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ANNUAL REPORT
2020
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Corporate Directory
Directors
Peter Henry Hwang
Carlos Alberto Fernicola
Simon
Pooley
James
Corporate Secretary
Carlos Alberto Fernicola
Stock Exchange
ASX LIMITED
ASX Code: SPQ
Company
SUPERIOR RESOURCES LIMITED
ABN 72 112 844 407
Registered Office
Unit 8, 61 Holdsworth Street
COORPAROO QLD 4151
Principal Office
Unit 8, 61 Holdsworth Street
COORPAROO QLD 4151
Telephone: 07 3847 2887
Email: manager@superiorresources.com.au
Internet Address
www.superiorresources.com.au
Postal Address
PO Box 189
COORPAROO QLD 4151
Share Registry
LINK MARKET SERVICES LIMITED
Level 21, 10 Eagle Street
BRISBANE QLD 4000
Postal Address
Locked Bag A14
SYDNEY SOUTH NSW 1235
Telephone: 1300 554 474
Facsimile: 02 9287 0303
Email: registrars@linkmarketservices.com.au
Auditor
William Buck
Level
21 307 Queen
BRISBANE QLD 4000
,
Street
Telephone: 07
Facsimile: 07
3229 5100
3221 6027
ANNUAL REPORT
2020
Contents
Chairman’s
Review 2020
Strategy
Operations Report
Directors' Report
1
2
3
33
Auditor's Independence Declaration
45
Corporate Governance Statement
Financial Report
Directors' Declaration
Independent Auditor’s Report
Shareholder Information
Tenement Schedule
Mineral Resources Statement
46
47
77
78
82
84
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CHAIRMAN’S REVIEW
Chairman’s Review 2020
Dear Fellow Shareholders,
On behalf of the Board of Directors, I take pleasure in presenting the Superior Resources Limited 2020
Annual Report.
The past 12 months has been a financially volatile and eventful year that has provided economic
challenges and opportunities.
Achievements include the completion of an earn in and joint venture relationship with South 32 Group
Operations Pty Ltd on the Nicholson Project and the resulting upgrade of several of the project’s
McArthur River-sized zinc-lead targets.
In moving the Company forward, the board recognised the opportunity presented by the favourable
gold market amid the international economic and pandemic situation and rapidly implemented a
strategy to advance our Steam Engine Project. The strategy includes the revision of the existing Mineral
Resource and commencement of both a scoping study and a resource drilling program.
The drilling program recently competed totalled 3,756 meters from 73 drill holes and delivered
consistently outstanding gold intercepts. Strong results from the drilling confirmed a northern
extension to the Steam Engine Lode which extended the gold mineralisation 150 metres northwards
along strike and remains open. A second drilling program was launched on the back of the better than
expected results of the first program.
Whilst we are very excited about the progress of the Steam Engine Project, we recognise the
importance of our portfolio of quality Tier-1 projects, which include the large Bottletree Copper Project,
the largely unexplored Big Mag sulphide nickel Project and our Nicholson and Victor zinc-lead-silver
projects.
At Bottletree, we recognise the potential for the early discovery of a major copper deposit. Exploration
drilling conducted in previous years returned nearly 300 metres of copper mineralisation with an
average grade of 0.22% copper and an 18.7 metre high-grade zone averaging 1.12% copper. This
significant interval of copper mineralisation coincides with a large IP chargeability anomaly that is at
least one kilometre in length with increasing size at depth.
The Company continues to monitor base metal prices and cycles in order to take advantage of the
opportunities available to maximise value for our shareholders.
I take this opportunity to sincerely thank all shareholders for their continued support and also the
Company’s staff and fellow Directors for their professionalism and dedication during the year.
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Chairman F
Carlos Fernicola
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Strategy
TO DEVELOP:
Steam Engine Gold Deposit – Greenvale
Expedite to toll-treatment production
Realise full potential by intense programs of drilling of at least 3
kilometres of historically mapped outcropping gold lode
Wyandotte Copper Deposit – Greenvale
TO DISCOVER:
a large nickel sulphide deposit
a large Mount Isa Style lead-zinc-copper deposit
a large VMS / porphyry copper-gold deposit
A PROJECT PORTFOLIO TO MAXIMISE VALUE GROWTH POTENTIAL:
Tier 1 exploration projects – Nicholson / Victor
Drill-ready targets in Carpentaria Zinc Province
Inlier of Macquarie Arc – Greenvale
World-class porphyry copper-gold region
Remnant of NSW Ordovician porphyry belt (e.g. Cadia, N Parkes)
Underexplored
More than 10 significant targets
SPQ holds most of the Greenvale Ordovician terrane
Battery Metals – Future Focused
Nickel – Cobalt
3 high impact projects
Globally growing markets
ENSURE EXPERIENCED, FOCUSSED BOARD AND MANAGEMENT
TO DELIVER VALUE GROWTH TO SHAREHOLDERS
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Project Portfolio
As at October 2020, Superior maintained a portfolio of zinc-lead, copper, gold, nickel and uranium
projects (Figure 1).
The Company’s current portfolio of projects is as follows:
Greenvale Project
• Bottletree
• Steam Engine Gold Deposit
• Big Mag
• Galah Dam
• Cockie Creek
• Wyandotte Copper
• Halls Reward
• One Mile/One Mile Dam
• Riesling
• Lucky Creek
Nicholson Project
• 8+ Tier 1 potential EM targets
Potential VMS / porphyry
(copper-gold)
High-grade orogenic lode gold
(gold)
Potential magmatic Nickel-Copper sulphide
(nickel-copper)
Potential porphyry / massive sulphide
(copper-gold)
Potential porphyry
(copper-gold)
High-grade copper
Cyprus style VMS
(high-grade copper)
VMS / massive sulphide
(copper-zinc-gold)
Broken Hill Style
(zinc-lead-copper)
Lateritic Nickel-Cobalt
(nickel-cobalt)
Mount Isa Style
(lead-zinc-silver)
• Walford Creek West
Mount Isa Style
(sulphide copper-lead-zinc-cobalt)
• Hedleys Uranium
Uranium
Victor Project
• Victor Project
• Kingfisher
Mount Isa Style
(lead-zinc-silver)
Copper-cobalt
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 1. Location of Superior’s projects.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Greenvale Project
Gold / Porphyry and VMS Copper-Gold / Nickel-Cobalt
HIGHLY MINERALISED LUCKY CREEK CORRIDOR, WHICH IS HELD 100% BY THE COMPANY, IS
RETURNING SUCCESS AT MULTIPLE LEVELS. FOCUSSED ON THE STEAM ENGINE GOLD
DEPOSIT, NICKEL AND SEVERAL LARGE COPPER TARGETS.
THE GREENVALE PROJECT COVERS A REGION OF VOLCANIC AND INTRUSIVE ROCKS OF
ORDOVICIAN AGE THAT ARE SIMILAR IN TYPE AND AGE TO THE PORPHYRY COPPER BELT IN
NEW SOUTH WALES. THE NEW SOUTH WALES BELT OF ROCKS HOST THE LARGE CADIA AND
NORTH PARKES PORPHYRY COPPER MINES. THE SEQUENCE OF ROCKS IN THE GREENVALE
AREA ARE LIKELY TO BE THE NORTHERN-MOST EXTENSION OF THE REMNANT NEW SOUTH
WALES ORDOVICIAN MACQUARIE ARC ROCKS (FIGURE 2).
Superior’s Greenvale Project is highly prospective for VMS and porphyry copper, orogenic gold, zinc
and silver deposits and contains at least ten mineral prospects (Figures 3 and 4). The project is located
within an area of notable economic significance, being proximal to the Kidston, Balcooma, Surveyor and
Dry River South deposits.
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Figure 2. A reconstruction of the Macquarie Arc across eastern Australia showing the development of the
Greenvale Province and other provinces including the Charters Towers Province.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Figure 3. Greenvale Project tenement location map showing locations of key prospects.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 4. Airborne magnetics (RTP) processed image over the Greenvale Project area and surrounds, showing the
key prospects and current tenements.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Steam Engine Gold Deposit
GOLD
HIGH-GRADE GOLD ORE SHOOT SYSTEM. MAY 2020 MINERAL RESOURCE UPGRADE BASED ON
ONLY 30% OF HISTORICALLY MAPPED LODE OUTCROP. RESOURCE DRILLING PROGRAM AND
SCOPING STUDY DURING 2020. MINERALISATION OPEN AT DEPTH AND ALONG STRIKE.
The Steam Engine Gold Deposit contains at least two sub-parallel gold-bearing lodes, referred to as the
Steam Engine Lode and the Eastern Ridge Lode, which are separated by about 600 metres (Figure 5). A
third zone of sub-parallel mineralisation exists a further 900 metres to the east of Eastern Ridge Lode
and an area of gold mineralisation comprising multiple lodes (Southern Zone) is located between and
to the south of the Steam Engine and Eastern Ridge lodes.
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Figure 5. Steam Engine Gold Deposit: Interpreted geology, gold-bearing lodes (in red) and recent drill holes (in red).
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
The mineralisation is developed within north-north-east trending, west-dipping lodes and are
essentially mineralised shear zones comprising pyrite-quartz-muscovite-carbonate schist within
amphibolite, metasediment and/or metatonalite.
The gold bearing lode zones are located within a shear zone and show strong continuity and a persistent
dip to the west (the Steam Engine Lode typically dips around 50° to 60° to the west and the Eastern
Ridge Lode typically dips at about 40° to 50° to the west).
Mineral Resource Estimate / Resource Drilling Program
During 2020, the Company commenced a program to evaluate the project’s potential to sustain an early
stage toll treatment mining operation. This program commenced with a revision of an existing Mineral
Resource Estimate followed by a resource drilling program aimed at upgrading the Mineral Resource
from Indicated and Inferred (JORC) to Measured and Indicated confidence levels. The resource drilling
program also included drill holes targeting potential extensions of the mineralisation along strike and
down dip at the Steam Engine and Eastern Ridge lodes.
The Steam Engine Gold Deposit’s Mineral Resource Estimate was upgraded by 11 percent prior to
commencement of 2020 drilling programs. The revision of the Mineral Resource resulted in a JORC
(2012) Indicated and Inferred Mineral Resource of 1.27 million tonnes at 2.3 g/t gold (0.5 g/t cut-off),
comprising (refer ASX announcement, 4 May 2020) (Table 1):
o
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Indicated Resource of 370,000 tonnes @ 2.5 g/t gold; and
Inferred Resource of 900,000 tonnes @ 2.2 g/t gold.
A plan view of the Mineral Resource wireframe model is shown in Figure 6, along with a 3-D block model
in Figure 7.
The resource drilling program was completed during September 2020 and a second program aimed at
increasing the Mineral Resource was launched in October 2020.
Table 1. Steam Engine Gold Deposit Mineral Resource
Classification
Cut-off Grade
Tonnes
Grade (g/t)
Gold (ounces)
Steam Engine (Main Zone)
Indicated
Inferred
SUBTOTAL
Steam Engine (Footwall Zone)
Inferred
Eastern Ridge
Inferred
0.5
0.5
0.5
0.5
370,000
420,000
790,000
210,000
270,000
TOTALS FOR STEAM ENGINE AND EASTERN RIDGE ZONES
Indicated
Inferred
TOTAL RESOURCES
370,000
900,000
1,270,000
9
2.5
2.3
2.4
1.6
2.7
2.5
2.2
2.3
30,000
31,000
61,000
11,000
23,000
30,000
64,000
94,000
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Figure 6. Plan view of Steam Engine and Eastern Ridge lode wireframes.
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Figure 7. 3D view of Steam Engine Lode Mineral Resource block model (open to the north and at depth).
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Steam Engine Gold Deposit Potential
Each of the Steam Engine Project lode zones demonstrate potential for extending the mineralisation
along strike and down dip.
SOIL GEOCHMISTRY – EVIDENCE OF A GREATER AREA OF MINERALISATION
The Mineral Resource, as it currently stands, has been developed to shallow depths over only 30
percent of the 2.5 kilometre strike length of the historically mapped outcropping gold lodes. Soil
geochemical surveys over the project area and nearby surrounds indicate a significantly greater area of
potential sub-surface gold mineralisation (Figure 8). Further programs of exploratory drilling are
planned to be commenced after delivery of a Scoping Study.
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Figure 8. Plan showing the locations of the recently drilled holes (in blue) and previously drilled holes (in black)
over gold soil anomalies and theoretical high-grade ore shoot corridors. The Steam Engine and Eastern Ridge gold-
bearing lodes are shown in red.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
STRIKE EXTENSION OF THE STEAM ENGINE LODE
Results from the first drilling program of 2020 demonstrated that high grade gold mineralisation
extends at least 150 metres northwards at the northern end of the Steam Engine Lode (Figure 9). A
second drilling program aimed at further extending the mineralisation at the Steam Engine and Eastern
Ridge lodes is planned to commence during November 2020.
A POTENTIAL THIRD LODE ZONE
Reconnaissance rock chip sampling of a 1.2 kilometre-length gossanous alteration zone located 1.2
kilometres east of the Eastern Ridge Lode returned up to 7.6 g/t gold. This zone of alteration parallels
the Steam Engine and Eastern Ridge lodes and may represent a new, third gold lode zone. This lode
zone is referred to as the Dinner Creek Lode (Figure 10).
HIGH-GRADE ORE SHOOT SYSTEM
The Company has also recognised potential for the existence of an extensive high-grade ore shoot
system at depth and related to the mineralised lode structures that are observed at surface. The
currently identified surface mineralisation is significant and is an indication of a potentially substantial
and extensively developed ore shoot system at depth. The Company is planning to apply seismic and
IP geophysical methods to identify potential sizeable zones of mineralisation for follow up with drill
testing (Figure 11).
Figure 9. Long section of the Steam Engine Lode showing significant intersections. Mineralisation and grade
intersections are shown as colour-coded bars.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 10. Plan showing the location of the Dinner Creek Lode alteration zone relative to the drilled portions of
the Steam Engine and Eastern Ridge lodes.
