SUNSHINE METALS LIMITED
FORMERLY (SUNSHINE GOLD LIMITED)
A.B.N. 12 063 388 821
ANNUAL FINANCIAL REPORT
30 JUNE 2023
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
2
CORPORATE DIRECTORY
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
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 Code: SHN
CONTENTS
PAGE
Chairman’s Letter
3
Directors’ Report
5
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
32
Directors’ Declaration
62
Independent Auditor’s Report
63
Auditor’s Independence Declaration
67
ASX Additional Information
68
Corporate Governance Statement
70
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
3
CHAIRMAN’S LETTER
The last 12 months year has been transformational for Sunshine Metals. Our strategy remains focused on
discovery and development of our high-quality projects in Queensland. During the year, we refined our
strategy by undertaking a substantial consolidation around our Ravenswood West Project. This took the
project from ~650sq kms to ~1,760sq kms and involved three separate transactions:
-
In January 2023 we entered into a Binding Farm-In and Joint Venture agreement with Rockfire Resources
PLC to earn up to 75% of the Lighthouse Gold Project (“Lighthouse”). Lighthouse contains an Inferred
Resource of 50K oz @ 1.66 g/t Au at the Plateau Breccia Prospect. Plateau remains open at depth and
along strike and is geologically analogous to the nearby Mt Leyshon Gold Mine (3.5M oz). Lighthouse
also contains numerous other attractive prospects.
-
In May 2023, Sunshine entered agreements to acquire 100% of Greater Liontown (~684kms2) for $3.25m
in cash with a further $2m of cash payable on production milestones. The acquisition was completed on
6 September 2023. Greater Liontown is ideally located in terms of infrastructure. Charters Towers is
35kms away providing ready access to a workforce and services. Our Townsville head office is only
135km away where there is significant infrastructure including: Townsville port, Cu & Zn refineries and
the proposed the Queensland Government’s $75 million Common User Facility which will be developed
for critical minerals such as zinc, copper and molybdenum. Mains power, sealed roads and rail to Cu &
Pb smelters are also readily available.
The consolidation led to the enlarged Ravenswood Consolidated Project which lies within a district that has
produced over 20 Moz gold, and 14 Mt of volcanic massive sulphides ore (copper-gold,lead-zinc).
Ravenswood Consolidated is now comprised of and includes:
-
~1,760 kms2 of tenements covering ~80% of the highly prospective Mt Windsor Volcanogenic Massive
Sulphide (VMS) horizon;
-
the Liontown Zn-Ag-Pb/Au-Cu VMS Resource of 4.94mt @ 12.0% ZnEq (32% Indicated and 68%
Inferred);
-
25 drill-ready Zn-Ag-Pb/Au-Cu IP geophysical targets;
-
the under-drilled Carrington Au-Cu lode with significant intersections including:
•
2.0m @ 82.5 g/t Au from 344m (LTD0022)
•
3.0m @ 46.2 g/t Au from 20m (LRC0018)
•
2.0m @ 68.6 g/t Au from 24m (LRC0043)
•
7.0m @ 13.0 g/t Au from 115m (LLRC184)
-
advanced Cu-Au VMS targets at Coronation, analogous to the nearby Highway-Reward Mine (4mt @
6.2% Cu & 1.0 g/t Au mined);
-
overlooked gold potential with drill ready targets, including the Tigertown-Cougartown trends and
Truncheon with historic intersections including:
•
17m @ 3.1 g/t Au from 22m (LLRC003, Tigertown)
•
33m @ 1.95 g/t Au from 12m (MWR037, Tigertown)
-
a 15km long Cu-Mo-Ag-Au mineralised porphyry corridor including numerous exciting targets (Gararin,
Keans, Bank) and a 2012 Code JORC Exploration Target at Titov (5-8mt @ 0.07% - 0.12% Mo (top 100m);
and
-
a Pipeline of breccia hosted intrusion related gold systems including Wilbur’s Hill, Plateau, Cardigan Dam
and Mt Cooper.
Remarkably, all of this has been built in about 2 years.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
4
In addition, we successfully completed a major drilling program at the Triumph Gold Project which we
consider to be analogous to the large Ravenswood Gold Mine (5.6Moz Au Resource). Drilling has now
confirmed a large-scale Au system at Triumph. More than 85% of Triumph’s Inferred Resource of 118,000oz
@ 2.03g/t Au is <100m deep and largely located within 1.2km of strike within a 6km long trend (Northern
Corridor). Drilling during the year saw both the Northern and Southern Corridors advanced significantly and
a new mineralised zone identified 600m south of the Southern Corridor.
With our focus on Ravenswood Consolidated and Triumph, we also decided to divest our other quality
projects (Investigator Cu and Hodgkinson Au-W) in an orderly manner.
Finally, the company name was changed from Sunshine Gold Limited to Sunshine Metals Limited to better
reflect the broad range of metals under our control.
In closing, we would like to thank our stakeholders including traditional owners, local communities,
employees, joint venture partners, suppliers and other business partners. We also would take this
opportunity to thank our fellow shareholders for your ongoing support.
Alec Pismiris
Chairman
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
5
DIRECTORS’ REPORT
The directors present their report together with the financial statements of the Group consisting of Sunshine
Metals Limited (“Sunshine Metals” or “the Company”) (formerly Sunshine Gold Limited) and its controlled
entities for the financial year ended 30 June 2023 (“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 Limited, Bubalus Resources Limited and The Market Herald Limited.
Former directorships (last 3 years): Lanthanein Resources Limited, Javelin Minerals Limited and Pacton Gold
Inc (TSX-V).
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
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
6
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): None
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): None
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
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
7
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, held during the year ended
30 June 2023 by each director:
Number
Eligible to Attend
Number
Attended
Alec Pismiris
13
13
Damien Keys
13
13
Paul Chapman
13
9
Leslie Davis
13
13
Antonio Torresan
13
13
The Board also approved 6 circular resolutions during the year ended 30 June 2023.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the course of the financial year comprised of exploration on the
Ravenswood Consolidated, Triumph, Hodgkinson, and Investigator Projects.
OPERATING AND FINANCIAL REVIEW
The Group made a loss after tax of $3,489,942 for the year ended 30 June 2023 (2022: $1,667,266).
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
8
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Operations Report – Ravenswood Consolidated
The Group expanded its footprint to 1,760km2 in the Ravenswood-Charters Towers district through the
acquisition of the Greater Liontown Project (May 2023, completed September 2023) and through a farm-in
at the Lighthouse Project (January 2023).
Field activities have been spread across all projects over the past year.
Drilling activities were completed at numerous targets including Titov, Bank, Elphinstone Creek and Wilbur’s
Hill. Soil sampling and mapping were completed at Elphinstone Creek and Connolly and geophysical surveys
were carried out at Wilbur’s Hill, Titov and Gagarin.
Drilling
Liontown
The Liontown Zn-Pb-Ag, Au-Cu VMS 2012 JORC Code Mineral Resource (“Liontown Resource”) was acquired
in May 2023, completed September 2023) as part of the Greater Liontown acquisition. A total of 25 diamond
drill holes from a 2022 program were either unassayed or unlogged. All drill holes were logged and assayed
with intersections including:
• 11.0m @ 1.74 g/t Au, 0.86% Cu, 9.17% Zn, 5.05% Pb, 179 g/t Ag (19.02% ZnEq 1, from 173.4m, LTDD22057A)
• 8.1m @ 10.65 g/t Au (17.77% Zn Eq1, from 152.2m, LTDD22055)
• 7.0m @ 2.50 g/t Au, 0.41% Cu, 11.89% Zn, 5.04% Pb (18.61% ZnEq1, from 94.0m, LTDD22070)
• 9.0m @ 1.54 g/t Au, 1.67% Cu, 5.29% Zn (12.51% ZnEq1, from 79.0m, LTDD22080)
• 3.9m @ 0.24 g/t Au, 8.30% Cu (23.30% ZnEq1, from 99.0m, LTDD22074)
• 8.5m @ 5.47 g/t Au, 0.39% Cu (10.17% ZnEq1, from 73.5m, LTDD22068)
• 8.7m @ 1.31 g/t Au, 1.88% Cu, 2.19% Zn (9.73% ZnEq1, from 128.0m, LTDD22072)
• 5.0m @ 0.29 g/t Au, 4.99% Cu, 1.32% Zn (15.91% ZnEq1, from 288.8m, LTDD22052)
• 5.3m @ 4.95 g/t Au, 1.36% Cu, 2.46% Zn (14.46% ZnEq1, from 195.0m, LTDD22054)
• 5.5m @ 1.65 g/t Au, 0.41% Cu, 6.21% Zn (13.39% ZnEq1, from 202.0m, LTDD22056)
In addition, it was determined that the Liontown Resource had not been updated since March 2020
notwithstanding that 96 holes had been drilled since that time. As a consequence, the following holes have
not yet been factored into the Resource:
• 8.0m @ 11.74 g/t Au, 0.85% Cu (21.89% ZnEq1, from 115.0m, LLRC184)
• 3.0m @ 13.34 g/t Au, 0.45% Cu,1.58% Zn (23.96% ZnEq1, from 89m, LLRC220)
• 6.0m @ 3.28 g/t Au, 0.76% Cu, 1.39% Zn (8.73% ZnEq1, 105.0m, LLRC206)
• 4.0m @ 4.38 g/t Au, 0.71% Cu, 3.68% Zn (12.26% ZnEq1, 131.0m, LLRC180)
• 14.0m @ 4.12 g/t Au, 4.95% Zn, 2.98% Pb, 82g/t Ag (oxide, 40m, LLRC200)
• 13.0m @ 2.12 g/t Au, 1.51% Cu, 8.54% Pb, 490g/t Ag (oxide, 46m, LLRC221)
DIRECTORS’ REPORT (CONTINUED)
1 % ZnEq is an estimate of recoverable zinc equivalent. The zinc equivalent grades for Greater Liontown (% ZnEq) are based on the
following prices: US$2,500t Zn, US$8,500t Cu, US$2,000t Pb, US$1,900oz Au, US$20oz Ag.
