Annual Report 2022
Four projects.
Tier one potential.
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
Unit 1, 23 Mackley Street
Garbutt, Queensland 4814
Postal Address
Unit 1, 23 Mackley Street
Garbutt, Queensland 4814
Telephone
(+61 8) 6245 9828
Corporate Directory
Share Registry
Automic Registry Services
Level 5, 191 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
Website
www.shngold.com.au
ABN
12 063 388 821
Sunshine Gold Limited Annual Report 30 June 2022
Four projects. Tier one potential
Sunshine Gold is developing four
projects in north Queensland in proven
districts with high prospectivity for gold,
copper, molybdenum, and rare earths
elements.
1
Sunshine Gold Limited Annual Report 30 June 2022
Contents
00
Corporate
Directory
02
Chairman’s Letter
03
Review of
Operations
11
Directors’ Report
16
Mineral Resources
and Ore Reserves
Statement
17
Schedule of
Tenement
Interests
21
Remuneration
Report
27
Statement of Profit
or Loss and Other
Comprehensive
Income
28
Statement of
Financial Position
29
Statement of
Changes in Equity
30
Statement of Cash
Flows
31
Notes to the
Financial
Statements
61
Directors’
Declaration
62
Independent
Auditor’s Report
66
Auditor’s
Independence
Declaration
67
ASX Additional
Information
69
Corporate
Governance
Statement
2
Sunshine Gold Limited Annual Report 30 June 2022
Finally, and no less significantly, the team delivered
this outstanding performance with zero injuries and
no environmental incidents.
As the first quarter of the new financial year already
draws to a close, Sunshine Gold has a runway of
activities ahead which I’m confident will see the
company start to take flight. Our dedicated and
systematic exploration efforts are just beginning to
reveal the incredible value hosted by our portfolio of
assets. On behalf of the board, I thank you for your
support and look forward to delivering on your
investment.
Yours faithfully
Alec Pismiris
Chairman
Sunshine Gold
Dear shareholder
On behalf of the Board of Directors of Sunshine Gold,
we are pleased to present to you the Annual Report
for the financial year ended 30 June 2022.
The past year was the most active to date in our short
history. We continued to build growth and
momentum within our portfolio of high quality 100%
owned Queensland gold and copper projects. We also
added leverage to rare earths through our discovery
of an enriched pluton at Ravenswood West.
Specifically, the past year has seen us achieve the
following:
•
Drilling of 17,359 m of reverse circulation and
diamond core, resulting in initial gold JORC
Resource at Triumph and the delineation of
porphyry
copper-gold-silver-molybdenum
porphyry systems at Titov, Keans and the
Bank, at Ravenswood West.
•
Delineation of 118,000 oz gold JORC
Resource at Triumph. The Resource is
shallow and open in all directions.
•
Discovery of a rare earth enriched intrusion,
high in neodymium and praseodymium, at
Elphinstone Creek, Ravenswood West.
•
Identification of a large-scale, breccia-pipe
gold target at Wilbur’s Hill, Ravenswood
West.
•
First field works conducted at Investigator
and Hodgkinson projects.
This has set the Company up for a strong 2023. Drilling
is planned for Ravenswood West and Triumph,
geophysical test work at Investigator and further field
work at Hodgkinson. A Mineral Resource update will
be provided at Triumph in 2023.
Chairman’s
Letter
3
Sunshine Gold Limited Annual Report 30 June 2022
Review of
Operations
4
Sunshine Gold Limited Annual Report 30 June 2022
The Resource comprises three zones totalling ~1.25km
of strike within the >5km long Southern Corridor and
one zone in the Northern Corridor. Over 90% of the
Resource ounces are within 100m of surface. Rock
chip sampling and broad spaced drilling have defined
mineralisation beyond the Resource limits along the
remaining 3.75km of the Southern Corridor. This
presents an opportunity for future Resource growth.
The Resource is presently classified as Inferred as
diamond drill assays and metallurgical studies were not
available at the time of the release of the Resource.
It is anticipated that the incorporation of this data will
result in a proportion of the Inferred Resource being
reclassified to Indicated Resource.
The initial Resource is expected to grow with future
drilling and an updated Resource is expected in April
2023.
Sunshine Gold released a 118,000 ounce JORC
2012 Mineral Resource Estimate (“Resource”)
grading 2.03 g/t Au in March 2022. The initial
Resource is a product of the successful drilling
programs completed to date. Further drilling, to be
completed in 2023, is expected to grow the
Resource in both the Southern and Northern
Corridors.
Drilling operations were conducted in the Triumph
Southern Corridor. A total of 9,322m (84 holes) were
drilled during the year and included best intersections
of:
• 16m @ 8.44 g/t Au from 38m (22SHRC018)
• 4m @ 11.71 g/t Au from 16m (21SCRC004)
• 10m @ 4.54 g/t Au from 20m (22SHRC029)
• 2m @ 16.18 g/t Au from 98m (22NCRC022)
Triumph Project
Au
Fig 1: Triumph Project location
5
Sunshine Gold Limited Annual Report 30 June 2022
Sampling also confirms that the contact between the
tonalite
and
surrounding
sediments
contains
anomalous gold.
In the Northern Corridor, a series of highly encouraging
drill results coincide with significant historic workings.
Historic production records indicated the advance
workings produced over 4,000 oz Au at a grade of ~3.5
oz/t between 1895 and 1908. Previous drilling has
intersected best results of:
• 3m @ 24.96 g/t Au from 17m (TDH155)
• 3m @ 9.68 g/t Au from 14m (TDH212)
The focus for future drilling will be split between the
Southern and Northern Corridors.
Within the Southern Corridor, mineralization is
interpreted to continue through untested zones
between delineated Resource areas. The mineralised
fracture network has been modelled using a
combination of drill intercept data, surface and
downhole geochemical data and geophysical methods
(induced polarization and electromagnetics).
New growth areas within the Southern Corridor include
known mineralisation westward toward the margins of
the host rock - the Norton Tonalite.
Fig 2: Reconstruction of the host Norton Tonalite, accounting for 1.8km of displacement across the Norton Fault (black line).
The Southern Corridor targets span from Brigham Young (west) to Bald Hill East (east).
6
Sunshine Gold Limited Annual Report 30 June 2022
Ravenswood West
Project
Au-Cu-REEs-Mo-Ag
Fig 3: Ravenswood West Project location
Preliminary metallurgical test work was completed on
a composite sample from RC drilling. The positive
metallurgical results form a basis for reporting a
recoverable
copper
equivalent
value*
for
drill
intersections at Titov and Keans. The best Titov drill
results included:
• 66m @ 2.10% recov. CuEq* (25m, 21TVRC004)
• 121m @ 0.75% recov. CuEq* (0m, 21TVRC001)
Higher-grade mineralization, including 4m @ 1.31%
CuEq* (from 69m, 21TVDD001) was intersected south
of Titov. Titov South represents a follow up drill target
for testing in late 2022.
The Ravenswood West project was acquired in
April 2021. The project has porphyry copper-gold-
molybdenum, intrusion-related gold and rare-earth
element potential. The project has been a hive of
activity with drilling, soil sampling and geophysical
surveys conducted in the last year.
Porphyry Copper-Gold-Molybdenum Exploration
Porphyry potential was first identified at Titov, an
outcropping, malachite-stained granodiorite with an
abundance of molybdenum-bearing quartz veins.
Mineralisation has now been identified over 350m of
strike and to depths of ~350m through RC and diamond
drilling.
Eight RC holes (1,550m) and one diamond drill hole
(501m) intersected thick zones of mineralisation.
* recoverable copper equivalent accounts for metallurgical
recovery, cost and other parameters. All assumptions are
listed in ASX release 11th August 2022, Table 1, Data
Aggregation Methods
7
Sunshine Gold Limited Annual Report 30 June 2022
Fig 4: Porphyry exploration at the Ravenswood West Project is
focused along a 15km long prospective structural corridor.
Reconnaissance RC drilling (15 holes, 1,830m) at
Keans intersected zone of high grade mineralisation.