Figure 11. Potential high-grade ore shoot targets across the Steam Engine and Eastern Ridge lode zones.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Big Mag
NICKEL-COPPER-COBALT / COPPER-GOLD
CHARACTERISED BY A REGIONALLY LARGE HIGH-ORDER MAGNETIC ANOMALY OF
APPROXIMATELY 70KM2 IN AREA (FIGURES 12 AND 13). CONSIDERED TO BE RELATED TO THE
SAME SERIES OF ROCKS AS THE OLD GREENVALE NICKEL MINE (SCONI). LARGELY UNEXPLORED
WITH ONLY MINOR SHALLOW DRILLING ON THE NORTHERN MARGIN. EXISTING DRILLING
IDENTIFIED LATERITE AND TERTIARY SEDIMENTS OVERLYING DIFFERENTIATED MAFIC TO
ULTRAMAFIC INTRUSIVE ROCKS, INDICATING HIGH POTENTIAL FOR NICKEL-COPPER-COBALT
SULPHIDE MINERALISATION.
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Figure 12. Airborne magnetics (RTP) processed image over the Greenvale Project area and surrounds. Big Mag is
shown relative to other Greenvale Project prospects.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
The Big Mag feature is a regionally large and high order magnetic feature that comprises a series of
mafic to ultramafic intrusions concentrated over a 70 km2, roughly circular area (Figure 12).
Geologically, Big Mag is considered to be located within a domain of rocks that also includes the nearby
Old Greenvale Nickel Mine (which produced approximately $6 billion of nickel at current metals prices)
(Figure 13).
Big Mag is relatively un-explored. Historically, only two closely spaced RC drill holes have been drilled
into the north eastern part of the feature. The two RC holes confirmed the existence of layered,
magnetite-rich, differentiated mafic to ultramafic magmatic intrusion rocks.
Big Mag is considered to be highly prospective for magmatic nickel-copper sulphide deposits. The
Company is planning to commence exploration programs including drilling at Big Mag during 2021.
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Figure 13. Airborne magnetics (RTP 1VD) with the Big Mag feature visible in the southern part of the image.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Bottletree
COPPER-GOLD
BOTTLETREE IS A LARGE (2KM X 1KM) SOIL COPPER ANOMALY (FIGURE 14), WITH A
COINCIDENT LARGE AND HIGH ORDER CHARGEABILITY ANOMALY. RC AND DIAMOND
DRILLING DURING 2017 AND 2018 CONFIRMED EXTENSIVE COPPER MINERALISATION
EXTENDING TO DEPTHS IN EXCESS OF 300 METRES. DIAMOND DRILLING DURING 2018
DISCOVERED HIGH GRADE COPPER MINERALISATION AT DEPTH. NEW 3D MODELLING
INDICATES THAT A LARGE COPPER TARGET LIES AT DEPTH AND IMMEDIATELY SOUTH OF THE
2018 DIAMOND DRILLING. DELINEATION AND DEFINITION DRILLING HAS ONLY JUST
COMMENCED.
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Figure 14. Copper-in-soil processed image showing the large scale Bottletree copper in soil anomaly.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 15. Bottletree MIMDAS IP survey line locations plotted over soil copper geochemistry, showing drill holes
SBTRD005 and SBTRD006. Also shown are cross section line 2400N and long section 3180E.
Following on from a four-hole, 528 metre RC drilling program completed during July 2017, the Company
completed a MIMDAS IP geophysical survey in 2018 (Figure 15) and the first deep diamond drilling
program at Bottletree. Two holes (650 metres and 450 metres) were drilled into a large MIMDAS
induced polarisation (IP) chargeability anomaly that is coincident with near surface copper
mineralisation.
Significant broad intervals of extensive visible coarse-grained chalcopyrite, pyrite and pyrrhotite
mineralisation were intersected in hole SBTRD006 with copper grades ranging from less than 0.1% to
greater than 1% copper (Figure 18). Assay results returned the following average grades1:
• 292m @ 0.22% copper (from 148m to 440m)2;
•
including 18.7m @ 1.12% copper (from 328m to 346.7m)4.
Advanced 3D modelling of the MIMDAS survey results indicate a close correlation between the copper
grades and chargeability. A cross section generated along survey line 2400N and a long section along
3180E indicate that the drilling to date has penetrated the edges of the main IP target zone (Figures 16
and 17). Based on the correlation between the IP data and the drill hole assay results, higher grade
copper mineralisation is expected to be encountered within the main chargeable target zone, which is
located to the south of SBTRD006 and also at deeper levels.
The limits to this large copper mineralised system have not yet been delineated and it remains open
both laterally and at depth.
1 Refer to ASX announcement 25 October 2018.
2 Cut-off of grade of 0.1% Cu but with some narrow intervals of less than 0.1% Cu included.
2 Cut-off of grade of 0.5% Cu including narrow intervals of less than 0.5% Cu.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 16. Bottletree long-section 3180E through hole SBTRD006 and other holes showing average copper
intersections on a background image of chargeability from 3D modelling of MIMDAS IP survey data.
Drill holes 2018
Figure 17. 3D modelling of Bottletree MIMDAS IP survey results presented in wireframe, showing locations of
2018 drill holes SBTRD005 and SBTRD006.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 18. Bottletree SBTRD006 core: Top and middle photographs showing Trays 37 and 38 containing drill core
from down hole depths 337m – 341.5m (approx.) and 341m – 344.5m (approx.) respectively, showing strong
chalcopyrite and pyrite mineralisation. Bottom photograph shows close-up view of drill core from 343m (approx.).
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Cockie Creek
COPPER-GOLD
COCKIE CREEK IS A LARGE POTENTIAL PORPHYRY COPPER-GOLD MINERALISED SYSTEM THAT
EXTENDS FOR OVER 1.2 KILOMETRES. TWO LARGE CHARGEABILITY ANOMALIES IDENTIFIED
BENEATH THE SHALLOWER COPPER MINERALISATION, ARE YET TO BE DRILL TESTED.
At Cockie Creek, disseminated copper mineralisation with some gold and molybdenum occurs
associated with a quartz-biotite-hornblende schist unit enclosed within a metamorphosed basic
volcanics sequence. The quartz- biotite-hornblende schist unit is interpreted as a metamorphosed
altered tonalite intrusive unit. The copper mineralisation, with a true width of up to 60 metres, extends
over 1.2 kilometres and dips grid easterly at -80° (Figure 19).
Historical drilling comprises a total of 63 drill holes for 6,638 metres. Selected drill hole intersections
are shown in Table 2.
Hole
EastMGA
NorthMGA
Table 2. Cockie Creek - Selected Drill Hole Intersections.
To
(m)
68
163
85
80
56
215
141
84
216
104
108
100
40
7904295
7904243
7904283
7904295
7904155
7904226
7904120
7904137
7904183
7904227
7904244
7904345
7904307
CRC002
CRC009
CRC010
CRC011
CRC014
CRC017
CRC023
CRC026
D1
D3
P11
P12
P16
267380
267356
267353
267320
267019
267378
267037
266995
267448
267075
267403
267339
267370
From
(m)
0
66
11
1
15
121
53
11
180
56
50
50
0
Length
(m)
68
97
74
79
41
94
88
73
36
48
58
50
40
Cu
(%)
0.74
0.48
0.42
0.45
0.50
0.53
0.43
0.44
0.57
0.48
0.64
0.44
0.75
Au
(g/t)
0.12
0.07
0.08
0.06
0.10
0.08
0.06
0.05
0.10
0.10
0.07
0.07
0.13
Mo
(ppm)
92
114
78
76
48
99
49
22
28
94
-
-
-
Also of interest is an intersection of 3m @ 9.0 g/t Au between 80 and 83m in drill hole CRC003(B03)
drilled through the central zone of copper mineralisation.
Geophysical modelling
Superior completed three-dimensional (3D) computer modelling of existing IP geophysical survey data.
The modelling produced at least two pronounced chargeable sources located beneath shallower
disseminated copper mineralisation and also indicated potential for the existence of a large porphyry
copper mineralised system beneath the near-surface mineralisation (Figures 20 and 21).
As a result, the modelling has opened up the potential of the Cockie Creek area to host a significant
porphyry copper deposit.
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2000 mN
1800 mN
1600 mN
1400 mN
1200 mN
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
E
m
0
0
0
2
E
m
0
0
2
2
E
m
0
0
4
2
9
2
B
E
m
0
0
6
2
5
1
B
6
1
B
2200 mN
Copper
Soil Contours
(ppm)
2000
1500
1000
500
200
2200 mN
8
P
7
P
0
2
B
4
0
B
4
1
P
5
0
3B
1
P
6
0
B
1
0
B
7
0
B
5
1
P
8
0
B
6
P
2
0
B
0
1
B
9
1
B
8
1
B
7
1
B
1
D
4
D
8
2
B
1
1
B
2
1
B
7
1
P
3
0
B
7
2
B
9
0
B
2
D
1
2
B
2
2
B
0
1
P
3
2
B
1800 mN
1600 mN
5
D
Geology
Soil and alluvium cover
Quartz-biotite-hornblende schist
Quartz-amphibole-biotite gneiss
Massive and layered amphibolite
2
1
P
5
P
8
1
P
0
2
P
9
1
P
3
D
3
1
B
4
P
1
2
P
2
2
P
4
1
B
6
2
B
4
2
P
3
2
P
5
2
P
Central
Zone of
Copper
Mineralisation
2
P
7
2
P
6
2
P
9
2
P
8
2
P
1
1
P
5
2
B
4
2
B
9
P
6
D
Quartz vein
1400 mN
Gossan
Fault
Cockie Creek Copper Prospect
Geology
Mineralisation
Drill Holes
E
m
0
0
0
2
E
m
0
0
2
2
E
m
0
0
4
2
E
m
0
0
6
2
1200 mN
1000 mN
Figure 19. Cockie Creek Copper Prospect - Geology showing all drill holes, soil copper geochemistry and the Central
Zone of Copper Mineralisation.
21
2000 mN
1800 mN
1600 mN
1400 mN
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
CRC003(B03) 3-74
71m @ 0.29% Cu
incl 37-65 28m @ 0.44 % Cu
80-83 3m @ 9.0g/t Au
Western
Chargeable
Source
(Untested)
Section 1700N
0
2
B
CRC020(B20) 0-69
69m @ 0.19% Cu
8
P
7
P
4
0
B
4
1
P
5
0
3B
1
P
6
0
B
9
1
B
8
1
B
CRC002(B02) 0-68
68m @ 0.74% Cu
1
D
7
1
B
CRC017(B17) 121-215
94m @ 0.53% Cu
9
0
B
CRC009(B09) 66-163
97m @ 0.48% Cu
4
D
2
D
D2 122-156
34m @ 0.46% Cu
2
1
P
5
P
8
1
P
0
2
P
9
1
P
1
0
B
7
0
B
5
1
P
8
0
B
6
P
2
0
B
0
1
B
8
2
B
1
1
B
2
1
B
7
1
P
3
0
B
7
2
B
1
2
B
2
2
B
Eastern
Chargeable
Source
1800 mN
Central
Zone of
Copper
Mineralisation
1600 mN
3
D
3
1
B
4
P
1
2
P
2
2
P
4
1
B
6
2
B
4
2
P
3
2
P
5
2
P
5
D
0
1
P
P10 122-200
78m @ 0.28% Cu
3
2
B
CRC023(B23) 53-141
88m @ 0.43% Cu
CRC026(B26) 11-84
73m @ 0.44% Cu
P2 0-40
40m @ 0.15% Cu
2
P
7
2
P
6
2
P
P28 0-34
34m @ 0.31% Cu
8
2
P
1
1
9
P
P27 2-40
38m @ 0.26% Cu
D6 218-286
68m @ 0.23% Cu
6
D
1400 mN
Figure 20. Cockie Creek Copper Prospect – Plan section of 3D chargeability model at 450RL (100m below surface)
showing the main mineralised area on the eastern side and the untested chargeable source on the western side.
Figure 21. Cockie Creek Copper Prospect – Vertical cross section through the 3D chargeability model at 1700N
showing the main mineralised area with drill hole copper intersections on the eastern side and the untested
chargeable source on the western side. Proposed drill hole 1 is also shown.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Nicholson Project
Mount Isa Style Lead-Zinc-Silver / Copper / Cobalt / Uranium
“TIER 1” LEAD-ZINC PROJECT LOCATED WITHIN THE CARPENTARIA ZINC PROVINCE, NORTH
WEST QUEENSLAND. AN INDUSTRY-LEADING OPPORTUNITY TO DISCOVER A WORLD-CLASS
MOUNT ISA STYLE ZINC-LEAD-COPPER DEPOSIT. THE CARPENTARIA ZINC PROVINCE CONTAINS
20% OF THE WORLD’S ZINC RESOURCE INVENTORY.
The Nicholson Project, together with the Victor Project (refer to next section), represents “Tier 1”-
potential zinc-lead-silver exploration projects that provide the Company with sector-leading
opportunities to discover a world-class Mount Isa Style Zinc-Lead-Copper deposit. The projects are
located in the Carpentaria Zinc Province, which contains 20% of the world’s zinc resource inventory
(Figure 22).
In the region immediately surrounding Mount Isa, rocks prospective for Mount Isa Style deposits are
exposed at or close to surface and as a consequence, have been intensely explored. In contrast, the
Company’s Nicholson and Victor projects, located about 150 kms and 300 kms northwest of Mount Isa,
are located in an equally prospective region that is relatively unexplored. In these regions the
prospective rock sequences are covered by varying depths of younger sediments. These are the most
likely areas within Queensland to make the next Mount Isa discovery.
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OPERATIONS REPORT
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Figure 22. The Carpentaria Zinc Province and the Nicholson and Victor Project tenements in green.
Regional setting
The Nicholson Project (EPM15670 and EPM18203), located near the Walford Creek lead-zinc-silver-
copper deposit, is considered to have potential to contain sediment-hosted lead-zinc-silver massive
sulphide deposits, similar to the Mount Isa and McArthur River deposits.
