2019
ANNUAL REPORT
ABN 94 088 488 724
30 JUNE 2019
CONTENTS
Company Projects
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss
and Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report
List of Mineral Concessions
Annual Mineral Resources Statement
JORC Code Competent Persons’ Statements
Additional ASX Information
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CORPORATE DIRECTORY
BOARD
Farooq Khan
William Johnson
Victor Ho
Malcolm Richmond
Matthew Hammond
COMPANY SECRETARY
Victor Ho
Chairman
Managing Director
Director
Non-Executive Director
Non-Executive Director
PRINCIPAL AND REGISTERED OFFICE
Level 2
23 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Facsimile:
Email:
Website:
(08) 9214 9700
(08) 9214 9701
info@strikeresources.com.au
www.strikeresources.com.au
AUDITORS
Rothsay Auditing
Chartered Accountants
Level 1, Lincoln House
4 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Website:
(08) 9486 7094
www.rothsayresources.com.au
2
28
37
44
45
46
47
48
49
70
71
75
76
78
81
STOCK EXCHANGE
Australian Securities Exchange
Perth, Western Australia
ASX CODE
SRK
The 2019 Corporate Governance Statement
can be found at the following URL
on the Company’s website:
http://strikeresources.com.au/corporate/corporate-governance/
Visit www.strikeresources.com.au for
• Market Announcements
• Financial Reports
• Corporate Governance
• Forms
• Email Subscription
SHARE REGISTRY
Advanced Share Registry Limited (ASX:ASW)
Main Office:
110 Stirling Highway
Nedlands, Western Australia 6009
Local Telephone:
Telephone:
Facsimile:
Email:
Investor Web:
1300 113 258
(08) 9389 8033
(08) 9262 3723
admin@advancedshare.com.au
www.advancedshare.com.au
Sydney Office:
Suite 8H, 325 Pitt Street
Sydney, New South Wales 2000
Telephone:
(02) 8096 3502
ANNUAL REPORT | 1
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Strike Resources Limited (ASX:SRK) (Strike) is an ASX listed resource company which owns the high grade
Apurimac Magnetite Iron Ore Project and Cusco Magnetite Iron Ore Project in Peru and the Paulsens East
Iron Ore Project in Western Australia. Strike is also developing a number of battery minerals related projects
around the world, including the highly prospective Solaroz Lithium Brine Project in Argentina and the Burke
Graphite Project in Queensland.
Paulsens East Iron Ore Project (Pilbara, Western Australia)
(Strike – 100%)
The Paulsens East Iron Ore Project is in the Pilbara region of Western Australia, located approximately 140
kilometres west of Tom Price, 8 kilometres from the Paulsens Gold Mine and 233 kilometres by road (of which
210 kilometres is good quality paved roads) from the Port of Onslow and 380 kilometres from the Port of
Dampier (refer Figure 1).
With the recent increase in iron ore prices (and with a number of market commentators forecasting these
prices to remain strong for the medium term), Strike is currently undertaking an economic study on and
advancing approvals for a Direct Shipping Ore (DSO) mining operation at Paulsens East.1
Figure 1: Paulsens East Project Location, West Pilbara.
1 Refer Strike’s ASX Announcement dated 19 June 2019: Strike’s Iron Ore Assets
ANNUAL REPORT | 2
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
JORC Mineral Resources
On 18 July 2019, Strike reported a significant Maiden JORC Inferred Mineral Resource for Paulsens East of
9.1 Million tonnes at 63.4 % Fe, 5.6% SiO2 and 3.2% Al2O3.2 The Inferred Mineral Resource estimate was
based upon data derived from two drilling campaigns undertaken by Strike (comprising a total of 66 reverse
circulation (RC) holes for 3,537 metres drilled) together with an extensive rock chip sampling programme.
On 4 September 2019, Strike reported a significant upgrade from Inferred to JORC Indicated Mineral
Resource of 9.6 million tonnes at 61.1 % Fe, 6.0% SiO2 and 3.6% Al2O3.3 This upgrade was as a result of
a programme of surveying and sampling, which was undertaken to increase the confidence in the iron ore
mineralisation and to enable a detailed mine plan and economic model to be developed.
Table 1 summarises the JORC Indicated Mineral Resources within a 58% Fe lower grade cut-off wireframe.
These resources extend from the surface to 75 metres below the deepest drill intersection or the 150 metre
RL (reduced level), whichever occurs first.
Table 1: Paulsens East Mineral Resource estimate using a 58% Fe lower cut-off wireframe
JORC
Category
Indicated
Fe%
Range
>58
Million
Tonnes
9.6
Fe%
61.1
SIO2%
6.0
AL2O3%
3.6
P%
0.08
S%
0.01
LOI%
2.1
A key feature of the Paulsens East Mineral Resource is an approximately 3 kilometre-long ridge of
outcropping hematite conglomerate which extends up to 60 metres above the surrounding terrain (refer
Figures 2, 3, 6, 7 and 8). Of the JORC Indicated Mineral Resource referred to above, approximately 3 million
tonnes of 61% Fe hematite material (with 5.9% SiO2 and 3.6% Al2O3) is estimated to occur above the base of
the ridge (as defined by drill hole collars) with minimal overburden.
In addition, there is potential to extend the resource for a strike distance of approximately 2 kms along an
arcuate extension of the ridge to the south east (refer Figures 2 and 6). This extension is based on small
hematite conglomerate outcrops along the surface and a plus 60% Fe drill intersection at a depth of 20 metres
at the eastern boundary of the tenement.
Figure 2: Paulsens East satellite image
2 Refer Strike’s ASX Announcement dated 15 July 2019: Maiden JORC Resource of 9.1 Million Tonnes at 63.4% Fe - Paulsens
East Iron Ore Project in the Pilbara
3 Refer Strike’s ASX Announcement dated 4 September 2019: Significant Upgrade of JORC Mineral Resource into Indicated
Category at Paulsens East Iron Ore Project
ANNUAL REPORT | 3
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 3: Paulsens East Hematite Ridge, facing North
Figure 4: Paulsens East Hematite Conglomerate
Figure 5: Paulsens East Rock Chip Sample
ANNUAL REPORT | 4
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Metallurgical Test Work Results
On 10 October 2019, Strike reported the results of metallurgical test work undertaken on a bulk composite
sample of approximately 250 kilogrammes collected from various surface locations across the entire length
and width of the Paulsens East deposit. 4 The results were highly encouraging, indicating the potential for a
very high lump:fines ratio of 79:21, where the ‘lump’ material (> 6mm < 30mm in size) has low deleterious
elements, low degradation during transport and other positive metallurgical properties.
The indicated very high lump:fines ratio is regarded as highly positive for the project as lump material typically
attracts a price premium over equivalent ‘fines’ material of the same grade. The test work also indicates that
the lump material is likely to be approximately 2% Fe higher in grade than that of the fines material, which will
also potentially attract a further price premium for the lump material.
Specific Gravity (SG) measurements were also undertaken on 20 samples (averaging 65% Fe) taken from
the ridge. These returned a consistent SG of 4.8, compared to a SG of 4.2 which was assumed for the
calculation of the JORC Indicated Mineral Resource estimate for the deposit, taking into account dilution and
low-grade envelope.
Further SG measurements are planned on lower grade material and waste in outcrop and at depth in drill
holes for mine planning purposes and to determine potential for increase in resource size and a decrease in
mining strip ratios.
Figure 6: Paulsens East Ridge, facing East
4 Refer Strike’s ASX Announcement dated 10 October 2019: Outstanding Metallurgical Testwork Results at Paulsens East
Iron Ore Deposit Indicate 79% Lump Yield with Low Impurities
ANNUAL REPORT | 5
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 7: Paulsens East Ridge, facing South
Figure 8: Looking east along Paulsens East ridge showing bedding
ANNUAL REPORT | 6
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 9: Looking west along Paulsens East ridge showing bedding and massive blocky hematite conglomerate beds
Figure 10: Looking west along Paulsens East ridge showing dip slopes of hematite conglomerate beds
ANNUAL REPORT | 7
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Studies and Approvals Process
Strike is examining the potential for undertaking a Direct Shipping Ore (DSO) mining operation at Paulsens
East using contract mining, crushing and transportation by truck to port then ship to customers in China.
Strike has commenced an economic study which focuses on the potential to, in the first instance, target the
approximately 3 million tonnes of outcropping 61% Fe hematite material, which in places extends up to 60
metres above surrounding terrain and presents as a 3 kilometre long ridge of outcropping hematite
conglomerate.
Strike envisages that such an operation could be undertaken relatively simply using shovels and trucks, with
minimal overburden. Excavated material would then be crushed and screened on site prior to transport by
road to a suitable port facility for export.
An outline of project activity as at the date of this report is summarised below:
Licensing
Strike has completed a survey of the boundaries to the tenement and lodged a formal application with
the Department of Mines, Industry Regulations and Safety (DMIRS) to convert the current Retention
License R47/07 to a Mining Lease.
Environmental Survey
Strike has engaged a specialist environmental consultant group, with extensive experience in the
Pilbara, to review the previous work and undertake an updated flora and fauna survey assessment to
be incorporated into the preparation of a Mining Proposal for submission to DMIRS. The initial field
work for a reconnaissance flora and vegetation survey and Level 1 fauna and fauna habitat
assessment has been completed over the project area.
Native Title
Strike has recommenced work previously undertaken (in 2008) with the local Puutu Kunti Kurrama &
Pinikuras (PKPP) community. Strike has engaged an experienced native title consultant and has re-
established dialogue with local community representatives in order to secure native title approvals.
Strike will schedule further meetings with PKPP over the coming months, with the objective of securing
an agreement with PKPP in relation to the development of the project.
Metallurgical Test Work
As reported earlier, ALS Metallurgy Iron Ore Technical Centre (ALS IOTC) has recently completed
metallurgical test work and Specific Gravity (SG) measurements on samples collected from the
Paulsens East deposit. Further SG measurements are planned on lower grade material and waste in
outcrop and at depth in drill holes for mine planning purposes and to determine the potential for an
increase in resource size and a decrease in mining strip ratios.
Contour Survey
Strike has completed a drone topographic survey of the project area, which was undertaken to develop
a high precision contour map and database of aerial photographs of the deposit for mapping and mine
planning purposes.
Mine Planning
With the Paulsens East deposit now upgraded to an JORC Indicated Mineral Resource category, Strike
is undertaking detailed mine planning work. Figures 11 and 12 show conceptual plans for proposed
development of the project:
ANNUAL REPORT | 8
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 11: Conceptual Mine Layout of Paulsens East Project
Figure 12: Schematic Cross Section of proposed pit at Paulsens East
ANNUAL REPORT | 9
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Mining, Crushing and Transport Services
Strike is continuing to advance discussions with various mining, crushing and transport contractors.
Strike envisages that mining of the outcropping portion of the deposit will be able to be undertaken
relatively simply using shovels and trucks, with the material then to be crushed and screened on site
prior to transport by road to a suitable port facility for export. Indicative prices have been received from
potential contractors and these will be incorporated into Strike’s economic model for the project.
Port Access and Facilities
Strike is continuing to advance discussions with the operators of port facilities between Onslow (233km
from the project), Karratha and Port Hedland.
Offtake Arrangements
Strike has had discussions with several parties interested in securing offtake arrangements for
Paulsens East. Strike is encouraged by the interest shown in the project by potential iron ore buyers
and expects these discussions to lead towards one or more offtake agreements. In this regard, Strike
notes the significant iron ore experience on its Board including industry veteran, Malcolm Richmond,
whose previous roles include: VP Strategy and Acquisition, Rio Tinto; Managing Director Research
and Technology, Rio Tinto; and Managing Director, Iron ore Development at Hamersley Iron.
Subject to successful completion of the above and prevailing market conditions, Strike plans to then proceed
to:
•
•
•
•
•
Enter into a port access agreement;
Finalise contract mining and trucking agreements;
Enter into product offtake agreement(s);
Initiate any required project financing; and
Commence production and first shipment.
On 24 October 2019, Strike announced that it had made two key appointments to strengthen its Management
Team to fast-track development of Paulsens East 5:
•
•
Wayne Richards – former Managing Director of Brockman Resources (ASX:BRM), Executive
Chairman/CEO of Tawana Resources (ASX: TAW) and Managing Director of IronClad Mining
(ASX:IFE), being companies involved in the development of iron ore projects in Western Australia,
West Africa and South Australia respectively; and
Shanker Madan - previously Managing Director of Strike between 2005 to 2010 and Chairman from
2010 to 2011 with over 35 years’ experience in the exploration and development of significant iron ore
projects in Australia and overseas (with Hamersley Iron; Rio Tinto; BHP Mineral, Texas Gulf, Hancock
and Wright Prospecting).
5 Refer Strike’s ASX Announcement dated 24 October 2019: Strike Strengthens Management Team for Paulsens East Iron Ore
Project with Key Appointments
ANNUAL REPORT | 10
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Apurimac Iron Ore Project (Peru)
(Strike – 100%)
Strike’s Apurimac Iron Ore Project in Peru is recognised as one of the highest grade, large scale magnetite
projects in the world with the potential to support the establishment of a significant iron ore operation. Over
A$50 Million has been expended by Strike since 2005 on acquisition, exploration, study and administration
costs relating to its Peru assets.
Figure 13: Strike Apurimac and Cusco Iron Ore Projects, showing route of proposed Andahuaylas Railway
Prior Pre-Feasibility Studies
A Pre-Feasibility Study completed in 20086 and updated in 20107 on the Apurimac Project indicated clear
potential for development of a world class iron ore project, with competitive capital costs and very low
operating costs:
•
•
The 2008 Pre-Feasibility Study undertaken by Snowden Mining Industry Consultants and SKM utilised
a proposed slurry pipeline configuration but considered a range of infrastructure options including a
railway. The concentrate pipeline was the preferred transport solution (under the study) as the
additional capital cost of building a railway compared to a slurry pipeline outweighed the operational
and other benefits of a railway. For further details, refer to Strike’s ASX Announcement dated 23 July
2008: Prefeasibility Results Confirm World Class Prospects in Peru.
Further infrastructure studies were undertaken by Ausenco Sandwell and SRK Consulting in 2010,
including a more detailed technical and costing study on building and operating a dedicated railway.
The purpose of these studies was to further compare the economics of the slurry pipeline versus
railway infrastructure solutions at various production levels. For further details, refer to Strike’s ASX
Announcement dated 23 November 2010: Apurimac Project Update and Strike’s December 2010
Quarterly Report.
6 Refer Strike’s ASX Announcement dated 23 July 2008: Prefeasibility Results Confirm World Class Prospects in Peru
7 Refer Strike’s ASX Announcement dated 23 November 2010: Apurimac Project Update and Strike’s December 2010 Quarterly
Report
ANNUAL REPORT | 11
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Andahuaylas Railway Study
In early 2018, the Peru Government signalled its intention to undertake a formal study to build a multi-user
railway from the inland city of Andahuaylas in southern Peru, to the mineral export Port of San Juan de
Marcona on the west coast of Peru (the Andahuaylas Railway).8
In October 2018, the Ministry of Transport and Communications in Peru (MOTC) awarded a A$13 million
tender to an international consortium of engineering companies to study the feasibility of constructing the
Andahuaylas Railway.9
Strike understands that the primary motivation behind the MOTC Andahuaylas Railway initiative is to provide
economic stimulation to the relatively poorer regions of Ica, Arequipa, Ayacucho and Apurimac. The Apurimac
Region in particular is positioned well inland and has historically suffered from lack of good transport
infrastructure connecting it to the coastal areas and the Peru capital, Lima.
Strike’s Apurimac Project is located only 20km from the city of Andahuaylas. The proposed Andahuaylas
Railway (approximately 570km in length) would provide a direct link from the Apurimac Project to an
established mineral export port, significantly improving development options for Apurimac, which would be
one of the biggest users of the railway.
The Andahuaylas Railway route proposed by the MOTC (refer Figure 13) almost exactly mirrors the railway
route considered by Strike in its own Pre-Feasibility Studies on Apurimac (referred to above).
The scale of Strike’s Apurimac Project, if it proceeds through the Andahuaylas Railway, is likely to provide for
very significant economic benefits to the Apurimac Province in terms of both direct investment and job
creation. Other mineral projects in the Apurimac and Cusco Regions are also likely to directly benefit from
the Andahuaylas Railway (refer Figure 14).
Figure 14: Mineral Projects in the Apurimac and Cusco Regions
8 Refer Strike’s ASX Announcement dated 8 February 2018: Peru Government Plans Railway Linking Strike’s Apurimac Iron
Ore Project to Port
9 Refer Strike’s ASX Announcement dated 23 October 2018: Peru Government Awards $13 Million Tender for Andahuaylas
Railway Study Linking Strike’s Apurimac Iron Ore Project to Port
ANNUAL REPORT | 12
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
A railway would also allow for capital and processing costs at the mine to be substantially reduced, given the
considerably simplified process to produce lump and fines products from Strike’s high-grade ore compared
to producing a slurry concentrate.
Included in Strike’s Pre-Feasibility Studies on Apurimac (referred to above) was a comprehensive study
undertaken by international engineering companies into the technical and commercial aspects of building a
railway from Andahuaylas to San Juan de Marcona. A detailed route alignment was mapped by Strike,
together with capital and operating cost estimates (in the order of +- 20%) relating to:
•
•
•
•
track infrastructure;
equipment, including locomotives, ore wagons, maintenance of way machines, vehicles etc;
maintenance and operating facilities, including repair shops, tools and equipment, railway offices,
communications and train control equipment, bunkhouses and online buildings; and
railway system manpower.
