thursday’s Gossan prospect in the Stavely
Project was undertaken by Stavely geologists in conjunction with Stavely’s consultants, Drs Greg Corbett, Scott
Halley and Paul Ashley, during the year. The assessment highlighted the significant similarities between the
large mineral system at Thursday’s Gossan with the Butte, Montana and Magma, Arizona copper deposits. This
prompted Stavely Minerals to test for similar high-grade lode-hosted copper-gold-silver mineralisation at
shallower depths.
The first diamond hole SMD050, seeking shallower lode-style mineralisation, drilled targeting the high-grade
structurally controlled copper-gold-silver mineralisation within the Ultramafic Contact Fault (UCF), returned
stunning grades of up to 40% copper within a 32m wide high-grade zone.
Diamond drilling during the year continued to demonstrate the growing scale and potential of the shallow
copper-gold discovery at Thursday’s Gossan, now known as the Cayley Lode. Mineralisation has grown to 1.5km
in strike length and remains open in all directions. Given that a similar style of mineralisation has been previously
intersected at drill depths in excess of 900m on the North-South Structure (NSS), it is anticipated that the Cayley
Lode mineralisation will extend to similar depths and possibly beyond.
As expected with any structurally hosted copper-gold deposit, the intercepts do vary in width and grade due to
inherent pinch and swell along the structure, however the Cayley Lode continues to deliver consistently good
widths of high-grade copper, gold and silver mineralisation. Recent drilling has demonstrated that the Cayley
Lode continues below the Low Angle Structure (LAS) with only a modest offset to the mineralisation.
It is now believed that the ‘chalcocite enriched blanket’ Mineral Resource is derived from the weathering and
redistribution and dispersion of metals from the high-grade lode-style copper-gold-silver mineralisation as it
approaches surface.
The polymetallic- precious metal signature of the mineralisation exhibited in the far north-west portion of the
Cayley Lode in SMD073 is very similar in character to the peripheral sulphide mineral zonation of the Magma,
Arizona lode-style mineralisation.
At the end of the year, an intensive resource drill-out was in progress on the now 1.5 km long discovery zone,
with in-fill and step-out drilling continuing on a roughly 40m x 40m drill grid.
A 2D Seismic survey was conducted at the Stavely Project earlier in the year. The survey comprised two
orthogonal lines for 8 km each and were centred on the Thursday’s Gossan porphyry prospect.
The seismic survey identified two strong porphyry targets at approximately 1,000m and 1,100m depth at
Thursday’s Gossan.
During the year, diamond drilling was undertaken at the Mathinna Project in Tasmania. The seven-hole diamond
drilling programme included three holes designed to target the potential extensions to the known lodes and four
stratigraphic holes designed to better understand the structural and stratigraphic controls of the region. Initial
results from the drilling confirmed the down-dip extensions of known lode style gold mineralisation.
2020 Annual Report | Page 4
OPERATIONS REPORT
CORPORATE
During the previous year, Stavely Minerals, through its 100% owned subsidiary Stavely Tasmania Operations Pty
Ltd, agreed 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 June 2019, the Acquisition Agreement with BCD Resources NL (among other parties) to purchase all assets
associated with the Beaconsfield gold processing plant was terminated.
Subsequently, the Company was served with a writ of summons in relation to its termination of the Acquisition
Agreement as detailed in its ASX announcement dated 18 June 2019. The writ was 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 pay damages (of an
unspecified amount).
In September 2019, Stavely Minerals agreed a Deed of Settlement and Release with BCD Resources NL (and the
other parties) to settle the termination and to release both parties from any further claim. As part of the Deed
of Settlement and Release, BCD Resources returned $100,000 of the original purchase deposit to Stavely
Minerals.
In October 2019, the Company completed a capital raising which was underpinned by a Share Placement of 19.6
million shares at $1.00 per share to sophisticated and institutional investors to raise $19.6M before costs.
In November 2019, Stavely Tasmania Pty Ltd (Stavely Tasmania), acquired:
o a key exploration licence covering the structural extension of the high-grade Mathinna Gold Project in
Tasmania;
o
the majority of the historical Lefroy goldfield where past gold production is reported to be 180,000 oz at
28g/t gold1; and
o an exploration licence in central Victoria approximately 10km east of the world-class 9 million-ounce
Fosterville Gold Mine.
In addition to the licence acquisitions, Stavely Tasmania was granted up to $50,000 towards direct drilling costs
on each of the granted exploration licences, EL4/2019 and EL19/2018 as part of the Mineral Resources Tasmania
Exploration Drilling Grant Initiative Program 2020.
During the year, Stavely Tasmania was granted three exploration licences (EL19/2018, EL4/2019 & EL6/2019)
within the highly prospective Alberton – Mathinna “Gold Corridor” in northeast Tasmania. These exploration
licences are subject to an agreement with Bestlevel Holdings Pty Ltd (Bestlevel). Upon grant of the exploration
licences, Stavely Tasmania managed the tenements and held a 51% interest in the tenements, with Bestlevel
having a 49% interest.
Subsequent to the drilling programme at Mathinna, Stavely Tasmania earnt an interest of 75% in EL19/2018,
EL4/2019 & EL6/2019 through the expenditure of $500,000. Bestlevel retain a 25% interest in the exploration
licences.
In April 2020, the Company reached agreement to purchase the existing 3% net smelter royalty (NSR) held by
New Challenge Resources on tenement RL2017 (formerly EL4556), which hosts the Thursday’s Gossan prospect
and other key prospects at its flagship Stavely Copper-Gold Project in western Victoria. The agreed terms
included the payment of $350,000 cash and the issue of 850,000 Stavely Minerals’ shares. The cash payment of
$350,000 and the issue of shares occurred on 1 July and 9 July 2020, respectively.
In May 2020, Stavely Minerals received correspondence from the Earth Resources Regulation section of the
Victorian Department of Jobs, Precincts and Regions informing the Company of the grant of two key Retention
Licences covering its principal base metal projects in western Victoria.
1 Tasmania Department of Mines – Report 1994/03, Northeast Goldfields: A Summary of the Beaconsfield, Lefroy, Back Creek and
Gladstone goldfields, McClenaghan, 1994
2020 Annual Report | Page 5
OPERATIONS REPORT
The Retention Licences, RL2017 over the Stavely Project and RL2020 over the Ararat Project, have been granted
for a period of 10 years and are renewable, on approval of a renewal application, for up to a further 10 years.
Subsequent to the year end:
➢
➢
the Company was successful in its application for participation in the Federal Government’s Junior
Minerals Exploration Incentive (“JMEI”) scheme for the 2020/2021 income year. The Company received
an allocation of up to $1,750,000 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 third year that
Stavely Minerals has been successful in receiving an allocation of JMEI credits.
In July 2020, a Letter of Intent (LOI) to divest its Mathinna/ Alberton and Lefroy Goldfields tenements
in Tasmania, as well as its Fosterville East tenement in Victoria to Nubian Resources Ltd (TSX-V:NBR)
(‘Nubian’) for A$2.5 million in Nubian shares and cash.
The terms of the LoI are as follows:
o Nubian to pay a non-refundable deposit of A$100,000;
o A 60-day exclusivity period to complete final due diligence and execute a definitive agreement;
o Upon execution of the definitive agreement, Nubian will issue to Stavely Minerals a number of
Nubian shares equivalent in value to A$2.4 million based on the 5-trading day volume-weighted
average price (VWAP) prior to the execution date, subject to a minimum issue of 5,050,000 Nubian
shares to Stavely Minerals.
The consideration for the purchase is based on 100% ownership of the tenements. Stavely Minerals is
in Joint Venture with Bestlevel Holdings Pty Ltd (Bestlevel), with Stavely Minerals currently holding a
75% interest in the three Mathinna JV tenements. The value of the Bestlevel 25% interest in the three
Mathinna JV tenements equates to approximately A$400,000 of Nubian shares to be issued to Bestlevel
or its beneficial owners.
➢ On 30 July 2020, Stavely issued 28,000,000 shares at an issue price of $0.60 per share pursuant to the
first tranche of a placement to sophisticated and institutional investors. Gross proceeds were
$16,800,000. The second Tranche of 13.67 million shares will be completed subject to shareholder
approval at a general meeting to be held on 31 August 2020.
➢ On 14 August 2020, Stavely issued 4,645,000 shares at an issue price of $0.60 per share pursuant to a
share purchase plan. Gross proceeds were $2,787,000.
2020 Annual Report | Page 6
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 Ararat and just east of the regional town of Glenthompson in Victoria (Figure
1).
The western Victorian Projects include exploration tenements with a total area of 162 square kilometres of 100%
owned, 100 square kilometres of joint venture tenure and 1,027 square kilometres of tenement application area.
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.
The Queensland Project includes four granted exploration licences with a total area of 544 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 four exploration
licences covering a total area of 142 square kilometres. Access to the Project area is excellent via sealed roads.
Access within the licence areas is by gravel roads on State Forest and private property.
The Lefroy Project is also located in north-eastern Tasmania, approximately 45km north of Launceston. The
Lefroy Project comprises one exploration licence and one retention licence covering an area of 28 square
kilometres. The licences are accessible by sealed roads and the majority of the area is in State Forest and private
bushland.
The central Victorian Project, comprising one exploration licence, is located 140km north of Melbourne and
covers 111 square kilometres. The majority of the Project area, which is accessible via the Northern Highway, is
privately owned and has been cleared for grazing or cultivation.
Figure 1. Project Location Plan.
2020 Annual Report | Page 7
OPERATIONS REPORT
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 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 continental 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 younger 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.
2020 Annual Report | Page 8
OPERATIONS REPORT
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.
Figure 3. Ravenswood Project - Regional Geology Plan.
Mineralisation is associated with shear hosted quartz veins and is dominated by pyrite-chalcopyrite-galena-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.