The project is located within a sequence of prospective Proterozoic sediments within the east-northeast
trending Hedleys Graben. This graben is bounded by the Fish River Fault on its northern side and the
Nicholson River Fault on its southern side (Figure 23).
Sediments of the Fickling Group within the Hedleys Graben are equivalent in age to sediments that host
large base metal mineral deposits at Mount Isa and Macarthur River. In particular, the Mount Les
Siltstone has potential for large stratiform base metal deposits at the Nicholson Project. The
Doomadgee Formation which unconformably overlies the Mount Les Siltstone is also thought to be of
similar age to the part of the Lawn Hill Formation which contains the large stratiform Century lead-zinc-
silver deposit. All of these formations are target horizons in the Nicholson Project area.
Exploration work completed to date has identified at least eight large high priority geophysical targets,
each of which have potential to be caused by Tier 1-sized stratiform base metal deposits (Figures 23
and 25). In addition, the project area also includes the Walford Creek West Zinc-Lead-Copper-Cobalt
Prospect and the Hedleys Uranium Prospect.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 23. Nicholson Project tenements and key prospect locations overlaid on regional geology.
Drilling program – South32 joint venture
The Company entered into an earn-in and joint venture agreement (JVA) with a wholly owned
subsidiary of South32 Limited during May 2019 to advance the exploration of the Nicholson Project.
The initial exploration program under the JVA included the drilling of up to 11 diamond core holes to
systematically test up to eight large high priority geophysical conductivity targets. Drilling commenced
during late July 2019 and was fully funded by South32.
Under the JVA, South32 was entitled to earn up to a 70% interest in the project by fully funding $6
million within five years. After completion of Stages 1 and 2, South32 was entitled to elect to earn an
additional 10% interest by completing a feasibility study. South32 withdrew from the JVA on 4 March
2020.
High priority EM conductivity anomalies
An airborne VTEM (Versatile Time Domain EM) survey over 260-line kilometres of part of the Nicholson
Project was completed by Geotech Airborne Pty Ltd in 2007. The original data was remodelled during
late 2018 and interpreted by geophysical consultants, Aarhus Geophysics. The applied Aarhus method
is designed for detection and delineation of subsurface contrasts in conductivity and resistivity. In
particular, the responses can be interpreted from the collected data to detect sub-surface
accumulations of massive sulphide deposits (Figure 24).
Most of the conductivity targets that have been identified are of sufficient size to be similar to a
McArthur River or Century-sized deposit.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
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Figure 24. VTEM Aarhus modelled conductivity sections on lines 184,000E and 187,000E showing the Nicholson
West and Nicholson River conductivity anomalies and interpreted major southwest-trending fault.
2019 drilling program
A total of four holes (totalling 3,175.7m) were drilled at three of the target areas (Figure 25). One of
the holes drilled at a highest priority target at Nicholson River did not intersect the target horizon and
requires follow-up drilling. Due to the northern region monsoon season, only the Nicholson West and
Nicholson River targets were drilled. Initial drilling at five other targets is yet to be conducted.
At the Nicholson West target area:
•
two drill holes at Nicholson West (NWDD001 and NWDD002) intersected multiple thin horizons
of visible stratiform sulphide mineralisation, including pyrite and sphalerite (zinc sulphide)
within thick Mount Les Siltstone;
• encouraging levels of zinc and lead mineralisation were returned within interpreted outer
edges of a SEDEX system, indicating that a main body of mineralisation may be developed closer
to the potential mineralising feeder structure located about 3 kilometres to the south at the
Nicholson River Fault Zone.
• anomalous lead and zinc values of up to 1840 ppm are scattered but concentrated near the top
and base of the Mount Les Siltstone, which is consistent with the visually observed multiple
thin bands of visible mineralisation in the core; and
•
the target area is considered to represent the outer zones of a potentially mineralised apron of
a large SEDEX system (Figure 26).
At the Nicholson River target area:
•
large, high order conductivity anomaly located 3.5 kms south of the Nicholson West drill holes
and within the Nicholson River Fault Zone (NRFZ) (the first of several highest priority targets
planned to be drilled);
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
•
•
the NRFZ is considered to be the likely major fault conduit and the potential source of
mineralised fluids for the deposition of zinc-lead-silver SEDEX ore deposits within the area
between the NRFZ and the Nicholson West drill holes; and
current analysis of drill hole NWDD003 (which targeted the Nicholson River anomaly) together
with geophysical data indicates that the anomaly was not intersected.
Figure 25. Plan of key Nicholson Project targets, showing 2019 drill hole locations.
Interpreted position of Nicholson
West holes within a SEDEX system
Figure 26. Schematic cross section of a typical northern Australian stratiform zinc-lead-silver deposit showing
multiple ore lens horizons at or near the source of hydrothermal mineralising fluids and an apron of diminishing
stratiform sulphide mineralisation away from the fluid source zone (Large et al., 2005). The interpreted position
of the Nicholson West holes (NWDD001 and NWDD002) relative to the schematic representation of a SEDEX
deposit system is also shown.
27
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Walford South
The Walford South target is a coincident VTEM and gravity anomaly with an associated audio-
magnetotelluric conductivity anomaly (AMT) (Figure 28). The anomalies are located adjacent to at least
two significant fault structures that trend east-west and northwest-southeast.
Previous historical drilling of three vertical diamond core holes by Superior intersected well-developed
stratiform pyritic shale within the Mount Les Siltstone (Figure 27).
Geophysical data sets covering the Walford South prospect area indicates that a high order AMT
conductivity anomaly may be associated with the significant northwest-trending fault (Figure 28).
Aarhus VTEM and AMT modelling indicates that there has been downwards displacement of
stratigraphy on the southwestern side of the fault.
Superior’s interpretation is that the northwest trending fault may have been a conduit that was feeding
hydrothermal mineralising fluids that formed the stratiform sulphide mineralisation at Walford South.
In this scenario, the AMT conductivity anomaly may represent a zone of copper-zinc-lead
mineralisation, as occurs at the nearby Walford Creek deposit (held by Aeon Metals Limited), which is
developed within and adjacent to the Fish River Fault.
The Walford South AMT target is a highest priority target. A diamond drill hole is being planned to test
the AMT anomaly and northwest trending fault structure during the next drilling program.
Figure 27. Well-developed stratiform pyritic shale intersected within Mount Les Siltstone from historical drilling of
the Walford South VTEM anomaly by Superior Resources Limited.
28
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Walford Creek
deposit
AMT conductivity anomaly
0
2
Kilometres
Walford South
gravity anomaly
Kingfisher East
gravity anomaly
Figure 28. Walford South gravity anomaly and AMT anomalies. Significant northwest and east-west trending
interpreted fault structures are delineated with dashed blue lines.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Victor Project
Mount Isa Style Lead-Zinc-Silver / Copper
SUPERIOR’S “NEXT MOUNT ISA” PROJECT COMPRISING FOUR EXPLORATION PERMITS,
COVERING A TOTAL AREA OF 438KM2. “TIER 1” LEAD-ZINC PROJECT LOCATED WITHIN THE
CARPENTARIA ZINC PROVINCE, NORTH WEST QUEENSLAND. AN INDUSTRY SECTOR-LEADING
OPPORTUNITY TO DISCOVER A WORLD-CLASS MOUNT ISA STYLE ZINC-LEAD-COPPER DEPOSIT.
The Victor Project represents the Company’s “Next Mount Isa” project and comprises four exploration
permits for minerals (EPM) covering a combined total area of 438 km2.
Work conducted by the Company indicates that stratigraphy prospective for the discovery of Mount Isa
Style deposits is likely to be present under moderate sedimentary cover within the Victor Project area.
This area is relatively un-explored.
Superior’s exploration strategy is based on the mechanism of geochemical “leakage” of key metals
(lead, zinc and copper) from a deeper Proterozoic mineralised source into the younger sediments
overlying the Proterozoic (Figure 29).
Figure 29. Diagrammatic representation of the ‘leakage’ concept. Superior believes that ‘leakage’ from
Proterozoic deposits into the overlying cover rocks may be one of the best methods of targeting prospective areas
for Mount Isa Style deposits under younger sediments.
Geochemical Leakage into Surrounding Rocks and Overlying Cover
Superior understands that there are two important types of “leakage”:
1.
the formation of major metal deposits is accompanied by “leakage” of metals at the time of
formation into the surrounding area resulting in “halo” anomalies/mineralisation. At Mount Isa a
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
subtle lead anomaly extends along the faults/stratigraphy well beyond the ore bodies. These
anomalies are recognisable in regional geochemical images; and
2.
it is apparent that lead and zinc (and probably copper) are remobilized into rocks above deposits,
post deposit formation. The lead-zinc within Cambrian cover sediments at Century and Grevillea
support this statement. The large lead-zinc anomaly at the Victor Project make this an area
potentially hosting large Proterozoic deposits below the Cambrian cover in which the anomaly is
developed (Figures 30 and 31).
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X
Figure 30. Imaging of historical stream and soil geochemical values highlight the Victor Project area because of
strong lead and zinc anomalies. This image shows that zinc anomalies are associated with other areas of
significant mineralisation including Mount Isa, Lady Loretta, Century and Grevillea. The size and intensity of the
Victor Project lead and zinc anomaly is similar to that at Mount Isa.
31
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
OPERATIONS REPORT
Historical Airborne Surveys
The north-west Queensland area is blessed by almost complete coverage by airborne magnetics and
radiometrics (Figure 31). In addition to this coverage there are numerous historical airborne EM surveys
available which are largely ignored by explorers. Superior has acquired most of the EM surveys in digital
form and processed a number of surveys to produce conductivity sections. Many of the surveys contain
anomalies over conductive graphitic sediments which makes interpretation for mineralisation difficult.
However, the surveys provide a view of the stratigraphy in covered areas. As mineralisation is often
associated with graphitic sediments the location of these conductive units can assist the delineation of
prospective areas.
Figure 31. Soil lead geochemical anomalies coincident with deeper large basement structures.
32
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
Company Background
Superior Resources Limited (Superior or the Company) is a Brisbane based ASX-listed company (ASX
code: SPQ) exploring for lead-zinc-silver, copper, gold and nickel sulphide deposits in Australia.
Superior currently holds a number of exploration permits and exploration permit applications in northern
Queensland.
In northwest Queensland, exploration for Mount Isa style deposits has resulted in Superior holding a first-
class portfolio of properties for these deposits. Superior has an expanding portfolio of volcanogenic
massive sulphide (VMS) and porphyry copper-gold, gold and nickel sulphide properties in the Greenvale
area of north eastern Queensland with Mineral Resources defined for two properties.
Corporate Philosophy
Superior’s aim is to increase shareholder value through the discovery, development and acquisition of
significant mineral deposits and the Board maintains a strategy consistent with this aim.
Superior targets areas with potential for larger high-grade deposits of copper, lead-zinc-silver, gold and
nickel sulphide. These include the large Mount Isa style projects in northwest Queensland and the more
moderate but high grade VMS deposits in northeast Queensland. The Company also holds a developing
portfolio of gold, nickel and cobalt projects within its north west and north east Queensland properties.
More recently, Superior has commenced a program of assessment and development of its 100%-owned
Steam Engine Gold Deposit at Greenvale.
Superior has adopted a conceptual approach in its search for Mount Isa style deposits which identifies
permissive environments for these deposits and then explores these areas. Models, derived from
existing large mineral deposits, are an integral part of this approach. Once a permissive environment is
identified, Superior uses advanced exploration methods (particularly geophysics) with modern computer
modelling of data to identify targets for further testing.
While a conceptual approach is also appropriate to a search for Proterozoic gold and VMS copper-gold
deposits, Superior has adopted the more traditional approach in its search for these types of deposits by
exploring around existing indications of mineralisation.
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33
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity (referred to in this Report as the Group)
consisting of Superior Resources Limited and the entities it controlled during the year ended 30 June
2020 (Report).
DIRECTORS
The following persons were Directors of the Company during the year and up to the date of this Report:
Managing Director
P H Hwang
C A Fernicola Chairman and Company Secretary
S J Pooley
K J Harvey
Non-Executive Director (appointed 28 November 2019)
Non-Executive Director (retired 28 November 2019)
PRINCIPAL ACTIVITIES
During the year the principal activity of the Group was exploration for base metals, copper-gold and
nickel-cobalt deposits in northern Queensland, Australia. The Company also commenced evaluation of
the Steam Engine Gold Deposit. There were no significant changes in the nature of the Company’s
activities during the year and no significant changes in activity are anticipated.
DIVIDENDS
There were no dividends paid to members during the financial year (2019: $nil).
REVIEW OF OPERATIONS
The loss after tax for the year was $461,100 (2019: loss of $549,373).
Coronavirus (Covid19) Impact
The impact of the Coronavirus (COVID-19) pandemic up to 30 June 2020 has been financially positive
for the consolidated entity. The Queensland State and Australian Federal Governments have provided
financial support by suspending the requirement to pay tenement rental fees and providing cash support
(Jobkeeper) for continued employment of staff.
Summary
The Company’s activities during the full year period were focused on the following:
• Nicholson Project (zinc-lead-silver)
o the Company as the operator, commenced exploration operations under an Earn-in and Joint
Venture Agreement (JVA) with South32;
o the JVA terminated on 4 March 2020;
• Greenvale Project (VMS and porphyry copper, gold and nickel-cobalt)
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Gold Deposit; and
o developed a revised Mineral Resource Estimate on the Steam Engine Gold Deposit;
o commenced a Scoping Study on the Steam Engine Gold Deposit;
o prepared a 3,500m reverse circulation and diamond core drilling program at the Steam Engine
o conducted data review and planning for exploration work at the Big Mag nickel-copper-cobalt
34
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
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REVIEW OF OPERATIONS – (continued)
Steam Engine Gold Project – Greenvale Project
The Company commenced an evaluation and development program at the Steam Engine Gold Deposit
during January 2020. The Steam Engine Mineral Resource Estimate was revised and upgraded to
Indicated and Inferred (JORC 2012), resulting in an approximate 11% increase in the in-situ gold Mineral
Resource.
