SUNSHINE GOLD LIMITED
(FORMERLY PELICAN RESOURCES LIMITED)
A.B.N. 12 063 388 821
ANNUAL FINANCIAL REPORT
30 JUNE 2021
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
CORPORATE DIRECTORY
CONTENTS
Directors’ Report
PAGE
3
Statement of Profit or Loss and Other
Comprehensive Income 25
Statement of Financial Position 26
Statement of Changes in Equity 27
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Auditor’s Independence Declaration
ASX Additional Information
Corporate Governance Statement
28
29
56
57
61
62
64
BOARD OF DIRECTORS
Alec Pismiris (Chairman)
Damien Keys (Managing Director)
Paul Chapman (Non-Executive Director)
Leslie Davis (Non-Executive Director)
Antonio Torresan (Non-Executive Director)
COMPANY SECRETARY
Alec Pismiris
REGISTERED OFFICE AND PRINCIPAL BUSINESS
OFFICE
5/16 Nicholson Road
Subiaco, Western Australia, 6008
Postal Address:
PO Box 572
Floreat Western Australia, 6014
Telephone: (+61 8) 6245 9828
SHARE REGISTRY
Automic Registry Services
Level 2
267 St Georges Terrace
Perth, Western Australia, 6000
Investor Enquiries: 1300 288 664
AUDITOR
HLB Mann Judd (WA) Partnership
Level 4
130 Stirling Street
Perth, Western Australia, 6000
Telephone: (+61 8) 9227 7500
SECURITIES EXCHANGE LISTING
ASX Limited (Australian Securities Exchange)
ASX Codes: SHN
2
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
The directors present their report together with the financial statements of the Group consisting of Sunshine
Gold Limited (formerly Pelican Resources Limited) (“Sunshine Gold” or “the Company”) and its controlled
entities for the financial year ended 30 June 2021 (“Balance Date”), the notes to the financial statements and
the auditor’s report thereon.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this
report are as follows. Directors were in office for the entire period unless otherwise stated.
Alec Pismiris
Damien Keys (appointed 24 November 2020)
Paul Chapman (appointed 24 November 2020)
Leslie Davis (appointed 24 November 2020)
Antonio Torresan
Colin Chenu (resigned 24 November 2020)
PARTICULARS OF DIRECTORS
Alec Pismiris B.Comm, MAICD, FGIA, FCIS
Chairman
Mr Pismiris has over 30 years of experience in the securities, finance and mining industries. Since 1990, Mr
Pismiris has served as a director and/or company secretary for various ASX listed companies as well as a
number of unlisted public and private companies. Mr Pismiris completed a Bachelor of Commerce degree at
the University of Western Australia, is a member of the Australian Institute of Company Directors and a fellow
of The Governance Institute of Australia. Mr Pismiris has participated numerous times in the processes by
which boards have assessed the acquisition and financing of a diverse range of assets and has participated in
and become familiar with the range of evaluation criteria used and the due diligence processes commonly
adopted in the commercial assessment of corporate opportunities.
Other current directorships: Agrimin Limited, Frontier Resources Limited, The Market Herald Limited and
Pacton Gold Inc.
Former directorships (last 3 years): Aguia Resources Limited, Victory Mines Limited.
Damien Keys PhD (Struct. Geo), MAIG (appointed 24 November 2020)
Managing Director
Dr Keys is a geologist with 19 years’ experience in mining and exploration. Dr Keys has led teams to
exploration success with Gold Fields Australia, Silver Lake Resources, Black Cat Syndicate and Spectrum
Metals. Dr Keys has completed a PhD in Structural Geology, a Bachelor of Science (Hons) and is a member of
the Australian Institute of Geoscientists.
Other current directorships: None
Former directorships (last 3 years): None
3
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
PARTICULARS OF DIRECTORS (CONTINUED)
Paul Chapman B.Comm, ACA, Grad. Dip. Tax, MAICD, MAusIMM (appointed 24 November 2020)
Non-Executive Director
Mr Chapman is a chartered accountant with over 30 years in the resource sector. Mr Chapman has experience
across a range of commodity businesses including gold, nickel, uranium, manganese, bauxite/alumina and
oil/gas. Mr Chapman has held managing director and other senior management roles in public companies.
Mr Chapman was a founding director of Reliance Mining, Encounter Resources, Rex Minerals, Silver Lake
Resources, Black Cat Syndicate and Dreadnought Resources.
Other current ASX directorships: Black Cat Syndicate Limited, Dreadnought Resources Ltd, Encounter
Resources Ltd
Former directorships (last 3 years): Avanco Resources Limited
Leslie Davis B.Sc. MAusIMM (appointed 24 November 2020)
Non-Executive Director
Mr Davis has 38 years’ mining industry experience including 17 years hands-on experience in mine
development and narrow vein mining. Mr Davis was the founding Managing Director of Silver Lake Resources
and a director of Black Cat Syndicate and Spectrum Metals. Mr Davis has completed a Masters of Science in
mineral economics.
Other current ASX directorships: Black Cat Syndicate Limited
Former directorships (last 3 years): Silver Lake Resources Limited, Spectrum Metals Limited
Antonio Torresan
Non-Executive Director (resigned as executive director 24 March 2021; appointed as non-executive director
24 March 2021)
Mr Torresan is a businessman with significant experience in capital markets. Mr Torresan has been actively
involved in arranging capital raisings for ASX listed companies as well as unlisted public companies, providing
investor relation services and assisting boards with development of strategic plans. Mr Torresan has also
played a significant role in negotiating mergers and acquisitions, especially in the mining exploration sector
where he has been pivotable in the recapitalisation and growth of ASX listed companies. Mr Torresan has
held numerous executive positions where his responsibilities have included strategy, operational
management and business development.
Other current directorships: None
Former directorships (last 3 years): None
4
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
PARTICULARS OF DIRECTORS (CONTINUED)
Colin Chenu, B. Juris, LLB (resigned 24 November 2020)
Non-Executive Director
Mr Chenu is a graduate of the University of Western Australia, with a Bachelor of Laws, and is admitted to
practice in the Supreme Court of Western Australia and the High Court of Australia. He has practised law in
Western Australia for more than 30 years, as both a barrister and solicitor, in a wide range of commercial,
litigious and non litigious work. Mr Chenu has gained extensive experience in the law of corporations, trade
practices, contracts, equity and trusts and tort.
COMPANY SECRETARY
Alec Pismiris, B.Comm, MAICD, FGIA, FCIS
Mr Pismiris has over 30 years’ experience in the securities, finance and mining industries and has held a
number of company secretary positions secretary for various ASX listed companies as well as a number of
unlisted public and private companies over the years.
DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Company’s directors, including directors’ circular
resolutions, held during the year ended 30 June 2021 by each director:
Alec Pismiris
Damien Keys
Paul Chapman
Leslie Davis
Antonio Torresan
Colin Chenu
PRINCIPAL ACTIVITIES
Number
Eligible to Attend
15
9
9
9
15
6
Number
Attended
15
9
9
9
15
6
The principal activities of the Group during the course of the financial year comprised of exploration on the
Triumph, Hodgkinson, Investigator and Ravenswood Projects.
5
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
The Company made a loss after tax of $1,064,797 for the year ended 30 June 2021 (2020: Profit $21,556).
QUEENSLAND - OPERATIONS
OVERVIEW
Sunshine Gold Limited re-listed on the Australian Securities Exchange (“ASX”) (ASX:SHN) on December 11
2020 following the acquisition of XXXX Gold Pty Ltd and successful re-capitalisation, with three projects in
Queensland: Triumph (100% SHN), Hodgkinson (100% SHN) and Investigator (100% SHN). In March 2021,
Sunshine Gold completed the acquisition of the Ravenswood West Au-Cu-REE Project via acquisition of
Ukalunda Pty Ltd (former subsidiary of Stavely Minerals Ltd). The four projects comprise 1,012 km2 of granted
tenure, with a further 54 km2 under application.
OUR STRATEGY
Sunshine Gold intends to delineate economic resource inventories using systematic and scientific exploration
across highly prospective projects. The Company is committed to:
• operating in a safe and sustainable manner;
• applying best practice exploration techniques to unlock resource potential;
• maximising in-ground exploration by maintaining low corporate overheads; and
• being ever vigilant in identifying opportunities to maximise the interests of shareholders.
SAFETY AND SUSTAINABILITY
The Board of Directors of Sunshine Gold are committed to executing the Company’s strategy and operations
in a safe and responsible manner. There were nil reportable incidents during the reporting period.
EXPLORATION PROGRAMS - TRIUMPH
Sunshine Gold commenced RC drilling at Triumph on the 27 November 2020. A total of 66 holes were drilled
for 7,126m in the successful maiden drilling campaign. Drilling occurred at prospects Big Hans, Super Hans,
New Constitution, South Constitution, Bald Hill, Brigham Young, Galena and Bonneville (Figure 1).
Figure 1. Triumph 1VD RTP Magnetics with significant results by prospect.
6
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Super Hans (EPM 18486)
Thirteen RC holes (1,220m) were drilled at Super Hans following up on 5 shallow RC hits from 2018 that
included:
13 RC holes drilled, 1,220 metres
• TDH181
• TDH124
• TDH182
• TDH192
Including
• TDH184
2m @ 7.57 g/t Au from 1m and 4m @ 2.27 g/t Au from 12m
3m @ 6.46 g/t Au from 6m and 3m @ 1.08 g/t Au from 25m
3m @ 5.01 g/t Au from 20m
22m @ 1.1 g/t Au from 12m
6m @ 1.96 g/t Au from 17m
3m @ 2.09 g/t Au from 22m
Sunshine Gold drilling has defined mineralisation over 200m of strike extent and to depths of ~90m.
Results from drilling for the quarter included:
• 21SHRC001
Including
• 21SHRC002
Including
• 21SHRC003
• 21SHRC004
and
• 21SHRC005
• 21SHRC007
• 21SHRC008
•
and
• 21SHRC009
• 21SHRC010
• 21SHRC011
and
10m @ 2.96 g/t Au from 11m
7m @ 4.06 g/t Au from 11m
16m @ 5.48 g/t Au from 34m
7m @ 10.64 g/t Au from 34m
3m @ 12.95 g/t Au from 30m
4m @ 1.80 g/t Au from 33m
2m @ 1.81 g/t Au from 53m
5m @ 3.20 g/t Au from 31m
2m @ 2.66 g/t Au from 71m
4m @ 3.26 g/t Au from 21m (temporary bore)
7m @ 5.06 g/t Au from 31m
3m @ 3.15 g/t Au from 69m
7m @ 1.19 g/t Au from 69m
2m @ 1.30 g/t Au from 125m
2m @ 1.28 g/t Au from 133m
Big Hans (EPM 18486)
Seven RC holes (844m) were designed to test high-grade potential around the historic intercept, 17m @ 4.30
g/t Au from 1m (TDH118). Drilling intersected significant mineralisation along 250m of strike. Main zone
mineralisation has been intersected at 150m depth. Big Hans mineralisation remains open in all directions.