Regional Geology North East Tasmania
The regional geology of the Mathinna & Lefroy Project is dominated by the Mathinna Supergroup rocks and
granitoids. Gold mineralisation within the north-westerly trending Mangana to Lyndhurst gold lineament is
hosted by the Silurian to Devonian Mathinna Beds (Figure 4). The Mathinna Beds are a folded sequence of
2020 Annual Report | Page 9
OPERATIONS REPORT
sediments comprise an alternating sequence of bedded quartzites, sandstones, siltstones and slates. The
Mathinna Beds are unconformably 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.
Figure 4. Mathinna & Lefroy Project - Regional Geology Plan.
Regional Geology Central Victoria
The central Victoria Project is located approximately 10km east of the high-grade +9 million-ounce Fosterville
Gold Mine. The Project is underlain by metasediments of Ordovician age, typical of the Bendigo Zone, although
these are obscured to a large degree by shallow transported sediments. Based on the publicly available data,
there is an interpreted structure running through the tenement, which appears to be sub-parallel to the main
north-northwest structures which control the mineralisation at Fosterville.
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).
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
2020 Annual Report | Page 10
OPERATIONS REPORT
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 (Figure 5).
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.
No exploration was conducted on the Ararat Project during the year.
Table 1. The Mount Ararat Resource Estimate (reviewed in 2020).
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.
2020 Annual Report | Page 11
OPERATIONS REPORT
Table 2. The Thursday’s Gossan Chalcocite Copper Inferred Resource Estimate (reviewed in 2020).
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.
2020 Annual Report | Page 12
OPERATIONS REPORT
Stavely Project
The Stavely Project hosts several significant opportunities for discovery of porphyry copper-gold and VMS base-
metals +/- gold deposits (Figure 5).
During the year, the Company completed diamond drill hole SMD049, targeting the deep porphyry and drilled
diamond holes SMD050 to SMD095, which targeted the high-grade structurally-controlled copper-gold-silver
mineralisation within the Ultramafic Contact Fault (UCF).
During the year, a 2D seismic survey was conducted by HiSeis Pty Ltd. The survey comprised two orthogonal lines
for 8 km each and were centred on the Thursday’s Gossan prospect. The seismic data provides a clear target for
deeper drill testing for well-developed copper-gold porphyry mineralisation. The location of the two porphyry
targets at ~1,000m and ~1,100m depth, is consistent with the Magma, Arizona mineralisation model for
Thursday’s Gossan.
Thursday’s Gossan Porphyry Prospect
During the year, one diamond hole, SMD049, was completed to target the deep porphyry at Thursday’s Gossan.
Hole SMD049 was designed to target the source porphyry believed to be responsible for high-grade structurally-
controlled polymetallic epithermal copper-gold-silver mineralisation encountered in drill holes SMD044,
SMD044W1, SMD045, SMD045W1 and SMD045W2 (Figure 6 & 7).
Diamond drill hole SMD044 returned:
o 38.3m @ 1.59% Cu, 0.27 g/t Au and 8g/t Ag from 890m including
▪
6m @ 2.75% Cu, 0.25 g/t Au and 7 g/t Ag, and
▪ 12.3m @ 2.59% Cu, 0.44 g/t Au and 18 g/t Ag, in the NSS.
Diamond drill hole wedge SMD045W2 returned:
o 12m @ 0.51% Cu, 0.1g/t Au and 2g/t Ag from 1,129m including
▪ 4m @ 0.91% Cu, 0.12g/t Au and 2g/t Ag from 1,133m, in the NSS.
SMD049, which was drilled from north to south, parallel to the mineralisation-hosting NSS, was completed to a
depth of 1,767.6m (Figure 8). The hole did not intersect the source porphyry, as the hole encountered
appreciable molybdenite in porphyry A veins from 1,315m to approximately 1,440m down-hole. This is
consistent with an outer molybdenite halo to a porphyry. It is possible that the drill hole ended in the barren
core to the QDP porphyry – interpreted to be porphyry #2 in a sequence of four porphyry phases – the later two
phases have not yet been seen in drilling but are inferred to be the likely drivers of the structurally-controlled
copper-gold-silver mineralisation.
Cayley Lode Copper – Gold Mineralisation
During the year, 42 diamond holes for 12,016m and 14 sonic holes for 1,278m were drilled to target the high-
grade structurally controlled copper-gold-silver mineralisation within the Ultramafic Contact Fault (UCF). The drill
collar locations are shown in Figures 9 and 10 and the details are given in Table 3.
The drilling focused on follow-up of the exceptional results received from the discovery diamond hole SMD050
(Figure 11), the first hole testing the UCF target which returned:
o 32m at 5.88% Cu, 1.00g/t Au and 58g/t Ag from 62m including
▪ 12m at 14.3% Cu, 2.26g/t Au and 145g/t Ag, including
• 2m at 40% Cu, 3.00g/t Au and 517g/t Ag
The first step out hole SMD051 (Figure 12), located 160m south of the discovery hole, returned an outstanding
thick mineralised intercept:
o 59m at 1.80% Cu, 0.43g/t Au and 15.4g/t Ag from 98m including:
▪ 8.5m at 4.38% Cu, 0.87g/t Au and 32.7g/t Ag, and
▪ 3m at 5.66% Cu, 0.29g/t Au and 4.6g/t Ag
2020 Annual Report | Page 13
OPERATIONS REPORT
and a second intercept of:
o 8m at 9.69% Cu, 0.40g/t Au and 16.8g/t Ag from 177m; including:
▪ 2m at 17.3% Cu, 0.57g/t Au and 13.1g/t Ag
An intensive resource drill-out was in progress at the end of the year on the south-eastern end of the now 1.5km
long discovery zone, with in-fill and step-out drilling based on roughly a 40m x 40m drilling grid.
Ongoing drilling at the Cayley Lode continues to deliver strong copper-gold-silver mineralisation over significant
widths. The widths and grades vary as the structure pinches and swells, but apart from the few holes that missed
the target, the consistency of the mineralisation is notable. The mineralisation remains open in all directions.
Drill holes which have delived particularly impressive results include:
From SMD064 (Figure 13):
o 8m at 5.12% Cu, 1.48g/t Au and 34.3g/t Ag from 121m, including:
▪ 1m at 26.8% Cu, 8.48g/t Au and 201g/t Ag
From SMD087 (Figure 14):
o 87m at 1.74% Cu, 0.57g/t Au and 20g/t Ag from 140m, including
▪ 24m at 4.19% Cu, 1.27g/t Au and 53g/t Ag from 163m, including:
• 2m at 11.75% Cu, 1.45g/t Au and 66g/t Ag from 170m, and including
• 1.5m at 13.28% Cu, 2.58g/t Au and 209g/t Ag from 181.7m, and including
• 0.8m at 24.1% Cu, 1.16g/t Au and 249g/t Ag
▪ 9m at 4.09% Cu, 1.83g/t Au and 39g/t Ag from 218m down-hole, including
• 1m at 1.30% Cu, 10.05g/t Au and 48g/t Ag
The base of the 24m high-grade interval hosted a narrower interval of strong polymetallic mineralisation
including:
o 2m at 9.95% Cu, 0.71g/t Au, 107g/t Ag, 3.87% Zn, 1.18% Pb, 0.89% Ni, 0.90% Cr and 0.05% Co
Drill holes SMD088 and SMD089, located 100m apart, intercepted the Cayley Lode both above and below the
LAS and demonstrates that the LAS’ influence is simply a modest offset to the mineralisation.
From SMD088 (Figure 15):
o 30m at 1.98% Cu, 0.23g/t Au and 9.1g/t Ag from 212.3m, including:
▪ 10.8m at 3.20% Cu, 0.31g/t Au and 16g/t Ag from 216m, and
▪ 5.8m at 3.54% Cu, 0.43g/t Au and 14g/t Ag from 233.2m
o 11.7m at 1.42% Cu, 0.15g/t Au and 4.5g/t Ag from 319.5m, and
o 15.6m at 1.26% Cu, 0.17g/t Au and 5g/t Ag from 342m, and
o 4.4m at 1.61% Cu, 0.20g/t Au and 5.7g/t Ag from 365.6m
From SMD089 (Figure 16):
o 11.8m at 1.54% Cu, 0.42g/t Au and 14g/t Ag from 87m, including:
▪ 3m at 3.28% Cu, 1.09g/t Au and 34g/t Ag from 91m
o 19.9m at 2.40% Cu, 0.35g/t Au and 17g/t Ag from 214m, including:
▪ 7.1m at 4.30% Cu, 0.52g/t Au and 35g/t silver from 219m, including:
• 3m at 6.02% Cu, 0.71g/t Au and 52g/t Ag from 219m
o 9.7m at 3.10% Cu, 0.97g/t Au and 26g/t Ag from 271m, including:
▪ 2m at 7.86% Cu, 2.09g/t Au and 88g/t Ag
2020 Annual Report | Page 14
OPERATIONS REPORT
A full list of significant intercepts is presented in Table 3.
The mineralisation is characterised by structurally controlled massive to semi-massive sulphide and quartz-
sulphide dominated by early pyrite that is fractured and brecciated by later copper sulphides chalcopyrite,
bornite and chalcocite.