The total in-situ mineral resource now stands at:
1.27 million tonnes at 2.3 g/t gold (approximately 94,000 ounces), including:
o Indicated Resources: 370,000 tonnes @ 2.5 g/t gold (approx. 33,000 ounces); and
o Inferred Resources: 900,000 tonnes @ 2.2 g/t gold (approx. 64,000 ounces)1.
A 3,500 metre resource infill and expansion drilling program commenced during late July 2020.
A Scoping Study was commenced during the period for the purpose of assessing the viability of a toll
treatment operation based on the revised Steam Engine Mineral Resource.
North West Queensland – Nicholson Project
The Nicholson Project (EPM15670 and EPM18203), located near the Walford Creek lead-zinc-silver-
copper deposit, is considered to have the potential to contain sediment-hosted lead-zinc-silver massive
sulphide deposits, similar to the Mount Isa and McArthur River deposits.
The Company entered into an Earn-in and Joint Venture Agreement (JVA) with South32 Group
Operations Pty Ltd on 28 May 2019 (South32) in respect of the Nicholson Project. Under the terms of
the JVA, South32 may earn an interest of up to 80% in the Project by satisfying the following
requirements:
-
-
-
Stage 1: South32 must sole-fund an initial $2,000,000 or 4,000m of drilling (whichever comes
first) within the first 12 months of operations;
Stage 2: provided South32 completes Stage 1, it will have a right to elect to proceed to Stage 2
to earn a 70% interest in the Project by sole-funding an additional $4,000,000 on exploration
within a further four years; and
Stage 3: provided South32 completes Stage 2, it will have a right to earn an additional 10%
interest in the Project by sole-funding a feasibility study.
Superior was the JV operator during Stages 1 and 2 of joint venture operations. Drilling of the first
diamond core hole commenced on 27 July 2019.
The Stage 1 drilling program targeted up to eight large (Tier-1 size potential) geophysical conductivity
anomalies having potential to be caused by large SEDEX (McArthur River style) base metal deposits.
Four diamond core holes, totalling 3,175.7m (of a planned eleven-hole program), drilled at three of the
targets were completed by late October 2019 (the end of the 2019 field season). Initial drilling at five
other targets are yet to be completed.
Assay results from selected drill intercepts confirms mineralisation that was visually observed within the
core and enables the commencement of an interpretative review of all data sets. This review is
incomplete, but ongoing.
The drilling confirmed the presence of a SEDEX mineralisation system at Nicholson West, which is
developed within a thick (up to 340m) and prospective Mount Les Siltstone rock unit. Interpretation of
the data indicates that holes are located at the outer edges of the SEDEX system and that the main body
of mineralisation may be developed closer to the potential mineralising feeder structure located about 3
kilometres to the south, at the Nicholson River Fault Zone.
On 4 March 2020, South 32 Withdrew from the JVA.
1 Refer ASX announcement dated 4 May 2020 for information relating to the upgraded Mineral Resource Estimate.
35
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
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REVIEW OF OPERATIONS – (continued)
CORPORATE and COMMERCIAL
o The Company raised $459,000 under a placement to sophisticated investors during August 2019.
57,375,000 placement shares were issued at an issue price of $0.008.
o The Company completed a capital raising campaign during the second calendar Quarter of 2020
comprising a two-tranche placement and a non-renounceable rights issue to raise up to $1.18 million
(before costs).
The placement was offered to institutional and sophisticated investors to subscribe for fully paid
ordinary shares priced at $0.003 (0.3 cents) per share, with one free attaching option for every three
subscribed shares. The options have an exercise price of $0.006 (0.6 cents) and expire on 31
December 2021. The placement was fully subscribed.
The rights issue was offered to existing shareholders on a pro-rata basis of one new share for every
three ordinary fully paid shares held in the Company on 26 May 2020, at a price of $0.003 (0.3 cents)
per new share. Shareholders who subscribed under the rights issue also received one free attaching
option for every three entitlement shares issued, with each option having an exercise price of $0.006
(0.6 cents) and expiring on 31 December 2021. The rights issue was oversubscribed.
Allotment and issue of all shares and options under the placement and rights issue was completed
on 14 July 2020.
o Appointment of Mr Simon Pooley as Non-Executive Director
Mr Simon Pooley was appointed as a Non-Executive Director of the Company on 28 November 2019.
o Retirement of Mr Ken Harvey (Non-Executive Director)
Mr Ken Harvey, Non-Executive Director of the Company, retired from the Board at the conclusion of
the 2019 Annual General Meeting held on 28 November 2019.
CASH CONSERVATION
The Company’s Board continues to maintain the current cash conservation measures with respect to the
Company’s operations and administration.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There are no significant changes in the state of affairs of the Group during the financial year.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Since the end of the financial year, the Group raised $366,530 through the issue of 122,176,641 new
shares at a value of $0.003 per share. A total of 77,996,452 free attaching options with an exercise price
of $0.006 and an expiry date of 31 December 2021 were also issued since the end of the financial year
under the capital raising exercise.
In addition, 15,000,000 options with an exercise price of $0.006 and an expiry date of 31 December 2021
were issued to the lead manager as part consideration for their role in the above capital raising.
Other than the above, no matters or circumstances have arisen since 30 June 2020 that have significantly
affected, or may significantly affect:
(a)
(b)
(c)
the Group’s operations in future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive
for the consolidated entity up to 30 June 2020, it is not practical to estimate the potential impact, positive
or negative, after the reporting date. The situation is continually developing and is subject to measures
imposed by the Australian State and Federal Governments, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
36
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
LIKELY DEVELOPMENTS AND EXPECTED RESULTS FROM OPERATIONS
Results from exploration are difficult to predict in advance and are uncertain.
ENVIRONMENTAL REGULATION
The Group’s operations are subject to significant environmental regulation under the laws of the
Commonwealth and the State of Queensland. No matters have arisen in relation to environmental issues
up to the date of this Report.
INFORMATION ON DIRECTORS
Peter Henry Hwang B.Sc.(Hons), LLB, MAIG, MGSA, MQLS
Managing director. Age 51
Experience and expertise
Mr Hwang has over 10 years’ experience as a gold, base metals and diamond exploration geologist and
18 years’ experience as a solicitor in national and Queensland law firms specialising in resources,
commercial and infrastructure and native title law. He has extensive experience in advising on the
development of mining and major infrastructure projects, mining transactions as well as resource sector
mergers and acquisitions transactions.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Managing Director.
Interests in SPQ shares and options
46,796,621 ordinary shares.
3,899,717 options over unissued ordinary shares.
Carlos Alberto Fernicola B.Com., FCA, F Fin FCIS FGIA CTA
Chairman. Age 58
Graduate Diploma Advanced Accounting, Graduate Diploma Applied Finance and Investments,
Graduate Diploma Corporate Governance and Graduate Certificate Financial Planning.
Experience and expertise
Mr Fernicola is the Principal of Carlos Fernicola & Co., Chartered Accountants. Mr Fernicola is a Fellow
of the Institute of Chartered Accountants in Australia, Fellow of the Governance Institute of Australia and
Fellow of the Financial Services Institute of Australia. He has over 30 years of experience in accounting,
taxation, audit and the financial services industry.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Chairman and Company Secretary.
Member of the Audit Committee.
Interests in SPQ shares and options
47,999,998 ordinary shares.
3,993,053 options over unissued ordinary shares.
37
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
Simon James Pooley B.Sc., MAIM, GAICD
Non-Executive Director. Age 57
Experience and expertise
Mr Pooley has 30 years’ experience in mine development, operations and mineral exploration. He has
held senior industry positions that have demonstrated leadership and management of base and precious
metals exploration and mining operations, development of project assessment types including definitive
and bankable feasibility studies and their conversion into mining operations and managed teams
undertaking exploration evaluations and valuations, project evaluation, resource estimation and
exploration management.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Member of the Audit Committee.
Interests in SPQ shares and options
1,250,000 ordinary shares.
COMPANY SECRETARY
The Company Secretary is Mr Carlos Alberto Fernicola, B.Com, FCA, FFin FCIS FGIA, CTA. Graduate
Diploma Advanced Accounting, Graduate Diploma Applied Finance and Investments, Graduate Diploma
Corporate Governance and Graduate Certificate Financial Planning.
Mr Fernicola was appointed to the position of Company Secretary on 11 November 2010.
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38
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The numbers of meetings of the company’s Board of Directors held during the year ended 30 June 2020,
and the numbers of meetings attended by each director were:
Board
Director
PH Hwang
CA Fernicola
SJ Pooley2
KJ Harvey1
Audit Committee
Director
CA Fernicola
SJ Pooley2
KJ Harvey1
1 Retired 28 November 2019
2 Appointed 28 November 2019
Meetings
Eligible to attend
4
4
2
2
Meetings
attended
4
4
2
2
Meetings
eligible to attend
2
1
1
Meetings
attended
2
1
1
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors are pleased to present your Group’s 2020 remuneration report which sets out remuneration
information for Superior Resources Limited’s non-executive Directors, executive Directors, and other key
management personnel.
The report contains the following sections:
(a) Directors and key management personnel disclosed in this Report
(b) Remuneration governance
(c) Use of remuneration consultants
(d) Executive remuneration policy and framework
(e) Relationship between remuneration and Superior Resources Limited’s performance
(f) Non-executive director remuneration policy
(g) Voting and comments made at the company’s 2019 Annual General Meeting
(h) Details of remuneration
(i) Service agreements
(j) Details of share-based compensation and bonuses
(k) Equity instruments held by key management personnel
(l) Loans to key management personnel
(m) Other transactions with key management personnel
(a)
Directors and key management personnel disclosed in this Report
Non-executive and executive Directors
P H Hwang
C A Fernicola
S J Pooley (appointed 28 November 2019)
K J Harvey (retired 28 November 2019)
Other key management personnel
Name
C A Fernicola
(b)
Remuneration governance
The Board is responsible for:
Position
Company Secretary
•
•
the over-arching executive remuneration framework;
the operation of any established incentive plans which may apply to the executive team, including key
performance indicators and performance hurdles;
remuneration levels of executive Directors and other key management personnel; and
•
• non-executive Directors' fees.
The objective is to ensure that remuneration policies and structures are fair and competitive and aligned
with the long-term interests of the Group.
(c)
Use of remuneration consultants
The Group has not engaged the services of any remuneration consultants during the current or prior
financial years.
(d)
Executive remuneration policy and framework
The combination of base pay and superannuation make up the executive Directors’ total remuneration.
Base pay for the executive Directors is reviewed annually to ensure the executives’ pay is competitive
with the market. The Board ensures that executive reward satisfies the following key criteria for good
reward governance practices:
•
•
•
•
competitiveness and reasonableness;
acceptability to shareholders;
transparency; and
capital management.
40
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) – (continued)
Long-term incentives
In the event that the Board of Directors proposes to establish any long-term incentives for executive
Directors, the Board will obtain approval at a general meeting of shareholders.
Any issue of options to executive Directors is designed to focus executives on delivering long-term
shareholder returns.
(e)
Relationship between remuneration and Superior Resources Limited’s performance
There is no direct link between remuneration, company performance and shareholder wealth. The
Group’s activities focus on the objective of delivery of long-term shareholder returns.
(f)
Non-executive director remuneration policy
Fees and payments to non-executive Directors reflect the demands which are made on, and the
responsibilities of those Directors. Non-executive Directors’ fees and payments are reviewed annually
by the Board.
Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is
periodically recommended for approval by shareholders. The maximum total pool currently stands at
$250,000 in aggregate plus statutory superannuation.
(g)
Voting and comments made at the company’s 2019 Annual General Meeting
The 2019 remuneration report was passed by a show of hands and had less than 25% proxy votes cast
against it. The company did not receive any feedback at the AGM or throughout the year on its
remuneration practices.
(h)
Details of remuneration
The following tables show details of the remuneration entitled to be received by the Directors and the
key management personnel of the Group for the current and previous financial year.
Consistent with the Board’s cash conservation measures, the Directors received between 50% and 65%
of their respective remuneration entitlement during the reporting period.
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41
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) – (continued)
Totals
293,703
23,342
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2020
Name
Non-executive Directors
C A Fernicola
K J Harvey1
S J Pooley2
Other key management
personnel
C A Fernicola (Company
Secretary)
Sub-total non-executive
Directors and other key
management personnel
Executive Directors
P H Hwang - Managing
Director
2019
Name
Non-executive Directors
C A Fernicola
K J Harvey
Other key management
personnel
C A Fernicola (Company
Secretary)
Sub-total non-executive
Directors and other key
management personnel
Executive Directors
P H Hwang - Managing
Director
Short-term
benefits
Post-
employment
benefits
Share-
based
payments
Cash salary
and fees
$
24,000
21,918
12,785
Superannuation
$
Options
$
-
2,082
1,215
24,000
-
82,703
3,297
211,000
20,045
Short-term
benefits
Post-
employment
benefits
Share-
based
payments
Cash salary
and fees
$
Superannuation
$
Options
$
24,000
35,616
-
3,384
24,000
-
83,616
3,384
211,000
20,045
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
24,000
24,000
14,000
24,000
86,000
231,045
317,045
Total
$
24,000
39,000
24,000
87,000
231,045
318,045
Totals
294,616
23,429
1 Retired 28 November 2019
2 Appointed 28 November 2019
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) – (continued)
(i)
Service agreements
Remuneration and other terms of employment of the Managing Director are formalised in an agreement.
The major provisions of the agreement relating to remuneration are set out below.
P H Hwang, Managing Director
•
•
Term of employment agreement – indefinite commencing 22 April 2013.
Base salary, inclusive of superannuation, for the year ended 30 June 2020 of $231,045, to be
reviewed at least annually by the Board.
Payment of a termination benefit on early termination by the Company, other than for gross
misconduct, equal to six months remuneration.
Agreement may be terminated by employee giving six months’ notice in writing.
•
•
(j)
Details of share-based compensation and bonuses
There have been no options granted affecting remuneration in the current or a future reporting period.
(k)
Equity instruments held by key management personnel
The tables below show the number of shares and options in the company that were held during the
financial year by key management personnel of the Group, including their close family members and
entities related to them.