Best results included:
• 12m @ 1.21% recov. CuEq* (81m, 21KNRC004)
• 21m @ 0.82% recov. CuEq* (1m, 21KNRC003)
First pass mapping and sampling were completed at
Gagarin and the Bank Cu-Au-Ag-Mo targets. Rock chip
sampling from Gagarin produced impressive results
from outcropping fault zones including:
• 10.96% Cu, 0.48 g/t Au, 4.61 g/t Ag, 1,048 ppm Mo
(GG001)
• 12.99% Cu, 0.07 g/t Au, 6.29 g/t Ag, 182 ppm Mo
(GG010)
An
Induced
Polarisation
(“IP”)
survey
was
commissioned over Gagarin in May 2022. Targets
generated from the Induced Polarisation survey will be
drill tested in late 2022.
Intrusion-Related Gold Exploration
RC drilling was completed at Dreghorn (34 holes,
3,558m), following up on a soil program that delineated
a broad surface geochemical anomaly. The soil
anomaly defined gold > 50 ppb Au over 9km of strike
length. Three dominant fault orientations were
identified from magnetic interpretation and soil
geochemistry in the target area.
The reconnaissance drill program was designed to
determine which fault orientations were most likely to
host mineralisation.
Drilling intersected narrow veins, with best results
including:
• 1m @ 8.06 g/t Au from 9m (21DRRC021)
• 1m @ 6.81 g/t Au from 7m (21DRRC029)
• 1m @ 5.85 g/t Au from 68m (21DRRC010)
A breccia pipe intrusion-related gold target was
identified from mapping and historic soil sampling at
Wilbur’s Hill. The target is located on the northeast
corner of the Boori Igneous Complex, a late
Carboniferous to Early Permian suite of intrusives and
volcanics.
Wilbur’s Hill forms a topographic high and is comprised
of rhyolitic volcanics which exhibit flow- banding, local
brecciation and limonitic fracture fill.
The Wilbur ‘s Hill target is analogous to the nearby 1
Moz Au Mt Wright Mine (9km east of Wilburs Hill) and
the 3.5Moz Au Mt Leyshon Mine. Both Mt Wright and
Mt Leyshon are also hosted in late Carboniferous to
Early Permian volcanic breccia pipes.
Sunshine Gold was awarded a $92,000 Collaborative
Exploration
Incentive
(“CEI”)
grant
from
the
Queensland Department of Resources to contribute
toward a deep-sensing Induced Polarisation and
Magnetotelluric geophysical survey at Wilbur ‘s Hill.
The survey was be completed in September 2022 and
defined three exciting areas for follow up:
• three diamond holes will target the main anomaly at
depths of ~150–200m commencing in early
October 2022;
• A second but discrete anomaly is seen along a
north-east striking fault zone (“Northern Fault
Zone”). Two RC drill holes will target the Northern
Fault Zone in early October 2022; and
In addition, a third anomalous area was identified ~1km
north of Wilbur’s Hill. Soil sampling in this area shows
continuation of anomalism of pathfinder elements
(including Ag, As, Bi, Cu, Pb, Sb, Te, Zn) for >1.5km.
* recoverable copper equivalent accounts for metallurgical
recovery, cost and other parameters. All assumptions are
listed in ASX release 11th August 2022, Table 1, Data
Aggregation Methods
8
Sunshine Gold Limited Annual Report 30 June 2022
Rare-Earth Exploration
The Elphinstone Creek and Bank Breccia targets are
hosted in the ~27km2 Barrabas Adamellite, a quartz
monzonite, with a broad, moderate magnetic response
and a strong potassium and thorium radiometric
signature.
Soil sampling has been completed over the entire
prospective intrusion with 20% of the samples grading
> 750 ppm TREO and 46 samples grading > 1,000 ppm
TREO.
Sunshine Gold was the recipient of a further CEI grant
(up to $34,050) to fund geochemical analytical costs.
Samples were analysed by specialists from Australian
National University and confirmed the Barrabas
Adamellite as the likely source of the rare earth
mineralisation.
Areas of secondary enrichment will be targeted in first
pass AC drilling in late 2022. The drilling will assess
ionic clay potential and/or enrichment in or around
pegmatitic phases of the Barrabas Adamellite.
Fig 5: The Elphinstone Creek Prospect hosts rare earth mineralisation is hosted in the 27km Barrabas Adamellite.
9
Sunshine Gold Limited Annual Report 30 June 2022
Investigator Project
Cu
A particular focus will be placed on characterising fault
fill and breccia type.
Electrical geophysical surveys and detailed magnetics
are planned for mid-2023 and will be integrated with
mapping data to refine targets for drill testing.
First field mapping was undertaken at the
Investigator Copper Project in February 2022. The
project is geologically analogous to the Capricorn
Copper Mine (61Mt @ 1.8% Cu) located 12km north.
Field mapping was undertaken in February 2022. The
mapping focused on refining the location and thickness
of the east-west oriented Investigator Fault.
Fig 6: Investigator Project location
10
Sunshine Gold Limited Annual Report 30 June 2022
Hodgkinson Project
Au W
Fig 7: Hodgkinson Project location
An integration of recently collected datasets (mapping,
soils and magnetics) has determined the intersections
of sandstone-dominant lithological packages and
northwest or northeast oriented faulting as a locus for
gold enrichment.
Three gold in soil anomalies were identified in May
2021 with the main anomaly field mapped in August
2021. The study showed quartz veining through
Hodgkinson Formation sediments. The anomalies are
flagged for future follow up work.
A detailed review and integration of data from the
magnetic survey completed (December 2020) and
soil sampling completed (May 2021) has generated
targets for drill testing in the northern area at
Campbell Creek.
Campbell Creek is at the head of the Palmer River
watershed. Palmer River has produced ~1.3Moz Au
from largely alluviual sources since that late 1800’s.
11
Sunshine Gold Limited Annual Report 30 June 2022
Photo
Directors’
Report
12
Sunshine Gold Limited Annual Report 30 June 2022
The directors present their report together with the financial statements of the Group consisting of Sunshine Gold
Limited (“Sunshine Gold” or “the Company”) and its controlled entities for the financial year ended 30 June 2022
(“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
Paul Chapman
Leslie Davis
Antonio Torresan
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, The Market Herald and Pacton Gold.
Former directorships (last 3 years): Lanthanein Resources, Javelin Minerals.
Damien Keys PhD (Struct. Geo), MAIG
Managing Director
Dr Keys is a geologist with over 20 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 AUSIMM and the
Australian Institute of Geoscientists.
Other current directorships: None
Former directorships (last 3 years): None
Directors’ Report
13
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
PARTICULARS OF DIRECTORS (CONTINUED)
Paul Chapman B.Comm, Grad. Dip. Tax, CA, MAICD, MAusIMM
Non-Executive Director
Mr Chapman is a company director with over 30 years in the resource sector. Mr Chapman has held senior
management roles across a range of commodity businesses and public companies in Australia and the USA. Mr
Chapman was a founding director and shareholder of Reliance Mining, Encounter Resources, Rex Minerals, Silver
Lake Resources, Black Cat Syndicate and Dreadnought Resources.
Other current ASX directorships: Black Cat Syndicate, Dreadnought Resources, Encounter Resources, Meeka Metals
Former directorships (last 3 years): Avanco Resources
Leslie Davis B.Sc. MAusIMM
Non-Executive Director
Mr Davis has over 40 years mining industry experience and was the founding Managing Director of Silver Lake
Resources and a current director of Black Cat Syndicate. Mr Davis has completed a Masters of Science in mineral
economics.
Other current ASX directorships: Black Cat Syndicate
Former directorships (last 3 years): Silver Lake Resources, Spectrum Metals
Antonio Torresan
Non-Executive Director
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
14
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
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 2022 by each director:
Number
Eligible to
Attend/Approve
Number
Attended/Approved
Alec Pismiris
18
18
Damien Keys
18
18
Paul Chapman
18
18
Leslie Davis
18
17
Antonio Torresan
18
18
PRINCIPAL ACTIVITIES
The principal activities of the Group during the course of the financial year comprised of exploration on the
Triumph, Hodgkinson, Investigator and Ravenswood West Projects.