Drill hole SMD073, located in the far north-west portion of the Cayley Lode, intercepted an interval of moderate
to strong sphalerite (zinc sulphide) mineralisation within pyritic massive sulphide in the Cayley Lode from 359.2m
to 365.0m. This zone returned polymetallic-gold mineralisation (Figure 17):
o 5m at 1.67g/t Au, 27g/t Ag, 2.35% Zn, 0.43% Pb and 0.25% Cu from 359m including,
▪ 0.9m at 4.58g/t Au, 51g/t Ag, 4.49% Zn, 0.52% Pb and 0.42% Cu
of
recognition
from
The
chalcocitebornitechalcopyritesphalerite, as exemplified by polymetallic-gold mineralisation in SMD073, is
entirely consistent with the well-documented spatial zonation observed in the Magma, Arizona lode-style vein
system, which is considered the best geological analogue for the discovery at Thursday’s Gossan.
lateral/temporal
zonation
Cayley
Lode
the
the
of
Junction 3 Prospect
Diamond hole SMD071 was drilled to investigate a magnetic high and coincident copper anomaly at the Junction
3 prospect (Figure 18 and 19). The hole intersected a large package of sandstone and siltstones with some
intervals of dacite porphyry. The sandstones and siltstones had variable disseminated magnetite as well as fine
chalcopyrite on fracture surfaces which may explain the magnetic feature and copper anomaly. However, the
presence of fine chalcopyrite veins could possibly indicate proximity to a Lode as it does at Thursdays Gossan
and further drilling is needed to determine this. SMD071 did not return any anomalous assay results.
Junction 1 Prospect
Diamond holes SMD075 and SMD077 were drilled to follow-up high-grade copper in historical aircore holes at
the Junction 3 prospect (Figure 18 and 19). SMD075 intersected a package of sandstone and siltstones with trace
pyrite veining with sericite halos. This hole did not explain the presence of the high-grade copper in the historical
aircore holes. SMD077 intersected sandstone and siltstone for the majority of the hole before ending in dacite
porphyry. Trace to locally weak quartz+carbonate+sulphide+base metal veining was intersected from 240m to
360m. These two holes have not been sampled as yet.
While the mineralisation in the diamond drill holes differs in character to that in aircore drill hole TGAC078, it is
likely that there is some structural complexity in this prospect area that needs to be resolved.
2020 Annual Report | Page 15
OPERATIONS REPORT
Figure 6. Thursday’s Gossan Prospect - Drill Collar Location Plan over Aeromagnetic Image.
Figure 7. Thursday’s Gossan Prospect - Drill Collar Location Plan.
2020 Annual Report | Page 16
OPERATIONS REPORT
Figure 8. Thursday’s Gossan Prospect Schematic Cross Section
SMD049.
2020 Annual Report | Page 17
OPERATIONS REPORT
Figure 9. Cayley Lode – Drill Collar Location Plan.
Figure 10. Cayley Lode – Drill Collar Location Plan over Aeromagnetic Image.
2020 Annual Report | Page 18
OPERATIONS REPORT
Figure 11. Drill Section SMD056, SMD055, SMD050, SMS010 & SMS006.
Figure 12. Drill Section SMD059, SMD051 & SMS001D.
2020 Annual Report | Page 19
OPERATIONS REPORT
Figure 13. Drill Section SMD064.
Figure 14. Drill Section SMD087, SMD058 & SMS004.
2020 Annual Report | Page 20
OPERATIONS REPORT
Figure 15. Drill Section SMD084, SMD068, SMD092 and SMD088.
Figure 16. Drill Section SMD065, SMD066 & SMD089.
2020 Annual Report | Page 21
OPERATIONS REPORT
Figure 17. Drill Section SMD073 & SMD072.
Figure 18. Junction 3 Drill Collar Location Plan.
2020 Annual Report | Page 22
OPERATIONS REPORT
Figure 19. Junction 3 Drill Collar Locations over Aeromagnetics.
Black Range Joint Venture Project
During the year, work conducted on the Black Range JV included the completion of two diamond drill holes at
the Yarram Gap prospect (Figure 20). The Yarram Gap prospect comprises two inferred Cambrian intrusions
within ultramafic and volcanic units of the Stavely Belt and is considered to have potential for porphyry copper-
gold and epithermal gold mineralisation. The possible intrusions coincide with demagnetized zones, surrounded
by strongly magnetic units. They occur at the intersection between the northwest-trending Elliott Belt and the
northerly-trending Stavely Belt.
Diamond hole SYGD001 was drilled to a depth of 201.6m at the Yarram Gap prospect targeting the north-west
trending contact between volcanic-sedimentary rocks and serpentinite (Figure 21). SYGD001 was positioned to
test beneath the historic aircore gold intersect of 3m at 1.42g/t gold from 24m. The hole did intersect a fault
zone however there was no obvious indications of gold mineralisation associated with the fault.
Diamond hole SYGD002 (Figure 21) was drilled to a depth of 201.5m to target the ultramafic contact.
Unfortunately, SYDG002 went directly into serpentinite at 25m, directly below the cover and failed to test the
ultramafic contact.
Neither of the drill holes returned any anomalous gold or base metal results.
2020 Annual Report | Page 23
OPERATIONS REPORT
Figure 20. Location of the Yarram Gap Prospect – Black Range JV.
2020 Annual Report | Page 24
OPERATIONS REPORT
Figure 21. Black Range JV – Drill Hole Location Plan.
Yarram Park 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, assays were received for the one diamond hole, STWD004, drilled at the Toora West prospect in
2019 (Figure 22).
Toora West Prospect
Diamond hole STWD004 was drilled to a depth of 372 metres to test a discrete magnetic anomaly in the vicinity
of the previous drilling at the Toora West prospect. STWD004 intercepted a south westerly-dipping sequence of
massive and amygdaloidal basaltic andesite and basalt lavas, intruded by numerous, northwest and southwest-
dipping stocks and/or dykes of very coarse-grained, sparsely feldspar phyric rhyodacite. The lavas were
overprinted by a moderate pervasive chlorite±magnetite±epidote alteration assemblage with intervals of coarse-
grained blebby pyrite and trace chalcopyrite. Below 170m, the lavas were cut by laminated quartz+pyrite shear-
related veins with sericite selvedges and low temperature carbonate+quartz veins with colloform banding and
no sulphides. The circular aeromagnetic feature appears to be related to patchy secondary magnetite within the
2020 Annual Report | Page 25
OPERATIONS REPORT
intermediate to mafic lavas. No anomalous gold and only minor anomalous base metal assays were returned
from drill hole STWD004.
Figure 22. Yarram Park Project - Drill Collar Plan over Aeromagnetic
Image.
Ravenswood Project
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 copper-molybdenum-gold prospects identified.
During the year, work commenced on applications for approvals, gaining landholder access and cultural heritage
clearance for a drill program planned at the Kirkers prospect on EPM26041 (Figure 23).
At the Kirkers prospect, rock chip sampling in 2017 returned up to 3.71g/t gold and 536ppm copper from the NE-
trending Kirkers vein. Recent mapping has indicated that the 670m long vein possibly bifurcates into two or more
subparallel veins at the southern end. Mineralised quartz veins containing hematite, galena and chalcopyrite
rimmed by chalcocite extend 500m SW of the Kirkers mine.
2020 Annual Report | Page 26
OPERATIONS REPORT
Figure 23. Ravenswood Project - Project Location Plan.
Tasmania and Central Victoria
During the year, the Company’s wholly owned subsidiary, Stavely Tasmania Pty Ltd (Stavely Tasmania), was
granted three exploration licences (EL19/2018, EL4/2019 & EL6/2019) within the highly prospective Alberton –
Mathinna “Gold Corridor” in northeast Tasmania (Figure 24). The Mathinna Goldfield, which was particularly
prolific prior to the first World War produced 289,000 ounces of gold up to 19322.
In addition, Stavely Tasmania acquired a key exploration licence (EL2/2015) covering the structural extension of
the high-grade Mathinna Gold Project in Tasmania; the majority of the historical Lefroy goldfield (EL3/2015,
RL1/2015) where past gold production is reported to be 180,000 oz at 28g/t gold3; and an exploration licence
(EL6668) in central Victoria approximately 10km east of the world-class 9 million-ounce Fosterville Gold Mine
(Figure 25).
2 Tasmania Department of Mines – Report 1992/10, Northeast Goldfields: A Summary of the Tower Hill, Mathinna and Dans Rivulet
Goldfields, Taheri and Findlay, 1992
3 Tasmania Department of Mines – Report 1994/03, Northeast Goldfields: A Summary of the Beaconsfield, Lefroy, Back Creek and
Gladstone goldfields, McClenaghan, 1994
2020 Annual Report | Page 27
OPERATIONS REPORT
Figure 24. Tasmania Project Location Plan.
2020 Annual Report | Page 28
OPERATIONS REPORT
Figure 25. Central Victoria Project Location Plan.
Mathinna Project
A total of seven diamond drill holes were completed for 2,194m at the Mathinna Project in the vicinity of the
New Golden Gate Mine (Figure 26).
Three diamond drill holes (MDD002 to MDD004) were designed to test the potential extensions of the historical
mine area. Drill hole MDD001 failed and was redrilled as MDD002. Four diamond drill holes (MDD005 to
MDD008) were drilled as part of Mineral Resources Tasmania’s (MRT) Exploration Drilling Initiative Program to
better understand the overall stratigraphic and structural setting of the Mathinna area.
The extensional drilling identified lode style gold mineralisation in the projected locations and included a number
of intervals containing small amounts of visible gold (Photo 1).
Photo 1. Photograph of Visible Gold in Mathinna Diamond
Drilling (MDD005 179.3m Down-hole).
2020 Annual Report | Page 29
OPERATIONS REPORT
Significant intercepts (using 30g Fire Assay method) include:
o MDD002 - 3m at 1.48 g/t Au from 90m
▪ 3.05m at 1.38 g/t Au from 113.95m4
▪ 3.24m at 1.20 g/t Au from 126m
▪ 4m at 1.67 g/t Au from 312m
o MDD004 - 1m at 2.77 g/t Au from 133.4m
o MDD005 - 8m at 0.61 g/t Au from 44m
▪ 2.69m at 0.48 g/t Au from 61.95m
▪ 0.54m at 0.27 g/t Au from 179.3m3
The individual sample repeatability using the 30g fire assay methods available in Tasmania was poor. As a result,
anomalous samples from MDD002 were sent to Perth for check analysis using the larger (500g) sample sized
PhotonAssay method.