Ordinary Shares
Name
P H Hwang
C A Fernicola
K J Harvey1
S J Pooley2
Balance at the
start of the
year
35,097,467
35,624,999
31,193,040
1,250,000
Received on
exercising
options
-
-
-
-
Options Over Unissued Ordinary Shares
Name
P H Hwang
C A Fernicola
K J Harvey1
S J Pooley2
Balance at the
start of the
year
3,332,246
3,562,499
3,119,304
-
Options
Exercised
-
-
-
-
1 Retired 28 November 2019
2 Appointed 28 November 2019
3 Options expired during the year
All options are vested and exercisable.
Net purchased
/ (sold)
11,699,154
12,374,999
10,397,679
-
Other changes Balance at the
end of the year
46,796,621
47,999,998
41,590.719
1,250,000
-
-
-
-
Net purchased
/ (sold)
3,899,717
3,993,053
3,465,893
-
Other changes Balance at the
end of the year
3,899,717
3,993,053
3,465,893
-
(3,332,246)3
(3,562,499)3
(3,119,304)3
-
(l)
Loans to key management personnel
There were no loans to key management personnel during the financial period.
(m)
Other transactions with key management personnel and/or their related parties
There were no other transactions with key management personnel or their related parties.
End of Remuneration Report
43
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ REPORT
SHARES UNDER OPTION
During the year ended 30 June 2020, 113,560,925 options that were issued in relation to a capital raising
transaction undertaken during January to March 2018, expired on 31 August 2019.
53,127,663 options were issued during the year with an exercise price of $0.006 and an expiry date of
31 December 2021. All remain outstanding at the date of this Report.
Since year end and up to the date of this Report, 92,996,452 options with an exercise price of $0.006
and an expiry date of 31 December 2021 were issued.
As at the date of this Report, a total of 146,124,115 options are on issue.
During the year and since year end, there were no shares issued on the exercise of options granted.
INSURANCE OF OFFICERS
During the year the Group paid a premium of $34,062 to insure the Directors and Secretary of the
Company.
The risks insured include pecuniary orders and legal costs that may result from civil or criminal
proceedings that may be brought against the officers in their capacity as officers and any other payments
arising in connection with such proceedings. This does not include such liabilities that arise from conduct
involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else or to cause detriment to the company. It
is not possible to apportion the premium between amounts relating to the insurance against legal costs
and those relating to other liabilities.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to any Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a
party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in or on behalf of the Company with leave of the Court
under section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the company are important.
Details of amounts paid or payable to the auditor for audit and non-audit services provided during the
year are outlined in Note 23 to the financial statements.
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 45.
AUDITOR
PKF Brisbane Audit resigned from office and were replaced by William Buck (Qld).
This Report is made in accordance with a resolution of the Directors.
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CA Fernicola
Chairman
Brisbane, 29th day of September 2020
44
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
UNDER S 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF SUPERIOR RESOURCES LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30
June 2020, there have been:
-
-
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to
the audit.
William Buck (Qld)
ABN 21 559 713 106
Junaide Latif
Director
Brisbane, 29 September 2020
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45
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CORPORATE GOVERNANCE
Corporate Governance practices that form the basis of a comprehensive system of control and
accountability for the administration of the Company have been adopted. The Board is committed to
administering the policies and procedures with openness and integrity, pursuing the true spirit of
corporate governance commensurate with the Company’s needs.
The Company has reviewed its corporate governance practices against the Corporate Governance
Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
A description of the Company’s current corporate governance practices is set out in the Company’s
corporate governance statement. This statement is available on the Company’s website and can be
viewed at www.superiorresources.com.au.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2020
Operator fees received
Other income
Accounting and audit fees
Administration expenses
Depreciation and amortisation
Loss on disposal of Tick Hill tenement
Loss on disposal of Carnaby Resources Shares
Office rent and outgoings
Tenement expenditure written-off
Loss before income tax
Income tax (expense) / benefit
Loss after tax for the year from continuing
operations attributable to owners of Superior
Resources Limited
Earnings (loss) per share
Basic earnings (loss) per share
Diluted earnings (loss) per share
Note
21
8
2020
$
2019
$
152,345
42,916
-
712
(27,810)
(417,357)
(2,352)
-
(37,802)
(15,125)
(155,915)
(42,980)
(293,886)
(3,469)
(226,282)
-
(14,076)
(10,377)
(461,100)
-
(590,358)
40,985
(461,100)
(549,373)
Cents
(0.06)
(0.06)
Cents
(0.08)
(0.08)
14
9
28
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The accompanying notes form part of these financial statements.
47
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Note
2020
$
2019
$
Loss for the year from continuing operations
attributable to owners of Superior Resources Limited
(461,100)
(549,373)
Items that will not be reclassified subsequently to profit or
loss:
Fair value gains / (losses) on financial assets at fair value
through other comprehensive income, net of tax
(114,497)
135,112
Other comprehensive income for the year, net of tax
(114,497)
135,112
Total comprehensive income / (loss) for the year, net
of tax, attributable to owners of Superior Resources
Limited
(575,597)
(414,261)
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The accompanying notes form part of these financial statements.
48
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
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ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Total Current Assets
Non-Current Assets
Financial assets
Plant and equipment
Exploration expenditure
Other
Note
2020
$
2019
$
10
11
12
12
13
14
15
1,004,061
36,851
11,485
103,745
85,802
17,929
1,052,397
207,476
-
8,382
4,457,027
32,500
1,280,393
9,330
4,427,456
28,500
Total Non-Current Assets
4,497,909
5,745,679
Total Assets
LIABILITIES
Current Liabilities
Payables
5,550,306
5,953,155
16
532,784
586,842
Total Current Liabilities
532,784
586,842
Non-Current Liabilities
Payables
Liabilities for restrictions over assets
16
20
44,666
-
44,666
1,000,000
Total Non-Current Liabilities
44,666
1,044,666
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
577,450
1,631,508
4,972,856
4,321,647
17
18
19
12,202,019
(3,210,410)
(4,018,753)
10,975,213
(3,095,913)
(3,557,653)
4,972,856
4,321,647
The accompanying notes form part of these financial statements.
49
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
$
Balance at 30 June 2019
10,975,213
(3,095,913)
(3,557,653)
4,321,647
Loss for the year
Other comprehensive income /
(loss)
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs
-
-
-
-
(461,100)
(461,100)
(114,497)
-
(114,497)
(114,497)
(461,100)
(575,597)
1,226,806
-
-
1,226,806
Balance at 30 June 2020
12,202,019
(3,210,410)
(4,018,753)
4,972,856
Balance at 30 June 2018
Loss for the year
Other comprehensive income
/ (loss)
Total comprehensive
income for the year
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs
10,975,213
(3,231,025)
(3,008,280)
4,735,908
-
-
-
(549,373)
(549,373)
135,112
-
135,112
10,975,213
135,112
(549,373)
(414,261)
-
-
-
-
Balance at 30 June 2019
10,975,213
(3,095,913)
(3,557,653)
4,321,647
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The accompanying notes form part of these financial statements.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Restricted cash
Restricted cash is excluded from cash and cash equivalents for the consolidated statement of cash flows.
Cash flows from operating activities
Receipts from customers (GST inclusive)
Receipts from Government
Payments to suppliers and employees (GST
inclusive)
Interest received
Net cash inflow (outflow) from operating
activities
Cash flows from investing activities
Proceeds of disposal of investments
Proceeds of disposal of plant and equipment
Payments for exploration expenditure
Payments for plant and equipment
Refunds (payments) of security deposits
Net cash inflow (outflow) from investing
activities
Cash flows from financing activities
Share application moneys received
Proceeds on issue of shares
Payment of capital raising costs
Net cash inflow (outflow) from financing
activities
Net increase (decrease) in cash held
Cash at beginning of financial year
Cash at the end of financial year
10
Note
2020
$
2019
$
156,809
42,831
29,878
-
(455,339)
(173,209)
85
401
27
(255,614)
(142,930)
190,683
-
(306,480)
(1,404)
(4,000)
162,042
1,888
(800,918)
(2,205)
(500)
(121,201)
(639,693)
50,325
1,272,588
(45,782)
1,277,131
900,316
103,745
1,004,061
-
-
-
-
(782,623)
886,368
103,745
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The accompanying notes form part of these financial statements.
51
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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1. General Information
Superior Resources Limited (Company) is a company limited by shares, incorporated and domiciled in
Australia. The Company’s shares are listed on the Australian Securities Exchange.
The registered office and principle place of business of the Company is:
Unit 8, 61 Holdsworth Street
Coorparoo QLD 4151
Ph 07 3847 2887
The financial statements are for the Group consisting of Superior Resources Limited and its subsidiaries
(the consolidated entity or the Group).
2. Significant Accounting Policies
(a)
Statement of compliance
These financial statements are general purpose financial statements which have been prepared in
accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the
Australian Accounting Standard Board and in compliance with International Financial Reporting
Standards (‘IFRS’) as issued by the International Accounting Standards Board. The Group is a for-profit
entity for financial reporting purposes under Australian Accounting Standards. Material accounting
policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
The financial statements were authorised for issue by the Directors on 29 September 2020.
(b)
Basis of preparation
Except for cash flow information, the financial statements have been prepared on an accrual basis and
are based on historical costs, modified, where applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial liabilities.
(c)
Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the Parent
(Superior Resources Limited) and all of the subsidiaries (including any structured entities). 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 or controlled operations is provided in Note 29.
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.
The acquisition method of accounting is used to account for business combinations by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss, statement of other comprehensive income, statement of changes
in equity and statement of financial position, respectively.
52
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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2. Significant Accounting Policies (continued)
(d)
Revenue recognition
Revenue is recognised to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled in exchange for the goods or
services. Revenue is recognised when the performance obligations of a contract are satisfied.
Interest revenue is recognised using the effective interest rate method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using
the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue is recognised when it is received or when the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax (GST).
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
(e)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the reporting date and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it
is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the assets and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
(f)
Cash and cash equivalents
For the consolidated statement of cash flows presentation purposes, cash and cash equivalents includes
cash on hand and deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
Restricted cash
Restricted cash represents cash and cash equivalents where the Group operates the bank accounts and
holds cash on behalf of external parties. These funds relate specifically to moneys held with banks and
registered in the name of the Group. However, these funds are not legal designated trust accounts.
Restricted cash is excluded from cash and cash equivalents for the consolidated statement of cash flows
presentation.
53
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant Accounting Policies (continued)
(g)
Financial instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument. Financial assets will be recognised on the date that
the Group becomes contractually bound to the relevant asset purchase or sale transaction (i.e. trade
date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction
costs, except where the instrument is classified "at fair value through profit or loss", in which case
transaction costs are expensed to profit or loss immediately. Where available, quoted prices in an active
market are used to determine fair value. In other circumstances, valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a
significant financing component or if the practical expedient was applied as specified in paragraph 63 of
AASB 15: Revenue from Contracts with Customers.
Classification and Subsequent Measurement
Financial assets
Financial assets are subsequently measured at:
•
•
•
amortised cost;
fair value through other comprehensive income; or
fair value through profit and loss.
Measurement is on the basis of the two primary criteria, being:
•
•
the contractual cash flow characteristics of the financial asset; and
the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
•
•
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
•
•
the contractual terms within the financial asset give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding on specified dates; and
the business model for managing the financial assets comprises both contractual cash flows
collection and the selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and
fair value through other comprehensive income are subsequently measured at fair value through profit
or loss.
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54
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant Accounting Policies (continued)
Financial liabilities
Financial liabilities are subsequently measured at:
•
•
amortised cost; or
fair value through profit and loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
•
•
•
a contingent consideration of an acquirer in a business combination to which AASB 3 Business
Combinations applies;
held for trading; or
initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest
method.
Equity instruments
At initial recognition, as long as the equity instrument is not held for trading and not a contingent
consideration recognised by an acquirer in a business combination to which AASB 3 applies, the Group
made an irrevocable election to measure any subsequent changes in fair value of the equity instruments
in other comprehensive income, while the dividend revenue received on underlying equity instruments
investment will still be recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and derecognised at settlement
date in accordance with the Group’s accounting policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from
the statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when the obligation in the contract is discharged,
cancelled or expires). An exchange of an existing financial liability for a new one with substantially
modified terms or a substantial modification to the terms of a financial liability, is treated as an
extinguishment of the existing liability and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration
paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit
or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the
asset is transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All the following criteria need to be satisfied for derecognition of financial assets:
•
•
•
the right to receive cash flows from the asset has expired or been transferred;
all risk and rewards of ownership of the asset have been substantially transferred; and
the Group no longer controls the asset (i.e. no practical ability to make unilateral decision to sell
the asset to a third party).
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55
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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2. Significant Accounting Policies (continued)
Impairment
The Group recognises a loss allowance for expected credit losses on:
•
•
•
•
•
financial assets that are measured at amortised cost or fair value through other comprehensive
income;
lease receivables;
contract assets (e.g. amount due from customers under construction contracts);
loan commitments that are not measured at fair value through profit or loss; and
financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
•
•
financial assets measured at fair value through profit or loss; or
equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a
financial instrument. A credit loss is the difference between all contractual cash flows that are due and
all cash flows expected to be received, all discounted at the original effective interest rate of the financial
instrument.
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain
or loss in the statement of profit or loss.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating
to that asset.
Assets measured at fair value through other comprehensive income are recognised at fair value, with
changes in fair value recognised in other comprehensive income. Amounts in relation to change in credit
risk are transferred from other comprehensive income to profit or loss at every reporting period.
For financial assets that are unrecognised (e.g. loan commitments yet to be drawn, financial guarantees),
a provision for loss allowance is created in the statement of financial position to recognise the loss
allowance.
(h)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values,
over their estimated useful lives, as follows:
Equipment / Software:
3 – 5 years
The asset’s residual values and useful lives are reviewed and adjusted if appropriate at each balance
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the consolidated statement of profit or loss. When revalued assets are sold, it is company
policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.