Results include:
7 RC holes drilled, 844 metres
• 21BNRC001
Including
• 21BNRC003
• 21BNRC005
• 21BNRC006
and
• 21BNRC007
and
4m @ 27.12 g/t Au from 43m
2m @ 52.86 g/t Au from 43m
1m @ 12.70 g/t Au from 96m
8m @ 2.59 g/t Au from 77m
1m @ 7.62 g/t Au from 45m
4m @ 11.53 g/t Au from 69m
2m @ 9.56 g/t Au from 63m
1m @ 5.52 g/t Au from 70m
7
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
New Constitution/South Constitution (EPM 18486)
New Constitution is one of the main historic workings on the Triumph Project. A historic drill hole drilled
immediately adjacent to the historic workings, intersected 10m @ 26.86 g/t Au from 54m (TDH056). Further
drilling along the trend intersected mineralisation over ~250m to the SSE of the TDH056 intersection.
Sunshine Gold drilling targeted extensions to the south end of the drilled mineralisation. Drilling also targeted
an inferred WNW striking zone of intense potassic alteration – South Constitution. A total of 7 holes (940m)
were drilled into New Constitution and a further 3 holes (390m) into South Constitution. Results included:
10 RC holes drilled, 1,330 metres
• 21NCRC001
• 21NCRC002
• 21NCRC003
• 21NCRC004
• 21NCRC006
• 21NCRC007
• 21NCRC008
3m @ 2.50 g/t Au from 80m (South Constitution)
3m @ 10.30 g/t Au from 64m (New Constitution)
2m @ 4.55 g/t Au from 64m (New Constitution)
4m @ 2.20 g/t Au from 168m (New Constitution)
1m @ 21.91 g/t Au from 135m (South Constitution)
2m @ 3.58 g/t Au from 135m (New Constitution)
6m @ 13.11 g/t Au from 17m (South Constitution)
Bald Hill (EPM 18486)
Sunshine Gold completed broad spaced, infill drilling at Bald Hill. RC drilling aimed to infill and extend on
previous programs that have yielded results including: 12m @ 13.42 g/t Au (9m, TDH039), 9m @ 3.59 g/t Au
(114m, TDH008), and 11m @ 3.03 g/t Au (46m, TDH046). Results from the twenty-one holes included:
21 holes drilled, 2,196 metres
• 21BHRC013
Including
• 21BHRC014
• 21BHRC015
• 21BHRC016
• 21BHRC010
2m @ 4.65 g/t Au from 33m
1m @ 8.77 g/t Au from 33m
2m @ 1.35 g/t Au from 46m
2m @ 1.73 g/t Au from 78m
4m @ 1.11 g/t Au from 89m
2m @ 1.30 g/t Au from 49m
Other (EPM 18486)
7 holes drilled, 622 metres Galena
3 holes drilled, 420 metres Brigham Young
5 holes drilled, 494 metres Bonneville
Sunshine Gold geologists located the historic Galena adit. An inspection revealed a discrete vein that had
been mined circa 1910. Seven shallow RC holes were designed to assess whether the discrete vein was in fact
part of a broader vein network and whether the vein would swell in thickness. Galena was in fact one of
several veins that were all less than a metre in thickness.
The Brigham Young vein is a WNW striking vein that is interpreted to intersect and potentially offset the
northern end of the New Constitution orebody. Three holes were designed to assess the vein, with
21BYRC003 also aiming to intersect any offset position on the New Constitution lodes. Mineralisation was
intersected in two of the holes but was unable to be strung together. Infill and step off extensional drilling at
New Constitution will be conducted to assist with future Brigham Young interpretation.
8
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Drilling at Triumph commenced with a 5 hole, 494m RC reconnaissance drilling program at Bonneville on 27
November 2020. Drilling tested a coincident geophysical (magnetic and induced polarisation) and rock-chip
geochemical anomaly.
• 21GARC004
• 21GARC006
and
• 21GARC007
• 21BYRC001
and
• 21BYRC003
1m @ 6.41 g/t Au from 69m (Galena)
1m @ 1.42 g/t Au from 43m
1m @ 2.46 g/t Au from 63m (Galena)
1m @ 1.22 g/t Au from 37m (Galena)
1m @ 1.56 g/t Au from 123m
2m @ 1.28 g/t Au from 133m (Brigham Young)
1m @ 3.33 g/t Au, 1.1% Pb & 2.3% Zn from 12m (Brigham Young)
Triumph RC drilling concluded in late March 2021 with no safety or environmental incidents recorded.
Rehabilitation of the drilling sites was completed in April 2021. Wild Environmental Consultants were
engaged to complete a baseline flora and fauna survey across the Southern Corridor prospects - Super Hans,
Big Hans and New Constitution.
Drilling is scheduled to return to Triumph in the October 2021 quarter. Infill and extensional drilling is planned
at Big Hans, Super Hans, New Constitution and South Constitution.
EXPLORATION PROGRAMS - RAVENSWOOD WEST
The Ravenswood West project comprises 4 granted exploration permits spanning 392 km2 and a further 2
exploration permits in application 54 km2. In March 2021, Sunshine Gold completed the acquisition of the
Ravenswood West Au-Cu-REE Project via acquisition of Ukalunda Pty Ltd (former subsidiary of Stavely
Minerals Ltd). Sunshine Gold commenced exploration upon acquisition with focused exploration in the
Dreghorn prospect.
Sunshine Gold used a systematic approach to exploration at Dreghorn including:
• Reprocessing of existing magnetic surveys and a subsequent structural re-interpretation;
• Mapping and rock chip sampling of key localities including historic shafts and costeans;
• 100m spaced soil sampling to refine drill targeting and structural interpretation; and
• Commencement of a 34 hole RC reconnaissance drill program.
9
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Figure 2. Prospects of the Ravenswood West Project.
Soil sampling and mapping in the Dreghorn Prospect commenced 29 April 2021. The historic Dreghorn gold
field contains numerous historical workings and gold soil anomalism of >50 ppb Au over a >9 km strike length.
A detailed soil sampling and field mapping program was designed to infill broad spaced data in the western
portion of Dreghorn. The field program is extending the historic soil survey from the Rejoice target to the
west to encompass the Albion and Queenslander targets. Soil samples were collected on a regular 100m x
100m grid and assayed for a comprehensive multi-element suite (63 elements) to enable detailed alteration
and lithological mapping. Preliminary analysis shows a strong relationship between gold and lead and a
moderate relationship between gold and zinc. Elevated arsenic and tungsten map the major faulting within
the prospect.
Initial targets for follow up field validation were generated from the strongest gold pathfinders being
anomalous lead and zinc.
A total of 288 soil samples were also taken over the Eastern Dreghorn prospect. The area sits 500m south of
the historic Trieste goldfield, which was the site of the first gold discovery in the Ravenswood area. Several
historic workings are located in the soil grid including Hanoverian, Tingleary and Molly Bawn workings.
A coherent >50 ppb gold anomaly striking for >700m in a northeast-southwest orientation is present to the
west of Hanoverian. This anomaly is likely structurally controlled and is along strike from the Kirkers mine.
Historical rock chip sampling at Kirkers reported >800m strike length of samples exceeding 1 g/t Au.
10
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
No drilling has been conducted within the sampled area or at the Kirkers workings.
RC drilling commenced at the Dreghorn Prospect on 30 June 2021. Three dominant fault orientations were
identified from magnetic interpretation and soil geochemistry in the target area. The drill program aimed to
determine which fault orientations were most likely to host mineralisation. The program was also designed
to test extensions to historically mined gold at Albion, Rejoice and Queenslander (Figure 3). One hole (112m)
was completed for the reporting period.
Figure 3. Anomalous soils over a 9km strike length at Dreghorn. Dreghorn West (left) and Dreghorn East
(right).
EXPLORATION PROGRAMS - HODGKINSON
An airborne magnetic and radiometric survey was completed over Hodgkinson on 16 November 2020. The
survey improved resolution from 400m line spaced data to 100m data over the entire project.
Soil sampling and mapping campaign at Campbell Creek commenced 29 April 2021. The 334-sample soil
geochemistry program over Campbell Creek was designed to identify potential sources of alluvial gold that
has been historically worked in the area. The sample grid was 2.5km wide x 4.6km long with 200m sample
centres closing to 100m within the main area of interest. Lines were spaced 200m.
11
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Assay results from the program have identified three discrete coherent anomalies (Figure 4) being Red Ridge
North, Red Ridge South and West Point. The largest anomaly (Red Ridge North) extends north-south for
500m. Soil sampling at Red Ridge North was partially infilled to 100m x 100m spacing. The anomaly has a
broad core of >20ppb Au and a high spot anomaly of 243ppb Au (or 0.24g/t Au). Subsequent check mapping
of Red Ridge South identified a high quartz content in the area. Mapping also confirmed that the soil anomaly
is coincident with a quartz-bearing ridge which is predominantly composed of psammite (micaceous,
metamorphosed sandstone) which strikes north-northwest. The psammite grades locally to quartzite. Quartz
float is abundant on the ridge and trends in the general direction of bedding and could represent an increased
density of veining.
The ridge and the psammite dominant zone are interpreted to continue to the south where they coincide
with another 300m long soil anomaly, Red Ridge South. A series of “gold in stone” and “reef” occurrences
have been documented (2007 Annual Tenement Report EPM 11945; CR50773, 2007) between the two soil
anomalous zones. The length of the gold anomalous zone is 3km.
Encouragingly, alluvial gold workings are also present in the creeks to the west and east of the Red Ridge
North and South anomalies. The alluvials have been worked sporadically for >40 years.
The third anomaly, West Point, consists of two zones, separated by the Campbell Creek in an area known as
Red Workings (alluvial). Twelve rock chip samples were also taken during a follow up mapping program and
are currently pending assay. Samples were collected from several sources including quartz veins, quartzite
and psammite. There has been no historical drilling at West Point.
12
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Figure 4. Soil anomalism and documented gold occurrences at Campbell Creek, Hodgkinson
Project.
EXPLORATION PROGRAMS – INVESTIGATOR
Exploration has been confined to desktop reviews. Field mapping and rock chip sampling is scheduled for
November 2021.