The individual check assays using the PhotonAssay method varied from the original 30g fire assay (FA) results by
up to +420% (0.32g/t using FA repeated at 1.66g/t using PhotonAssay) and the overall mineralised zones were
up to 51% higher using the larger (and more representative) PhotonAssay method (MDD002 113.95m to 117m -
3.05m at 1.38 g/t using FA methods repeated at 2.09 g/t using PhotonAssay).
Clearly variability of this magnitude is unusual and needs to be investigated along with the low grades reported
from intervals where visible gold was observed.
Individual sample results from MDD002 using the PhotonAssay method identified that the gold distribution in a
number of the samples was heterogeneous, indicating the presence of nuggety coarse gold. This could go part
of the way to explain why the very small (30g) fire assay methods available in Tasmania have not resulted in
higher grade results.
Based on the limited amount of check assay results to date, the results received using the 30g fire assay method
(and reported above) may not be representative of the mineralisation.
Four co-funded drill holes (MDD005 – 008) were completed to understand the stratigraphic and structural setting
of the Mathinna mineralisation. MRT’s Exploration Drilling Grant Initiative contributed 50% of direct drilling
costs, capped at $100,000 for these four holes. These holes have provided a significant dataset of excellent
structural information that will help to target further exploration both at Mathinna and along the structural trend
which extends for more than 30km from Tower Hill in the south to Alberton in the north.
4 Interval where visible good was observed
2020 Annual Report | Page 30
OPERATIONS REPORT
Figure 26. Mathinna Project - Diamond Drill Hole Location Plan.
2020 Annual Report | Page 31
OPERATIONS REPORT
Table 3. Cayley Lode - Significant Intercept Table.
Thursday’s Gossan Prospect – Cayley Lode Intercept Table
MGA 94 zone 54
Intercept
Hole id
Hole
Type
East
North
Dip/
Azimuth
RL
(m)
Total
Depth (m)
From
(m)
SMD050
DD
642070
5836609
-60/59.5
264
132.6
Incl.
and
62
82
85
To
(m)
94
94
87
SMD051
DD
642160
5836476
-60/59.5
264
220.9
98.0
157.0
96.7
101.1
Incl.
and
106.6
115.1
134.0
137.0
177.0
185
Incl.
179.0
181.0
SMD052
DD
642238
5836421
-60/59.5
264
271.7
SMD053
DD
642302
5836355
-60/59.5
264
273.6
Incl.
Incl.
25
76
77
30
92
92
84
52
176
178
SMD054
DD
642048
5836641
-60/59.5
264
245.52
Incl.
and
and
Incl.
Incl.
SMD055
DD
642032
5836595
-60/59.5
264
169.9
SMD056
DD
642031
5836590
-60/59.5
264
185.8
202
203
204
55
86
90
92
96
24
78
156
162
79
207
204
205
57
97
97
95
101
29
83
157
163
82
Width
(m)
Cu
(%)
Au
Ag
(g/t)
(g/t)
Ni
(%)
32
12
2
4.4
59
8.5
3.0
8.0
2.0
67
16
7
22
2
5.88
1.00
58
14.3
2.26
40
3.00
145
517
1.80
0.43
15.4
4.38
0.87
32.7
5.66
0.29
4.60
9.69
0.40
16.8
17.30
0.57
13.1
0.38
0.10
0.63
0.28
0.98
0.23
0.37
2.5
7.0
12
1.17
1.23
4.1
5.81
3.20
43.6
8.42
1.77
97
2.91
8.69
23.9
5
1
1
2
1.89
0.56
11
4.62
0.57
7
3
5
5
5
1
1
3
7.10
0.72
10.87
0.67
1.00
0.32
1.37
0.17
1.18
0.72
3.64
0.60
1.68
0.18
16
25
39
52
7
8
8
43
8
3.98
1.42
201
211.3
10.3
3.09
1.69
22.6
157
165.3
8.3
1.65
0.23
7.2
Incl.
157
160
3
3.75
0.25
10.2
SMD057
SMD058
DD
DD
642386
5836309
-60/59.5
264
242.2
642115
5836542
-60/59.5
264
140.5
Incl.
No Significant Results
19
68
88
48
91
91
29
23
3
0.37
1.34
0.26
6.33
0.27
3.5
2.9
2020 Annual Report | Page 32
OPERATIONS REPORT
Thursday’s Gossan Prospect – Cayley Lode Intercept Table
MGA 94 zone 54
Hole id
Hole
Type
East
North
Dip/
Azimuth
RL
(m)
Total
Depth (m)
SMD059
DD
642122
5836461
-60/59.5
264
317.8
Intercept
From
(m)
21
197
235
To
(m)
22
202
253
Incl.
245.8
252.6
Width
(m)
Cu
(%)
Au
Ag
(g/t)
(g/t)
Ni
(%)
1
5
18
6.8
3.15
3.28
0.27
1.00
0.10
1.85
0.17
SMD060
DD
642137
5836508
-60/59.5
264
203.2
19.2
135.4
102.31
0.68
Incl.
Incl.
and
Incl.
74
74
135.4
48.22
1.04
0.31
86
12
1.55
0.63
111
135.4
13.63
1.90
0.38
129
135.1
6.10
3.55
0.73
116.6
119
2.44
SMD061
SMD062
DD
DD
642276
586435
-60/59.5
264
219.5
160.2
164.5
642337
5836367
-60/59.5
264
227.70
25
13
3
6
14
13
33
41
23
11
16
31
35
1.20
Incl.
and
SMD063
SMD064
SMD065
SMD066
SMD067
DD
DD
DD
DD
DD
642063
5836585
-60/59.5
264
162.7
642041
5836619
-60/59.5
264
184.9
Incl.
642427
5836356
-60/239.5
264
350
641936
5836807
-60/59.5
264
294
641884
5836880
-60/59.5
264
236
Incl.
SMD068
DD
642342
5836414
-60/239.5
264
342
641725
5837063
-60/59.5
264
Incl.
130.7
642199
5836451
-60/59.5
264
275.9
Incl.
and
and
100.9
641585
5837196
-60/59.5
264
641473
5837155
-60/59.5
264
409.9
SMD069
SMD070
DD
DD
SMD072
SMD073
DD
DD
128
156
160
160
106
121
128
16
25
107
50.3
98
285
20
65
69.3
71
149
359
131
162
162
161
107
129
129
34
27
109
102
102
287
95
84
73
72
153
364
4.3
3.0
6.0
2.0
1.0
1.0
8.0
1.0
2.06
0.44
2.43
0.25
3.95
0.38
7.46
0.61
10.5
0.86
1.10
0.16
5.12
1.48
5.5
34
26.8
8.48
201
Assays Pending
No Significant Results
18.0
0.43
0.35
2.0
2.0
1.21
0.27
1.32
51.7
0.39
4
2
1.75
0.31
0.26
0.65
No Significant Results
75.0
0.60
0.19
19.0
1.48
0.40
13
27
8
16
1.8
5
15
66
3.7
1.0
6.02
1.18
9.23
2.67
125
No Significant Results
4.0
5.0
0.9
1.31
0.31
0.25
1.67
0.42
4.58
6
27
51
2020 Annual Report | Page 33
Incl.
361.1
362
OPERATIONS REPORT
Thursday’s Gossan Prospect – Cayley Lode Intercept Table
MGA 94 zone 54
Hole id
Hole
Type
East
North
Dip/
Azimuth
RL
(m)
Total
Depth (m)
SMD074
DD
642162
5836437
-60/59.5
264
302
Intercept
From
(m)
25
To
(m)
Width
(m)
Cu
(%)
Au
Ag
(g/t)
(g/t)
Ni
(%)
59
34.0
0.32
176
183.6
7.6
1.36
0.24
193
197.7
4.35
1.94
0.27
213
234.3
21.3
1.31
0.43
7
10
6
SMD076
DD
642174
5836523
-60/59.5
264
198.4
Incl.
128
139
144
144
16
5
1.01
0.24
6.5
2.42
0.55
SMD078
DD
642237
5836464
-60/59.5
264
274.9
227.2
231
3.8
4.97
3.08
SMD079
DD
642099
5836496
-60/59.5
264
306.7
SMD080
DD
642196
5836406
-60/59.5
264
309.3
24
86
141
153
159
41
87
144
154
161
17
0.31
1
3
1
2
1.29
0.41
1.38
0.15
1.16
0.31
0.64
1.82
207.9
211
3.1
3.16
0.70
23
25
25
52
2
27
1.75
0.58
SMD082
DD
642264
5836342
-60/59.5
264
313.4
Incl.
Incl.
154
157.95
3.95
3.78
0.43
54
Incl.
156
157.95
1.95
7.02
0.35
102
189
196
7
1.07
0.26
224.2
230.6
6.4
2.71
0.52
23
8.3
32
99
117.3
85.3
0.82
117.3
18.3
2.56
0.16
9.4
104.5
116
11.5
3.76
0.23
243
247.8
4.8
2.42
0.31
SMD083
DD
642599
5835995
-60/49.5
264
433.1
Assays Pending
SMD084
DD
642236
5836364
-60/59.5
264
278.1
43
72
SMD085
DD
642444
5836022
-60/49.5
264
522.3
Incl.
Incl.
Incl.
Incl.