In April 2019, Strike executed a Cooperation and Confidentiality Agreement10 with Consorcio Ferrocarril Del
Sur (Southern Railway Consortium), the consortium of international engineering companies undertaking
the Peru Government funded Andahuaylas Railway study. Given the scale of economic and social benefits
which the Andahuaylas Railway will bring to the Apurimac Region (and Peru as a country), Strike has agreed
to share its own railway study with the Southern Railway Consortium, provide input and advice and otherwise
cooperate with the consortium in whatever way it can to expedite the completion of its feasibility study.
In August 2019, the Managing Director attended a review meeting in Peru with representatives from the
Southern Railway Consortium and other major mining companies operating in or close to the Apurimac region.
At this meeting it was confirmed that the consortium had selected the preferred route for the Andahuaylas
Railway, which aligns with the route previously identified by Strike in its own studies. This route leads directly
to the existing Airport at Andahuaylas, which is located only several hundred metres from Strike’s main
Opaban I deposit at Apurimac (refer Figure 15).
Figure 15: Outcropping Iron ore at the Opaban 1 ore body (with Andahuaylas Airport in the background)
10 Refer Strike’s ASX Announcement dated 18 April 2019: Strike Enters into Cooperation Agreement with Peru Railway
Consortium
ANNUAL REPORT | 13
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
The selection of the preferred Andahuaylas Railway route is significant for Strike, since if the railway goes
ahead as planned using this route it will deliver the ideal transport infrastructure solution to advance the
Apurimac Project, with the railway line envisaged to start directly at Strike’s Apurimac Project and terminating
at a multi-user export port on the coast of Peru.
The Andahuaylas Railway study is scheduled to be completed by the June quarter of 2020.
JORC Mineral Resources
A JORC (2012) Indicated and Inferred Mineral Resource has been defined at the main Opaban 1 and
Opaban 3 concessions of 269Mt of iron ore at 57.3% Fe (142 Mt Indicated Resource at 57.84% Fe and 127
Mt Inferred Resource at 56.7% Fe).11
The exceptionally high-grade +57% Fe magnetite iron at Apurimac is almost twice as high as the grades of
magnetite deposits developed in Australia. The Apurimac ore bodies present as continuous broad zones of
mineralisation with predominantly high grade, coarse grained magnetite providing comparatively high mass
recoveries (>60%) at coarse grind size (>500 microns).
Favourable topography (refer Figure 16) indicates the potential for a low mining strip ratio (between 1.2 – 1.8)
and the coarse-grained nature of the ore provides significant processing energy savings as only coarse
grinding is necessary to liberate the magnetite.
Metallurgical testwork on reverse circulation chip samples from the Opaban 1 ore body has returned excellent
product grades with low impurities, at coarse crushing with particle sizes of 80% passing 125 and 250 microns:
Table 2: Testwork results showing potential for high grade, low impurity product from Opaban 1 ore
%
68.02 to 68.28
Fe
0.01 to 0.02
P
1.51 to 1.77
SiO2
Al2O3 0.30 to 0.35
Within the Apurimac JORC Mineral Resource, there has also been identified the potential for low impurity
Direct Shipping Ore (DSO) material of approximately 67.9 Mt at 61.5% Fe with low impurities (refer Table 3),
which could be mined from surface and shallow near surface mineralisation.
Table 3: Opaban 1 DSO characteristics
%
61.5
Fe
0.03
P
0.1
S
Al2O3 1.7
1.0
LOI
In addition to the current JORC Mineral Resource, there is significant exploration potential given the deposits
are open at depth and along strike (with very promising drill results including 154m @ 62% Fe) with extensive
undrilled gravity and magnetic anomalies.
11 Refer Strike’s ASX Announcement dated 19 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
ANNUAL REPORT | 14
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 16: Opaban I deposit has favourable topography for low strip-ratio, open cut mining
Small-Scale Production Potential
Given the time framework for the construction of a potential railway from the Apurimac deposit to the coast is
yet to be finalised, Strike believes it is appropriate to examine ways in which it can potentially bring a smaller
scale mining and trucking operation into production utilising very high grade surface and near surface
mineralisation that is present across the Opaban 1 and Opaban 3 deposits.
As referred to above, within the current JORC Mineral Resource of 269 Mt at 57.3% Fe there has been
identified the potential for DSO material of approximately 67.9 Mt at 61.5% Fe (with low impurities) to be
mined from surface and shallow near surface mineralisation.
In December 2013, Strike commenced a pilot operation, where approximately 8,000 tonnes of ore was mined
from surface outcrops from its concessions by local artisanal miners, using an excavator.
Figure 17: Excavation of high-grade iron ore from Opaban 3, 2013
ANNUAL REPORT | 15
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 18: Stockpile created from artisanal mining at Opaban 3 deposit, 2013
Once mined, the ore was transported to a third-party crushing plant near the coastal town of Pisco in Southern
Peru. After crushing, the ore was sold to a local steel plant for use in their blast furnace to produce steel for
the domestic market.
The quality of iron ore product delivered to the plant was consistently superior than the minimum
characteristics specified by the plant (refer Table 4).
Table 4: Peru steel plant minimum specifications for delivered iron ore
Fe
P
S
SiO2
%
> 64
< 0.08
< 0.08
< 4.0
Strike gained valuable experience in the mining and transport of iron ore from its concessions during this pilot
programme and believes that, given the current and expected iron ore price in the medium term, the pilot
programme can potentially be expanded to produce a small scale but high grade iron ore mining operation in
a relatively short period, for export of iron ore to China.
Such an operation would be undertaken in compliance with Peruvian legislation permitting small groups of
local ‘artisanal miners’ (that are in the process of being formalised under applicable regulations) to mine up
to 350 tonnes per day (or ~125,000 tonnes per annum) from specific portions of a mining concession. This
legislation allows for significantly reduced timetables and simplified processes for obtaining environmental
and other permitting.
Based upon the pilot production previously undertaken and a review of the DSO material, Strike would target
initial production of high-grade DSO with low impurities as follows:
Table 5: Target characteristics of DSO material from Opaban 3
%
64.35
Fe
0.07
P
0.07
S
2.85
SiO2
0.56
LOI
Al2O3 0.91
Given Strike’s concessions contain multiple locations of outcropping ore, it is possible that multiple areas
could be mined simultaneously by different groups of local artisanal miners under Strike’s direction, thus
giving Strike the potential to sell several hundred thousand tonnes of DSO per year to Chinese (and potentially
other) buyers.
Strike has had discussions with the local community and artisanal miners, together with potential equipment
suppliers and transport operators and continues to examine the practicalities and commercial viability of
commencing such an operation in the near term.
ANNUAL REPORT | 16
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Cusco Iron Ore Project (Peru)
(Strike – 100%)
The Cusco Project lies approximately 150km to the south - east of the Apurimac Project and forms a potential
secondary development target for Strike in Peru with an initial JORC (2004) Inferred Mineral Resource
estimate of 104Mt at 32.6% Fe.12
Like the Apurimac Project, iron ore mineralisation at Cusco is coarse-grained and dominated by magnetite,
with high grades recorded. Preliminary metallurgical tests indicate a concentrate grade of >65% Fe could be
produced from this ore using conventional grinding and magnetic separation processes.
Whilst no detailed work has been undertaken on a railway route between Strike’s Apurimac and Cusco
Projects, it is clear that if the Andahuaylas Railway proceeds, a ‘spur line’ from Andahuaylas to Strike’s Cusco
Project would (subject to technical and commercial feasibility) be a very sensible consideration, given the
proximity of several other major mining projects nearby Strike’s Cusco Project which would also benefit from
such a rail link.
12 Refer Strike’s ASX announcement dated 17 June 2011: Cusco Project – Resource Estimate
ANNUAL REPORT | 17
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Solaroz Lithium Project (Argentina)
(Strike – 90%)
The Solaroz Lithium Brine Project (Solaroz) comprises concessions (Solaroz Concessions) totalling 12,000
hectares in area, mostly adjacent to and principally surrounded by concessions held by ASX-listed Orocobre
Limited (ASX:ORE ) and TSX-listed Lithium Americas Corporation (TSX:LAC), within South America’s
‘Lithium Triangle’ in North-West Argentina.
Solaroz is located in the same Salar de Olaroz Basin as and directly adjacent to the producing Salar de Olaroz
Lithium Brine Project operated by Orocobre and its JV partner, Tokyo Stock Exchange listed Toyota Tsusho
Corporation (TYO:8015).
The location of Solaroz is considered by Strike to be highly strategic and prospective for containing
commercial quantities and concentrations of lithium-rich brine, since Strike believes that the aquifer which
supplies the lithium-rich brine being extracted by Orocobre is likely to extend under Strike’s Solaroz
Concessions. This will be tested by geophysical work and drilling in due course with a view to fast tracking
production of lithium carbonate dependent upon these works being successfully concluded.
Solaroz Concessions
The Solaroz Concessions comprise 8 (eight) exploitation concessions totalling 12,000 hectares (refer Figure
19) in Jujuy Province in northern Argentina, approximately 230 kilometres north-west of the capital city of
Jujuy. The Solaroz Concessions lie at an altitude of approximately 3,900 metres and are accessed by good
quality road infrastructure.
The location is supported by favourable conditions in terms of both the operating environment and local
infrastructure. Very limited rainfall combined with dry, windy conditions create the ideal environment for the
brine-evaporation process.
The area is also serviced by a gas pipeline which intersects the Solaroz Concessions, high voltage electricity,
and paved highways. Three major seaports, Buenos Aires in Argentina, Antofagasta and Iquique in Chile,
are serviced by international carriers and are easily accessible by road and/or rail.
The Solaroz Concessions lie over the same Salar de Olaroz Basin from which Orocobre is extracting and
processing lithium rich brine for sale as lithium carbonate since 2015. The Solaroz Concessions follow and
overlap into the visible white halite salt layer of the ‘Salar’ (salt lake) and extend as substantial flat areas with
1 - 2 metres of elevation to the visible halite area, providing the ideal location and topography for the
construction of evaporation ponds (refer Figure 20)
Strike’s interpretation of the basin architecture is that the aquifer which supplies the lithium-rich brine being
extracted by Orocobre (and targeted by other exploration and development companies in the area) extends
under the Solaroz Concessions (refer Figure 21).
The Salar de Olaroz is one of a number of land locked salt lakes located high up in the Argentinian Puna
Region. The Salar de Olaroz Basin is bounded by a pair of north-south reverse faults that thrust Andes
Paleozoic sediment west to east as a result of the Pacific Plate colliding with the South American Plate. This
results in the west side of the basin being continually pushed higher which replenishes the sediment fill within
the basin.
ANNUAL REPORT | 18
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 19: Solaroz Project – Location of Concessions
ANNUAL REPORT | 19
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 20: Photographs of Solaroz concession area taken from ‘Site A’ (top) facing North and ‘Site B’ (bottom) facing South
(Sites as identified in Figure 19: Solaroz Project – Location of Concessions)
Strike’s Exploration Target is based on the interpretation that the alluvial deposits upon which the Solaroz
Concessions are located (at the North-West corner of the Salar) have been deposited relatively recently and
lie directly above the productive deep sand unit of the lithium rich aquifer from which Orocobre is extracting
its brine (refer “Deep Sand Unit”, shown in yellow in Figure 21). The potential quantity and grade of Strike’s
Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral
Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Strike’s geological interpretation indicates that the majority of the Solaroz Concessions are likely to lie directly
over the productive lithium rich aquifer. Previously published geophysical studies undertaken by Orocobre 13
indicate that the sub-surface brine hosting aquifers appear to extend well outside the boundaries of the visible
salt area and to depth and adds evidence supporting the likelihood of lithium rich brine hosted beneath the
Solaroz Concessions.
Other exploration and development companies (for example, Advantage Lithium Corp. (TSXV:AAL);
Millennial Lithium Corp. (TSXV:ML); Lake Resources N.L. (ASX:LKE) and Galan Lithium Limited (ASX:GLN)
have also confirmed through geophysics and drilling that lithium-rich brine hosting aquifers in Argentina tend
to extend well outside boundaries of today’s visible salt pans.
13 Reference: Olaroz Technical Report dated 13 May 2011: Salar De Olaroz Lithium-Potash Project, Jujuy Province, Argentina
ANNUAL REPORT | 20
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Figure 21: Geological cross sections depicting evolution of Olaroz Salar Basin
and Strike’s primary target zone for lithium mineralisation
The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient
exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation
of a Mineral Resource.
ANNUAL REPORT | 21
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Completion of Environmental Impact Assessment Report
In July 2019, Strike completed the preparation of an Environmental Impact Assessment (EIA) Report for
exploration work at Solaroz.14 The EIA Report includes results from collecting and monitoring baseline
environmental data and a detailed proposed fieldwork programme covering 2 years of proposed exploration
activity. Following a period of consultation with local community groups, the EIA Report was submitted to the
Jujuy Mining Authority (the provincial authority responsible for approving exploration and mining activities at
Solaroz) for review.
Strike expects the review process to take several months, after which Strike expects to be able to commence
its exploration programme. Strike’s planned exploration programme (subject to approval of the EIA) consists
of geophysical surveys, followed by drilling, sampling and flow rate testing in the event that sufficient brine is
intersected.
Lithium in Argentina
Argentina holds the world’s biggest lithium resources (as brine deposits) and is currently the world’s third
largest producer of lithium, after Australia and Chile.
One of the key attractions of lithium brine projects in Argentina is their low cost of production compared to
hard rock lithium projects – Argentinian (and Chilean) lithium brine projects are well recognised as being the
lowest on the lithium carbonate production cost curve.
The principle reason for the low operating cost is that lithium rich brine, once pumped to the surface (typically
from aquifers at up to several hundred metres depth) is then transferred to large evaporation ponds, which
rely on free energy from the sun and local atmospheric conditions to concentrate the brine. There are
generally no environmentally damaging tailings or toxic by-products.
Strike proposes to follow the well-established and proven production methodology for converting lithium-rich
brines into lithium carbonate in a similar manner to existing Argentinian based lithium brine producers.
14 Refer Strike’s ASX Announcement dated 19 July 2019: Completion of Environmental Impact Assessment Report for Solaroz
Lithium Project, Argentina
ANNUAL REPORT | 22
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Burke Graphite Project (Queensland, Australia)
(Strike – ~70%)
The Burke Graphite Project is located in the Cloncurry region in North Central Queensland, where there is
access to well-developed transport infrastructure to an airport at Mt Isa (~122km) and a port in Townsville
(~783km).
Figure 22: Burke Graphite Project Tenement Location in North Central Queensland
A Mineral Resource Estimate (MRE) for the Burke Project has defined a maiden Inferred Mineral Resource
of15:
•
6.3 million tonnes @ 16.0% Total Graphitic Carbon (TGC) for 1,000,000 tonnes of contained
graphite;
• Within the mineralisation envelope there is included higher grade material of 2.3 million tonnes @
20.6% TGC (with a TGC cut-off grade of 18%) for 464,000 tonnes of contained graphite which will be
investigated further.
15 Refer Grade Tonnage Data in Table 2 of CSA Global’s Burke Graphite Project MRE Technical Summary dated 9 November
2017 (attached as Annexure A of Strike’s ASX Announcement dated 13 November 2017: Maiden Mineral Resource Estimate
Confirms Burke Project as One of the World’s Highest Grade Natural Graphite Deposits)
ANNUAL REPORT | 23
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
These grades place the Burke deposit as one of the highest-grade deposits of graphite in the world held by
an Australian listed company.
Based upon the MRE for the Project referred to above, the following Chart illustrates the TGC grades of
published Total JORC Resource/Reserves of selected ASX Listed Graphite Projects relative to the Burke
Project:
Figure 23: Selected TGC% of Published Total JORC Resource/Reserve* vs. Maiden Burke Mineral Resource Estimates
In addition to the high-grade nature of the deposit, the Burke Graphite Project:
•
•
•
•
Comprises natural graphite that has been demonstrated to be able to be processed by standard
flotation technology to international benchmark product categories. The flotation tests conducted by
Independent Metallurgical Operations Pty Ltd (IMO) have confirmed that a concentrate of purity in
excess of 95% and up to 99% TGC can be produced using a standard flotation process;
Contains graphite from which Graphene Nano Platelets (GNP) have been successfully extracted direct
from the Burke Graphite deposit via Electrochemical Exfoliation (ECE). The ECE process is relatively
low cost and environmentally friendly compared to other processes, yet it can produce very high purity
Graphene products. The ECE process is however not applicable to the vast majority of worldwide
graphite deposits as it requires a TGC of over 20% and accordingly the Burke Deposit has potentially
significant processing advantages over other graphite deposits;
Is located in the relatively safe and mining friendly jurisdiction of Queensland, Australia with well-
developed transport infrastructure and logistics nearby; and
Is potentially amenable to low cost open-pit mining.
ANNUAL REPORT | 24
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
High Grade Intersections from Drilling
A maiden drilling campaign was undertaken by Strike between 24 April 2017 and 14 May 2017 to test the
graphite mineralisation in the key Burke tenement, EPM 2544316. Total metres drilled were 735.2m (618m in
9 RC holes and 117.2m in one diamond core hole) spread across four cross-sections over a strike length of
500m.
Drilling confirmed the continuity of high grade (>10%) graphite mineralisation over 500m along strike in the
NE-SW direction and confirmed the presence of extensive zones of very high-grade graphite mineralisation,
commencing at surface and extending to at least 100m in depth (refer Figure 24). Intersections encountered
include:
•
•
Diamond Core Hole BGDD001 : 99.8 Metres @ 21.1% TGC from 9 metres depth; and
RC Hole BGRC001 : 43 Metres @ 18.87% TGC from 21 metres depth.
Figure 24: Burke Tenement Drilling Cross Section 7830950mN
16 Refer Strike’s ASX Announcements dated and 13 June 2017: Extended Intersections of High-Grade Graphite Encountered
at Burke Graphite Project and 21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project
ANNUAL REPORT | 25
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Ground EM Survey Results
A ground Electro Magnetic (EM) survey was completed in June 2018, covering the south-eastern corner of
Burke tenement EPM 25443 (North) (drilled by Strike in 2017) 17 and the Corella tenement EPM 25696 (South)
(located ~20 km south of EPM 25443) 18.