13
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
WESTERN AUSTRALIA
COCKATOO IRON NL
Sunshine holds 5,000,000 fully paid ordinary shares in Cockatoo Iron NL (“Cockatoo Iron”) as a consequence
of the sale of its interests in the Cockatoo Island Project.
Sunshine Gold and Cockatoo Iron further executed a Revenue Sharing Agreement (“RSA”), whereby Sunshine
was entitled to receive up to a maximum of $500,000 per annum of gross revenue received by Cockatoo Iron
and its subsidiary Pearl Gull Iron Pty Ltd (“Pearl”) from certain non-mining activities that may be conducted
by third parties within mining lease 04/235-I and miscellaneous licence applications 04/102 and 04/103.
Cockatoo Iron had the right of pre-emption in respect of a sale by Sunshine of its rights under the RSA. During
the year, Sunshine executed a Deed of Settlement and Termination with Cockatoo Iron and Pearl, terminating
the RSA been the parties in exchange for a cash payment of $225,000 which was received on 19 January
2021.
On 22 July 2021, Pearl Gull Iron Limited (“Pearl Gull”) lodged its prospectus with ASIC for an IPO on the ASX
and commenced trading on 20 September 2021. Cockatoo Iron has a 43.24% interest in Pearl Gull.
CORPORATE
At the Company’s Annual General Meeting held 26 October 2020, shareholders approved all resolutions
relating to the acquisition of XXXX Gold Pty Ltd (“XXXX Gold”) which satisfied the requirements of Listing Rule
12.1.
During the December 2020 quarter, completion of an underwritten Entitlement Offer and Broker Offer
(“Offers”) occurred under which the Company successfully raised $2,026,845 (before costs). On 24 November
2020 the Company issued the following securities pursuant to the Offers and acquisition of XXXX Gold:
• Entitlement Offer – 63,842,244 Shares
• Broker Offer – 37,500,000 Shares
• XXXX Gold Vendor Share Consideration – 88,000,000 Shares *
• XXXX Gold Vendor Share Deferred Consideration T1 – 50,000,000 Shares *
• XXXX Gold Vendor Share Deferred Consideration T2 – 50,000,000 Shares *
• XXXX Gold Vendor Option Consideration – 40,000,000 Options *
• Underwriter Option Issue – 10,000,000 Options *
• Board and Consultant Option Issue – 21,000,000 Options *
•
Incentives – 17,000,000 Performance Rights *
* Securities subject to 24 month escrow from readmission to official quotation.
Sunshine’s securities re-commenced trading on the ASX on 11 December 2020.
On 31 March 2021, the Company acquired Ukalunda Pty Ltd (“Ukalunda”) for $400,000 cash, refund of a
security bond of $4,500 and a 1% net smelter royalty on gold revenue from Stavely Minerals Ltd. Ukalunda
owns the Ravenswood West Gold-Copper-Rare Earths project.
14
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
SCHEDULE OF TENEMENT INTEREST AS AT 30 JUNE 2021
Project
Tenement
Status
TRIUMPH
TRIUMPH
HODGKINSON
HODGKINSON
HODGKINSON
HODGKINSON
HODGKINSON
HODGKINSON
INVESTIGATOR
INVESTIGATOR
RAVENSWOOD WEST
RAVENSWOOD WEST
RAVENSWOOD WEST
RAVENSWOOD WEST
EPM 18486
EPM 19343
EPM 18171
EPM 19809
EPM 25139
EPM 27539
EPM 27574
EPM 27575
EPM 27343
EPM 27344
EPM 26041
EPM 26152
EPM 26303
EPM 26304
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
GRANTED
RAVENSWOOD WEST
EPM 27824
APPLICATION
RAVENSWOOD WEST
EPM 27825
APPLICAITON
Beneficial
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
BUSINESS DEVELOPMENT
The directors believe the Company’s existing cash reserves will provide sufficient working capital to carry
out its objective of assessing the open-pit potential of the Queensland projects whilst testing for large-scale
mineralisation. The Company will maintain an ongoing program of assessing projects that meet its acquisition
strategy.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than what has been disclosed in the review of operations section, there has been no change in the
state of affairs during the financial year.
DIVIDENDS
No dividends were paid or recommended for the year ended 30 June 2021.
15
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
EVENTS SUBSEQUENT TO REPORTING DATE
On 20 September 2021, the Company announced that it had secured commitments for a placement of
104,111,112 shares at an issue price of $0.045 to raise $4,685,000 million (before costs) to institutional and
sophisticated investors (“Placement”). In addition, subject to shareholder approval, the directors will also
subscribe for 7,000,000 shares at an issue price of $0.045 to raise an additional $315,000.
The Placement was completed, and new shares issued to institutional and sophisticated investors on 27
September 2021.
No other matters or circumstances have arisen subsequent to the balance date which would significantly
affect the operations of the Company, its operating results or its state of affair in the subsequent financial
years.
SHARE OPTIONS
The Company has the following securities on issue as at the date of the Directors’ Report.
Security Description
Fully paid shares
Number of Securities
548,822,730
Unissued shares
As at the date of this report, there were 72,000,000 unissued ordinary shares under options (30 June 2020:
35,000,000), 17,000,000 performance shares and 100,000,000 deferred shares subject to performance
hurdles.
Option holders do not have any right, by virtue of the options, to participate in any share issue of the
Company or any related body corporate.
Shares issued as a result of the exercise of options
During the financial year there were no ordinary shares issued as a result of the exercise of options (2020:
46,667,600).
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group will continue to focus on its search for further opportunities. Given that the nature of the Group’s
activities is exploration focused, no further information can be provided as to likely developments as such
developments will depend on exploration success at the Group’s various project interests, and the nature of
any new acquisitions going forward.
16
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
ENVIRONMENTAL REGULATION
The Group has assessed whether there are any particular or significant environmental regulations which
apply. It has determined that the risk of non-compliance is low and has not identified any compliance
breaches during the year.
DIRECTORS’ INTERESTS IN SHARES OF THE COMPANY
At the date of this report, the directors’ interests in shares of Sunshine Gold Limited were:
Number of Ordinary
Shares
14,062,500
22,000,000
22,555,000
22,400,000
60,477,131
Alec Pismiris
Damien Keys
Paul Chapman
Leslie Davis
Antonio Torresan
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behavior and accountability, the directors of
Sunshine Gold Limited support and have substantially adhered to the best practice recommendations set by
the ASX Corporate Governance Council. The Company’s corporate governance statement can be viewed on
the Company’s website at www.shngold.com.au/investor-centre/corporate-governance/.
INDEMNIFICATION AND INSURANCE OF DIRECTORS
The Company has, during or since the financial year, in respect of any person who is or has been an officer
of the Company or a related body corporate:
-
-
indemnified or made any relevant agreement for indemnifying against a liability incurred as an
officer, including costs and expenses in successfully defending legal proceedings; or
paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an
officer for the costs or expenses to defend legal proceedings.
Insurance of Officers
Since the end of the previous financial year, the Company has paid insurance premiums in respect of directors
and officers liability and corporate reimbursement, for directors and officers of the Company. The insurance
premiums relate to:
-
-
any loss for which the directors and officers may not be legally indemnified by the Company arising
out of any claim, by reason of any wrongful act committed by them in their capacity as a director or
officer, first made against them jointly or severally during the period of insurance; and
indemnifying the Company against any payment which it has made and was legally permitted to
make arising out of any claim, by reason of any wrongful act, committed by any director or officer in
their capacity as a director or officer, first made against the director or officer during the period of
insurance.
The insurance policy outlined above does not allocate the premium paid to each individual officer of the
Company and does not allow disclosure of the premium.
17
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act
2001 is set out on page 61.
NON-AUDIT SERVICES
The Board of Directors are satisfied that the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2021. The directors
are satisfied that the services disclosed below do not compromise the external auditors’ independence for
the following reasons:
-
-
all non-audit services are reviewed and approved by the Board prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
The aggregate amount of fees paid or payable to HLB Mann Judd during the year ended 30 June 2021 are as
follows:
Tax due diligence
Independent Limited Assurance Report
$
5,000
20,000
25,000
18
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for directors and executives of the Group.
Remuneration policy
The remuneration policy of Sunshine Gold Limited has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration component and
offering specific long-term incentives based on key performance areas affecting the Group’s ability to attract
and retain the best executives and directors to run and manage the Group.
The Board’s policy for determining the nature and amount of remuneration for board members and senior
executives of the Group is as follows.
The remuneration policy setting out the terms and conditions for the executive directors and other senior
executives was developed by the Board.
Executive remuneration and other terms of employment are reviewed annually by the Board having regard
to performance against goals set at the start of the year, relevant comparative information and independent
expert advice.
As well as a base salary, remuneration packages include superannuation, retirement and termination
entitlements, performance-related bonuses and fringe benefits.
Remuneration packages are set at levels that are intended to attract and retain executives capable of
managing the Company’s diverse operations.
Remuneration and other terms of employment for the executive director and certain other senior executives
have been formalised in service agreements as follows:
The Company has entered into an executive service agreement with managing director, Mr Damien Keys. The
terms of the service agreement are set out as follows:
-
-
-
-
-
Commencement date: 24 November 2020
Term: two years
Fixed remuneration: $220,000 per annum (exclusive of superannuation)
Termination for cause: no notice period
Termination without cause: three month notice period
19
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Remuneration policy (continued)
The Company has entered into agreements with non-executive directors. The terms of the agreements are
set out as follows:
-
-
-
-
Term: no fixed term
Fixed remuneration: $36,000 per annum
Termination for cause: no notice period
Termination without cause: no notice period
Remuneration of non-executive directors is determined by the Board within the maximum amount approved
by the shareholders from time to time and which currently stands at $250,000 per annum.
The Board undertakes an annual review of its performance against goals set at the start of the year. The
Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is
designed to attract the highest calibre of executives and reward them for performance that results in long-
term growth in shareholder wealth.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
Performance-based remuneration
The Company currently has performance-based remuneration component built into director and executive
remuneration packages.
The Company has established an Employee Securities Incentive Plan (“Plan”) that provides greater flexibility
by allowing for the issuance of Performance Securities upon a determination by the Board that an eligible
employee may participate in the Plan. Performance Securities can include a Plan Share, Option, Performance
Right or other Convertible Security.
The Company received 100% “yes” votes on its remuneration report for the 30 June 2020 financial year.
The table below summarises the earnings of the Group and other factors that are considered to affect
shareholder wealth for the 5 years to 30 June 2021.