132
157
197
339
357
201
201
201
362
361
358
359
29
69
44
4
23
4
1
0.44
1.00
0.18
1.43
0.26
4.16
0.61
1.07
0.11
4.44
0.26
9.44
0.22
14
81
9
5
8
8.4
30
14
25
5.4
7.3
23
7.9
6.4
2020 Annual Report | Page 34
OPERATIONS REPORT
Thursday’s Gossan Prospect – Cayley Lode Intercept Table
MGA 94 zone 54
Intercept
Hole id
Hole
Type
East
North
Dip/
Azimuth
RL
(m)
Total
Depth (m)
From
(m)
To
(m)
Width
(m)
Cu
(%)
Au
Ag
(g/t)
(g/t)
Ni
(%)
SMD086
DD
642465
5836370
-60/239.5
264
385.9
142
154
12
1.01
0.18
Incl.
149
153
261
262
301
308
318
321
326
140
327
2276
163
187
170
172
4
1
7
3
1
87
24
2
2.33
0.42
2.17
7.06
0.16
0.48
2.6
5.3
7.9
15
0.32
0.49
0.29
3.4
5.90
0.33
1.74
0.57
4.19
1.27
11.75
1.45
47
20
53
66
181.7
183.2
1.5
13.28
2.58
209
185.6
186.4
0.8
24.1
1.16
249
185
187
218
227
226
227
2
9
1
9.95
0.71
107
0.89
4.09
1.83
1.30
10.05
39
48
SMD087
DD
642060
5836522
-60/59.5
264
268.3
Incl.
and
and
and
and
Incl.
and
SMD088
DD
642427
5836445
-60/239.5
264
405.5
212.3
242.3
30
1.98
0.23
9.1
SMD089
DD
642502
5836384
-60/239.5
262
Incl.
and
Incl.
and
and
502.1
Incl.
Incl.
Incl.
Incl.
Incl.
216
226.8
10.8
3.20
0.31
233.2
239
5.8
3.54
0.43
319.5
370
50.5
0.88
0.11
319.5
331.2
11.7
1.42
0.15
342
357.6
15.6
1.26
0.17
365.6
370
4.4
1.61
0.20
87
91
98.8
11.8
1.54
0.42
94
3
3.28
1.09
214
233.9
19.9
2.40
0.35
219
226.1
7.1
4.30
0.52
219
222
3
6.02
0.71
271
280.7
9.7
3.10
0.97
16
14
3.8
4.5
5.0
5.7
14
34
17
35
52
26
88
273
275
273
274
2
1
7.86
2.09
11.05
2.73
131
SMD090
DD
642068
5836563
-60/59.5
262
213.8
SMD091
DD
642374
5836383
-60/59.5
262
191
SMD092
DD
642346
5836411
-60/59.5
262
222
SMS001D
Sonic/
DD
642197
5836489
-60/59.5
264
212
Assays Pending
Assays Pending
Assays Pending
No Significant Results
2020 Annual Report | Page 35
OPERATIONS REPORT
1.
2.
3.
4.
5.
6.
Excluding 13.9m of core loss
Excluding 13.2m of core loss
Excluding 10.8m of core loss
1.8m of core loss immediately above this interval
0.4m of core loss included in this interval
0.3m of core loss included in this interval
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.
2020 Annual Report | Page 36
DIRECTORS’ REPORT
Your Directors present their report for the year ended 30 June 2020.
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.
2020 Annual Report | Page 37
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) (removed from the Official List of ASX on 26 September 2019).
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.
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:
C Cairns
J Murphy
P Ironside
A Sparks
Board of Directors
Audit and Risk Committee
Meetings
Held**
8
8
8
8
Meetings
Attended
8
8
8
8
Meetings
Held**
*
2
2
2
Meetings
Attended
*
2
2
2
* 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
8,032,268
5,146,705
31,887,982
2,171,206
Number of Unlisted
Options at $1.47,
expiry 30/11/2022
750,000
550,000
375,000
375,000
2020 Annual Report | Page 38
DIRECTORS’ REPORT
DIVIDENDS
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
Van Diemens Gold Limited (formerly
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
Principal Activity
The Group’s principal activity was mineral exploration for the year ended 30 June 2020. There were no
significant changes in the nature of the principal activities during the year.
Operations review
Refer to the Operations Review on pages 4 to 36.
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:
Year
Year
30 June 2020
30 June 2019
$
$
Cash and cash equivalents held at year end
9,424,932
2,875,862
Net loss for the year after tax
Included in loss for the year:
Exploration costs
Equity-based payments
(15,306,220)
(9,012,511)
(12,560,283)
(6,700,678)
(1,338,930)
(1,172,406)
Basic loss per share (cents) from continuing operations
(7.48)
(5.65)
Net cash used in operating activities
Net cash used in investing activities
Net cash from financing activities
(11,332,767)
(7,336,529)
(346,387)
(364,225)
18,228,224
4,017,574
During the year:
- On 18 October 2019, Stavely issued 19,610,000 shares at $1.00 per share pursuant to a placement to
sophisticated and institutional investors. Gross proceeds were $19,610,000.
2020 Annual Report | Page 39
DIRECTORS’ REPORT
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 4 to 36
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.
2020 Annual Report | Page 40
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the 2020 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
Peter Ironside
Amanda Sparks
–
–
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.
2020 Annual Report | Page 41
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.
2020 Annual Report | Page 42
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
Christopher
Cairns
Jennifer Murphy
Term of agreement
Commenced 22/1/2014 (varied effective
1/11/2017 & 31/12/2019)
Commenced 22/1/2014 (varied effective
1/11/2017, 15/10/2018 & 31/12/2019)
Peter Ironside
Ongoing, subject to re-elections
Amanda Sparks
Ongoing, subject to re-elections
Base annual salary
exclusive of
statutory
superannuation at
30/6/2020
Termination
benefit
$300,000
12 months
$220,000
12 months
$50,000
$100,000
None
None
2020 Annual Report | Page 43
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
annual leave
provisions
$
-
95,833
380,334
198,580
271,447
141,519
43,000
28,700
68,000
53,500
762,781
518,132
Year
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Post Employment
Share Based
Superannuation
and movement in
long service leave
provisions
$
Total Cash
and
Provisions
$
Total
including
share based
payments
$
Options (1)
$
-
11,057
32,963
19,000
27,253
13,537
4,085
2,726
6,460
2,726
70,761
49,046
-
106,890
413,297
217,580
298,700
155,056
47,085
31,426
74,460
56,226
833,542
567,178
-
112,371
371,925
224,742
272,745
164,811
185,963
112,371
185,963
112,371
-
219,261
785,222
442,322
571,445
319,867
233,048
143,797
260,423
168,597
1,016,596
1,850,138
726,666
1,293,844
Directors
W Plyley*
C Cairns
J Murphy
P Ironside
A Sparks**
TOTAL
(1) Equity based payments – options. These represent the amount expensed for options granted and vested in the year with
an exercise price of $1.47 (2019: $0.36).
* 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.
2020
Directors
C Cairns
J Murphy
P Ironside
A Sparks
Number of Options
at $1.47,
expiry 30/11/2022
Value* per option
at grant date
$
750,000
550,000
375,000
375,000
0.4959
0.4959
0.4959
0.4959
These options were granted to recognise the contribution made by the Directors, and to acknowledge that the
cash remuneration paid to Directors is low. These options also provide an incentive component in the
remuneration package for the Related Parties to motivate and reward the performance of the Related Parties 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 can maximise the availability of cash for the Company’s future
exploration activities. The options also provide a retention incentive to all Directors. Issue of these Director
options were approved by Shareholders at the Company’s Annual General Meeting held on 29 November 2019.
* 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 price at grant date and the expected volatility of the underlying share, the expected dividend
2020 Annual Report | Page 44
DIRECTORS’ REPORT
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 5 August 2019, 5,225,000 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 1,495,391 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 29.42 cents and the exercise price of 21 cents in
relation to the options.
On 15 October 2019, 8,200,000 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 5,859,742 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 $1.2614 and the exercise price of 36 cents in
relation to the options.
E. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
30 June 2020
Balance at
beginning of the year
Increase from
Exercise of Options
Other Net change
during the year
Balance at
end of the year
Directors
C Cairns
J Murphy
P Ironside
A Sparks
15,672,961
4,259,420
30,730,219
920,428
51,583,028
2,859,307
2,087,285
1,157,763
1,250,778
7,355,133
(9,300,000)
(400,000)
-
-
9,232,268
5,946,705
31,887,982
2,171,206
(9,700,000)
49,238,161
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
C Cairns
J Murphy
P Ironside
A Sparks
Balance at
beginning of
the year
Granted as
remuneration
Exercised
during the
year
Balance at
end of the
year
Exercisable
5,500,000
750,000
(5,500,000)
4,000,000
550,000
(4,000,000)
1,800,000
375,000
(1,800,000)
2,125,000
375,000
(2,125,000)
750,000
550,000
375,000
375,000
750,000
550,000
375,000
375,000
13,425,000
2,050,000
(13,425,000)
2,050,000
2,050,000
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 $132,749 (net of GST) was paid/payable for office rental and variable
outgoings (2019: $131,250, 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
2020 Annual Report | Page 45
DIRECTORS’ REPORT
amount of $34,151 (net of GST) was paid/payable by Zamanco to the Company for reimbursement of office
rental and associated expenses (2019: $37,630, 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 95.76% of ‘yes’ votes for its remuneration report for the 2019 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
2,700,000
Exercise Price
$1.47
Expiry Date
30/11/2022
No option holder has any right under the options to participate in any other share issue of the Company or any
other related entity.
7,050,000 unlisted employee/consultant options with an exercise price of 21 cents and 15,650,000 unlisted
employee/consultant options with an exercise price of 36 cents were exercised during the year. Of the options
exercised, 13,425,000 options were exercised by Key Management Personnel. (2019: 9,587,500 unlisted
employee/consultant options with an exercise price of 19 cents were exercised. Of the options exercised,
7,075,000 options were exercised by Key Management Personnel).