The EM survey identified the Corella Prospect as a significant target area for additional high-grade
mineralisation as well as identifying new zones of increased conductivity adjacent to previously drilled graphite
mineralisation at the Burke Prospect.
The Corella Prospect (north east corner of EPM 25696 (South)) EM survey was carried out over outcropping
and sub-cropping Geological Survey of Queensland mapped Graphitic Schists - the “Milo beds” - within the
Corella Formation. Graphite grading 5 -10% TGC is widespread throughout the outcropping Milo beds and
the EM survey was carried out to identify higher-grade areas of mineralisation and identify future drill targets.
The survey highlighted an area of approximately 1000m x 500m (refer Figure 25) within which conductive
features similar to those corresponding to high-grade graphite occurring at the Burke EPM 2543 tenement
were identified.
Figure 25: EM Survey - Corella Prospect, Burke Graphite Project
17 Refer Strike’s ASX announcements dated 13 June 2017: Extended Intersections of High-Grade Graphite Encountered at
Burke Graphite Project and 21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project
18 Refer Strike’s ASX Announcement dated 26 June 2018: Burke Graphite Project – New Target Area Identified From Ground
Electro-Magnetic Surveys
ANNUAL REPORT | 26
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
The conductive features identified at the Corella Prospect appear to be shallow to flat-lying and occur in areas
of outcropping and sub-cropping graphite that have rock chips (from previous sampling by Strike) of up to
14.85% TGC19.
In addition to identifying the new potential at Corella, the EM survey identified minor structural offsets, together
with new zones of increased conductivity at the previously drilled Burke Prospect.
Figure 26: EM Survey - Burke Prospect, Burke Graphite Project
The EM survey over the south-eastern corner of Burke EPM 2543 (North) was carried out over outcropping
and sub-cropping Geological Survey of Queensland mapped Graphitic Schists of the Corella Formation. The
survey highlighted the high-grade graphite identified in Strike’s maiden drilling programme and identified
minor structural offsets, together with new zones of increased conductivity (refer Figure 26). In addition, the
survey verified the width and dip of the drill intersected high-grade graphite.
19 Refer Strike’s ASX announcement dated 21 April 2017: Jumbo Flake Graphite Confirmed at Burke Graphite Project,
Queensland
ANNUAL REPORT | 27
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
The Directors present their report on Strike Resources Limited ABN 94 088 488 724 (Company or SRK) and
its controlled entities (the Consolidated Entity or Strike) for the financial year ended 30 June 2019 (Balance
Date).
SRK is a company limited by shares that was incorporated in Western Australia and has been listed on the
Australian Securities Exchange (ASX) since 7 March 2000 (ASX Code: SRK).
The Company has prepared a consolidated financial report incorporating the entities that it controlled during
the financial year, being wholly owned subsidiaries.
PRINCIPAL ACTIVITIES
Strike Resources is an ASX listed resource company which owns the high grade Apurimac Magnetite Iron
Ore Project and Cusco Magnetite Iron Ore Project in Peru and the Paulsens East Iron Ore Project in Western
Australia. Strike is also developing a number of battery minerals related projects around the world, including
the highly prospective Solaroz Lithium Brine Project in Argentina and the Burke Graphite Project in
Queensland.
Strike’s principal activities during the financial year were:
•
the investigation of potential value-adding strategies in relation to the development of its Apurimac Iron
Ore Project in Peru;
•
•
•
the evaluation of its Paulsens East Iron Ore Project in Western Australia;
the acquisition and evaluation of its Solaroz Lithium-Brine Project in Argentina;
the exploration and evaluation of its Burke Graphite Project in Queensland.
OPERATING RESULTS
Consolidated
Total revenue
Total expenses
Loss before tax
Income tax expense
Loss after tax
CASH FLOWS
Consolidated
Net cash flow from operating activities
Net cash flow from investing activities
Net change in cash held
Cash held at year end
June 2019
$
306,461
(2,181,554)
(1,875,093)
-
(1,875,093)
June 2019
$
(1,728,417)
568,164
(1,160,253)
1,289,411
June 2018
$
652,845
(1,334,459)
(681,614)
-
(681,614)
June 2018
$
(1,697,877)
(1,251,713)
(2,949,590)
2,361,403
In addition to its cash reserves, Strike held an investment portfolio of $1.34 million comprising securities in
ASX 200 listed resource stocks (30 June 2018: $1.93 million).
ANNUAL REPORT | 28
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
FINANCIAL POSITION
Consolidated
Cash
Financial assets at fair value through profit or loss
Exploration and evaluation expenditure
Receivables
Other assets
Liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total equity
REVIEW OF OPERATIONS
Apurimac Iron Ore Project (Peru)
June 2019
$
1,289,411
1,340,686
348,956
166,391
7,502
(117,992)
3,034,954
148,439,925
15,074,101
(160,479,072)
3,034,954
June 2018
$
2,361,403
1,932,400
581,433
46,221
6,343
(95,097)
4,832,703
148,439,925
14,996,757
(158,603,979)
4,832,703
Strike’s Apurimac Iron Ore Project in Peru is recognised as one of the highest grade, large scale magnetite
projects in the world with the potential to support the establishment of a significant iron ore operation.1 Over
A$50 million has been invested by Strike since 2005 on acquisition, exploration, study and operational costs
relating to its Peru assets, including a Pre-Feasibility Study completed in 20082 and updated in 20103 on the
Apurimac Project.
During 2018:
•
•
The Ministry of Transport and Communications in Peru (MOTC) announced that it would undertake a
formal study to build a multi-user railway from the inland city of Andahuaylas in southern Peru, to the
mineral export Port of San Juan de Marcona on the west coast of Peru (the Andahuaylas Railway)4;
and
The MOTC awarded a tender to an international consortium of engineering companies to study the
feasibility of constructing the proposed Andahuaylas Railway (Consortium).5
Strike’s Apurimac Project is located only 20km from the city of Andahuaylas. The proposed Andahuaylas
Railway (approximately 570km in length) would provide a direct link from Strike’s Project to an established
mineral export port, significantly improving the Apurimac Project’s development prospects.
In April 2019, Strike executed a Cooperation and Confidentiality Agreement6 with the Consortium to provide
input and assistance to the Andahuaylas Railway study. Under this agreement, Strike is sharing its own 2010
railway study3 (which was an update to its 2008 Pre-Feasibility Study2) on the Apurimac Project with the
Consortium and providing additional assistance as necessary to assist with the completion of the study.
Strike has been advised that the Consortium’s Andahuaylas Railway study is expected to be completed by
the June 2020 quarter.
1 Refer Strike’s ASX Announcement 19 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
2 Refer Strike’s ASX Announcement dated 23 July 2008: Prefeasibility Results Confirm World Class Prospects in Peru
3 Refer Strike’s ASX Announcement dated 23 November 2010: Apurimac Project Update and Strike’s December 2010 Quarterly Report
4 Refer Strike’s ASX Announcement dated 8 February 2018: Peru Government Plans Railway Linking Strike’s Apurimac Iron Ore Project to Port
5 Refer Strike’s ASX Announcement dated 24 October 2018: Peru Government Awards $13 Million Tender for Andahuaylas Railway Study Linking
Strike’s Apurimac Iron Ore Project to Port
6 Refer Strike’s ASX Announcement dated 18 April 2019: Strike Enters into Cooperation Agreement with Peru Railway Consortium
ANNUAL REPORT | 29
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
With spot prices for iron ore strengthening from the lows of approximately US$40 per tonne in December
2015 to approximately US$93/t as at 20 September 2019 (with a 12 month trading range of approximately
US$68/t to 121/t)7, the timing of the MOTC Andahuaylas Railway initiative, being co-incident with
strengthening iron ore prices, is considered by Strike to be positive for the Apurimac Project.
Strike is encouraged by the prospect of the Andahuaylas Railway and has re-started project activity in Peru.
Given the feasibility and time framework for the construction of a potential railway from Strike’s Apurimac
deposit to the coast is yet to be finalised, Strike is examining ways in which it can potentially bring a smaller
scale mining and trucking operation into production in the near term utilising very high grade surface and near
surface mineralisation that is present across the Opaban 1 and Opaban 3 deposits at Apurimac.8
Paulsens-East Iron Ore Project (Western Australia)
The Paulsens East Iron Ore Project is located approximately 140 kilometres west of Tom Price, 8 kilometres
from the Paulsens Gold Mine and only 233 kilometres by road (of which 210 kilometres is good quality paved
road) from the Port of Onslow. Paulsens East consists of hematite iron ore mineralisation occurring as a
ridge rising to approximately 60 metres above the valley floor and extending for approximately 3,000 metres
West to East.
With the increase in iron ore prices, Strike has recommenced previous work conducted between 2006 - 2008
to examine the potential for undertaking a Direct Shipping Ore (DSO) mining operation using contract mining,
crushing and transportation by truck to port then ship to China.8
On 18 July 2019, Strike reported a significant Maiden JORC Inferred Mineral Resource for Paulsens East. 9
On 4 September 2019, Strike reported a significant upgrade of the Paulsens East resource from an Inferred
to an Indicated JORC Mineral Resource category.10
Strike is conducting the following activities to advance Paulsens East 11:
•
•
•
•
•
•
•
Undertake detailed metallurgical test work for the deposit including lump to fines ratio, crushing indices,
tumble index etc.
Undertake an economic viability study based upon a contract mining, crushing and transportation
operation.
Restart and conclude Environmental Survey and Native Title Agreements (which were previously
commenced but not completed) and other statutory approvals to mine.
Conversion of the current Retention Licence to a Mining Lease.
Undertake a mine planning study.
Ongoing discussions with potential transport and mining contractors and a number of port facilities.
Ongoing discussions with potential offtake partners for the sale of an expected high grade premium
product.
7 Source: https://www.marketindex.com.au/iron-ore (Industry standard NYMEX traded 62% Fe, CFR China)
8 Refer Strike’s ASX Announcement dated 19 June 2019: Strike’s Iron Ore Assets
9 Refer Strike’s ASX Announcement dated 15 July 2019: Maiden JORC Resource of 9.1 Million Tonnes at 63.4% Fe - Paulsens East Iron Ore
Project in the Pilbara
10 Refer Strike’s ASX Announcement dated 4 September 2019: Significant Upgrade of JORC Mineral Resource into Indicated Category at
Paulsens East Iron Ore Project
11 Refer also Strike’s ASX Announcement dated 1 August 2019: Strong Progress at the Paulsens East Iron Ore Project
ANNUAL REPORT | 30
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Solaroz Lithium Project (Argentina)
In March 2019, Strike acquired a 90% interest in 12,000 hectares of highly prospective lithium
concessions in North-West Argentina.12 The Solaroz Lithium Brine Project (Solaroz) is located within
the Salar de Olaroz Basin and is directly adjacent to or surrounded by concessions held by ASX-listed
Orocobre Limited (ASX:ORE) and TSX-listed Lithium Americas Corporation (TSX:LAC).
The Orocobre-Toyota Tsusho JV Lithium Facility is producing lithium carbonate from lithium-rich brine
extracted from bore fields drilled on the salar. Strike believes that the aquifer which supplies the lithium-
rich brine being extracted by Orocobre is likely to extend under Strike’s Solaroz concessions.
Strike is targeting a fast track exploration programme to test its geological model for Solaroz.13 Strike
has completed an Environmental Impact Assessment (EIA) Report for exploration work at Solaroz.14 Once
the EIA is approved, Strike will commence a drilling programme to delineate the extent of potential
lithium brine, its grade and related hydrological matters to identify the potential for commercial
development of Solaroz.
The terms of acquisition are also summarised in Note 21(f) (Contingencies - Deferred Payments Relating to
Acquisition of Solaroz Lithium Project (Argentina)) of the financial statements.
Burke Graphite Project (Queensland)
Strike’s Burke Graphite Project15 (in which Strike holds a ~70% interest16) is located in the Cloncurry region
in North Central Queensland, where there is access to well-developed transport infrastructure to an airport at
Mt Isa (~122km) and a port in Townsville (~783km).
In November 2017, Strike defined a maiden Inferred Mineral Resource estimate for the Burke Project with the
grades placing the Burke deposit as one of the highest-grade deposits of graphite in the world held by an
Australian listed company.17
In June 2018, Strike announced the completion of a ground Electro Magnetic (EM) survey covering the south-
eastern corner of Burke tenement EPM 25443 (North) (drilled by Strike in 201718) and the Corella tenement
EPM 25696 (South) (located ~20 km south of EPM 25443), which identified the Corella Prospect as a
significant target area for additional high grade mineralisation as well as identifying new zones of increased
conductivity adjacent to previously drilled graphite mineralisation at the Burke Prospect.19
Strike is considering undertaking further metallurgical test work to examine the potential suitability of Burke
graphite for use in electric vehicle (EV) batteries.
12 Refer Strike’s ASX announcement dated 13 March 2019: Strike Secures Solaroz Lithium Brine Project in Argentina’s Lithium Triangle
13 Refer Strike’s ASX announcement dated 17 April 2019: Strike Commences Solaroz Lithium Brine Project Work Programme in Argentina
14 Refer Strike’s ASX announcement dated 19 July 2019: Completion of Environmental Impact Assessment Report for Solaroz Lithium Project,
Argentina
15 Refer Strike’s ASX announcement dated 9 November 2016: Strike Secures Graphite Project in Queensland
16 In July 2017, Strike completed its earn-in obligations to acquire a 60% interest in the Burke Graphite Project tenements. All subsequent
expenditure on the project are shared in proportion to the owners’ interests (with an industry standard dilution to apply if a party elects not to
contribute their share).
17 Refer Strike’s ASX Announcement dated 13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the World’s
Highest Grade Natural Graphite Deposits).
18 Refer Strike’s ASX announcements dated 13 June 2017: Extended Intersections of High-Grade Graphite Encountered at Burke Graphite Project
and 21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project
19 Refer Strike’s ASX Announcement dated 26 June 2018: Burke Graphite Project – New Target Area Identified From Ground Electro-Magnetic
Surveys
ANNUAL REPORT | 31
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Lithium and Gold Exploration Tenements (Western Australia)
The North Pilbara hosts a number of lithium and tantalum prospects with mineralisation occurring either within
pegmatite veins or within alluvials draining the elevated areas containing pegmatite veins.
In 201620, Strike applied for Exploration Licences EL 45/4799 and E45/4800 totalling ~31,000 hectares in the
North Pilbara of Western Australia - these tenements existed within the extent of the known lithium and
tantalum mineral fields in the region, adjacent to licences that have outcropping lithium and tantalum elevated
pegmatite occurrences.
Following reviews of historical information and ground based reconnaissance and sampling programmes,
Strike relinquished tenement EL45/4799 in January 2019 due to lack of prospectivity for the target minerals
(lithium and gold).
DIVIDENDS
No dividends have been paid or declared during the financial year.
CAPITAL RAISING
On 18 July 2019, the Company raised $0.981 million through a placement of 21,800,000 shares at 4.5 cents
per share to professional and sophisticated investors, being the maximum available under the Company’s
15% placement capacity under the ASX Listing Rules.
The funds raised from the placement (after paying expenses of the issue) will be applied towards the costs
of advancement of exploration, evaluation and development of the Company’s Paulsens East Iron Ore Project
and other resource projects and for general working capital purposes.
This issue was ratified and approved by shareholders at a general meeting21 held on 6 September 201922,
thus refreshing the Company’s 15% placement capacity under the ASX Listing Rules.
SECURITIES ON ISSUE
The Company currently has 167,134,268 fully paid ordinary shares on issue (30 June 2019 and 30 June
2018: 145,334,268). All such shares are listed on ASX. The Company has no other securities on issue.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Consolidated Entity save as otherwise
disclosed in this Directors’ Report or the financial statements and notes thereto.
FUTURE DEVELOPMENTS
The Consolidated Entity will continue to:
•
•
•
•
investigate potential value-adding strategies in relation to the development of its Apurimac Iron Ore
Project in Peru;
evaluate the development of its Paulsens East Iron Ore Project in Western Australia;
advance its other resource projects through exploration, evaluation and development; and
potentially investigate and pursue other prospective projects in the resources sector.
20 Refer Strike’s ASX Announcement dated 18 August 2016: New Lithium Projects in Chile and Western Australia
21 Refer Strike’s ASX Announcement dated 5 August 2019: Notice of General Meeting and Explanatory Statement
22 Refer Strike’s ASX Announcement dated 6 September 2019: Results of General Meeting
ANNUAL REPORT | 32
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
The likely outcomes of these activities depend on a range of technical and economic factors and also industry,
geographic and other strategy specific issues. In the opinion of the Directors, it is not possible or appropriate
to make a prediction on the results of these activities, the future course of markets or the forecast of the likely
results of the Consolidated Entity’s activities.
ENVIRONMENTAL REGULATION
The Consolidated Entity holds mineral tenement/concession licences issued by the relevant mining and
environmental protection authorities of the various countries in which Strike operates (from time to time). In
the course of its mineral exploration, evaluation and development activities, the Consolidated Entity adheres
to licence conditions and environmental regulations imposed upon it by various authorities (as applicable).
The Consolidated Entity has complied with all licence conditions and environmental requirements (as
applicable) during the financial year and up to the date of this report. There have been no known material
breaches of the Consolidated Entity’s licence conditions and environmental regulations during the financial
year and up to the date of this report.
BOARD OF DIRECTORS
Farooq Khan
Chairman
Appointed
18 December 2015; Director since 1 October 2015
Qualifications
BJuris, LLB (Western Australia)
Experience
Mr Khan is a qualified lawyer having previously practised principally in the field of corporate law.