OPERATING RESULTS
The Company made a loss after tax of $1,667,266 for the year ended 30 June 2022 (2021: $1,064,797).
REVIEW OF OPERATIONS
Our operations are reviewed on pages 4 to 10.
15
Sunshine Gold Limited Annual Report 30 June 2022
CORPORATE
CAPITAL RAISING
In September 2021, the Company completed a share placement to institutional and sophisticated investors at $0.045
for a total of $5 million (before costs). Directors contributed $315,000 to the Placement subject to shareholder
approval, which was obtained on 18 November 2021. A further $162,000 was raised in November 2021 through the
exercise of options.
INVESTMENT IN COCKATOO IRON NL
Sunshine Gold holds 6,250,000 fully paid ordinary shares in Cockatoo Iron NL (“Cockatoo Iron”) as a consequence
of the sale of its interests in the Cockatoo Island Project and participation in a subsequent entitlements issue.
Cockatoo Iron has a 43.24% interest in Pearl Gull Limited (ASX: PLG).
16
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
MINERAL RESOURCES AND ORE RESERVES STATEMENT
Sunshine Gold’s initial Resource at 30 June 2022 was 1.8 million tonnes at 2.03 g/t Au for 118 koz of contained
gold. This is the first Resource quoted by Sunshine Gold.
There were no Ore Reserves at 30 June 2022.
Table 1: Resources at as 30 June 2022.
Notes on Resource:
1. The preceding statement of Resources conforms to the ‘ Australian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC Code) 2012 Edition’.
2. All tonnages are reported as dry metric tonnes.
3. Data is rounded to thousands of tonnes and thousands of ounces gold. Discrepancies in totals may occur due to rounding.
4. Resources have been reported with varying cut-offs based on several factors discussed in the corresponding Table 1 which can be found with the
original ASX announcement, 31st March 2022 “Robust Maiden Resource at Triumph Gold Project”
QUALITY CONTROL
Sunshine Gold ensures that the Resource estimate quoted is subject to internal controls activated at a site and
corporate level. All aspects of the Resource process follow a high level of industry standard practices. Contract RC
and diamond drilling was overseen by experienced Sunshine Gold employees, with completed holes subject to
downhole gyroscopic survey and collar coordinates surveyed with RTK GPS. Geological logging and sampling were
completed by Sunshine Gold geologists. Sunshine Gold employs field quality control (QC) procedures, including
addition of standards, blanks and duplicates ahead of assaying which was undertaken using industry standard fire
assay at Intertek and ALS laboratories in Townsville. All drilling information is continually validated and managed by
a database consultant. Geological models and wireframes were built using careful geological documentation and
interpretations, all of which were validated by peer review. Resource estimation was undertaken by consultant
Measured Group. Estimation techniques are industry standard and include block modelling using Ordinary Kriging.
Application of other parameters including cut off grades, top cuts and classification are all dependent on the style
and nature of mineralisation being assessed. All Resources are reported under JORC 2012. No Ore Reserve
estimation has been completed or announced to date at Triumph.
NO MATERIAL CHANGES
Sunshine Gold confirms that it is not aware of any new information or data that would materially affect the information
included in the quarterly activities report dated 29 July 2022 and market announcements dated 1 August 2022, 11
August 2022 and 19 September 2022, and that all material assumptions and technical parameters in the market
announcements continue to apply and have not materially changed.
COMPETENT PERSON STATEMENT
The information in this report that relates to Resources is based on information compiled and reviewed by Mr Andrew
Dawes, who is a Member of the Australasian Institute of Mining and Metallurgy and is a Principal Geologist employed
by Measured Group Pty Ltd. Mr Andrew Dawes has sufficient experience that is relevant to the style of mineralisation
and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Mineral Resources. Mr Andrew Dawes consents
to the inclusion in the report of the matters based on his information in the form and context in which it appears.
17
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
SCHEDULE OF TENEMENT INTEREST AS AT 30 JUNE 2022
Project
Tenement
Status
Beneficial
Interest
HODGKINSON
EPM 18171
GRANTED
100%
HODGKINSON
EPM 19809
GRANTED
100%
HODGKINSON
EPM 25139
GRANTED
100%
HODGKINSON
EPM 27539
GRANTED
100%
HODGKINSON
EPM 27574
GRANTED
100%
HODGKINSON
EPM 27575
GRANTED
100%
INVESTIGATOR
EPM 27343
GRANTED
100%
INVESTIGATOR
EPM 27344
GRANTED
100%
INVESTIGATOR
EPM 28369
APPLICATION
100%
RAVENSWOOD
EPM 26041
GRANTED
100%
RAVENSWOOD
EPM 26152
GRANTED
100%
RAVENSWOOD
EPM 26303
GRANTED
100%
RAVENSWOOD
EPM 26304
GRANTED
100%
RAVENSWOOD
EPM 27824
GRANTED
100%
RAVENSWOOD
EPM 27825
GRANTED
100%
RAVENSWOOD
EPM 28237
APPLICATION
100%
RAVENSWOOD
EPM 28240
APPLICATION
100%
TRIUMPH
EPM 18486
GRANTED
100%
TRIUMPH
EPM 19343
GRANTED
100%
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 2022.
18
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
EVENTS SUBSEQUENT TO REPORTING DATE
On 22 August 2022, the Company completed a capital raising of $3.505 million (before costs) by the issue of
140,200,000 fully paid ordinary shares at $0.025 per share to institutional and sophisticated investors. An additional
amount of 9,800,000 fully paid ordinary shares at $0.025 per share raising $245,000 to be issued to directors is
subject to shareholder approval which will be sought at the Company’s Annual General Meeting.
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.
COMPANY SECURITIES
The Company has the following securities on issue as at the date of the Directors’ Report.
Security Description
Number of Securities
Fully paid shares
759,922,730
Unissued shares
As at the date of this report, there were the following unissued shares on issue:
Security Description
Number of Securities
2022
2021
Ordinary shares under options
68,300,000
72,000,000
Performance shares
8,500,000
17,000,000
Deferred shares subject to performance hurdles
50,000,000
100,000,000
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 5,400,000 ordinary shares issued as a result of the exercise of options (2021:
Nil).
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
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 projects .
19
Sunshine Gold Limited Annual Report 30 June 2022
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’ (and their associates) interests in shares of Sunshine Gold were:
Number of Ordinary
Shares
Alec Pismiris
15,062,500
Damien Keys
40,500,000
Paul Chapman
40,455,000
Leslie Davis
37,840,000
Antonio Torresan
67,000,000
CORPORATE GOVERNANCE
In recognising the need for high standards of corporate behavior and accountability, the directors 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.
20
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
USE OF FUNDS
The Company confirms that it has used its available cash and assets at the time of admission to the ASX consistent
with the business objectives.
Total cash expenditure during the financial year ended 30 June 2022 was $5,188,066. Exploration and evaluation
cash expenditure was $4,045,068. Approximately 49% of this expenditure was spent on exploration activities at the
Triumph Project, 41% at the Ravenswood West Project and the remainder primarily at the Investigator Project.
Activities included mapping, rock and soil sampling, geophysics and pre-drilling preparations, and significant drilling.
Use of Funds
Prospectus Year 2
Budget
12 Months Actuals
to 30 June 2022
Triumph
$520,000
1,997,800
Investigator
$514,000
276,248
Hodgkinson
$273,570
111,154
Ravenswood West
-
1,659,866
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 67.
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 were no fees paid or payable to HLB Mann Judd during the year ended 30 June 2022 (2021: $25,000) for non-
audit services.
21
Sunshine Gold Limited Annual Report 30 June 2022
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 has been designed to align director and executive objectives with shareholder and business
objectives by providing a fixed remuneration component and potentially 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 set out below.
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 may 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 activities.