EVENTS OCCURRING AFTER THE REPORTING PERIOD
On 22 April 2020, Stavely Minerals reached an agreement to purchase the existing 3% net smelter royalty (NSR)
held by New Challenge Resources Pty Ltd on tenement RL 2017, which hosts the Thursday’s Gossan prospect
and other key prospects at the Stavely Copper-Gold Project in Victoria. The consideration was a cash payment
of $350,000 and the issue of 850,000 Stavely Minerals’ shares at a deemed issued price of 40 cents per share.
The cash payment of $350,000 was paid to New Challenge Resources on 1 July 2020 and the shares issued on 9
July 2020.
In July 2020, a Letter of Intent (LoI) was executed to divest the Company’s Mathinna/Alberton and Lefroy
Goldfields tenements, as well as its Fosterville East tenement in Victoria, to Nubian Resources Ltd (TSX-V: NBR)
(‘Nubian’) for A$2.5 million in Nubian shares and cash.
The terms of the LoI are as follows:
o Nubian to pay a non-refundable deposit of A$100,000 cash;
o
A 60-day exclusivity period to complete final due diligence and execute a definitive agreement;
o Upon execution of the definitive agreement, Nubian will issue to Stavely Minerals a number of Nubian
shares equivalent in value to A$2.4 million based on the 5-trading day volume-weighted average price
(VWAP) prior to the execution date, subject to a minimum issue of 5,050,000 Nubian shares to Stavely
Minerals.
2020 Annual Report | Page 46
DIRECTORS’ REPORT
The consideration for the purchase is based on 100% ownership of the tenements. Stavely Minerals is in Joint
Venture with Bestlevel Holdings Pty Ltd (Bestlevel), with Stavely Minerals currently holding a 75% interest in the
three Mathinna JV tenements. The value of the Bestlevel 25% interest in the three Mathinna JV tenements
equates to approximately A$400,000 of Nubian shares to be issued to Bestlevel or its beneficial owners.
On 30 July 2020, Stavely issued 28,000,000 shares at an issue price of $0.60 per share pursuant to the first
tranche of a placement to sophisticated and institutional investors. Gross proceeds were $16,800,000. The
second Tranche of 13.67 million shares will be completed subject to shareholder approval at a general meeting
to be held on 31 August 2020.
On 14 August 2020, Stavely issued 4,645,000 shares at an issue price of $0.60 per share pursuant to a share
purchase plan. Gross proceeds were $2,787,000.
COVID-19
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential
future impact after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
There are no other matters or circumstances that have arisen since 30 June 2020 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.
AUDIT INDEPENDENCE AND NON-AUDIT SERVICES
Auditor’s independence - section 307C
The Auditor’s Independence Declaration is included on page 48 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 services
Signed in accordance with a resolution of the Directors.
2020
$19,766
2019
$19,375
Christopher Cairns
Managing Director
Dated this 28th day of August 2020
2020 Annual Report | Page 47
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS
2020 Annual Report | Page 48
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 2020 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 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
Christopher Cairns
Managing Director
Dated this 28th day of August 2020
2020 Annual Report | Page 49
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue and Income
Interest revenue
Rental sub-lease revenue
Profit on sale of fixed assets
Government subsidies
Expenses
Administration and corporate expenses
Administration – equity based expenses
Exploration expensed
Interest expense
Total expenses
Consolidated
Year ended
30 June 2020
Year ended
30 June 2019
Note
$
$
135,366
34,151
10,436
50,000
69,299
37,630
11,951
-
229,953
118,880
2(a)
3
2(b)
2(c)
(1,614,475)
(1,338,930)
(12,560,283)
(22,485)
(1,258,307)
(1,172,406)
(6,700,678)
-
(15,536,173)
(9,131,391)
Loss before income tax
(15,306,220)
(9,012,511)
Income tax expense
Loss after income tax attributable to members of
Stavely Minerals Limited
4
-
-
(15,306,220)
(9,012,511)
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
(15,306,220)
(9,012,511)
Loss per share for the year attributable to the members of
Stavely Minerals Limited
Basic loss per share
5
Cents Per
Share
(7.48)
Cents Per
Share
(5.65)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
2020 Annual Report | Page 50
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Receivables
Right of use assets
Property, plant and equipment
Deferred exploration expenditure acquisition costs
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Lease liabilities – Right of use assets
Provisions
Total Current Liabilities
Non-Current Liabilities
Lease liabilities – Right of use assets
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
30 June 2020
$
Note
30 June 2019
$
6
7
7
8
9
10
11
8
12
8
9,424,932
469,527
9,894,459
139,500
212,956
184,226
4,099,719
4,636,401
2,875,862
2,022,727
4,898,589
72,500
-
157,588
3,006,057
3,236,145
14,530,860
8,134,734
2,090,865
79,239
174,070
2,344,174
182,546
182,546
2,526,720
667,590
-
108,578
776,168
-
776,168
776,168
12,004,140
7,358,566
13
14
50,033,910
6,147,189
(44,176,959)
31,711,470
4,468,259
(28,821,163)
12,004,140
7,358,566
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
2020 Annual Report | Page 51
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
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
$
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
At 1 July 2019
Change in Accounting Policy – refer note 1(c)
31,711,470
4,468,259
(28,821,163)
7,358,566
-
-
(49,576)
(49,576)
Restated Equity at the beginning of the year
31,711,470
4,468,259
(28,870,739)
7,308,990
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
Shares to be issued – refer note 14
Share based payments
-
-
-
-
-
(15,306,220)
(15,306,220)
-
-
(15,306,220)
(15,306,220)
-
-
-
-
-
19,610,000
(1,287,560)
340,000
1,338,930
20,001,370
19,610,000
(1,287,560)
-
-
340,000
1,338,930
18,322,440
1,678,930
As at 30 June 2020
50,033,910
6,147,189
(44,176,959)
12,004,140
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
2020 Annual Report | Page 52
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated
Year ended
Year ended
30 June 2020
30 June 2019
Note
$
$
Cash flows from operating activities
Receipts in the ordinary course of activities (incl. GST)
Payments to suppliers and employees
Interest received
1,319,805
(12,769,011)
116,439
867,993
(8,280,039)
75,517
Net cash flows used in operating activities
6(i)
(11,332,767)
(7,336,529)
Cash flows from investing activities
Payments for plant and equipment
Proceeds from disposal of plant and equipment
Payment for bonds
Payment for exploration acquisitions (capitalised)
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
Payment of lease liabilities (right of use assets)
Net cash flows from financing activities
(241,161)
10,436
(57,000)
(158,662)
100,000
(346,387)
19,610,000
(1,287,560)
(94,216)
18,228,224
(97,225)
13,000
(30,000)
-
(250,000)
(364,225)
4,308,519
(290,945)
4,017,574
Net (decrease)/increase in cash and cash equivalents
held
6,549,070
(3,683,179)
Add opening cash and cash equivalents brought forward
2,875,862
6,559,041
Closing cash and cash equivalents carried forward
6
9,424,932
2,875,862
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
2020 Annual Report | Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 2020 was authorised for issue
in accordance with a resolution of the Directors on 28 August 2020.
(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 2019.
New and amended standards adopted by the Group
The Group has adopted the following new accounting policy for the current reporting period:
• AASB 16 Leases
AASB 16 Leases replaces AASB 117 Leases for annual periods beginning on or after 1 January 2019. The
standard sets out the principles for the recognition, measurement, presentation and disclosure of leases
and requires lessees to account for all leases under a single on-balance sheet model.
The Group adopted AASB 16 using the modified retrospective method of adoption with the date of initial
application of 1 July 2019. Under this method, the standard is applied retrospectively with the cumulative
effect of initially applying the standard recognised at the date of initial application. The Group elected to
use the recognition exemptions for lease contracts that, at the commencement date, have a lease term
of 12 months or less and do not contain a purchase option (‘short term leases’), and lease contracts for
which the underlying asset is low value (‘low-value assets’).
The effect of adopting AASB 16 as at 1 July 2019 is as follows:
Non-Current Assets
Right of use assets
Total Assets
Current Liabilities
Lease liabilities – Right of use assets
Non-Current Liabilities
Lease liabilities – Right of use assets
Total Liabilities
The net impact on accumulated losses was a decrease of $49,576.
$
283,940
283,940
71,731
261,785
333,516
2020 Annual Report | Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
The lease liabilities as at 1 July 2019 can be reconciled to the operating lease commitments as at 30 June
2019 as follows:
Operating lease commitments as at 30 June 2019 – note 15 of the Annual
Financial Report
Less: Leases not considered right of use assets
Add: Option to extend Nedlands office lease
Operating Lease Commitments of Nedlands office premises as at 30 June
2019
Discounted operating lease commitments of Nedlands office premises at
1 July 2019
$
116,765
(22,553)
292,947
387,159
333,516
Nature of the effect of adoption of AASB 16
The Group has several property lease contracts. Rental contacts for residential premises in Ararat,
Victoria are typically for 12 months. The rental contract for office premises in Nedlands, WA was entered
into in November 2014 for three years, and has two extension terms of three years each. Before the
adoption of AASB 16, the Group classified its property leases as an operating lease as it did not transfer
substantially all of the risks and rewards incidental to ownership of the leased asset to the Group. The
leased properties were not capitalised and the lease payments were recognised as rent expense in profit
or loss on a straight-line basis over the lease term. Upon adoption of AASB 16, the Group applied a single
recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Standard provides specific transition requirements and practical expedients, which has
been applied by the Group.
The Group recognised a right-of-use asset and lease liability for the office property lease previously
classified as an operating lease. The right-of-use asset was recognised based on the amount equal to the
lease liability at the initial application date. Lease liabilities were recognised based on the present value
of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial
application.