Loss after income tax
attributable to shareholders ($)
Share price at year end ($)
Total dividends declared
(cents per share)
Returns of capital (cents per
share)
Basic earnings/(loss) per share
(cents)
2021
2020
2019
2018
2017
(1,064,797)
0.0550
21,556
0.0258
(1,913,882)
0.0258
3,221,041
0.0303
(455,250)
0.0136
-
-
-
-
-
-
-
-
-
-
(0.29)
0.01
(0.53)
0.89
(0.12)
20
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Key management personnel compensation
Details of the nature and amount of emoluments paid for each director and executive of Sunshine Gold
Limited are set out below:
Primary
Benefits
Salary
& Fees
$
62,0001
60,0001
19,756
19,756
81,7422
102,000
10,0003
30,000
321,587
192,000
Directors
A Pismiris - Non-Executive Director
2021
2020
D Keys – Managing Director
2021
P Chapman – Non-Executive Director
2021
L Davis – Non-Executive Director
2021
A Torresan – Non-Executive Director
2021
2020
C Chenu - Non-Executive Director
2021
2020
Total Remuneration:
2021
2020
Post
Employment
Super-
annuation
$
Share Based
Payments
Shares/
Options
$
TOTAL
Performance
Based
$
%
-
-
112,000
-
174,000
60,000
-
-
-
140,525
21,633
21,633
112,000
-
193,742
102,000
28,000
-
38,000
30,000
1,877
1,877
-
-
-
-
15,946
-
252,000
-
589,533
192,000
64
-
-
-
-
58
-
74
-
43
-
128,333
12,192
Notes:
(1) Includes $31,000 (FY2020: $30,000) paid as fees for company
secretarial services
(2) Stepped down as an executive director on 24 March 2021
(3) Resigned 24 November 2020
Other related party transactions of key management personnel are disclosed in Note 16.
Remuneration Options and Performance Rights
During the year ended 30 June 2021, 18,000,000 options were issued as part of director remuneration (30
June 2020: Nil). Refer to Note 25 for details of Director options.
During the year ended 30 June 2021, 17,000,000 performance rights were issued as part of director
remuneration (30 June 2020: Nil). No value has been ascribed to these rights as the achievement of the
hurdles cannot be assessed with any certainty at the time of issue. Refer to Note 13(d) for details of
performance rights.
21
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Shareholdings by Directors
2021
Balance
01/07/20
(No. of Shares)
A Pismiris
D Keys1
P Chapman1
L Davis1
A Torresan
C Chenu2
Total
Notes:
(1) Appointed 24 November 2021
(2) Resigned 24 November 2021
18,000,000
-
-
-
77,429,877
-
95,429,877
Received
Remuneration
(No. of Shares)
Capital
Reconstruction
(No. of Shares)
Net Other
Change
(No. of Shares)
Balance
30/06/21
(No. of Shares)
-
-
-
-
-
-
-
(6,750,000)
-
-
-
(29,036,204)
-
(35,786,204)
2,812,500
22,000,000
22,555,000
22,400,000
13,083,458
-
82,850,958
14,062,500
22,000,000
22,555,000
22,400,000
61,477,131
-
142,494,631
2020
A Torresan
C Chenu
A Pismiris
Total
Balance
01/07/19
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/20
(No. of Shares)
59,193,981
-
12,000,000
71,193,981
-
-
-
-
18,235,896(1)
-
6,000,000(2)
24,235,896
-
-
-
-
77,429,877
-
18,000,000
95,429,877
(1) On 30/06/19, A Torresan exercised 18,235,896 options exercisable at $0.01 into fully paid ordinary shares that were issued on 2/7/19.
Total holding post exercised is 77,429,877 ordinary shares.
(2) On 30/06/19, A Pismiris exercised 6,000,000 options exercisable at $0.01 into fully paid ordinary shares that were issued on 2/7/19. Total
holding post exercised is 18,000,000 ordinary shares.
Options Holdings by Directors
2021
A Pismiris
D Keys1
P Chapman1
L Davis1
A Torresan
C Chenu2
Total
Notes:
Balance
01/07/20
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/21
(No. Options)
-
-
-
-
-
-
-
8,000,000
-
-
-
8,000,000
2,000,000
18,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
10,000,000
10,000,000
-
(2,000,000)
28,000,000
8,000,000
10,000,000
10,000,000
10,000,000
8,000,000
-
46,000,000
(1) Appointed 24 November 2020
(2) Resigned 24 November 2020
22
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Options Holdings by Directors (continued)
2020
Balance
01/07/19
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/20
(No. Options)
A Torresan
C Chenu
A Pismiris
10,500,000
2,000,000
7,500,000
Total
20,000,000
(1) These options expired on 31/12/19.
-
-
-
-
-
-
-
-
Performance Rights Holdings by Directors
2021
A Pismiris
D Keys
P Chapman
L Davis
A Torresan
C Chenu
Total
Balance
01/07/20
(No. Rights)
Granted as
Remuneration
(No. Rights)
No. of
Right
Acquired
No. of
Rights
Exercised
-
-
-
-
-
-
-
-
10,000,000
4,000,000
3,000,000
-
-
17,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(10,500,000)
(2,000,000)
(7,500,000)
(20,000,000)(1)
-
-
-
-
Net
Change Other
(No. Rights)
Balance
30/06/21
(No. Rights)
-
-
-
-
-
-
-
-
10,000,000
4,000,000
3,000,000
-
-
17,000,000
End of remuneration report (audited).
23
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
Signed in accordance with a resolution of the board of directors.
Dated at Perth this 27th day of September 2021
_______________________
Alec Pismiris
Director
24
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Other income
Corporate expenses
Exploration expenditure written-off
Share based payments
Consolidated
Note
2021
$
2020
$
2
3
25
241,295
601,317
(998,092)
-
(308,000)
(565,641)
(14,120)
-
Profit/(Loss) before income tax
(1,064,797)
21,556
Income tax benefit
Profit/(Loss) for the year
4
-
-
(1,064,797)
21,556
Other comprehensive income/(loss)
Item that may subsequently be reclassified to profit or loss:
Currency translation differences
Other comprehensive income/(loss) for the year
-
-
(88,250)
(88,250)
Total comprehensive loss for the year
(1,064,797)
(66,694)
Basic earning/(loss) per share (cents per share)
Diluted earning/(loss) loss per share (cents per share)
19
19
(0.29)
(0.29)
0.01
0.01
The above consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
25
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Current Assets
Cash and cash equivalents
Term deposit
Security deposits
Trade and other receivables
Prepayments
Total Current Assets
Non-Current Assets
Exploration and evaluation expenditure
Plant and equipment
Other financial assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest-bearing liabilities
Employee leave liabilities
Total Current Liabilities
Non-Current Liabilities
Interest-bearing liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
Note
2021
$
2020
$
5
2,192,165
2,094,411
6
7
8
9
10
11
12
11
-
1,200,000
144,000
114,000
91,711
43,378
12,897
18,288
2,471,254
3,439,596
4,513,541
39,011
200,000
-
-
200,000
4,752,552
200,000
7,223,806
3,639,596
156,722
74,186
19,158
18,315
-
194,195
74,186
8,301
8,301
-
-
202,496
74,186
7,021,310
3,565,410
13
14
17,609,493
14,096,796
2,945,083
1,937,083
(13,533,266)
(12,468,469)
7,021,310
3,565,410
The above consolidated statement of financial position
should be read in conjunction with the accompanying notes.
26
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Issued
Capital
Options
Reserve
Consolidated
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Non-
Controlling
Interest
Total
Equity
$
$
$
Balance at 01/07/2019
14,096,796
1,937,083
88,250
(12,490,025)
(834,072)
2,798,032
Total comprehensive income
for the year
Profit for the year
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss
Exchange differences on disposal of
subsidiary
Total comprehensive income / (loss)
for the year
Transactions with owners
recorded directly into equity
Disposal of subsidiary
-
-
-
-
-
-
-
-
Balance at 30/06/2020
14,096,796
1,937,083
Balance at 01/07/2020
14,096,796
1,937,083
Total comprehensive income
for the year
Loss for the year
Total comprehensive loss
for the year
Transactions with owners
recorded directly into equity
Shares/options issued on acquisition
of subsidiary
Share based payments
Issue of fully paid ordinary shares
Capital raising costs
-
-
-
-
1,760,000
560,000
-
2,026,845
(274,148)
448,000
-
-
Balance at 30/06/2021
17,609,493
2,945,083
-
21,556
(88,250)
-
(88,250)
21,556
-
-
-
21,556
(88,250)
(66,694)
-
-
-
-
-
-
-
-
-
-
-
834,072
834,072
(12,468,469)
(12,468,469)
(1,064,797)
(1,064,797)
-
-
-
-
(13,533,266)
-
-
-
-
-
-
-
-
-
3,565,410
3,565,410
(1,064,797)
(1,064,797)
2,320,000
448,000
2,026,845
(274,148)
7,021,310
The above consolidated statement of changes in equity
should be read in conjunction with the accompanying notes.
27
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Consolidated
Note
2021
$
2020
$
(1,142,907)
(728,240)
21,387
47,244
Net Cash Used in Operating Activities
15(b)
(1,121,520)
(680,996)
Cash Flows from Investing Activities
Payments for exploration expenditure
Cash brought to account on acquisition of XXXX Gold
Payments for acquisition of subsidiary
Proceeds from termination of revenue sharing agreement
Proceeds from sale of project
Transaction costs relating to sale
Transfers from/(to) term deposits
Net Cash Provided by/(Used in) Investing Activities
Cash Flows from Financing Activities
Gross proceeds from share issues
Costs of share issues
Repayment of borrowings
Net Cash Provided by Financing Activities
(1,567,719)
(14,120)
27
28
53,155
(400,000)
225,000
-
-
-
-
-
2,230,000
(274,000)
1,200,000
(1,200,000)
(489,564)
741,880
2,026,845
(129,231)
(188,776)
1,708,838
-
-
-
-
Net increase in cash and cash equivalents held
97,754
60,884
Cash and cash equivalents at the beginning of the financial year
2,094,411
2,033,527
Cash and cash equivalents at the end of the financial year
15(a)
2,192,165
2,094,411
The above consolidated statement of cash flows
should be read in conjunction with the accompanying notes
28
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sunshine Gold Limited is a company domiciled in Australia. The consolidated financial statements of the
Company as at and for the year ended 30 June 2021 comprise the Company and its subsidiaries (referred to
as the Group).
The significant policies, which have been adopted in the preparation of this financial report, have been
applied consistently unless otherwise stated and are as follows:
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Act 2001.
The financial report was authorised for issue by the Board on 27th September 2021.