Metallurgical metal recoveries are supported by metallurgical test work undertaken and are: 88.8% Zn, 80% Cu, 70% Pb, 65% Au, 65%
Ag. The ZnEq calculation is as follows: ZnEq = Zn grade% * Zn recovery + (Cu grade % * Cu recovery % * (Cu price $/t/ Zn price $/t)) +
(Pb grade % * Pb recovery % * (Pb price $/t/ Zn price $/t * 0.01)) + (Au grade g/t /31.103 * Au recovery % * (Au price $/oz/ Zn price
$/t)) + (Ag grade g/t /31.103 * Ag recovery % * (Ag price $/oz/ Zn price $/t * 0.01)). It is the opinion of Sunshine and the Competent
Person that all elements and products included in the ZnEq formula have reasonable potential to be recovered and sold.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
9
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
• 4.0m @ 6.26 g/t Au, 3.11% Pb, 167g/t Ag (oxide, 25m, LLRC207)
• 6.0m @ 3.58 g/t Au, 9.39% Pb, 106g/t Ag (oxide, 22m, LLRC223)
These results are expected to upgrade and extend the current Liontown Resource with an update to be
completed in the December 2023 quarter.
Titov
At Titov, 12 holes tested the extent of the “Main Zone” lode, defining mineralisation over a 500m strike length
and showing the deposit to be open at depth. Notable assays include:
• 103m @ 0.57% CuEq 2 from surface (22TVRC012)
• 42m @ 0.34% CuEq2 from 15m (22TVRC011)
• 16m @ 0.50% CuEq2 from 15m (22TVRC022)
Additionally, 3 holes at Titov South intercepted higher-grade Cu-Mo bearing veins in a similar structural
orientation to the Main Zone, including:
• 5m @ 0.95% CuEq2 from 201m and 5m @ 0.79% CuEq2 from 229m (22TVRC018)
Meanwhile, one shallow hole drilled 300 north of Titov Main (to test a coincident shallow east-west
conductor and Cu-Ag bearing float) returned anomalous Au.
The total work completed at Titov comprised a prospect-scale IP survey, 27 RC holes and 1 diamond hole.
From the successful programs, the first geological model of Titov was generated and formed the basis of an
Exploration Target. The Exploration Target is for mineralisation <100m depth and totalled 5 - 8Mt @ 0.07% -
0.12% molybdenum (Mo) and 0.28% - 0.44% copper (Cu). The Exploration Target is based on a number of
key assumptions including:
•
Tonnage of 5 - 8Mt – which reflects the geologically modelled dimensions of the Mo-rich, sericite-altered,
quartz vein domain. The modelling is based on geological mapping and logging of Sunshine’s drill holes
from surface to 100m vertical depth (open pit focus).
•
Mo Grade of 0.07 – 0.12% – estimated using +/- 25% around the mean Mo grade within the Mo-rich,
sericite-altered, quartz vein domain based on Sunshine’s drill holes.
•
Cu Grade of 0.27 - 0.44% – estimated using +/- 25% around the mean Cu grade within the Mo-rich,
sericite-altered, quartz vein domain based on Sunshine’s drill holes.
Titov remains open at depth. It is also the first of 5 Cu-Mo porphyries tested along a 15km long corridor.
Further work will evaluate the economic potential of Titov Deeps, Keans, Gagarin, Bank and Barrabas.
Bank
The first drilling campaign in over 20 years at the Bank Cu-Au-Ag-Mo target was completed. A total of 5
reconnaissance RC holes (716m) intersected broad zones of disseminated and vein hosted sulphides within
intensely altered host granodiorite. Notable assays include:
• 70m @ 0.22% CuEq2 from 15m (22BKRC005)
Drilling indicated that Cu endowment and alteration is increasing toward the contact with a central intrusion,
known as the Barrabas Porphyry. Future exploration targeting will focus on this contact zone.
2 recoverable copper equivalent accounts for metallurgical recovery, cost and other parameters. All assumptions are listed in ASX
release 11 August 2022, Table 1, Data Aggregation Methods.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
10
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Wilbur’s Hill
Two diamond holes (22WHDD001 and 22WHDD002) were drilled at Wilbur’s Hill (1,318m). The holes
targeted a breccia pipe hosted intrusion related gold system as seen at the nearby major gold mines at Mt
Leyshon (3.5 Moz Au) and Mt Wright (1 Moz Au). Wilbur’s Hill was targeted on coincident:
• strong Induced Polarisation (“IP”) chargeability anomaly;
• deep IP and MT resistivity low;
• mapped rhyolite volcanic complex; and
• elevated Au, Ag, Bi, Cu, Mo, Te, Pb and Zn in soils.
Drilling intercepted:
• 1m @ 0.31 g/t Au, 13.7 g/t Ag and 0.77% Cu from 68m; and
1m @ 0.19 g/t Au, 4.1 g/t Ag and 0.33% Cu from 125m (22WHDD001)
• 480m interval of >3% pyrite3, including 70m >5% pyrite3 (22WHDD001); and
• 67m interval of >2% pyrite3 and a 36m interval of >3% pyrite3 (22WHDD002);
• intense magnetite alteration (22WHDD002);
• multiple zones of rhyolite, locally brecciated or flow banded; and
• geochemical evidence for a strongly zoned intrusion related gold system.
The two diamond holes intersected intense magnetite alteration, indicating the hottest part of the breccia
gold system. Soil sampling provides a potential vector to a cooler zone on the northern margin of the breccia
pipe. The northern target zone remains within a zone of IP chargeability and elevated Zn and Pb in soils. A
second target is located on a shear zone emanating from the breccia pipe and contains rockchip anomalism
to 14.1 g/t Au.
Elphinstone Creek
A first-pass, low-cost, air-core drilling program was completed to quickly and cheaply assess the rare earth
potential. The 67-hole program had an average hole depth of 6m. The program intercepted anomalous gold,
4m @ 0.71 g/t Au from 2m (22ECAC021) but showed that rare earths anomalism was confined only to a thin
sub-metre soil profile. The area will continue to be assessed for Au potential.
Geophysical surveys
A TITAN IP-MT geophysical survey completed in September 2022 identified 2 drill ready targets at Wilbur’s
Hill. The first target is a strong conductive and chargeable pipe-like anomaly ~300m x 250m in dimension and
defined to depths of 800m (from MT). The top of the anomaly is at 150m depth. The TITAN IP-MT survey
identified sub-surface MT conductivity to 1,500m depth and resistivity and chargeability to depths of 750m.
These targets are planned to be drilled in early 2024.
In addition, a dipole-dipole IP survey was completed over Gagarin to define drill targets. The survey
comprised six north-south oriented IP lines, 200m apart, with 50m spacing between survey stations along
each line. The survey successfully delineated 2 discrete chargeable anomalies. The main chargeability
anomaly coincides with a low resistivity zone and Cu soil anomaly which has been shallowly drilled. Historical
drilling however did not reach the top of the chargeability anomaly. Gagarin now presents as an exciting
opportunity for another porphyry Cu-Au-Ag-Mo discovery and will be ranked for drilling along with other
opportunities.
3 Pyrite percentage is an estimate that has been stoichiometrically calculated. The calculation assumes that all sulphide is pyrite. The
formula used to calculate pyrite percentage was Pyrite = % Sulphur / 0.5333 (Weight % S in Pyrite). Pyrite Percentage was composited
using a 1% cut off with up to 3m of internal dilution.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
11
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Mapping and Soil Sampling
Mapping has extended the high-grade Cu-Mo-Au-Ag mineralisation at the Keans prospect. Vein-hosted and
disseminated mineralisation was mapped and sampled ~350m west of previous drilling. Rock chip results
include:
• 7.50% Cu, 0.13% Mo, 12.3 g/t Ag, 0.14 g/t Au, (KN23_003)
• 5.60% Cu, 0.24% Mo, 106 g/t Ag, 0.62% Pb, 0.12% Sb (KN23_002)
Soil sampling at the Connolly Au prospect, 15km south of the Ravenswood Gold Mine and in the north of the
Dreghorn trend, has defined a large-scale 1.8km x 2.5km >50 ppb Au soil anomaly, with ~15% of samples
returning assays >50ppb Au, with a max of 1.47 g/t Au.
First mapping was also conducted at Cardigan Dam (Lighthouse Farm-In) which comprises a ~300m long, sub-
cropping zone of brecciated and sheared granodiorites. Historic rock chip results include: 23.4 g/t Au, 15.6
g/t Au, 11.4 g/t Au and 9.9 g/t Au. The rock chips correlate with a 350m long, >50ppb Au soil anomaly and
are coincident with a magnetic feature interpreted to be a large fault zone and returned up to:
• 8.35 g/t Au, 32.8 g/t Ag, 0.28% Cu, 0.13% Co, 1.0% Ba (CD23_001).
Further mapping has delineated the full 300m long extent of the outcropping gossan. Results include:
• 13.20 g/t Au, 4.8 g/t Ag (CD23_023)
• 8.42 g/t Au, 0.9 g/t Ag (CD23_029)
• 6.86 g/t Au, 4.1 g/t Ag (CD23_031)
• 6.22 g/t Au, 6.5 g/t Ag (CD23_025)
• 5.05 g/t Au, 3.7 g/t Ag (CD23_024)
Field work also identified a 100m long manganiferous gossan to the north of the Main Gossan (North Gossan).