(i)
Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of
the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
56
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant Accounting Policies (continued)
(j)
Exploration expenditure
Expenditure is accumulated separately for each area of interest until such time as the area is abandoned
or sold. The realisation of the value of the expenditure carried forward depends on any commercial
results that may be obtained through successful development and exploitation of the area of interest or
alternatively by its sale. If an area of interest is abandoned or is considered to be of no further commercial
interest the accumulated exploration costs relating to the area are written off against income in the year
of abandonment. Some exploration expenditure may also be written off where areas of interest are partly
relinquished and in cases where uncertainty exists as to the value, provisions for possible diminution in
value are established.
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
capitalise costs in relation to that area.
The Group held restricted cash held as a result of its role as the Operator under the Earn-in and Joint
Venture Agreement (JVA) with South32 Group Operations Pty Ltd (South32). As at 30 June 2020, all
restricted cash had been expended.
In accordance with the first stage of commitment, South32 must sole-fund an initial $2 million or 4,000m
of drilling within the first 12 months of operations. As at 30 June 2020, South32 had paid $1.89 million to
the Company as the Operator under the JVA to fund the planned exploration operations in accordance
with the agreement.
This prepaid amount was held solely for the benefit of South32 in meeting their obligations under the
JVA and was held as restricted cash as it is not available to finance the Group’s day-to-day operations
and therefore has been excluded from cash and cash equivalents for the purposes of the statement of
cash flows. All funds held as restricted cash have been cleared at balance date.
In the 2019 financial statements these funds were disclosed as a non-current asset. An offsetting liability
was recognised representing the obligation of the Company, as the Operator under the JVA to South32,
to meet their first stage of exploration commitments.
(k)
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(l)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of the financial year but not distributed at balance
date.
(m)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the
Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year.
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57
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant Accounting Policies (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
(n)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other receivables
or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to the taxation authority, are presented as
operating cash flow.
(o)
Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick
leave, which are expected to be settled within 12 months after the end of the period in which the
employees render the related services, are recognised in respect of employees’ services up to the end
of the reporting period and are measured at the amounts expected to be paid when the liabilities are
settled. The liability for annual leave is recognised in the provision for employee benefits. All other
short-term employee benefit obligations are presented as payables.
Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months
after the end of the period in which the employees render the related services, is recognised in the
provision for employee benefits and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the end of the reporting period using the
projected unit credit method. Consideration is given to expected future wage and salary levels, employee
departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period on
government bonds with terms and currencies that match, as closely as possible, the estimated future
cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting date, regardless of
when the actual settlement is expected to occur.
(p)
Parent entity financial information
The financial information for the parent entity, Superior Resources Limited, disclosed in note 30 has been
prepared on the same basis as the consolidated financial statements.
(q)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
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58
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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2. Significant Accounting Policies (continued)
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or
reclassifies items in its financial statements, an additional (third) statement of financial position as at the
beginning of the preceding period in addition to the minimum comparative financial statements is
presented.
(r)
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 (i.e. unforced) transaction between independent, knowledgeable and willing market
participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is
used to determine fair value. Adjustments to market values may be made having regard to the
characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded
in an active market are determined using one or more valuation techniques. These valuation techniques
maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or
liability (i.e. 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 (i.e. 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.
(s)
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal sources of
information including dividends received from subsidiaries, associates or joint ventures deemed to be
out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset
by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs
of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount
over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a
revalued amount in accordance with another Standard (for example in accordance with the revaluation
model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated
as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible
assets not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss
is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated as a revaluation increase.
59
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant Accounting Policies (continued)
(t)
Coronavirus (Covid19)
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the consolidated entity based on known information. This consideration
extends to the nature of the activities of the group including services offered, customers, supply chain,
staffing and geographic regions in which the consolidated entity operates. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial
statements or any significant uncertainties with respect to events or conditions which may impact the
consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
3. New and Amended Accounting Standards
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current
reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 16 Leases
The consolidated entity adopted AASB 16 during the current year.
AASB 16 does not apply to leases that convey rights to explore for or use minerals, oil, natural gas and
similar non-regenerative resources.
The Group and specifically, the Company, is a lessee in respect of two properties:
• Coorparoo Office (Corporate and Operations); and
• Greenvale Residential.
Management has assessed the effects of applying the new standard and has concluded that the above
leases are “short term leases” as that term is used in AASB 16. On the basis of this classification, the
consolidated entity has elected to adopt the recognition exemption as provided under the standard. As
a result, the Group will continue to recognise rental expense payments that relate to the leases as
expenses in the Consolidated Statement of Profit or Loss.
There are no other standards that are not yet effective and that are expected to have a material impact
on the consolidated entity in the current or future reporting periods and on foreseeable future
transactions.
4. Financial Risk Management
The Group’s overall risk management plan seeks to minimise potential risks resulting from the
unpredictability of financial markets.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does
it write options. The most significant financial risks to which the Group are exposed are credit risk,
liquidity risk, market risk and cash flow interest rate risk.
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60
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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4. Financial Risk Management (continued)
The Group holds the following financial assets and liabilities:
Financial assets
Cash and cash equivalents
Financial assets – restricted cash
Trade and other receivables
Financial assets at fair value through other comprehensive
income
Financial liabilities
Trade and other payables
2020
$
2019
$
1,004,061
-
36,851
11,485
1,052,397
103,745
943,855
85,802
354,467
1,487,869
577,450
577,450
631,508
631,508
Risk management is carried out by the Group’s finance function under policies and objectives which have
been approved by the Board of Directors. The Managing Director has been delegated the authority for
designing and implementing processes which follow the objectives and policies.
The Board receives monthly reports which provide details of the effectiveness of the processes and
policies in place.
(a)
Credit risk
Credit risk is the risk of loss from a counterparty failing to meet its financial obligations to the Company.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets is the carrying amount of those assets, net of any provision for
expected credit loss, as disclosed in the consolidated statement of financial position and notes to the
financial statements.
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For
bank and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings (if available).
Cash at bank and short-term bank deposits
Financial assets – restricted cash
2020
$
2019
$
1,004,061
-
1,004,061
103,745
943,855
1,047,600
Other than cash and cash equivalents, the most significant financial assets are trade and other
receivables. The Group does not have any material credit risk exposure to any single debtor or Group
of debtors under financial instruments entered into by the Group. There were no past due debts at
balance date requiring consideration of impairment provisions.
(b)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet
obligations when due.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance
facilities were available to the Group at the end of the reporting period.
61
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
4. Financial Risk Management (continued)
Maturities of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings.
Contractual
maturities of
financial liabilities
At 30 June 2020
Trade and other
payables
At 30 June 2019
Trade and other
payables
(c)
Market risk
Less
than 6
months
$
6 – 12
months
$
Between
1 and 2
years
$
Between
2 and 5
years
$
Over
5
years
$
Total
contractual
cash flows
$
Carrying
amount
$
474,229
58,555
44,666
474,229
58,555
44,666
541,626
45,216
44,666
541,626
45,216
44,666
-
-
-
-
-
-
-
-
577,450
577,450
577,450
577,450
631,508
631,508
631,508
631,508
The Group is exposed to equity securities price risk. This arises from securities investments held by the
Group in Deep Yellow Limited and Carnaby Resources Limited and classified on the statement of
financial position as financial assets. As a result of the disposal of the Carnaby Resources Limited
financial asset during the current year, the risk exposure in respect of that asset no longer exists.
The Group is not exposed to any commodity price risk.
The table below summaries the impact of increases and decreases in the Deep Yellow Limited and
Carnaby Resources Limited share price on the Group’s total comprehensive income and loss for the year
and on equity. The analysis is based on the assumption that the share price had increased or decreased
by 25% (2019: 25%) from balance date fair value with all other variables held constant.
Impact on post-tax loss
2019
2020
$
$
Impact on reserves
2020
$
2019
$
+25%
-25%
+25%
-25%
+25%
-25%
+25%
-25%
Investment in
Deep Yellow
Limited
Investment in
Carnaby
Resources
Limited
-
-
-
1,233
(1,233)
2,871
(2,871)
3,250
(3,250)
- 23,137
(23,137)
-
-
60,998
(60,998)
(d)
Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets or borrowings, the Group’s income and operating
cash flows are not materially exposed to changes in market interest rates.
(e)
Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes. The net fair value of financial assets and financial liabilities
approximates the respective carrying values as disclosed in the consolidated statement of financial
position and the notes to the financial statements.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
5. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that
are believed to be reasonable under the circumstances.
(a)
Critical judgements in applying the entity’s accounting policies
The Group has capitalised non-current exploration expenditure of $4,457,027 (2019: $4,427,456).
This amount includes costs directly associated with exploration. These costs are capitalised as an
intangible asset until assessment of the permit is complete and the results have been evaluated. These
costs include employee remuneration, materials, drilling costs, delay costs, rental payments and
payments to contractors. The expenditure is carried forward until such a time as the asset moves into
the development phase, is abandoned or sold. Given exploration activities have not yet reached a stage
which permits a reasonable assessment of the existence or otherwise of recoverable resources and the
difficulty in forecasting cash flows to assess the fair value of exploration expenditure, there is uncertainty
as to the carrying value of exploration expenditure. The ultimate recovery of the carrying value of
exploration expenditure is dependent upon the successful development and commercial exploitation or,
alternatively, sale of the Group’s interest in the tenements.
(b)
Joint arrangements
The Group undertakes business activities through contractual arrangements with other parties. In
assessing the classification of these arrangements for accounting purposes, the Group must first assess
whether it has gained control, joint control or a significant influence in the arrangement. A joint
arrangement is an arrangement over which two or more parties have joint control. Joint control is the
contractually agreed sharing of control over an arrangement in circumstances where decisions about the
relevant activities (being those that significantly affect the returns of the arrangement) require the
unanimous consent of the parties. Judgement is required to determine when the Group has control,
which requires an assessment of the relevant activities and when the decisions in relation to those
activities require unanimous consent.
Judgement is also required to classify a joint arrangement as either a joint operation or a joint venture.
Classifying the arrangement requires the Group to assess its rights and obligations arising from the
arrangement. This assessment often requires significant judgement. Whether the arrangement is a Joint
Operation or a Joint Venture, may materially impact the accounting.
The Group previously announced the formation of an Earn-in and Joint Venture Agreement with South32
Group Operations Pty Ltd (JVA) which is structured through an unincorporated arrangement in
accordance with the terms of the JVA. In assessing the facts and circumstances relating to this
arrangement, the Group assessed that the arrangement is currently in the earn-in stage and as such, a
joint venture had not been formed during or after the reporting period. As a result, accounting for the
arrangement was on the basis of considering the individual transactions and expenses incurred under
the JVA against the terms and operation of the JVA. This has resulted in restricted assets and liabilities
for restrictions over assets being recognised in accordance with policy Note 2(f) for the amounts shown
in Note 12 and Note 20.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
6. Going Concern Principle
Notwithstanding that the Group incurred an operating loss after tax of $461,100 (2019: loss of $549,373)
these financial statements have been prepared on a going concern basis which assumes continuity of
normal business activities and the realisation of assets and the settlement of liabilities in the ordinary
course of business.
The ability of the consolidated entity to continue as a going concern depends on one or more of the
following:
•
•
•
•
achieving sufficient future cash flows from operations to enable its obligations to be met;
the success of cost saving initiatives, which include entering into Joint Venture arrangements
and reducing tenement areas, so as to reduce the carrying and expenditure costs for tenements;
cash flows from the sale of any of the Group’s assets; and
obtaining additional funding from capital raising activities.
The Directors acknowledge that to continue the exploration and development of the Group’s exploration
projects, the budgeted cash flows from operating and investing activities for the future will necessitate
further capital raisings. In addition, the Directors have agreed to retain between 35% and 50% of their
salary payments in the interests of assisting the consolidated entity’s ability to continue as a going
concern.
At the date of this Report and having considered the above factors, the Directors consider that the Group
will be able to continue as a going concern and will be able to pay its debts as and when they fall due
and payable.
In the event that the Group is unable to satisfy future funding requirements, a material uncertainty would
exist that would cast significant doubt on the Group’s ability to continue as a going concern with the result
that the Group may be required to realise its assets at amounts different from those currently recognised,
settle liabilities other than in the ordinary course of business and make provisions for costs which may
arise as a result of cessation or curtailment of normal business operations.
7. Segment Information
The Group operates solely within one segment, being the mineral exploration industry in Australia.
8. Other Income
Interest
Insurance claim
Government grants – Covid:
Jobkeeper
Cash flow boost
2020
$
85
-
12,000
30,831
42,916
2019
$
401
311
-
-
712
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
9. Income Tax
(a) Numerical reconciliation of income tax expense / (benefit)
to prima facie tax payable:
Profit (loss) from continuing operations before income
tax expense
Tax at the Australian tax rate of 27.5%
Tax effect of permanent differences
Temporary differences not recognised
Income tax expense / (benefit)
2020
$
2019
$
(461,100)
(590,358)
(126,803)
(8,457)
(162,348)
26,963
135,260
-
94,400
(40,985)
(b) Tax adjustment relating to items of other comprehensive income
Financial assets - fair value adjustment
-
(40,985)
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
Potential tax benefit @ 27.5%
12,424,397
3,416,709
7,612,563
2,093,455
(d) Franking credits
Franking credits available for use in subsequent
financial year
251,146
251,146
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65
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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10. Cash and Cash Equivalents
Cash at bank and on hand
11. Trade and Other Receivables
CURRENT
Other receivables
Prepayments
12. Financial Assets
CURRENT
Deep Yellow Limited1
Investments in listed equity securities designated at fair value through
other comprehensive income
NON-CURRENT
Carnaby Resources Limited1
Investments in listed equity securities designated at fair value through
other comprehensive income
Restricted Cash – Prepaid contributions from earn-in participant2
Total financial assets
1 Listed equity securities
2020
$
2019
$
1,004,061
103,745
10,771
26,080
36,851
-
85,802
85,802
11,485
17,929
-
-
-
11,485
336,538
943,855
1,280,393
1,298,322
The investment in listed equity securities are stated at fair value. AASB 13 Fair Value Measurement requires disclosure
of fair value measurements by the level of the following fair value measurement hierarchy:
1) Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability;
3) Level 3 – Inputs for the asset or liability that are not based on observable market data.