The financial report has been prepared on an accruals basis and is based on historical costs except for certain
assets which are carried at fair value. Cost is based on the fair values of the consideration given in exchange
for assets.
For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity.
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
statements and notes comply with International Financial Reporting Standards (IFRS).
(c)
New and Revised Accounting Standards and Interpretations adopted by the Group
The accounting policies have been consistently applied by the Group and are consistent with those in
the June 2020 annual financial report except for the impact (if any) of new and revised standards and
interpretations outlined below.
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current
year.
Standards and Interpretations applicable to 30 June 2021
In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current reporting
period. As a result of this review, the Directors have determined that there is no material impact of the
new and revised Standards and Interpretations on the Group and, therefore, no material change is
necessary to Group accounting policies.
29
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent,
Sunshine Gold Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent
controls an entity when it 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 over the entity. A list of the subsidiaries is
provided in Note 18.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains
or losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests”. The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation
at either fair value or at the non-controlling interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and
each component of other comprehensive income. Non-controlling interests are shown separately within the
equity section of the statement of financial position and statement of profit or loss and other comprehensive
income.
(e)
Income Tax
The charge for current income tax is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using the rates that have been enacted or are substantively enacted by the
balance date.
Deferred tax is accounted for using the statement of financial position liability method in respect of
temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the
financial statements. No deferred income tax will be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised
or liability is settled. Deferred tax is credited in the statement of profit or loss and other comprehensive
income except where it relates to items that may be credited directly to equity, in which case the deferred
tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future profit will be available
against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the Group will
derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions
of deductibility imposed by the law.
30
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. 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 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.
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves.
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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses
of the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
(g)
Share Based Payments
The fair value at grant date is independently determined using a Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact
of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.
The fair value of the options granted excluded the impact of any non-market vesting condition (for example,
exploration related targets). Non-market vesting conditions are included in assumption about the number
of options that are expected to become exercisable. The employee benefit expense recognised each period
takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to these options is
transferred to share capital.
The market value of shares issued to employees for no cash consideration under the employee share scheme
is recognised as an employee benefits expense with a corresponding increase in equity when the employees
become entitled to the shares.
31
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h) Investments and other financial assets
Financial assets and are recognised when the Group becomes a party to the contractual provisions of the
financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from
the financial asset expire, or when the financial asset and substantially all the risks and rewards are
transferred.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured
at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable). For the purpose of subsequent measurement, financial
assets, other than those designated and effective as hedging instruments, are classified into the following
categories:
-
-
-
- debt instruments at fair value through other comprehensive income (FVOCI).
amortised cost;
fair value through profit or loss (FVTPL);
equity instruments at fair value through other comprehensive income (FVOCI); and
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
The classification is determined by both:
-
-
the entity’s business model for managing the financial asset; and
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Subsequent measurement of financial assets
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect
and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial
assets whose contractual cash flows are not solely payments of principal and interest are accounted for at
FVTPL. All derivative financial instruments fall into this category, except for those designated and effective
as hedging instruments, for which the hedge accounting requirements apply.
The category also contains an equity investment. The Group accounts for the investment at FVTPL and did
not make the irrevocable election to account for the investment in unlisted equity securities at fair value
through other comprehensive income (FVOCI). The fair value was determined in line with the requirements
of AASB 9, which does not allow for measurement at cost.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss.
The fair values of financial assets in this category are determined by reference to active market transactions
or using a valuation technique where no active market exists.
32
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment of financial assets
AASB 9’s impairment requirements use more forward-looking information to recognise expected credit
losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of these requirements included
loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract
assets recognised and measured under AASB 15 and loan commitments and some financial guarantee
contracts (for the issuer) that are not measured at fair value through profit or loss.
The Group considers a broad range of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the instrument.
12-month expected credit losses’ are recognised for financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that have low credit risk while ‘lifetime expected
credit losses’ are recognised for financial instruments that have deteriorated significantly in credit quality
since initial recognition and whose credit risk is not low.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses
over the expected life of the financial instrument.
(i)
Impairment of Assets
At each reporting date, the directors review the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in
use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the directors estimate the
recoverable amount of the cash-generating unit to which the asset belongs.
(j)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in
an orderly (ie unforced) transaction between independent, knowledgeable and willing market participants
at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may be made having regard to the characteristics of
the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market
are determined using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data.
33
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Fair Value of Assets and Liabilities (continued)
To the extent possible, market information is extracted from either the principal market for the asset or
liability (ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence
of such a market, the most advantageous market available to the entity at the end of the reporting period (ie
the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer
the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to
use the asset in its highest and best use or to sell it to another market participant that would use the asset in
its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer
of such financial instruments, by reference to observable market information where such instruments are
held as assets. Where this information is not available, other valuation techniques are adopted and, where
significant, are detailed in the respective note to the financial statements.
Valuation Techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more
valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation
technique that is appropriate in the circumstances and for which sufficient data is available to measure fair
value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation techniques selected by the Group are consistent with one or
more of the following valuation approaches:
• Market approach: valuation techniques that use prices and other relevant information generated by
•
market transactions for identical or similar assets or liabilities;
Income approach: valuation techniques that convert estimated future cash flows or income and expenses
into a single discounted present value; and
• Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current
service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when
pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the
Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of
unobservable inputs. Inputs that are developed using market data (such as publicly available information on
actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing
the asset or liability are considered observable, whereas inputs for which market data is not available and
therefore are developed using the best information available about such assumptions are considered
unobservable.
34
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Fair Value of Assets and Liabilities (continued)
Fair Value Hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input
that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date.
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data. If all significant inputs required to measure fair value are observable, the asset or
liability is included in Level 2. If one or more significant inputs are not based on observable market data, the
asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following
circumstances:
(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice
versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice
versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value
hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change
in circumstances occurred.
35
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Investments in Associates
Investments in associate companies are recognised in the financial statements by applying the equity method
of accounting where significant influence is exercised over an investee. Significant influence exists where the
investor has the power to participate in the financial and operating policy decisions of the investees but does
not have control or joint control over those policies. The equity method of accounting recognises the Group’s
share of post-acquisition reserves of its associates.
(l)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars which is the parent entity’s functional and presentation currency. All figures presented
in the financial report have been rounded to the nearest dollar.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of
the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit
or loss and other comprehensive income, except where deferred in equity as a qualifying cash flow or net
investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to
the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is
recognised in the statement of profit or loss and other comprehensive income.
Controlled entities
The financial results and position of foreign operations whose functional currency is different from the
Group’s presentation currency are translated as follows:
• Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.
•
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Income and expenses are translated at average exchange rates for the period.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the statement of financial position. These differences are recognised
in the statement of profit or loss and other comprehensive income in the period in which the operation is
disposed. The functional currency of the subsidiaries incorporated in the Philippines (refer Note 18) is the
Philippine PESO.
36
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m)
Cash and Cash Equivalents
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, net of outstanding bank overdrafts.
(n)
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
All revenue is stated net of the amount of goods and service tax (GST).
(o)
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 statement of financial position 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.
(p)
Earnings/(Loss) per share
(i) Basic Earnings/(Loss) per share
Basic earnings/(loss) per share is determined by dividing the operating profit/(loss) after income tax
attributable to members of Sunshine Gold Limited by the weighted average number of ordinary
shares outstanding during the financial year.
(ii) Diluted Earnings/(Loss) per share
Diluted earnings/(loss) per share adjusts the amounts used in the determination of basic
earnings/(loss) per share by taking into account unpaid amounts on ordinary shares and any
reduction in earnings per share that will probably arise from the exercise of options outstanding
during the financial year.
(q)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
37
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r)
Adoption of new and revised standards
Standards and Interpretations issued not yet adopted
The Directors have also reviewed all Standards and Interpretations that are relevant to the Group and have
recently been revised or amended but are not mandatory for the year ended 30 June 2021. As a result of this
review the Directors have determined that there is no material impact of these Standards and Interpretations
and, therefore, no change is necessary to Group accounting policies.
(s) Critical Accounting Estimates and Judgments
The preparation of financial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. The directors evaluate estimates and judgments incorporated into the financial
statements based on historical knowledge and best available current information. Estimates assume a
reasonable expectation of future events and are based on current trends and economic data, obtained both
externally and within the Group. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements
are described in the following notes:
Note 4 - Income Tax
Note 7 - Exploration and Evaluation Expenditure
Note 22 - Risk Management Objectives and Policies
Note 25 - Share Based Payments
38
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 2: OTHER INCOME
Interest earned
Consideration for termination of revenue sharing agreement
Gain on sale of SNPDC
Total
NOTE 3: EXPENSES AND GAINS/(LOSSES)
Consolidated
2021
$
16,295
225,000
-
2020
$
47,244
-
554,073
241,295
601,317
Significant Items
Profit/(Loss) before income tax includes the following expenses whose disclosure is relevant in explaining
the financial performance of the Group:
Included in corporate expenses
Consulting and directors fees
Share register maintenance and listing fees
Legal fees
NOTE 4: INCOME TAX
The prima facie tax on profit/(loss) before income tax
is reconciled to the income tax as follows:
Profit/(Loss) before income tax
Income tax calculated at 30% (2020: 30%)
Add back:
Provisions
Capital raising costs
Foreign losses movement
Future income tax (charge)/benefits not brought to account
Income tax expense/(benefit)
Deferred tax assets:
Capital raising costs
Provisions
Carried forward tax losses (including foreign tax losses)
Deferred tax liabilities:
Capitalised exploration costs
Accrued income
39
273,890
110,655
298,643
256,942
38,916
127,709
Consolidated
2021
$
2020
$
(1,064,797)
21,556
(319,439)
6,467
(3,505)
(8,049)
-
330,993
(7,565)
(239)
(25,408)
26,745
-
-
219,318
11,345
1,822,714
239
7,383
1,521,822
2,053,378
1,529,444
1,354,062
-
1,354,062
-
1,756
1,756
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 4: INCOME TAX (continued)
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax
assets have not been recognised in respect of these items because it is not probable that future taxable profit will
be available against which the Group can utilise the benefits thereof.