Mr Khan has extensive experience in the securities industry, capital markets and the executive
management of ASX-listed companies. In particular, Mr Khan has guided the establishment and
growth of a number of public listed companies in the investment, mining and financial services
sector. He has considerable experience in the fields of capital raisings, mergers and acquisitions
and investments.
Special responsibilities
Member of the Audit Committee
Member of the Remuneration and Nomination Committee
Relevant Interests in
shares and options
Other current
directorships in listed
entities
530,010 shares (directly)
Executive Chairman of:
Orion Equities Limited (ASX:OEQ) (since 23 October 2006)
Bentley Capital Limited (ASX:BEL) (since 2 December 2003)
Executive Chairman and Managing Director of:
Queste Communications Ltd (ASX:QUE) (since 10 March 1998)
Former directorships
in other listed entities
in past 3 years
Nil
ANNUAL REPORT | 33
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
William Johnson
Managing Director
Appointed
25 March 2013; Director since 14 July 2006
Qualifications
MA (Oxon), MBA
Experience
William Johnson holds a Masters Degree in Engineering Science from Oxford University, England
and an MBA from Victoria University, New Zealand. His 30-year business career spans multiple
industries and countries, with executive/CEO experience in mineral exploration and investment
(Australia, Peru, Chile, Saudi Arabia, Oman, North Africa and Indonesia), telecommunications
infrastructure investment (New Zealand, India, Thailand and Malaysia) and information technology
and Internet ventures (New Zealand, Philippines and Australia). Mr Johnson is a highly experienced
public company director and has considerable depth of experience in corporate governance,
business strategy and operations, investment analysis, finance and execution.
Special
responsibilities
None
Relevant Interests in
shares and options
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
349,273 shares (directly)23
Executive Director of:
Bentley Capital Limited (ASX:BEL) (since 1 January 2016; Director since March 2009)
Non-Executive Director of:
Keybridge Capital Limited (ASX:KBC) (since 29 July 2016)
Molopo Energy Limited (ASX:MPO) (since 31 May 2018)
Yowie Group Ltd (ASX:YOW) (10 April 2018 to 8 October 2018)
Malcolm Richmond
Non-Executive Director
Appointed
Director since 25 October 2006
Qualifications
BSc Hons (Metallurgy) and B. Comm. Merit (Econs) (New South Wales)
Experience
Mr Richmond has 30 years’ experience with the Rio Tinto and CRA Groups in a number of positions
including: Vice President, Strategy and Acquisitions; Managing Director, Research and Technology;
Managing Director, Development (Hamersley Iron Pty Limited) and Director of Hismelt Corporation
Pty Ltd. He was formerly Deputy Chairman of the Australian Mineral Industries Research
Association and Vice President of the WA Chamber of Minerals and Energy. Mr Richmond has
also served as a Member on the Boards of a number of public and governmental bodies and other
public listed companies.
He is a qualified metallurgist and economist with extensive senior executive and board experience
in the resource and technology industries both in Australia and internationally. His special interests
include corporate strategy and the development of markets for internationally traded minerals and
metals - particularly in Asia.
Mr Richmond served as Visiting Professor at the Graduate School of Management and School of
Engineering, University of Western Australia until January 2012 and is a Fellow of the Australian
Academy of Technological Sciences & Engineering, a Fellow of Australian Institute of Mining and
Metallurgy and a Member of Strategic Planning Institute (US).
Special
responsibilities
Chairman of the Audit Committee
Member of the Remuneration and Nomination Committee
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
Non-Executive Director of:
Argonaut Resources NL (ASX:ARE) (since 14 March 2012)
Nil
23 Refer Strike’s ASX Announcement dated 20 May 2019: Change of Director’s Interest Notice
ANNUAL REPORT | 34
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Matthew Hammond
Non-Executive Director
Appointed
25 September 2009
Qualifications
BA (Hons) (Bristol)
Experience
Mr Hammond is Group Managing Director and CFO of Mail.ru, a leading European Internet
communication and entertainment services group, which is listed on the London Stock Exchange.
Prior to that he was Group Strategist for Metalloinvest Holdings, where he had broad-ranging
responsibilities for part of the non-core asset portfolio and advised the Metalloinvest Board on
strategic acquisitions and investments. He began his career at Credit Suisse and was Sector Head
in Equity Research and in Private Bank Ultra High Net Worth Client Advisory advising on portfolio
allocation, strategic M&A and individual investments. As a Technology Analyst at Credit Suisse, he
was ranked #1 in the Extell and Institutional Investor surveys 8 times.
Special
responsibilities
Chairman of the Remuneration and Nomination Committees
Member of the Audit Committee
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Managing Director and Chief Financial Officer of:
Mail.Ru Group Limited (LSE:MAIL)
(since April 2011; Director since May 2010; CFO since June 2013);
Former directorships
in other listed entities
in past 3 years
Non-Executive Director of:
Realm Therapeutics plc (formerly PuriCore plc) (LSE:RLM) (May 2010 to 17 November 2017)
Victor Ho
Director and Company Secretary
Appointed
Director since 24 January 2014; Company Secretary since 30 September 2015
Qualifications
BCom, LLB (Western Australia), CTA
Experience
Victor Ho has been in Executive roles with a number of ASX-listed companies across the
investments, resources and technology sectors over the past 19+ years. Mr Ho is a Chartered Tax
Adviser (CTA) and previously had 9 years’ experience in the taxation profession with the Australian
Tax Office (ATO) and in a specialist tax law firm. Mr Ho has been actively involved in the investment
management of listed investment companies (as an Executive Director and/or a member of the
Investment Committee), the structuring and execution of a number of corporate, M&A and
international joint venture (in South America, Indonesia and the Middle East) transactions, capital
raisings and capital management initiatives and has extensive experience in public company
administration, corporations’ law and stock exchange compliance and investor/shareholder relations.
Special
responsibilities
Secretary of Audit Committee and Remuneration and Nomination Committee
Relevant Interests in
shares and options
Nil
Other positions held
in listed entities
Executive Director (also Company Secretary) of:
Orion Equities Limited (ASX:OEQ) (Secretary since 2 August 2000 and Director since 4 July 2003)
Queste Communications Ltd (ASX:QUE) (Secretary since 30 August 2000 and Director since 3
April 2013)
Company Secretary of:
Bentley Capital Limited (ASX:BEL) (since 5 February 2004)
Keybridge Capital Limited (ASX:KBC) (since 13 October 2016)
Former position in
other listed entities
in past 3 years
None
ANNUAL REPORT | 35
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
DIRECTORS' MEETINGS
The following table sets out the numbers of meetings of the Company's Directors held during the financial
year (including Directors’ circulatory resolutions), and the numbers of meetings attended by each Director of
the Company:
Board Meetings
Audit Committee
Remuneration Committee
Name of Director
Attended
Farooq Khan
William Johnson
Malcolm Richmond
Matthew Hammond
Victor Ho(a)
Notes:
5
5
5
3
5
Max. Possible
Meetings
5
5
5
5
5
Attended
2
-
2
-
2
Max. Possible
Meetings
2
-
2
2
2
Attended
-
-
-
-
-
Max. Possible
Meetings
-
-
-
-
-
(a)
Mr Ho attended Audit Committee meetings as Secretary of the Audit Committee
Audit Committee
The Audit Committee was established in March 2010 and currently comprises Malcolm Richmond (as
Chairman), Farooq Khan and Matthew Hammond.
The Audit Committee has a formal charter to prescribe its objectives, duties and responsibilities,
access and authority, composition, membership requirements of the Committee and other
administrative matters. Its function includes reviewing and approving the audited annual and reviewed
half-yearly financial reports, ensuring a risk management framework is in place, reviewing and
monitoring compliance issues, reviewing reports from management and matters related to the external
auditor.
A copy of the Audit Committee Charter may be downloaded from the Company’s website:
http://strikeresources.com.au/corporate/corporate-governance/.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee was established in August 2010 and currently
comprises Matthew Hammond (as Chairman), Farooq Khan and Malcolm Richmond.
The Remuneration and Nomination Committee has a formal charter to prescribe its purpose, key
responsibilities, composition, membership requirements, powers and other administrative matters. The
Committee has a:
•
•
Remuneration function - with key responsibilities to make recommendations to the Board on
policy governing the remuneration benefits of the Managing Director and Executive Directors,
including equity-based remuneration and assist the Managing Director to determine the
remuneration benefits of senior management and advise on those determinations; and a
Nomination function - with key responsibilities to make recommendations to the Board as to
various Board matters including the necessary and desirable qualifications, experience and
competencies of Directors and the extent to which these are reflected in the Board, the
appointment of the Chairman and Managing Director, the development and review of Board
succession plans and addressing Board diversity.
A copy of the Remuneration and Nomination Committee Charter may be downloaded from the
Company’s website: http://strikeresources.com.au/corporate/corporate-governance/.
ANNUAL REPORT | 36
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
This Remuneration Report details the nature and amount of remuneration for each Director and Company
Executive (being a company secretary or senior manager) (Key Management Personnel) of the Company.
The information provided under headings (1) to (8) below has been audited for compliance with section 300A
of the Corporations Act 2001 (Cth) as required under section 308(3C).
(1)
Key Management Personnel disclosed in this report
Name
Current Position
Tenure
Farooq Khan
Chairman
Chairman since 18 December 2015; Director since 1 October 2015
William Johnson
Managing Director
Managing Director since 25 March 2013; Director since July 2006
Victor Ho
Director and Company
Secretary
Director since 24 January 2014; Company Secretary since 30 September
2015
Malcolm Richmond Non-Executive
Director
Director since 25 October 2006; Previously, Chairman between 3
February 2011 and 18 December 2015
Matthew Hammond Non-Executive
Since 25 September 2009
Director
(2)
Remuneration Policy
The Board (with guidance from the Remuneration and Nomination Committee) determines the
remuneration structure of all Key Management Personnel having regard to the Consolidated Entity’s
strategic objectives, scale and scope of operations and other relevant factors, including experience
and qualifications, length of service, market practice (including available data concerning remuneration
paid by other listed companies in particular companies of comparable size and nature within the
resources sector in which the Consolidated Entity operates), the duties and accountability of Key
Management Personnel and the objective of maintaining a balanced Board which has appropriate
expertise and experience, at a reasonable cost to the Company.
The Remuneration and Nomination Committee: A purpose of the Committee is to assist the
Managing Director and the Board to adopt and implement a remuneration system that is required to
attract, retain and motivate the personnel who will enable the Company to achieve long-term success.
In carrying out this ‘remuneration function’, the Committee’s key responsibilities are to:
•
•
•
make recommendations to the Board on the specific benefits to be provided to the Managing
Director within the policy
conduct an annual review of Non-Executive Directors’ fees and determining whether the limit
on the Non-Executive Directors’ fee pool remains appropriate, and
assist the Managing Director to determine the remuneration (including equity-based
remuneration) of ‘Senior Management’ (being executive direct reports to the Managing Director
and other senior employees) and advise on those determinations.
A copy of the Remuneration and Nomination Committee Charter may be downloaded from the
Company’s website: http://strikeresources.com.au/corporate/corporate-governance/.
Corporate Governance Principles: The Company’s Corporate Governance Statement (CGS) also
addresses matters pertaining to the Board, Senior Management and Remuneration.
The latest version of the CGS may be downloaded from the Company’s website:
http://strikeresources.com.au/corporate/corporate-governance/.
Fixed Cash Short-term Employment Benefits: The Key Management Personnel of the Company
are paid a fixed amount per annum plus applicable employer superannuation contributions. The Non-
Executive Directors of the Company are paid a maximum aggregate base remuneration of $550,00024
24 As approved by shareholders at the Annual General Meeting held on 25 November 2009; refer SRK’s Notice of Annual General Meeting
released on ASX on 27 October 2009 and SRK’s ASX Announcement dated 25 November 2009: Results of Annual General Meeting
ANNUAL REPORT | 37
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
per annum inclusive of employer superannuation contributions where applicable, to be divided as the
Board determines appropriate.
The Board has determined the following fixed cash remuneration for current Key Management
Personnel as follows:
(a) Mr Farooq Khan (Chairman) - a base fee of $80,000 per annum plus employer superannuation
contributions;
(b) Mr William Johnson (Managing Director) - a base fee of $208,000 per annum plus employer
superannuation contributions;
(c) Mr Victor Ho (Director and Company Secretary) - a base fee of $95,000 (comprising $45,000
fees) per annum plus employer
fees and $50,000 Company Secretarial
Director’s
superannuation contributions;
(d) Mr Malcolm Richmond (Non-Executive Director) - a base fee of $45,000 per annum plus
employer superannuation contributions; and
(e) Mr Matthew Hammond (Non-Executive Director) - a base fee of $45,000 per annum.
Special Exertions and Reimbursements: Pursuant to the Company’s Constitution, each Director is
also entitled to receive:
•
•
Payment for reimbursement of all travelling, hotel and other expenses reasonably incurred by a
Director for the purpose of attending meetings of the Board or otherwise in and about the
business of the Company; and
In respect of Non-Executive Directors, payment for the performance of extra services or the
making of special exertions for the benefit of the Company (at the request of and with the
concurrence of the Board).
Short-Term Benefits: The Managing Director has the opportunity to earn an annual short-term
incentive (STI) cash amount if predefined key performance indicators (KPI’s) are achieved. The
STI/KPI’s are reviewed annually (where applicable). There were no STI KPI’s set for the Managing
Director in respect of the past 2018/19 financial year or the 2019/20 financial year.
Long-Term Benefits: Other than early termination benefits disclosed in ‘Employment Agreements’
below, Key Management Personnel have no right to termination payments save for payment of accrued
unused annual and long service leave (where applicable) (other than Non-Executive Directors).
Equity-Based Benefits: The Company has not provided equity based benefits (e.g. grant of shares
or options) to Key Management Personnel during the financial year. The Company has previously
granted unlisted options to Key Management Personnel (refer ‘Options Held By Key Management
Personnel’ below). There were no shares issued as a result of the exercise of options previously
issued to Key Management Personnel during the financial year.
Employee Share Option Plan: The Company has an Employee Share Option Plan (the ESOP) which
was last approved by shareholders at the 2008 Annual General Meeting held on 6 November 200825.
The ESOP was developed to assist in the recruitment, reward, retention and motivation of employees
(and potentially Executive Directors). Under the ESOP, the Board will nominate personnel to
participate and will offer options to subscribe for shares in the Company to those personnel. A
summary of the terms of ESOP is set out in Annexure B to the Company’s Notice of Annual General
Meeting and Explanatory Statement dated 8 October 200826. The Company has not granted any
options to Key Management Personnel during the financial year.
Post-Employment Benefits: The Company does not presently provide retirement benefits to Key
Management Personnel. The Company notes that shareholder approval is required where a Company
proposes to make a “termination payment” (for example, a payment in lieu of notice, a payment for a
post-employment restraint and payments made as a result of the automatic or accelerated vesting of
share based payments) in excess of one year’s “base salary” (defined as the average base salary over
the previous 3 years) to a director or any person who holds a managerial or executive office.
25 Refer SRK’s ASX announcement dated 6 November 2008: Results of Annual General Meeting
26 Refer SRK’s ASX announcement dated 8 October 2008: Notice of 2008 AGM and Explanatory Statement and Proxy Form
ANNUAL REPORT | 38
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
Performance-Related Benefits and Financial Performance of Company: Save for any applicable
STI(s) in place for the Managing Director or any applicable equity-benefits that may be provided to Key
Management Personnel, the current remuneration of Key Management Personnel is fixed, is not
dependent on the satisfaction of a performance condition and is unrelated to the Company’s
performance.
In considering the Company's performance and its effects on shareholder wealth, Directors have had
regard to the data set out below for the latest financial year and the previous four financial years.
Profit/(Loss) Before Income Tax
Basic Earnings/(Loss) per share (cents)
Dividends Paid (total)
Dividends Paid (per share)
Capital Returns Paid (total)
Capital Returns Paid (per share)
VWAP Share Price on ASX for financial year ($)
Closing Bid Share Price on ASX at 30 June ($)
2019
(1,875,093)
(1.29)
-
-
-
-
0.07
0.05
2018
(681,614)
(0.47)
-
-
-
-
0.07
0.05
2017
(1,147,929)
(0.79)
-
-
-
-
0.05
0.04
2016
(628,670)
(0.43)
-
-
-
-
0.05
0.04
2015
(517,864)
(0.36)
-
-
-
-
0.05
0.05
(3)
Details of Remuneration of Key Management Personnel
Details of the nature and amount of each element of remuneration of each Key Management Personnel
paid or payable by the Company during the financial year are as follows:
2019
Key
Management
Personnel
Short-term Benefits
Post-
Employment
Benefits
Other Long-
term
Benefits
Performance
- related
%
Cash
salary and
fees
$
Non-cash
benefit
$
Superannuation
$
Long
service
leave
$
Equity-
Based
Shares &
options
$
Directors:
William Johnson
Farooq Khan
Malcolm Richmond
Victor Ho
Matthew Hammond
Company Secretary:
Victor Ho
-
-
-
-
-
-
208,000
80,000
45,000
45,000
45,000
50,000
-
-
-
-
-
-
19,760
7,600
4,275
4,275
-
4,750
-
-
-
-
-
-
-
-
-
-
-
-
2018
Key
Management
Personnel
Short-term Benefits
Post-
Employment
Benefits
Other
Long-term
Benefits
Performance
- related
%
Cash
salary and
fees
$
Annual
Leave
$
Superannuation
$
Long
service
leave
$
Equity-
Based
Shares &
options
$
Directors:
William Johnson
Farooq Khan
Malcolm Richmond
Victor Ho
Matthew Hammond
Company Secretary:
Victor Ho
-
-
-
-
-
-
208,000
79,999
45,000
44,999
45,000
50,000
-
-
-
-
-
-
19,760
7,600
4,275
4,275
-
4,750
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
227,760
87,600
49,275
49,275
45,000
54,750
Total
$
227,760
87,599
49,275
49,274
45,000
54,750
ANNUAL REPORT | 39
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
(4)
Employment Agreements
Details of the material terms of employment agreements entered by the Company with Key
Management Personnel are as follows:
Key Management
Personnel and
Position Held
William Johnson
(Managing
Director)
Current Base
Salary/Fees
per annum
$208,000
plus employer
superannuatio
n contributions
(currently
9.5% of base
salary)
Relevant
Date(s)
22 April 2013
(date of
employment
agreement)
11 March 2013
(commencement
date)
1 May 2015
(date of effect of
current
remuneration)
Other Current Terms
• Standard annual leave (20 days) and personal/sick leave (10
days paid) entitlements plus entitlement to long service leave
of 60 days after 7 years of service with an additional 5 days
after each year of service thereafter.