The sample is highly enriched in cobalt and further work on the North Gossan is planned. The rock chip
sample contained:
• 0.62% Co, 0.48% Cu, 0.92% Ba, 185ppm Ni (CD23_035)
A sub-cropping breccia located 500m south of the Main Gossan was located during the traverse. The rock
chip sample contained:
• 9.58 g/t Au, 9.9 g/t Ag (CD23_004)
Operations Report – Triumph
A 2,922m RC drilling program was completed which had two key objectives:
1. extend the current Resource of 118,000 oz @ 2.03g/t Au which is mainly hosted in only 20% of the
Southern Corridor down to 100m; and
2. test highly prospective targets across the broader area for future Resource drilling.
In addition, 2 reconnaissance holes (224m) were drilled 600m south of the current Southern Corridor
Resource. These holes tested an undrilled EW trending 1km long, gold in soil anomaly over a number of
historical workings. Both holes intersected mineralisation showing continuity of the structure over an 80m
strike length. Encouraging gold grades were intercepted in both holes. Hole 23TRRC036 also intersected
significant Ag-Zn-Pb mineralisation which are pathfinder elements to Au mineralisation. Results include:
• 4m @ 1.92 g/t Au, 151 g/t Ag, 1.62% Zn, 1.25% Pb from 48m (23TRRC036)
• 3m @ 1.23 g/t Au from 38m (23TRRC035)
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
12
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
Drilling within the Southern Corridor also targeted the Constitution and Welcome veins and comprised 17
holes for 1,520m (average depth 89m). Results included:
• 2m @ 8.46 g/t Au (23TRRC010, from 57m)
• 2m @ 4.59 g/t Au (23TRRC008, from 43m)
• 7m @ 1.31 g/t Au (23TRRC009, from 77m)
• 3m @ 3.61 g/t Au (23TRRC003, from 74m)
Drilling in the Northern Corridor targeted the Advance and Bald Hill areas, which provide significant potential
for Resource growth. Advance was historically the most productive mine in the district and is comprised of
multiple vein sets in two predominant orientations (NW striking and EW striking).
A total of 10 holes were completed at Advance for 616m (average depth 61m). Two NW-trending veins were
targeted, with the western vein intercepted 70m to the north of historic workings. Drilling at Advance was
followed by extensional drilling at Bald Hill (outside of the current Resource). A total of 5 holes were drilled
for 446m (average depth 89m). Results included:
• 4m @ 4.00 g/t Au (23TRRC034, from 42m)
• 6m @ 1.30 g/t Au (23TRRC022, from 25m)
• 2m @ 3.00 g/t Au (23TRRC022, from 37m)
• 3m @ 2.33 g/t Au (23TRRC031, from 61m)
• 3m @ 1.82 g/t Au (23TRRC026, from 23m)
• 1m @ 4.57 g/t Au (23TRRC030, from 75m)
CORPORATE
CAPITAL RAISINGS
In August 2022, the Company completed a share placement to institutional and sophisticated investors at
$0.025 for a total of $3.75 million (before costs). Directors increased their investment into the Company by
$245,000 to circa $3 million via the Placement.
In May 2023, in conjunction with the agreement to acquirethe Greater Liontown Project, the Company
announced that firm commitments have been received from existing shareholders, institutional and
sophisticated investors to raise $3.6m (before costs) by way of a share placement at $0.015 per share. The
share placement was completed in two tranches. The first tranche made under the Company’s Listing Rule
7.1 and 7.1A placement capacity was completed in May 2023, with the second tranche which included
participation from directors completed in July 2023.
ACQUISITIONS
In January 2023 the Company entered into a binding Farm-In and Joint Venture agreement with Rockfire
Resources PLC to earn up to 75% of the Lighthouse Gold Project (“Lighthouse”) which adjoined Sunshine’s
100% owned Ravenswood West Project. Lighthouse contains a JORC 2012 Inferred Resource of 961kt @ 1.66
g/t Au totalling 50K oz Au at the Plateau Breccia Prospect which is open at depth and along strike and,
importantly, is geologically analogous to the nearby Mt Leyshon Gold Mine (3.5M oz).
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
13
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
In May 2023 the Company announced the acquisition of 100% of Greater Liontown which comprised of 16
tenements, covering an aera of approximately 684kms2 for $3.25m in cash with a further $2m of cash payable
on production milestones. The acquisition of Greater Liontown delivered control of approximately 80% of
the highly prospective Mt Windsor Volcanogenic Massive Sulphide horizon, 1,760kms2 of highly prospective
Au/Cu-Au ground, a Zn-Cu-Pb-Au VMS JORC 2012 Resource of 4.94mt @ 12.0% ZnEq (32% Indicated and 68%
inferred) and numerous drill-ready Zn-Cu-Pb-Au IP geophysical targets.
UNLISTED INVESTMENT IN COCKATOO IRON NL
Sunshine Metals holds 6,250,000 unlisted 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 21.14% interest in Pearl Gull Limited (ASX: PLG).
OPERATING AND FINANCIAL RISKS
The Group’s activities have inherent risk and the Board is unable to provide certainty of the expected results
of activities, or that any or all of the likely activities will be achieved. The material business risks faced by the
Group that could influence the Group’s future prospects, and how the Group manages these risks, are
detailed below:
Operational risks
The Group may be affected by various operational factors. In the event that any of these potential risks
eventuate, the Group’s operational and financial performance may be adversely affected. No assurances can
be given that the Group will achieve commercial viability through the successful exploration and/or mining
of its tenement interests. Until the Group is able to realise value from its projects, it is likely to incur ongoing
operating losses.
The Group’s tenements are at various stages of exploration, and potential investors should understand that
mineral exploration and development are speculative and high-risk undertakings that may be impeded by
circumstances and factors beyond the control of the Group.
There can be no assurance that exploration of the tenements, or any other exploration properties that may
be acquired in the future, will result in the discovery of an economic Resource. Even if an apparently viable
deposit is identified, there is no guarantee that it can be economically exploited.
There is no assurance that exploration or project studies by the Group will result in the definition of an
economically viable mineral deposit. In the event the Group successfully delineates economic deposits on
any tenement, it will need to apply for a mining lease to undertake development and mining on the relevant
tenement. There is no guarantee that the Group will be granted a mining lease if one is applied for and if a
mining lease is granted, it will also be subject to conditions which must be met.
Further capital requirements
The Group’s projects may require additional funding in order to progress activities. There can be no assurance
that additional capital or other types of financing will be available if needed to further exploration or possible
development activities and operations or that, if available, the terms of such financing will be favourable to
the Group.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
14
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
The Group’s activities are subject to Government regulations and approvals
The Group is subject to certain Government regulations and approvals. Any material adverse change in
government policies or legislation in Queensland and/or Australia that affect mining, processing,
development and mineral exploration activities, export activities, income tax laws, royalty regulations,
government subsidiaries and environmental issues may affect the viability and profitability of any planned
exploration or possible development of the Group’s portfolio of projects.
Global conditions
General economic conditions, movements in interest and inflation rates and currency exchange rates may
have an adverse effect on the Group’s exploration activities, as well as on its ability to fund those activities.
General economic conditions, laws relating to taxation, new legislation, trade barriers, movements in interest
and inflation rates, currency exchange controls and rates, national and international political circumstances
(including outbreaks in international hostilities, wars, terrorist acts, sabotage, subversive activities, security
operations, labour unrest, civil disorder, and states of emergency), natural disasters (including fires,
earthquakes and floods), and quarantine restrictions, epidemics and pandemics, may have an adverse effect
on the Group’s operations and financial performance, including the Group’s exploration, as well as on its
ability to fund those activities.
General economic conditions may also affect the value of the Group and its market valuation regardless of
its actual performance.
EXPLORATION TARGETS, RESOURCES AND ORE RESERVES STATEMENT
Sunshine Metals’ Resource at Triumph at 30 June 2023 was 1.8 million tonnes at 2.03 g/t Au for 118 koz of
contained gold (100% Inferred).
As at June 30 2023, Greater Liontown currently hosts a Zn-Cu-Pb-Au VMS Resource of 4.94 million tonnes at
12.0% ZnEq (32% Indicated, 68% Inferred). The Liontown Resource is composed of the Liontown, Liontown
East, Waterloo and Orient deposits.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
15
DIRECTORS’ REPORT (CONTINUED)
EXPLORATION TARGETS, RESOURCES AND ORE RESERVES STATEMENT (CONTINUED)
Sunshine Metals is earning an interest in the Plateau Resource. The Resource currently stands at 961
thousand tonnes at 1.66 g/t Au for 49.7 koz of contained gold (100% Inferred). Sunshine Metals can earn up
to a 75% stake in the Resource (and Lighthouse Project) through exploration spend of $2.2 million over 3
years commencing January 2023.
There were no 2012 JORC Code Ore Reserves (“Ore Reserves”) at 30 June 2023.
An Exploration Target (“Exploration Target”) has been defined for Titov Cu-Mo target. As at June 30 2023,
the Exploration Target ranges between 5 - 8Mt @ 0.07% - 0.12% molybdenum (Mo) and 0.28% - 0.44% copper
(Cu).
Table 1: Resources at as 30 June 2023.
Table 2: Titov Exploration Target at as 30 June 2023.
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’ (“2012 JORC Code”).