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Goods and services tax
Other
NOTE 7: EXPLORATION AND EVALUATION EXPENDITURE
Balance at the beginning of the period
Acquisition of XXXX Gold Pty Ltd (note 27)
Acquisition of Ukalunda Pty Ltd (note 28)
Expenditure incurred during the period
Balance at the end of the period
Consolidated
2021
$
2020
$
2,192,165
2,094,411
2,192,165
2,094,411
90,170
1,541
7,045
5,852
91,711
12,897
-
2,482,688
399,998
1,630,855
4,513,541
-
-
-
-
-
The above amounts represent costs of areas of interest carried forward as an asset in accordance with the
accounting policy set out in Note 1(f). The ultimate recoupment of deferred exploration and evaluation
expenditure in respect of an area of interest is dependent upon the discovery of commercially viable reserves
and the successful development and exploitation of the respective areas or alternatively sale of the underlying
areas of interest for at least their carrying value.
40
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 8: PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Movement:
Balance at the beginning of the period
Acquisition of XXXX Gold Pty Ltd (note 27)
Additions/(Disposals)
Depreciation expense
Balance at the end of the period
NOTE 9: OTHER FINANCIAL ASSETS
Non-Current
Unlisted investments at fair value:
Shares in other entities(i) (fair value through profit or loss)
Consolidated Consolidated
2021
$
2020
$
47,549
(8,538)
39,011
-
47,633
(84)
(8,538)
39,011
-
-
-
-
-
-
-
-
200,000
200,000
200,000
200,000
(i) As at 30 June 2021, the Group held 5,000,000 shares in Cockatoo Iron Pty Ltd as a result of the sale of the
Cockatoo Island Project.
NOTE 10: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
Advances/loans – other parties
NOTE 11: INTEREST BEARING LIABILITIES
Lease Liabilities
Current
Non-Current
NOTE 12: EMPLOYEE LEAVE LIABILITIES
Annual leave entitlements
41
155,443
1,279
72,907
1,279
156,722
74,186
19,158
8,301
27,459
18,315
18,315
-
-
-
-
-
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 13: ISSUED CAPITAL
Issued Capital
(a)
444,711,618 Ordinary shares fully paid (2020: 408,591,140)
17,609,493
14,096,796
Consolidated
2021
$
2020
$
(b) Movements in ordinary share capital of the Company:
Date
Details
01/07/2019
02/07/2019
Opening balance
Exercise of options
No. of Shares
$
361,923,540
46,667,600
14,096,796
-
30/06/2020
Closing balance
408,591,140
14,096,796
01/07/2020
30/10/2020
09/12/2020
09/12/2020
09/12/2020
30/06/2021
Opening balance
Share consolidation (5 for 8)
Entitlement offer
Broker offer
XXXX Gold Vendor Consideration
Less: capital raising costs
Closing balance
408,591,140
(153,221,766)
63,842,244
37,500,000
88,000,000
-
444,711,618
14,096,796
-
1,276,845
750,000
1,760,000
(274,148)
17,609,493
(c) Deferred Shares
As part of the consideration for the acquisition of XXXX Gold Pty Ltd, the Company agreed to:
(a) 50,000,000 Deferred Shares on the Company announcing to ASX, within 3 years of completion of the
Acquisition, that it has a JORC 2012 compliant inferred resource of 100,000 ounces of gold or gold
equivalent at a minimum 1 gram per tonne cut off on tenements owned or being acquired or applied for
by XXXX Gold at the time of completion; and
(b) a further 50,000,000 Deferred Shares on the Company announcing to ASX, within 3 years of completion
of the Acquisition, that it has a JORC 2012 compliant inferred resource of 200,000 ounces of gold or gold
equivalent at a minimum 1 gram per tonne cut off on tenements owned or being acquired or applied for
by XXXX Gold at the time of completion.
(d) Performance Rights
During the year, 17,000,000 Performance Rights were issued to directors in the following tranches:
(a) Tranche 1 – 50% of the rights will vest on the Company announcing to ASX within 3 years of completion
of the acquisition of XXXX Gold Pty Ltd (note 27) that it has a JORC 2012 compliant resource of 100,000
ounces of gold; and
(b) Tranche 2 – 50% of the rights will vest on the Company announcing to ASX within 3 years of completion
of the acquisition of XXXX Gold Pty Ltd (note 27) that it has a JORC 2012 compliant resource of 200,000
ounces of gold.
No value has been ascribed to the rights as the achievement of the above hurdles cannot be assessed with any
certainty at the date they were issued or at balance date.
42
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 13: ISSUED CAPITAL (continued)
(e) Capital Risk Management
When managing capital, management’s objective is to ensure the Group continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims
to maintain a capital structure that ensures the lowest cost of capital available to the Group.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The Group does not have a defined share buy-back plan.
No dividends were paid in 2020 and no dividends will be paid in 2021.
There is no current intention to incur further debt funding on behalf of the Group as on-going expenditure
will be funded via cash reserves or equity.
The Group is not subject to any externally imposed capital requirements.
NOTE 14: RESERVES
(a)
Composition
Options reserve
Consolidated
2021
$
2020
$
2,945,083
1,937,083
2,945,083
1,937,083
(b) Movements in options on issue during the last two years were as follows:
Date
Details
01/07/2019 Opening balance
31/12/2019
30/06/2020 Closing balance
Expired
No. of
Unlisted Options
Exercise
Price
Expiry
Date
35,000,000
(35,000,000)
-
$0.02
31/12/2019
No. of
Exercise
Expiry Date
Date
Details
Unlisted Options
Price
01/07/2020 Opening balance
09/12/2020 XXXX Gold Vendor consideration
-
40,000,000
$0.03
30/09/2025
options
09/12/2020 Board, management and
21,000,000
$0.03
30/09/2025
consultant options
09/12/2020 Underwriter options
04/01/2021 Employee options
30/06/2021 Closing balance
10,000,000
1,000,000
71,000,000
$0.03
$0.03
30/09/2025
02/11/2025
Refer to Note 25 for details of options issued during the year ended 30 June 2021.
43
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 14: RESERVES (continued)
(c) Nature and Purpose of Reserves
Options reserve
The options reserve is the value of equity benefits provided to directors, employees and consultants by the
Group as part of their remuneration.
NOTE 15: NOTES TO THE STATEMENT OF CASH FLOWS
a) Cash and cash equivalents at the end of the financial year as shown in the
Statement of Cash Flows is reconciled to items in the Statement of Financial
Position as follows:
Consolidated
2021
$
2020
$
Cash and cash equivalents (Note 5)
2,192,165
2,094,411
b) Reconciliation of net cash and cash equivalents used in operating activities
to profit/(loss) for the year:
Profit/(Loss) for the year
Depreciation expense
Exploration and evaluation expenditure written off / impaired
Gain on sale of SNPDC
Gain on termination of revenue sharing agreement
Share based payment expense
Movements in assets and liabilities:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in other assets
Increase/(Decrease) in trade and other payables
(1,064,797)
21,556
8,538
-
-
(225,000)
308,000
-
14,120
(554,073)
-
-
(78,814)
(25,010)
(44,437)
(1,045)
7,510
(169,064)
Net cash used in operating activities
(1,121,520)
(680,996)
c) Non-cash investing and financing activities
The Company issued shares and options for the acquisition of XXXX Gold Pty Ltd during the year ended 30 June 2021.
Refer note 27. There were no non-cash investing and financing activities during the year ended 30 June 2020.
44
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 15: NOTES TO THE STATEMENT OF CASH FLOWS (continued)
d)
Changes in liabilities arising from financing activities
Opening balance
Loans and borrowings acquired
Repayment of borrowings
Closing balance
NOTE 16: KEY MANAGEMENT PERSONNEL
Consolidated
2021
$
2020
$
-
216,235
(188,776)
27,459
-
-
-
-
This note is to be read in conjunction with the Remuneration Report which is included in the Directors’ Report.
(a) Compensation of Key Management Personnel
Compensation by category:
Short-term
Post employment
Termination benefit
Share based payment
321,587
15,946
-
252,000
192,000
-
-
-
589,533
192,000
(b) Transactions with Key Management Personnel
On 15 August 2020, XXXX Gold entered into loan agreements with Stone Poneys Nominees Pty Ltd (“Stone
Poneys”) and Leslie Brian Davis and Annette Fay Davis as trustees for . The
key terms of the loan agreements (other than the principal amounts) are identical and are set out below.
Brief description
Term
Principal amount
Drawdown
Interest
Certain Vendors (each a Lender) agrees to loan up to the principal amount to XXXX
Gold to fund direct exploration expenditure (excluding salaries and for no other
purpose) and XXXX Gold agrees to repay that amount to the Lender.
The agreements will terminate on the later of 30 November 2020 or upon full
repayment of the relevant loan (Repayment Date).
1. Stone Poneys - $100,000
2. Leslie Brian Davis and Annette Fay Davis as trustees for - $50,000
Each drawdown must be for a minimum amount of $10,000.
XXXX Gold agrees to provide a Lender 2 Business Days’ written notice of a drawdown.
Interest will accrue daily at the rate of 10.0% per annum and will be paid monthly
from 15 August 2020 until the Repayment Date. XXXX Gold agrees to pay interest to
the Lender within 5 Business Days of the end of each month. Any interest accrued
at the Repayment Date will be payable to the Lender within 5 Business Days of the
Repayment Date.
45
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 16: KEY MANAGEMENT PERSONNEL (continued)
Repayment
XXXX Gold agrees to repay the loan in full on or by 30 November 2020 (subject to a
Lender’s right to require immediate repayment in an event of default).
The loans were repaid on 19 January 2021.
NOTE 17: REMUNERATION OF AUDITORS
Audit services – HLB Mann Judd
– Overseas auditors (non HLB affiliates)
Consolidated
2021
$
37,598
4,278
41,876
2020
$
24,353
2,739
27,092
Non-audit services – HLB Mann Judd
25,000
-
NOTE 18: INTEREST IN SUBSIDIARIES
(a)
Information about Principal Subsidiaries
The consolidated financial statements include the financial statements of Sunshine Gold Limited and the
subsidiaries listed in the following table:
XXXX Gold Pty Ltd
Ukalunda Pty Ltd
Sunrise Exploration Pty Ltd
Sunshine Gold Pty Ltd
Sunpacific Resources Philippines, Inc.
Sunrom Philippines Holdings Corp’n.
Country of
Equity Interest
Incorporation
2021
%
2020
%
100
100
100
100
100
100
-
-
100
100
100
100
AUS
AUS
AUS
AUS
PHP
PHP
46
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 19: EARNINGS/(LOSS) PER SHARE
The following reflects the income and data used in the calculations of basic and diluted earnings/(loss) per share:
Profit/(Loss) used in calculating basic and diluted earnings/(loss) per
share
(1,064,797)
21,556
Consolidated
2021
$
2020
$
Weighted average number of ordinary shares used in calculating:
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
NOTE 20: COMMITMENTS FOR EXPENDITURE
Minimum exploration expenditure:
- Not later than 1 year
-
Between 1 year and 5 years
Finance Lease repayments:
- Not later than 1 year
-
Between 1 year and 5 years
NOTE 21: SEGMENT INFORMATION
Business Segments
Number of
Number of
Shares
Shares
411,987,597
411,987,597
255,369,462
255,369,462
2021
$
2020
$
250,000
3,069,500
20,415
8,506
-
-
-
-
The directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are
reviewed by the chief operating decision maker (the Board) in allocating resources and have concluded that at this
time there are no separate identifiable business segments.