• One month’s notice of termination by the Company or
employee. Immediate termination without notice if employee
commits any serious act of misconduct.
• Permitted to be a Non-Executive Director of no more than 2
public companies provided that it does not compromise ability
to devote the care and attention to the Company’s affairs
required by the position.
• Entitlement to cash short-term incentive (STI) payments in
respect of up to 30% of annual base salary, as set by the Board
(having regard
the Remuneration and
Nomination Committee) – no STI was defined in respect of the
2018/2019 financial year and as at the date of this report.
to advice
from
(5) Other Benefits Provided to Key Management Personnel
No Key Management Personnel has during or since the end of the financial year, received or become
entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a
contract made by the Company or a related entity with the Director or with a firm of which he is a
member, or with a Company in which he has a substantial interest.
(6)
Engagement of Remuneration Consultants
to provide remuneration
The Company has not engaged any remuneration consultants
recommendations in relation to Key Management Personnel during the year. The Board has
established a policy for engaging external Key Management Personnel remuneration consultants
which includes, inter alia, that the Non-Executive Directors on the Remuneration Committee be
responsible for approving all engagements of and executing contracts to engage remuneration
consultants and for receiving remuneration recommendations from remuneration consultants regarding
Key Management Personnel. Furthermore, the Company has a policy that remuneration advice
provided by remuneration consultants be quarantined from Management where applicable.
(7)
Shares held by Key Management Personnel
The number of ordinary shares in the Company held by Key Management Personnel is set below:
Key Management Personnel
Farooq Khan
William Johnson
Victor Ho
Malcolm Richmond
Matthew Hammond
Note:
Balance at
30 June 2018
750,803
249,273
-
-
-
Received as part
of remuneration
-
-
-
-
-
Net Other
Change
-
100,000 27
-
-
-
Balance at
30 June 2019
750,803
349,273
-
-
-
The disclosures of shareholdings above are in accordance with the accounting standards which require disclosure of shares held directly,
indirectly or beneficially by each key management person, a close member of the family of that person, or an entity over which either of
these persons have, directly or indirectly, control, joint control or significant influence (as defined under Accounting Standard AASB 124
Related Party Disclosures)
27 Refer Strike’s ASX Announcement dated 20 May 2019: Change of Director’s Interest Notice
ANNUAL REPORT | 40
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
(8)
Voting and Comments on the Remuneration Report at the 2018 AGM
At the Company’s most recent (2018) AGM, a resolution to adopt the prior year (2018) Remuneration
Report was put to a vote and passed unanimously on a show of hands with the proxies received also
indicating majority (99.9%) support in favour of adopting the Remuneration Report.28 No comments
were made on the Remuneration Report at the 2018 AGM.
This concludes the audited Remuneration Report.
28 Refer Strike’s ASX announcement dated 29 November 2018: Results of 2018 Annual General Meeting
ANNUAL REPORT | 41
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company insures Directors and Officers against liability they may incur in respect of any wrongful acts
or omissions made by them in such capacity (to the extent permitted by the Corporations Act 2001 (Cth))
(D&O Policy). Details of the amount of the premium paid in respect of the insurance policies are not disclosed
as such disclosure is prohibited under the terms of the contract.
DIRECTORS’ AND OFFICERS’ DEEDS
In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by
the Corporations Act 2001 (Cth)), the Company has also entered into a deed with each of the Directors and
the Company Secretary (Officer) to regulate certain matters between the Company and each Officer, both
during the time the Officer holds office and after the Officer ceases to be an officer of the Company, including
the following matters:
•
•
The Company’s obligation to indemnify an Officer for liabilities or legal costs incurred as an officer of
the Company (to the extent permitted by the Corporations Act 2001 (Cth)); and
Subject to the terms of the deed and the Corporations Act 2001 (Cth), the Company may advance
monies to the Officer to meet any costs or expenses of the Officer incurred in circumstances relating
to the indemnities provided under the deed and prior to the outcome of any legal proceedings brought
against the Officer.
LEGAL PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of a court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of such proceedings. The Company was not a party to any such proceedings during and
since the financial year.
AUDITORS
Details of the amounts paid or payable to the Auditors for audit and non-audit services provided during the
financial year are set out below:
Auditor
Rothsay Auditing
Audit & Review Fees
$
14,000
Non-Audit Services
$
-
Total
$
14,000
The Board is satisfied that the provision of non-audit services by the Auditors during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth). The
Board is satisfied that the nature of the non-audit services disclosed above did not compromise the general
principles relating to auditor independence as set out in the Institute of Chartered Accountants in Australia
and APES 110 Code of Ethics for Professional Accountants: Professional Independence, including reviewing
or auditing the auditor’s own work, acting in a management or decision making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risk and rewards.
Rothsay Auditing continues in office in accordance with Section 327 of the Corporations Act 2001 (Cth).
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act
2001 (Cth) forms part of this Directors Report and is set out on page 44. This relates to the Audit Report,
where the Auditors state that they have issued an independence declaration.
ANNUAL REPORT | 42
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
EVENTS SUBSEQUENT TO BALANCE DATE
The Directors are not aware of any matters or circumstances at the date of this Directors’ Report, other than
those referred to in this Directors’ Report or the financial statements or notes thereto (in particular Note 23),
that have significantly affected or may significantly affect the operations, the results of operations or the state
of affairs of the Company in subsequent financial years.
Signed for and on behalf of the Directors in accordance with a resolution of the Board,
Farooq Khan
Chairman
26 September 2019
William Johnson
Managing Director
ANNUAL REPORT | 43
26
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
for the financial year ended 30 June 2019
REVENUE
Interest revenue
Other
Net gain on financial assets at fair value through profit or loss
Dividend revenue
Other income
Foreign exchange gain
TOTAL REVENUE AND INCOME
EXPENSES
Exploration and evaluation expenses
Net loss on financial assets at fair value through profit or loss
Personnel expenses
Corporate expenses
Occupancy expenses
Finance expenses
Administration expenses
LOSS BEFORE INCOME TAX
Income tax expense
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Other Comprehensive Income, Net of Tax
Note
2
2019
$
2018
$
35,281
82,423
-
101,112
159,151
10,917
529,960
40,462
-
13,731
306,461
666,576
(953,112)
(21,362)
(524,647)
(480,390)
(60,546)
(8,969)
(331,421)
-
(508,047)
(335,782)
(43,618)
(5,510)
(132,528)
(123,812)
(1,875,093)
(681,614)
-
-
(1,875,093)
(681,614)
3
5
Exchange differences on translation of foreign operations
77,344
(187,686)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(1,797,749)
(869,300)
LOSS PER SHARE FOR LOSS ATTRIBUTABLE TO THE
ORDINARY EQUITY HOLDERS OF THE COMPANY:
Basic and diluted loss per share (cents)
6
(1.29)
(0.47)
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 45
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2019
CURRENT ASSETS
Cash and cash equivalents
Financial assets at fair value through profit or loss
Receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation expenditure
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2019
$
2018
$
7
8
11
12
13
14
15
1,289,411
1,340,686
166,391
4,000
2,361,403
1,932,400
46,221
3,436
2,800,488
4,343,460
348,956
3,502
581,433
2,907
352,458
584,340
3,152,946
4,927,800
112,307
5,685
89,610
5,487
117,992
95,097
117,992
95,097
3,034,954
4,832,703
148,439,925
148,439,925
15,074,101
14,996,757
(160,479,072)
(158,603,979)
3,034,954
4,832,703
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 46
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the financial year ended 30 June 2019
Issued capital
Currency
translation
reserve
Share-based
payments
reserve
Accumulated
losses
$
$
$
$
Total
$
BALANCE AT 1 JUL 2017
148,439,925
1,951,417
13,233,026
(157,922,365)
5,702,003
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
(187,686)
(187,686)
-
-
-
(681,614)
-
(681,614)
(187,686)
(681,614)
(869,300)
BALANCE AT 30 JUN 2018
148,439,925
1,763,731
13,233,026
(158,603,979)
4,832,703
BALANCE AT 1 JUL 2018
148,439,925
1,763,731
13,233,026
(158,603,979)
4,832,703
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
77,344
77,344
-
-
-
-
(1,875,093)
(1,875,093)
-
-
77,344
-
(1,875,093)
(1,797,749)
BALANCE AT 30 JUN 2019
148,439,925
1,841,075
13,233,026
(160,479,072)
3,034,954
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 47
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the financial year ended 30 June 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payments for exploration and evaluation
2019
$
2018
$
(1,166,933)
(1,154,925)
(561,484)
(542,952)
NET CASH USED IN OPERATING ACTIVITIES
7(a)
(1,728,417)
(1,697,877)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Dividends received
Payment for share investments
Proceeds from share investments
Payment for purchases of plant and equipment
35,281
101,112
112,176
40,462
(3,536,739)
(4,237,532)
3,971,840
2,835,092
(3,330)
(1,911)
NET CASH USED IN INVESTING ACTIVITIES
568,164
(1,251,713)
NET DECREASE IN CASH HELD
(1,160,253)
(2,949,590)
Cash and cash equivalents at beginning of financial year
2,361,403
5,308,855
Effect of exchange rate changes on cash held
88,261
2,138
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR
7
1,289,411
2,361,403
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 48
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
1.
ABOUT THIS FINANCIAL REPORT
(c)
1.1
Background
the consolidated
financial report covers
financial
This
statement of the consolidated entity consisting of Strike
Resources Limited (the Company), its subsidiaries and
investments in associates (the Consolidated Entity or
Strike). The financial report is presented in the Australian
currency.
Strike Resources Limited is a company limited by shares
incorporated in Australia and whose shares are publicly traded
on the Australian Securities Exchange (ASX).
These
financial statements have been prepared on a
streamlined basis where key information is grouped together
for ease of understanding and readability. The notes include
information which is required to understand the financial
statements and is material and relevant to the operations,
financial position and performance of the Consolidated Entity.
Information is considered material and relevant if, for example:
(a)
(b)
(c)
(d)
the amount in question is significant because of its size
or nature;
it is important for understanding the results of the
Consolidated Entity;
it helps to explain the impact of significant changes in
the Consolidated Entity’s business; or
it relates to an aspect of the Consolidated Entity’s
operations
future
performance.
that may be
important
its
to
The notes to the financial statements are organised into the
following sections:
(a)
line
Key Performance: Provides a breakdown of the key
individual
statement of
comprehensive income that is most relevant to
understanding performance and shareholder returns
for the year:
items
the
in
Notes
2
3
4
5
6
Revenue
Expenses
Segment information
Income tax expense
Loss per share
(b)
Financial Risk Management: Provides information
about
the Consolidated Entity’s exposure and
management of various financial risks and explains
how these affect the Consolidated Entity’s financial
position and performance:
Notes
7
8
9
10
Cash and cash equivalents
Financial assets at fair value through
profit or loss
Financial risk management
Fair value measurement of financial
instruments
Other Assets and Liabilities: Provides information
on other balance sheet assets and liabilities that do
not materially affect performance or give rise to
material financial risk:
Notes
11
12
13
Receivables
Exploration and evaluation expenditure
Payables
Capital Structure: This section outlines how the
Consolidated Entity manages its capital structure and
related financing costs (where applicable), as well as
capital adequacy and reserves. It also provides
details on the dividends paid by the Company:
Notes
14
15
16
Issued capital
Reserve
Capital risk management
Consolidated Entity Structure: Provides details and
disclosures relating to the parent entity of the
Consolidated Entity, controlled entities, investments
in associates and any acquisitions and/or disposals of
businesses in the year. Disclosure on related parties
is also provided in the section:
Notes
17
18
19
Parent entity information
Investment in controlled entities
Related party transactions
Other: Provides information on items which require
disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements
however, are not
in
understanding the financial performance or position of
the Consolidated Entity:
considered
significant
(d)
(e)
(f)
Notes
20
21
22
23
Auditors' remuneration
Commitments
Contingencies
Events occurring after the reporting
period
Significant and other accounting policies that summarise the
measurement basis used and presentation policies and are
relevant to an understanding of the financial statements are
provided throughout the notes to the financial statements.
1.2
Basis of Preparation
These general purpose financial statements have been
prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of
the Australian
Accounting Standards Board, Australia Accounting
Interpretations and the Corporations Act 2001 (Cth). The
Company is a for-profit entity for the purpose of preparing the
financial statements.
Compliance with
Standards (IFRS)
International Financial Reporting
The consolidated financial statements of the Consolidated
Entity comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards
Board (IASB).
ANNUAL REPORT | 49
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
Reporting Basis and Financial Statement Presentation
The financial report has been prepared on a going concern
basis and is based on historical costs modified by the
revaluation of financial assets and financial liabilities for which
the fair value basis of accounting has been applied.
The principal accounting policies adopted in the preparation of
these financial statements have been consistently applied to
all the years presented, unless otherwise stated.
1.3
Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the Company as at 30 June 2019 and the
results of its subsidiaries for the year then ended. The
Company and its subsidiaries are referred to in this financial
report as Strike or the Consolidated Entity.
All inter-company balances and transactions between entities
in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation.
1.4
Comparative Figures
Where required by the Accounting Standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial period.
1.5
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown
inclusive of GST. Cash flows are presented in the Statement
of Cash Flows on a gross basis, except for the GST component
of investing and financing activities, which are disclosed as
operating cash flows.
ANNUAL REPORT | 50
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
1.6
Summary of Accounting Standards Issued But Not Yet Effective
The following new Accounting Standards and Interpretations (which have been released but not yet adopted) have no material
impact on the Consolidated Entity’s financial statements or the associated notes therein.
AASB
reference
AASB 16
Title and
Affected
Standard(s)
Leases
Application
date
Annual
reporting
periods
beginning on or
after 1 January
2019
Nature of Change
AASB 16 requires lessees to account for all leases under a single on-
balance sheet model in a similar way to finance leases under AASB 117
Leases. The standard includes two recognition exemptions for lessees –
leases of ’low-value’ assets (e.g., personal computers) and short-term
leases (i.e., leases with a lease term of 12 months or less). At the
commencement date of a lease, a lessee will recognise a liability to make
lease payments (i.e., the lease liability) and an asset representing the right
to use the underlying asset during the lease term (i.e., the right-of-use
asset).
Lessees will be required to separately recognise the interest expense on the
lease liability and the depreciation expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence
of certain events (e.g., a change in the lease term, a change in future lease
payments resulting from a change in an index or rate used to determine
those payments). The lessee will generally recognise the amount of the
remeasurement of the lease liability as an adjustment to the right-of-use
asset.
Lessor accounting is substantially unchanged from today’s accounting under
AASB 117. Lessors will continue to classify all leases using the same
classification principle as in AASB 117 and distinguish between two types of
leases: operating and finance leases.
ANNUAL REPORT | 51
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
2.
REVENUE
The Consolidated Entity's operating loss before income tax includes the
following items of revenue:
Revenue
Interest revenue
Other
Net gain on financial assets at fair value through profit or loss
Dividend revenue
Other income
Foreign exchange gain
2019
$
2018
$
35,281
35,281
-
101,112
159,151
10,917
82,423
82,423
529,960
40,462
-
13,731
306,461
666,576
Accounting policy
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated
Entity and the revenue can be reliably measured. All revenue is stated net of the amount of Goods and Services
Tax (GST) except where the amount of GST incurred is not recoverable from the Australian Tax Office. The
following specific recognition criteria must also be met before revenue is recognised:
(i) Sale of financial assets, goods and other assets
Revenue from the sale of financial assets, goods or other assets is recognised when the Consolidated Entity
has passed control of the financial assets, goods or other assets to the buyer.
(ii)
Interest revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
(iii) Dividend revenue
Dividend revenue is recognised when the right to receive a dividend has been established. The Consolidated
Entity brings dividend revenue to account on the applicable ex-dividend entitlement date.
(iv) Other revenues
Other revenues are recognised on a accruals basis.
3.
EXPENSES
2019
$
2018
$
The Consolidated Entity's operating loss before income tax includes the
following items of expenses:
Net loss on financial assets at fair value through profit or loss
21,362
-
Exploration and evaluation expenses
Impairment loss
Other exploration and evaluation expenses
Personnel expenses
Salaries, fees and employee benefits
Occupancy expenses
Finance expenses
686,683
266,429
524,647
60,546
8,969
319,363
12,058
508,047
43,618
5,510
ANNUAL REPORT | 52
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
3.
EXPENSES (continued)
Corporate expenses
Professional fees
ASX fees
Accounting, taxation and related administration
Audit
Share registry
Other corporate expenses
Administration expenses
Insurance
Travel, accommodation and incidentals
Depreciation
Other administration expenses
2019
$
2018
$
262,436
27,053
160,126
14,000
6,207
10,568
16,897
49,922
2,075
63,634
138,675
23,215
139,108
14,000
6,331
14,453
16,661
44,547
827
61,777
2,181,554
1,348,190
Accounting policy
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income,
except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or
are attributable to part of the net investment in a foreign operation. Foreign exchange gains or losses that relate to
borrowings are presented in the Consolidated Statement of Profit or Loss and Other Comprehensive Income within
finance costs. All other foreign exchange gains and losses are presented in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income on a net basis within other income or operating expenses.