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 release, 31 March 2022 “Robust Maiden Resource at Triumph Gold Project”
5. 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 release, 8 May 2023 “Fully Funded Acquisition of Greater Liontown”
6. 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 release, 20 January 2023 “Consolidation of High Grade Advanced Au Prospects RW”
7. Exploration Target for Titov based on several factors discussed in the corresponding Table 1 which can be found with the original ASX
release 21 March 2023 “Shallow High Grade Titov Cu-Mo Exploration Target”
Resource
Tonnage
Copper
Molybdenum
Class
(kt)
(%)
(%)
Titov
Exploration Target
5,000 - 8,000
0.28 - 0.44
0.07 - 0.12
Prospect
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
16
DIRECTORS’ REPORT (CONTINUED)
EXPLORATION TARGETS, RESOURCES AND ORE RESERVES STATEMENT (CONTINUED)
QUALITY CONTROL
Sunshine Metals 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 at Triumph was
overseen by experienced Sunshine Metals’s employees, with completed holes subject to downhole gyroscopic survey and collar
coordinates surveyed with RTK GPS. Geological logging and sampling were completed by Sunshine Metals’s geologists. Sunshine
Metals 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 the 2012 JORC Code. No Ore Reserve estimation has been completed at Triumph.
Current Mineral Resource Estimates at Greater Liontown and at Plateau were undertaken by and reported to JORC 2012 standards
by the previous tenure operators and were subject to site and corporate due diligence procedures by Sunshine Metals prior to
acquisition. This included review of available data, geological modelling and estimation techniques.
COMPETENT PERSON’S STATEMENT
The information in this report that relates to Resources at Triumph 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 JORC Code. 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.
The information in this report that relates to Mineral Resources at Waterloo and Orient is based on information compiled and
reviewed by Mr Stuart Hutchin, who is a Member of the Australian Institute of Geoscientists (AIG) and is a Principal Geologist
employed by Mining One Pty Ltd. Mr Stuart Hutchin 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 Stuart Hutchin consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at Liontown and Liontown East is based on information compiled
and reviewed by Mr Peter Carolan, who is a Member of the Australasian Institute of Mining and Metallurgy and was a Principal
Geologist employed by Red River Resources Ltd. Mr Peter Carolan 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 Peter Carolan consents to the inclusion
in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at Plateau is based on information compiled and reviewed by Dr
Damien Keys, who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of
Geoscientists (AIG). Dr Keys 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. Dr Keys consents to the inclusion in the report of the matters based on his information in
the form and context in which it appears.
The information in this report that relates to the Titov Exploration Target is based on, and fairly represents, information compiled by
Mr Matt Price, a Competent Person who is a Member of the Australian Institute of Geoscientists (AIG) and the Australian Institute of
Mining and Metallurgy (AusIMM). Mr Price has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration, and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
JORC Code. Mr Price consents to the inclusion in the report of the matters based on his information in the form and context in which
it appears.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
17
DIRECTORS’ REPORT (CONTINUED)
SCHEDULE OF TENEMENT INTERESTS AS AT 30 JUNE 2023
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
Granted
100%
Triumph
EPM 18486
Granted
100%
Triumph
EPM 19343
Granted
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
Granted
100%
Ravenswood
EPM 28240
Granted
100%
Ravenswood*
EPM10582
Granted
100%
Ravenswood*
EPM12766
Granted
100%
Ravenswood*
EPM16929
Granted
100%
Ravenswood*
EPM26718
Granted
100%
Ravenswood*
EPM27357
Granted
100%
Ravenswood*
EPM27520
Granted
100%
Ravenswood*
EPM14161
Granted
100%
Ravenswood*
EPM25815
Granted
100%
Ravenswood*
EPM18471
Granted
100%
Ravenswood*
EPM18470
Granted
100%
Ravenswood*
EPM18713
Granted
100%
Ravenswood*
EPM25895
Granted
100%
Ravenswood*
ML10277
Granted
100%
Ravenswood*
ML100290
Application
100%
Ravenswood*
ML100302
Application
100%
Ravenswood#
EPM25617
Granted
0%
Ravenswood#
EPM26705
Granted
0%
* Cautionary Statement: Conditions precedent are to be satisfied prior to completion which occurred on 6 September 2023.
# Farm-In tenements. SHN has the capacity to earn 75% beneficial interest over 3 years.
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
18
DIRECTORS’ REPORT (CONTINUED)
DIVIDENDS
No dividends were paid or recommended for the year ended 30 June 2023.
EVENTS SUBSEQUENT TO REPORTING DATE
On 5 July 2023, the Company changed its name to Sunshine Metals Limited as approved at the general
meeting of shareholders held on 23 June 2023.
On 7 July 2023, the Company issued the following securities that were approved at the general meeting of
shareholders held on 23 June 2023:
-
49,566,666 shares at $0.015 each to raise $743,500 which was part of the Tranche 2 Placement;
-
20,000,000 unlisted options exercisable at $0.0225 each expiring on 30/06/2027 to directors; and
-
20,000,000 unlisted options exercisable at $0.0225 each expiring on 7/7/2027 to the lead manager of
the placement undertaken in May 2023.
On 12 July 2023, the Company issued 1,000,000 shares at $0.015 each to raise $15,000 as part of the Tranche
2 Placement.
On 2 August 2023, the Company issued 4,933,334 unlisted options exercisable at $0.0225 each expiring on
30 June 2027 to employees.
On 6 September 2023, the Company completed the Greater Liontown transaction which related to the
acquisition of 16 tenements in two separate transactions with unrelated, third parties adjacent to the
Ravenswood West project. Consideration for the acquisition is set out below.
Cromarty
Hebrides
Cash Payments
Non-Refundable Deposit/Fee
$400,000
$25,000
Cash Paid at Completion
$2,100,000
$225,000
Deferred Cash – 31 October 2023
$500,000
-
Total Cash Payments
$3,000,000
$250,000
Milestone Payments
- $1m of Production Revenue
$1,000,000
-
- $1m of Production Revenue + 1 Year
$1,000,000
-
Total Milestone Payments
$2,000,000
-
Total Consideration
$5,000,000
$250,000
On 20 September 2023 Cockatoo Iron’s shareholding in Pearl Gull Limited was released from escrow.
On 21 September 2023, the Company announced that it had secured commitments for a placement of $3.0
million (before costs) at an issue price of $.014 per share with one attaching option for every three new
shares exercisable at $0.03 expiring 30 September 2025. Funds from the placement were received on 26
September 2023.
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
19
DIRECTORS’ REPORT (CONTINUED)
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
1,224,008,444
Unissued shares
As at the date of this report, there were the following unissued shares on issue:
Security Description
Number of Securities
Ordinary shares under options
113,233,334
Performance shares
8,500,000
Deferred shares subject to performance hurdles
50,000,000
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
Options exercisable at $0.0225 expiring 7 July 2027
20,000,000
Options exercisable at $0.0225 expiring 30 June 2027
24,933,334
Performance rights
Performance rights with vesting condition expiring 30 September 2023
8,500,000
Deferred consideration shares
Deferred shares with vesting condition expiring 11 December 2023
50,000,000
The vesting condition that applies to the Performance Rights and Deferred Consideration Shares relates to
the Company announcing to ASX by 30 September 2023 that it has Resource of 200,000 ounces of gold on
tenements owned or being acquired or applied for by Sunshine (Triumph) Pty Ltd (formerly XXXX Gold Pty
Ltd) at the time of completion. The vesting condition will not be achieved and the Company expects the
Performance Rights and Deferred Consideration Shares to expire on the respective expiry dates.
Option holders do not have any right, by virtue of the options, to participate in any share issue of the
Company or any related body corporate.
Shares issued as a result of the exercise of options
During the financial year there were no ordinary shares issued as a result of the exercise of options (2022:
5,400,000).
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
20
DIRECTORS’ REPORT (CONTINUED)
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.
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 Metals were:
Number of
Ordinary Shares
Number of
Deferred Shares
Number of
Options
Number of
Performance
Rights
Alec Pismiris
19,395,833
-
12,000,000
-
Damien Keys
41,300,000
12,500,000
13,000,000
5,000,000
Paul Chapman
54,455,000
12,500,000
10,600,000
2,000,000
Leslie Davis
43,173,333
12,500,000
13,000,000
1,500,000
Antonio Torresan
85,666,667
-
12,000,000
-
CORPORATE GOVERNANCE
In recognising the need for high standards of corporate behavior and accountability, the directors support
and have substantially adhered to the recommendations set by the ASX Corporate Governance Council. The
Company’s corporate governance statement can be viewed on the Company’s website at
www.shnmetals.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 a relevant agreement for indemnifying
against a liability incurred as an officer, including costs and expenses in successfully defending legal
proceedings.
In addition, the Company has, during or since the 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
21
DIRECTORS’ REPORT (CONTINUED)
The insurance policy outlined above does not allocate the premium paid to each individual officer of the
Company and does not allow for disclosure of the premium.
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 is 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 Board is also 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 2023 (2022: $Nil) for non-
audit services.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
22
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 directors and senior
executives of the Group is set out below.
The remuneration policy setting out the terms and conditions for the executive directors and 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 and relevant comparative information.
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 Group’s diverse activities.
Remuneration and other terms of employment for the directors have been formalised in service agreements
as follows:
A. The Group has entered into an executive service agreement with managing director, Dr Damien Keys.
The terms of the service agreement are set out as follows:
-
Commencement date: 24 November 2020
-
Term: two years (extended by a further 2 years on initial expiry)
-
Fixed remuneration: $242,000 per annum (exclusive of superannuation)
-
Termination for cause: no notice period
-
Termination without cause: three month notice period
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
23
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Remuneration policy (continued)
B. The Group 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 $250,000 per annum.
The Board undertakes an annual review of its performance against goals set at the start of the year. The
Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is
designed to attract high calibre of executives and to remunerate them for performance that results in long-
term growth in shareholder wealth.