Remuneration and other terms of employment for the directors have been formalised in service agreements as
follows:
A. 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: $242,000 per annum (exclusive of superannuation)
-
Termination for cause: no notice period
-
Termination without cause: three month notice period
22
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Remuneration policy (continued)
B. 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 $250,000 per annum.
The Board undertakes an annual review of its performance against goals set at the start of the year. The Board may
exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract high
calibre of executives and to remunerate them for performance that results in long-term growth in shareholder wealth.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
Performance-based remuneration
The Company currently has performance-based remuneration component built into director and executive
remuneration packages.
The Company has established an Employee Securities Incentive Plan (“Plan”) that provides greater flexibility by
allowing for the issuance of Performance Securities upon a determination by the Board that an eligible employee
may participate in the Plan. Performance Securities can include a Plan Share, Option, Performance Right or other
Convertible Security.
The Company received 100% “yes” votes on its remuneration report for the 30 June 2021 financial year.
The table below summarises the earnings of the Group and other factors that are considered to affect shareholder
wealth for the 5 years to 30 June 2022.
2022
2021
2020
2019
2018
Loss after income tax
attributable to shareholders ($)
(1,667,266)
(1,064,797)
21,556
(1,913,882)
3,221,041
Share price at year end ($)
0.0280
0.0550
0.0258
0.0258
0.0303
Basic earnings/(loss) per share
(cents)
(0.30)
(0.29)
0.01
(0.53)
0.89
23
Sunshine Gold Limited Annual Report 30 June 2022
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 are set out below:
Primary
Benefits
Post
Employment
Share
Based
Payments
TOTAL
Performance
Based
Salary
Super-
Shares/
& Fees
annuation
Options
$
$
$
$
%
Directors
A Pismiris - Non-Executive Director
2022
72,0001
-
-
72,000
-
2021
62,0001
-
112,000
174,000
64
D Keys – Managing Director
2022
225,500
22,550
100,000
348,050
29
2021
128,333
12,192
-
140,525
-
P Chapman – Non-Executive Director
2022
32,727
3,273
40,000
76,000
53
2021
19,756
1,877
-
21,633
-
L Davis – Non-Executive Director
2022
32,727
3,273
30,000
66,000
45
2021
19,756
1,877
-
21,633
-
A Torresan – Non-Executive Director
2022
36,000
-
-
36,000
-
2021
81,7422
-
112,000
193,742
58
C Chenu - Non-Executive
Director
2021
10,0003
-
28,000
38,000
74
Total Remuneration:
2022
398,954
29,096
170,000
598,050
28
2021
321,587
15,946
252,000
589,533
43
Notes:
(1) Includes $36,000 (FY2021: $31,000) 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 18.
Remuneration Options and Performance Rights
During the year ended 30 June 2022, no options were issued as part of director remuneration (30 June 2021:
18,000,000). Refer to Note 27 for details of Director options.
During the year ended 30 June 2022, no performance rights were issued as part of director remuneration (30 June
2021: 17,000,000). 8,500,000 tranche 1 performance rights vested and were exercised as a result of the achievement
of the performance hurdle and have been valued at the share price on grant date. Refer to Note 15(d) for details of
performance rights.
24
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Shareholdings by Directors (and Associates)
2022
Balance
Received
Acquired
Options
Net Other
Balance
01/07/21
Remuneratio
n
Exercised
Change
30/06/22
(No. of
Shares)
(No. of
Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
A Pismiris
14,062,500
-
1,000,000
-
-
15,062,500
D Keys
22,000,000
-
-
1,000,000
17,500,0001
40,500,000
P Chapman
22,555,000
-
-
3,400,000
14,500,0001
40,455,000
L Davis
22,400,000
-
440,000
1,000,000
14,000,0001
37,840,000
A Torresan
61,477,131
-
5,522,869
-
-
67,000,000
Total
142,494,631
-
6,962,869
5,400,000
46,000,000
200,857,500
Notes:
(1) Vesting of vendor deferred shares on acquisition of XXXX Gold Pty Ltd as a result of achievement of performance hurdle.
2021
Balance
Received
Capital
Net Other
Balance
01/07/20
Remuneration
Reconstruction
Change
30/06/21
(No. of Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
A Pismiris
18,000,000
-
(6,750,000)
2,812,500
14,062,500
D Keys1
-
-
-
22,000,000
22,000,000
P Chapman1
-
-
-
22,555,000
22,555,000
L Davis1
-
-
-
22,400,000
22,400,000
A Torresan
77,429,877
-
(29,036,204)
13,083,458
61,477,131
C Chenu2
-
-
-
-
-
Total
95,429,877
-
(35,786,204)
82,850,958
142,494,631
Notes:
(1) Appointed 24 November 2021
(2) Resigned 24 November 2021
Options Holdings by Directors (and Associates)
2022
Balance
Granted as
No. of
No. of
Net
Balance
01/07/21
Remuneration
Options
Options
Change Other
30/06/22
(No. Options)
(No. Options)
Acquired
Exercised
(No. Options)
(No. Options)
A Pismiris
8,000,000
-
-
-
-
8,000,000
D Keys
10,000,000
-
-
(1,000,000)
-
9,000,000
P Chapman
10,000,000
-
-
(3,400,000)
-
6,600,000
L Davis
10,000,000
-
-
(1,000,000)
-
9,000,000
A Torresan
8,000,000
-
-
-
-
8,000,000
Total
46,000,000
-
-
(5,400,000)
-
40,600,000
Values of options over ordinary shares granted, exercised or lapsed for directors as part of compensation during
the year ended 30 June 2022 are set out below:
2022
Value of options
granted during the
year
Value of options
exercised during the
year
Value of options
lapsed during the
year
Remuneration
consisting of options
for the year
$
$
$
%
D Keys
-
13,000
-
4
P Chapman
-
44,200
-
58
L Davis
-
13,000
-
20
25
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Options Holdings by Directors (and Associates) (continued)
2021
Balance
Granted as
No. of
No. of
Net
Balance
01/07/20
Remuneration
Options
Options
Change Other
30/06/21
(No. Options)
(No. Options)
Acquired
Exercised
(No. Options)
(No. Options)
A Pismiris
-
8,000,000
-
-
-
8,000,000
D Keys1
-
-
-
-
10,000,000
10,000,000
P Chapman1
-
-
-
-
10,000,000
10,000,000
L Davis1
-
-
-
-
10,000,000
10,000,000
A Torresan
-
8,000,000
-
-
-
8,000,000
C Chenu2
-
2,000,000
-
-
(2,000,000)
-
Total
-
18,000,000
-
-
28,000,000
46,000,000
Notes:
(1) Appointed 24 November 2020
(2) Resigned 24 November 2020
Performance Rights Holdings by Directors (and Associates)
2022
Balance
Granted as
No. of
No. of
Net
Balance
01/07/21
Remuneration
Right
Rights
Change Other
30/06/22
(No. Rights)
(No. Rights)
Acquired
Exercised
(No. Rights)
(No. Rights)
A Pismiris
-
-
-
-
-
-
D Keys
10,000,000
-
-
(5,000,000)
-
5,000,000
P Chapman
4,000,000
-
-
(2,000,000)
-
2,000,000
L Davis
3,000,000
-
-
(1,500,000)
-
1,500,000
A Torresan
-
-
-
-
-
-
Total
17,000,000
-
-
(8,500,000)
-
8,500,000
2021
Balance
Granted as
No. of
No. of
Net
Balance
01/07/20
Remuneration
Right
Rights
Change Other
30/06/21
(No. Rights)
(No. Rights)
Acquired
Exercised
(No. Rights)
(No. Rights)
A Pismiris
-
-
-
-
-
-
D Keys
-
10,000,000
-
-
-
10,000,000
P Chapman
-
4,000,000
-
-
-
4,000,000
L Davis
-
3,000,000
-
-
-
3,000,000
A Torresan
-
-
-
-
-
-
C Chenu
-
-
-
-
-
-
Total
-
17,000,000
-
-
-
17,000,000
End of remuneration report (audited).
26
Sunshine Gold Limited Annual Report 30 June 2022
DIRECTORS’ REPORT (CONTINUED)
Signed in accordance with a resolution of the board of directors.