4.
SEGMENT INFORMATION
The operating segments are reported in a manner consistent with the internal reporting provided to the Managing
Director. The Managing Director is responsible for allocating resources and assessing performance of
the
operating segments and has considered the business and geographical perspectives of the operating results and
determined that the Consolidated Entity operates only in Australia, Peru and Argentina.
ANNUAL REPORT | 53
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
4.
SEGMENT INFORMATION (continued)
2019
Revenue
Other
Total segment revenues
Net loss on financial assets
at fair value through profit or loss
Exploration and evaluation expenses
Personnel expenses
Corporate expenses
Finance expenses
Depreciation expense
Other expenses
Total segment loss
Adjusted EBITDA
Total segment assets
Total segment liabilities
2018
Revenue
Other
Total segment revenues
Exploration and evaluation expenses
Personnel expenses
Corporate expenses
Finance expenses
Depreciation expense
Other expenses
Total segment loss
Adjusted EBITDA
Total segment assets
Total segment liabilities
Argentina
$
-
-
-
-
-
-
-
-
-
-
-
-
340,389
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Peru
$
-
14,174
14,174
-
257,969
-
240,780
7,016
-
35,105
(526,696)
(526,696)
73,788
84,387
-
-
-
238,050
-
72,915
2,918
-
8,247
(322,130)
(322,130)
Australia
$
Total
$
35,281
35,281
257,006
271,180
292,287
21,362
695,143
524,647
239,610
1,953
2,075
306,461
21,362
953,112
524,647
480,390
8,969
2,075
155,894
190,999
(1,348,397)
(1,875,093)
(1,346,313)
(1,873,009)
2,738,769
3,152,946
33,605
117,992
82,423
570,422
652,845
93,371
508,047
262,867
2,592
827
144,625
(359,484)
(358,273)
82,423
570,422
652,845
331,421
508,047
335,782
5,510
827
152,872
(681,614)
(680,403)
67,093
83,385
4,860,707
4,927,800
11,712
95,097
Accounting policy
The operating segments are reported in a manner consistent with the internal reporting provided to the Managing
Director. The Managing Director is responsible for allocating resources and assessing performance of
the
operating segments and has considered the business and geographical perspectives of the operating results and
determined that the Consolidated Entity operates only in Australia, Peru and Argentina.
ANNUAL REPORT | 54
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
5.
INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current tax
Deferred tax
2019
$
-
-
-
2018
$
-
-
-
(b)
The prima facie tax on operating loss before income tax is reconciled
to the income tax as follows:
Prima facie tax payable on operating loss before income tax at 27.5%
(2018: 27.5%)
(515,650)
(187,444)
Adjust tax effect of:
Non-deductible expenses
Movement in unrecognised temporary differences
Current year tax losses not recognised
23,363
(515,088)
1,007,375
1,131
(89,550)
275,863
Income tax attributable to entity
-
-
(c) Unrecognised deferred tax balances
Unrecognised deferred tax asset - revenue losses
Unrecognised deferred tax asset - other
8,278,713
4,238,211
8,103,922
4,238,211
12,516,924
12,342,133
Critical accounting judgement and estimate
Deferred tax assets have not been recognised as, in the Directors' opinion, it is not probable that future taxable
profit will be available against which the Consolidated Entity can utilise the benefits. The utilisation of revenue and
capital tax losses are subject to compliance with taxation legislation.
Accounting policy
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and for unused tax losses. The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the
Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
ANNUAL REPORT | 55
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
5.
INCOME TAX EXPENSE (continued)
Accounting policy (continued)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets
and liabilities are not recognised for temporary differences between the carrying amount and tax bases of
investments in foreign operations where the Company is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities, and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
Other Comprehensive Income or directly in equity. In this case, the tax is also recognised in Other Comprehensive
Income or directly in equity, respectively.
6.
LOSS PER SHARE
Basic and diluted loss per share
The following represents the loss and weighted average number of shares used
in the EPS calculations:
Net loss after income tax
Weighted average number of ordinary shares
2019
cents
(1.29)
2018
cents
(0.47)
(1,875,093)
(681,614)
Shares
Shares
145,334,268
145,334,268
Accounting policy
Basic earnings/loss per share is determined by dividing the operating result after income tax by the weighted
average number of ordinary shares on issue during the financial period.
Diluted earnings/loss per share adjusts the figures used in the determination of basic earnings/loss per share by
taking into account amounts unpaid on ordinary shares and any reduction in earnings/loss per share that will
probably arise from the exercise of options outstanding during the financial period.
ANNUAL REPORT | 56
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
7.
CASH AND CASH EQUIVALENTS
Cash at bank
Term deposits
(a)
Reconciliation of operating loss after income tax to
net cash used in operating activities
Loss after income tax
Add non-cash items:
Depreciation
Write off of office equipment
Impairment loss
Unrealised movement in financial assets
Adjustment for movement in foreign exchange
Changes in assets and liabilities:
Receivables
Other current assets
Financial assets at fair value through profit or loss
Exploration and evaluation expenditure
Payables
Provisions
2019
$
1,264,411
25,000
1,289,411
2018
$
335,649
2,025,754
2,361,403
(1,875,093)
(681,614)
2,075
827
659
-
- 319,363
301,802
(250,707)
(10,917)
(189,825)
(138,941)
(113,629)
17,066
(280,441)
232,477
23,151
(255)
(1,853)
(279,253)
(530,894)
36,268
(6,560)
(1,728,417)
(1,697,877)
Accounting policy
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less and bank overdrafts. Bank overdrafts (if any) are shown
within short-term borrowings in current liabilities on the Statement of Financial Position.
8.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Listed securities at fair value
2019
$
1,340,686
2018
$
1,932,400
Accounting policy
Financial
instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition, financial assets at fair value
through profit and loss acquired principally for the purpose of selling in the short term or if so designated by
management and within the requirements of AASB 9 (Financial
Instruments) will recognise its realised and
unrealised gains and losses arising from changes in the fair value of these assets in the Statement of Profit or Loss
and Other Comprehensive Income in the period in which they arise.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the balance sheet date which is the current bid
price.
ANNUAL REPORT | 57
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
9.
FINANCIAL RISK MANAGEMENT
The Consolidated Entity's financial
instruments consist of deposits with banks, receivables and payables. The
Consolidated Entity's financial instruments are subject to market (which includes interest rate and foreign exchange
risk), credit and liquidity risks.
The Board is responsible for the overall internal control framework (which includes risk management) but no cost-
effective internal control system will preclude all errors and irregularities. The system is based, in part, on the
appointment of suitably qualified management personnel. The effectiveness of the system is continually reviewed
by management and at least annually by the Board.
The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30
days. The Consolidated Entity holds the following financial assets and liabilities:
Cash and cash equivalents
Receivables
Payables
Net financial assets
(a) Market risk
Note
7
11
13
2019
$
2018
$
1,289,411
2,361,403
166,391
46,221
1,455,802
2,407,624
(112,307)
(89,610)
1,343,495
2,318,014
Market risk is the risk that the fair value and/or future cash flows from a financial instrument will fluctuate as a
result of changes in market factors. Market risk comprises of price risk from fluctuations in the fair value of
equities, foreign exchange risk from fluctuations in foreign currencies and interest rate risk from fluctuations in
market interest rates.
(i)
Price risk
The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by
the Consolidated Entity and classified in the Statement of Financial Position at fair value through profit or
loss. The Consolidated Entity is exposed to commodity price risk in respect of its investments indirectly
via market risk and equity securities price risk.
The value of a financial instrument will fluctuate as a result of changes in market prices, whether those
changes are caused by factors specific to the individual
instrument, its issuer or factors affecting all
instruments in the market. By its nature as an investment company, the Consolidated Entity will always
be subject to market risk as it invests its capital in securities that are not risk free. This is reflected in the
market price of these securities which can and will fluctuate. The Consolidated Entity does not manage
this risk through entering into derivative contracts, futures, options or swaps.
Equity price risk is minimised through ensuring that investment activities are undertaken in accordance
with Board established mandate limits and investment strategies.
The Consolidated Entity has performed a sensitivity analysis on its exposure to equity securities price
risk for listed and unlisted financial assets at fair value through profit or loss. The analysis demonstrates
the effect on the current year results and equity which could result from a change in these risks. The
ASX/S&P 200 Accumulation Index was utilised as the benchmark for the investment portfolio.
ANNUAL REPORT | 58
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
9.
FINANCIAL RISK MANAGEMENT (continued)
(i)
Price risk (continued)
Impact on post-tax profit
Impact on equity
Increase 5%
Decrease 5%
(ii) Foreign exchange risk
2019
$
67,034
(67,034)
2018
$
96,620
(96,620)
2019
$
67,034
(67,034)
2018
$
96,620
(96,620)
The Consolidated Entity operates internationally and is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to the US dollar and Peruvian Nuevo Soles.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Consolidated Entity's functional currency. The risk is measured
using sensitivity analysis and cash flow forecasting.
The Consolidated Entity has a policy of not hedging foreign exchange risk and therefore has not entered
including
into any hedging against movements in foreign currencies against
forward exchange contracts, as at the reporting date and is currently fully exposed to foreign exchange
risk.
the Australian dollar,
The Consolidated Entity's exposure to foreign exchange risk expressed in US dollars at the reporting
date are as follows:
Cash and cash equivalents
Payables
Net financial assets/(liabilities)
2019
USD
39,695
(34,007)
5,688
2018
USD
36,742
(58,970)
(22,228)
The Consolidated Entity has performed a sensitivity analysis on its exposure to exchange risk. The
management assessment is based upon an analysis of current and future market position. The analysis
demonstrates the effect on the current year results and equity when the Australian dollar strengthened
or weakened by 10% against the foreign currencies detailed above.
Increase 10%
Decrease 10%
Impact on post-tax profit
Impact on equity
2019
$
569
(569)
2018
$
(2,223)
2,223
2019
$
-
-
2018
$
-
-
(iii)
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market
interest rates. The Consolidated Entity's exposure to market risk for changes in interest rates relate
primarily to investments held in interest bearing instruments. The weighted average interest rate of the
cash at bank for the year for the table below is 1.93% (2018: 2.44%).
ANNUAL REPORT | 59
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
9.
FINANCIAL RISK MANAGEMENT (continued)
(ii)
Interest rate risk (continued)
Cash at bank
Term deposit
2019
$
1,264,411
25,000
1,289,411
2018
$
335,649
2,025,754
2,361,403
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in
interest rates based on observation of current market conditions. The calculations are based on a
change in the average market interest rate and the financial instruments that are sensitive to changes in
interest rates.
Increase by 25bps
Decrease by 25bps
Impact on post-tax profit
Impact on equity
2019
$
3,224
(3,224)
2018
$
5,904
(5,904)
2019
$
-
-
2018
$
-
-
(b)
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated
with financial
liabilities. The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash
investments can be realised to meet trade and other payables arising in the normal course of business. The
financial liabilities disclosed in the above table have a maturity obligation of not more than 30 days.
(c) Credit risk
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on
its contractual obligations resulting in financial loss to the Consolidated Entity. Credit risk arises from cash
and cash equivalents and deposits with banks and financial institutions, including outstanding receivables and
committed transactions. Concentrations of credit risk are minimised primarily by the management carrying out
all market
transactions through recognised and creditworthy brokers and the monitoring of receivable
balances. The Consolidated Entity's business activities do not necessitate the requirement for collateral as a
means of mitigating the risk of financial loss from defaults.
The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference
to external credit ratings (if available with Standard & Poor's) or to historical information about counterparty
default rates. The maximum exposure to credit risk at reporting date is the carrying amount of the financial
assets as summarised below:
Cash and cash equivalents
AA-
No external credit rating available
Receivables (due within 30 days)
No external credit rating available
2019
$
2018
$
1,232,048
2,311,184
56,105
49,465
1,288,153
2,360,649
166,391
46,221
ANNUAL REPORT | 60
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
Fair value hierarchy
AASB 13 (Fair Value Measurement) requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
(i)
(ii)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and
(iii)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Financial assets at fair value through
profit or loss:
Listed securities at fair value
Level 1
Level 2
Level 3
$
$
$
Total
$
2019
2018
1,340,686
1,932,400
-
-
-
-
1,340,686
1,932,400
There have been no transfers between the levels of the fair value hierarchy during the financial year.
(a) Valuation techniques
The fair value of the listed securities traded in active markets is based on closing bid prices at the end of the
reporting period. These investments are included in Level 1.
The fair value of any assets that are not traded in an active market are determined using certain valuation
techniques. The valuation techniques maximise the use of observable market data where it is available, or
independent valuation and rely as little as possible on entity specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the
significant inputs is not based on observable market data, the instrument is included in Level 3.
(b) Fair values of other financial assets and liabilities
Cash and cash equivalents
Receivables
Payables
Note
7
11
13
2019
$
2018
$
1,289,411
2,361,403
166,391
1,455,802
(112,307)
1,343,495
46,221
2,407,624
(89,610)
2,318,014
Due to their short-term nature, the carrying amounts of cash, current receivables and current payables is
assumed to approximate their fair value.
ANNUAL REPORT | 61
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
11. RECEIVABLES
Receivable from sale of listed securities
Other receivables
Interest receivable
Risk exposure
2019
$
135,252
31,139
-
166,391
2018
$
-
34,248
11,973
46,221
The Consolidated Entity’s exposure to credit and interest rate risks is discussed in Note 9.
Accounting policy
AASB 9 (Financial Instruments) introduces a new expected credit loss (ECL) impairment model that requires the
Consolidated Entity to adopt an ECL position across the Consolidated Entity’s financial assets at 1 July 2018. The
Consolidated Entity’s receivables balance comprises deposits, GST refunds from the Australian Tax Office and
distributions from managed trusts.
At each reporting date, the Consolidated Entity reviews the carrying value of its financial assets based on the ECL
model under AASB 9, which proposes three approaches in assessing impairment:
(i)
the simplified approach (which will be applied to most trade receivables) which requires the recognition of
lifetime ECLs by considering forward-looking assumptions and information regarding expected future conditions
affecting historical customer default rates;
(ii) the general approach (which will be applied to most loans and debt securities) whereby ECL is recognised in
two stages. For credit exposures for which there has not been a significant increase in credit risk since initial
recognition, the Consolidated Entity will provide for credit losses that result from default events that are possible
within the next 12 months. For those credit exposures for which there has been a significant increase in credit risk
since initial recognition, a loss allowance will arise for credit losses expected over the remaining life of exposure,
irrespective of the timing of the default; and
(iii) For purchased or originated credit-impaired receivables, the fair value at initial recognition already takes into
account lifetime expected losses. At each reporting date, the Consolidated Entity updates its estimated cash flows
and adjusts the loss allowance accordingly.
The loss allowances for financial assets are based on the assumptions about risk of default and expected loss
rates. The Consolidated Entity uses judgement in making these assumptions and selecting the inputs to the
impairment calculation, based on the Consolidated Entity’s past history, existing market conditions as well as
forward looking estimates at the end of each reporting period. The Consolidated Entity has not recognised any
additional impairment to its current receivables or non-current receivables as a result of the application of AASB 9.
This is due to the fact that the Consolidated Entity does not consider that there are any further ECL to the current
carrying values of its current receivables or its non-current receivables.
12. EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Exploration and evaluation costs
Impairment loss
Closing balance
2019
$
581,433
454,206
(686,683)
348,956
2018
$
369,902
530,894
(319,363)
581,433
ANNUAL REPORT | 62
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
12. EXPLORATION AND EVALUATION EXPENDITURE (continued)
Critical accounting estimates and judgements
The Consolidated Entity has assessed the carrying amount of the exploration and evaluation in accordance with
AASB 6 (Exploration for and Evaluation of Mineral Resources). The ultimate recoverability of deferred exploration
and evaluation expenditure is dependent on the successful development or sale of the relevant area of interest.
Accounting policy
Exploration and evaluation expenditure incurred is initially capitalised in respect of each identifiable area of interest
where the Consolidated Entity has right of tenure. These costs are only carried forward to the extent that they are
expected to be recouped through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence or otherwise of economically-recoverable
reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in
which the decision to abandon the area is made.
Under AASB 6 (Exploration for and Evaluation of Mineral Resources), if facts and circumstances suggest that the
carrying amount of any recognised exploration and evaluation assets may be impaired, the Consolidated Entity
must perform impairment tests on those assets and measure any impairment in accordance with AASB 136
(Impairment of Assets). Any impairment loss is to be recognised as an expense. A regular review is undertaken of
each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area
of interest.
13. PAYABLES
Trade payables
Other creditors and accruals
Withholding tax
2019
$
89,417
22,890
-
112,307
2018
$
62,043
27,114
453
89,610
Accounting policy
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of
the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the
reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using
the effective interest method.
14.
ISSUED CAPITAL
2019
$
2018
$
145,334,268 (2018: 145,334,268) fully paid ordinary shares
148,439,925
148,439,925
Accounting policy
Ordinary shares are classified as equity. Fully paid ordinary shares carry one vote per share and the right to
dividends.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
ANNUAL REPORT | 63
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
15. RESERVE
Share-based payments reserve
Foreign currency translation reserve
(a) Share-based payments reserve
2019
$
2018
$
13,233,026
13,233,026
1,841,075
1,763,731
15,074,101
14,996,757
The share-based payments reserve records the consideration (net of expenses) received by the Company on
the issue of options. In relation to options issued to Directors and employees for nil consideration, the fair
values of these options are included in the share-based payments reserve.
(b) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency
translation reserve as described in the accounting policy note below and accumulate in a separate reserve
within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
Accounting policy
Foreign currency translation reserve
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different
from the presentation currency are translated into the
presentation currency as follows:
(i)
(ii)
assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
income and expenses for Consolidated Statement of Profit or Loss and Other Comprehensive Income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions), and
(iii) all resulting exchange differences are recognised in Other Comprehensive Income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in Other
Comprehensive Income.