The listed equity securities are traded in an active market, being the Australian Securities Exchange, and consequently
they are measured as a Level 1 instrument on the fair value hierarchy. The quoted market price, used to determine the
value of these securities, is the bid price at balance date.
2 Restricted Cash – Nicholson Project
The Group has $0 (2019: $943,855) in restricted cash held as a result of its role as the Operator under the Earn-in and
Joint Venture Agreement (JVA) with South32 Group Operations Pty Ltd (South32), dated 28 May 2019, which terminated
in February 2020. All transactions under the JVA have been finalised as at 30 June 2020 and the company has earned
an operator fee of $152,345.
In accordance with the first stage of commitment, South32 was required to sole-fund an initial $2 million or 4,000m of
drilling within the first 12 months of operations. As at 30 June 2020, South32 had contributed $1,876,889 to the
Company in its capacity as the Operator under the JVA, to fund the planned exploration operations in accordance with
South32’s first stage of commitments.
This prepaid amount was used solely for the benefit of South32 in meeting its obligations under the JVA, in accordance
with the policy described in Note 2(f), and was held as restricted cash as it is not available to finance the Group’s day-
to-day operations. These funds have been excluded from cash and cash equivalents for the purposes of the statement
of cash flows. The funds have been disclosed as a non-current asset in 2019 with an offsetting liability recognised
representing the obligation of the Company, in its capacity as the Operator, to undertake exploration work under the
Stage 1 earn-in terms. Refer to Note 21 for further information.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
13. Plant and Equipment
NON-CURRENT
Equipment / software – at cost
Accumulated depreciation
Year ended 30 June 2020
Opening net book amount
Additions
Depreciation charge
Closing net book amount
Year ended 30 June 2019
Opening net book amount
Additions
Depreciation charge
Closing net book amount
14. Exploration Expenditure
2019
$
85,337
(76,007)
9,330
2020
$
86,740
(78,358)
8,382
Equipment /
Software
$
9,330
1,403
(2,351)
8,382
12,482
-
(3,152)
9,330
Exploration phase property costs
Deferred geological, geophysical, drilling and other expenditure –
at cost
Non-current
Total capitalised exploration expenditure
The capitalised exploration expenditure carried forward above has
been determined as follows:
Opening balance
Expenditure incurred during the year
Disposal of assets classified as held for sale
Tenement expenditure written-off
Derecognition of South 32 contributions
Closing balance
2020
$
2019
$
4,457,027
4,457,027
4,427,456
4,427,456
4,427,456
1,910,116
-
(155,915)
(1,724,630)
4,457,027
3,963,615
921,912
(447,694)
(10,377)
-
4,427,456
Exploration expenditure incurred during the year includes an amount of $1,603,636 (2019: $120,994)
contributed by the Joint Venture participant, South32 Group Operations Pty Ltd in relation to the
Nicholson Project under the Earn-in and Joint Venture Agreement, dated 28 May 2019. The agreement
was terminated 4 March 2020. Refer to Notes 12, 20 and 21 for further information.
15. Non-Current Assets – Other
Security deposits
2020
$
2019
$
32,500
28,500
67
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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16. Payables
Current liabilities
Trade payables and accrued expenses
Other payables – application money
Other payables - ATO
Other payables – related party (i)
Employee entitlements
Non-current liabilities
Other payables – related party (ii)
Total Payables
2020
$
2019
$
114,154
50,325
7,547
302,203
58,555
532,784
44,666
44,666
577,450
253,515
-
43,571
244,540
45,216
586,842
44,666
44,666
631,508
(i) These amounts represent the unpaid Directors’ remuneration that may be called within the next 12
months. The liability is unsecured and no decision has been made by the Directors on the timing or
nature of the consideration to be provided in settlement.
(ii) These amounts represent the unpaid Directors’ remuneration for periods to 30 June 2016. The
Directors have agreed that they will not call upon the payment of this balance outstanding for a period of
not less than 12 months from the date of this Report.
17. Contributed Equity
2020
$
2019
$
1,016,614,718 (2019: 688,043,740) ordinary shares fully paid
12,202,019
10,975,213
(a)
Movements in ordinary share capital
Date
At 30 June 2018
Shares issued
At 30 June 2019
31 July 2019
27 May 2020
25 June 2020
At 30 June 2020
(b)
Ordinary shares
Details
Balance
Balance
Shares issued
Shares issued
Shares issued
Share issue cost
Issue price
$
0.008
0.003
0.003
Number of
shares
688,043,740
-
688,043,740
57,375,000
111,812,810
159,383,168
1,016,614,718
$
10,975,213
-
10,975,213
459,000
335,438
478,150
(45,782)
12,202,019
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is
entitled to one vote and upon a poll, each share is entitled to one vote.
68
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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17. Contributed Equity (continued)
(c)
Share options
Date
Details
At 30 June 2018
17 October 2018
30 June 2019
At 30 June 2019
31 August 2019
25 June 2020
At 30 June 2020
Balance
Options issued
Options expired
Balance
Options expired
Options issued
Balance
Weighted
Average Exercise
Price
Number of
options
140,935,925
10,000,000
(37,375,000)
113,560,925
(113,560,925)
53,127,722
53,127,722
$
0.02
0.03
0.03
0.03
0.03
0.006
Expiry
31-Aug-19
31-Aug-19
31-Aug-19
31-Dec-21
The lead manager to the share placement and rights issue undertaken in June received 15 million options
(post year end), having the same terms as options issued under the placement and rights issue at no
consideration.
(d)
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern,
so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
The capital structure of the Group includes cash and cash equivalents, equity attributable to equity
holders comprising of contributed equity, reserves and accumulated losses. In order to maintain or adjust
the capital structure, the Group may issue new shares, sell assets to reduce debt or adjust the level of
activities undertaken by the Company.
The Group monitors capital on the basis of cash flow requirements for corporate overheads, exploration
and evaluation expenditure. The Group’s exposure to borrowings as at 30 June 2020 totals $nil (2019:
$nil). The Group will continue to access capital markets and joint venture arrangements to satisfy
anticipated funding requirements.
The Group’s strategy to capital risk management is unchanged from prior years.
18. Reserves
2020
$
2019
$
Financial assets revaluation reserve
(3,210,410)
(3,095,913)
At beginning of year
Realised gains/(losses) on disposals
Revaluation increment / decrement
Income tax @ 27.5%
At end of year
(3,095,913)
-
(114,497)
-
(3,210,410)
(3,231,025)
28,180
147,917
(40,985)
(3,095,913)
69
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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19. Accumulated Losses
Accumulated losses
At beginning of year
Net loss for the year
At end of year
2020
$
2019
$
(4,018,753)
(3,557,653)
(3,557,653)
(461,100)
(4,018,753)
(3,008,280)
(549,373)
(3,557,653)
20. Liabilities for Restrictions Over Assets
Contribution received from South32
-
1,000,000
Liabilities for restrictions over assets represents contributions in advance from earn-in participant
South32, representing part of their first stage commitment under the Earn-in and Joint Venture
Agreement (JVA) to sole fund the planned exploration operations in respect of the Nicholson Project. In
the event that South32 satisfies the Stage 1 and Stage 2 earn-in requirements under the JVA, the
liabilities for restrictions over assets will be settled by the Company with the divestment of 70% of its
interest in the Project. An explanation of the JVA and exploration commitments under the JVA are set
out below.
The JVA was terminated by South32 on 4th March 2020 without satisfaction of the Stage 1 or Stage 2
earn-in requirements.
21. Joint Venture Entities
Nicholson Project
The Company entered into an earn-in and joint venture agreement (JVA) with South32 Group Operations
Pty Ltd on 28 May 2019 (South32) in respect of the Nicholson Project. Under the terms of the JVA,
South32 may earn an interest of up to 80% in the Project by satisfying the following requirements:
-
-
-
Stage 1: South32 must sole-fund an initial $2,000,000 or 4,000m of drilling (whichever comes
first) within the first 12 months of operations;
Stage 2: provided South32 completes Stage 1, it will have a right to elect to proceed to Stage 2
to earn a 70% interest in the Project by sole-funding an additional $4,000,000 on exploration
within a further four years; and
Stage 3: provided South32 completes Stage 2, it will have a right to earn an additional 10%
interest in the Project by sole-funding a feasibility study.
The Company was the JV operator during Stages 1 and 2 of joint venture operations which commenced
with the drilling of the first diamond core hole on 27 July 2019. As Operator, the Company will receive
contributions from South32 to fund the exploration commitments under the JVA and a fee equal to 10%
of exploration expenditure (total operator fees earned in 2020 was $152,345 (2019: $nil)). Exploration
expenditure incurred on behalf of South32 will be capitalised to the Nicholson Project tenements and any
unspent funds will be held as Restricted Cash and separated from cash flow from operations of the
Company. As at 30 June 2020, the contributions received and spent on exploration of the Nicholson
Project tenements and the related liabilities for restrictions over assets are summarised in the table
below.
The earn-in and JVA was terminated by South 32 on 4 March 2020 without satisfaction of the Stage 1 or
Stage 2 earn-in requirements.
70
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
21. Joint Venture Entities (continued)
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Restricted cash – prepaid contributions from South32
Exploration expenditure by South32 - capitalised
JVA creditors
Liabilities for restrictions over assets – total contribution
from South32
12
22. Key Management Personnel Disclosures
(a)
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
2020
$
-
-
-
-
2019
$
943,855
120,994
(64,849)
1,000,000
2020
$
293,703
23,342
317,045
2019
$
294,616
23,429
318,045
Detailed remuneration disclosures are provided in the remuneration report on pages 40 to 43.
At 30 June 2020, $346,869 (2019 $289,206) remains payable.
(b)
Equity instrument disclosures relating to key management personnel
(i)
Options provided as remuneration and shares issued on exercise of such options
There have been no options granted affecting remuneration in the current or a future reporting period.
(ii)
Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each
Director of the Company and other key management personnel of the Group, including their personally
related parties, is set out below.
Balance at the
start of the
year
Options
Exercised
Name
Directors of Superior Resources Limited
P H Hwang
C A Fernicola
K J Harvey1
S J Pooley2
3,332,346
3,562,499
3,119,304
-
-
-
-
-
Net purchased
/ (sold)
Other changes Balance at the
end of the year
3,899,717
3,993,053
3,465,893
-
(3,332,346)3
(3,562,499)3
(3,119,304)3
-
3,899,717
3,993,053
3,465,893
-
1 Retired 28 November 2019
2 Appointed 28 November 2019
3 Options expired during the year
All options are vested and exercisable.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
22. Key Management Personnel Disclosures (continued)
(iii)
Share holdings
The number of ordinary shares in the company held during the financial year by each Director of Superior
Resources Limited and other key management personnel of the Group, including their personally related
parties, is set out below.
2020
Balance at the
start of the
year
Received on
exercising
options
Name
Directors of Superior Resources Limited
P H Hwang
C A Fernicola
K J Harvey1
S J Pooley2
35,097,467
35,624,999
31,193,040
1,250,000
Net purchased
/ (sold)
Other changes Balance at the
end of the year
-
-
-
-
11,699,154
12,374,999
10,397,679
-
-
-
-
-
46,796,621
47,999,998
41,509,719
1,250,000
1 Retired 28 November 2019
2 Appointed 28 November 2019
2019
Balance at the
start of the
year
Received on
exercising
options
Name
Directors of Superior Resources Limited
P H Hwang
C A Fernicola
K J Harvey
35,097,467
35,624,999
31,193,040
Net purchased
/ (sold)
Other changes Balance at the
end of the year
-
-
-
-
-
-
-
-
-
35,097,467
35,624,999
31,193,040
23. Remuneration of Auditors
During the year, the following fees were paid or payable for
services provided by the auditor, its related practices and non-
related audit firms:
PKF Brisbane Audit
Audit or review of financial report
William Buck (Qld)
Audit of financial report
2020
$
2019
$
17,000
40,500
15,000
32,000
-
40,500
24. Contingencies
There are no contingent liabilities affecting the Group as at the date of this Report.
25. Commitments
(a)
Exploration commitments
So as to maintain current rights to tenure of various exploration and mining tenements, the Company is
required to outlay amounts in respect of tenement rent to the relevant governing authorities and to meet
certain annual exploration expenditure commitments. These outlays (exploration expenditure and rent),
which arise in relation to granted tenements, including in relation to tenement applications that were
granted after 30 June 2020, are as follows:
72
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
25. Commitments (continued)
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Exploration expenditure commitments
Commitments for payments under exploration permits for minerals
in existence at the reporting date but not recognised as liabilities
payable is as follows:
Payable within one year
Payable between one and five years
2020
$
2019
$
1,171,269
2,428,696
3,599,965
1,118,970
1,962,518
3,081,488
Outlays may be varied from time to time, subject to approval of the relevant government departments,
and may be relieved if a tenement is relinquished or certain contractual arrangements are entered into
with third parties (e.g. a farm-in or joint venture arrangement). Cash security bonds totalling $32,500
(2019: $28,500) are currently held by the relevant governing authorities to ensure compliance with
granted tenement conditions.
26. Events Occurring After Balance Date
Since the end of the financial year, the Group raised $366,530 through the issue of 122,176,641 new
shares at a value of $0.003 per share. A total of 77,996,452 free attaching options with an exercise price
of $0.006 and an expiry date of 31 December 2021 were also issued since the end of the financial year
under the capital raising exercise.
In addition, 15,000,000 options with an exercise price of $0.006 and an expiry date of 31 December 2021
were issued to the lead manager as part consideration for their role in the above capital raising.
No other matters or circumstances have arisen since the end of the financial year which have significantly
affected or may significantly affect the operations of the Group, the results of the operations or the state
of affairs of the Group in financial years subsequent to 30 June 2020.