Dated at Perth this 29th day of September, 2022
_______________________
Alec Pismiris
Director
27
Sunshine Gold Limited Annual Report 30 June 2022
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
2021
Note
$
$
Other income
2
5,934
241,295
Corporate expenses
3
(942,775)
(998,092)
Impairment of investments
(161,400)
-
Rehabilitation expense
(357,000)
-
Share based payments
27
(212,025)
(308,000)
Loss before income tax
(1,667,266)
(1,064,797)
Income tax benefit
4
-
-
Loss for the year
(1,667,266)
(1,064,797)
Other comprehensive income/(loss)
Item that may subsequently be reclassified to profit or loss:
Currency translation differences
-
-
Other comprehensive income/(loss) for the year
-
-
Total comprehensive loss for the year
(1,667,266)
(1,064,797)
Basic loss per share (cents per share)
21
(0.30)
(0.29)
Diluted loss per share (cents per share)
21
(0.30)
(0.29)
The above consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
28
Sunshine Gold Limited Annual Report 30 June 2022
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Consolidated
2022
2021
Note
$
$
Current Assets
Cash and cash equivalents
5
1,853,737
2,192,165
Security deposits
178,615
144,000
Trade and other receivables
6
69,219
91,711
Prepayments
-
43,378
Total Current Assets
2,101,571
2,471,254
Non-Current Assets
Exploration and evaluation expenditure
7
9,943,600
4,513,541
Plant and equipment
8
340,557
39,011
Other financial assets
9
51,100
200,000
Total Non-Current Assets
10,335,257
4,752,552
Total Assets
12,436,828
7,223,806
Current Liabilities
Trade and other payables
10
306,134
156,722
Interest-bearing liabilities
11
8,408
19,158
Lease liability
12
87,282
-
Employee leave liabilities
13
50,863
18,315
Total Current Liabilities
452,687
194,195
Non-Current Liabilities
Interest-bearing liabilities
11
-
8,301
Lease liability
12
172,595
-
Provisions
14
357,000
-
Total Non-Current Liabilities
529,595
8,301
Total Liabilities
982,282
202,496
Net Assets
11,454,546
7,021,310
Equity
Issued capital
15
22,497,970
17,609,493
Reserves
16
4,157,108
2,945,083
Accumulated losses
(15,200,532) (13,533,266)
Total Equity
11,454,546
7,021,310
The above consolidated statement of financial position
should be read in conjunction with the accompanying notes.
29
Sunshine Gold Limited Annual Report 30 June 2022
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
Issued
Capital
$
Share-
Based
Payments
Reserve
$
Accumulate
d
Losses
$
Total
Equity
$
Balance at 01/07/2020
14,096,796
1,937,083
(12,468,469)
3,565,410
Total comprehensive income
for the year
Loss for the year
-
-
(1,064,797)
(1,064,797)
Total comprehensive loss for the year
-
-
(1,064,797)
(1,064,797)
Transactions with owners recorded
directly into equity
Shares/options issued on acquisition of
subsidiary
1,760,000
560,000
-
2,320,000
Share based payments
-
448,000
-
448,000
Issue of fully paid ordinary shares
2,026,845
-
-
2,026,845
Capital raising costs
(274,148)
-
-
(274,148)
Balance at 30/06/2021
17,609,493
2,945,083
(13,533,266)
7,021,310
Balance at 01/07/2021
17,609,493
2,945,083
(13,533,266)
7,021,310
Total comprehensive income for the
year
Loss for the year
-
-
(1,667,266)
(1,667,266)
Total comprehensive loss for the year
-
-
(1,667,266)
(1,667,266)
Transactions with owners recorded
directly into equity
Share based payments
-
1,212,025
-
1,212,025
Issue of fully paid ordinary shares
5,162,000
-
-
5,162,000
Capital raising costs
(273,523)
-
-
(273,523)
Balance at 30/06/2022
22,497,970
4,157,108
(15,200,532)
11,454,546
The above consolidated statement of changes in equity
should be read in conjunction with the accompanying notes.
30
Sunshine Gold Limited Annual Report 30 June 2022
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
2021
Note
$
$
Cash Flows from Operating Activities
Payments to suppliers and employees
(1,036,978)
(1,142,907)
Interest received
5,935
21,387
Net Cash Used in Operating Activities
17(b)
(1,031,043)
(1,121,520)
Cash Flows from Investing Activities
Payments for exploration expenditure
(4,045,068)
(1,567,719)
Cash brought to account on acquisition of XXXX Gold
29
-
53,155
Payments for acquisition of subsidiary
30
-
(400,000)
Proceeds from termination of revenue sharing agreement
-
225,000
Payments for acquisition of investments
(12,500)
-
Payments for acquisition of plant and equipment
(66,020)
-
Transfers from/(to) term deposits
(27,500)
1,200,000
Net Cash Used in Investing Activities
(4,151,088)
(489,564)
Cash Flows from Financing Activities
Gross proceeds from share issues
5,162,000
2,026,845
Costs of share issues
(299,583)
(129,231)
Repayment of borrowings
17
(18,714)
(188,776)
Net Cash Provided by Financing Activities
4,843,703
1,708,838
Net increase/(decrease) in cash and cash equivalents held
(338,428)
97,754
Cash and cash equivalents at the beginning of the financial year
2,192,165
2,094,411
Cash and cash equivalents at the end of the financial year
17(a)
1,853,737
2,192,165
The above consolidated statement of cash flows
should be read in conjunction with the accompanying notes
31
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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 2022 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 29th September 2022.
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 2021 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 2022
In the year ended 30 June 2022, 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.
32
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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 20.
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.
33
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
34
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h) Investments and other financial assets
Financial assets 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:
-
amortised cost;
-
fair value through profit or loss (FVTPL);
-
equity instruments at fair value through other comprehensive income (FVOCI); and
-
debt instruments at fair value through other comprehensive income (FVOCI).
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.
35
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
36
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
37
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
38
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
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.
•
Income and expenses are translated at average exchange rates for the period.
•
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
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 20) is the Philippine PESO.
39
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
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.
(m)
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).
(n)
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.
(o)
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. Unpaid amounts
on ordinary shares and the exercise of options are excluded if they are anti-dilutive.
(p)
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.
40
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
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 2022. 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.
(r) Critical Accounting Estimates and Judgments
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and
equity. Refer to note 27 for further information.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for
anticipated tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome
of these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated
to discount future lease payments to measure the present value of the lease liability at the lease commencement
date. Such a rate is based on what the Group estimates it would have to pay a third party to borrow the funds
necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic
environment. Refer to notes 8 and 12 for ROU assets and lease liabilities recognised for the Group’s leasing
arrangement.
41
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or
mined. The Group's mining and exploration activities are subject to various laws and regulations governing the
protection of the environment. The Group recognises management's best estimate for assets retirement obligations
and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ
materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine
estimates and discount rates could affect the carrying amount of this provision.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial
production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral
resources. Key judgements are applied in considering costs to be capitalised which includes determining
expenditures directly related to these activities and allocating overheads between those that are expensed and
capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors that could impact the future commercial production at
the mine include the level of reserves and resources, future technology changes which could impact the cost of
mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined
not to be recoverable in the future, they will be written off in the period in which this determination is made.