16. CAPITAL RISK MANAGEMENT
The Company's objectives when managing its capital are to safeguard its ability to continue as a going concern, so
that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a
capital structure balancing the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the Company
and shareholders from time to time, including undertaking capital raisings, share buy-backs, capital reductions and
selling assets to reduce debt.
The Consolidated Entity has no external borrowings.
ANNUAL REPORT | 64
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
17. PARENT ENTITY INFORMATION
The following information provided relates to the Company, Strike Resources
Limited, as at 30 June 2019.
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive income for the year
2019
$
2018
$
(811,151)
(349,906)
-
-
(811,151)
(349,906)
Statement of financial position
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
Other
Non current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Options reserve
Accumulated losses
Equity
The parent entity does not have any contingent assets or liabilities.
18.
INVESTMENT IN CONTROLLED ENTITIES
Investment in controlled entities
Incorporated
Strike Finance Pty Ltd
Strike Australian Operations Pty Ltd
Strike Operations Pty Ltd
Strike Resources Peru S.A.C.
Apurimac Ferrum S.A.C.
Ferrum Trading S.A.C
Hananta S.A.
Australia
Australia
Australia
Peru
Peru
Peru
Argentina
1,233,306
1,334,422
152,708
2,675,269
5,395,705
2,311,937
1,923,400
32,029
1,917,597
6,184,963
33,605
33,605
11,712
11,712
5,362,100
6,173,251
148,439,924
148,439,924
13,233,025
13,233,025
(156,310,849)
(155,499,698)
5,362,100
6,173,251
Ownership interest
2019
100%
100%
100%
100%
100%
100%
90%
2018
100%
100%
100%
100%
100%
100%
-
ANNUAL REPORT | 65
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
18.
INVESTMENT IN CONTROLLED ENTITIES (continued)
Accounting policy
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The
Consolidated Entity controls an entity when the group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains on transactions in the Consolidated Entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
assets transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Consolidated Entity.
19. RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or
payable to each member of the Consolidated Entity's KMP for the year ended 30 June 2019. The total
remuneration paid to KMP of the Consolidated Entity during the year is as follows:
Directors
Short-term employee benefits
Post-employment benefits
Other KMP
Short-term employee benefits
Post-employment benefits
2019
$
423,000
35,910
50,000
4,750
513,660
2018
$
422,998
35,910
50,000
4,750
513,658
(b) Transactions with other related parties
No other related party transactions have been identified other than those disclosed above.
20. AUDITORS' REMUNERATION
During the year the following fees were paid for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
Audit and review of financial statements
Rothsay Auditing
2019
$
14,000
2018
$
14,000
ANNUAL REPORT | 66
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
21.
COMMITMENTS
(a)
Lease Commitments
On 1 February 2019, the Consolidated Entity entered into a non-cancellable operating lease
agreement for shared office accommodation. The lease was for a further 12 month term expiring on
or about 31 January 2020. The lease commitment is the Consolidated Entity's share of the lease
costs and includes all outgoings (inclusive of GST).
(b) Mineral Tenements/Concessions - Commitments for Expenditure
(i)
Australian Tenements
In order to maintain current rights of tenure to exploration tenements, the holders of Australian
mineral tenements are required to outlay lease rentals and meet minimum expenditure
commitments. The Consolidated Entity does not currently have any material commitments
for expenditure relating to Australian tenements.
(ii)
Peruvian Mineral Concessions
The Consolidated Entity is required to pay annual licence fees by 30 June of each year, at
rates which vary on an amount per-hectare basis. The total amount of this commitment will
depend upon the number and area of concessions retained, relinquished or granted (if any)
and cannot therefore be reliably estimated.
22.
CONTINGENCIES
(a)
Australian Native Title
The Consolidated Entity's tenements in Australia may be subject to native title applications in the
future. At this stage, it is not possible to quantify the impact (if any) that native title may have on the
operations of the Consolidated Entity.
(b)
Government Royalties
The Consolidated Entity is liable to pay royalties on production obtained from its mineral
tenements/concessions.
(c)
Directors' Deeds
The Consolidated Entity has entered into deeds of indemnity with Strike Resources Limited Directors,
indemnifying them against liability incurred in discharging their duties as Directors/officers of the
Consolidated Entity. As at the reporting date, no claims have been made under any such indemnities
and, accordingly, it is not possible to quantify the potential financial obligation of the Consolidated
Entity under these indemnities.
ANNUAL REPORT | 67
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
22.
CONTINGENCIES (continued)
(d)
Deferred Payments from Settlement Agreement Relating to Apurimac Ferrum SAC
Pursuant to a settlement agreement dated 30 December 2012 whereby the Consolidated Entity
acquired the (50%) balance of equity interest in Apurimac Ferrum SAC (AF) (the holder of the
Apurimac and Cusco Projects) from D&C Pesca SAC, the Consolidated Entity has a series of
deferred payment obligations as outlined below.
The Consolidated Entity has payment obligations if certain milestones are achieved as follows:
(i)
(ii)
Resource Milestone Payment: US$2 million on the delineation of at least 500 Mt of JORC
Mineral Resources at an average grade of at least 55% Fe with at least 275 Mt of contained
iron having an average grade of at least 52.5% Fe, on the Apurimac Project mineral
concessions.
Approvals Milestone Payment: Up to US$3 million on AF receiving all formal government
environmental and community approvals for the construction and operation of an iron ore mine
and required infrastructure with a design capacity of at least 10Mtpa of iron ore product,
relating to the Apurimac Project mineral concessions.
(iii) Construction Milestone Payment: Up to US$5 million on formal approval of the AF Board
to commence construction of an iron ore project or the commencement of bulk earthworks for
an iron ore mine or processing plant, in either case with a design capacity of at least 10Mtpa
of iron ore product, relating to the Apurimac Project mineral concessions.
The Consolidated Entity has royalty payment obligations as follows:
(i)
(ii)
1.5% of the net profits from sales of iron ore mined and iron ore products produced from the
Apurimac and Cusco Project mineral concessions.
2% of the proceeds of sales of other metals (on a net smelter return basis) mined from the
Apurimac and Cusco Project mineral concessions.
AF may extinguish the royalties (save for royalties on other metals up to a cap of US$0.5 million per
annum) by making an Extinguishment Payment as follows - US$30 million, if paid 4 years from 20
December 2012 but before the Construction Milestone occurs or the 15th anniversary of the
settlement agreement (whichever is sooner).
Due to the inherent uncertainty surrounding the achievement and timing of the above
milestones/royalty triggers, the Consolidated Entity regards these future payment obligations as
contingencies.
For further background details, refer also to Strike’s ASX Announcement dated 31 December 2012:
Strike Moves to 100% Ownership of AF
(e)
Legal Disputes Over Peru Mineral Concessions
The Consolidated Entity has successfully defended against a number of legal actions and claims
made by several Peruvian parties (that have had a contractual relationship with AF) relating to the
Consolidated Entity’s mineral concessions in Peru. Whilst there still remain some outstanding claims
and appeals, the Consolidated Entity believes that they will all eventually be dismissed, consistent
with previous decisions by the relevant Peruvian authorities.
For further background details, refer also to Strike’s ASX Announcement dated 1 May 2014: Strike
Wins Millenium Arbitration Case in Peru.
ANNUAL REPORT | 68
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2019
22.
CONTINGENCIES (continued)
(f)
Deferred Payments Relating to Acquisition of Solaroz Lithium Project (Argentina)
In March 2019, the Consolidated Entity entered into an agreement to acquire a 90% shareholding in
Hananta S.A. (incorporated in Argentina) (Hananta). Hananta has, in turn, entered into an Option
and Purchase Agreement (Agreement) with the registered legal and beneficial owner (Owner) of
applications for exploitation concessions (totalling 12,000 ha) currently being processed before the
Administrative Mining Court of the Province of Jujuy (Mining Properties) which comprise the Solaroz
Lithium Brine Project (Solaroz) located in northern Argentina.
Under the Agreement, Hananta will make a series of payments in cash and (at the election of the
Consolidated Entity, shares) over 4 years totaling US$6,590,000 to the Owner according to the
schedule below:
Hananta’s Payments to the Owner
On execution of the Agreement
6 months after the approval of the Environmental Impact
Assessment (EIA) Report
12 months after EIA approval
18 months after EIA approval
30 months after EIA approval
42 months after EIA approval
Total
Cash
US$
140,000
120,000
Cash or Shares
US$
-
-
Total
US$
140,000
120,000
330,000
880,000
1,180,000
1,190,000
3,840,000
-
750,000
1,000,000
1.000.000
2,750,000
330,000
1,630,000
2,180,000
2,190,000
6,590,000
At the completion of the payments to the Owner, registered title to the Mining Properties will be
transferred to Hananta. The Consolidated Entity can elect to terminate Hananta’s Agreement with
the Owner at any time, with no penalty.
Strike will fund 100% of the development costs for Solaroz (including the abovementioned payments
to the Owner) to the completion of a bankable feasibility study, with such funding to be provided as
loans to Hananta, to be repaid to the Consolidated Entity as a priority prior to any distributions to
shareholders. Thereafter, Hanaq Argentina S.A. (Hanaq) (as the other 10% shareholder in Hananta)
will contribute pro-rata or dilute. Hanaq can at any time elect to covert its holding in Hananta to a 1%
Net Smelter Royalty.
Further details are also contained in Strike’s ASX announcement dated 13 March 2019: Strike
Secures Solaroz Lithium Brine Project in Argentina’s Lithium Triangle.
23.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a)
On 18 July 2019, the Company raised $0.981 million (gross) through a placement of 21,800,000
shares at 4.5 cents per share to professional and sophisticated investors.
No matter or circumstance has arisen since the end of the financial year that significantly affected, or may
significantly affect, the operations of the Consolidated Entity, the results of those operations, or the state of
affairs of the Consolidated Entity in future financial periods.
ANNUAL REPORT | 69
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
(1)
The financial statements, comprising the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of
Cash Flows, Consolidated Statement of Changes in Equity, and accompanying notes as set out on
pages 45 to 69 are in accordance with the Corporations Act 2001 (Cth) and:
(a)
(b)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting; and
give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2019 and
of their performance for the year ended on that date;
(2)
(3)
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable;
The Directors have been given the declarations required by section 295A of the Corporations Act 2001
(Cth) by the Managing Director (the person who, in the opinion of the Directors, performs the Chief
Executive Officer function) and Company Secretary (the person who, in the opinion of the Directors,
performs the Chief Financial Officer function); and
(4)
The Company has included in the notes to the Financial Statements an explicit and unreserved
statement of compliance with the International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of
the Corporations Act 2001 (Cth).
Farooq Khan
Chairman
26 September 2019
William Johnson
Managing Director
ANNUAL REPORT | 70
26
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
LIST OF MINERAL CONCESSIONS
The following mineral concessions were held as at the end of the financial year (30 June 2019) and currently:
Apurimac Iron Ore Project (Peru)
(Strike – 100%)
Concession Name
Opaban I
Opaban III
Ferrum 1
Ferrum 4
Ferrum 8
Cristoforo 22
Ferrum 31
Ferrum 37
Wanka 01
Sillaccassa 1
Sillaccassa 2
900
379
327
695
100
700
400
Area
(Ha)
999
990
965
Province
Code
Title
Andahuaylas
5006349X01 No 8625-94/RPM Dec 16, 1994
Andahuaylas
5006351X01 No 8623-94/RPM Dec 16, 1994
Andahuaylas
010298304 No 00228-2005-INACC/J Jan 19, 2005
1,000 Andahuaylas/ Aymaraes 010298604 No 00230-2005-INACC/J Jan 19, 2005
File No
20001465
20001464
11053798
11053810
11053827
Andahuaylas
Andahuaylas
010299004 No 00232-2005-INACC/J Jan 19, 2005
010165602 RP2849-2007-INGEMMET/PCD/PM Dec 13,
11067786
2007
Andahuaylas
010552807 RP 1266-2008-INGEMMET/PCD/PM May 12,
11076509
2008
Andahuaylas
010621507 RP 1164-2008-INGEMMET/PCD/PM May 12,
11076534
2008
Andahuaylas
010208110 RP 3445-2010-INGEMMET/PCD/PM Oct
11102187
18,2010
Andahuaylas
010212508 RP 5088-2008-INGEMMET/PCD/PM Nov 19,
11084877
2008
Andahuaylas
010212608 RP 3183-2008-INGEMMET/PCD/PM Sept 8,
11081449
2008
Cusco Iron Ore Project (Peru)
(Strike – 100%)
Concession
Name
Area
(Ha)
Province
Code
Title
Flor de María
907
Chumbivilcas
05006521X01 No 7078-95-RPM Dec 29, 1995
Delia Esperanza
1,000
Chumbivilcas
05006522X01 No 0686-95-RPM Mar 31, 1995
El Pacífico II
1,000
Chumbivilcas
05006524X01 No 7886-94/RPM Nov 25, 1994
File No.
20001742
20001743
20001746
Solaroz Lithium Brine Project (Argentina)
(Strike – 90%)
Concession Name
Mario Ángel
Payo
Payo I
Payo 2
Chico I
Chico V
Chico VI
Silvia Irene
Area (Ha)
Province
File No
543
990
1,973
2,193
835
1,800
1,400
2,465
Jujuy
Jujuy
Jujuy
Jujuy
Jujuy
Jujuy
Jujuy
Jujuy
1707-S-2011
1514-M-2010
1516-M-2010
1515-M-2010
1229-M-2009
1312-M-2009
1313-M-2009
1706-S-2011
Paulsens East Tenement (Western Australia)
(Strike – 100%)
Tenement No.
Status Grant Date
Expiry Date
Area (blocks/Ha) Area (km²)
Retention Licence RL 47/7
Granted 4/12/2014
Pending conversion to
Mining Lease ML 1583
(applied on 28 August 2019)
~381 Ha
~3.81
Burke Graphite Project (Queensland)
(Strike – ~70%)
Tenement No
Status
Grant Date
Expiry Date
Area (blocks/Ha)
Area (km²)
Burke EPM 25443
Granted
4/9/2014
Corella EPM 25696
Granted
2/4/2015
3/9/2019
1/4/2020
5 sub-blocks
11 sub-blocks
~16
~36
Pilbara Tenement (Western Australia)
(Strike – 100%)
Tenement No
EL 45/4800
Status
Granted
Grant Date
Expiry Date
Area (blocks/Ha)
Area (km²)
10/8/2017
9/8/2022
70 blocks
~225
ANNUAL REPORT | 75
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ANNUAL MINERAL RESOURCES
STATEMENT
The following JORC Code compliant (2004 and 2012) Mineral Resources estimates are as at the end of the financial
year (30 June 2019) and currently:
Apurimac Iron Ore Project (Peru)
(Strike – 100%)
The Apurimac Project has a JORC Code (2012 Edition) compliant Mineral Resource of 269.4 Mt, consisting
of:
•
•
a 142.2 Mt Indicated Mineral Resource at 57.8% Fe; and
a 127.2 Mt Inferred Mineral Resource at 56.7% Fe.
Category
Indicated
Indicated
Inferred
Total Indicated and Inferred
Concession
Opaban 1
Opaban 3
Opaban 1
Density t/m3
4
4
4
Mt
133.71
8.53
127.19
269.4
Fe%
57.57
62.08
56.7
57.3
SiO2%
9.46
4.58
9.66
9.4
Al2O3%
2.54
1.37
2.7
2.56
P%
0.04
0.07
0.04
0.04
S%
0.12
0.25
0.2
0.16
The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in Strike’s ASX
announcement dated 11 February 2010: Peruvian Apurimac Iron Ore Project Resource Increased to 269 Million Tonnes) and has
subsequently been upgraded to comply with the 2012 JORC Code and disclosed in Strike’s ASX Announcement dated 19 January
2015: Apurimac Mineral Resources Updated to JORC 2012 Standard.
Cusco Iron Ore Project (Peru)
(Strike – 100%)
The Cusco Project has a JORC Code (2004 Edition) compliant Mineral Resource:
Category
Inferred
Concession
Santo Tomas
Mt
104.4
The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in Strike’s ASX
announcement dated 17 June 2011: Cusco Project – Resource Estimate). It has not been updated since to comply with the 2012
JORC Code on the basis that the information has not materially changed since it was last reported.
Density t/m3
4
Al2O3%
3.19
SiO2%
0.53
Fe%
32.62
P%
0.035
S%
0.53
Paulsens East Iron Ore Project (Australia)
(Strike – 100%)
The Paulsens East Iron Ore Project has a JORC Code (2012 Edition) compliant Mineral Resource:
JORC
Category
Indicated
Fe%
Range
>58
Million
Tonnes
9.6
Fe%
61.1
SIO2%
6.0
AL2O3%
3.6
P%
0.08
S%
0.01
LOI%
2.1
Note: The Mineral Resource was estimated using a 58% Fe lower cut-off wireframe.
Refer also to Strike’s ASX Announcements dated:
•
4 September 2019: Significant Upgrade of JORC Mineral Resource into Indicated Category at Paulsens East Iron Ore
Project; and
•
15 July 2019: Maiden JORC Resource of 9.1 Million Tonnes at 63.4% Fe – Paulsens East Iron Ore Project in the Pilbara.
Burke Graphite Project (Australia)
(Strike – ~70%)
The Burke Graphite Project has a JORC Code (2012 Edition) compliant Mineral Resource:
Category Weathering State
Oxide
Fresh
Inferred
Inferred
Total Oxide + Fresh
Mt
0.5
5.8
6.3
TGC (%)
14.0
16.2
16.0
Contained Graphite (Mt)
0.1
0.9
1.0
Density (t/m)
2.5
2.4
2.4
Note: The Mineral Resource was estimated within constraining wireframe solids defined above a nominal 5% TGC cut-off. The
Mineral Resource is reported from all blocks within these wireframe solids. Differences may occur due to rounding.