All remuneration paid to directors and executives is valued at the cost to the Group and expensed.
Performance-based remuneration
The Group currently has performance-based remuneration component built into director and executive
remuneration packages.
The Group has established an Employee Securities Incentive Plan (“Plan”) that provides greater flexibility by
allowing for the issuance of performance securities upon a determination by the Board that an eligible
employee may participate in the Plan. Performance securities can include an option or performance share.
The Group received 98.9% “yes” votes on its remuneration report for the 30 June 2022 financial year.
The table below summarises the earnings of the Group and other factors. Shareholder wealth for the Group
is largely driven by exploration success, Resource growth and share price increase. Factors that are
considered to affect shareholder wealth for the 5 years to 30 June 2023 are shown below.
2023
2022
2021
2020
2019
Loss after income tax
attributable to shareholders ($)
(3,489,942)
(1,667,266)
(1,064,797)
21,556
(1,913,882)
Share price at year end ($)
0.014
0.028
0.055
0.0258
0.0258
Basic earnings/(loss) per share
(cents)
(0.45)
(0.30)
(0.29)
0.01
(0.53)
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
24
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Performance-based remuneration (continued)
The table below is a summary of the Company’s Global Resources.
Prospect
Resource
Tonnage
Copper
Lead
Zinc
Gold
Silver
Zinc Eq.
Class
(kt)
(%)
(%)
(%)
(g/t)
(g/t)
(%) *
Greater
Liontown
Indicated
(32%)
Inferred
(68%)
4,941
0.8
2
7.1
1.1
35
11.96
Plateau#
Inferred
961
-
-
-
1.7
10.7
Triumph
Inferred
1,808
-
-
-
2
-
Global
Resource
7,710
Prospect
Contained
Copper (t)
Contained
Lead (t)
Contained
Zinc (t)
Contained
Gold
(Koz)
Contained
Silver
(Koz)
Greater
Liontown
41,889
97,125
349,822
179
5,561
Plateau#
-
-
-
50
329
Triumph
-
-
-
118
-
Global
Resource
41,889
97,125
349,822
347
5,890
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
25
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 Chairman
2023
72,0001
-
29,042
101,042
29
2022
72,0001
-
-
72,000
-
D Keys – Managing Director
2023
242,000
25,410
29,042
296,452
10
2022
225,500
22,550
100,000
348,050
29
P Chapman – Non-Executive Director
2023
32,579
3,421
29,042
65,042
45
2022
32,727
3,273
40,000
76,000
53
L Davis – Non-Executive Director
2023
32,579
3,421
29,042
65,042
45
2022
32,727
3,273
30,000
66,000
45
A Torresan – Non-Executive Director
2023
36,000
-
29,042
65,042
45
2022
36,000
-
-
36,000
-
Total Remuneration:
2023
415,158
32,252
145,210
592,620
25
2022
398,954
29,096
170,000
598,050
28
Notes:
(1) Includes $36,000 (FY2022: $36,000) paid as fees for Group secretarial services.
There were no other related party transactions with key management personnel during the year ended 30 June
2023 (Note 18).
Remuneration Options and Performance Rights
During the year ended 30 June 2023, no options were issued as part of director remuneration (30 June 2022:
Nil). Options were approved by shareholders at a general meeting on 23 June 2023 and issued on 7 July
2023. Refer to Note 27 for details of director’s options.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
26
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
The options granted to directors during the year had no vesting conditions. The following table lists the inputs
to the model used for the value of the options during the year:
Measurement date
23/6/2023
Issue date
7/7/2023
Expiry date
30/6/2027
Dividend yield
Nil
Expected volatility
90%
Risk-free interest rate
3.84%
Expected life of options (years)
4 years
Underlying share price
$0.013
Option exercise price
$0.0225
Value of option
$0.00726
Number of options issued
20,000,000
Value of options
$145,208
During the year ended 30 June 2023, no performance rights were issued as part of director remuneration (30
June 2022: Nil). Refer to Note 15(d) for details of performance rights.
Shareholdings by Directors (and Associates)
2023
Balance
Received
Acquired
Options
Net Other
Balance
01/07/22
Remuneration
Exercised
Change
30/06/23
(No. of Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
(No. of Shares)
A Pismiris
15,062,500
-
1,000,000
-
-
16,062,500
D Keys
40,500,000
-
800,000
-
-
41,300,000
P Chapman
40,455,000
-
4,000,000
-
-
44,455,000
L Davis
37,840,000
-
2,000,000
-
-
39,840,000
A Torresan
67,000,000
-
2,000,000
-
-
69,000,000
Total
200,857,500
-
9,800,000
-
-
210,657,500
Options Holdings by Directors (and Associates)
2023
Balance
Granted as
No. of
No. of
Net
Balance
01/07/22
Remuneration
Options
Options
Change Other
30/06/23
(No. Options)
(No. Options)
Acquired
Exercised
(No. Options)
(No. Options)
A Pismiris
8,000,000
4,000,000
-
-
-
12,000,000
D Keys
9,000,000
4,000,000
-
-
-
13,000,000
P Chapman
6,600,000
4,000,000
-
-
-
10,600,000
L Davis
9,000,000
4,000,000
-
-
-
13,000,000
A Torresan
8,000,000
4,000,000
-
-
-
12,000,000
Total
40,600,000
20,000,000
-
-
-
60,600,000
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
27
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Options Holdings by Directors (and Associates) (continued)
Values of options over ordinary shares granted, exercised or lapsed for directors as part of compensation during
the year ended 30 June 2023 are set out below:
2023
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
$
$
$
%
A Pismiris
29,042
-
-
29
D Keys
29,042
-
-
10
P Chapman
29,042
-
-
45
L Davis
29,042
-
-
45
A Torresan
29,042
-
-
45
Performance Rights Holdings by Directors (and Associates)
2023
Balance
Granted as
No. of
No. of
Net
Balance
01/07/22
Remuneration
Right
Rights
Change Other
30/06/23
(No. Rights)
(No. Rights)
Acquired
Exercised
(No. Rights)
(No. Rights)
A Pismiris
-
-
-
-
-
-
D Keys
5,000,000
-
-
-
-
5,000,000
P Chapman
2,000,000
-
-
-
-
2,000,000
L Davis
1,500,000
-
-
-
-
1,500,000
A Torresan
-
-
-
-
-
-
Total
8,500,000
-
-
-
-
8,500,000
End of remuneration report (audited).
Signed in accordance with a resolution of the board of directors.
Dated at Perth this 27th day of September, 2023
Alec Pismiris
Director
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
28
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
2022
Note
$
$
Other income
2
-
5,934
Corporate expenses
3
(1,192,506)
(942,775)
Change in fair value of investments through profit or loss
(16,626)
(161,400)
Rehabilitation expense
(1,198,000)
(357,000)
Share based payments
27
(145,208)
(212,025)
Impairment of exploration
7
(937,602)
-
Loss before income tax
(3,489,942)
(1,667,266)
Income tax benefit
4
-
-
Loss for the year
(3,489,942)
(1,667,266)
Other comprehensive income/(loss) for the year
-
-
Total comprehensive loss for the year
(3,489,942)
(1,667,266)
Basic loss per share (cents per share)
21
(0.45)
(0.30)
Diluted loss per share (cents per share)
21
(0.45)
(0.30)
The above consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
29
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Consolidated
2023
2022
Note
$
$
Current Assets
Cash and cash equivalents
5
3,329,590
1,853,737
Security deposits
-
178,615
Trade and other receivables
6
139,346
69,219
Total Current Assets
3,468,936
2,101,571
Non-Current Assets
Exploration and evaluation expenditure
7
12,808,321
9,943,600
Plant and equipment
8
251,972
340,557
Other financial assets
9
34,474
51,100
Security deposits
178,445
-
Total Non-Current Assets
13,273,212
10,335,257
Total Assets
16,742,148
12,436,828
Current Liabilities
Trade and other payables
10
323,035
306,134
Interest-bearing liabilities
11
-
8,408
Lease liability
12
99,508
87,282
Employee leave liabilities
13
55,692
50,863
Total Current Liabilities
478,235
452,687
Non-Current Liabilities
Lease liability
12
86,458
172,595
Provisions
14
1,555,000
357,000
Total Non-Current Liabilities
1,641,458
529,595
Total Liabilities
2,119,693
982,282
Net Assets
14,622,455
11,454,546
Equity
Issued capital
15
28,800,741
22,497,970
Reserves
16
4,512,188
4,157,108
Accumulated losses
(18,690,474) (15,200,532)
Total Equity
14,622,455
11,454,546
The above consolidated statement of financial position
should be read in conjunction with the accompanying notes.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
30
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
Issued
Capital
$
Share-Based
Payments
Reserve
$
Accumulated
Losses
$
Total
Equity
$
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
Balance at 01/07/2022
22,497,970
4,157,108
(15,200,532)
11,454,546
Total comprehensive income for the year
Loss for the year
-
-
(3,489,942)
(3,489,942)
Total comprehensive loss for the year
-
-
(3,489,942)
(3,489,942)
Transactions with owners recorded directly
into equity
Shares to be issued
319,500
-
-
319,500
Share based payments
-
355,080
-
355,080
Issue of fully paid ordinary shares
6,591,500
-
-
6,591,500
Capital raising costs
(608,229)
-
-
(608,229)
Balance at 30/06/2023
28,800,741
4,512,188
(18,690,474)
14,622,455
The above consolidated statement of changes in equity
should be read in conjunction with the accompanying notes.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
31
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
2022
Note
$
$
Cash Flows from Operating Activities
Payments to suppliers and employees
(1,227,490)
(1,036,978)
Interest received
-
5,935
Net Cash Used in Operating Activities
17(b)
(1,227,490)
(1,031,043)
Cash Flows from Investing Activities
Payments for exploration expenditure
(3,928,517)
(4,045,068)
Payments for acquisition of investments
-
(12,500)
Payments for acquisition of plant and equipment
(11,698)
(66,020)
Transfers to term deposits
-
(27,500)
Proceeds from exploration rebate grant
138,813
-
Net Cash Used in Investing Activities
(3,801,402)
(4,151,088)
Cash Flows from Financing Activities
Gross proceeds from share issues
6,591,501
5,162,000
Costs of share issues
(397,750)
(299,583)
Gross proceeds from shares to be issued
319,500
-
Repayment of finance lease
17
(8,506)
(18,714)
Net Cash Provided by Financing Activities
6,504,745
4,843,703
Net increase/(decrease) in cash and cash equivalents held
1,475,853
(338,428)
Cash and cash equivalents at the beginning of the financial year
1,853,737
2,192,165
Cash and cash equivalents at the end of the financial year
17(a)
3,329,590
1,853,737
The above consolidated statement of cash flows
should be read in conjunction with the accompanying notes.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sunshine Metals Limited is a Company domiciled in Australia. The consolidated financial statements of the
Company as at and for the year ended 30 June 2023 comprise the Company and its subsidiaries (referred to
as the Group).