42
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: OTHER INCOME
Consolidated
2022
2021
$
$
Interest earned
5,934
16,295
Consideration for termination of revenue sharing agreement
-
225,000
Total
5,934
241,295
NOTE 3: EXPENSES AND GAINS/(LOSSES)
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
Accounting and administration fees
106,530
73,601
Consulting and directors fees
272,817
273,890
Share register maintenance and listing fees
75,079
110,655
Legal fees
2,049
298,643
NOTE 4: INCOME TAX
The prima facie tax on loss before income tax
Consolidated
is reconciled to the income tax as follows:
2022
2021
$
$
Loss before income tax
(1,667,266)
(1,064,797)
Income tax calculated at 30% (2021: 30%)
(500,180)
(319,439)
Add back:
Provisions
57,014
(3,505)
Capital raising costs
(32,860)
(8,049)
Fair value loss on investment
48,420
-
Share-based payments
25,108
-
Capitalised exploration immediately deductible
(1,329,018)
(700,344)
Other
927
455
Future income tax benefits not brought to account
1,730,589
1,031,337
Income tax expense/(benefit)
-
-
Deferred tax assets:
Capital raising costs
383,307
219,318
Provisions
68,359
11,345
Carried forward tax losses (including foreign tax losses)
3,553,303
1,822,714
4,004,969
2,053,378
Deferred tax liabilities:
Capitalised exploration costs
2,029,361
1,354,062
2,029,361
1,354,062
43
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
Consolidated
2022
2021
$
$
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
1,853,737
2,192,165
1,853,737
2,192,165
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Goods and services tax
58,089
90,170
Other
11,130
1,541
69,219
91,711
NOTE 7: EXPLORATION AND EVALUATION EXPENDITURE
Balance at the beginning of the period
4,513,541
-
Acquisition of XXXX Gold Pty Ltd (note 29)
1,000,000
2,482,688
Acquisition of Ukalunda Pty Ltd (note 30)
-
399,998
Expenditure incurred during the period
4,430,059
1,630,855
Balance at the end of the period
9,943,600
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.
44
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
$
2021
$
NOTE 8: PLANT AND EQUIPMENT
At cost
382,529
47,549
Accumulated depreciation
(41,972)
(8,538)
340,557
39,011
Plant and equipment
Balance at the beginning of the period
39,011
-
Acquisition of XXXX Gold Pty Ltd (note 29)
-
47,633
Additions/(Disposals)
61,055
(84)
Depreciation expense
(18,216)
(8,538)
Balance at the end of the period
81,850
39,011
Right of use asset
Balance at the beginning of the period
-
-
Additions/(Disposals)
273,925
-
Depreciation expense
(15,218)
-
Balance at the end of the period
258,707
-
NOTE 9: OTHER FINANCIAL ASSETS
Non Current
Unlisted investments at fair value:
Shares in other entities(i) (fair value through profit or loss)
51,100
200,000
51,100
200,000
(i) As at 30 June 2022, the Group held 6,250,000 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
306,134
155,443
Advances/loans – other parties
-
1,279
306,134
156,722
45
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
$
2021
$
NOTE 11: INTEREST BEARING LIABILITIES
Current
8,408
19,158
Non-Current
-
8,301
8,408
27,459
NOTE 12: LEASE LIABILITY
Office operating lease
Current
87,282
-
Non-Current
172,595
-
259,877
-
NOTE 13: EMPLOYEE LEAVE LIABILITIES
Annual leave entitlements
50,863
18,315
50,863
18,315
NOTE 14: PROVISIONS
Provision for rehabilitation
357,000
-
357,000
-
Provision for rehabilitation
The provision represents the present value of the estimated costs to rehabilitate the exploration areas affected.
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 Company believes there are no potential for future
operations, therefore it has engaged environmental consultants to develop a plan to rehabilitate the Xanadu
tenements area that will satisfy the requirements of the Department of Mines, Industry, Regulation and Safety.
As a result of this change in obligation from the prior period, the Company has recognized a Provision for
Rehabilitation of $357,000 during the year ended 30 June 2022.
46
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
$
2021
$
NOTE 15: ISSUED CAPITAL
(a)
Issued Capital
619,722,730 Ordinary shares fully paid (2021: 444,711,618)
22,497,970
17,609,493
(b) Movements in ordinary share capital of the Company:
Date
Details
No. of Shares
$
01/07/2020
Opening balance
408,591,140
14,096,796
30/10/2020
Share consolidation (5 for 8)
(153,221,766)
-
09/12/2020
Entitlement offer
63,842,244
1,276,845
09/12/2020
Broker offer
37,500,000
750,000
09/12/2020
XXXX Gold Vendor Consideration
88,000,000
1,760,000
Less: capital raising costs
-
(274,148)
30/06/2021
Closing balance
444,711,618
17,609,493
01/07/2021
Opening balance
444,711,618
17,609,493
27/09/2021
Placement
104,111,112
4,685,000
29/11/2021
Director Placement
7,000,000
315,000
30/11/2021
Option exercise
5,400,000
162,000
01/04/2022
Performance rights vesting (d)
8,500,000
-
01/04/2022
Deferred shares vesting (c)
50,000,000
-
Less: capital raising costs
-
(273,523)
30/06/2022
Closing balance
619,722,730
22,497,970
(c) Deferred Shares
As part of the consideration for the acquisition of XXXX Gold Pty Ltd, the Company issued:
(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) 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.
On 31 March 2022, the Company announced a maiden Resource at the 100% owned Triumph Gold Project
totalling 1.8 million tonnes at 2.0 g/t for 118 koz of contained gold. As a result, 50,000,000 Deferred Shares vested
and were converted into fully paid ordinary shares. Refer to Note 27 for valuation of deferred shares. The value of
deferred shares was recognized in reserves.
47
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 15: ISSUED CAPITAL (continued)
(d) Performance Rights
During the 2021 financial 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.
On 31 March 2022, the Company announced a maiden JORC 2012 Mineral Resource Estimate at the 100% owned
Triumph Gold Project totalling 1.8 million tonnes at 2.03 g/t for 118 koz of contained gold. As a result, 8,500,000
Performance Rights vested and were converted into fully paid ordinary shares.
At date of issue, no value has been ascribed to the Tranche 2 Performance Rights as the achievement of the hurdle
cannot be assessed with any certainty. During the 2022 financial year, the Company recognized a share-based
payment expense of $170,000 relating to the Tranche 1 Performance Rights that vested which has been recorded in
the options reserve. Refer to Note 27 for further information on the valuation.
(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 2021 and no dividends will be paid in 2022.
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.
48
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 16: RESERVES
Consolidated
2022
$
2021
$
(a)
Composition
Share-Based Payments Reserve
4,157,108
2,945,083
4,157,108
2,945,083
(b) Movements in options on issue during the last two years were as follows:
Date
Details
No. of
Unlisted Options
Exercise
Price
Expiry Date
01/07/2020
Opening balance
-
09/12/2020
XXXX Gold Vendor
consideration options
40,000,000
$0.03
30/09/2025
09/12/2020
Board, management and
consultant options
21,000,000
$0.03
30/09/2025
09/12/2020
Underwriter options
10,000,000
$0.03
30/09/2025
04/01/2021
Employee options
1,000,000
$0.03
02/11/2025
30/06/2021
Closing balance
72,000,000
01/07/21
Opening balance
72,000,000
01/10/21
Employee options
1,000,000
$0.07
31/07/2024
30/11/21
Option exercise
(5,400,000)
$0.03
30/09/2025
09/12/21
Employee options
700,000
$0.07
31/07/2024
30/06/2022
Closing balance
68,300,000
Refer to Note 27 for details of options and deferred shares issued during the year ended 30 June 2022.
(c) Nature and Purpose of Reserves
Share-Based Payments Reserve
The share-based payments reserve is the value of equity benefits provided to directors, employees and consultants
by the Group as part of their remuneration. In addition, where the fair value of goods or services cannot be readily
determined, the fair value of equity instruments issued in consideration for the good or service acquired may be
recognized within the share-based payments reserve.