Refer also Grade Tonnage Data in Table 2 of CSA Global Pty Ltd’s Burke Graphite Project MRE Technical Summary dated 9
November 2017 (attached as Annexure A of Strike’s ASX Announcement dated 13 November 2017: Maiden Mineral Resource
Estimate Confirms Burke Project as One of the World’s Highest Grade Natural Graphite Deposits).
ANNUAL REPORT | 76
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ANNUAL MINERAL RESOURCES
STATEMENT
Compliance
•
•
•
•
•
•
•
•
The Mineral Resources estimates in respect of the Apurimac and Cusco Iron Ore Projects (above) have not
changed since reported in last year’s (2018) Annual Report.
The Mineral Resources estimate in respect of the Burke Graphite Project (above) has not changed since
reported in last year’s (2018) Annual Report.
The Mineral Resources estimate in respect of the Paulsens East Iron Ore Project (above) was prepared and
first disclosed subsequent to the financial year ended 30 June 2019.
The Mineral Resources estimates (above) are based on, and fairly represents, information and supporting
documentation prepared by a Competent Person (recognised under the JORC Codes (2004 and 2012, as
the case may be)).
The Annual Mineral Resources Statement as a whole (in respect of each of the Apurimac/Cusco Iron Ore
Projects, Paulsens East Iron Ore Project and the Burke Graphite Project) has been approved by the
Competent Persons named in the JORC Code Competent Persons’ Statements section of this Annual
Report (at pages 78 to 80) where further information concerning their qualifications and professional
memberships are also disclosed.
Due to the nature, stage and size of the Company’s existing operations, Strike believes there would be no
efficiencies gained by establishing a separate Mineral Reserves/Resources Committee responsible for
reviewing and monitoring the Company’s processes for calculating JORC Code compliant Mineral
Reserves/Resources. The Board as a whole has responsibility in this regard (with assistance from external
advisers as appropriate) including ensuring that appropriate internal controls are applied to such
calculations.
The Company ensures that any Mineral Reserve/Resource calculations are prepared by Competent Persons
and where appropriate, reviewed independently and verified (including estimation methodology, sampling,
analytical and test data).
The Company will report any future Mineral Reserves/Resources estimates in accordance with the 2012
JORC Code.
ANNUAL REPORT | 77
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
JORC CODE COMPETENT PERSONS’
STATEMENTS
JORC Code (2012) Competent Person Statement - Apurimac Project Mineral Resources
The information in this document that relates to Mineral Resources in relation to the Apurimac Iron Ore Project
(Peru) is extracted from the following ASX market announcement made by Strike Resources Limited on:
•
19 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
The information in the original announcement that relates to Mineral Resources and other Exploration Results (as
applicable) in relation to the Apurimac Iron Ore Project (Peru) is based on, and fairly represents, information and
supporting documentation prepared by Mr Ken Hellsten, B.Sc. (Geology), who is a Fellow of The Australasian
Institute of Mining and Metallurgy (AusIMM). Mr Hellsten was a principal consultant to Strike Resources Limited
and was also formerly the Managing Director of Strike Resources Limited (between 24 March 2010 and 19 January
2013). Mr Hellsten has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the
2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves” (the JORC
Code). The Company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement. The Company confirms that the form and context in
which the Competent Person’s findings are presented have not been materially modified from the original market
announcement.
JORC Code (2004) Competent Person Statement – Cusco Project Mineral Resources
The information in this document that relates to Mineral Resources and other Exploration Results (as applicable) in
relation to the Cusco Iron Ore Project (Peru) is based on, and fairly represents, information and supporting
documentation prepared by Mr Ken Hellsten, B.Sc. (Geology), who is a Fellow of AusIMM. Mr Hellsten was a
principal consultant to Strike Resources Limited and was also formerly the Managing Director of Strike Resources
Limited (between 24 March 2010 and 19 January 2013). Mr Hellsten has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2004 Edition of the JORC Code. Mr Hellsten approves and
consents to the inclusion in this document of the matters based on this information in the form and context in which
it appears.
JORC Code (2012) Competent Person Statement – Paulsens East Project Mineral Resources
(a)
The information in this document that relates to Mineral Resources in relation to the Paulsens East Iron
Ore Project (Pilbara, Western Australia) is extracted from the following ASX market announcements made
by Strike Resources Limited on:
•
4 September 2019: Significant Upgrade of JORC Mineral Resource into Indicated Category at
Paulsens East Iron Ore Project; and
•
15 July 2019: Maiden JORC Resource of 9.1 Million Tonnes at 63.4% Fe – Paulsens East Iron Ore
Project in the Pilbara.
The information in the original announcements is based on, and fairly represents, information and supporting
documentation prepared by Mr Philip Jones, who is a Member of AusIMM and the Australian Institute of
Geoscientists (AIG). Mr Jones 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 JORC Code. The Company confirms that it is not aware of any new
information or data that materially affects the information included in the original market announcements.
The Company confirms that the form and context in which the Competent Person’s findings are presented
have not been materially modified from the original market announcements.
(b)
The information in this document that relates to metallurgical test work, Exploration Targets and other
Exploration Results (as applicable) in relation to the Paulsens East Iron Ore Project (Pilbara, Western
Australia) is extracted from the following ASX market announcement made by Strike Resources Limited on:
•
10 October 2019: Outstanding Metallurgical Testwork Results at Paulsens East Iron Ore Deposit
Indicate 79% Lump Yield with Low Impurities; and
•
1 August 2019: Strong Progress at the Paulsens East Iron Ore Project.
ANNUAL REPORT | 78
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
JORC CODE COMPETENT PERSONS’
STATEMENTS
The information in the original announcements is based on and fairly represents information and supporting
documentation compiled by Mr Philip Jones, who is a Member of the AusIMM and AIG. Mr Jones is an
independent contractor to Strike Resources Limited. The information that relates to Processing and
Metallurgy is based on the work done by ALS Metallurgy Iron Ore Technical Centre (ALS IOTC) on a bulk
sample collected under the direction of Mr Jones and fairly represents the information compiled by him from
the ALS IOTC testwork report. Mr Jones 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 JORC Code. The Company confirms that it is not
aware of any new information or data that materially affects the information included in the original market
announcements. The Company confirms that the form and context in which the Competent Person’s findings
are presented have not been materially modified from the original market announcements.
JORC Code (2012) Competent Person Statement – Solaroz Lithium Brine Project
The information in this document that relates to Exploration Targets in relation to the Solaroz Lithium Brine Project
(Argentina) is extracted from the following ASX market announcement made by Strike Resources Limited on:
•
13 March 2019: Strike Secures Solaroz Lithium Brine Project in Argentina’s Lithium Triangle
The information in the original announcement that relates to Exploration Targets is based on, and fairly represents,
information and supporting documentation prepared by Mr Peter Smith, BSc (Geophysics) (Sydney) AIG ASEG,
who is a Member of AIG. Mr Smith is a consultant to Strike Resources Limited. Mr Smith has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he
is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. The Company
confirms that it is not aware of any new information or data that materially affects the information included in the
original market announcement. The Company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcement.
JORC Code (2012) Competent Person Statement - Burke Graphite Project Mineral Resources
(a)
The information in this document that relates to Mineral Resources in relation to the Burke Graphite Project
(Queensland) is extracted from the following ASX market announcement made by Strike Resources Limited
on:
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest-Grade Natural Graphite Deposits
The information in the original announcement (including the CSA Global MRE Technical Summary in
Annexure A) that relates to in-situ Mineral Resources for the Burke Graphite Project is based on information
compiled by Mr Grant Louw (an employee of CSA Global Pty Ltd) under the direction and supervision of Dr
Andrew Scogings (employed by CSA Global Pty Ltd at the date of the original announcement). Dr Scogings
takes overall responsibility for this information. Dr Scogings is a Member of AIG and AusIMM and has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of
the JORC Code. The Company confirms that it is not aware of any new information or data that materially
affects the information included in the original market announcement. The Company confirms that the form
and context in which the Competent Person’s findings are presented have not been materially modified from
the original market announcement.
(b)
The information in this document that relates to metallurgical test work in relation to the Burke Graphite
Project (Queensland) is extracted from the following ASX market announcements made by Strike Resources
Limited on:
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest Grade Natural Graphite Deposits; and
•
16 October 2017: Test-work confirms the potential suitability of Burke graphite for Lithium-ion battery
usage and Graphene production.
ANNUAL REPORT | 79
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
JORC CODE COMPETENT PERSONS’
STATEMENTS
The information in the original announcements that relates to metallurgical test work is based on, and fairly
represents, information and supporting documentation prepared by Mr Peter Adamini, BSc (Mineral Science
and Chemistry), who is a Member of AusIMM. Mr Adamini is a full-time employee of Independent
Metallurgical Operations Pty Ltd, who has been engaged by Strike Resources Limited to provide
metallurgical consulting services. The Company confirms that it is not aware of any new information or data
that materially affects the information included in the original market announcements. The Company
confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from the original market announcements.
(c)
The information in this document that relates to Exploration Results (including in relation to the ground
Electro-Magnetic (EM) survey) in relation to the Burke Graphite Project (Queensland) is extracted from the
following ASX market announcements made by Strike Resources Limited on:
•
26 June 2018: Burke Graphite Project – New Target Area Identified From Ground Electro-Magnetic
Surveys;
•
•
•
•
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest Grade Natural Graphite Deposits;
16 October 2017: Test-work confirms the potential suitability of Burke graphite for Lithium-ion battery
usage and Graphene production;
21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project;
13 June 2017: Extended Intersections of High-Grade Graphite Encountered at Burke Graphite
Project; and
21 April 2017: Jumbo Flake Graphite Confirmed at Burke Graphite Project, Queensland.
The information in the original announcements that relates to Exploration Results (including in relation to the
ground Electro-Magnetic (EM) survey) is based on, and fairly represents, information and supporting
documentation prepared by Mr Peter Smith, BSc (Geophysics) (Sydney) AIG ASEG, who is a Member of
AIG. Mr Smith is a consultant to Strike Resources Limited. Mr Smith has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. The
Company confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcements. The Company confirms that the form and context in which
the Competent Person’s findings are presented have not been materially modified from the original market
announcements.
The Strike ASX market announcements referred to above may be viewed and downloaded from the Company’s
website: www.strikeresources.com.au or the ASX website: www.asx.com.au under ASX code “SRK”.
FORWARD LOOKING STATEMENTS
This document contains “forward-looking statements” and “forward-looking information”, including statements and forecasts which
include without limitation, expectations regarding future performance, costs, production levels or rates, mineral reserves and
resources, the financial position of Strike, industry growth and other trend projections. Often, but not always, forward-looking
information can be identified by the use of words such as “plans”, “expects”, “is expected”, “is expecting”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, or variations (including negative variations) of such words and
phrases, or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will” be taken, occur or be achieved.
Such information is based on assumptions and judgements of management regarding future events and results. The purpose of
forward-looking information is to provide the audience with information about management’s expectations and plans. Readers are
cautioned that forward-looking information involves known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Strike and/or its subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking information. Such factors include, among others,
changes in market conditions, future prices of minerals/commodities, the actual results of current production, development and/or
exploration activities, changes in project parameters as plans continue to be refined, variations in grade or recovery rates, plant
and/or equipment failure and the possibility of cost overruns.
Forward-looking information and statements are based on the reasonable assumptions, estimates, analysis and opinions of
management made in light of its experience and its perception of trends, current conditions and expected developments, as well
as other factors that management believes to be relevant and reasonable in the circumstances at the date such statements are
made, but which may prove to be incorrect. Strike believes that the assumptions and expectations reflected in such forward-
looking statements and information are reasonable. Readers are cautioned that the foregoing list is not exhaustive of all factors
and assumptions which may have been used. Strike does not undertake to update any forward-looking information or statements,
except in accordance with applicable securities laws.
ANNUAL REPORT | 80
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 25 October 2019
CORPORATE GOVERNANCE STATEMENT
The Company has adopted the Corporate Governance Principles and Recommendations (3rd Edition, March 2014)
issued by the ASX Corporate Governance Council in respect of the financial year ended 30 June 2019.
Pursuant to ASX Listing Rule 4.10.3, the Company’s 2019 Corporate Governance Statement (dated on or about 29
October 2019) and ASX Appendix 4G (Key to Disclosures of Corporate Governance Principles and
Recommendations) can be found at the following URL on the Company’s Internet website:
http://strikeresources.com.au/corporate/corporate-governance/
ISSUED CAPITAL
Class of Security
Fully paid ordinary shares
DISTRIBUTION OF FULLY PAID ORDINARY SHARES
Spread of Holdings
1
- 1,000
1,001
5,001
- 5,000
- 10,000
10,001
- 100,000
100,001
- and over
TOTAL
Number of
Holders
352
565
258
376
128
1,679
UNMARKETABLE PARCELS
Spread
1
of Holdings
-
12,195
12,196
-
over
TOTAL
Number of
Holders
1,215
464
1,679
Number of
Shares
144,660
1,660,504
2,094,312
12,737,243
150,497,549
167,134,268
Number of
Shares
4,342,862
162,791,406
167,134,268
Quoted on ASX
167,134,268
% of Total
Issued Capital
0.087%
0.994%
1.253%
7.621%
90.046%
100.00%
% of Total
Issued Capital
2.598%
97.402%
100.00%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 12,499 shares or less
(being a value of $500 or less in total), based upon the Company’s closing share price of $0.041 on 25 October 2019.
VOTING RIGHTS
Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there
are none), at meetings of shareholders of the Company:
• Each shareholder entitled to vote may vote in person or by proxy or by power of attorney or, in the case of a
shareholder which is a corporation, by representative;
• Every person who is present in the capacity of shareholder or the representative of a corporate shareholder
shall, on a show of hands, have one vote; and
• Every shareholder who is present in person, by proxy, by power of attorney or by corporate representative
shall, on a poll, have one vote in respect of every fully paid share held by him.
ANNUAL REPORT | 81
30 JUNE 2019
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 25 October 2019
TOP 20 ORDINARY FULLY PAID SHAREHOLDERS
Rank Holder name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BENTLEY CAPITAL LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
DATABASE SYSTEMS LTD
ORION EQUITIES LIMITED
IRIS SYDNEY HOLDINGS PTY LTD
ACN 139 886 025 PTY LTD
RUBI HOLDINGS PTY LTD
JP MORGAN NOMINEES AUSTRALIA LIMITED
MR JON FAZZALORI
UPSKY EQUITY PTY LTD
MR IANAKI SEMERDZIEV
MR VU QUANG MINH DANG & MRS THI KIM DAU NGUYEN
D&C PESCA S.A.C.
MRS LILIANA TEOFILOVA
MR JOHN CLIFFORD GOULDING & MRS CAROL ANN GOULDING
LAVISH LIMOUSINES PTY LTD
MR CHI MAU PHUONG
SKYWALKER HOLDINGS WA PTY LTD
WINDELL HOLDINGS PTY LTD
EMPIRE HOLDINGS
TOTAL
Shares Held
52,553,493
26,447,581
11,704,063
10,000,000
2,580,000
2,260,261
2,222,223
1,864,105
1,814,390
1,805,533
1,379,000
1,167,916
1,081,027
947,000
920,000
907,617
894,777
888,889
888,889
700,000
% Issued
Capital
31.44%
15.82%
7.00%
5.98%
1.54%
1.35%
1.33%
1.12%
1.09%
1.08%
0.83%
0.70%
0.65%
0.57%
0.55%
0.54%
0.54%
0.53%
0.53%
0.42%
123,026,764
73.61%
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholders
Registered Shareholder
Shares Held
% Voting Power
Bentley Capital Limited I
Windfel Properties Limited
and Associate II
Database Systems Ltd
and Ambreen Chaudhri III
Orion Equities Limited IV
Queste Communications Ltd V
Bentley Capital Limited
HSBC Custody Nominees
(Australia) Limited
52,553,493
25,825,000
Database Systems Ltd
11,704,063
Orion Equities Limited
Orion Equities Limited
10,000,000
10,000,000
31.44%
15.45%
7.00%
5.98%
5.98%
I Refer Bentley’s ASX announcement dated 22 July 2019: Notice of Change in Interests of Substantial Holder
II Refer Notice of Change in Interests of Substantial Holder dated 23 July 2019
III Refer Notice of Change in Interests of Substantial Holder dated 22 July 2019
IV Refer Orion’s ASX announcement dated 22 July 2019: Notice of Change in Interests of Substantial Holder
V Refer Queste’s ASX announcement dated 22 July 2019: Notice of Change in Interests of Substantial Holder; Orion is the
registered holder of Strike shares and Queste is taken under section 608(3)(b) of the Corporations Act to have a relevant
interest in securities in which Orion has a relevant interest by reason of having control of Orion
ANNUAL REPORT | 82
ASX Code: SRK
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
PRINCIPAL & REGISTERED OFFICE:
Level 2
23 Ventnor Avenue
West Perth, Western Australia 6005
T | (08) 9214 9700
F | (08) 9214 9701
E | info@strikeresources.com.au
W | www.strikeresources.com.au
SHARE REGISTRY:
Advanced Share Registry Limited
Western Australia – Main Office
110 Stirling Highway
Nedlands, Western Australia 6009
PO Box 1156, Nedlands
Western Australia 6909
Local T | 1300 113 258
T | (08) 9389 8033
F | (08) 9262 3723
E | admin@advancedshare.com.au
New South Wales – Branch Office
Suite 8H, 325 Pitt Street
Sydney, New South Wales 2000
PO Box Q1736
Queen Victoria Building NSW 1230
T | (02) 8096 3502
W | www.advancedshare.com.au