The operations and assets of Sunshine Gold Limited and its controlled entities are employed in exploration activities
relating to minerals in Australia.
47
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 22: RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and short-term deposits, short-term loans and
investments in unlisted entities.
The main purpose of these financial instruments is to finance the Group’s operations. The Group has various
other financial assets and liabilities such as other receivables and trade payables, which arise directly from
its operations. It is, and has been throughout the entire period under review, the Group’s policy that trading
in financial instruments may be undertaken.
The main risks arising from the Group’s financial instruments is cash flow interest rate risk, foreign exchange
risk and market price risk. Other minor risks are either summarised below or disclosed at Note 10 in the case
of capital risk management. The Board reviews and agrees policies for managing each of these risks.
Cash Flow Interest Rate Risk
The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s short-
term deposits with a floating interest rate. These financial assets with variable rates expose the Group to
cash flow interest rate risk. All other financial assets and liabilities in the form of receivables and payables
are non-interest bearing. The Group does not engage in any hedging or derivative transactions to manage
interest rate risk.
The Group has not entered into any hedging activities to cover interest rate risk. In regard to its interest rate
risk, the Group does not have a formal policy in place to mitigate such risks.
The following tables set out the carrying amount by maturity of the Group’s exposure to interest rate risk
and the effective weighted average interest rate for each class of these financial instruments. There were no
fixed interest rate financial assets or liabilities held by the Group (2020: nil).
Non Interest
Bearing
$
Weighted
Average Effective
Interest Rate %
Floating
Interest Rate
$
Total
$
2021
2020
2021
2020
2021
2020
2021
2020
Financial Assets
- Cash and cash equivalents
- Deposits held
- Other receivables
- Unlisted investments
Total Financial Assets
Financial Liabilities
- Trade creditors
- Loan – other parties
Total Financial Liabilities
492,165
-
1,541
200,000
693,706
155,443
1,279
156,722
154,411
-
5,852
200,000
360,263
72,907
1,279
74,186
0.60
-
-
-
1.50
1.50
-
-
1,700,000
144,000
-
-
1,844,000
1,940,000
1,314,000
-
-
2,192,165
144,000
1,541
200,000
2,094,411
1,314,000
5,852
200,000
3,254,000
2,537,706
3,614,263
-
-
-
-
-
27,459
27,459
-
-
-
155,443
28,738
184,181
72,907
1,279
74,186
Net Financial Assets / (Liabilities)
536,984
286,077
1,816,541
3,254,000
2,353,525
3,540,077
48
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 22: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest Rate Sensitivity
At 30 June 2021, if interest rates had changed by 10% during the entire year with all other variables held constant,
profit/(loss) for the year and equity would have been $1,630 lower/higher, mainly as a result of lower/higher
interest income from cash and cash equivalents.
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short term
and long term Australian dollar interest rates. A 10% decrease sensitivity would move short term interest rates at
30 June 2021 from around 0.3% to 0.27% (10% increase: 0.33%) representing an 3 basis points shift. This would
represent one increase which is reasonably possible in the current environment with the bias coming from the
Reserve Bank of Australia and confirmed by market expectations that interest rates in Australia are more likely to
move down than up in the coming period.
Based on the sensitivity analysis, only interest revenue from variable rate deposits and cash balances are impacted
resulting in a decrease or increase in overall income.
Liquidity Risk
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities and through
the continuous monitoring of budgeted and actual cash flows.
Contracted maturities of liabilities at 30 June
Payables
- less than 30 days
- less than 12 months
Loans other parties
- less than 12 months
- greater than 12 months
Consolidated
2021
$
2020
$
156,722
72,907
-
-
19,158
8,301
184,181
1,279
-
74,186
49
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 22: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Market Price Risk
The Group is exposed to equity price risk which arises from equity securities at fair value through profit or loss
(FVTPL).
The Group is exposed to market price risk arising from investments in other companies carried at fair value. At 30
June 2021, if the fair value of investments in other companies had changed by 10% during the entire year with all
other variables held constant, profit/(loss) for the year and equity would have been $20,000 lower/higher. The
Group holds shares in Cockatoo Iron NL which is held at fair value.
Net Fair Values
For assets and other liabilities the net fair value approximates their carrying value. The Group has financial assets
and liabilities that are classified as level 3 under the fair value hierarchy and has no financial assets or liabilities
where the carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to and forming part of the financial statements.
Financial Instruments
The following table presents the Group’s assets and liabilities measured and recognised at fair value:
30 June 2021
Equity investments at FVTPL
30 June 2020
Asset
Equity investments at FVTPL
Financial liabilities
Finance lease
Level 1
Level 2
$
-
$
-
Level 1
Level 2
$
-
$
-
Level 3
$
200,000
Level 3
$
200,000
Total
$
200,000
Total
$
200,000
Interest
rate
%
6.99
Maturity
30 June
30 June
6/11/2022
2021
$
27,459
27,459
2020
$
-
-
50
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 22: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Financial Instruments (continued)
Valuation techniques
The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to
the previous reporting period.
Fair Value Hierarchy
Level 3
Fair value through FVTPL
Fair value is based on unobservable inputs for the asset or liability.
NOTE 23: EVENTS SUBSEQUENT TO REPORTING PERIOD
On 20 September 2021, the Company announced that it had secured commitments for a placement of
104,111,112 shares at an issue price of $0.045 to raise $4,685,000 million (before costs) to institutional and
sophisticated investors (“Placement”). In addition, subject to shareholder approval, the directors will also
subscribe for 7,000,000 shares at an issue price of $0.045 to raise an additional $315,000.
The Placement was completed, and new shares issued to institutional and sophisticated investors on 27
September 2021.
No other matters or circumstances have arisen subsequent to the balance date which would significantly affect
the operations of the Group, its operating results or its state of affair in the subsequent financial years.
NOTE 24: CONTINGENT LIABILITIES
As part of its acquisition of Nugold Hill Mines in 2002, the Company has an obligation to rehabilitate the Xanadu
tenements area. The Company has a security bond in place with the Department of Mines, Industry, Regulation
and Safety which is expected to cover the majority of the cost.
A 1% net smelter royalty is payable as part of total consideration on the acquisition of Ukalunda Pty Ltd (refer to
Note 28). The exploration activities of the Company are not yet at a stage to determine if the royalty will be paid.
Other than as stated above, Sunshine Gold Limited has no known material contingent liabilities at the end of the
financial year.
51
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 25: SHARE BASED PAYMENTS
The following share based payment transactions occurred or were recognised during the year:
• 21,000,000 $0.03 share options expiring 30/09/2025 were issued to board, management and consultants.
These options were valued at $294,000 and were fully expensed.
• 10,000,000 $0.03 underwriter options expiring 30/09/2025 with a total value of $140,000 were
recognised during the year as a capital raising cost and issued in December 2020.
• 40,000,000 consideration options, which form part of the acquisition costs (note 27).
• 1,000,000 $0.03 employee options expiring 02/11/2025 with a total value of $14,000 were recognised
during the year as an employment expense.
All share options issued during the year vested immediately. The total amount of $308,000 (2020: $nil) was
recognised as a share based payment expense, $140,000 (2020: $Nil) was recognised as a capital raising cost and
$560,000 was recognised as consideration paid to the XXXX Gold vendors.
Fair values of share options issued are determined using the Black-Scholes model based on information available
as at the measurement date, considering the exercise price, term of option, the share price at grant date, expected
price volatility of the underling share, expected yield and the risk-free interest rate for the term of the option.
Parameters for all share options issued during the period were:
Measurement date
Issue date
Expiry date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of options (years)
Underlying share price
Option exercise price
Value of option
Number of options issued
Value of options
Amount expensed during year
Capital raising cost recognised during year
XXXX Gold vendor options
09/12/2020 31/12/2020
09/12/2020 04/01/2021
30/09/2025 02/11/2025
-
100%
0.44%
5.10
$0.02
$0.03
$0.014
71,000,000
$994,000
$294,000
$140,000
$560,000
-
100%
0.44%
5.10
$0.02
$0.03
$0.014
1,000,000
$14,000
$14,000
-
-
The number and weighted average exercise prices of share options are as follows:
Outstanding at 1 July
Forfeited during the year
Exercised during the year
Expired during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
Number of
Options
2021
-
-
-
-
72,000,000
72,000,000
72,000,000
Weighted
average exercise
price
2020
Number of
Options
2020
$0.02
-
-
$0.02
-
-
-
35,000,000
-
-
(35,000,000)
-
-
-
Weighted
average exercise
price
2021
-
-
-
-
$0.03
$0.03
$0.03
52
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 26: PARENT ENTITY DISCLOSURES
The accounting policies of the Parent Entity are consistent with those of the Group as disclosed in Note 1, except
for Investment in Subsidiaries, which are accounted for at cost less impairment
(a) Financial Position
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
(b) Financial Performance
Profit/(Loss) for the year
Other comprehensive income
Total Comprehensive Profit/(Loss)
(c) Guarantees
2021
$
2020
$
2,350,884
8,128,903
3,439,451
4,589,452
21,010
21,010
72,908
72,908
17,609,492
2,945,083
(12,446,682)
14,096,796
1,937,083
(11,517,334)
8,107,893
4,516,545
(929,347)
-
1,403,071
-
(929,347)
1,403,071
The parent entity has not entered into any guarantees, in relation to the debts of subsidiaries.
(d) Contingent liabilities
As part of its acquisition of Nugold Hill Mines in 2002, the Company has an obligation to rehabilitate the Xanadu
tenements area. The Company has a security bond in place with the Department of Mines, Industry, Regulation
and Safety which is expected to cover the majority of the cost. The Department of Mines, Industry, Regulation and
Safety has not currently insisted on rehabilitating the site as there is the potential for future operations.
A 1% net smelter royalty is payable as part of total consideration on the acquisition of Ukalunda Pty Ltd (refer to
Note 28). The exploration activities of the Company are not yet at a stage to determine if the royalty will be paid.
Other than as stated above, the parent entity has no known material contingent liabilities at the end of the
financial year.