49
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
NOTE 17: NOTES TO THE STATEMENT OF CASH FLOWS
2022
$
2021
$
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:
Cash and cash equivalents (Note 5)
1,853,737
2,192,165
b) Reconciliation of net cash and cash equivalents used in operating activities
to loss for the year:
Loss for the year
(1,667,266)
(1,064,797)
Depreciation expense
33,434
8,538
Impairment of investments
161,400
-
Gain on termination of revenue sharing agreement
-
(225,000)
Share based payment expense
212,025
308,000
Movements in assets and liabilities:
(Increase)/Decrease in trade and other receivables
22,492
(78,814)
(Increase)/Decrease in other assets
43,378
(25,010)
Increase/(Decrease) in trade and other payables
163,494
(44,437)
Net cash used in operating activities
(1,031,043)
(1,121,520)
c)
Non-cash investing and financing activities
The Company issued options to employees as part of their remuneration during the year ended 30 June 2022. The Company
issued shares and options for the acquisition of XXXX Gold Pty Ltd during the year ended 30 June 2021. Refer note 29.
d)
Changes in liabilities arising from financing activities
Consolidated
2022
$
2021
$
Opening balance
27,459
-
Loans and borrowings acquired
259,543
216,235
Repayment of borrowings
(18,714)
(188,776)
Closing balance
268,288
27,459
50
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 18: KEY MANAGEMENT PERSONNEL
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
Consolidated
2022
$
2021
$
Compensation by category:
Short-term
398,954
321,587
Post employment
29,096
15,946
Termination benefit
-
-
Share based payment
170,000
252,000
598,050
589,533
(b) Transactions with Key Management Personnel
There were no transactions with key management personnel during the year ended 30 June 2022.
Transactions with key management personnel in the 2021 financial year is disclosed as follows. 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
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.
Term
The agreements will terminate on the later of 30 November 2020 or upon full
repayment of the relevant loan (Repayment Date).
Principal amount
1. Stone Poneys - $100,000
2. Leslie Brian Davis and Annette Fay Davis as trustees for - $50,000
Drawdown
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
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.
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.
51
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
NOTE 19: REMUNERATION OF AUDITORS
2022
$
2021
$
Audit services – HLB Mann Judd
37,637
37,598
– Overseas auditors (non HLB affiliates)
-
4,278
37,637
41,876
Non-audit services – HLB Mann Judd
-
25,000
NOTE 20: 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:
Country of
Equity Interest
Incorporatio
n
2022
2021
%
%
XXXX Gold Pty Ltd
AUS
100
100
Ukalunda Pty Ltd
AUS
100
100
Sunrise Exploration Pty Ltd
AUS
100
100
Sunshine Minerals Pty Ltd
AUS
100
100
Sunpacific Resources Philippines, Inc.
PHP
100
100
Sunrom Philippines Holdings Corp’n.
PHP
100
100
52
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 21: LOSS PER SHARE
The following reflects the income and data used in the calculations of basic and diluted loss per share:
Consolidated
2022
2021
$
$
Loss used in calculating basic and diluted loss per share
(1,667,266)
(1,064,797)
Number of
Shares
Number of
Shares
Weighted average number of ordinary shares used in calculating:
Basic loss per share
546,417,950
411,987,597
Diluted loss per share
546,417,950
411,987,597
NOTE 22: COMMITMENTS FOR EXPENDITURE
2022
2021
$
$
Minimum exploration expenditure:
-
Not later than 1 year
460,000
250,000
-
Between 1 year and 5 years
2,585,000
3,069,500
Finance Lease repayments:
-
Not later than 1 year
8,506
20,415
-
Between 1 year and 5 years
-
8,506
NOTE 23: SEGMENT INFORMATION
Business Segments
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.
53
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: 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 15 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 held by the Group (2021: nil).
Non
Interest
Bearing
$
Weighted
Average
Effective
Interest
Rate %
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Total
$
2022
2022
2022
2022
2022
Financial Assets
- Cash and cash
equivalents
1,853,737
0.20
-
-
1,853,737
- Deposits held
-
-
178,615
-
178,615
- Other receivables
701
-
-
-
701
- Unlisted investments
51,100
-
-
-
51,100
Total Financial Assets
1,905,538
178,615
-
2,084,153
Financial Liabilities
- Trade creditors
306,134
-
-
-
306,134
- Loan – other parties
-
-
8,408
-
8,408
- Lease liability
-
6
-
259,877
259,877
Total Financial Liabilities
306,134
8,408
259,877
574,419
Net Financial Assets /
(Liabilities)
1,599,404
170,207
(259,877)
1,509,734
54
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Cash Flow Interest Rate Risk
2021
Non Interest
Bearing
$
Weighted
Average
Effective
Interest
Rate %
Floating
Interest
Rate
$
Total
$
2021
2021
2021
2021
Financial Assets
- Cash and cash
equivalents
492,165
0.60
1,700,000
2,192,165
- Deposits held
-
-
144,000
144,000
- Other receivables
1,541
-
-
1,541
- Unlisted investments
200,000
-
-
200,000
Total Financial Assets
693,706
1,844,000
2,537,706
Financial Liabilities
- Trade creditors
155,443
-
-
155,443
- Loan – other parties
1,279
-
27,459
28,738
- Lease liability
-
-
-
-
Total Financial Liabilities
156,722
27,459
184,181
Net Financial Assets /
(Liabilities)
536,984
1,816,541
2,353,525
Interest Rate Sensitivity
At 30 June 2022, 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 $593 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
2022 from around 1.35% to 1.21% (10% increase: 1.48%) representing an 8 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 up than
down 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.
55
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
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.
Consolidated
2022
$
2021
$
Contracted maturities of undiscounted liabilities at 30 June
Payables
- less than 30 days
306,134
156,722
- less than 12 months
-
-
Loans other parties
- less than 12 months
8,408
19,158
- greater than 12 months
-
8,301
Lease liability
- less than 12 months
100,000
- between 1 to 2 years
100,000
- between 2 to 5 years
83,333
597,875
184,181
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 2022, 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.
56
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Financial Instruments
The following table presents the Group’s assets and liabilities measured and recognised at fair value:
30 June 2022
Level 1
Level 2
Level 3
Total
$
$
$
$
Equity investments at FVTPL
-
-
51,100
51,100
30 June 2021
Level 1
Level 2
Level 3
Total
Asset
$
$
$
$
Equity investments at FVTPL
-
-
200,000
200,000
Financial liabilities
Interest
rate
Maturity
30 June
2022
30 June
2021
%
$
$
Finance lease
6.99
6/11/2022
8,408
27,459
8,408
27,459
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 25: EVENTS SUBSEQUENT TO REPORTING PERIOD
On 22 August 2022, the Company completed a capital raising of $3.505 million (before costs) by the issue of
140,200,000 fully paid ordinary shares at $0.025 per share to institutional and sophisticated investors. An additional
amount of 9,800,000 fully paid ordinary shares at $0.025 per share raising $245,000 to be issued to directors is
subject to shareholder approval which will be sought at the Company’s Annual General Meeting.
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 26: CONTINGENT LIABILITIES
The Company has no known material contingent liabilities at the end of the financial year.
57
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 27: SHARE BASED PAYMENTS
The following share-based payment transactions occurred or were recognised during the year:
•
1,700,000 $0.07 share options expiring 31/07/2024 were issued to employees. These options were valued at
$42,025 and were fully expensed.
•
5,400,000 $0.03 options expiring 30/9/2025 were exercised by directors raising $162,000 in cash. The shares
issued on exercise are escrowed until 10/12/2022.
•
8,500,000 performance rights expiring 30 September 2023 vested. The performance rights were valued at
$170,000 and were fully expensed on achievement of the milestone, refer note 15(d).
•
50,000,000 deferred shares expiring 24 November 2023 vested. The deferred shares were valued at
$1,000,000 capitalized as exploration and evaluation expenditure as it related to the acquisition of XXXX Gold
Pty Ltd in November 2020.
•
The performance rights and deferred shares were valued at $0.02 being the market price of the Company’s
shares on the measurement date.