The significant policies, which have been adopted in the preparation of this financial report, have been
applied consistently unless otherwise stated and are as follows:
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Act 2001.
The financial report was authorised for issue by the Board on 27th September 2023.
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 2022 annual financial report except for the impact (if any) of new and revised standards and
interpretations outlined below.
Standards and Interpretations applicable to 30 June 2023
In the year ended 30 June 2023, 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 Metals 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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.
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 or 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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.
The Group makes use of a simplified approach in accounting for trade and other receivables and records the
loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cashflows
considering the potential default at any point during the life of the financial instrument. In calculating, the
Group uses its historic experience, external indicators and forward-looking information to calculate expected
credit losses.
(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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Fair Value of Assets and Liabilities (continued)
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.
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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.
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 Metals 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
Plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the
items.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Building improvements - lease term
Right of use assets - lease term
Plant and equipment - 5 to 7 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate,
at each financial period end.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal. Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These are included in the statement of comprehensive income.
(r)
Leases
At inception of a contract, the Company assesses if the contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding lease liability is recognised by the Company where the
Company is a lessee. However, all contracts that are classified as short-term leases (i.e. a lease with a
remaining lease term of 12 months or less) and leases of low-value assets are recognised as an operating
expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate
cannot be readily determined, the Company uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
i.
fixed lease payments less any lease incentives;
ii.
variable lease payments that depend on an index or rate, initially measured using the index or rate at
the commencement date;
iii. the amount expected to be payable by the lessee under residual value guarantees;
iv. the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
v.
payments of penalties for terminating the lease if the lease term reflects the exercise of an option to
terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned
above, any lease payments made at or before the commencement date, as well as any initial direct costs.
The subsequent measurement of the right-of-use assets is at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is
the shortest. Where a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset
reflects that the Company anticipates to exercise a purchase option, the specific asset is depreciated over
the useful life of the underlying asset.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(s)
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and
are not discounted. The amounts are unsecured and usually paid within 30 days of recognition.
(t)
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 2023. 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.
(u) 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
NOTE 2: OTHER INCOME
Consolidated
2023
2022
$
$
Interest earned
-
5,934
Total
-
5,934
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
97,650
106,530
Consulting and directors fees
263,861
272,817
Share register maintenance and listing fees
84,859
75,079
Legal fees
103,348
2,049
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 4: INCOME TAX
The prima facie tax on loss before income tax
Consolidated
is reconciled to the income tax as follows:
2023
2022
$
$
Loss before income tax
(3,489,942)
(1,667,266)
Income tax calculated at 30% (2022: 30%)
(1,046,983)
(500,180)
Add back:
Provisions
422,289
57,014
Capital raising costs
(69,354)
(32,860)
Fair value loss on investment
4,988
48,420
Share-based payments
43,562
25,108
Capitalised exploration immediately deductible
(648,329)
(1,329,018)
Capitalised exploration written off
281,281
-
Other
-
927
Future income tax benefits not brought to account
1,012,546
1,730,589
Income tax expense/(benefit)
-
-
Deferred tax assets:
Capital raising costs
760,355
383,307
Provisions
490,648
68,359
Carried forward tax losses (including foreign tax losses)
4,565,849
3,553,303
5,816,852
4,004,969
Deferred tax liabilities:
Capitalised exploration costs
2,677,691
2,029,361
2,677,691
2,029,361
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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
2022
$
$
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
3,329,590
1,853,737
3,329,590
1,853,737
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Goods and services tax
138,416
58,089
Other
930
11,130
139,346
69,219
NOTE 7: EXPLORATION AND EVALUATION EXPENDITURE
Balance at the beginning of the period
9,943,600
4,513,541
Acquisition of Sunshine (Triumph) Pty Ltd (formerly XXXX Gold Pty Ltd)
-
1,000,000
Non-refundable deposits paid for the Greater Liontown acquisition
375,000
-
Expenditure incurred during the period
3,427,323
4,430,059
Impairment of exploration assets(i)
(937,602)
-
Balance at the end of the period
12,808,321
9,943,600
(i) The Company intends to divest of the Hodgkinson and Investigator projects in due course as they are non-core
to the future strategy and direction; and have therefore impaired the carrying value of $937,602 at 30 June
2023.
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.
The terms of the Greater Liontown acquisition are set out in Note 25.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
$
2022
$
NOTE 8: PLANT AND EQUIPMENT
At cost
408,697
382,529
Accumulated depreciation
(156,725)
(41,972)
251,972
340,557
Plant and equipment
Balance at the beginning of the period
81,850
39,011
Additions/(Disposals)
11,698
61,055
Depreciation expense
(22,239)
(18,216)
Balance at the end of the period
71,309
81,850
Right of use asset
Balance at the beginning of the period
258,707
-
Additions/(Disposals)
14,470
273,925
Depreciation expense
(92,514)
(15,218)
Balance at the end of the period
180,663
258,707
NOTE 9: OTHER FINANCIAL ASSETS
Non Current
Unlisted investments at fair value (note 24):
Shares in other entities(i) (fair value through profit or loss)
34,474
51,100
34,474
51,100
(i) As at 30 June 2023, the Group held 6,250,000 shares in Cockatoo Iron Pty Ltd as a result of the sale of the
Cockatoo Island Project in a prior year.
NOTE 10: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
323,035
306,134
323,035
306,134
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
$
2022
$
NOTE 11: INTEREST BEARING LIABILITIES
Current
-
8,408
-
8,408
NOTE 12: LEASE LIABILITY
Office operating lease
Current
99,508
87,282
Non-Current
86,458
172,595
185,966
259,877
The office lease began in May 2022 and is for a period of three years.
NOTE 13: EMPLOYEE LEAVE LIABILITIES
Annual leave entitlements
55,692
50,863
55,692
50,863
NOTE 14: PROVISIONS
Provision for rehabilitation
1,555,000
357,000
1,555,000
357,000
Provision for rehabilitation
The provision for the estimated costs to rehabilitate historical mining areas has been on a closure cost
estimate methodology prepared by experienced mine closure consultants. The responsibility for and the
amount of the obligation are subject to ongoing review and do not take into account commercial factors
that could significantly reduce the actual work required and the cost of doing so. These factors are discussed
in detail below.
In 2002, the Company acquired the mineral assets of Nugold Hill Mines Limited (“Nugold”) pursuant to an
acquisition agreement. The acquisition included the Xanadu Gold Project which comprised three mining
leases and an exploration license (“Xanadu”). The Xanadu tenements were relinquished by the Company in
2009 and were subsequently acquired and explored by third parties thereafter. As a consequence of mining
operations undertaken by Nugold prior to the Company’s acquisition of Xanadu, there exists an obligation to
rehabilitate the site of the historical mining activities. The Company has a security bond of $114,000 in place
with the Department of Mines, Industry, Regulation and Safety (“DMIRS”). Mine closure consultants have
provided a report to the Company which includes a costed plan to rehabilitate Xanadu as required by DMIRS.
The costed plan forms the basis of the provision for rehabilitation.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 14: PROVISIONS (continue)
The Company reserves its rights in relation to the rehabilitation obligation, if any. It should be noted that:
-
the Company is undertaking a legal review to determine whether rehabilitation obligations were part
of the Nugold acquisition;
-
the Company is undertaking a review to determine what rehabilitation obligations arose from third
party activities in the period from relinquishment in 2009 to 30 June 2023;
-
the Company has not accepted the scope of the DMIRS rehabilitation obligations;
-
Xanadu is subject to active exploration by third parties which may reduce the need for rehabilitation
due to potential future mining activities;
-
the rehabilitation obligation as estimated by using the DMIRS Rehabilitation Liability Estimate
Calculator in the previous financial year was $357,000; and
-
the costed plan does not consider the above factors and is subject to change.
Notwithstanding the above, the directors have taken a conservative approach and made provision for the
closure cost estimate prepared by the mine closure consultants.