(e) Commitments for expenditure
The parent entity has not entered into any commitments for expenditure as at the end of the financial year.
53
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 27: ACQUISITION OF XXXX GOLD PTY LTD
On 30 July 2020, the Company entered into Memorandum of Understanding (“MOU”) with XXXX Gold Pty Ltd
(“XXXX Gold”) to acquire all the issued shares and options in XXXX Gold. The acquisition was subject to various
conditions precedent and was completed on 9 December 2020.
Consideration
As consideration for the acquisition, the Company agreed to issue to the shareholders of XXXX Gold the following
securities in the capital of the Company (on a post-Consolidation basis):
(a)
(b)
(c)
88,000,000 Consideration Shares;
40,000,000 Consideration Options;
50,000,000 Deferred Shares on the Company announcing to ASX, within 3 years of completion of the
Acquisition, that it has a JORC 2012 compliant inferred resource of 100,000 ounces of gold or gold
equivalent at a minimum 1 gram per tonne cut off on tenements owned or being acquired or applied for
by XXXX Gold at the time of completion; and
a further 50,000,000 Deferred Shares on the Company announcing to ASX, within 3 years of completion
of the Acquisition, that it has a JORC 2012 compliant inferred resource of 200,000 ounces of gold or gold
equivalent at a minimum 1 gram per tonne cut off on tenements owned or being acquired or applied for
by XXXX Gold at the time of completion.
(d)
Accounting standards applied
The acquisition of XXXX Gold has been accounted for as an asset acquisition. The acquisition does not meet the
definition of a business combination in accordance with AASB 3 Business Combinations (as XXXX Gold is considered
for accounting purposes not to be a business). As such the acquisition has been accounted for as a share-based
payment transaction using the principles of AASB 3 Business Combinations and AASB 2 Share-based Payment.
The fair value of the consideration paid and allocation to net identifiable assets is as follows:
Fair value of consideration paid:
88,000,000 Consideration Shares
40,000,000 Consideration Options
100,000,000 Deferred Shares (i)
Fair value of net identifiable assets acquired:
Cash and cash equivalents
Security deposits
Trade and other receivables
Property, plant and equipment
Exploration and evaluation expenditure
Trade and other payables
Loans and borrowings
$
1,760,000
560,000
-
2,320,000
53,155
20,000
25,431
47,633
2,482,688
(97,386)
(211,521)
2,320,000
(i) No cost was been attributed to the Deferred shares due to exploration activities of the Company not yet being
at a stage to determine if the vesting conditions will be met.
54
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 28: ACQUISITION OF UKALUNDA PTY LTD
On 31 March 2021, the Company acquired Ukalunda Pty Ltd (“Ukalunda”) for $400,000 cash, refund of a security
bond of $4,500 and a 1% net smelter royalty on gold revenue from Stavely Minerals Ltd. Ukalunda owns the
Ravenswood West Gold-Copper-Rare Earths project.
Accounting standard applied
The acquisition of Ukalunda has been accounted for as an asset acquisition. The acquisition does not meet the
definition of a business combination in accordance with AASB 3 Business Combinations (as Ukalunda is considered
for accounting purposes not to be a business). As such the acquisition has been accounted for as a share-based
payment transaction using the principles of AASB 3 Business Combinations and AASB 2 Share-based Payment.
The fair value of the consideration paid and allocation to net identifiable assets is as follows:
Fair value of consideration paid:
Cash
Security Bond
1% net smelter royalty
Fair value of net identifiable assets acquired:
Cash and cash equivalents
Security deposits
Exploration and evaluation expenditure
$
400,000
4,500
-
404,500
2
4,500
399,998
404,500
(i) No cost has been attributed to the net smelter royalty due to exploration activities of the Company not yet being
at a stage to determine if the royalty will be paid.
55
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors:
a.
the accompanying financial statements, notes and additional disclosures are in accordance with
the Corporations Act 2001 including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
performance for the year then ended; and
ii.
complying with Accounting Standards and Corporations Regulations 2001; and
b.
the financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
This declaration is signed in accordance with a resolution of the Board of Directors.
_______________________
Alec Pismiris
Director
Dated this 27th day of September 2021
56
INDEPENDENT AUDITOR’S REPORT
To the members of Sunshine Gold Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sunshine Gold Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30
June 2021, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined the matters described below to
be the key audit matters to be communicated in our report.
57
Key Audit Matter
How our audit addressed the key audit
matter
Exploration and evaluation expenditure
Note 7 to the financial report
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises exploration and evaluation expenditure.
Our audit focussed on the Group’s assessment of the
recognition of the capitalised exploration and
evaluation expenditure asset, due to this asset being
the most significant asset of the Group.
Our procedures included but were not
limited to the following:
- We selected a sample of additions to
capitalised exploration and assessed
the recognition in line with the
requirements of AASB 6;
- We reviewed management’s
assessment of indicators of
impairment in relation to its capitalised
exploration expenditure under AASB 6
and AASB 136;
- We considered the classification of
exploration expenditure in line with the
current accounting policy; and;
- We verified rights to tenure over
individual tenements.
Acquisition accounting
Refer to Notes 27 and 28
During the year the Group acquired 100% of the
shares of XXXX Gold Pty Ltd and Ukalunda Pty Ltd.
While neither of the acquired entities meet the
definition of a business, the acquisitions were
accounted for using the principles of AASB 3 Business
combinations and AASB 2 Share-Based Payments.
Our procedures included but were not
limited to the following:
- We read the sale and purchase
agreement to understand key terms and
conditions;
Accounting for such transactions is a complex and
judgemental exercise, requiring management to
determine the fair value of the consideration and the
net assets acquired under business combination
principles.
The excess of consideration over net assets acquired
has been recognised as exploration assets of
$2,882,686 and is material to the statement of
financial position.
It is due to the impact on the financial statements,
potential complexity and judgement involved that this
is considered to be a key audit
matter.
- We assessed the principles applied in
the acquisition accounting;
- We considered whether or not XXXX
Gold Pty Ltd and Ukalunda Pty Ltd
constituted a business under AASB 3;
- We assessed the consideration and
accounting for the acquisition; and
- We assessed the adequacy of the
Group’s disclosure in respect of the
acquisition.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2021, but does not
include the financial report and our auditor’s report thereon.
58
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
-
-
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
59
-
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Sunshine Gold Limited for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
27 September 2021
N G Neill
Partner
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AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Sunshine Gold Limited for the
year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 September 2021
N G Neill
Partner
61
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 22 SEPTEMBER 2021:
SPREAD
OF HOLDINGS
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
NO. OF
HOLDERS
50
43
68
368
309
838
NO. OF
SHARES
18,297
121,998
589,348
18,974,948
425,007,027
444,711,618
PERCENTAGE OF
ISSUED CAPITAL %
0.00%
0.03%
0.13%
4.27%
95.57%
100.00%
The number of shareholdings held in less than marketable parcels is 136 (based on the last sale
price of $0.05 on 22 September 2021).
(ii)
TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES:
The names of the twenty largest shareholders of ordinary fully paid shares are listed below:
NAME
1
2
2
2
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
SNOWBALL 3 PTY LTD
PARETO NOMINEES PTY LTD
MR DAMIEN LESLIE KEYS & MRS AMY DAWN KEYS
STONE PONEYS NOMINEES PTY LTD
MR LESLIE BRIAN DAVIS & MRS ANNETTE FAY DAVIS
TOPAZE ENTERPRISES PTY LTD
MR KENNETH GATCHALIAN
MONSLIT PTY LTD
MR JOE LEUZZI & MRS SALLY LEUZZI
DF LYNTON-BROWN PTY LTD
ACP INVESTMENTS PTY LTD
DARLOT INVESTMENTS PTY LTD
P D CRUTCHFIELD PTY LTD
ALITIME NOMINEES PTY LTD
MR ROGER BLAKE & MRS ERICA LYNETTE BLAKE
GAB SUPERANNUATION FUND PTY LTD
ACP INVESTMENTS PTY LTD
MR JOSE MARI MORAZA & MR ANTONIO MORAZA
QUARTZ MOUNTAIN MINING PTY LTD
ENERGY-SAVING TECHNOLOGY PTY LTD
RFID SYSTEMS PTY LTD
GALLANT (WA) PTY LTD
ENERGY-SAVING TECHNOLOGY PTY LTD
Total
NO. OF
ORDINARY
SHARES HELD
PERCENTAGE
OF ISSUED
SHARES %
46,245,297
22,000,000
22,000,000
22,000,000
22,000,000
16,213,476
16,062,244
14,231,834
10,273,677
10,000,000
9,375,000
8,500,000
7,645,352
7,000,000
5,000,000
4,921,115
4,687,500
4,545,278
4,500,000
3,918,801
3,791,181
3,610,292
3,490,625
272,011,672
10.40%
4.95%
4.95%
4.95%
4.95%
3.65%
3.61%
3.20%
2.31%
2.25%
2.11%
1.91%
1.72%
1.57%
1.12%
1.11%
1.05%
1.02%
1.01%
0.88%
0.85%
0.81%
0.78%
61.17%
62
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION (continued)
QUOTED SECURITIES (continued)
(a)
ORDINARY FULLY PAID SHARES (continued)
(iii)
VOTING RIGHTS
Article 15 of the Constitution specify that on a show of hands every member present in person,
by attorney or by proxy shall have:
(a)
(b)
for every fully paid share held by him one vote; and
for every share which is not fully paid a fraction of the vote equal to the amount paid up
on the share over the nominal value of the shares.
(iv)
SUBSTANTIAL SHAREHOLDERS
Name
Torresan Group
Stone Poneys Nominees Pty Ltd
(b)
UNQUOTED SECURITIES
(i)
UNLISTED OPTIONS ON ISSUE
Ordinary Shares
No.
60,477,131
22,555,000
83,032,131
%
13.60
5.07
18.67
Options exercisable at $0.03 expiring 30 September 2025
Options exercisable at $0.03 expiring 2 November 2025
71,000,000
1,000,000
(ii)
PERFORMANCE RIGHTS
Performance rights with vesting conditions expiring 30 September 2023
17,000,000
63
SUNSHINE GOLD LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT
Sunshine Gold Limited and the Board are committed to achieving and demonstrating the highest standard of
corporate governance. Sunshine Gold Limited has modelled its corporate governance policies against the
Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance
Council.
The 2021 corporate governance statement was approved by the board on 27 September 2021 and is current as at
27 September 2021. A description of the Group’s current corporate governance practices is set out in the Group’s
Corporate Governance Statement which can be viewed at www.shngold.com.au/investor-centre/corporate-
governance/.
64