The Group also applied the available practical expedients, where applicable, wherein it:
• Recognised lease liabilities based on the present value of the remaining lease payments, discounted
using the incremental borrowing rate at the date of initial application;
• Relied on its assessment of whether leases are onerous immediately before the date of initial
application;
• Applied the short-term lease exemptions to leases with a term that ends within 12 months at the date
of initial application;
• Excluded initial direct costs from the measurement of the right-of-use asset at the date of initial
application; and
• Used hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
2020 Annual Report | Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Summary of new accounting policies
Set out below are the new accounting policies of the Group upon adoption of AASB 16, which have been
applied from the date of initial application:
• Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of right-
to-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less and lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated
useful life and the lease term. Right-of-use assets are subject to impairment.
• Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments less
any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and payments of penalties for
terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable
lease payments that do not depend on an index or a rate are recognised as expense in the period on
which the event or condition that triggers the payment occurs. In calculating the present value of lease
payments, the Group uses the incremental borrowing rate at the lease commencement date if the
interest rate implicit in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment
to purchase the underlying asset.
• Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (ie: those leases
that have a lease term of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption to leases that are considered
of low value. Lease payments on short-term leases and leases of low-value assets are recognised as an
expense on a straight-line basis over the lease term.
• Significant judgement in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered
by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group has the option, under its property lease, to lease the property for an additional term of 3 years.
The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to
renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the
renewal. After the commencement date, the Group reassesses the lease term if there is a significant
event or change in circumstances that is within its control and affects its ability to exercise (or not to
exercise) the option to renew (e.g. a change in business strategy).
The Group included the renewal period as part of the lease term for the property lease due to being
reasonably certain that the lease property will continue to suit the Group’s occupation needs at time of
the extension option is able to be exercised.
2020 Annual Report | Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
New Accounting Standards and Interpretations not yet mandatory or early adopted by the Group
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30
June 2020. The Group’s assessment of the impact of these new or amended Accounting Standards and
Interpretations, most relevant to the Group, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1
January 2020 and early adoption is permitted. The Conceptual Framework contains new definition and
recognition criteria as well as new guidance on measurement that affects several Accounting Standards.
Where the Group has relied on the existing framework in determining its accounting policies for
transactions, events or conditions that are not otherwise dealt with under the Australian Accounting
Standards, the Group may need to review such policies under the revised framework. At this time, the
application of the Conceptual Framework is not expected to have a material impact on the Group's
financial statements.
There are no other material new or amended standards not yet adopted by the Group.
(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.
Coronavirus (COVID-19) Pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has
had, or may have, on the Group based on known information. Currently there is no significant impact
upon the financial statements or any significant uncertainties with respect to events or conditions which
may impact the Group unfavourably as at the reporting date or subsequently as a result of the
Coronavirus (COVID-19) pandemic.
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.
Deferred Exploration Expenditure Acquisition Costs
The Group capitalises acquisition expenditure relating to exploration and evaluation where it is
considered likely to be recoverable or where the activities have not reached a stage which permits a
reasonable assessment of the existence of reserves. While there are certain areas of interest from which
no reserves have been extracted, the Directors are of the continued belief that such expenditure should
not be written off since exploration activities in such areas have not yet concluded.
2020 Annual Report | Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
(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.
2020 Annual Report | Page 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2 - EXPENSES
(a) Administration and Corporate Expenses
Administration and corporate expenses include:
Depreciation - administration
Depreciation – right of use assets
Office premises expenses
Personnel costs – administration and corporate
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 13
Other exploration costs expensed
Government Co-Funding for exploration
(c) Interest Expensed
Interest on right of use assets
Year ended
30 June 2020
$
Year ended
30 June 2019
$
23,105
70,984
40,786
1,006,080
473,520
1,614,475
1,338,930
2,953,405
191,418
1,347,550
11,121,315
(100,000)
12,560,283
7,500
-
127,644
703,856
419,307
1,258,307
1,172,406
2,430,713
59,693
1,602,114
5,147,080
(108,209)
6,700,678
22,485
-
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.
2020 Annual Report | Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 2020
30 June 2019
$
$
1,338,930
1,172,406
(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
2019/2020
3/12/2019
2,700,000
Expire 30/11/2022 at $1.47 exercise
price
2018/2019
6/12/2018 15,650,000
Expire 31/12/2019 at 36c exercise
price
- 650,000 granted to employees and
consultants as incentives.
- 2,050,000 granted to Directors as
approved by Shareholders at the
AGM held on 29/11/2019.
- 5,950,000 granted to employees
and consultants as incentives.
- 9,700,000 granted to Directors as
approved by Shareholders at the
AGM held on 28/11/2018.
The assessed fair values of the options were determined using a Black-Scholes option pricing model, taking into
account the exercise price, term of option, the share price at grant date and expected price volatility of the
underlying share, expected dividend yield and the risk-free interest rate for the term of the option. The inputs to
the model used were:
Grant date
Option exercise price ($)
Expected life of options (years)
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Underlying share price ($)
Value of Option ($)
Vesting Conditions
3/12/2019
1.47
3.00
-
93.38
0.69
0.99
0.4959
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.
2020 Annual Report | Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses) – continued
(c) Weighted average fair value
The weighted average fair value of equity-based payment options granted during the year was $0.4959 (2019:
$0.0749).
(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
$1.47 (2019: $0.21 to $0.36).
(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 3.00 years (2019: 0.81 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 2020
Number
12 Months to
30 June 2020
WAEP $
12 Months to
30 June 2019
Number
12 Months to
30 June 2019
WAEP $
Outstanding at the beginning of year
22,700,000
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at the end of the year
Exercisable at year end
2,700,000
(22,700,000)
-
2,700,000
2,700,000
0.31
1.47
0.31
-
1.47
1.47
16,637,500
15,650,000
(9,587,500)
-
22,700,000
22,700,000
0.20
0.36
0.19
-
0.31
0.31
The weighted average share price for options exercised during the year was $0.31 (2019: $0.19).
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.
2020 Annual Report | Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4 - INCOME TAX EXPENSE - continued
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.
(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% (2019: 30%)
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 2020
Year ended
30 June 2019
$
$
(15,306,220)
(9,012,511)
(4,591,866)
(2,703,753)
404,513
4,187,353
354,551
2,349,202
-
-
11,483,545
(150,534)
7,001,724
(112,992)
11,333,011
6,888,732
2020 Annual Report | Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4 - INCOME TAX EXPENSE - continued
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. Under the tax
consolidation regime, all members of a tax consolidated group are jointly and severally liable for the tax
consolidated group’s income tax liabilities. The head entity of the tax consolidated group is Stavely Minerals
Limited.
(c) Franking Credits
The franking account balance at year end was $nil (2019: $nil).
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 2020
Year ended
30 June 2019
Cents
(7.48)
Cents
(5.65)
$
$
Loss attributable to ordinary equity holders of the Company used in
calculating:
- basic loss per share
(15,306,220)
(9,012,511)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
204,547,955
159,399,340
For the year ended 30 June 2020, 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
2020 Annual Report | Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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.
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
Depreciation – Right of Use Assets
Gain on disposal of property, plant and equipment
Share based payments expensed - options
Exploration drilling – non-cash*
Change in assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
Net cash flows used in operating activities
Year ended
30 June 2020
$
Year ended
30 June 2019
$
9,424,932
2,875,862
(15,306,220)
(9,012,511)
214,523
70,984
(10,436)
1,338,930
1,347,550
67,193
-
(11,951)
1,172,406
1,602,114
124,577
799,348
87,977
(133,166)
(1,064,884)
44,270
(11,332,767)
(7,336,529)
* During the year ended 30 June 2019, 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. As at 30 June 2020,
the remaining balance of $1,347,550 had been utilised (30 June 2019: $652,450 utilised). Refer to note 13.
(ii) Non-Cash Financing and Investing Activities
As a result of adopting AASB 16 effective 1 July 2019, right of use lease asset additions for the year amounted
to $283,940 (refer note 1(c)). There were no other non-cash financing and investing activities were undertaken
during the year (2019: 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.
▪
2020 Annual Report | Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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
Prepaid drilling services (refer note 13b)
Deposit for Beaconsfield Assets
Other
Total current receivables
Non-Current
Cash on deposit - security bonds
30 June 2020
$
30 June 2019
$
373,983
40,000
-
-
55,544
372,330
40,000
1,347,550
250,000
12,847
469,527
2,022,727
139,500
72,500
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 19.
(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 2020 (2019: none).
NOTE 8 – RIGHT OF USE ASSETS AND LIABILITIES
Refer to Note 1(c) for Stavely’s accounting policy for Right of use assets and corresponding lease liabilities.
Non-Current Assets
Right of use assets - properties
Lease Liabilities
Current
Non-Current
30 June 2020
$
30 June 2019
$
212,956
79,239
182,546
261,785
-
-
-
-
2020 Annual Report | Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9 - 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.
Motor vehicles- at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
30 June 2020
30 June 2019
$
125,888
(113,445)
12,443
532,981
(361,198)
171,783
$
95,650
(67,721)
27,929
350,330
(220,671)
129,659
Total property, plant and equipment
184,226
157,588
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
27,929
58,510
(73,996)
12,443
129,659
182,651
-
(140,527)
171,783
48,142
-
(20,213)
27,929
80,463
97,225
(1,049)
(46,980)
129,659
2020 Annual Report | Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10 - DEFERRED EXPLORATION EXPENDITURE ACQUSITION COSTS
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.
Deferred exploration acquisition costs brought forward
Capitalised acquisition expenditure incurred during the year*
30 June 2020
$
3,006,057
1,093,662
30 June 2019
$
3,006,057
-
Deferred exploration acquisition costs carried forward
4,099,719
3,006,057
* Includes $690,000 consideration to be paid for the purchase on 22 April 2020 of the 3% net smelter royalty
on tenement RL 2017, which hosts the Thursday’s Gossan prospect and other prospects in Victoria. The
consideration is cash of $350,000 and 850,000 Stavely Minerals’ shares at a deemed issue price of 40 cents per
share ($340,000). The cash was paid on 1 July 2020 and the shares issued on 9 July 2020.