Consolidated
2023
$
2022
$
NOTE 15: ISSUED CAPITAL
(a)
Issued Capital
959,156,064 Ordinary shares fully paid (2022: 619,722,730)
28,800,741
22,497,970
(b) Movements in ordinary share capital of the Group:
Date
Details
No. of Shares
$
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
01/07/2022
Opening balance
619,722,730
22,497,970
22/08/2022
Placement
140,200,000
3,505,000
02/12/2022
Director placement
9,800,000
245,000
15/05/2023
Placement – Tranche 1
189,433,334
2,841,500
Placement – Tranche 2 Shares to be
issued
-
319,500
Less: capital raising costs
-
(608,229)
30/06/2023
Closing balance
959,156,064
28,800,741
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 15: ISSUED CAPITAL (continued)
(c) Deferred Shares
As part of the consideration for the acquisition of Sunshine (Triumph) Pty Ltd (formerly XXXX Gold Pty Ltd), the
Company issued:
(a) 50,000,000 Deferred Shares on the Company announcing to ASX by 11 December 2023 that it has an
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 Sunshine (Triumph) Pty Ltd (formerly XXXX Gold
Pty Ltd) at the time of completion; and
(b) further 50,000,000 Deferred Shares on the Group announcing to ASX by 11 December 2023 that it has an
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 Sunshine (Triumph) Pty Ltd (formerly XXXX Gold
Pty Ltd) at the time of completion.
On 31 March 2022, the Company announced an initial 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. The value of deferred shares was recognized in reserves.
At date of issue, the Deferred Shares subject to the achievement of the 200,000 ounces of gold or gold equivalent
hurdle are not expected to be issued.
(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 by 30 September 2023 that it
has a Resource of 100,000 ounces of gold on tenements owned or being acquired or applied for by
Sunshine (Triumph) Pty Ltd (formerly XXXX Gold Pty Ltd) at the time of completion; and
(b) Tranche 2 – 50% of the rights will vest on the Company announcing to ASX by 30 September 2023 that it
has Resource of 200,000 ounces of gold on tenements owned or being acquired or applied for by Sunshine
(Triumph) Pty Ltd (formerly XXXX Gold Pty Ltd) at the time of completion.
On 31 March 2022, the Company announced an initial Resource 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. 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 share-based payment reserve.
At date of issue, no value has been ascribed to the Tranche 2 Performance Rights as the achievement of the hurdle
is not expected to be realised.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 15: ISSUED CAPITAL (continued)
(e) Capital Risk Management
When managing capital, management’s objective is to ensure the Group continues as a going concern as well as
to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to
maintain a capital structure that ensures the lowest cost of capital available to the Group.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The Group does not have a defined share buy-back plan.
No dividends were paid in 2023 (2022: Nil).
There is no current intention to incur further debt funding on behalf of the Group as on-going expenditure will be
funded via cash reserves or equity.
The Group is not subject to any externally imposed capital requirements.
NOTE 16: RESERVES
Consolidated
2023
$
2022
$
(a)
Composition
Share-based payments reserve
4,512,188
4,157,108
4,512,188
4,157,108
(b) Movements in options on issue during the last two years were as follows:
Date
Details
No. of
Unlisted Options
Exercise
Price
Expiry Date
01/07/21
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
01/07/2022
Opening balance
68,300,000
23/06/2023* Lead manager options
20,000,000
0.0225
07/07/2027
Director options
20,000,000
0.0225
30/06/2027
30/06/2023
Closing balance
108,300,000
* These options were approved by shareholders on 23 June 2023 and issued on 7 July 2023
Refer to Note 27 for details of options issued during the year ended 30 June 2023.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 15: ISSUED CAPITAL (continued)
(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.
Consolidated
NOTE 17: NOTES TO THE STATEMENT OF CASH FLOWS
2023
$
2022
$
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)
3,329,590
1,853,737
b) Reconciliation of net cash and cash equivalents used in operating activities
to loss for the year:
Loss for the year
(3,489,942)
(1,667,266)
Depreciation expense
114,753
33,434
Impairment of investments
16,626
161,400
Impairment of exploration
937,602
-
Rehabilitation expense
1,198,000
-
Share based payment expense
145,208
212,025
Movements in assets and liabilities:
(Increase)/Decrease in trade and other receivables
(70,127)
22,492
(Increase)/Decrease in other assets
-
43,378
Increase/(Decrease) in lease liabilities
(73,914)
-
Increase/(Decrease) in trade and other payables
(5,696)
163,494
Net cash used in operating activities
(1,227,490)
(1,031,043)
c)
Non-cash investing and financing activities
The Company granted options to directors and the lead manager as part of their remuneration during the year ended
30 June 2023. These options were issued post-30 June 2023. Refer notes 25 and 27.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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
2023
$
2022
$
Compensation by category:
Short-term
415,158
398,954
Post-employment
32,252
29,096
Termination benefit
-
-
Share based payment
145,210
170,000
592,620
598,050
(b) Transactions with Key Management Personnel
There were no transactions with key management personnel during the year ended 30 June 2023.
Consolidated
NOTE 19: REMUNERATION OF AUDITORS
2023
$
2022
$
Audit services – HLB Mann Judd
39,154
37,637
39,154
37,637
NOTE 20: INTEREST IN SUBSIDIARIES
(a)
Information about Principal Subsidiaries
The consolidated financial statements include the financial statements of Sunshine Metals Limited and the
subsidiaries listed in the following table:
Equity Interest
Country of
2023
2022
Incorporation
%
%
Sunshine (Triumph) Pty Ltd (formerly XXXX Gold Pty Ltd)
AUS
100
100
Sunshine (Ravenswood) Pty Ltd (formerly 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
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 21: LOSS PER SHARE
The following reflects the income and data used in the calculations of basic and diluted loss per share:
Consolidated
2023
2022
$
$
Loss used in calculating basic and diluted loss per share
(3,489,942)
(1,667,266)
Number of
Shares
Number of
Shares
Weighted average number of ordinary shares used in calculating:
Basic loss per share
770,007,022
546,417,950
Diluted loss per share
770,007,022
546,417,950
NOTE 22: COMMITMENTS FOR EXPENDITURE
2023
2022
$
$
Minimum exploration expenditure:
-
Not later than 1 year
1,170,000
460,000
-
Between 1 year and 5 years
3,165,500
2,585,000
Finance Lease repayments:
-
Not later than 1 year
-
8,506
-
Between 1 year and 5 years
-
-
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 Metals Limited and its controlled entities are employed in exploration
activities relating to minerals in Australia.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 (2022: nil).
2023
Non
Interest
Bearing
$
Weighted
Average
Effective
Interest
Rate %
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Total
$
Financial Assets
- Cash and cash equivalents
3,329,590
-
-
-
3,329,590
- Deposits held
-
-
178,445
-
178,445
- Other receivables
701
-
-
-
701
- Unlisted investments
34,474
-
-
-
34,474
Total Financial Assets
3,364,765
178,445
-
3,543,210
Financial Liabilities
- Trade creditors
323,035
-
-
-
323,035
- Lease liability
-
6
-
185,966
185,966
Total Financial Liabilities
323,035
-
185,966
509,001
Net Financial Assets /
(Liabilities)
3,041,730
178,445
(185,966)
3,034,209
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 24: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Cash Flow Interest Rate Risk
2022
Non
Interest
Bearing
$
Weighted
Average
Effective
Interest
Rate %
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Total
$
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
Interest Rate Sensitivity
The Group’s exposure to interest rate risk at balance date is immaterial.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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
2023
$
2022
$
Contracted maturities of undiscounted liabilities at 30 June
Payables
- less than 30 days
323,035
306,134
- less than 12 months
-
-
Loans other parties
- less than 12 months
-
8,408
- greater than 12 months
-
-
Lease liability
- less than 12 months
107,422
100,000
- between 1 to 2 years
89,510
100,000
- between 2 to 5 years
-
83,333
519,967
597,875
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 2023, 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 $3,447 (2022: $5,110)
lower/higher. The Group holds shares in Cockatoo Iron NL which is unlisted and 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.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 2023
Level 1
Level 2
Level 3
Total
$
$
$
$
Equity investments at FVTPL
-
-
34,474
34,474
30 June 2022
Level 1
Level 2
Level 3
Total
Asset
$
$
$
$
Equity investments at FVTPL
-
-
51,100
51,100
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 5 July 2023, the Company changed its name to Sunshine Metals Limited as approved at the general
meeting of shareholders held on 23 June 2023.
On 7 July 2023, the Company issued the following securities that were approved at the general meeting of
shareholders held on 23 June 2023:
-
49,566,666 shares at $0.015 each to raise $743,500 which was part of the Tranche 2 Placement;
-
20,000,000 unlisted options exercisable at $0.0225 each expiring on 30/06/2027 to directors; and
-
20,000,000 unlisted options exercisable at $0.0225 each expiring on 7/7/2027 to the lead manager of
the placement undertaken in May 2023.
On 12 July 2023, the Company issued 1,000,000 shares at $0.015 each to raise $15,000 as part of the Tranche
2 Placement.
On 2 August 2023, the Company issued 4,933,334 unlisted options exercisable at $0.0225 each expiring on
30 June 2027 to employees.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 25: EVENTS SUBSEQUENT TO REPORTING PERIOD (continued)
On 6 September 2023, the Group completed the Greater Liontown transaction which related to the
acquisition of 16 tenements in two separate transactions with unrelated, third parties adjacent to the
Ravenswood West project. Consideration payable for the acquisition is set out below.
Cromarty
Hebrides
Cash Payments
Non-Refundable Deposit paid
$400,000
$25,000
Cash Paid on Completion
$2,100,000
$225,000
Deferred Cash – 31 October 2023
$500,000
-
Total Cash Payments
$3,000,000
$250,000
Milestone Payments
- $1m of Production Revenue
$1,000,000
-
- $1m of Production Revenue + 1 Year
$1,000,000
-
Total Milestone Payments
$2,000,000
-
Total Consideration
$5,000,000
$250,000
On 21 September 2023, the Group announced that it had secured commitments for a placement of $3.0
million (before costs) at an issue price of $.014 per share with one attaching option for every three new
shares exercisable at $0.03 expiring 30 September 2025. Funds from the placement were received on 26
September 2023.