All share options issued during the year vested immediately. The total amount of $42,025 (2021: $308,000) was
recognised as a share-based payment expense, $nil (2021: $140,000) was recognised as a capital raising cost and
$1,000,000 (2021: $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 on issued during period were:
Measurement date
27/09/21
07/12/21
Issue date
01/10/21
09/12/21
Expiry date
31/07/24
31/07/24
Dividend yield
Nil
Nil
Expected volatility
100%
100%
Risk-free interest rate
0.19%
0.93%
Expected life of options (years)
2.84
2.65
Underlying share price
$0.051
$0.043
Option exercise price
$0.07
$0.07
Value of option
$0.027
$0.021
Number of options issued
1,000,000
700,000
Value of options
$27,407
14,618
Amount expensed during year
$27,407
14,618
The number and weighted average exercise prices of share options are as follows:
Weighted average
exercise price
Number of
Options
Weighted average
exercise price
Number of
Options
2022
2022
2021
2021
Outstanding at 1 July
$0.03
72,000,000
-
-
Forfeited during the year
-
-
-
-
Exercised during the
year
$0.03
(5,400,000)
-
-
Expired during the year
-
-
-
-
Granted during the year
$0.07
1,700,000
$0.03
72,000,000
Outstanding at 30 June
$0.03
68,300,000
$0.03
72,000,000
Exercisable at 30 June
$0.03
68,300,000
$0.03
72,000,000
58
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 28: 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
2022
2021
$
$
Current Assets
1,927,913
2,350,884
Total Assets
13,451,644
8,128,903
Current Liabilities
75,154
21,010
Total Liabilities
432,154
21,010
Equity
Issued capital
22,497,970
17,609,492
Reserves
4,157,108
2,945,083
Accumulated losses
(13,635,588)
(12,446,682)
Total Equity
13,019,490
8,107,893
(b) Financial Performance
Profit/(Loss) for the year
(1,188,906)
(929,347)
Other comprehensive income
-
Total Comprehensive Profit/(Loss)
(1,188,906)
(929,347)
(c) Guarantees
The parent entity has not entered into any guarantees, in relation to the debts of subsidiaries.
(d) Contingent liabilities
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.
59
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 29: 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)
88,000,000 Consideration Shares;
(b)
40,000,000 Consideration Options;
(c)
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
(d)
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.
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
1,760,000
40,000,000 Consideration Options
560,000
100,000,000 Deferred Shares (i)
-
2,320,000
Fair value of net identifiable assets acquired:
Cash and cash equivalents
53,155
Security deposits
20,000
Trade and other receivables
25,431
Property, plant and equipment
47,633
Exploration and evaluation expenditure
2,482,688
Trade and other payables
(97,386)
Loans and borrowings
(211,521)
2,320,000
(i) No cost has 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. Refer to Note 15(c) and 27 for the reassessment of recognition
of the deferred shares during the year on achievement of a vesting condition.
60
Sunshine Gold Limited Annual Report 30 June 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 30: 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 100% owns the
Ravenswood 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
400,000
Security Bond
4,500
1% net smelter royalty
-
404,500
Fair value of net identifiable assets acquired:
Cash and cash equivalents
2
Security deposits
4,500
Exploration and evaluation expenditure
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.
61
Sunshine Gold Limited Annual Report 30 June 2022
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 2022 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 2022.
This declaration is signed in accordance with a resolution of the Board of Directors.
_______________________
Alec Pismiris
Director
Dated this 29th day of September 2022
62
Sunshine Gold Limited Annual Report 30 June 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
SUNSHINE GOLD LIMITED
63
Sunshine Gold Limited Annual Report 30 June 2022
INDEPENDENT AUDITOR’S REPORT (continued)
64
Sunshine Gold Limited Annual Report 30 June 2022
INDEPENDENT AUDITOR’S REPORT (continued)
65
Sunshine Gold Limited Annual Report 30 June 2022
INDEPENDENT AUDITOR’S REPORT (continued)
66
Sunshine Gold Limited Annual Report 30 June 2022
AUDITOR’S INDEPENDENCE DECLARATION
67 Sunshine Gold Limited Annual Report 30 June 2022
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
(a)
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 21 SEPTEMBER 2022:
SPREAD
NO. OF
NO. OF
PERCENTAGE OF
OF HOLDINGS
HOLDERS
SHARES
ISSUED CAPITAL %
1 – 1,000
56
19,357
0.00%
1,001 - 5,000
39
113,106
0.01%
5,001 - 10,000
67
583,028
0.08%
10,001 - 100,000
493
24,437,479
3.22%
100,001+
547
734,769,760
96.69%
1,202
759,922,730
100.00%
The number of shareholdings held in less than marketable parcels is 286 (based on the last sale price
of $0.023 on 21 September 2022).
(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
NO. OF
PERCENTAGE
ORDINARY
OF ISSUED
SHARES
HELD
SHARES %
1
Snowball 3 Pty Ltd
52,000,000
6.84%
2
Stone Poneys Nominees Pty Ltd
39,900,000
5.25%
3
Mr Leslie Brian Davis & Mrs Annette Fay Davis
35,940,000
4.73%
4
Mr Damien Leslie Keys & Mrs Amy Dawn Keys
35,500,000
4.67%
5
Pareto Nominees Pty Ltd
34,500,000
4.54%
6
Tri-Star E&P Pty Ltd
20,000,000
2.63%
7
P D Crutchfield Pty Ltd
18,756,463
2.47%
8
Mr Kenneth Gatchalian
16,062,244
2.11%
9
Monslit Pty Ltd
15,000,000
1.97%
9
Topaze Enterprises Pty Ltd
15,000,000
1.97%
9
Mr Joe Leuzzi & Mrs Sally Leuzzi
15,000,000
1.97%
10
Mr Philip David Crutchfield
10,000,000
1.32%
10
ACP Investments Pty Ltd
10,000,000
1.32%
10
DF Lynton-Brown Pty Ltd
10,000,000
1.32%
10
Mr Roger Blake & Mrs Erica Lynette Blake
10,000,000
1.32%
11
Darlot Investments Pty Ltd
9,000,000
1.18%
12
Parkrange Nominees Pty Ltd
8,795,556
1.16%
13
Citicorp Nominees Pty Limited
8,116,533
1.07%
14
Mr Pavle Tomasevic
8,000,000
1.05%
15
Mr Glenn Thomas Garbin & Mrs Lynette Evelyn
Garbin
5,622,222
0.74%
16
Mr Glenn Thomas Garbin
5,007,222
0.66%
17
Northerly Investments Pty Ltd
5,000,000
0.66%
68 Sunshine Gold Limited Annual Report 30 June 2022
17
Mrs Judith Suzanne Piggin & Mr Damien Jaye Piggin
& Mr Glenn Adam Piggin
5,000,000
0.66%
17
Mr Damien Leslie Keys
5,000,000
0.66%
17
ACP Investments Pty Ltd
5,000,000
0.66%
17
Quartz Mountain Mining Pty Ltd
5,000,000
0.66%
18
Almost Farming Pty Ltd
4,010,000
0.53%
19
Briken Nominees Pty Ltd
4,003,408
0.53%
20
Energy-Saving Technology Pty Ltd
3,918,801
0.52%
Total
419,132,449
55.15%
Total Issued Capital
759,922,730
100.00%
(iii)
VOTING RIGHTS
Article 12.13 of the Constitution specify that on a show of hands every member present in person,
by attorney or by proxy shall have:
(a)
for every fully paid share held by him one vote; and
(b)
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
Ordinary Shares
No.
%
Torresan Group
67,000,000
6.84
Stone Poneys Nominees Pty Ltd
39,900,000
5.25
106,900,000
12.09
(b)
UNQUOTED SECURITIES
(i)
UNLISTED OPTIONS ON ISSUE
Options exercisable at $0.03 expiring 30 September 2025
65,600,000
Options exercisable at $0.03 expiring 2 November 2025
1,000,000
Options exercisable at $0.07 expiring 31 July 2024
1,700,000
(ii)
PERFORMANCE RIGHTS
Performance rights with vesting conditions expiring 30
September 2023
8,500,000
(ii)
DEFERRED CONSIDERATION SHARES
Deferred shares with vesting conditions expiring 11 December
2023
50,000,000
69 Sunshine Gold Limited Annual Report 30 June 2022
CORPORATE GOVERNANCE STATEMENT
Sunshine Gold Limited and the Board are committed to achieving and demonstrating high standards 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 2022 corporate governance statement was approved by the board on 16 September 2022 and is current as at
29 September 2022. 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/.
70 Sunshine Gold Limited Annual Report 30 June 2022
Sunshine Gold Limited
ABN 12 063 388 821
Unit 1, 23 Mackley Street
Garbutt, Queensland 4814
Telephone
+(61 8) 6245 9828
shngold.com.au