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or, alternatively, sale of the respective areas.
NOTE 11 - 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 2020
30 June 2019
$
1,353,702
387,163
1,740,865
$
488,018
179,572
667,590
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 12 – 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.
2020 Annual Report | Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12 – PROVISIONS - continued
Current
Employee entitlements
NOTE 13 – ISSUED CAPITAL
30 June 2020
30 June 2019
$
$
174,070
108,578
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
213,799,785 (2019: 181,236,479) ordinary shares fully paid
(b) Movements in Ordinary Share Capital
30 June 2020
$
30 June 2019
$
50,033,910
31,711,470
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
181,236,479 Opening balance at 1 July 2019
2,017,701
2,574,755
8,360,850
19,610,000
Issue of shares – Exercise of Unlisted Employee/Consultant Options 5
August 2019
Issue of shares – Exercise of Unlisted Employee/Consultant Options 9
October 2019
Issue of shares – Exercise of Unlisted Employee/Consultant Options 18
October 2019
Issue of shares – Placement 18 October 2019
Costs of equity issues
213,799,785 Closing Balance at 30 June 2020
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
31,711,470
-
-
-
19,610,000
(1,287,560)
50,033,910
Pre-payment of Drilling Services
During the previous year, on 17 April 2019, 7,692,308 ordinary shares at 26 cents were issued to Titeline Drilling
Pty Ltd and Greenstone Property Pty Ltd as trustee for the Titeline Property Trust as a prepayment of $2,000,000
for drilling services to be utilised over 12 months to April 2020. During the year, 5,182,887 shares ($1,347,550)
were released from escrow to pay for drilling services (2019: 2,509,421 shares ($652,450). No shares remained
in escrow as at 30 June 2020.
Placement
On 18 October 2019, Stavely issued 19,610,000 shares at $1.00 per share pursuant to a placement to
sophisticated and institutional investors. Gross proceeds were $19,610,000.
2020 Annual Report | Page 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13 – ISSUED CAPITAL - continued
(c) Options on issue at 30 June 2020
Unlisted Options
Number
2,700,000
Exercise Price
$1.47
Expiry Date
30/11/2022
During the year:
(i)
(ii)
(iii)
2,700,000 unlisted options were granted as share-based payments (2019: 15,650,000);
No unlisted options expired (2019: nil); and
7,050,000 unlisted employee/consultant options with an exercise price of 21 cents and 15,650,000
unlisted employee/consultant options with an exercise price of 36 cents were exercised during the
year. Of the options exercised, 13,425,000 options were exercised by Key Management Personnel.
12,953,306 shares were issued following the conversion of these unlisted options via the ‘cashless
exercise’ mechanism as part of Stavely’s Employee Incentive Plan. On exercise of the options, the
Company issued the number of shares equal in value to the difference between the market price of
the shares (based on a VWAP for the 5 trading days prior to the exercise date) and the exercise price
otherwise payable in relation to the options. (2019: 9,587,500 unlisted employee/consultant options
with an exercise price of 19 cents were exercised. Of the options exercised, 7,075,000 options were
exercised by Key Management Personnel).
(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.
NOTE 14 - 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
Other reserve
Balance at the beginning of the year
Shares to be issued – refer note 10
Balance at the end of the year
Total Reserves
30 June 2020
$
30 June 2019
$
4,468,259
1,338,930
5,807,189
-
340,000
340,000
3,295,853
1,172,406
4,468,259
-
-
-
6,147,189
4,468,259
2020 Annual Report | Page 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 14 – RESERVES - continued
Nature and purpose of the reserves:
The Equity-based payments reserve is used to recognise the fair value of options granted. The Other reserve
amounts relating to shares to be issued in relation to the agreement to purchase the existing 3% net smelter on
tenement RL 2017. Refer to note 10.
NOTE 15 – 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 2020
$
30 June 2019
$
32,266
-
32,266
114,312
2,453
116,765
These non-cancellable operating leases are primarily for 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 2020/2021. 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.
(c)
Contingencies
30 June 2020
$
30 June 2019
$
4,871,357
1,108,000
Farm-In Agreement – Mathinna Gold Project, Tasmania
Stavely’s wholly owned subsidiary, Stavely Tasmania Pty Ltd (Stavely Tasmania) has 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).
2020 Annual Report | Page 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15 – COMMITMENTS AND CONTINGENCIES – continued
•
•
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 has paid the $50,000 payment referred to above, and has expended the in excess of $500,000, to earn
a 75% interest in the Project as at year end.
The Group had no other contingent liabilities at year end.
NOTE 16 – RELATED PARTIES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Equity-based payment
30 June 2020
$
30 June 2019
$
762,781
70,761
1,016,596
518,132
49,046
726,666
1,850,138
1,293,844
(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 $132,749 (net of GST) was paid/payable for office rental and variable
outgoings (2019: $131,250, 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 $34,151 (net of GST) was paid/payable by Zamanco to the Company for reimbursement of office
rental and associated expenses (2019: $37,630, net of GST).
(c) Transactions with Other Related Parties
There were no transactions with other related parties (2019: none).
NOTE 17 – AUDITOR’S REMUNERATION
30 June 2020
$
30 June 2019
$
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
40,850
19,766
60,616
34,483
19,375
53,858
2020 Annual Report | Page 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18 – 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.
2020 Annual Report | Page 72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19 – 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 2020
$
30 June 2019
$
9,210,894
83,058
9,293,952
2,797,232
331,320
3,128,552
Sensitivity
At 30 June 2020, 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 $46,455 higher (2019: changes of 0.5%
$14,387 higher). The 0.5% (2019: 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.
2020 Annual Report | Page 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20 – PARENT ENTITY INFORMATION
Statement of Financial Position Information
Current assets
Non-current assets
Current liabilities
Non-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 2020
$
30 June 2019
$
9,791,514
3,449,311
(1,739,814)
(182,546)
4,877,227
3,179,719
(775,035)
-
11,318,465
7,281,911
50,033,910
31,711,470
5,807,189
4,468,259
(44,522,634)
11,318,465
(28,897,818)
7,281,911
(15,575,239)
(9,057,033)
(15,575,239)
(9,057,033)
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
Van Diemens Gold Limited (formerly
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 2020
30 June 2019
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
NOTE 21 – EVENTS OCCURRING AFTER THE REPORTING PERIOD
On 22 April 2020, Stavely Minerals reached an agreement to purchase the existing 3% net smelter royalty (NSR)
held by New Challenge Resources Pty Ltd on tenement RL 2017, which hosts the Thursday’s Gossan prospect
and other key prospects at the Stavely Copper-Gold Project in Victoria. The consideration was a cash payment
of $350,000 and the issue of 850,000 Stavely Minerals’ shares at a deemed issued price of 40 cents per share.
The cash payment of $350,000 was paid to New Challenge Resources on 1 July 2020 and the shares issued on 9
July 2020.
In July 2020, a Letter of Intent (LoI) was executed to divest the Company’s Mathinna/Alberton and Lefroy
Goldfields tenements, as well as its Fosterville East tenement in Victoria, to Nubian Resources Ltd (TSX-V: NBR)
(‘Nubian’) for A$2.5 million in Nubian shares and cash.
The terms of the LoI are as follows:
o Nubian to pay a non-refundable deposit of A$100,000 cash;
o
A 60-day exclusivity period to complete final due diligence and execute a definitive agreement;
o Upon execution of the definitive agreement, Nubian will issue to Stavely Minerals a number of Nubian
shares equivalent in value to A$2.4 million based on the 5-trading day volume-weighted average price
(VWAP) prior to the execution date, subject to a minimum issue of 5,050,000 Nubian shares to Stavely
Minerals.
2020 Annual Report | Page 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21 – EVENTS OCCURRING AFTER THE REPORTING PERIOD - continued
The consideration for the purchase is based on 100% ownership of the tenements. Stavely Minerals is in Joint
Venture with Bestlevel Holdings Pty Ltd (Bestlevel), with Stavely Minerals currently holding a 75% interest in the
three Mathinna JV tenements. The value of the Bestlevel 25% interest in the three Mathinna JV tenements
equates to approximately A$400,000 of Nubian shares to be issued to Bestlevel or its beneficial owners.
On 30 July 2020, Stavely issued 28,000,000 shares at an issue price of $0.60 per share pursuant to the first
tranche of a placement to sophisticated and institutional investors. Gross proceeds were $16,800,000. The
second Tranche of 13.67 million shares will be completed subject to shareholder approval at a general meeting
to be held on 31 August 2020.
On 14 August 2020, Stavely issued 4,645,000 shares at an issue price of $0.60 per share pursuant to a share
purchase plan. Gross proceeds were $2,787,000.
COVID-19
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential
future impact after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
There are no other matters or circumstances that have arisen since 30 June 2020 that have or may significantly
affect the operations, results, or state of affairs of the Group in future financial years.
2020 Annual Report | Page 75
INDEPENDENT AUDIT REPORT
2020 Annual Report | Page 76
INDEPENDENT AUDIT REPORT
2020 Annual Report | Page 77
INDEPENDENT AUDIT REPORT
2020 Annual Report | Page 78
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 26 August 2020
a) Substantial Shareholders
Name
Peter Reynold Ironside
Greenstone Property Pty Ltd and Associates
Number of Ordinary Shares
per Notice given to
Stavely Minerals Limited
31,887,982
13,120,974
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
345
704
568
1,229
287
3,133
253
(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.
2020 Annual Report | Page 79
ADDITIONAL SHAREHOLDER INFORMATION
d)
Twenty largest shareholders:
Name
Chaka Investments Pty Ltd
Citicorp Nominees Pty Limited
Greenstone Property Pty Ltd
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