27. Reconciliation of Loss After Income Tax to Net Cash Flows From Operating Activities
2020
$
2019
$
Loss for the year after income tax
(461,100)
(549,373)
Depreciation and amortisation
Loss on disposal of tenement
Tenement expenditure written off
Loss on disposal of Carnaby Resources Limited shares
Income tax
Changes in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase) / decrease in prepayments
Increase/(decrease) in trade payables
Increase/(decrease) in other payables - current
Increase/(decrease) in employee entitlements
2,352
-
155,915
37,802
-
(10,771)
59,722
(74,512)
21,639
13,339
3,469
226,282
10,377
-
(40,985)
-
(21,877)
77,102
141,403
10,672
Net cash outflow from operating activities
(255,614)
(142,930)
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
28. Earnings (loss) Per Share
(a) Basic earnings (loss) per share
2020
Cents
2019
Cents
Profit (loss) attributable to the ordinary equity holders of the
company
(0.06)
(0.08)
(b) Diluted earnings (loss) per share
Profit (loss) attributable to the ordinary equity holders of the
company
(0.06)
(0.08)
2020
$
2019
$
(c) Reconciliations of earnings (loss) used in calculating
earnings per share
Basic earnings (loss) per share
Profit (loss) attributable to ordinary equity holders of the company
used in calculating basic earnings per share
(461,100)
(549,373)
Diluted earnings(loss) per share
Profit (loss) attributable to ordinary equity holders of the company
used in calculating diluted earnings per share
(461,100)
(549,373)
2020
Number
2019
Number
(d) Weighted average number of shares used as the
denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings (loss) per share
Adjustments for calculation of diluted earnings (loss) per share:
Options
Weighted average number of ordinary shares and potential
ordinary shares used as the denominator in calculating diluted
earnings (loss) per share
753,123,457
688,043,740
-
-
753,123,457
688,043,740
Unissued ordinary shares under option are not included in the calculation of diluted earnings per share
because they are antidilutive for the years ended 30 June 2020 and 30 June 2019. These shares under
option could potentially dilute basic earnings per share in the future.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
29. Related Party Disclosures
(a)
Parent entity
The parent entity within the Group is Superior Resources Limited.
(b)
Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares which are held
directly by the Group. The % ownership interests held equals the voting rights held by the Group.:
Country of
incorporation
Principal Place
of Business
% ownership interest
Held by the Group
2019
2020
Investment
2020
$
2019
$
Subsidiaries
Superior Gold
Pty Ltd
Australia
Australia
100
100
1,000
1,000
(c)
Joint Agreement
Country of
incorporation
Principal
Place of
Business
% ownership interest
Held by the Group
2019
2020
Investment
2020
$
2019
$
Hedley’s Joint
Venture (Nicholson
Project) - Note 21
Unincorporated
Australia
-
100
-
-
(d)
Key management personnel
Disclosures relating to key management personnel are set out in Note 22.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
30. Parent Entity Information
(a)
Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Reserves
Accumulated losses
2020
$
2019
$
1,037,845
4,498,909
5,536,754
227,200
4,702,153
4,929,353
511,842
44,666
556,508
556,464
44,666
601,130
4,980,246
4,328,223
12,202,019
(3,210,410)
(4,011,363)
10,975,213
(3,095,913)
(3,551,077)
4,980,246
4,328,223
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income/(loss) net of tax
Total comprehensive income/(loss) for the year
(460,286)
(114,497)
(574,783)
(548,112)
135,112
(413,000)
(b)
Contingent liabilities and commitments of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.
The commitments of the parent entity are as disclosed at Note 25 for the Group.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
DIRECTORS’ DECLARATION
In the Directors’ opinion:
1.
the financial statements and notes set out on pages 47 to 76, are in accordance with the
Corporations Act 2001, including:
(a)
(b)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020
and of its performance for the financial year ended on that date, and
2.
having regard to note 6 to the financial statements, there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and payable.
Note 2(a) confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the chief executive officer/chief financial officer as
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
CA Fernicola
Chairman
Brisbane, 29th September 2020
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Superior Resources Limited
Independent auditor’s report to the members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Superior Resources Limited (the Company
and its subsidiaries (the Group)), which comprises the consolidated statement of
financial position as at 30 June 2020, the consolidated statement of profit or loss,
consolidated statement of other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group, is in accordance
with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June
2020 and of its financial performance for the year ended on that date; and
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.
Material Uncertainty Related to Going Concern
We draw attention to Note 6 in the financial report, which indicates that the Group
incurred a net loss after tax of $461,100 during the year ended 30 June 2020 and
had net cash outflows from operations of $255,614. As stated in Note 6, these events
or conditions, along with other matters as set forth in Note 6, indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue
as a going concern. Our opinion is not modified in respect of this matter.
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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.
CARRYING VALUE OF EXPLORATION COSTS
Area of focus
Refer also to note 14
Capitalised exploration and evaluation assets represent
over 74% of the Group’s total assets. The carrying value
of exploration and evaluation assets is impacted by the
Group’s ability, and intention, to continue to explore and
evaluate these assets. The results of these
activities then determine the extent to which it may or
may not be commercially viable to develop and extract
identified reserves.
Due to the significance of this asset and the subjectivity
involved in determining its carrying value and
recoverable amount, this is a key audit matter.
How our audit addressed it
Our audit procedures included:
— A review of the Directors’ assessment
of the criteria for the capitalisation of
exploration and evaluation expenditure
and their assessment of whether there
are any indicators of impairment to
capitalised costs;
— Considering the Group’s intention and
ability to continue activities necessary
to support a decision to develop the
exploration and evaluation assets,
which included an assessment of the
Group’s ability to fund such activities
and a review of their future budgets;
— Performing an assessment of whether
any indicators of impairment existed in
line with requirements of Australian
Accounting Standards, including a
review of the integrity of tenement title
status and total commitments value;
and
— We assessed the adequacy of the
Group’s disclosures in respect of the
carrying value of exploration costs.
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Other Information
The Directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the Directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the Directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the 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.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors’ Report for the year ended 30
June 2020.
In our opinion, the Remuneration Report of Superior Resources Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
80
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.
William Buck (Qld)
ABN 21 559 713 106
Junaide Latif
Director
Brisbane, 29 September 2020
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
Shareholder Information
The information set out below was applicable at 21 October 2020.
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
Class of security - Ordinary Shares
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Number of Holders
28
19
83
449
705
1,284
The number of holders holding less than a marketable parcel of ordinary shares was 271 and they held
4,358,425 securities.
B. EQUITY SECURITY HOLDERS
Total of Ordinary Shares on Issue 1,158,029,906.
Twenty largest equity security holders
Holders of fully paid ordinary shares (ASX:SPQ):
Holder
YARRAANDOO PTY LTD
HBH FAMILY PTY LTD
KJ HARVEY & ASSOCIATES PTY LTD
MR TERRY TAYLOR & MRS LYNDA LOUISE TAYLOR
MR GEOFFREY JAMES HARRIS
AIHANMI PTY LTD
JORLYN INVESTMENTS PTY LTD
HAMILTON HAWKES PTY LTD
MR CARLOS ALBERTO FERNICOLA & MRS KERRIE ALISON FERNICOLA
BT PORTFOLIO SERVICES LIMITED
TERRA SEARCH PTY LTD
MR JOHN JOSEPH SCHOLL & MRS PATRICIA JOY SCHOLL
GOLDFIRE ENTERPRISES PTY LTD
MR JOHN JOSEPH SCHOLL & MRS PATRICIA JOY SCHOLL
TENBAGGA RESOURCES FUND PTY LTD
MR SIMON DAVID BEAMS & MR RICHARD HUTTON LESH & MR DAVID RANDAL
JENKINS
CAPITAL FINANCIAL ADVISERS PTY LTD
BT PORTFOLIO SERVICES LIMITED
TRANQUIL PLUS PTY LTD
MR SIMON DAVID BEAMS
Ordinary Shares
Number
49,900,000
38,722,221
37,424,053
33,000,000
32,850,825
26,000,000
24,286,675
20,232,891
19,101,666
17,812,500
16,397,221
16,289,556
16,003,383
15,783,333
15,000,000
14,194,442
13,481,156
12,968,750
12,928,238
12,666,666
Percent
4.31
3.34
3.23
2.85
2.84
2.25
2.10
1.75
1.65
1.54
1.42
1.41
1.38
1.36
1.30
1.23
1.16
1.12
1.12
1.09
Total
445,043,576
38.43
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
Unquoted equity securities
Unquoted Options
Number on issue
Number of Holders
Unlisted $0.006 options exercisable on or before 31
December 2021
126,885,568
231
Holders of greater than 20% of the unlisted equity securities
There are no holders with greater than 20% of the unlisted equity securities of Superior Resources
Limited at the date of this report.
C. SUBSTANTIAL HOLDERS
Substantial holders of the Company’s ordinary securities are set out below.
Holder of Relevant Interest
Registered Holder
MR GEOFFREY JAMES HARRIS (7.15%)
YARRAANDOO PTY LTD
MR GEOFFREY JAMES HARRIS
Ordinary Shares
Number
49,900,000
32,850,825
Percent
4.31
2.84
D. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands each member present at a meeting in person or by proxy shall have
one vote and on a poll each share shall have one vote.
(b) Options
No voting rights.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
Tenement Schedule
Current interests in tenements held by the Company and its subsidiaries as at 21 October 2020 are set
out below.
All tenements are located within Queensland. Exploration Permits for Minerals (EPM) are specified for
all minerals other than coal.
Tenement
Name
Project
Date of Grant
Date of
Expiry
Area
Holder
SPQ
Interest
Northwest Queensland
EPM156701
EPM182031
Hedleys 2
Hedleys South
Nicholson
Nicholson
21 Aug 06
29 May 14
20 Aug 21
28 May 24
186 km2
114 km2
EPM19097
EPM19214
EPM25264
EPM26720
Tots Creek
Scrubby Creek
Tomahawk Creek
Victor Extended
Victor
Victor
Victor
Victor
27 Nov 14
27 Nov 14
24 Dec 15
30 Aug 18
26 Nov 21
26 Nov 21
23 Dec 20
29 Aug 23
108 km2
90 km2
180 km2
60 km2
Northeast Queensland
Cockie Creek
Cassidy Creek
Dinner Creek
EPM18987
EPM19247
EPM25659
EPM25691 Wyandotte
EPM26165
Cockie South
Twelve Mile
Creek
EPM26751
Notes:
Greenvale
Greenvale
Greenvale
Greenvale
Greenvale
25 Sep 13
28 May 13
21 Apr 15
7 Apr 15
30 Jan 17
24 Sep 23
27 May 23
20 Apr 25
6 Apr 25
29 Jan 22
153 km2
48 km2
192 km2
90 km2
108 km2
Greenvale
28 May 19
27 May 24
258 km2
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
SPQ
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1. Subject to an Earn-in and Joint Venture Agreement between South32 Group Operations Pty Ltd
and Superior Resources Limited in respect of EPM15670 and EPM18203 from 28 May 2019 to
4 March 2020.
Abbreviations:
SPQ
EPM
Superior Resources Limited
Exploration Permit for Minerals
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
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Mineral Resources Statement
Mineral Resources as at 30 June 2020
Project
Resource
category
Cut-off
grade
Quantity
(tonnes)
Average
grade
Notes
Steam Engine Gold Deposit
Indicated
Inferred
Total
0.5g/t Au
0.5g/t Au
0.5g/t Au
370,000
900,000
1,270,000
2.5g/t Au
2.2g/t Au
2.3g/t Au
1, 2
1, 2
1, 2
Notes:
1. Steam Engine Gold Deposit lies south of the Gregory Development Road within EPM26165
“Cockie South”, approximately 210km west northwest of Townsville, Queensland, Australia.
2. Competent person – Mineral Resources, Mr Kevin Richter (MAusIMM).
Steam Engine Prospect
Information in relation to the Steam Engine Gold Deposit Mineral Resource Estimate and related
information were originally reported on the ASX Market Announcements Platform on 4 May 2020
(“Steam Engine Gold Mineral Resource Upgraded 11% Scoping Study Planned Amid Record AUD Gold
Prices”) and complies with the guidelines of the 2012 JORC Code. The Company confirms that it is not
aware of any new information that materially affects the information as originally reported. All material
assumptions and technical parameters on which the Mineral Resource Estimate is based, continue to
apply and have not materially changed.
Information contained in this report that relates to the Steam Engine Gold Deposit Mineral Resource
Estimate is based on information compiled by Mr Kevin Richter, an employee of Superior Resources
Limited, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Richter has
sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Mr Richter consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
Mineral Resource and Ore Reserve Governance
The Mineral Resource Estimates as reported, have been generated by a suitably qualified person using
industry standard best practice modelling and estimation methods.
Unless stated otherwise, Mineral Resources and Ore Reserves are compiled in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC
Code) 2012 Edition.
The Mineral Resources Statement included in this report has been reviewed by a suitably qualified
Competent Person.
Reporting of Exploration Results
The reporting of some exploration results in this report reflects information that was originally reported
in market announcements as referenced in various parts of this report. The Company confirms that it
is not aware of any new information or data that materially affects the information included in the
relevant original market announcement.
85
SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
Other information contained in this report that relates to exploration results is based on information
compiled by Mr Kevin Richter, an employee of Superior Resources Limited, who is a Member of the
Australasian Institute of Mining and Metallurgy. Mr Richter has sufficient experience which is relevant
to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Richter consents to the
inclusion in this report of the matters based on his information in the form and context in which it
appears
Information contained in this report that relates to Exploration Activities is based on information
evaluated by Mr Peter Hwang, an executive director and shareholder of Superior Resources Limited
and a Member of the Australian Institute of Geoscientists. Mr Hwang has sufficient experience which
is relevant to this style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person under the 2012 edition of the “Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Hwang consents to the
inclusion in this report of the matters based on the information in the form and context in which it
appears.
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
( THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK )
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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)
SHAREHOLDER INFORMATION
( THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK )
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Telephone: 07 3847 2887
Email: manager@superiorresources.com.au
www.superiorresources.com.au