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 Group has no known material contingent liabilities at the end of the financial year.
NOTE 27: SHARE BASED PAYMENTS
The following share-based payment transactions occurred or were recognised during the year:
•
20,000,000 unlisted options exercisable at $0.0225 each expiring on 30 June 2027 were approved by
shareholders on 23 June 2023 and issued to directors on 7 July 2023; and
•
20,000,000 unlisted options exercisable at $0.0225 each expiring on 7 July 2027 were approved by
shareholders on 23 June 2023 to the lead manager of the placement undertaken in May 2023.
All share options issued during the year vested immediately. The total amount of $145,208 (2022: $42,025) was
recognised as a share-based payment expense, $209,872 (2022: $nil) was recognised as a capital raising cost and
$Nil (2022: $1,000,000) was recognised as consideration paid on the acquisition of Sunshine (Triumph) Pty Ltd
(formerly XXXX Gold Pty Ltd).
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 27: SHARE BASED PAYMENTS (continued)
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
23/6/2023
15/5/2023
Issue date
7/7/2023
7/7/2023
Expiry date
30/6/2027
7/7/2027
Dividend yield
Nil
Nil
Expected volatility
90%
90%
Risk-free interest rate
3.84%
3.84%
Expected life of options (years)
4 years
4 years
Underlying share price
$0.013
$0.017
Option exercise price
$0.0225
$0.0225
Value of option
$0.00726
$0.01049
Number of options issued
20,000,000
16,000,000
Value of options
$145,208
$209,872
Amount expensed during the year
$145,208
-
Amount recognised in equity during the year
-
$209,872
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
2023
2023
2022
2022
Outstanding at 1 July
$0.03
68,300,000
$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
$0.0225
40,000,000
$0.07
1,700,000
Outstanding at 30 June
$0.0274
108,300,000
$0.03
68,300,000
Exercisable at 30 June
$0.03
68,300,000
$0.03
68,300,000
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 27: SHARE BASED PAYMENTS (continued)
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
2023
2023
2022
2022
Outstanding at 1 July
$0.03
68,300,000
$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
$0.0225
40,000,000
$0.07
1,700,000
Outstanding at 30 June
$0.0274
108,300,000
$0.03
68,300,000
Exercisable at 30 June
$0.03
68,300,000
$0.03
68,300,000
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
2023
2022
$
$
Current Assets
3,429,816
1,927,913
Total Assets
15,080,912
13,451,644
Current Liabilities
101,457
75,154
Total Liabilities
458,457
432,154
Equity
Issued capital
28,800,741
22,497,970
Reserves
4,512,188
4,157,108
Accumulated losses
(18,690,474)
(13,635,588)
Total Equity
14,622,455
13,019,490
(b) Financial Performance
Profit/(Loss) for the year
(5,054,886)
(1,188,906)
Other comprehensive income
-
-
Total Comprehensive Profit/(Loss)
(5,054,886)
(1,188,906)
(c) Guarantees
The parent entity has not entered into any guarantees, in relation to the debts of subsidiaries.
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 28: PARENT ENTITY DISCLOSURES (continued)
(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.
(f) Recoverability of non-current assets
The recoverability of non-current assets is dependent upon the discovery of commercially viable reserves and
successful development and exploitation of the respective areas or alternatively sale of the underlying areas of
interest (exploration and evaluation).
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
62
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 2023 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 2023.
This declaration is signed in accordance with a resolution of the Board of Directors.
Alec Pismiris
Director
Dated this 27th day of September 2023
63
INDEPENDENT AUDITOR’S REPORT
To the Members of Sunshine Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sunshine Metals Limited (“the Company”) and its controlled entities
(“the Group”), which comprises the statement of financial position as at 30 June 2023, the statement of profit
or loss and other comprehensive income, the statement of changes in equity and the statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
64
Key Audit Matter
How our audit addressed the key audit matter
Exploration and evaluation assets
Refer to note 7
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises all costs associated with acquisition and
exploration of its mineral resources. As at 30 June
2023, the Group held capitalised exploration
assets of $12,808,321. During the year, the Group
wrote-off the Hodgkinson and Investigator assets
in Queensland, resulting in $937,602 of impairment
expense.
Our audit focused on the Group’s assessment of
the carrying amount of the capitalised exploration
and evaluation assets, as this is the most
significant asset of the Group. We planned our
work to address the audit risk that the capitalised
expenditure may no longer meet the recognition
criteria of the standard. Additionally, we considered
it necessary to assess whether facts and
circumstances existed to suggest the carrying
amount of the exploration and evaluation assets
may exceed their recoverable amounts.
Our procedures included, but were not limited to:
−
We obtained an understanding of the key
processes associated with management’s review
of the carrying values of each area of interest;
−
We considered management’s assessment of
potential impairment indicators in addition to
making our own assessment. This included
reviewing the basis for management’s impairment
of the Hodgkinson and Investigator assets;
−
We obtained evidence that the Group has current
rights to tenure over its areas of interest;
−
We considered the nature and extent of planned
ongoing activities;
−
We substantiated a sample of expenditure by
agreeing to supporting documentation; and
−
We examined the disclosures made in the
financial report.
Site rehabilitation provision
Refer to note 14
As at 30 June 2023, the carrying value of the
Group's
site
rehabilitation
provision
was
$1,555,000.
The Group's provision for rehabilitation is material
to the financial statements and requires significant
estimates of future costs.
The determination of the provision requires
management's judgement in relation to estimating
the costs of performing the work required, including
volume and unit rates, the timing of cash flows and
the appropriate inflation and discount rates.
Our procedures included, but were not limited to:
−
We assessed the competence and objectivity of
the expert used by management in the
preparation of the cost model.
−
We evaluated management's cost model and
critically assessed the reasonableness of key
assumptions and their impact, including inflation
and discount rates.
−
We assessed the expected timing of cash flows
for restoration works.
−
We recalculated the value of the adjustment
raised to the rehabilitation provision.
−
We assessed the appropriateness of the
disclosures included in the relevant notes to the
financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2023, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
65
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
−
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
−
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
−
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
66
−
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Sunshine Metals Limited for the year ended 30 June 2023
complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd
D I Buckley
Chartered Accountants
Partner
Perth, Western Australia
27 September 2023
67
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Sunshine Metals Limited for the
year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 September 2023
D I Buckley
Partner
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
68
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
(a)
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 21 SEPTEMBER 2023:
SPREAD
NO. OF
NO. OF
PERCENTAGE OF
OF HOLDINGS
HOLDERS
SHARES
ISSUED CAPITAL %
1 – 1,000
61
20,425
0.00%
1,001 - 5,000
37
104,178
0.01%
5,001 - 10,000
61
525,764
0.05%
10,001 - 100,000
480
24,383,225
2.41%
100,001+
595
984,689,138
97.52%
1,234
1,009,722,730
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
54,000,000
5.35%
2
STONE PONEYS NOMINEES PTY LTD
53,900,000
5.34%
3
MR LESLIE BRIAN DAVIS &
MRS ANNETTE FAY DAVIS
41,673,333
4.13%
4
MR DAMIEN LESLIE KEYS &
MRS AMY DAWN KEYS
36,300,000
3.60%
5
MONSLIT PTY LTD
31,666,667
3.14%
6
P D CRUTCHFIELD PTY LTD
25,156,463
2.49%
7
TRI-STAR E&P PTY LTD
20,000,000
1.98%
7
PARETO NOMINEES PTY LTD
20,000,000
1.98%
8
CAMPBELL KITCHENER HUME & ASSOCIATES PTY LTD
19,409,149
1.92%
9
MR JOE LEUZZI &
MRS SALLY LEUZZI
18,500,000
1.83%
10
MR KENNETH GATCHALIAN
16,062,244
1.59%
11
TOPAZE ENTERPRISES PTY LTD
15,000,000
1.49%
11
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSI EDA
15,000,000
1.49%
11
MR ROGER BLAKE &
MRS ERICA LYNETTE BLAKE
15,000,000
1.49%
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
69
12
PARKRANGE NOMINEES PTY LTD
13,928,889
1.38%
13
IONA COMPANY PTY LTD
13,200,000
1.31%
14
BUDWORTH CAPITAL PTY LTD
13,000,000
1.29%
15
PARETO CAPITAL PTY LTD
12,000,000
1.19%
16
ACP INVESTMENTS PTY LTD
11,000,000
1.09%
17
CITICORP NOMINEES PTY LIMITED
10,869,878
1.08%
18
DF LYNTON-BROWN PTY LTD
10,000,000
0.99%
19
DARLOT INVESTMENTS PTY LTD
9,000,000
0.89%
20
MR PHILIP DAVID CRUTCHFIELD
8,570,100
0.85%
Total
483,236,723
47.86%
Total issued capital - selected security class(es)
1,009,722,730
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
85,666,667
8.48
Stone Poneys Nominees Pty Ltd
53,900,000
5.34
139,566,667
13.82
(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
Options exercisable at $0.0225 expiring 7 July 2027
20,000,000
Options exercisable at $0.0225 expiring 30 June 2027
24,933,334
(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
SUNSHINE METALS LIMITED AND CONTROLLED ENTITIES
70
CORPORATE GOVERNANCE STATEMENT
Sunshine Metals Limited and the Board are committed to achieving and demonstrating high standards of
corporate governance. Sunshine Metals Limited has modelled its corporate governance policies against the
Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance
Council.
The 2023 corporate governance statement was approved by the board on 27 September 2023 and is current as at
27 September 2023. 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/.